In the consideration of the Internal Tax Bill Mr. Sumner took
an active part, as the _Congressional Globe_ attests.
When this bill came from the House of Representatives, it
contained a tax of one cent a pound on cotton. The Finance
Committee of the Senate reported against this tax. Mr. Sumner,
though never disposed to spare Slavery, was unwilling to
bear hard on an interest so important as cotton to the whole
country, especially to the South when redeemed, as well as to
the manufactures of the North, and therefore exerted himself
against the tax. May 27th, he spoke as follows.
MR. PRESIDENT,--I am in favor of the proposition of the Committee,
which seems to me sound in principle and policy.
There are reasons against taxing cotton,--first, from the character
of the product itself, and, secondly, from the effect of the tax on
manufactures.
If we look at the character of the product, we find, in the first
place, that it is agricultural,--peculiar, indeed, to one section of
the country, but as much an agricultural product as grain, hemp, and
flax, which are left untouched by this bill. There should be reason
for adopting the tax in one case and not in the other. No such reason
exists.
But cotton is not only an agricultural product, it is also a leading
export. Now I raise no constitutional question on the power to tax
exports, although it may not be entirely easy to reconcile such tax
with the language of the Constitution: “No tax or duty shall be laid
on articles exported from any State.” The object of this clause was
to prevent discrimination among States through the taxing power. But
not questioning the power in the present case, it seems to me that its
exercise is of doubtful policy, according to principles of political
economy. I do not think that it is the policy of civilized nations
to tax exports, which play an important part, first, in quickening
commerce, and, secondly, in furnishing the equivalent of imports.
Then there is difficulty arising from the condition of the country.
Until the Cotton States are restored to the Union, little or no revenue
can be expected from any such tax. But if their representatives were
once more here, can anybody suppose it possible to tax this great
staple of the South, while the great staples of the West--grain,
provisions, and wool--are free? It seems to me unadvisable to attempt,
in the absence of these representatives, what we would not attempt, if
they were present,--in other words, to do what is of doubtful equity,
simply because we have the votes. Our tax, at best, can be little more
than prospective. Is it not better to wait till it may be a reality?
Even if at another time the tax on cotton seemed politic, I doubt if
it can be so regarded for some time to come. Considering the peculiar
condition of things, there is small doubt that the country for the next
five years will have greater interest in encouraging the production of
cotton than in taxing it.
Sometimes it is said, that, if cotton is not taxed, the Cotton States
will escape taxation, which would be a practical injustice to other
parts of the country. But I am not satisfied that we cannot tax
their slaves. Besides, the $200,000,000 of cotton exported assures
the importation of $200,000,000 of foreign products, which, with
twenty-five per cent duty, gives a revenue of $50,000,000 annually.
But if cotton must be taxed, it should not be by a specific tax, but
by a tax _ad valorem_, and for obvious reason. Cotton is sold in the
market under seven different grades, varying materially in value.
These grades are classified as follows, beginning with the lowest or
least valuable, and ending with the highest or most valuable: (1.)
ordinary, (2.) good ordinary, (3.) low middling, (4.) middling, (5.)
good middling, (6.) middling fair, (7.) Sea Island. For ten years, from
1850 to 1860, the average price of ordinary cotton was six and five
eighths cents a pound, while middling fair, the highest grade except
Sea Island, averaged twelve cents a pound. A tax of one cent a pound
on ordinary cotton would be over fifteen per cent on its value, while
one cent a pound on middling fair cotton would be eight and one third
per cent, and the same tax on Sea Island cotton, commanding the highest
price of all, would be less than five per cent.
The tax on cotton, if any is imposed, ought not to exceed five per cent
_ad valorem_. In the natural course of events, without interruption of
war, the cotton exported would have amounted in value for a year to
$200,000,000. If to this we add the value of cotton used in the United
States, $35,000,000, we shall have the sum-total of $235,000,000. A tax
of five per cent _ad valorem_ on this would be $11,750,000.
The proposed tax of one cent a pound is much larger. During the year
ending the 30th of June, 1860, the value of the cotton exported was
$191,806,555, and the number of pounds exported was 1,767,686,338. A
tax of one cent a pound would be $17,676,863,--a very large sum, which
I should be glad to pour into our Treasury. But, assuming the value of
this cotton at ten and eight tenths cents a pound, the tax of one cent
a pound will be above nine and one fourth per cent,--nearly double what
the tax ought to be.
Consider now, if you please, the effect of this tax on cotton
manufactures. It appears that we manufacture annually about seven
hundred thousand bales of cotton, one half of which is of the three
lower grades, and is worked into what is called by manufacturers coarse
goods. Of these one pound of cotton will make about two and a half
yards, worth twenty cents. Now a tax of three per cent on this cloth
would be six mills. Add the tax of one cent a pound on cotton, and you
have a total of sixteen mills, making a tax of eight per cent on the
value of the cloth,--a higher tax than is imposed by the Tax Bill on
anything except dogs, whiskey, and tobacco.
The rest of the cotton manufactured in our country is worked into what
are called fine goods, of which one pound will make from four to eight
yards, valued at thirty to forty cents, or, on an average, thirty-five
cents. The tax of three per cent on these goods at thirty-five cents
would be ten and a half mills. Add the tax of one cent on the cotton,
which is ten mills, and you have the total of twenty and a half mills,
making a tax on this article of more than five and eight tenths per
cent.
Of the finest goods, a pound of cotton would make cloth worth
seventy-five cents. The tax upon this class would be four and one third
per cent.
Thus the cheap goods used by the poorer people will be taxed much
higher than the finer goods used by the rich. Are you ready to set up
this discrimination?
There is an important export trade of cotton manufactures, which must
not be forgotten. But these are entirely of the class known as coarse
goods. For instance, during the year ending June 30, 1860, cotton
goods exported amounted to $10,934,796. This commerce is conducted
under difficulties. Necessarily it encounters strong competition in
the foreign markets, and must have failed, but for the anomalous
opportunities it enjoyed in China and the East Indies, where these
goods were often sent as remittances instead of bills of exchange, it
being cheaper to pay for them in Boston even more than they will bring
at their destination than to pay the premium of exchange. But this
business, having such anomalous support, cannot bear additional burden.
It will be annihilated,--at least I am so assured by those who ought to
know.
The proposed tax upon coarse goods used in our country is found, on
calculation, equal to seven per cent on the capital invested in their
manufacture, and on exported goods it is equal to five per cent. If
cotton must be taxed, it ought not to be higher than five per cent,
and I have already shown that it ought to be _ad valorem_. On goods
exported there should be a drawback in favor of the manufacturer, not
only of the three per cent on the goods, but also of the five per cent
on the cotton. If the three per cent tax on all goods used in this
country were reduced to one and one half per cent _ad valorem_, this,
with the five per cent tax on the cotton, would be equal to three and
one sixth per cent _ad valorem_ on coarse goods, and to three and one
third per cent on fine goods. But I prefer the proposition of the
Committee, leaving the bill otherwise as it is.
In conclusion, I have to say that the cotton cloths manufactured in our
country are nearly as much a necessary as breadstuffs, entering into
the daily life of all, whether rich or poor, like daily bread.
In the debate which ensued, Mr. Davis, of Kentucky, alluded to
Mr. Sumner.
“I have been very strongly arrested by the debate to-day,
and I very much approve of its spirit and its tenor. I am
glad to see gentlemen quitting visionary subjects”--
MR. CLARK. Do not lug them in.
--“and coming to questions of legitimate political
economy; and especially I am glad that the Senators from
Massachusetts have shown a disposition to come to such
legitimate ground of legislation.”
In the same speech the Kentucky Senator indulged in prophecy.
“And if the slaves were liberated, if the theory of the
gentlemen from Massachusetts and other Senators were
carried into operation, I believe, as certainly as I
believe that I am now addressing the Senate of the United
States, that there would not be one fifth as much cotton
raised in any year in the next five years as has been
raised, according to the estimate of the Senator from Rhode
Island, for the past year. I do not believe that the man
lives, that the child lives, who will ever see, after the
universal emancipation of the slaves, under any state of
labor, or of care, or of application of labor, either the
labor of men or of machinery, that the production of cotton
in the United States will reach one half of five millions
of bags.”[61]
The amendment striking out the tax was adopted,--Yeas 20, Nays
16.
* * * * *
June 3d, at the next stage of the bill, the question was
presented again, when Mr. Sumner renewed his opposition to
the tax. In the course of his remarks the following passages
occurred.
MR. SUMNER. Then, Sir, as I had the honor of saying in the former
debate, suppose the vacant seats on the other side of the Chamber were
filled, suppose Senators here from the Cotton States, would you think
of imposing a tax on cotton without in the same bill imposing a tax on
the agricultural products of the North? You would not, I am sure; and,
Sir, in their absence, I will not do what I would not do, if I could,
were they here.
MR. GRIMES. Would you not abolish Slavery in the District of
Columbia?
MR. SUMNER. I would do that, were they here, and propose it to their
faces, and be too happy in the opportunity.
June 4th, the debate was continued, when Mr. Sumner spoke as
follows.
I am admonished by my friend, the Senator from Maine [Mr. FESSENDEN],
not to say anything. I shall say very little. I am in favor of
reducing the tax from one cent to half a cent, and I am also in favor
of striking out the whole tax. If there must be a tax, I wish the
smallest; and if I can have the attention of the Senator from Wisconsin
[Mr. HOWE], whose remarks were so candid, I should like to put him a
question. You heard him say that he would not impose any tax which he
knew would really be burdensome on the manufacturers. Other Senators
have repeated the same thing.
Now, Sir, on whom will he rely, in determining whether the tax will be
burdensome? I take it that the manufacturers are competent witnesses,
if not the best witnesses; and Senators from manufacturing States, when
they express themselves on the question, are to be heard. But it is
the clear opinion of the manufacturers that the proposed tax will be
burdensome, that it will almost annihilate a certain branch of trade
with China and the East Indies, and that it will be most oppressive
on the coarser fabrics at home. The tax on the latter will swell to
as much as seven per cent, which is a very large tax, larger than is
imposed on anything else in the bill, unless it be whiskey and dogs.
I put it to the Senator from Wisconsin, who so candidly said that he
would not impose a tax that he knew to be burdensome, whose testimony
will he accept? On what will he rely? Is it his own knowledge, his own
impressions, his own imagination, if you please? In answer to all these
I present the positive testimony of those really familiar with the
subject.
Here, then, is the question in a nutshell. In imposing this tax, you
have on one side the certainty of undue burden on a special interest;
and what have you on the other side? An uncertainty. Who here can say
that the proposed tax will be productive? Sir, we have not the cotton
in our hands. Through the machinations of wicked men, it has ceased to
be within our possession. I remember in my childhood being much amused
with a little poem entitled “Oxen in the Skies,” which pleasantly
described a contest between two senseless persons as to who should own
certain imagined oxen in the skies,--that is, a contest about something
not within reach. The cotton you propose to tax is not within reach. I
trust that it may soon be. Should we not act on existing facts, rather
than on hopes?
There is a larger view of the question. While you begin to tax the
agricultural products of the country, you open the door to that great
experiment. If the Senate is ready to march in that direction, I will
not say whether I am not ready to march also; but the Senate should
not commence the experiment without considering where it leads. In
this whole bill you do not tax a single agricultural product. Why,
therefore, make an exception of cotton? If you begin with cotton, where
will you stop? Must you not also tax hemp, flax, and corn? Why not? Not
that I am in favor of such taxation; but where in principle are you to
stop? Sir, I put these questions as a warning to Senators.
The original proposition from the House of Representatives was
amended by substituting “one half cent” a pound, instead of
“one cent,”--Yeas 30, Nays 10.