LETTER FROM THE SECRETARY OF THE TREASURY, TRANSMITTING The report of a commission appointed for the revision of the revenue system of the United States. TREASURY DEPARTMENT, January 29, 1866. SIR: Herewith I have the honor to present to you a report from Messrs. David A. Wells, Stephen Colwell, and S. S. Hayes, appointed a commission for the revision of the revenue system of the United States, in accordance with the provisions of the 19th section of the amendatory act of Congress, approved March 3, 1865. In presenting this report, it may be proper for me to remark that, with the single exception, perhaps, of the one in regard to the time at which the payment of the principal of the national debt should be commenced, the recommendations of the commission have my hearty approval. The very important work devolved upon the commission, as far as it has been prosecuted, has been most admirably performed. I earnestly ask that the report may receive the early and careful consideration of Congress. I am, very truly, your obedient servant, Hon. SCHUYLER Colfax, HUGH McCULLOCH, Secretary of the Treasury. Speaker of the House of Representatives. REPORT OF THE UNITED STATES REVENUE COMMISSION. TREASURY Department, Office of the U. S. Revenue Commission, January, 1866. SIR: The undersigned, members of the commission appointed by the Secretary of the Treasury in accordance with the provisions of section 19 of the amendatory act of March 3, 1865, " To provide internal revenue," &c., have the honor to submit the following report: The following are the provisions of the act, above referred to, constituting this commission: "That the Secretary of the Treasury is hereby authorized to appoint a commission, consisting of three persons, to inquire and report at the earliest practicable moment upon the subject of raising by taxation such revenue as may be necessary in order to supply the wants of the government, having regard to and including the sources from which such revenue should be drawn, and the best and most efficient mode of raising the same, and to report the form of a bill; and that such commission have power to inquire into the manner and eliciency of the present and past methods of collecting the internal revenue, and to take testimony in such manner and under such regulations as may be prescribed by the Secretary of the Treasury." The commission, thus authorized, became fully organized in June, 1865, by the appointment of the following members: David A. Wells, of New York; Stephen Colwell, of Pennsylvania; and Samuel Snowden Hayes, of Illinoiswith E. B. Elliott, of Massachusetts, as secretary; and has, since then, been constantly engaged in the discharge of the duties assigned to it. The creation of a commission charged with the investigation of important public questions with reference to future legislation, and, at the same time, consisting of other than members of the National Legislature, was undoubtedly a novelty in American experience. It finds, however, frequent precedents both in Great Britain and in France, and is believed to present some obvious advantages over the methods, ordinarily followed, of conducting such investigations. through congressional committees. In the present instance, a more unrestricted opportunity has been afforded to the commission for personally inquiring into and making themselves practically acquainted with the nature and character of some of the great sources of national revenue, and of observing the operation of the revenue laws in respect to the same, than could have been well enjoyed by a congressional committee, upon the members of which would have rested, at the same time, the onerous and responsible duties of legislation, the many and varied claims of constituents, and also, to a greater or less extent, the claims of important private interests. The commission, therefore, in view of these advantages, confidently anticipate that the first result of their labors, as now presented, may receive the unbiased judgment of the Congress to which they are to be submitted. Previous to the year 1861 the United States stood before the world in the anomalous position of a great nation with, substantially, no national debt. Since then the measures required for the maintenance of the national existence have entailed upon the nation a debt rivalling or exceeding in magnitude the accumulated deficits of any of the old states of Europe, and rendering necessary the collection of an annual revenue which, though at present somewhat indefinite, may be safely stated as unparalleled by the collections of any other nations, with the exception of France and Great Britain. The question of the hour, then, is, "In what manner shall this debt be treated, the payment of its interest be provided for immediately and recurringly, and the payment of its principal gradually, without impairing the strength and resources of the nation, or of arresting its progress and development?" To endeavor to answer this question in part, is the business with which the commission find themselves charged by the appointment of the Secretary of the Treasury and the authority of Congress. The same exigency which created the debt, has also rendered it expedient that the nation should thus far avail itself of every means in its power to raise, by direct and indirect taxation, the largest possible revenue in the least possible time, without much regard to acknowledged politico-economic laws or precedents; so that, at the present time, the sources of national revenue may be said to be commensurate and co-extensive with every department or sub-department of trade or industry in the country, as well as of every form of fixed or circulating capital. It accordingly became apparent to the commission, at the outset, that any attempt to embrace in their investigations, prior to the time of the presentation of a first report, the whole field of inquiry assigned to them, would not only be impracticable, but, also, that any effort with this object in view would, from its |