If we turn to the national bank act, which has been referred to many times as one of the most beneficent laws that the federal government has put upon the statute books, it will be noted that it had its origin in the necessities of the civil war, that it was developed as a revenue measure in the hope of forcing the banks of the day to buy the bonds of the distressed government. The principles which were recognized by the secretary of the treasury at the time as essential to the establishment of a banking system were taken in part from the experiences of Massachusetts and New York. Out of these came the right of free banking, the principle of the redemption fund, and the issue of paper money upon a bonded security, as important parts of the national bank act.
Passing in quick review the federal legislation relating to pure foods, it will be found that not until 1906 was any legislation secured which authorized the inspection and examination of foods by federal officers and placing upon adulteration an adequate penalty. For seventeen years the people of the nation had urged congress to pass a bill that would meet the many abuses that had arisen in the adulteration of food and dairy products. The same story can be told about the tariff. Since the civil war the different tariffs that have been enacted for the purpose of protecting manufacturers in the United States have steadily increased, and the percentage of the burden laid in the form of customs duty, regardless of the conflict of interests and the necessities of the consumer, has steadily augmented, until under the provisions of the McKinley bill it stood at a higher percentage than at any time in the history of the nation.
Nor is this all. The encroachments upon the financial strength of the states, in the form of added taxes, have come with the growing activity of the federal government, as might well have been expected. In the year 1909 the federal corporation tax was laid upon all corporations engaged in interstate business in the United States. It has been urged that a large revenue would be secured by this form of tax levy; that it would give greater control over the many corporations of the country, making it possible to reorganize their book-keeping and accounting systems along the lines of the best principles of accountancy. The law has now been in existence about two years, and it has been shown clearly that it lays a heavy burden upon corporations in the impossible demands of the accounting methods required, while the principle of self-assessment, now unchecked by government examination, leaves it practically with the corporations to determine what they shall pay. But the worst side of the corporation tax is that the fiscal system of those states that have developed such a plan of taxation is materially affected. These states find that their own sources of revenue are cut into, while the corporations subject to this fiscal control are provided with an argument of double taxation against proper state taxes. This phase of the corporation tax has been regarded by many economic
