The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1866-06-08
Ta8ation Of United s..le. bonds.

Z lie GlssslDS=-E1s greatest ornament
and the support Of public virtue
Taxation OF United states Bonds.
/ AfsEdays ago we published some
suggestions upon this important quss-
ton. We have received since then, a
copy Of Senator Sherman's remarks
upon the matter, in his speech upon the
House bill, which we condense below
( for the information Of our readers:
Mr.. Sherman hrst laid Il down as
settled Law, beyond all question, that
no state can tax the bonds Of the United
Statsz, nnless the night to do so is ex-
/ pressIy conceded in the act Of Congress.
Such power IN the States, he said, SIS
entirely inconsistent with the supreme
power Of the General Government to
borrow money" And this point, he
says, sis settled more clearly than
almost any question of constitutional
I law which has ever been moosed in this
government"
Herefers. for general principles, to the
noted case OF ''MeCulIOeh against the
STATE of Maryland;" and for specific
decision, TO the case of Weston against
the City Of Charleston" in I'd Peters,
40. The city Of Charleston, in 1879,
under authority of State law, levied a
tax upon United States bonds in the
hands of citizen. The Supreme Court
OF The state decided in favor Of the va
iidity Of the tax: but Judge Huger dis
scented on the ground that, II the states
can tax the stock of the United States,
ait Is impossible not to perceive that the
fiscal operations Of the general govern
menf may be completely frustrated by
the States" He said, Congress may
offer ten per cent. for loans, but who
will lend, IL the States can appropriate
the whole to their own use. The case
came before the Supreme Court of the
United states, and the Judges concurred
unanimously in the decision which was
given by Judge Marshall, that TO allow
the taxation Of Government securities
would enable the States 10 destroy the
power Of the National Government.
prevent it from prosecuting a war and
from maintaining the authority of the
United States" This view has been
acquieseed in by every Judge who has
ever sat upon that bench, and has never
since been controveTted by any State of
the Union.
The question was brought mp while
Judge fancy was on the bench, in
''Dobbins dJt. ths.Commfssioners of
Erie Company" and the principle was
meree d1t. Tax Commissioners of New
York City," in 1862 In one case, OF
later date, the Court held, by a major
ity, that shares in the national banks
may betaxed, because Il was evidently
the intention of Congress not to ex-
empt the shares from taxation, IL the
States chose to tax them. 1t is, there
fore, settled principle of law, whether
it Is inserted In the act or not, that
United States bonds cannot be taxed by
the States, unless Congress chooses 70
make Il an express part Of the contract
at the time OF making the loan.
On the question whether Congress
should incorporate in the act a per-
mission 70 the States to tax the bonds,
he asked whether IL would be wise now
70 allow the States such 3 power over
the public credit. All the bonds ont
standing are guaranteed against being
taxed. II tho new bonds are not thus
exempted, who would surrender an ex-
listing bond for new one at i've per
cent, liable to taxation at the pleasure
ofeVery State.
on the argument that It Is unjust to
exempt so much property from local
taxes, he said Il was not privilege to
the holder Of the bonds, but right OF
the supreme power OF the whole coun-
try TO borrow money on the most IA
vorable terms in its power. II the pres
emit rate of interest were to be contin-
lied the taxpayer might justly com
plain. But II such terms are Of
fered as will induce the bondhOlder to
be satisfied with i've per cent. for his
money, while the taxpayer gets six
or seven per cent. for his, the bondhold-
er may say wit b truth, HI pay my tax
in advance" This policy in England
has reduced the rateof interest ON pub
lie securities from six to three per cent.
Mr.. Sherman closed this part of his
argument in these words: ST say,
therefore, that In every view in which
/ can take OF this bill, Il Is wise meas
ure, Intended to, save interest on the
public debt, 10 adjust on correct prin-
cipIes equality OF taxation, and to
tighten the enormous burdens upon
our people. And there is another fea-
ture which commends IL 10 my
favor. II this bin pass in the form
In which 1t now stands, the
fundholders will themselves pay OF
the principal of the public debt. The
one per cent. saved ON the rate of inte-
rest will pay on every dollar of this
debt in thifty-six years. When the |
fundholder and the taxpayer stand
before the public hustings, and this |
matter Is dragged into politics, as it |
'fundholder, Your property Is exempt |
and free from all Eax, the fundholder |
may say No, my friend, IL Is not: your |
money you can loan 10 your neighbor |
az six per cent. tnteresf, and the law |
enables you TO collect the principal az /
plensures i have already paid for this 4
privilege by deduc3ing one-sixtli of my |
Income; I have surrendered the princf- I
pal sum loaned by me for an annuity
the taxes Will pay of every dollar Of |
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