Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1865-11-09
RUTLAND HERALD.
MONDAY, NOVEMBER 6, 1865.
Uuit.d states Securities.

NJ m91OrlIN OIL lnt tuHillllbNNI vi "hN
,,..ps op House Bill No 5, entitled can
A''' ornard soctior six ofchanter eiobtv
acV "
three OF lhe "eueIal @t'tutes anu W t"A
j HE income Of United States Bonds
rbis report was written by Mr.. Clark Of
a ,,Itrev and besides himself was
NJ. JUo,.o ~. p,.,l,t,,rl, and
ssue" - ,c,
Mr. barues VI Dui i''"S''"' "' '''''
two members OF TINS committee are MI
Hebard OF Chelsea and Mr.. Foster of
,,o,tnelicr who have presented a mi
,,.,,,.-, IL, r,,.,,, of t.>ing tl,o in
. '',,,,,,'';.,.,o o,,,., p.,..t.
fo'' Oh I"'''' 5,''''' '''''.'''
76 he H0"Se O. h'Pr'af"t'''FeS
The Committee OF Ways aud Means,
10 whom was referred House Bill No 5,
entitled IAN act 70 amend section six of
chapter eighty three OF the General Stat
utrs, and to tax the income Of United
States Bonds VI respectfully report that
they have considered the important
question presented IN the NH, and sub
mited the ioIlowlnS-aS the result OF
their examination
The power OF taxation exists both in
the states ana I'D the government OF the
Union, ana may DE exercised concurrent
T by the TWO Governments. ms pow
eT IS essential I'd lhelr existence. But
The power ol taNaIIoh III Ihe SIdte Is
s,~@a'tt to the constitution OF the
Union and the laws made in pursuance
thereof which are supreme. Such laws
control the constitution and laws OF the
respective States and cannot be con
trolled by them; were it otherwise, the
power OF taxing by the States might be
exercised in such manner as TO defeat
the legitimate operations ofgovernment.
The principles stated are embodied in
the unanimous opinion OF the United
& States Court, delivered by Chief Justice
q Marshall in 1919, and have not since
s been COntrCverted.
q This bill provides that the income of
# bonds stock, and other securities of the
United States shall be taxable, and
shall be set in the grand list; and the
inquiry arises IS this proris,0a ~ rrafici
nth measures adopted bB tie United States
Government, or is it calculated to ijnpeqe Of.
oJ,,ytfct those measures If so. it is OBJ
viousIy wrong, and will have no legal
force The power of the Federal Gov
ernment to borrow money and issue
Il bonds and stocks is II sovereign power
Il and no State has the right to impose a
tax on such bonds or stocks which shall
in any way qualify or impair them as
means to promote the objects of gov
ernment. This principle was settled by
decision of the Supreme Court in 1929
in the case of H'estoU against the City Of
Charleston, and has never been Overruled.
Such is the law in the absence of special
legal exemption. But if doubt ex SITS in
the premises, the act of Congress OF Feb
ruary 70, 1862, fully settles the question,
lor 1t expressly provides that "aH StockS
oonaS ana other securities Of the limited States,
y nan 6y ha'VmuaES, corporations, or aSsoca-
t1oi's, t1'td" the United States, shall Be Greolpt
from tarattoH by or pnder State authority"
Such provisions of law existing, taxa
ton OF the means employed by Govern
ment for beneficial purposes would be an
ABUSE or uSurpatlOn OF power.
1t may be claimed that taxing In
come, IS not taxing 600ds, and that the
authorities stated have n" application
10 the question presented. THE |1comc
o. 0oH@S, or the interest becoming pcf'0a3eaHy
d aN IS part Of the orW"7E contract, and IS
""ht'o" e'"5 ~ me C'A'IS oI lie one Is
evidently as much of an interference
with the operations of the Government
as the taxing of the other; no matter
whether such interference be direct or
t@dhfct The tax on the income Of
pond, to use the language Of the author
ity already quoted. IS "A TAX on Jhe OPP
eratIonS OF an instrument empIoyet by
the Government OF the Union to carry
ltS powers into execution Such tax
must De '"'0'Sf'f"'o"@.'
United States bonds or stocks are
similar in their provisions to u promis-
q sorry note, payable ininstallments, Cou-
PonS or interest warrants are usually
/ attached. These warrants are u part
ol the original obligation, and as Sc
curIty, are Identical with it. At inter
Vais Of six months the interest becomes
que; the warrants are detached-pre-
sented to the Treasury for payment,
and their identity as a government Sc
curity ceases. Other bonds are regis
tered, or are payable at maturity, with
the accrued interest but all possessing
the same general character. The money