The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1865-08-04
raxassop OF the stocks OF the United
0fDt00,

1a1s0en OF IN 1870.
We alluded q few days ago to the fact
that the State of New Hampshire had
passed law plssing tax Of twenty-five
per cent. upon the income derived from
United States securities, and that asimilar
proposition was before the Legislature of
Connecticut. These matters have attract
ed the attention of Hon. FREEMAN CLARKE,
Comptroller of the currency, who has
written the following letter to bank Off
Ger in Hartford upon the subject:
TREASURY DEPARTMENT,
OFFICE OF COMPTROLLER OF THE CURRENCY
WASHINGTON, July %, 1865.
DEAR SIR: Your letter of the 14th inst. to
the Secretary of the Treasury has this day been
referred to me, with the request that I should
answer it.
cannot but express my surprise that the leg
islature of the State of Connecticut should en-.
terrain proposition to virtually cOnfscate
portion Of the government securities held by
inhabitants of that State.
The law exempting from taxation govern.
ment securities is so specific and clear that 1t
cannot be questioned. The bonds were dispOs-
ed of, and purchased with the provision Of law
as part of the contract, that they were to be
exempt from taxation, and the country has re-
ceived an equivalent for such exemption, in the
additional price received for the bonds.
Can any one believe that the obligations OF.
the government would have sold for anything
commensurate with their value, if it had been
supposed possible that they could be taxed by
State laws, directly or indirectly? Ifyour leg
islature can impose a tax of fifteen per centum
on the income derived from government secur-
tiles, it is just as competent for it to impose q
tax Of fifty or one hundred per cent.
1t is a source of regret that any Northern
an attempt to repudiate or nullify constitu.
6onal act of Congress, and one, too, that was
deemed necessary TO preserve the integrity of
the nation. In one aspect of the case, how
ever, it may be regarded as q most fortunate
occurrence, as it will serve to show the people
that it viii not be safe for the government to
allow the Southern States to be 80 reconstruct
ed as to permit their being represented in Con-
gress as unit, as they would be, by men who
would be but too willing to unite with North.
ern men of the character of those favoring the
measure under consideration, to repudiate the
national debt, if not by direct action, by an
equally destructive want of action in providing
the means Of payment. am glad to hear, and
the whole country have reason to rejoice, that
stands opposed to this insiduous measure The
effect of the proposed tax would be to reduce
the value of government securities in the hands
of the people of your State, fifteen per cent,
| provided there was an assurance that no fur
Their exaction would be imposed, but without
| such assurance would reduce the market value
| much more, as the next, or any subsequent
legislature, could increase the tax to the extent
| OF destroying their productive value entirely.
The State of New Hampshire has passed law
| imposing q tax of twenty-five per cent. on the
income derived from national securities.
If this action was confined to the two States,
the result would be simply to deprive the peo-
pie of New Hampshire and Connecticut of the
privilege OF holding or owning government Sc
curities. 1t is very clear that the States would
not get the tax, as the owners would sell the
securities to parties out of the State, or 90
out themselves with the securities
If, however, other Northern States should
| follow their example, and 1t should be conced.
ed that they had the right to do so, the credit
of the government and the national currency
would be practically destroyed.
This, perhaps, Is the object of the Confeder-
acy in this suicidal scheme. think am JUS
titled in saying there is not the least danger of
the proposed act, if it should become law,
being sustained by the Supreme Court of the
United States.
1t is, perhaps, proper that should say that
the Secretary of the Treasury concurs in nv
views as to the right of the States to tax United
States securities, but is otherwise ignerant OF
the contents of this letter.
Referring to the proposed act to tax the
stock owned by individuals in national banks,
am clearly Of opinion that such stock, repre-
sented by capital invested in whole or in part
in United States securities, is liable to State
taxation only on the amount not so invested
and enclose herewith printed slip, containing
letter written by e. G. Spaulding of New
York, and one written by myself, both concur
ring in the views have stated on the subject
Yours very respectfully, As CLARKE.
John L. Bunce, President Phoenix Nationa
Bank, Hartford, Conn.
The opinion of Mr.. CLARKE that the Su.
preme Court of the United States will de.
clare the law of New Hampshire unconsti.
tutional, and that the same will be done
concerning the law of Connecticut, should
it be passed, is legitimate line of argu'
ment; but that because these States, over.
whelmingly Republican as they are, see Fl
to pass such law, therefore the South ii
never to be represented in Congress, is 60
ing little too far, and especially ont O.
place is the insinuation that suoh actor
was prompted by the Confederates. E" Mr.
OLARKE has overshot bis mark. The ques
ton of taxing the income of the United
States bonds is not party question. Coco
men of both parties are discussing it, ani
are determined to have the matter judi
cially decided. If three thousand million.
of dollars are to be forever exempted from
taxation in any form, the people want tt
know it.
New Publications.
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