another, and that by the sacrifice of the original object. It is, in a word, a violation by perversion, the most dangerous of all because the most insidious and difficult to resist.

138. Social Implications of the Taxing Power

Some of the ways in which the taxing power may be used to benefit certain classes of the community so that the general level of civilization may be raised are suggested by President Roosevelt in his message of December, 1907:

tax.

When our tax laws are revised the question of an income tax The income and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional.

The inheritance tax, however, is both a far better method of taxation, and far more important for the purpose of having the fortunes of the country bear in proportion to their increase in size a corresponding increase and burden of taxation. The Government has the absolute right to decide as to the terms upon which a man shall receive a bequest or devise from another, and this point in the devolution of property is especially appropriate for the imposition of a tax. Laws imposing such taxes have repeatedly been placed upon the National statute books and as repeatedly declared constitutional by the courts, and these laws contained

The

inheritance tax.

Foreign experience.

Purpose of the tax.

the progressive principle, that is, after a certain amount is reached the bequest or gift, in life or death, is increasingly burdened and the rate of taxation is increased in proportion to the remoteness of blood of the man receiving the bequest.

These principles are recognized already in the leading civilized nations of the world. In Great Britain all the estates worth $5,000 or less are practically exempt from death duties, while the increase is such that when an estate exceeds five millions of dollars in value and passes to a distant kinsman or stranger in blood the Government receives all told an amount equivalent to nearly a fifth of the whole estate. In France so much of an inheritance as exceeds $10,000,000 pays over a fifth to the State if it passes to a distant relative. The German law is especially interesting to us because it makes the inheritance tax an imperial measure, while allotting to the individual States of the empire a portion of the proceeds and permitting them to impose taxes in addition to those imposed by the Imperial Government. Small inheritances are exempt, but the tax is so sharply progressive that when the inheritance is still not very large, provided it is not an agricultural or a forest land, it is taxed at the rate of 25 per cent. if it goes to distant relatives. There is no reason why in the United States the National Government should not impose inheritance taxes in addition to those imposed by the States, and when we last had an inheritance tax about one-half of the States levied such taxes concurrently with the National Government, making a combined maximum rate, in some cases as high as 25 per cent. The French law has one feature which is to be heartily commended. The progressive principle is so applied that each higher rate is imposed only on the excess above the amount subject to the next lower rate; so that each increase of rate will apply only to a certain amount above a certain maximum. The tax should if possible be made to bear more heavily upon those residing without the country than within it.

A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like tax would be on a small

fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. . . . Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal, but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows.

139. Preparation of a Revenue Bill

A slight notion of the difficult task which devolves upon the committee of ways and means and its chairman in the preparation of a general tariff act is given in the following interesting extract from the memoirs of Mr. Dingley:

members

The preparation of the Dingley tariff bill began on the evening Republican of December 10, . . . when the Republican members of the ways take the and means committee met in the committee room and voted "to initiative. begin a tariff bill and have it ready for an extra session of congress." ...

mittee

The room of the committee on ways and means in the National The Comhouse in December, 1896, when the preparation of the Dingley Roon. tariff bill was begun, was the largest and most commodious in the capitol. The library had about four thousand volumes covering very completely the subjects of tariff and finance. An open fireplace and inviting easy chairs, made this committee room a general reception room for those desiring private conferences with prominent members of congress. Chairman Dingley was sought after more than any other member of congress, unless it was the speaker; and he always received all with uniform courtesy. In

Hearings on the tariff.

Preparing the first draft.

Duty on kindling wood.

the center of the room stood a large table around which were arranged 17 chairs. Along the edge of the table directly in front of each chair, was a small silver plate on which was engraved the name of the member of the committee occupying the seat. Chair man Dingley sat at the head of the table farthest from the door with Sereno E. Payne of New York on his right and John Dalzell of Pennsylvania on his left. . . .

The series of tariff hearings by the committee on ways and means began December 28 and closed January 11. The committee room was crowded at every hearing, and representatives of all the leading lines of industry were present. Chairman Dingley presided over these hearings, listening to and commenting on the mass of testimony.

Wednesday, January 13, the Republican members of the committee began the framing of the tariff bill, in rooms they had engaged at the Cochran hotel, immediately opposite the Hamilton house, centrally located and convenient to the chairman. It took two weeks and two days to complete the first draft of the Dingley tariff bill, and get the printed copies ready for congress. The Republican members of the committee worked almost uninterruptedly during this period in the preparation of the bill. It was a tremendous task. Schedule by schedule, paragraph by paragraph, the entire bill was constructed with great care and precision. Mr. Dingley was the guiding spirit, all yielding to his judgment, knowledge and tact. During these conferences various interests often clashed, but the chairman was always ready with some compromise or plan of procedure that seemed to satisfy all. With rare shrewdness he succeeded in adjusting all differences and in harmonizing the several parts of this important measure. His associates had implicit confidence in him and regarded him as students regard a wise and noble instructor.

Many amusing events transpired during the preliminary preparation of the Dingley tariff bill, some of them at the expense of the chairman, who was always so absorbed in the seriousness of his work as to forget the humorous side of life. Mr. Dingley, it

is related, was very anxious to have a duty on kindling wood. Most of the members associated kindling wood with their wood piles at their back doors and were inclined to poke fun at the chairman. They were not aware of the fact that in many of the northern states there was a regular industry of manufacturing kindling wood and putting it on the market in bundles. Mr. Dingley proceeded to argue in favor of a duty on this article and took seriously the objections raised by some of the members who objected in a spirit of pure fun. But the duty on kindling wood was agreed to. Shortly afterwards, Mr. Tawney of Minnesota, became interested in a duty on enamelled shoe strings. So one morning he asked to have the schedule which he had prepared, considered by the Republican members. The chairman, who was overwhelmed with requests and anxious to complete the first draft of the bill, said, perhaps with some haste: "We have no time now for such trifling matters." Mr. Tawney with more spirit than he now wishes he had displayed, replied: "Mr. Chairman, I think shoe strings are as important as kindling wood." The other members including the chairman joined in a hearty laugh and proceeded to consider other sections of the bill.

Duty on

shoe strings.

leaders.

Chairman Dingley sat at the head of the table, Mr. Payne on The three his right and Mr. Dalzell on his left. These three men were the Republican triumvirate in the preparation of the first draft of the bill. So great was the chairman's confidence in the judgment of these two men, that he unconsciously conferred with them alone, and in a low voice on the rates to be agreed upon, and in a quiet way would say: "If there is no objection it will be the sense of the committee that the rate of duty on such and such an article shall be so and so."

on the

Some of the younger Republican members at the foot of the A mild joke table, while having implicit confidence in the chairman and his chairman. two leading associates, conspired to play a mild joke on the chairman. They agreed to object and vote down the chairman on some minor matter the next time the chairman talked in a low tone to Messrs. Payne and Dalzell, and put the question. The three