Fremont journal. [volume] (Fremont, Sandusky County [Ohio]) 1853-1866, 1865-09-29
STATE TAXATION OF NATIONAL BONDS,

titles. hall q dozen or more state con-
yentions added plank to their platforms
advocating such impositions on the bonds
of the Government. The Ohio Copper
heads, under the leadership of ValIandig-
ham, werded their assault on the bonds as
follows:
{ IA. Resolved, That we most explicitly con-
denim the policy of the party in power, in crea-
ting thousands of millions Of dollars of Govern
ment debt, and attempting to exonerate the
holders thereof from all obligations to pay their
Just proportion of taxes FIR the support of the
State in which they reside; and thereby creating
an odious and privileged mOneyed aristocraey,
and we declare it to be the immediate duty Of
Congress and the State Legislature to use all
tne legal and constitutional power they possess,
10 SUBJECT money SO invested to a burden of
taxation equal to that imposed upon other prop
erty for Federal, State and municipal purposes.
As to the bonds creating an ''odious
and privileged moneyed aTistocracy," it
is sufficient reply that any Copperhead
who thinks that the bondholders have too
good thing of it, can have all the 1905
he wants at s94 cents on the dollar. His
politics will be no bar to his getting all his
money will purchase. He can have them
of any size from $50 upwards. If he pre-
fers l0-40's he can purchase them At go:
and even the favorite 5-2O's can be OBJ
tanned at small premium. There is no
monopoly in the ownership of those bonds.
Hundreds and thousands of poor men and
men in moderate circumstances own more
or less of those securities. Large num-
bers OF discharged soldiers invested their
surplus wages in them. They are owned
by all classes, from the day laborer to the
retired millionaries, and everybody else
can have them who desire them. In
New York, SO large portion of the Cop
perheads hold Government securities that
the State Convention of that party passed
resolutions denying the constitutional
power OF States to tax them, and denoun-
cling the attempt as an act of bad faith to
the lender of the money. This action of
the ''party" in the Empire State viii prob
ably have restraining influence on the
demagogues of the other States
The provision of the law is:
"All stocks, bonds and Other securities Of
the United States, shall Be exempt from tara
ton, by or under State authority"
This is part of the contract between
the government and every man who
loaned it his money to help put down the
rebellion, and any attsmps Of the States to
tax these bonds is palpable violation Of
the contract, and would be held void by
any court in the land. The Supreme
Court has declared that it could not be
done, even if no such condition had been
inserted in the law. A State has not tie
constitutional authority to impair the
credit Of the National Government by levy.
ing imports on It's securities-neither. can
State, annul law of Congress. The
General Government has the constitutional
right to borrow money. The Supreme
Court has declared tnat for State or city
to lay q tax on that borrowed money would
be to retard, impede, burden and control
the acts of Congress, and might result in
nullifying them and destroying the power
Of the Government to procure money.
On this subject Chief Justice Marshall
said:
"No power has been conferred by the Ameri.
can people on this Government the free and nm.
burdened exercise of which more deeply affects
every member Of our Republic - Can
anything be more dangerous or more injurious
than the admission Of a principle which author
ICES every State and every corporation in the
Union which possesses the right Of taxation to
burden the exercise of this power at discretionf
If the right to impose tax exists, it is a right
which In Its nature acknowledges no limits I"
The question came again before the Su-
preme Court in 1912, when the same de-
cision was given, that State can Law no
such tax. The court was then presided
over by Judge Taney, and as senator Sher-
man says, it was democratic machine
The Court then declared: 'That any tax
upon any agent in the employment Of the
United States, or any security of the Uni
ted States by any State, was unconstitu-
tional and void"
The N. Y. World, the leading organ of
that party, takes direct issue with the
Ohio Copperheads, and makes the follow
ing observations and citations of authority
on the subject:
'sFhe Government has engaged its honor for
the exemption Of its bonds from State and mu-
nlcipal taxation and Il cdRnot, lcithosH dfscrace
repEdiGts its CONTRACT ad5
"a repeal of that part Of the loan law might
unsettle public confidence; but in other respects
1t would amount to nothing. That part Of the
law is, as regards enscting force mere surplus
age. 1t merely served to advertise an advsn.
tageous portion of the lOsn. The Federal stocks
would be Just as much exemp from State taxa
tion without that clause as they are with it. In
the case OF Weston Us. The City Council of
Charleston, e Peters, 463, it was decided, by
the Supreme Court of the United 8 ates that
no tax can be laid on Federal stocks BY Stats
authority without q violation Of the Constitu.
tion. Chief Justice Marshall, who delivered
the opinion of the Court said:
4" The American people have conferred the
power OF borrowing money Of their Govern
ment, and, by making that Government 50.
preme, have shielded its action in the exercise
Of this power, from the action of the local Gov.
ernments.'
@Ths right to tax the contract to any extent
when made, must operate upon the power 10
borrow before 1t is exercised, and have a seusi-
bic influence on the contract. The extent cf
this ihuence depends on the will of a dirtipct
government To any extent, how ever ineonsid.
erable. It is burden on the operations Of the
government. 1t may be carried to an extent
which shall arrest them entirely.
the Court to be tax on the contract. a tax on
the power to borrow money on the credit of the
United States, and consequently to be repug-
nant to the Constitution.
ut will be seen, therefore, that the exemp-
ion in question has dl,cGys e1ists4: that IT re-
sEts from the ConStiAtion, and is superior. e,is.
alton; that it was only advertised, not enacted.
BY insertion in the loan law.
''What in the opinion Of sound Lawyers, the
State Government may do, is to tax The income
arising from these stocks, at the sous rates as
income from other sources: and tax the shares in
banks as it taxes other property The stocks
ire taxable by the Federal Government though
Exempt from State taxation"
The last observation is undoubtedly cor
'eet. Congress has right to tax the
bonds or coupons. Indeed the latter are
low taxed one and one-haf per cent, and
here is no Constitution or contract pre-
n