The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1865-11-11
Taxing u. .. Bonds.

the Ottawa Republican,, rather ungraciousiy,
we think, makes fling at his predecessors
by saying that under his control, the Repub- |
lican "will never stoop to the doctrine OF re-
pudiation in any FORM This Is, of course,
said in reference to several editorials 'ha'
appeared in that paper while under the con-
troll of Messrs. Grover & Wirick, IN "hich
the Justice of taxing U. S. bonds was main
tanned.
The fling was both ungracious and invoiv.
81 an untruih Neither the writer OF tie
articles above alludcd 10, nor any advocate
Of taxing U. S. securities, proposes, so lar
rs we are aware, anything that resembles
Reputation. The government OF the U. D.,
in issuing those bonds. simply guarantees 10
the purchaser that they are not taxable by
the states. This the government can do
without saving a word Oh the subject, Tor the
principle is well settled by the courts that
government securities are not taxable by the
states, no more than government lands. docks
arsanals. or other buildings are. But this
does not debar the government Itself from
already, in an indirect way, by taxing the
incomes derived from them. 1t agrees, for
instance, to pay the holder six per cent IN
terest, but then it takes back one-thiri OF one
RF searfye gent as iqs9me tax, so that the holder
instead of 6 per cent, which the government
agreed to pay him. And no bondholder has
ever imagined that the taking back OF this j
of per cent is, to that extent, reputation.
He never imagined Tor if he did, he imagin
ed foolishly) that the mere fact of his invest
ing his property in government Instead OF
railroad stocks. entitled him to be released
from all Inability or responsibility to contribute
his share to the support of the government
We hold, then. that so far as the Republi
can, under its late editors, maintained the
right Of the general government TO lax those
bonds, the case is decided in their favor al
ready, by the unchalenged action of the gov
ernment itself. and as to their other posi-
ton, that there is way in which the states
can also reach these bonds, the case is also
already decided as papably IN their favor
Not only the Court of ppeals Of New York
ut also Of Vermont, has decided that |. 5
bonds can be taxed by the states in the shape
Of bank stocks, on the obvious principle that
the bonds, when converted into bank stocks
become the property of the banks, and the
shareholders have hank stock ia exchange
for them. The right Of the states TO tax in
Genes derived from government securities is
also substantially affirmed by the same courts
Here, then, without squint towards rcpu,
diation, are at least three ways in which Z
5. bonds can unquestionably be reached by
taxatioa-Now, then, word as to It's Justice
and expcdiency.
These bonds amount. in round figures, t.
atont g, 00000,0 600, which is, we believe
eGral 20 half the assessed vlue of all thu
property in the L. s. These bond
epresert taxable property. A man mus
earn money, which is taxable, or sell hi
farm, or house, which are taxable, 70 rails
money to buy bonds, but having made thi
conversion, his property ceases to be taxable
SO, in course Of time ne>third Of all TIL
property in the L. S. ceases to be taxab e
and the burden of supporting the government
and paying the national debt falls upon tn,
| other two-thirds. Is this just? Is not thi
making privileged class equal proportion
to population and wealth 10 the nobility i,
England? These bond holders draw six pc
cent. in gold, equal to per cent. or thei
actual investment. They turn these bond
iIto bank securities. draw the face of then
in q currency which they lend out and max
ten per cent. more. being 10 per cent. o.
their Investment Thus rapidly wealth &C
cumulates into their hands. There is Just 5
much wealth IL the country. Where one ma
grows richer, somebody else must grow poorer
Give c'ass such an advantage over thei
fellows, and IN a short time an immense pre-
ponderance of the wealth Of the county at
cumulates into their hands, and the other am
taypaying classes grow just SO much poorer
Eventually the burdens of government
already oppressive, grow SO onerous upo
them that they can bear it no longer, and tn
inequality of taxation being so glarlng, wi
it then be strange if the people begin ser
ously to talk of repudiation As a matte
of policy On the par, of the bond holder
themselves, they should not object TO reason
able taxation, for assuredly if they do shir
! it, the day will come when they will wish the
n hadn't.