On the 5th day of August, 1861, a Federal statute was passed entitled “An act to provide increased revenue from imports, to pay interest on the public debt, and for other purposes.”

This law was passed at a time when immense sums of money were needed by the Government for the prosecution of a war for the Union, and the purpose of the law was to increase in almost every possible way the Federal revenues.  The first seven sections of the statute were devoted to advancing very largely the rates of duties on imports, and to supplement this the eighth section provided that a direct tax of $20,000,000 should be annually laid and that certain amounts therein specified should be apportioned to the respective States.  The remainder of the law, consisting of fifty sections, contained the most particular and detailed provisions for the collection of the tax through Federal machinery.

It was declared, among other things, that the tax should be assessed and laid on all lands and lots of ground, with their improvements and dwelling houses; that the annual amount of said taxes should be a lien upon all lands and real estate of the individuals assessed for the same, and that in default of payment the said taxes might be collected by distraint and sale of the goods, chattels, and effects of the delinquent persons.

This tax was laid in execution of the power conferred upon the General Government for that purpose by the Constitution.  It was an exercise of the right of the Government to tax its citizens.  It dealt with individuals, and the strong arm of Federal power was stretched out to exact from those who owed it support and allegiance their just share of the sum it had decreed should be raised by direct taxation for the general good.  The lien created by this tax was upon the land and real estate of the “individuals” assessed for the same, and for its collection the distraint and sale of personal property of the “persons delinquent” were permitted.

But while the direct relationship and responsibility between the individuals taxed and the Federal Government were thus created by the exercise of the highest attribute of sovereignty, it was provided in the statute that any State or Territory and the District of Columbia might lawfully “assume, assess, collect, and pay into the Treasury of the United States” its quota of said tax in its own way and manner and by and through its own officers, assessors, and collectors; and it was further provided that such States or Territories as should give notice of their intention to thus assume and pay or to assess, collect, and pay into the Treasury of the United States such direct tax, should be entitled, in lieu of the compensation, pay, per diem, and percentage in said act prescribed and allowed to assessors, assistant assessors, and collectors of the United States, to a deduction of 15 per cent of the quota of direct tax apportioned to such States or Territories and levied and collected through their officers.