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Rh enactment of measures looking to an increase of revenue from the increase of indirect taxes upon imports, and it was not until four months after the actual outbreak of hostilities that a direct tax of twenty million dollars was apportioned among the States, and an income tax of three per cent on all incomes in excess of eight hundred dollars was authorized, the first being made to take effect practically eight and the second ten months after date of enactment. Such laws, of course, became operative in the loyal States only, and produced but comparatively little revenue; and although the sphere of taxation was soon extended, the aggregate receipts from all sources by the Government for the third year of the war—from excise, income, stamps, and all other internal and direct taxes was less than forty million dollars, and that too at a time when the expenditures were in excess of sixty million dollars per month, or at the rate of more than seven hundred million dollars per annum. And as showing how novel was this whole system of direct and internal taxation to the people, and how completely the Government officials were lacking in all experience in respect to it, the following incident may be cited: The Secretary of the Treasury in his report for 1863 stated that with a view of determining his resources he had employed a very competent person, with the aid of practical men, to estimate the probable amount of revenue to be derived from each department of internal taxation for the current year. The estimate arrived at was eighty-five million dollars, but the actual receipts were less than forty million—$37,640,787.

The people of the loyal States were, however, more determined and earnest in respect to this matter of taxation and revenue than were their rulers, and everywhere the one opinion expressed was, that taxation in all its forms should immediately, and to the largest extent, be made effective and imperative. And Congress, spurred up by and rightfully relying on public sentiment to sustain its action, at last resolutely took up the matter, and devised, or rather drifted into, a system of internal taxation which for its universality and peculiarities has no parallel in anything which had theretofore been recorded in civil history, or is likely to be thereafter.

The great necessity of the situation was revenue, and to obtain it speedily and in large amounts through taxation was the only principle recognized (if it can be called a principle), and was akin to that recommended to the traditionary Irishman on his first visit to Donnybrook Fair: "Wherever you see a head, hit it!" "Wherever you find an article, a product, a trade, a profession, a sale, or a source of income, tax it! And so an edict went forth to this effect, and the people cheerfully submitted. Incomes under five thousand dollars were taxed five per cent, with an exemption