Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1866-10-04
Taxing National Bonds.

In somc sections of the West, Copper
head speakers regae their hearers with
rambling disqusitions i'm favor of local tax
alton of Federal bonds. They talk long
and loudly on the enormity of letting the
rich bondholdcr escape while the poor man
is oppressively taxed. These appeals are
only addressed to ignorant, stupid persons.
Taxing Federal bonds is a favOritc theme
with Copperhcad bushwhackers in Indi-
ana like Dave Turpic, Nallandigham in
Ohio. Clay Dean in Iowa, Brick POmerOy
in Wisconsin, and Josh Allen i'm Illinois
AS remarked. il is only the very ignorant,
stupid and unreilecting class that swallow
the bond-tax humhug. Only partisan fools
advocate il, and only partisan fools will ia
vOr it.
Let us see five cannot convince ven an
ignoramus of the folly OF the proposition
to tax Federal bonds. In the first place, a
Federal honda five-twenty, for example
is simply Uncle Sans rote of hand for
given amount. payable five years from date
with six per cent interest in gold, semi-an-
nually. The first series of such bonds was
given in 1868, amounting to three hundred
millions. They are due next July. The
interest has been promptly paid thus far,
and when those bonds mature next sum-
mcr, the Government has the option to pay
them of or renew them for fifteen years
longer mt the same rate of six per cent in
tcreSt.
One of the express conditions of the act
authorizing the loan is, that the bonds shall
not he subject to State or local taxation.
But, in the face of this engagement with
those who loaned their money to the Gov
eminent, Copperhead dcmagogues clamOr
for local taxation of the bonds. Whercv-
er it has been attempted, the Supreme
Court has forbidden it as violation of a
contract, and, therefore. unconstitutional.
The bonds which have already been issued
with the anti-taX clause cannot be taxed,
no matter if Congress should favor it, sim
ply because it woald be uncOn 'titutional.
Ii is not the present intention Ofthe Gov
eminent to renew the tiye-twentleS fOr fif-
teen years longer, but to pay them Off
How can that be done when there is not
money enough in the treasury! BY selling
twenty year bonds drawing only fire per
cent interest. 1t is believed that such
bonds can he sold at par. and with the pro-
cecds the three hundred millions of five
twenties due next summer may be taken
M, and three millions of interest in gold saw
cd each year thereafter.
But suppose Congress omits the anti-tax
clause, and permits State, county and 9th
er local taxation, ofthe new five per cents
how much will they sell for? Not seventy
five cents on the dollar, and if Federal
tax should also be added. not fifty cents
on the dollar would they bring.
Secretary McCulloch gave it as his opin-
ion last summer, when this question was
before Congress, that if the proposed five
per cent bonds were subject to all kinds
of taxation, he would not be able TO OBJ
tain two-thirls of their face. The truth is,
that for every dollar which would ever be
realized by local taxation, the Federal
Government would lose ten dollars in de-
probation of its credit The true policy is
for the Government to improve its credit
to the highest possible extent, by punctual-
ly fulfilling its obligations, and performing
its promises to the letter. 1t will thereby
secure the confidence of capitalists in Eu-
rope and America, and be able to negotiate
its bonds ut their face at a low rate of in
terest. One-half of the public debt is
drawing six per cent interest in coin, and
two-thirds of the remainder $50 per cent in
currency. Now if the interest on the en-
tire debt can be reduced to the Uniform
rate of five per cent, there will be a saving
to the taxpayers of thirty millions a year,
and at the same time the credit of the Gov
ernNent will be maintained at the highest
point.
BY no possibility could local taxation Sc
cure ten or even five millions from the
bonds, because they would be concealed
from the assessors, and not returned, just
as moneys, notes and credit are now con-
cealed in all parts of the Union. But con-
o. tl,e ~, lN<,
inflicted on the general Government A
loss of % per cent on the sale of $4,000
100000 of new bonds to pay off the old
ones, would amount 10 1928, 100000, and
this sum would have to be added to the
national debt, and interest paid on it. For
the Government to tax its own bonds wo'd
be as absurd and destructive of its credit
as for an individual who had note in a
bank to withhold portion of the lawful
interest due them. How much would his