FEDERAL DIRECT LAND TAX (HENDERSON COUNTY): 1865

Jonathan Kennon Thompson Smith

(Pages 68-70)

  Due to the great cost of the military conflict known generally as the American Civil War in the first years of the 1860s decade, the government of the United States levied an "tax" upon the states, those loyal (northern) and those in the Confederacy called the insurrectionary states. This measure provided for a levy of some twenty million dollars based on population that was apportioned among those states. Congress passed legislation providing for taxes on income, land and basic commodities but it was chiefly the direct land tax which affected those persons living in the Confederacy and this only when and where federal authority was sufficiently established that such taxation could be effected. (TAXATION AND TAXES IN THE UNITED STATES UNDER THE INTERNAL REVENUE SYSTEM, 1791-1895, by Frederic C. Howe, New York, 1896, pages 82, 84, 85; cited hereafter as TAXATION AND TAXES. Also, the POLITICS AND DEVELOPMENT OF THE FEDERAL INCOME TAX, by John F. Witte, Wisconsin, 1985, pages 67, 68.)

  The national government levied such taxes through its right to do so provided in the Constitution. "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States." Furthermore, the right to tax persons living in the Confederacy was emphasized strongly with the belief that these states were technically a part of the United States but in a condition of insurrection or rebellion.

  On August 5, 1861 Congress passed "An Act to provide increased revenue from imports; to pay interest on the public debt and for other purposes. "A direct tax was levied on persons owning real estate in the United States; "the said direct tax levied by this act shall be assessed and laid on the value of all lands and lots of ground, with their improvements and dwelling-houses, which several articles subject to taxation shall be enumerated and valued, by the respective assessors, at the rate each of them is worth in money on the first day of April, eighteen hundred and sixty-two." (U.S. STATUTES AT LARGE, 36th, 37th Congresses, Boston, Mass., 1865, Chapter CXlX, volume 12, page 297)

  A bureaucracy of civilian officials was provided for the collection of these taxes; lands on which taxes failed to be paid could be sold by officials but a liberal allowance was made part of this law, allowing owners two years to redeem — pay their debt with interest imposed — such property. However, "beasts of the plow" and implements of a trade could not be seized or sold to satisfy unpaid taxes. (IBID., page 306)

  On June 7, 1862 Congress passed "An Act for the Collection of direct taxes in Insurrectionary Districts within the United States and for other purposes. "(IBID., pages 422-426)

  In some parts of Tennessee such as Memphis and Shelby County and other localities throughout the state well under federal control, the direct land tax was levied beginning in 1863. However, it was only in 1865, after the war had ended that these taxes could be collected in most counties, including HENDERSON COUNTY. The people of this county were taxed under this legislation for only one year, 1865, which taxes were due to be paid early in 1866. Numerous individuals were exempted from the levy due to the modest assessed values of their real estate, i.e. under $500. However, some individuals paid taxes on property valued at less than $500. Perhaps some persons more familiar with the law applied for exemption and others through ignorance or fear of coercion paid their small tax bills. Some individuals paid their entire "charged tax" while most others paid only a portion with an understanding that they would pay a penalty at ten and fifteen percent. There is no evidence of land in HENDERSON COUNTY having been confiscated for non-payment of taxes.

  By act of Congress, March 3, 1865, more specific procedures for levying and collecting the direct land tax in the insurrectionary states were adopted, including the sale of lands for unpaid taxes which latter legislation had only a theoretical effect upon the citizens of HENDERSON COUNTY because, as stated previously, there is no record of actual confiscation of land having been conducted in this county. (U.S. STATUTES AT LARGE, 38th Congress, Boston, 1866, Chapter LXXVII, volume 13, pges 501-504)

  By the close of the war, almost all of the loyal states and territories of the United States had met their specified apportionments but the taxes had been collected only partially in the southern states of Florida, South Carolina, Virginia, Tennessee, Louisiana, North Carolina and Arkansas. "Moderate though the taxes were, it was well-night impossible to collect them. Currency was scarce, the markets insecure and production precarious and almost at a standstill, owing to the scarcity of labor and machinery. At the close of the war the distress in the South was nearly universal; and the committee on reconstruction, in reporting the Fourteenth Amendment of the Constitution to Congress, recommended that any state, upon ratification of the same, should be allowed to assume its apportionment of the direct tax and be granted ten years in which to make payment of the same. Collection by distress had proceeded in many districts down to as late as 1866 when further proceedings were suspended by order of the President /Andrew Johnson/ in conformity with an Act of Congress. "(TAXATION AND TAXES, page 86)

  By legislation passed July 28, 1866 Congress suspended further collection of the direct land taxes until January 1, 1868. (U.S. STATUTES AT LARGE, Boston, Mass., Chapter 298, volume 14, page 331) In the summer of 1868 the Congress further suspended the collection of these taxes until January 1, 1869. (IBID., Boston, 1869, Chapter 69, volume 15, page 260) No attempt was subsequently made to finish collecting these taxes. By 1883 the apportioned taxes still unpaid by the northern states amounted to $455,228 and in the former Confederate states, $2,725,104. This neglect "operated as a penalty upon the patriotism of those who had paid the tax, while an irreparable injury had been done those whose lands had been distrained and sold under the levy. An attempt was made to remedy this injustice, in part, by an Act passed in /March 3/ 1883 for refunding the surplus receipts from the sales of lands for which purpose $190,000 was appropriated. But so long a time had elapsed and so unintelligible were the records, that it was well-nigh impossible to identify those dispossessed and only $64,000 was allowed on the claims presented." (TAXATION AND TAXES, pages 87-88)

  In time the national Supreme Court determined that the individual states could not be held responsible for such apportionments that had been passed by Congress in the 1860s but rather that individual citizens were constitutionally responsible for payment of such taxes. In 1888 Congress considered legislation which would have refunded to the individual states the monies that had been collected from the direct taxes levied upon their citizens. President Grover Cleveland, a Democrat, opposed this measure, suggesting that it would open up demand for the return of sums raised by the income tax and other internal taxes. (CONGRESSIONAL RECORD, 51st Congress, Second Session, Washington, D.C., 1891, volume 22, part 4, page 3215; cited hereafter as CONGRESSIONAL RECORD) The Senate would have approved the measure but fillibustering doomed it before the House of Representatives had an opportunity to have voted on it. (GROVER CLEVELAND, A STUDY IN COURAGE, by Allan Nevins, New York, 1966, page 393)

  By early 1891 the refunding of the direct land tax monies came before Congress again in the form of Senate Bill 172. There was heated debate over the merits of the proposed legislation, part of a broader controversy over tariffs, with numerous Democrats leading the opposition and the Republicans generally approving, the latter holding that it was a sensible solution to an unresolved, three-decades-long problem and that these monies could be paid from a surplus in the national treasury. Hilary Abner Herbert, Representative from Alabama, spoke for the Democratic partisan line when he stated in the House that "all these things indicate an unmistakable purpose on the part of gentlemen on the other side of this House /Republicans/ to bankrupt this Government; that is, to create a deficiency in the Treasury so that the Democratic party, when it comes to control this House . . . will be compelled to add to the burdens of the people in order to pay the debts heaped up by this Congress as it goes out. This is the legacy of the Fifty-first Congress to the Democratic party coming into this House /and the citizenry should/ answer the question whether the deliberate purpose of the Republicans in control of this Congress" was as many of the Democrats claimed. (IBID., page 3216)

  Finally, on March 2, 1891, after a bitter debate among members of Congress, pro and con, the "Act to credit and pay to the several States and Territories and the District of Columbia all moneys collected under the direct tax levied by the act of Congress approved August fifth, eighteen hundred and sixty-one" with several amendments tacked on was signed into law by President Benjamin Harrison. (U.S. STATUTES AT LARGE, 51st Congress, Washington, D.C., 1891, Chapter 496, pages 822-823) This legislation included the monies from the insurrectionary states as the Act of June 7, 1862 affecting them was viewed as an extension of the Act of August 1861. The measure had been passed 172 to 101 votes in the House, February 24 and overwhelmingly in the Senate, February 28, 1891. (CONGRESSIONAL RECORD, pages 7227, 5543)

  Governor John P. Buchanan of Tennessee reported to the General Assembly of the state late in August 1891 that of the $402,908.58 received from the federal government some $368,699.49 had already been distributed among claimants and he anticipated a surplus at the end of the six year period allowed for accepting applications for individual refunds. (MESSAGES OF THE GOVERNORS OF TENNESSEE, by Robert H. White, volume 7, Nashville, 1967, page 432)

  By the provisions of the General Assembly through this act, regarding the refunding of direct taxes paid by citizens of Tennessee, 1863-1866, under the Acts of Congress, August 1861, June 1862 and March 1865, citizens presented their tax receipts to the Tennessee Direct Tax Commission by which refunds were approved and paid as per the law. After these funds had been expended and the Commission dismissed, some time afterwards, the loose papers and receipts were destroyed and those records kept were ledgers showing the names of claimants, acreages owned, valuations of same in 1863-1866, amounts of tax paid, when paid in the 1860s and the refunding payments and when these were approved. The remaining ledgers are in a collection designed at Group 41 in the Manuscript Department of the Tennessee State Library and Archives.

  Individual researchers using these direct tax land figures for individuals in Henderson County might like to contrast specific ones assigned to individuals in the United States Census of 1860. The census enumerators depended upon the honesty and reliability of the individuals upon whom they called to collect pertinent data from them. It has been found that in many comparisons that the amounts of land owned and the valuations cited for them differed considerably, some higher, some lower, with the federal tax figures. By law, the federal tax agents depended upon the local county trustee's tax lists dating before January 1, 1861; likely the 1860 Henderson County trustee's listings were used and additional landowners were added to provide a more complete enumeration. There was less emphasis in that time for spelling of names precisely. For instance, in the government tax lists (1865) such renderings are revealed as Evins for Evans, Mainis for Maness, Muns for Munns, Moffit for Moffitt.

  The data abstracted and reported by the present writer were read and taken by him from the microfilm roll, CIVIL WAR DIRECT TAX ASSESSMENT TAX LISTS, TENNESSEE, MF 369, Microcopy T 227, Roll 3. Reported here are the names of the landowners, the acreage they claimed and the valuation of same; the amount of tax due and paid are not given, being of secondary genealogical interest.

Districts One through Five
Districts Six through Ten
Districts Eleven Through Fifteen
Districts Sixteen through Twenty and Supplement

Other works by Jonathan K. T. Smith can be found at the Madison County Records Repository at TNGenWeb.