Lecture 8 of 10 · The Rosetta Stone to the US Code A New History of Taxation
The Civil War
The Civil War by Charles Adams is a free audio lecture (1:23:11) at freecapitalists.org, part of the 10-lecture series The Rosetta Stone to the US Code A New History of Taxation.
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0:00How about what the Civil War was really all about? Yeah, that Supreme Court Justice that put John Fries on the gallows was named Samuel Chase. And he was the one they tried to impeach. And he was the one that our current Chief Justice wrote an article about And he said that was a wonderful thing that he did in impeaching. And I wrote and said it's a terrible shame they did in impeaching because it established a pattern of perpetuating incompetent and bad judges. And we should have a way of getting rid of them. And if you can't get rid of this guy, then you'll never get rid of any of them, you know.
0:47But oh, they do now, once in a while. If they get them on tax evasion, they usually can throw them out, I don't know if they do that. I think the judges, what would it take to have a mechanism to limit or have a recall provision for federal judges that now have a lifetime appointment? Well, that's the Constitution says that they are for life and you're stuck with them. In the constitution it says something along the lines of, as long as the...
1:48Short of that, you couldn't go at it generally, but I understand on a specific cause the Congress has the power to limit judicial review on a certain...
2:18That would be the only way to keep their hands out of them.
2:39Does this have a relationship to Salmon, Chase?
2:48That was a Civil War guy and he was in the cabinet. That's right, yeah, that one. I wonder if this is in relation to the case. I don't know. I wouldn't know. Yeah, but the other guy... They would both be high in cash. Well, Salmon Chase is interesting because he became Chief Justice. Right. And he really longed to write an opinion to go against the South that you couldn't secede. So he finally got his chance after the Civil War in the case of the Texas bonds or something, I think there were some bonds that Texas had issued and then the argument was made that the bonds weren't any good because, well the bonds were good because, whatever it was, you can't succeed but you could succeed and it all boiled down to a question of whether or not this was it and therefore the
4:15of the Civil War. Because that's the reason why they didn't prosecute for treason Jefferson Davis. Because they were afraid they'd lose. And first they thought they'd win and everybody was excited about it, and they had it, but it could be the trial of the century, and this was really going to be something. And then they got around to it, hiring some pretty good lawyers. Richard Dana, and they said, you know, we're going to lose this, and you're going to get a judicial opinion justified, and it can't be treason, and we're going to lose this, so you better find a way out of it.
5:02It's funny because the government first thought it off gung-ho, they were going to really nail this guy, and then the more they got into it, and the more good lawyers got a voice in it, They say, you've got to find some way out of this because we're going to lose it if we go to court. And of course, Jefferson Davis, he wouldn't ask for a pardon. He wanted to be tried and vindicated and let it go. And it was amazing that they finally chickened out, you know. And then, of course, they had this wonderful opinion by Chalman Chase, you know. But that's an interesting period of our history, isn't it? I wanted to go back to the constitutional problem. I think one of the most interesting expressions on the Constitution was by Madison.
5:49Now, many people think about Madison as the father of the Constitution. He was certainly a big gun behind it, and he pushed it. And he wrote in the Federalist No. 10, and he talked about taxes. Yet there is perhaps no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. He's talking about taxes. Every share of your number is a shilling saved in their own pockets.
6:34So this is the old story about the dominant party being able to put taxes on a minority party. He then said, and this is really good, It is vain to say that enlightened statesmen will be able to adjust all these conflicting interests and render them subservient to the public good. Enlightened statesmen will not always be at the helm. Boy, that says it all. And so the argument was, well, sure, you can have this potential injustice, and you're sure you can have a predominant party that's going to overtax the minority party, but we have wise leaders who will never let that happen. And you know, when you get down to the Supreme Court case on the Constitution, That's essentially, this is the case that was in 1960, and that's essentially what they said, they said, well the argument that this will become out of balance and unjust and you'll overburden, this was on the question of progressive rights, they said, well this won't happen because if it did happen then that would mean that democratic and republican government is at an end.
7:47I never, never satisfied me. What do you mean it's at an end? They do it all the time. Perhaps the best Civil War bit of tact information came from the House when they were debating some new taxes to pay for the war. And one of the representatives said, well, the tax was like a man that had a boil on the end of his nose. And he kept complaining about the boil on his nose. And finally one of his buddies said, well, where else would you rather have it? And he said, on some other guy's back. And that's kind of the story of tax making from the beginning of time, you know, put it on some other guy's back.
8:38But then Madison then was followed up by Hamilton. And so here you have the problem. You have a constitution in which a majority can overburden a minority and abuse them. And then Madison says that we've got to do something about it, in so many words. And the interesting answer to that was Hamilton about the danger of partiality and oppression in taxes in the constitution. And Hamilton said, but it is prevented because we have a uniformity clause, and the uniformity clause in effect says that you can't burden one group and not another group, it has to be everybody treated the same.
9:27Well Hamilton, you're a pretty bright guy, I'm surprised you were so dumb. But anyway, so much then for the uniformity clause. When we get to a Civil War period, we've had this, what do I call it, the war of the tariffs, and we start with an earlier one, but the real war was the Tariff of Abomination in 1828, and that particular tariff was the one that prompted South Carolina to say they were going to get out of the Union. Jackson said that he was going to collect the tax.
10:30Perhaps, I've heard concerning juries, if the law is unfair, they can vote whether the law is valid or not itself, as well as whether the facts in the case.
11:00Well, I threw it out there when South Carolina tried it, Jackson refused to accept it, and that more or less ended it.
11:30And it was Clay, I think, and Calhoun, and they did agree to start reducing the tariffs. So in a sense, South Carolina was winning, but they didn't win nullification. But nullification was a pretty strong argument during that period. If the government did something to violate the Constitution, a state had the right to nullify the law. And so South Carolina, in effect, nullified the tariff because they felt that it was not within the powers of the Constitution and the Constitution to make this kind of a tariff because a tariff was for revenue and this wasn't for revenue, this was basically a harmful tariff to the South and so they would vote it out, so anyway that was the nullification doctrine, it stayed on for a long time and then after the episode with Jackson, the South shifted the nullification to secession, the best idea is to say we'll just get out, you know, we'll just go our own way, and so we have the right to to get out if you want to and they threatened it off and on all through this period and and I think it was generally conceded that they probably could succeed most when the succession ordinances were adopted by the South in 1860 and 61 a number of the northern newspapers recognize the right of succession you know the Constitution that talks about the consent of the governed and if the southern states don't want to be in the confederation they
12:59They had the same right to get out, they had the same right to get in, it was their argument, we voted to go in, now we can vote to get out, and that would seem to be pretty true with leagues in Europe, it seemed to have a long respectable history. The problem was that we had this, we got into this awful war over it, and how the sequence This is interesting because in my book I've maintained, the South maintained, that they were really going to secede because of the taxes that were unfair, because the Constitution said taxes had to be uniform, and they were not uniform, that the South paid the vast majority of the taxes, and the North didn't pay anything, and worse than that, as Calhoun said, not only did we pay all the taxes, and after we paid them, all of the money was spent on the North.
13:56So we were really getting it from both ends, and that was Calhoun's argument, and that was Calhoun's argument. That argument shows up in the Charlton, Mercury, I guess it was, and it was throughout the South at the time the Civil War got started. So there was a strong feeling that they were getting had. The war, as you know how it went, the Southerners see the number of the forts in the South, and they were lined up to seize Fort Sumter and of course in the meantime you have this President Buchanan and you have this long period from the election in November to the swearing in of Lincoln in March and so during this period it was when the southern states were succeeding is when this period they were seizing some of the forts and then the question boiled down to Fort Sumter and one of the interesting One of the interesting things is that the general of the Army, Scott, he said, well, it would take 20,000 men to protect that fort, and we really don't need it. It has no military value.
15:10And so I have a chapter in my book called A Useless Fort, question mark. And I think if you look into some of the writings of this period, the forts were there to collect the revenue, coming into the country, they enforced the tariff, basically. And so it wasn't a useless fort, and that was the main purpose of the forts, and the writers say that, it was to collect and protect the revenue. Now, on the Sumter problem, there was so much effort on Lincoln to let it go, don't start a war over the fort, we don't need it anyway, and so that's where the arguments went, but then Lincoln got the idea, and he went to his cabinet, and what do you think, well the first time he said let it go, and then finally it came out that of all the terrible consequences The New York Times, for example, said, oh, it's no big deal, we can get along without them, then after they got thinking about it, The New York Times came around and said, hey, we've got to stop these guys, because they're going to ruin the country, the wars and the docks will be empty, our factories will shut down, they play this horrible story of what would happen if the South seceded, and that is when the momentum came up to stop these guys.
16:41Before we get ruined, in order to protect ourselves, we're going to have to have custom houses from Norfolk, Virginia, all the way to New Mexico, because the goods can come in so much cheaper in the South. And then the rumor came out that the South had made a deal with Britain, and they were going to have a free trade zone, and boy, then the people in Pittsburgh and the Pittsburgh Steel interests, they were up in arms. The economics of secession would have been disastrous to the North, or so the North thought. And I think that's one of the reasons why Lincoln finally, when he was approached by a fellow named Baldwin, and from Virginia, who came up, because Virginia was debating whether or not they secede.
17:29And Lincoln's famous question was, well, what will become of my tariff? And what will I do for my revenue? So we have all this setting that the whole economics is behind the Civil War and I think economics seems to me a pretty good obvious thing, that money makes the wheel go round and yet today we keep hearing the story and we keep told and we keep teaching our kids. One of the boys I was talking to said he went to private school, and they told him the Civil War was economics, and then when he went to public school, they told him, remember, he told me this, the Civil War was over slavery when he went to public school. It's an interesting switch from public school to private school, whether you're a teacher is a different point of view.
18:18Maybe the problem we have is that, as I've said some time, maybe we shouldn't write our own history, you know, maybe we as a, maybe humanity aren't capable of being honest and fair about themselves, you know, maybe we just don't like the right history the right way it is. I started my book on the Civil War with a quotation from an ancient historian, Polybius, and Polybius was considered the greatest historian of antiquity, and he wrote a wonderful history of the Romans. But he talked about writing history, and I do have it in here. It's quite an interesting state when you consider what was made such a long time ago. Dr. Adams, did you, to reiterate, did you say yesterday that regardless of whether the North had won or the South had won, slavery was on its way out and it would have disappeared anyway, just a matter of timing?
19:30I guess maybe you know that, they really wanted the South to succeed, but at the same time they were very much anti-slave and so it looked like they had a dilemma here, if you favor the Confederacy and the Confederacy will perpetuate slavery and of course they even talked about reopening the slave trade and extending it all the way down to Cape Horn, but the argument was this that right now slavery is on its way out throughout the world. All of the nations are getting rid of it and have gotten rid of it. The Netherlands did, of course the British did a long time ago, the French did, even the Danes had it, they got rid of it, the Russians freed 30 million serfs. It was just a general feeling that slavery had no of Place and Western Civilization and that it had to go.
20:28But as long as it was in the Union and as long as it was protected by the Constitution, if it had the power of the Union and the Union was a very powerful force throughout the world, it would stay. In other words, slavery was protected in the Union and we probably wouldn't get rid of it. If the South seceded, and they were on their own, then the world would gang up on them and force them to abolish slavery, and there was economic sanctions, pressure on them, maybe intellectual pressure, but that's the way they could support the Confederacy and secession and at the same time live with slavery, which the world really hated at that time.
21:17So that's the way the argument went. And so you frequently read in the writings, in the European writings, that with secession slavery would be ended sooner than if the South stayed in the, if the North, well, Lincoln was well aware that he was talking about keeping it around for a long, long time, if it had been abolished. But in his early days he didn't think he could interfere with it and maybe it would On the slave issue, one of the dumbest things the Southerners ever did was to make it a major point for secession.
22:02Now, Calhoun said that the reason that it became an issue is because he couldn't get enough interest in the tariff for secession, and for the southern states to want to move out on their own, so he resorted to slavery. So then you read these various ordinances of secession, which you're probably not familiar with, and they do talk about slavery there. You know, slavery's endangered and we're going to secede from the Union, but it wasn't endangered. That was the thing that was such a strange thing, is that Lincoln made it clear. As one British writer said that Lincoln was prepared to give slavery more protection than it had ever before enjoyed. So, how can you say it was slavery?
22:47But they do say it because these idiots, excuse my expression, these leaders of the South behind the Cessna ordinance made it such a big point. It was too bad, because I think if they had not done that, I think they would have had European strong support, recognition, which is what they wanted most of all. They wanted recognition from Europe, and I think they would have got the support, because Europeans looked upon the United States as a dangerous country. They used some pretty harsh language. We were a dangerous bunch over here and it better off to break us up and so we wouldn't have so much potential power if we stole half of Mexico. The Mexicans are getting it back now.
23:33One of the recent leaders in Texas of the Mexican group, he says, we're going to take over this place because we're having the babies. And there's some truth in that, believe it or not. My son married a Mexican girl and she's 111 children and her mother was 114. So, you know, you add those up, and they'll figure each one there has a dozen kids, so pretty soon they're going to take over. And literally, they have taken over. You know, the population of the Latins is a large percentage of the nation, so maybe they will take over. Okay, I'm going to try to get up here a little bit into the...
24:19You were looking for a quote when I interrupted you on something. Which one? Oh. In your book. You were looking for a quote in that book when I interrupted you. You did. I shouldn't have done that. Well, one of the interesting quotes that I kind of like Is Lincoln on free trade or on tariff? Let's see if I got the right, I got the damn many books, I should have only written one. You'd be surprised, I'd say, now what book is that yet? But here's what, you know, Lincoln said this on low tariffs. He said, must result in the increase in both useless labor and idleness and so in proportion must reduce want and ruin among our people.
25:12He's talking about a tariff, a low tariff. Isn't that many? That's what he said. Well, let me see what else I could have been looking up. I looked at Madison. I told you that. I told you about Hamilton when he said, well, the reason we will prevent the majority from over-packaging the minority is because we have a clause in the Constitution that says taxes have to be uniformed. And that's a nice idea, but it hasn't worked. And that particular problem goes back to the Constitutional Convention when they had debates, you know, and you can read them. And when they submitted the Constitution to the Committee on Style, they had the term uniform and equal.
25:59And for some strange reason, the Committee on Style, at the Constitutional Convention, deleted uniform and equal. And as far as we know, Madison wrote in uniform, in his own handwriting on the draft, and that's where it came from. But they were pretty clear that it had to be the same for everybody. That's not why, what was that? That was only applied to, on a federal level, to allow the states to do it. Although generally, as Thomas Cooley, one of the great scholars, said that a tax that is not uniform and equal is not a tax is a form of confiscation, a form of stealing if it's not uniform. Because the person who is treated unequally is being treated unfairly and you're taxing him without his consent. These are the arguments that go along.
26:52Well, I wish I could know what I was good looking for. It was the Quote on Polybius. Yep, let me see.
27:20Yeah, Polybius wrote, this is in my preface, he said, a good person, even a political person, ought to love his friends, his country, his party, and should share their loyalties and hatreds. But a person who takes up the role of historian must discard all considerations of this kind. The historian may have to speak well of his or her enemies and even award them the highest praise should their actions demand this. For just as a living creature is deprived of its eyesight, if deprived of its eyesight, is rendered completely helpless.
28:05So if history is deprived of the truth, we are left with nothing but an idle, unprofitable tale. That was, I believe you just wrote that, and I'm glad you asked me to look like I got sidetracked on it. Because, and I was talking about the fact that people just don't seem to be able to be honest about history, particularly if they're partisans. We have a magazine called The Southern Partisan, and I've written for them. for them. But the magazine says they're partisan, so you're not surprised that they have a strong view on the Southern cause and on the history of civil war because that's the name. They're not holding themselves out as being really an objective magazine. They have a rough time of it, incidentally. It's kind of interesting. I've known the editor and I've been the publisher for many years but, oh well, we, Macmillan Magazine in Britain wrote a question and sent one of their correspondents over to America to answer the question, what
29:16on earth is the North fighting for? What on earth are they fighting for? What's the war about? The British had a lot of trouble trying to figure this out. And he went over to America, and he got these answers, and he wrote back. He said, well, we are not fighting for emancipation. We are not fighting for the blacks. We are fighting for the whites, for plain economic interests. That kind of said it all. So then he writes back to his editors, and he says, hey, this is what they're fighting for. When the North Americans saw this, some of the veterans, the North American Review, which was a public out of Boston, and said, well, the South seceded on the pretext of slavery.
30:08But the mask has been thrown off, and we know now that what they want is economic independence, and they want to see New York, Boston, and Philadelphia shown of their economic power and they see the economics shift to Charlton and New Orleans and Savannah and this would become the great trading centers of the world so there was really a bitter contest here One British writer said that this is simply a contest for empire or independence, the south wants independence and the northerners want to retain their empire.
31:02And one of the fellows who caught on to that was General Scott, Winfield Scott, and he talked to this writer and he said, Isn't the British Empire worth fighting for? He asked the question, meaning of course that the American Empire was worth fighting for. So we have great economic struggles for our story of our Civil War and I think we have to kind of come to the idea that that's what it was really all about. The slavery issue got mixed up in it and I think it was the worst thing that happened to the South to get it mixed up in it. They should have focused on the right of secession and the funny thing is, there's a new book came out, a new British writer, This is a rather recent book, and he said what most Americans don't want to realize is that Lincoln did not believe in the self-determination of peoples.
32:00You know, that's in the United Nations Charter, it was in the Atlantic Charter that Franklin Roosevelt signed a self-determination of peoples. He said that when you get down, he didn't believe in that. And Americans should have to acknowledge and admit that, because now that's become an important We also had an interesting thing when the Chinese Premier was here a couple of years ago and they were kind of concerned about Taiwan and starting a war over Taiwan and he said, well look at Lincoln, he says we can go to war over Taiwan because Lincoln is our authority to do so. There's not much you can say, even Gorbachev said that when the Soviet Union was breaking up.
32:54He said the same thing. Again, Lincoln went to war to preserve his Union. Why can't I go to war to preserve the Soviet Union? So it has become a bit of a thorn in our side that that's what he had. Now, secession has historically been a dangerous thing, and I have a chapter in my book called The Dangerous Road to Secession. And in it we can go back to the ancient Greeks and to the city-states that tried to withdraw from the Athenian League, and we found out that they got crushed. The Romans had the same problem, and it was always over taxes. The Boudicca story was a tax revolt, and she wanted to get up from under the taxes. The British wanted to secede from the Roman Empire, and it became up into the modern world.
33:40The poor Scots, the Scots tried for 500 years to secede from the English, and they finally were put down just before American independence in one of the final revolts, and that was sort of the end of it. What I liked about that revolt that was so interesting is that the British went in and And with the same fury and violence that Sherman did in going into the South, they went up into Scotland and they literally obliterated the Scots and the Scots never again came back. But one of the things that they did, and I think maybe nobody ever noticed this, we have the Second Amendment of the Constitution, the right to bear arms, and they took away They took away from the Scots the right to bear arms, because for four or five hundred years they'd been bearing arms and battling the damn English, you know, and they hated them with a passion, they wanted to get out of there.
34:42So they took away the right of the Scots to bear arms. And this was in around 1760. It was only about fifteen years before the American Revolution, that period. I think that the Second Amendment in the American Constitution has its roots in what the British did to the Scots by taking away the right to bear arms. And now we argue about what it means, but I think it really meant that just like the Americans didn't want to be in the problem that the Scots got themselves into. They wanted to be able to bear arms. And this was only 15 years, that's not very far, when you get my age, 15 years is like yesterday, your age might look like it's long.
35:27So they took away the right of the Scots to bear arms. There was also the Poles, they had revolt after revolt. In fact, one of the, I think it's a rather cute little illustration in this book on Civil War that I wrote, it shows Abraham Lincoln and the Tsar of Russia. And this was at the time that the Poles had risen up for the fourth time in the last twenty years, and it was for the last time, and the Russians really crushed them. Imperial son of Nicholas the Great, we err in the same fix I calculate.
36:22You with his poles, with southern rebels I, who spurn my rule and my revenge defy. Alexander the Tsar says, Vengeance is mine, old man, see where it falls. Behold, yon harsh-laid waste and ruined walls. You gibbets where the struggling patriot hangs, while my brave myrmidons enjoy his pangs.
37:01Attempts to succeed have always been pretty tough, and I think that the Southerners, they obviously bit off more than they can chew. In fact, I thought the two most interesting things about the Civil War period was the Southerners' belief that they could succeed with secession. You know, they just didn't have a prayer. And many of the foreign writers saw that. They said, My God, they don't have any armor. Hell, they don't have enough industry to make a teapot. No, literally. How in the world in a modern war can they create the armaments necessary, you know, to go to war against this major power, which was the North United States, which had everything.
37:52The other side of the Civil War is the Northern belief that they could destroy Southern culture, and they really talked about it. They were going to go in there and they were going to do this and do that. They were going to take over the South and they sent in their armies and they had the generals run stuff. And that went along pretty good until there was a presidential election that ended up kind of in doubt with Rutherford B. Hayes and Tilden. Maybe Tilden kind of won. Well, the Republicans, the Southerners got in touch with the Republicans and says, Okay, we'll vote in the presidential, what was it, Powwow?
38:48The Electoral College. Yeah, the Electoral College. We'll vote in the Electoral College for your man, Rutherford, if you will, pack up your armies and leave. which they did, and when they left, of course, the blacks who thought they were going to be top dogs down there and even said so, suddenly realized they were on the outs, and the southern whites came back and really took over things, and that was kind of sad because the blacks were sure misled, and even today you have the bitterness down here and the problem down I don't understand that the U.S. Constitution provides a means for eliminating the So why didn't we go through the legitimate steps to secede from the Union instead of fighting?
40:26in Britain and France and Germany and Italy, so they were so gung-ho to go to war, like when Lincoln called for 75,000 men and he allocated to each of the states how many regiments they were to give, and of course the border states said go stick it, you know, they weren't going to do it at all. I mean, Arkansas and those states, they were not sending any men, you're gonna use that to invade our countrymen. But in the North, boy, they just were so oversubscribed, and there were, you know, you see pictures or etchings of the troops going down Fifth Avenue, New York and Broadway, and boy, they're just gonna, they're just gonna go get those guys, you know.
41:15It was a pretty ugly time, and in that sense, the North wanted war, and they wanted to crush the South, and they wanted to destroy them. Even some of the abolitionists who were dangerous, you talk about terrorists, today you read what the abolitionists in the North wanted to do. They wanted to exterminate the South, kill every man, woman and child, lay all the cities to ashes, and then repopulate the place. Now, boy, that's not terrorism, nothing is. And these were ministers in the North, these were the Northern abolitionist society, and that's why the British abolitionist society wanted no part of them, thought there was a lunatics.
42:06And they based their legitimacy on the emancipation of the black people? Pardon? They based their legitimacy of that war on the emancipation of the black as a pretext? Yeah, as a pretext, yeah. In fact, the main thing Lincoln wanted to do, along with the abolitionists, they kind of went together, they wanted to gather all the blacks together and persuade as many free blacks as they could to go back to Africa where they came from, and that was a pretty crackpot idea, because there's only three and a half million of them. I mean, even today we couldn't have done that. So that's a sad time in history. One of the things that also, I guess one of the things about this period was the total destruction of civil rights and civil liberties throughout the Union.
43:02The Columbia Law Review said that 38,000 people were locked up and imprisoned by Lincoln, the newspapers were shut down, their editors had disappeared too, and this turned out to be a problem to shut down the newspapers, and so apparently the War Department in the North got the idea, well we don't need to shut down the newspapers, it makes people unhappy, I asked the editor to throw him in jail, and then the newspaper would still keep coming. Boy, it was just a bad time in terms of that. The one thing I focused on in some of my research, which was of interest, I thought, was the story involving Chief Justice Roger Bittani.
43:56And Roger Bittani was the Chief Justice of the United States, and there was a guy named Merriman who was thought to be a bit of a rebel down there in Maryland and so they arrested him and threw him into the federal fort down there in the harbor in Maryland and he was able to get his lawyer to file a petition for habeas corpus to challenging the right to incarcerate him. Now, people know what habeas corpus is. It's one of your most basic rights. And that's the thing that Guantanamo Bay is about, a problem. Here you've got all these guys locked up, and they have no right to see a lawyer, no right to habeas corpus. And yet, it's one of the most fundamental principles of liberty, because you go to other countries where you don't have this, and they lock people up and throw the key away.
44:49But in America, under the Constitution, you can't do that. And the way the Constitution reads is that Congress has the right to suspend the right of habeas corpus. It's in the powers of Congress. But Lincoln went ahead and did it on his own. He didn't even do that. And they went and arrested this guy named Merriman and threw him in the can. And his lawyer gets out a writ of habeas corpus, takes the writ into the Chief Justice of the United States, The General orders to bring in the person and justify why you can hold him against his will.
45:35That's what habeas corpus is, probably the most important liberty that you folks enjoy. Well, what happened is that he went out to serve the rent, and they wouldn't let him in. And there was an order for a hearing, and of course, the General sends one of his aide-de-camp, he's got his sash, and he's got his big sword, and he goes wandering into the courtroom, and he says, President Lincoln says, I don't have to do this. The Chief Justice then wrote out the opinion, ex parte merriman, in which he explained that you can't do that, President. You have to bring this man in and you must bring this man in. And so at that particular stage he sent the Federal Marshal down again to serve and once again he was barred entrance by the soldiers who would let him in.
46:40At this age, what Connie should have done, what do you do? Let's suppose it was this case, suppose it was me, and suppose they had barred, the Federal Marshal came to get me and hold me before the court so they could show just cause for holding me. What would the judge do? His remedy is to swear out a posse. How many men it takes, it doesn't matter, to come in and seize me, or take me, and the guy who's holding me, and haul him in the court, and find him for contempt for not bringing him in. So Taney's remedy would have been to have brought in a posse, maybe take a thousand men and brought in a posse.
47:27Instead of that, he writes out this opinion, telling the President of the United States that he can't do this. And it's a beautiful opinion, considered one of the great opinions of the Supreme Court. It was totally ignored, and Taney then said that he was afraid that before nightfall he'd be arrested. for doing this. And he almost was. And while it doesn't show up in any of the government stuff or in any Lincoln's riff, in the private papers of the Federal Marshal, he tells a story that Lincoln signed a warrant to arrest the Chief Justice of the United States, gave it to him and said, use your own discretion unless you hear us.
48:19Now that disappeared from history and it turned out that the Lincolnites, I like to call them the Lincoln lovers, said, well it's a phony deal, it never happened. Lincoln would never have done anything like that. Arrest the Chief Justice of the United States? You've got to be kidding. Well, the Federal Marshal wrote it out in his private papers that this is what happened, and then in the research that I have fortunate enough to do, I found confirmation of it in two sources, one by Justice Benjamin R. Curtis, and Benjamin R. Curtis was a remarkable man, he was a Justice of the Supreme Court, he wrote The Descending Opinion in Dred Scott, which Lincoln carried around in his pocket when he was having the debates with Stephen Douglas, and he got in such a ruckus with the Chief Justice over the Dred Scott case that he resigned.
49:23And so he somewhat disappears from history except he was probably the most important lawyer in America at the time. He represented the President of the United States in the trial of impeachment for the The Senate, Johnson, and he wrote a little pamphlet called Executive Power in which he attacked the Republican administration for what they were doing, not only in taking away civil liberties and rights and stuff like that, and he didn't publish it, he centered of Money, the Federal Reserve, the Federal Reserve, the Federal Reserve, the Federal Reserve,
50:34by R. Curtis. He believed in the cause of the North. He wasn't a Southerner. He believed in the cause of the North, but he didn't believe in the abuse of power that the executive branch of government was doing. He even challenged the Emancipation Proclamation. He didn't think Lincoln had the right to do that. He didn't think that that was within his presidential He gave them powers to take away property, because slavery was property, and you can't take away without just compensation. And so, what are you guys doing this for? But they didn't pick him up in the middle of the night, like you thought he was. But his pamphlet on executive power I think became the basis for the case of X-Party Milligan.
51:23Milligan was decided in 1866, but what happened, Milligan was up in Ohio and he was kind of a pro-Confederate. So they tried to indict him in a civil case, in a civil court for treason and disloyalty, and a grand jury wouldn't do it. So they then went to the military court, and that was no problem, you know, so they held him in the military court and charged him and convicted him and sent him to be hanged. to be hanged, you know, nice quick swift justice in Milligan, but at that time the Supreme Court jumped in in 1866 and wrote an opinion saying you can't do that and probably it's the basis for what we're doing now in Guantanamo was the Milligan case, probably the judicial basis for it.
52:15It was a wonderful decision, and they said that as long as civilian courts are open, you cannot use military courts. Now what that meant in the times is that the trial and execution of the so-called conspirators of Lincoln was illegal. Mary Surratt was tried, convicted, and hung. When they were hauling her out the hangar, the other men who were the conspirators said, She's innocent. She had nothing to do with it.
53:01Her only problem was she had a boarding house where John Booth-Luke was, and so therefore Guilt by Association and therefore, but she was tried by a military court after the war when the civilian courts were open. She should have been indicted by a grand jury and tried by the jury of people, like she should have been. But they just railroaded her through and then they hung her. And of course, her lawyer at the time said, well, they wouldn't have hung her on any evidence. They were just determined to hang somebody for the assassination of Lincoln. But it's a marvelous example of the importance of being tried by civilian courts, be indicted by a grand jury, because here's what happens when military courts handle these things.
53:53And I think what they're going to do out in Guantanamo, they're going to maybe try these guys by a military court, I don't know. It's going to be worth watching because you have these fundamental principles of liberty in the Constitution that are being tossed out the window. Now I wrote an article, it was a bit of a joke, to one of the guys who's yelling that, you know, for these guys to have their civil liberties, and I said, well, as far as they're terrorists go, if they're terrorists, I said, it's very simple, give them a fair trial and then hang them. I said, what's the problem? He didn't answer me. Oh well, that's one of the fun things about being a writer, I was originally planning on being a teacher at the college and university level and one of the things that I was told by somebody who talked me out of it is that when you're in a university you kind of have to toe the party line, you know, the dean and the president and the school, he says you can't really write what you really want to write
54:59Based on that and a few other things, I thought maybe that was a good idea, and this particular advisor of mine, a man in the family that we knew, a lawyer, he said, well why don't you make it a hobby, your writing, and then you can say anything you want to say, and of course I have all these books and I've said anything I want to say, in fact one guy I used to work for died and he got a lot of trouble with the service and his wife wrote me and she said, you sure have a lot A lot of courage, talking about my tax books, and I've never been too much afraid of the IRS, but I do know that they can be pretty difficult at times, and that's kind of an understatement, just in some of the personal experiences I've had, one of them that was kind of interesting, I had a client who owed the IRS some money, and he was being, you know, the collecting division was trying to run him down, and for some reason they thought I must have had some of his money hidden away, which I hadn't.
56:11As a matter of fact, he owed me money if you want to get down to him. I get this call from this IRS agent, saying that he wanted to talk to me about one of my clients. I said, well, I don't talk about my clients, lawyers don't do that. Well, we won't talk about clients. He said, you'll be in your office tomorrow morning at 8.30. I normally didn't get in until 9, so 8.30 I'm there, doesn't show up, no call comes in. I told my secretary, I had things to do, I said, if that treasury agent calls, you tell them I don't talk to them about my client's affairs anyway. So apparently, she told him that, and he said, well, Mr. Adams wants to play rough.
56:58So they went out and they seized my client's trust account at the bank. And the bank calls me and says, they seized my trust account. I was livid, understanding of the world, and so I knew the fellow who signed the order to seize the trust account, and I'd known he would be the supervisor of that particular office, and so I called him up and I gave him, I used language I wouldn't even use here, it was just all men's. The next thing I knew, they released it. They released the account. And apparently he told the agent, he said, you know, you might get a little trouble with this guy. Well, I was still living.
57:43The rest of the story is, I wrote to a congressman, who happened to be our former law partner, and I told him about it. And he wrote me back, and he said, well, I tried to talk to the district director, his name was Schmidt, down in Los Angeles, and he says, that's all I can do. And I said, well, they had no business doing this. So then, not letting go, because when you get them, you don't want to let them go. I had them by the, you know. Because they were wrong. I mean, they were so wrong. So I then packed up all my information, sent it to the Board of Governors at the California State Bar. And I says, this is what's happened. Well, they then ordered or asked the director of the IRS to come in and explain things.
58:35And they were in San Francisco, and he was in L.A., so he went up there with his hat in his hand. And he said, well, we're sorry, and we won't do it anymore. Because apparently they'd done it to others. I wasn't the only one. And so, fine, so then they get a letter from the state bar telling me what had happened and they weren't going to do it anymore. Well, the story's not over. About three weeks later, I get a call from the IRS, they're going to audit me. Me personally, yeah. I'm going to be personally audited. Have all my records ready and find a CPA and be there on such and such a day. Never showed up.
59:21A year later, they call me, they're going to audit me. Okay, fine, get everything ready. They never showed up. Finally, it got to the point where the Statute of Limitations was going to run on me. So, I know what they're going to do. I guess a tax story. Yeah, okay. So, anyway, they then said they were going to issue a jeopardy assessment, seize everything I had, and I says, do it. And I never heard from them again. But you see, they were so mad because the district director had to go eat crow, and now they're going to get that upstart lawyer out there. That's one of the great experiences of my life. I've got a lot of interesting stories that came in my practice, but I think that was one of the most interesting.
1:00:10It shows you that they were wrong, and I could have done nothing once they released the levy, which they did after I called up the supervisor and raised hell. and Race to Hell. But I felt that they had gone too far, and I said, don't let them get off the hook. And so I pursued it and pursued it. I remember the letter I got from the congressman, who was a former partner, and he said, he said, Charles, I did everything I could. He says, but you know, these people, you can't, we can't, even we in the congress can't move them because they're sort of beyond, it's like Representative Hanson, who was I'm sorry to take you back to the beginning of the story here, but exactly who was the trustee and who was the beneficiary of his trust account?
1:01:17Well, you cannot commingle your client's monies with your monies, and lawyers do it and get in trouble all the time. So their assumption was that I had this client's money in my trust account, hiding it. You see, as I told you, he owed me money, hell with him and his wife. and shutting down your whole practice, really, if you couldn't transact your clients' money.
1:02:07What year was that approximately? That would have been, you want to know how old I am, huh? Was it in the 90s that they... No, no, no, no. In the 90s, when they finally got fed up... This was in the 60s. This was about 65, 67, around in there. Just a young attorney. When your experience along with the others built up to where they finally said they put some claims on the IRS?
1:03:01You know, you know what happened? The service showed up and said, you know, we'll be good. But I'm glad I could tell that story because it's something that people should know about. It had a good ending, you know, it had a lot of fun. From my standpoint, I could have dropped it, like I said, at the beginning, I thought I had these guys by the yin-yang and I was going to let them off. And it's too bad they do get away with abuses like that. I mean, I remember the lady, the collecting officer was Mrs. Tripp. I remember her name, yeah. She was an honorary old buzzard.
1:03:48I think she might have been a little embarrassed after that. I think it's very often within the service, the district director would have said, Who in the hell was the idiot that did this? This is the problem that we discussed when I asked the question this morning when I first started off. I said that liberty has the seeds of slavery in it. The seeds are that you grant extraordinary taxes, I used to notice the 60 Minutes with Mike Wallace. I used to frequently tell stories about IRS abuses. He hadn't done it for years.
1:04:47I watched pretty faithfully. I don't think there's been an IRS abuse on that program for years. John Stossel would if one came up. But 60 Minutes is such an important thing. And see, what usually happens is that they audit these guys, and then pretty soon they say, well, you lay off us, we'll lay off you. One of the earliest examples of IRS misdeeds was a Reader's Digest ran a series called The Tyranny of the IRS, many, many years ago, and they had some pretty ugly stories in there. So the United States Congress, the Ways and Means Committee decided to hold hearings on it because of what had happened.
1:05:39Did you know that the only person before the hearing was the Commissioner of Internal Revenue? He didn't bring in any of the people and any of the stories. And the idea was, well, you know, the Commissioner said it's no big deal, and so we drop it. So I guess what Hanson did, Hanson, who wrote this book, and he got all kinds of trouble, he went to the Ways and Means Committee and says you ought to investigate some of these things the IRS is doing. and his answer was the committee said that they were scared to death of what the IRS might do to them. No, scared to death. If your own congress is scared to death, you've now got a fourth branch of government, in a sense, you know, the tax people.
1:06:27Well, Archer would have said that, wouldn't he? Who? Bill Archer. He would have kept that. I don't know when Hansen, Hansen probably did that when the Democrat guy was in, you know, the guy they got in the slammer, remember the ways it means? Dan Rusty, the guy, yeah, Rusty, yeah, Rusty, yeah, it had to be then, it had to be then because the Republicans weren't in. But at least that's in Hanson's book. They're afraid of the death of what the IRS might do to them, though they didn't want to. And recently they did have some hearings in the Senate, you know, about four or five years ago, you remember those? And they had the guys with hoods and the, you know, undefined and, you know, not a good job.
1:07:18That's not the way it should be. What we did in Canada, Mr. Salerno, because our IRS, our revenue was worse, it was terrible, really misbehaving. The House of Commons committees organized into twos and they went into all the major cities of Canada with an ad in the newspaper to come in and tell us about your problems with a revenue department of Revenue Canada. And of course Revenue Canada was mad as hell and they said we're getting a hoax job, but that did a good thing. The problem with the Senate is that they just stayed in Washington and batted a few people in and put on a little dog and pony show. What they should have done, they should have gone from city to city just like the Canadians.
1:08:04Yeah, and go from city to city and let the people come in and tell their stories. And maybe if there's enough members of the Congress, they go out by twos and they maybe could go to 50 cities. I thought the Canadians did that right, because they behaved themselves since then, so it would be nice. Anyway, I was thinking of some of the interesting European stories that are out there. What was the famous tennis player that was so good? What was her name? The German girl? Do you remember her? The thing that was so dumb about her, being a German, she could have given up her German She can change residency, just residency, move to Monaco, where a lot of the great athletes go, and then she wouldn't have any tax problems. So simple.
1:09:17She could go back to Germany as a visitor, you know, and there wouldn't have been a problem, and then she'd keep all the jacks, all the monies she was making, you know, sometimes. And she could keep her passport? Oh yeah, yeah, yeah, just change residency. The thing Americans don't understand, don't appreciate, is that America taxes citizenship. The rest of the world taxes residency, and that makes a lot of difference. That means if you get fed up with the tax system, you just move to another country. You might have a departure tax and a few things like that, but there's no problem with your citizenship because they only tax residents, and if you're not a resident, there's no tax. So being a German, all she had to do was go to a tax haven, and Monaco was full of famous athletes that go there.
1:10:04I mean, what was a skier? Stengman, the great Swedish skier, Ingmar Stengman or something or something, many years ago, he lives there. Stengman, I think, Stengman, he was Olympic champion many years ago, but he's just an example of one of many great European athletes who made a lot of money when he lives in Monaco. So you could claim a residency of some place that you don't lose your studentship. No, not in the slightest, because it's a tax on your resident of the country, and you have to contribute to pay the services that the country provides, and if you're not there, there's nothing to provide. It's just like, I live in Canada, and Canada provides all kinds of stuff, a lot more than America does, it's somewhat socialistic, you know.
1:10:55We've got wonderful medical care and nobody goes there. We never use it. Unless we're dying and we can't get out of the country, you know. I don't want to knock them too much. It's the price you pay for socialized medicine. You just don't get the services that you'd like to have. Well, let me see what we're doing up there.
1:11:25What were the war taxes that were passed during the Civil War? The war tax? There were some taxes passed that were later declared unconstitutional. Well, there was the income tax. Any other? No, that's all I recall. Yeah, they passed an income tax, and of course it might get you a little prelude to tomorrow. But I did talk a little bit about the second whiskey rebellion, which was the attempt to tax whiskey in the South. And so when the Federal armies left, we mentioned that, and I guess it was 1876 or so.
1:12:14I know it's not a tax, but certainly the printing of paper money was no batting of silver or gold that occurred during the war. I would say that the green bat, they started printing green.
1:12:44The Greenback, the Congress passed the first Greenback law and the courts held it unconstitutional because the Constitution says you can coin money, it didn't say you could print the damn stuff. So then they came back and read the Supreme Court, said it's okay, but actually it had trouble in the courts because it violated the Constitution. And so that's true. I was just going to give you one neat little story about during the whiskey days in the South with the origin and the beginning of the Internal Revenue Bureau.
1:13:36They paid rewards for informers, you know, wonderful practice. And the most interesting story of that period was the Martins and the Coys, the Feuden Mountain Boys. You remember who they were? Hatfields and McCoys. Hatfields and McCoys, yeah. What that was about is one of the McCoys or the Hatfields snitched on the other They were all making illegal booze and got the reward and then the other guys knew about it and that was the basis of that horrible family feud where they were shooting and killing each other for generations. It was because one of them snitched on the other one that they were making booze and got their butt.
1:14:21And another thing they would do to make it frustrating is that they gave ten bucks to anybody who would come in and testify and so forth. So if they arrested the old man, you know, for making booze, a little liquor, then the whole family would show up to testify against him. They all get ten bucks. Then he would get fined $100, and then he'd claim poverty, so they dropped the fine. So it was a little way of making a little money on the side using the system. Oh well, there are a lot of interesting things that came out of that period. Yes, I'm just trying to think of, isn't it George Jones that has a western ballad about white lightning?
1:15:15You remember that? Yeah, white lightning. That's what it's called. It's called white lightning. And it's a cute little ballad because you get the impression it has a lot of punch to it. You ever had any?
1:15:59You can buy Kentucky whiskey, it's $110.00 per drink. Meaning liquor store? Yes. Most of them are stock, I think, especially over there.
1:16:29Before we get off the tax of the war, I think the cruelest tax that was ever imposed on the South, was the seven cents tax of a pound on cotton, which started in 1868, right after the Reconciliation. You talk about a cruel tact. I mean, when the Senate literally hit them to tax cotton, which only could have been rolled for seven days. I just can't believe anybody could do that to them.
1:17:15They were. I don't know what to say. I think they stole most of the cotton, too, that they tried to tax, didn't they? I do remember that particular story. Well, I think that's about it. Let's get some more. We've got a few more minutes. I'd like to discuss some more interesting stories of mine. I like that story, that service. I remember a man I worked for, his name was Harry Margolis, and he was a very aggressive tax planner.
1:18:07And I remember some of his antics, where service would show up to audit one of his friends and he'd go out there and he'd walk in and he'd say, get out, get out, and of course The thing about him that was so interesting is they really want to get him. I mean, they really want to get him. And I understand they had as many as 50 agents working on his work. They never could nail him. He was acquitted on two big trials and one of them was out in San Francisco, but they wanted so much to nail him that they hired some of the professors from New York University, NYU, and they shipped them out there and they were there for four months, you know, because they wanted the best in the business, you know, to get this guy, he was acquitted on all counts and they went home just talking to themselves and since I had worked for him, They came to me, and I didn't work for them then, and they wanted to know if they could,
1:19:21if I would assist them in their, in their prosecution of Margolis. And I said, no. I said, the problem is, he's going to win. Because I knew how he operated. I understood the theory and the practice, and I felt that he was within the law. And I said, he's going and the Win. Oh no, no, we got these big guys, we got these big guns in the East, they said, you watch. And sure enough, I acquitted him on all counts. Who is this? Margolis was his name, Harry Margolis, he was in San Francisco. He represented a lot of big people, he represented Ingemar Stevens, Inger Stevens, who was an actress, many of the Hollywood crowd he represented.
1:20:08He had some ingenious techniques which were really brilliant. I noticed just this week on the news that they have indicted the former president of Chile and have seized his American bank accounts on tax evasion. Oh yeah? Oh yeah? How would he have evaded the U.S. tax as being the president of Chile? Penalty? Penalty. Oh, that guy. You mean that? Yeah. Well, isn't he in pretty bad health? Yeah, he is. Yeah, yeah, that's very good. They're going after his money, they don't care. Well, the sequence, the Magola story, was that he got brain cancer about 15 years ago. And they indicted him with brain cancer.
1:20:56I thought that was pretty ridiculous. They proceeded to try and he beat him again. Fourteen counts, I'm not guilty. He was a tenacious little Jewish guy that was a genius and he was a little bit wacky in some ways because one reason I disassociated with him is because I thought he was nuts in some of the stuff that he did. I had one case where he had some wild, he was always doing things that nobody, he used In this particular case, the service came in and they audited this family and they came up with what you call a revenue agent's report, which was $870.
1:21:52It was simply you sign here and then pay the bill, it was simply the agent's report. So they came up in this case with a charge of, I think $5,000, and I said, pay it, close the file. No! And Margolis says, no, I'm not going to pay it, you know, blah, blah, blah. So he didn't pay it, and it didn't turn out right. But he was a hater, and he felt he could beat anybody. He died, unfortunately, but I wish somebody would write up a history of his life, because Well, see you tomorrow, we'll talk about, we'll take the income tax from the beginning to the end, we'll take it apart, and you can all become, get jobs working for HW Block, you know.
1:22:42Is it HW Block? I don't know. One of the most interesting stories I'll tell you next tomorrow is Howard Hughes. You will find this fascinating.
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The Rosetta Stone to the US Code A New History of Taxation
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Speakers: Charles Adams.
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