Quantity of distilled spirits remaining in bond July 1, 1874... Distilled spirits produced from July 1, 1874, to March 3, 1875.. produced from March 3. 1875, to June 30, 1875. Total produced to June 30, 1875..... Distilled spirits withdrawn tax-paid under act of June 6, 1872, at 70 cents allowed for loss by casualty.... 24,448 244, 482 158 * Including 2.145,010 gallons out on export-bonds, and excluding 204,716 gallons, at 50 cents, destroyed by fire, and 2,034 gallons assessed as not actually in warehouse. EXPORTATION OF DISTILLED SPIRITS. The quantity of distilled spirits removed from distillery-warehouses for export during the year ended June 30, 1874, was 4,060,106 gallons; the quantity so removed during the year ended June 30, 1875, was only 587,413 gallons; a decrease of 3,472,693 gallons. No change has been made in the laws or regulations governing such exportations, except that the regulation requiring sureties on bonds filed with collectors of customs to justify on the basis of their real estate was revoked by you in an order dated February 28, 1875. There has been no increase in the rate of exportation of alcohol during the first quarter of the present fiscal year, but the quantity of rum removed for exportation has largely increased; the quantity reported removed up to the time this report is made (November 5, 1875) being 404,503 taxable gallons. EXPORTATION OF MANUFACTURED TOBACCO AND SNUFF IN BOND. The records of the Office show that tobacco and snuff which had been removed in bond for exportation prior to July 1, 1874, remained unaccounted for by landing-certificates on that day, as follows: Tobacco at 20 cents tax.... Snuff at 32 cents tax.... Total........ 5, 476, 115. 50 pounds. 5,033. 63 pounds. 5,481, 149. 13 pounds. During the fiscal year ended June 30, 1875, the quantities of tobacco removed for exportation in bond without payment of tax were as follows: Tobacco under exportation-bonds, at 20 cents.. 6,691, 190. 63 pounds. 2,204, 695.00 pounds. 214, 674.00 pounds. 38,756.25 pounds. Total removed from manufactories for exportation........ 9, 179, 315. 88 pounds. A decrease of 1,621,611.12 pounds from the amount so removed during the fiscal year ended June 30, 1874. This decrease may be partly explained by the fact that under the act of June 6, 1872, the manufacturer alone could execute the export-bond as principal, and thereby was held responsible for the acts of his cus tomers to whom he sold the tobacco and who were the real exporters. If it should prove true that this fact has tended to discourage to some extent the exportation of tobacco, it is hoped and believed that the evil will be remedied by the act of February 8, 1875, by which the manufac turer is allowed to remove tobacco under a transportation-bond, which is canceled upon the production of a clearance-certificate by the collector of customs at the port of export, showing that the goods have been laden on board the outward-bound vessel, and upon the execution of an export-bond by the owner or shipper of the tobacco to the collector of customs. While the amount bonded for exportation has decreased, the amount actually accounted for as exported by landing-certificates has increased. The amount thus accounted for during the year is 10,991,808.13 pounds, 1,955,784.24 pounds more than during the previous year. The amount of tobacco removed and remaining unaccounted for by landing-certificates at the end of the year is as follows: Amount removed from bonded warehouses, at 20 cents tax Tobacco removed under transportation-bonds, of which 78, 067 pounds Total...... Pounds. 77,-30.50 1,679, 193, 50 1,604, 52, 50 7,2:1.00 211, 674.00 3,614,534.50 Showing a reduction from the balance reported at the beginning of the year, of 1,866,614.63 pounds. DRAWBACK. The following table shows the amount of drawback of internal taxes allowed on different articles exported during the fiscal year ended June 30, 1875. Total amount of drawback allowed during the fiscal year ended June 30, 1871, was $35,495.31, showing a decrease of $6,553.48, in the claims allowed during the past year. TAXATION UPON THE CAPITAL, DEPOSITS, AND CIRCULATION OF BANKS AND BANKERS. National banks pay taxes to the Treasurer of the United States in the months of January and July, of one-half of one per cent. each halfyear, upon the average amount of their notes in circulation; of onequarter of one per cent. each half-year, upon the average amount of their deposits, and the same rate each half-year on the average amount of their capital stock beyond the amount invested in United States bonds. These taxes are collected by the Treasurer, and constitute no part of the internal revenue. Since the organization of national banks, the amount realized from these sources up to the close of the last fiscal year has been sixty-four million nine hundred and eighty-nine thousand three hundred and seventy-four dollars and forty-six cents, ($64,989,374.46;) the amount realized during the last fiscal year having been seven million two hundred and seventy thousand seven hundred and fifty-eight dollars and forty cents, ($7,270,758.40.) The amount paid by the national banks on deposits alone, during the period of their existence up to June 30, 1875, is thirty million eighteen thousand and twen ty-eight dollars and twelve cents, ($30,018,028,12,) while the amount paid during the last fiscal year is three million four hundred and twentyseven thousand five hundred and seventy-six dollars and thirty-one cents, ($3,427,576.31.) Other taxes on banks and bankers, not national, are collected under the internal-revenue laws. The persons, firms, and institutions thus taxed embrace every incorporated or other bank, and every person, firm, or company having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or promissory notes are received for discount or for sale. These taxes consist, first, of a tax of one-twenty-fourth of one per cent. each month upon the average amount of the deposits of money subject to payment by check or draft or represented by certificates of deposit; second, of a tax of onetwenty-fourth of one per cent. each month on the capital employed by these banks and bankers beyond the average amount invested in United States bonds; third, of a tax of one-twelfth of one per cent. each month upon the average amount of circulation issued by them, and an additional tax of one-sixth of one per cent. each month upon the average amount of such circulation issued beyond the amount of 90 per cent. of the capital of the bank, association, corporation, company, or person. I have been thus particular in calling your attention to the laws regulating taxes upon national banks, and upon banks not national, and bankers, for the purpose of presenting forcibly the exemptions on deposits in savings-banks. It is provided that the deposits in associations or companies known as provident institutions, savings-banks, savingsfunds, or savings-institutions, having no capital stock and doing no other business than receiving deposits to be loaned or invested for the sole benefit of the parties depositing, without profit or compensation to the association or company, shall be exempt from tax on so much of *heir deposits as they have invested in securities of the United States, and on all deposits not exceeding two thousand dollars, ($2,000,) made in the name of any one person. Congress, by act of 18th of June, 1874, extended this exemption from taxation to deposits in such institutions as were then existing, doing business only as savings banks, and recognized as such by the laws of their respective States or by Congress. The exemption from taxation was to be the same as with deposits in savings-institutions having no capital, although, in fact, they had a capital stock or bond for the additional security of their depositors. In fact, the law authorized a dividend of 8 per cent. on the stock in providing that the excess of profits above this dividend should be divided among the depositors, and besides provided that interest at the rate of not less than 43 per cent. be paid in all cases to the depositors, to be made good, if necessary, from the capital stock. This is the present condition of the law. The internal-revenue act of June 30, 1864, exempted savings-banks from all taxation where they had no capital stock and confined their business to receiving and loaning deposits for the benefit of depositors only, doing no other business of banking. The act of March 3, 1865, struck out this exemption, and, of course, left savings-banks liable to taxation upon their deposits. But Congress, on the 13th of July, 1866, again having the subject under consideration, subjected to taxation all deposits in provident institutions, savings-banks, and savings-institutions where the deposits made by any one person amounted to five hundred dollars, ($500,) or upward. By the existing law, as seen, the deposits made by any one person are not liable to tax unless they exceed two thousand dollars, ($2,000,) and this exemption instead of being confined to savings-banks having no capital stock and doing no banking business is now, by recent legislation, extended to classes of institutions bearing kindred names having a capital stock and making dividends. The fruits of this legislation are seen in the appended table, which exhibits the capital and deposits held by banks and bankers, other than national, in May, 1875, and the aggregate average amount of the same during the six months previous, in the several States and Territories, taxable under the internal-revenne laws, and the percentage of the taxable amounts reported for said six months as compared with the total amounts held during May last. It will be observed from the footings of this tableThat the average amount of capital held by these banks and bankers (not national) in May, 1875, was....... That the average amount of their deposits in the same month was ... That the total of capital and deposits in the same month was.... While the amount of the taxable capital and deposits of these banks and bankers during said six months was only.... $200,316,098 1,346,014, 813 1,546, 330, 911 780, 491, 076 or a little more than three-fourths of a million of dollars, while the amount of the actual capital and deposits of these same institutions was, in round numbers, $1,516,000,000. It will also be apparent from the table how unequally this taxation is distributed among the States. Thus, upon a given amount of capital and deposits, the tax on California, as compared with Massachusetts, is as ten to one; on Michigan, as compared with the same State, as sixteen to one; on Virginia, as compared with Vermont, as five to one. The city of New York, possessing taxable capital and deposits $50,000,000 less than Maine, New Hampshire, Vermont, Massachusetts, and Connectient combined, pays a tax three times as great as these States, while these same States, having capital and deposits three times State or Territory. as great as California, pay about one-half the tax thereon that is paid by California. I present these figures for your consideration, and for such use as you deem proper to make in your report to Congress, and with this single remark, that if deposits in these so-called savings-institutions are thought a proper subject for exemption from taxation where they are employed with such profitable results, it were better to return to the rule adopted by Congress in 1866, when deposits made by any one person in excess of $500 were subjected to taxation. The following is the table referred to: On the 15th day of May last I assumed the duties of the office of Commissioner of Internal Revenue, made vacant by the resignation of Hon. John W. Douglass. |