Nor to any insurance company or association which conducts all its business solely upon the mutual plan, and only for the benefit of its policy holders or metbers, and having no capital s ock and no stock or shareholders, and holding all its property in trust and in reserve for its policy holders or members; nor to that part of the business of any insurance ompany having a capital stock and stock and shareholders, which is conducted on the mutual plan, separate from its stock plan of insurance, and solely for the benefit of the policy holders and meaibers insured on said mutual plan, and holding all the property belonging to and derived from said mutual part of its business in trust and reserve for the benefit of its policy holders and members insured on s.id mutual plan.

That all State, county, municipal, and town taxes paid by corporations, companies, or assoc ations, shall be included in the operating and business expenses of such corporations, companies, or associations.

Sec. 33. That there shall be levied, collected, and paid on all salaries of officers, or payments for services to persons in the civil, military, naval, or other employment or service of the United States, including Senators and Representatives and Delegates in Congress, when exceeding the rate of four thousand dollars per annum, a tax of two per centum on the excesss above the said four thousand dollars; and it shall be the duty of all paymasters and all disbursing officers under the Government of the United States, or persons in the employ thereof, when making any payment to any officers or perso s as aforesaid, whose compensation is determined by a fixed salary, or upon settling or adjusting the accounts of such officers or persons, to deduct and withhold the aforesaid tax of two per centum; and the pay roll, receipts, or account of officers or persons paying such taxes as aforesaid shall be made to exhibit the fact of such payment. And it shall be the duty of the accounting officers o the Tr. asury Department, when audit ng the accounts of any paymaster or disbursing officer, or any officer withho ding his salary from moneys received by him, or when settling or adjusting the accounts of any such officer, to require evidence that the taxes mentioned in this section have been deducted and paid over to the Treasurer of the United States, or other officer authorized to receive the same. Every corporation which pays to any employee a salary or compensation exceeding four thousand dollars per annum shall report the same to the collector or deputy collector of his district and said employee shall pay thereon, subject to the exemptions herein provided for, the tax of two per centum on the excess of his alary over four thousand dollars: Provided, That salaries due to State, county, or municipal officers shall be exempt from the income tax herein levied.

Sec. 3167. That it shall be unlawful for any collector, deputy collector, agent, clerk, or other officer or employee of the United States, to divulge or to make known in any manner whatever not provided by law to any per on the op rations, style of work or apparatus of any manufacturer or producer visited by him in his official duties, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any income return by any person or corpo ration, or to permit any income return or copy thereof or any book containin any abstract or particulars thereof, to be seen or examined by any person except as provided by law; and it shall be unlawful for any person to print or publish in any manner whatev r not provided by law, any income or part thereof or the amount or source of income, profits, losses, or expenditures appearing in any income return; and any offense against the foregoing provision sha I be a misdemeano and be punished by a fine not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court; and if the o ender be an officer or employee of the United States he shall be dismissed from office and be incapable thereafter of holding any office under the Goverment.

PLAYING CARDS.

Sec. 38. That on and after the first day of August, eighteen hundred and ninetyfour; there shall be levied, collected, and paid, by adhesive stamps, a tax of two cents for and upon every pack of playing cards containing not more tha fifty-four cards, manufactured and sold or removed, and also upon every pack in the stock of any dealer on and after that date; and the Commissioner of Internal Revenue, w th the approval of the Secretary of the Treasury, shall make regulations as to dies and adhesive stamps.

Report on the Income Tax.

Mr. McMillin, from the Committee on Ways and Means, submitted the following report on the income tax :

1

The wealt of this country amounts to more than $65,000,000,000, and the question arises whether it is not just and fair that a portion of this money should be raised by a tax on the earnings of wealth instead of imposing it all or nearly all on consumption. The committee believe that it is eminently just and proper that the amount proposed by this bill should be collected from a tax on incomes instead of placing all of it on the necessities of life, which are consumed by all but are not used in proportion to their ability to pay taxes, but according to the necessities of existence.

What just complaint can there be against placing thirty millions of this burden on wealth rather than all of it upon consumption? t is not proposed to raise all of it by an income tax. It is not even proposed to raise half, or one-fourth, or onetenth of it that way; but only a small per cent by an imposition of 2 per cent tax on the incomes over $4,000 of all individuals and the net incomes of all corporations. The committee see no hardship in requiring those who have incomes of more than $4,000 a year to pay 2 per cent of all in excess of that amount to carry on the Government under which it has been accumulated and by which it is protected. Corporations are by law given special privileges and advantages. Their stockholders in the main are freed from personal liability by the laws of their creation. They have almost perpetual life; they may sue or be sued as individuals. Through the courts of the country they are protected and enabled to carry on their operations. It has therefore been deemed by the committee not unjust to place a tax of 2 per cent on their net earnings.

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It is said that this tax cannot be collected. Against this assertion we place the facts of history. The following table shows the collections under the income-tax law in existence from 1862 to 1870, and the committee place this collection of $346,000,000 against the assertion that it is impossible to collect this. Had this tax been retained, even at the reduced rates imposed in 1867, the public debt could have been extinguished f om this source alone years ago.

NOTE. After he year 1862 the collections during any given fiscal year were not confined to the previous calendar year, but naturally include amounts due and unpaid for any previous year. TREASURY DEPARTMENT, Internal Revenue Office, August 23, 1893.

The effort to carry on the administration of Government by taxing consumption alone has been tried in other countries and proven as unequal in its burd ns and unsatisfactory in its results as here. Great Brita n tried the experiment for many years of encouraging and protecting manufacturers b the imposition of tariff duties. There, as here, it proved inadequate. In 1798 an income tax was imposed to supplement failing revenues. It was maintained until 1816, then the old system was returned to in the hope that it would be sufficient in times of peace But in 1842 Sir Robert Peel was forced to resort to an income tax. He believed that to equalize the burdens of taxation a greater share s ould be placed on we lth and less on things t at had to be bought and consumed daily.

It was predicted then, as it is now, that the tax would be unsatisfactory; that it was inquisitorial, and would be, therefore, unpopular. But the courageous premier was willing to risk his party and his administration on the intrinsic justice of the measure. He succeeded in having it adopted. Notwithstanding a half a century has elapsed, and many political revolutions have swept over the country, carrying down the ministry with them, there has been no power strong enough even in tl at great monarchy to break it down and put all of taxation back on consumption. This, under peculiar institutions, favoring the accumulation of real estate, and where their possession, in the hands of the ruling classes, is encouraged and thought to contribute to the stability of the governments.

Under that law only £150 ($750) is exempted from taxation. Great Britain derived from this source £13,290,000-about $66,500,000-last year. The rate imposed is 7 pence a pound.

P us ia, the greate t of the states composing the German Empire, imposed an income tax as far back as 1851, and has had that form of taxation for many years. There is only $225 income exempt. It is graduated from le s than 1 to 4 per cent. For the year 1892-'93 there was derived from this source 124,842,848 marks-about $30,210,712. Almost all the twenty odd states of the German Union have imposed an income tax very similar to that of Prussia.

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An income tax has existed in Austria since the beginning of the nineteenth century, xcept the period between 1829 and 1849. In 1892 it yielded $10,000,000. In 1892 there was collected from incomes by the Italian Government $45,000,000. The rate is 12 per cent, and in addition thereto 1 per cent is levied for war purposes.

Other governments have followed this tendency.

THE INCOME TAX.

Extract From the Speech of Scott Wike, of Illinois.

Hon. Mr. Wike said:

In my judgment a very heavy graduated income tax should be levied, not on incomes simply, but on incomes of fortunes, to stay the insatiable hands of fortuneseeking adventurers who aim really more to gratify a vaulting ambition to belong to the aristocracy of gigantic wealth, with the attendant fascination of power, than from any rational desire or hope to enjoy or make useful these unreasonable and unholy amassments. * *

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When these colossa! fortunes were unknown in this country, pauperism, too, was in a measure unknown; but now destitution, poverty, and want prevail in a ratio of geometrical proportion as the property of the country is concentrated in the hands of a few. Already the unsightly piles of wealth look down with ever increasing menace to the perpetuity of the simple and popular government that was devised to secure the blessings of liberty and prosperity to the masses.

Figures give no adequate idea of the common understanding of the immensity of hundreds and thousands of these fortunes, or the rapidity with which they are amassed. For example, if Adam, created in the beginning, and which was recently popularly supposed to be five thousand years ago, had been endowed with what seventy-five years ago would have been considered a large fortune-$50,000—and had doubled it the first year, and had lived and added to it a like amount annually from that day to the present time, saving it all, he would not yet have accumulated the princely fortune that at least one family possesses, or which, perhaps, is possessed by several separate families and individuals in this country to-day.

Incomes, both in numbers and amounts, in the United States far exceed those in Great Britain, and the increase in wealth has been infinitely more rapid here than in that country. Since the adoption of the present revenue system and bounty policy, the concentration of wealth in the hands of the few is unprecedented in any country. The extent to which this concentration has been going on since the war is not only alarming, but in the light of the ultimate consequences is absolutely appalling. It is now maintained that one-half of the wealth of the country is already concentrated in the hands of 25,000 persons, and three-fourths or four-fifths of it in the hands of 250,000 people.

The question of the concentration of wealth and the extent of such concentration becomes a very important one in considering the utility and desirableness of the income tax.

Let us see, therefore, if we can, whether these statements as to the extent of such concentration are true or not. In the absence of official information we must examine the most reliable data at hand, and to this end attention is invited, in the first place to the statements and statistics published in the Forum Magazine for September and November, 1889, by Mr. Thomas G. Shearman, one of the foremost economists of this country, as furnishing perhaps the clearest and most convincing analysis and exposition of the question that has been written.

STATISTICS SHOWING CONCENTRATION OF WEALTH.

Your attention is first called to the following statements, made in the September magazine article alluded to:

"The St. Louis Globe recently published a list of seventy-two persons who were worth, collectively, the whole amount of our national debt, averaging $18,000,000 each. The wealthiest railroad manager in America in 1865 was worth $40,000,000, but not more. His heir died recently, leaving an estate of nearly $200,000,000; and there are several gentlemen now living who are worth $100,000,000 each. Within a short period a number of quiet, unobtrusive men, of no national fame, have died in Pennsylvania, leaving estates of over $20,000.000 each. Twenty living persons in the oil business are reputed to be as rich. Forty persons could be easily named none of them worth less than $20,000,000, and averaging $40,000,000 each.

"At the lowest reasonable estimate there must now be more than two hundred and fifty persons in this country whose wealth averages over $20,000,000 for each. But let us call the number only two hundred. Income-tax returns in Great | ritain and in the United States show that in general the number of incomes, when arranged in large classes, multiplies by from three to five fold for every reduction in the amount of one-half. For extreme caution, however, we estimate the increase in the number of incomes at a very much lower rate than this. At this reduced rate the amount of wealth in the hands of persons worth over $500,000 each in the United States would be about as follows:

"This estimate is very far below the actual truth. Yet, even upon this basis, we are confronted with the startling result that 25,000 persons now possess more than half of the whole national wealth, real and personal, according to the highest estimate ($60,000,000,000) which any one has yet ventured to make of the aggregate amount."

In the November article mentioned a statement is made of the wealthiest estates in England, showing the richest of the Rothschilds and the world-renowned banker, Baron Overstone, each left about $17,000,000. Earl Dudley, the owner of the richest iron mines, left $20,000,000.

The Duke of Buccleuch (who carried half of Scotland in his pocket) left about $30,000,000. The Marquis of Bute was worth, in 1872, $28,000,000 in land, and he may now be worth $40,000,000 in all. The Duke of Norfolk may be worth $40,000,000, and the Duke of Westminster perhaps $50,000,000.

The table of incomes derived from the profits of business, exclusive of railways, mines, etc., in Great Britain, is also given, as follows: