Time: Tue Apr 01 23:50:27 1997 Date: Tue, 01 Apr 1997 23:49:23 -0800 To: (Recipient list suppressed) From: Paul Andrew Mitchell [address in tool bar] Subject: SLS: Insider's view of Internal Revenue by L.E. Chittenden "His Register of the Treasury" (fwd) <snip> > >Greetings, > >Please read below for some interesting information. > >A book published in 1891 in New York by Harper & Brothers, Franklin >Square, the title of which is "RECOLLECTIONS OF PRESIDENT LINCOLN AND >HIS ADMINISTRATION", and Authored by L.E. Chittenden His Register of the >Treasury has some very interesting information. Some excerpts are >provide below. > >Page 4 > "When I took charge of a bureau in the Treasury, I naturally wished to >understand the theory of its construction. What were the functions of >the several bureaus? their relation to the secretary and to each other? >I wanted a history of the institution. Mr. Hamilton was its reputed >creator. What were his plans? his objects? How did he propose to secure >them? > No such history existed. The memoirs of Mr. Hamilton were silent upon >the details of this the greatest work of his life. The only printed book >which gave any promise of the information I wanted was a work by "Robert >Mayo, M.D., Compiler of a New System Mythology," published in 1847. In >these thin quartos, buried in an indigestible mass of circulars, >instructions and decisions of secretaries, were a few details of the >functions of the different bureaus, and that was all." > >Page 4 & 5 >"By its complete control of the finances during the war it was a might >power for evil as well as for good. The fate of the nation depended upon >its competent management. Directed by an able financier who could >reinforce the military and naval departments by the confidence born of a >strong national credit, ours was one of the strongest governments on >earth. In the hands of an incompetent secretary, careless of the >national credit, the future promised was bankruptcy, defeat in the >field, and a divided union." > >Page 342 > "Secretary Chase was opposed upon principle to any system of direct >taxation which required a force of revenue officers for its collection. >His chief objection was, that it would create an inquisition into the >private affairs of the people to which they were unused, and which could >not fail to become disagreeable and offensive. To the cases cited of >Great Britain and other powers, where a large revenue was collected >under such a system, he replied that the revenue was obtained from few >articles or sources; that his kind of taxation had been so long in use >that its evils had been reformed; the people had become accustomed to it >and its burdens were light. Whereas here, the whole subject was novel, >and the tax would necessarily be laid upon a much larger number of >articles." > > "But Secretary Chase had constantly before him one controlling fact, to >which the general public gave but little attention. The Treasury was the >weakest point in the national defences and the constant source of >impending peril. The national credit was as necessary to a restoration >of the Union as oxygen to life. If that became bankrupt, a divided union >and a confederacy founded upon negro slavery were as inevitable as >death." > >Page 343 & 344 > "The secretary invited suggestions from a number of gentlemen for the >structure of the Internal Revenue Statutes. These suggestions arranged >themselves in two classes. One class proceeded upon the assumption that >men were naturally dishonest, and that they would regrard a fraud upon >the United States as an evidence of shrewdness rather than a crime, as a >credit rather thatn a stigma. The other insisted that the nation was now >experiencing a grand and most creditable development of patriotism, >which led it to regard the payment of necessary taxes as a duty, and >which would no more tolerate frauds upon the Treasury than it would any >other form of treason." > > "The first of these classes consequently proposed an internal revenue >system which should enforce the collection of taxes by heavy fines, >penalties, and forfeitures, which should be divided with informers and >spies. As these informers would require instruction in their labors, in >order to become experts, they proposed a bureau of detectives in the >Treasury, presided over by a chief, with such a number of subordinates >as should be found necessary, all to be salaried officers of the United >States." > "The general plan of the second class proposed considerable rewards for >prompt returns and payments, in deductions from the amount of the tax. >Their principle reliance, however, was upon the honesty of a patriotic >people, who, if properly encouraged by the Treasury would constitute a >great army of unpaid agents for the collection of the taxes, besides >paying their own, since no man who bore his own share of the burdens of >war would permit his neighbor to escape from the same burdens by fraud >or dishonesty. This plan wholly dispensed with detectives and paid >informers." > "I took a somewhat active part in the discussion of the subject, and, >at the request of the secretary, prepared a written argument, in which >it was claimed that the employment of an army of detectives was >inconsistent with the dignity of the government, and would exert a >corrupting influence upon the people. I also stated that in my >experience as a lawyer I could not remember that I had ever met with a >professional detective who could be trusted; that the reason was >probably to be found in the fact that a man who used deception and >falsehood as the tools of his trade became incapable of distinquishing >them from truth, so that he would use either, as at the moment seemed >most expedient. Such a man's mind was not likely to be controlled by >conscience, nor were perfect candor and sincerity towards an employer to >be expected from one whose ordinary line of action in the pursuit of a >criminal must necessarily involve a constant exercise of the opposite >qualities. It was also stated that the people, knowing that such agents >were employed by the Treasury, would infer that honesty and integrity >were no longer appreciated, and would lose all interest in the honest >execution of the laws, concluding that, as they got no credit for fair >payment of their taxes, they might just as well evade them whenever they >could. The results would necessarily be a general demoralization of the >public service and a thorough corruption of the public mind." > "The advice of the class first mentioned finally prevailed. After long >hesitation the secretary decided upon the employment of detectives, and >the first internal revenue act of 1862 was framed upon the theory that >the taxpayers were the natural enemies of the government, who would >avail themselves of every opportunity to defraud it, and evade the >payment of their taxes. The laws for the collection duties upon imports >were amended so as to conform to the same theory. Heavy penalties were >imposed by the internal revenue and the tariff laws, which were to be >devided between the government and the informers. Statutes were enacted >which gave to irresponsible detectives powers of visitation and >inquisition into the business of the citizen which were intolerable >enough to have provoked a revolution if the country had not been already >involved in war. > "The Detective Bureau was established as one of the regular bureaus, >not under the control of the commissioner of internal revenue, or the >commissioner of the customs, as it should have been, if permitted to >exist, but as an annex to the office of the secretary. One L.C. Baker, >who had acquired some notoriety as a detective, was appointed its chief. >By some means, never clearly understood, his jurisdiction was extended >to the army, and he exercised his authority in all the departments and >throughout the United States." > >Page 346 >"How large his regiment ultimately grew is uncertain, but at one time he >asserted that it exceeded two thousand men. > With this force at his command, protected against interference from the >judicial authorities, Baker became a law unto himself. He instituted a >veritable Reign of Terror. He dealt with every accused person in the >same manner; with a reputable citizen as with a deserter or petty thief. >He did not require the formality of a written charge; it was quite >sufficient for any person to suggest to Baker that a citizen might be >doing something that was against the law. He was immediately arrested, >handcuffed, and brought to Baker's office at that time in the basement >of the Treasury. There he was subjected to a brow beating examination, >in which Baker was said to rival in impudence some heads of the criminal >bar. This examination was repeated as often as he chose. Men were kept >in his rooms for weeks, without warrant, affidavit,or other semblance of >authority. If the accused took any measure for his own protection, he >was hurried into the Old Capitol Prison, where he was beyond the reach >of the civil authorities. Baker's subordinates in other cities emulated >and often surpassed the example of their chief. Powers such as they >exercised were never similarly conferred by under any government >claiming to be enlightened." > > > >Hope you enjoyed. >Joe Hill > > > > ======================================================================== Paul Andrew, Mitchell, B.A., M.S. : Counselor at Law, federal witness email: [address in tool bar] : Eudora Pro 3.0.1 on Intel 586 CPU web site: http://www.supremelaw.com : library & law school registration ship to: c/o 2509 N. Campbell, #1776 : this is free speech, at its best Tucson, Arizona state : state zone, not the federal zone Postal Zone 85719/tdc : USPS delays first class w/o this ========================================================================
Return to Table of Contents for
Supreme Law School: E-mail