Daily State sentinel. [volume] (Indianapolis, Ind.) 1861-1865, 1865-09-20
THE ORGAN OF THE nov pOCRaCY
on THE TAN QIEsGION

The Journsl has changed front upon the tar
question IL has been insisting all along that
United States securities we're eIsnp, from taxa
ton By State authority. not that the bonds we're
90 exempted by act Of Congress merely, but that
IN Congress had passed no law in reference there
TO. under the provisions of the Constitution ss
srpounded by the Supreme Court. all Govern
nent bends would be exempt from taxation for
State. county or municipal purposes. Now, the
Republican organ assumes the ground that the
present Government bonds are exempted from
local taxation by contract between the Nation
and lie creditors 80. then, according to the pre-
sent position Of the Journal. the States would
have tac right 10 tax the bonds il a contract be
tween the Government and lie creditors did not
prohibi, IT, And il Gays further, that the crea-
ton ola new debt, subject to State taxation, il
deems q question OF sIpsdiency and not of CON
stituiionsl power" This is a complete back
down from the position il has heretofore taken
The Journal argues that the nation should
keep faith with its creditors. that when the
present loans expire, mostly within three yeirs.
such confidence will De imposed in the integrity
Of the Government that nes loans can be nego
tated on much more favorable terms-sabjecs to
such taxation by the States as Congress may see
St to prescribe The Journal is opposed to tax
ing the outstanding bonds, but Is 10 favor Of
taxing those which may be issued hereafter to
redeem the Others as they fall due It's reason
for 80 doing il obvious II eau get pay for ,d-
voc.ting the exemption Of the outstanding bonds
from State taxation, but il cannot expect com
pensstion for maintaining that new loans may
be, or should be made subject to that equitable
burden. IL takes the bread and butter side Of
the question, not Of Justice aud equality.
Now we ask the Journal with its propose
fnsnciering scheme. where il expects to get the
money TO redeem the outstanding bonds as they
fall duef II said the other day that new loans
should be negotiated at four per cent. and Il
now proposes to subject them 20 State taxation
Jar Cooke estimates that State, county and
municipal taxes arc equal To about three per
cent This would leave vsrS small income on
the investment Ii ia not very probable that tho
holders OF the outstanding bonds would nego-
tiate rev loans such rates, or that
other capitalists would invest upon such
terms How then Is the money to
be raisedG viii it be by shsowing the
new four per cent. loans. subject 10 taxation,
upon the market for What they will bringg II %
they will TO have 10 sell at a heavy discount and
the result will be that just tho amonnt they ara
disposed of below their face viii be added to the
public debt So bv the Journals financierine
process the National Indebtedness will be large J
increased What remedy will the Journal apply
wilt il favor compelling the present bOndholders
to take new bonds bearing less rate OF interest
If so, would thi. not be virtually reputation
The easies, and most equitable way Of meet
ing the difficulty is TO subject Goversmsni
bonds to the same taxation as other prop
e.ty Capital subject to State taxation ID
loaned in New York and the Eastern States al
six or seven per cent. interest, and there is no
reason why the Government should not be able
to borrow upon as favorable or better terms
ssbjectng the bonds to the same taxation to
which other property or capital is liable II not,
il would show that there but little conf iencs
among capitalists in the stability and resources
OF the Government.