The Portland daily press., 1866-07-02
Taxation of Government Bonde.

3rd DiSt-JA M Els Tie tkIA ~ F-s Oh N N b"Sass
4A D,st.-JOHN A. PETERS, OF Bangor.
Taxation of Government Bonds.
Secretary McCulloch's proposed American
five per cent. untaxed consols are not favora-
bly, regarded in any influential quarter. The
Republican press has been cutspoken from
the start. There is but one honorable, OF
even honest policy, respecting the bonds issued
during the war. They were taken under inc
express condition, that they should be exempt
from taxation. That condition may have been
unnecessary and unwise, but the faith OF the
United States is pledged, and it must not be
broken. During the few years those bon0s
have to run, the promise OF the Government
must be respected. Against Reputation, in
this or any other form, the Republican party
is unalterably set
The proposition of the Secretary of the
Treasury, to continue and perpetuate this
doubtful expedient, by issuing bonds of long
date, exempt from every form OF taxation, is
another matter. There is no l)nger the plea
OF necessity. 1t is only question of interest
i've per CGuI VI olAs 4NODOoJ oOoDVo 'lAeAo SA1S
loan would be taken at six per cent, without
the bait of exemption from taxation. The
consolidated debt of the United States, especi-
ally if it be assured by the Constitutional
amendment which forbids its validity to be
even questioned, will be an attractive and IA
vorite investment. There are even those who
believe the loan might readily be placed at
five per cent. subject to taxation. But
if the choice lay between five per cent. with
out and six per cent. with taxation, and even
if there were, as Secretary McCulloch thinks,
a small pecuniary advantage in favor of ex-
record that the proposition would be rejected
with great unanimity by the Republican party
both in and out of Congress.
In recent letter to Governor Smyth, Of
New Hampshire, Chief Justice Chase says, II
can understand an argument for not taxing
a debt which the creditor may take up after
five or ten years, for l can see the country
may save more in interest than it would lose
in taxes; but l cannot imagine an honest ar
gument for debt for thirty years, and ex-
empted from the taxing burden to which 9th
er property may be subjected. 1 got money,
and all that was needed, in the worst times,
on short comfortable loans, subject to naiioae,
tardtion." Readers will remember how SEN
ator Fessenden treated the proposition, as en-
bodied in Senator Sherman's bill. II am op-
posed to that bill,'' said Mr.. Fessenden, sand
shall object to its being taken up at any time
so far as / am concerned. It does not meet
my appreciation in any particular"
While the opinions of the two men who
were called to manage the national finances
during the war, are so clear and decisive,
there has been no counterblast from Republi-
can speakers or writer's Mr.. McCullochs
opinions have been treated with the respect
to which they are doubtless entitled, but there
has been no lack of warning that his policy in
this respect was regarded with grave suspicion
and anxiety.
There is now no money to be borrowed on
ly floating debt to be funded. The perpetu-
ity of the government is no longer exposed to
question; its future is assured by the victori-
Gus issue of the war. For the policy which
was ulOIG VI tCSo CAOoSskUAC JlCH, UuVlC 10 uOb
shadow of an excuse now. The creation of
class of persons exempt by law from the Or
binary burdens of the community in which
they live, yet empowered by law to vote ap-
preparations indefinitely increasing these bur-
dens, is not republican or rational An ex-
emption for thirty years would render the
bonds relatively higher here than abroad,
where no such exemption exists, and infali-
bly, bring them back upon the American mar
ket and curtail our working capital The ma
tional debt is equal to nearly one-ffth of the
national wealth. We cannot afford to leave
three billions of dollars out of the national
valuation. The scheme is idle, it's promised
advantages we believe to be delusve.
The Democratic press has maintained
profound silence, so far as we have observed,
respecting this matter. Democratic Congress
men have made no attempt to bring it up or
put it down. The argus, some time ago,
spoke rather hastily and indisereetly of Mr..
Sherman's bill as zone Of the most important
and one of the wisest measures introduced in
Congress at this session." but appeared to be
lTlSHIcucQ db tuC CCAO Va It's OWu NOlCC, anu
relapsed into silence. One day last week, it
woke up again and declared, with innocent
forgetfulness of its last words on the subject,
that the proposed exemption Of government
bondholders lis not equitable and can never
be made to appear SOP Then why did you
try? one asks. at was one of the solemn
duties of Congress to attend to this matter"
says the argus. Congress has effectualJy at
tended to the matter. Senator Sherman's bill
embodying the 'grand scheme" which in May
you trusted would be 'carried to complete
success" but which in June you had grown
suddenly ashamed of, has silently been con-
demned by Congress. 1t will not pass. A
consolidated debt we shall doubtless have, but
sui sect to taxation like other stocks. That is
the pole; (which we have no doubt will be
unanimously approved by the Republican par
ty.
The Argus inquiries after Mr.. Lynchs posi-
ton on this question. We beg to remind the
ARGUS that the grand scheme" which receiv-
ed its hearty commentator so recently, came
up in the Senate, and has never come before
announce his views, and we are not authoriz-
ed to speak for him. Nevertheless we have
no doubt that upon this as upon other qu1s-
tions he is in full sympathy with his party,
and that if the McCulloch-Sherman-A Argus
proposition to exempt United States consols
from taxation, should come before the House,
he would promptly set upon it the seal of
his condemnation.
GRANTS Transformation Mr. SbeIlabar-
ger, Of Ohio, recently ent the following letter
from Gen. Grant to the clerks desk to be read.
calling attention to the fact that it was PEN