of five hundred dollars and house rent actually paid. Incomes in excess of five thousand dollars and not in excess of ten thousand dollars were taxed two and a half per cent in addition, and incomes over ten thousand dollars, five per cent additional, without any allowance or exemptions whatever. Nearly every industrial product was taxed. Cotton was taxed at the rate of two cents per pound; salt, six cents per hundred pounds; tobacco, from fifteen to thirty-five cents per pound; cigars, from three to forty dollars per thousand; sugar, from two to three cents and a half per pound. Distilled spirits were taxed progressively; first at twenty cents, and finally at two dollars per proof gallon.
But the most curious and complex taxes were those imposed on the various products of what may be termed ordinary manufacturing industry—a tax, by intent or construction, being first imposed on the raw material, and then on the total or increased value, according to circumstances, of each successive stage of its elaboration up to the finished product. And, as if this was not enough, every manufacturer was compelled to take out an annual license, while the goods produced, if sold by dealers or agents independent of the manufacturers, were subject to an additional tax of one tenth of one per cent, reckoned upon the amount of sales. This tax upon manufactures and products, with the exception of a few articles, was at first fixed, in 1864, at an average of five per cent; but in 1865 the rate was increased twenty per cent, making the tax for most articles six per cent.
Under the operation of this system the Government actually levied and collected on many articles of finished industrial products a tax of six per cent, the effect of which may be thus illustrated: Many manufacturing establishments sold products annually to three times the amount of their invested capital. If the capital invested was one hundred thousand dollars and the sales three hundred thousand, the tax on that business was eighteen thousand dollars, or eighteen per cent on the cost of the establishment.
The sales of its products by a manufacturing establishment are, however, no indication of its profits. It may make and sell to the amount of a million dollars without making a dollar of profit, but that, under the law, was no reason for the nonassessment and noncollection of a tax of sixty thousand dollars on the value of the product represented by its sales.
Again, the effect of the tax on every stage of elaboration of a manufactured product may be illustrated by a great variety of actual examples. Thus, in the case of the manufacture of umbrellas and parasols, it was shown that separate taxes were paid, first, on-the sticks or supporting rods; then upon the handles, if carved or turned separately, of bone, wood, or ivory; then, in like
