President of the Anglo-French loan mission to the United States in 1915, and special envoy of the British Government to the United States in 1917.] This compares favorably even with the British figures. But it conclusively shows how impossible it is even with the best of will, to raise more than a relatively small part of war expenses from war taxes; especially during the early period of a war. CHARACTER OF WAR TAXATION The next point of interest is that of the character of the war taxes imposed by the various countries. Here again we notice a very great difference. In all of the European belligerents on the continent, at least as much additional revenue was raised from direct, as from indirect, taxation. In France about as much new revenue came from indirect taxation or taxes on consumption as from direct taxation or taxes on wealth. The situation is still less satisfactory in the other continental countries. In England, on the other hand, a different path was pursued from the beginning. While it is true that a considerable increase of revenue was derived from indirect taxes like customs and excise, the chief reliance was placed on the increase of the income tax, on a new war profits tax and finally, although to a minor degree, on an increase in the inheritance tax. When we come, however, to the situation in the United States we find the democratic movement so strong that the overwhelming proportion of the new tax revenue was derived from direct taxation on wealth rather than from indirect taxation on consumption. In the great Revenue Act of 1917 over 79 per cent. of the new tax revenue came from direct taxation, principally the income tax and the excess profits tax. In the second great Revenue Act of 1918, the proportions were still more favorable, the amount ascribable to direct taxation in 1919 being almost 81 per cent. UNITED STATES Internal Revenue Receipts In millions of dollars Per Per Year ending June 30 1918 Cent. 1919 Cent. Income and profits taxes 2,839 2,596[20] Munition manufacturers tax 13 ..... Estate tax 47 82 Corporate capital stock tax 25 29 ----- ----- Total taxes on wealth 2,924 79.1 2,707 70.5