(e) Industrial Alcohol and Chemical Division.-The Internal Revenue Service now has an extensive analytical division, necessitated by the enactment of the National Prohibition Act and the Narcotic Act, in the Industrial Alcohol and Chemical Division, with branch laboratories in many cities.

(f) The McKinley Tariff Act was another step in the direction of taxation as a regulatory expedient, instead of for revenue, in the tax of $10 a pound levied on domestic opium for smoking purposes. The law also placed the manufacturers of smoking opium under the surveillance of the Commissioner of Internal Revenue. The duties of the Revenue Bureau were also extended in a new direction by imposing upon it administration of the sugar bounty, until August 28, 1894, when the law was repealed.34

(g) Chinese Laborers' Registration.-Collectors of Internal Revenue were required by the Acts of May 5, 1892,35 and November 3, 1893,36 to issue certificates of residence to Chinese laborers in the respective internal revenue districts.

38

(h) The Wilson Tariff Act of 189437 further enlarged the duties of the Internal Revenue Service. In particular, it reimposed the income tax. Appropriation for the administration of the income tax law having been provided,3 an Income Tax Division was organized. Its activities were ended by reason of the Supreme Court's decisions as to its unconstitutionality.39

(i) The tax on filled cheese was a tax for prohibitory purposes, that has accomplished its purpose, for under it only $630.31 has been collected.41

(j) The sale of forfeited opium was authorized in 1897.42

(k) The Dingley Tariff Act changed the tax on tobacco products and fermented spirits.43

(1) The Spanish-American War of 1898,44 calling for increased revenues, was a success as a revenue producer.45

(m) A second Deputy Commissioner was authorized in 1900.46

(n) The Revenue Act of 1898 included a tax on "mixed flour" as a regulatory measure, imposing a license tax on the manufacturer and a stamp tax on the product.

(o) All the new taxes of the Revenue Act of 1898, except that on mixed

33 Act Oct. 1, 1890 (26 Stat. 567).

34 28 Stat. 521.

35 27 Stat. 25 (Comp. St. §§ 4315-4323).

36 28 Stat. 7 (Comp. St. §§ 4320, 4324).

37 28 Stat. 509-570.

38 Act Jan. 25, 1895 (28 Stat. 637).

39 Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429, 15 S. Ct. 673, 39 L. Ed. 759; 158 U. S. 601, 15 S. Ct. 912, 39 L. Ed. 1108.

40 Act June 26, 1896 (29 Stat. 253).

41 Institute for Government Research, Service Monograph No. 25, 1923, p. 38.

42 Act March 3, 1897 (29 Stat. 695).

43 Act July 24, 1897 (30 Stat. 206 [Comp. St. § 6204]).

44 Act June 13, 1898 (30 Stat. 448).

45 Institute for Government Research, Service Monograph No. 25, p. 39.

46 Act April 17, 1900 (31 Stat. 103).

flour, were repealed, and some of the older taxes were reduced or abolished, in 1901 and 1902,47

(p) The Denatured Alcohol Act of 190618 was designed to promote the manufacture of industrial alcohol by providing for its denaturization.

(q) A Corporation Tax Division was organized, pursuant to the corporation tax providing for a tax of 1 per cent. on corporate incomes exceeding $5,000.49 (r) The tax on white phosphorus matches50 was a successful prohibitory

measure.

(s) Income Tax of 1913.-The Sixteenth Amendment to the Constitution became effective February 25, 1913. Congress enacted the income tax law.51 This act repealed the corporation tax of 1909. The Personal Income Tax Division was organized. The Corporation Income Tax Division continued to collect corporate returns.

(t) Under this act a third Deputy Commissioner was provided for.

(u) The appointment of deputy collectors and deputy marshals was provided for in 1913.52

(v) Narcotic Regulatory Legislation.-The importation of opium, except for medicinal use, was prohibited in 1909, in view of the fact that the importations of that drug had been four times the quantity required in science.53 Five years later there was further legislation, as a result of the International Opium Commission at Shanghai (1900) and convention at The Hague (1911), regulating importation of opium and prohibiting exportation of smoking opium absolutely, and permitting the exportation of opium and cocaine products only to such countries as conditioned the entry thereof upon approved regulations,54 repealing provisions of the McKinley Act in regard to domestic smoking opium, and providing for a large increase in the opium tax and bond required of manufactur55 and the Harrison Act,56 requiring registration of dealers and restricting their operations; the duty of enforcement being placed upon the Commissioner of Internal Revenue. Important amendments were made in 1919.56 As the improper use of narcotic drugs appeared to be increasing throughout the country, the Secretary of the Treasury appointed a special committee, of which Hon. Henry T. Rainey was chairman, which reported after a year's investigation.57 Amendments to aid in the enforcement of the Harrison Act were included in the Revenue Act of 1918.58

ers,

47 Acts of March 2, 1901 (31 Stat. 938), and of April 12, 1902 (32 Stat. 96).

48 Acts of June 7, 1906 (34 Stat. 217 [Comp. St. §§ 6132, 6136]), and of March 2, 1907 (34 Stat. 1250 [Comp. St. §§ 6133-6135]).

49 Act Aug. 5, 1909 (36 Stat. 112).

50 Act April 9, 1912 (37 Stat. 81 [Comp. St. §§ 6271-6287]).

51 Act Oct. 3, 1913 (38 Stat. 166).

52 Act Oct. 22, 1913 (38 Stat. 208).

53 Act Feb. 9, 1909 (35 Stat. 614 [Comp. St. §§ 8800, 8801]).

54 Acts Jan. 17, 1914 (38 Stat. 275, 277 [Comp. St. §§ 8800-8801f]).

55 Act Dec. 17, 1914 (38 Stat. 785 [Comp. St. §§ 6287g-6287q]). .

56 Act Feb. 24, 1919 (40 Stat. 1130 [Comp. St. Ann. Supp. 1919, § 6336%a et seq.]).

57 "Traffic in Narcotic Drugs," 1919, Gov. Printing Office.

58 Sections 1006, 1007, and 1008, of Act Feb. 24, 1919 (40 Stat. 1057 [Comp. St. Ann. Supp. 1919, §§ 6287g, 62871, 6287r]).

(w) Cotton Futures.-Contracts for future delivery of cotton, not complying with certain specified conditions, were taxed.59 The law was declared unconstitutional in a federal District Court.6 60 It was re-enacted.61

(x) World War Emergency Revenue. The inadequacy of revenue due to interruption of normal commerce by the World War necessitated enactment of an emergency revenue bill,62 similar to the Spanish-American War Revenue Act. Intoxicating beverages and tobaccos, special occupations, and various means of public amusement were the principal objectives, though there were also stamp taxes and taxes upon communications. This act was repealed by the Omnibus Revenue Act of 1916,63 except sections 3 and 4, imposing special taxes, which remained in force until January 1, 1917. The Omnibus Act included a surtax in the income tax provisions, and imposed estate, munition manufacturers', and capital stock taxes. This necessitated the creation of an Estate Tax Division. The estate tax was increased in 1917,64 and modified by the War Revenue Act of 1918.65 The Omnibus Act provided for publication of "statistics of income." The excess profits tax was a feature of the 1917 act to provide increased war revenues. The Revenue Act of 191865 was a codification of previously existing laws, with some changes. Another feature was an attempt to regulate child labor,66 resulting in the organization of the Child Labor Tax Division. This effort was declared unconstitutional,67 as had been68 the earlier act of 1916.69 The Revenue Act of 1918 provided for an Advisory Tax Board, which was organized and succeeded by the Committee on Appeals and Review. A Sales Tax Unit was also organized, under which, on December 1, 1919, were placed Tobacco and Miscellaneous Divisions, which were, on January 7, 1920, consolidated as one division, which, in turn, on April 12, 1921, was transferred from the Sales Tax Unit to the Miscellaneous Unit.

(y) Revenue Act of 1921.-The Revenue Act passed November 23, 1921, abolished excess profits, transportation, soft drinks, furs, toilet articles, patent medicines, and so-called luxury taxes, and provided for the Tax Simplification Board, which concluded its labors on December 31, 1924.

(z) Liquor Traffic Control.-Under the Food and Fuel Control Act,70 an

59 Cotton Futures Act Aug. 18, 1914 (38 Stat. 693).

60 Hubbard v. Lowe (D. C.) 226 F. 135.

61 Act Aug. 11, 1916 (39 Stat. 476 [Comp. St. §§ 6309a-6309v]).

62 Act Oct. 22, 1914 (38 Stat. 745 [Comp. St. § 6111 et seq.]).

63 Act Sept. 8, 1916 (39 Stat. 756 [Comp. St. § 6336a et seq.]).

64 Acts of March 3, 1917 (39 Stat. 1002 [Comp. St. 1918, § 63361⁄2b]), and of October 3, 1917 (40 Stat. 324 [Comp. St. 1918, § 63361⁄2bbb]).

65 Act Feb. 24, 1919 (40 Stat. 1057 [Comp. St. Ann. Supp. 1919, § 6336a et. seq.]).

66 Title 12 of Act Feb. 24, 1919 (40 Stat. 1138 [Comp. St. Ann. Supp. 1919, §§ 6336%a6336%h]).

67 Child Labor Tax Case, 259 U. S. 20, 42 S. Ct. 449, 66 L. Ed. 817.

68 Hammer v. Dagenhart, 247 U. S. 251, 38 S. Ct. 529, 62 L. Ed. 1101, 3 A. L. R. 649, Ann. Cas. 1918E, 724.

69 Act Sept. 1, 1916 (39 Stat. 675).

70 Act Aug. 10, 1917 (40 Stat. 282 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115%

et seq.]). See, also, Thorpe, Prohibition and Industrial Liquor, pt. II, for full description of war-time prohibition.

executive order of August 10, 1917, created the Food Administration, and an executive order of September 2, 1917, transferred the control of the manufacture of distilled spirits to the Bureau of Internal Revenue. A proclamation of December 8, 1917, provided that no food material should be used in the manufacture of malt liquor, except under internal revenue license, restricted the amount of food material to be used, and limited alcoholic content to 2.75 per cent. by weight. A proclamation of September 16, 1918,72 prohibited the use of food material in the manufacture of malt liquor after December 1, 1918. A proclamation of January 30, 1919,73 permitted the use of grain in the manufacture of nonintoxicating malt beverages, and a proclamation of March 4, 1919, extended permission of such use for other food materials. The Act of November 31, 1918,74 prohibited the use of food products in the manufacture of malt and vinous liquors after May 1, 1919, and the sale of liquor for beverage purposes, except for export, after June 30, 1919, until the termination of demobilization of the World War forces. The Eighteenth Amendment was adopted on January 16, 1919, and the Volstead Act was passed over the President's veto on October 28, 1919,75 the enforcement of which was placed upon the Bureau of Internal Revenue. The supplementary act to the National Prohibition Act was passed November 23, 1921.76

3. Activities

The activities of the Bureau of Internal Revenue appear under "Organization," post, and under the description of the following chapters dealing with the Accounts and Collections Unit, the Income Tax Unit, the Miscellaneous Tax Unit, and the Prohibition Unit.

4. Organization

I. Office of the Commissioner.

A. Office Proper.

(a) The Commissioner.

(b) Assistant to Commissioner.

B. Appointment Division.

(a) Proper.

(1) Head of Division.

(2) Assistant Head.

(3) Certification Clerk.

(b) Field Personnel Section.

(1) Collectors Force.

(2) Prohibition Force.

(3) Revenue Agents Force.

71 40 Stat. pt. 2, 1728 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115%).

72 40 Stat. pt. 2, 1848 (Comp. St. Ann. Supp. 1919, § 31157).

73 40 Stat. pt. 2, 1930.

74 40 Stat. 1045 (Comp. St. Ann. Supp. 1919, §§ 311511/12f-311511/12h).

75 41 Stat. 305 (Comp. St. Ann. Supp. 1923, § 101384 et seq.).

76 42 Stat. 222 (Comp. St. Ann. Supp. 1923, § 101382aaa et seq.).

(c) Time and Disbursement Section.
(1) Chief.

(2) Information and Disbursements.
(3) Time Clerks.

C. Communication Division.

(a) Central Mail Room.

(1) Head of Division.

(2) Assistant Head.
(3) Clerk.

(b) Registry Section.

(c) Unidentified Matter Section.

(d) Telegraph Office.

(e) Branch Mail Rooms.

D. Information Division.

(a) Head of Division.

(b) Assistant Head.

E. Intelligence Unit.