Gallipolis journal. [volume] (Gallipolis, Ohio) 1837-1919, 1867-09-12
Taxation of National Bonds.

1dAdIl0n OF NaLl0ndi bCnQs'
Hon. John Sherman made aspeech
at Canton, Ohio, on the evening of
the Goth inst, in which he discussed
pretty thoroughly the question of
the finances, in reply to Messrs. !.
Thurman and RanEey, who have had
considerable to say on the subject.
We copy SO much of his speech as
relates to the subjects Of the taxa
ton of national bonds and the ad-
vantages growing out of the estab-
lishment of national banks, and ask
for it a careful perusal by every one
into whose hands the present num-
Der of the Journal may fall:
at is said that the debt is not sub
ject to taxes, and that this discrim-
ination is unjust to other taxpayers,
Now, this debt as property or in.
come held by our citizens is subject
to taxes by the United States, Con
gress may impose taxes on it, as it
does on other property or income
These bonds now pay income. tax,
but it is not subject to State tax
This is true, but whose fault is it?-
Did the Union party make this .ex-
emption? Not at all. 1t is made by
the Constitution of the United
States, for which our Democratic
friends, when it suits their purposes,
profess such profound Difference
The Supreme Court of the United
States as early as 1919, decided that
bonds of the United States are not
subject to any tax by or under State
authority. This decision has been
followed in q multitude of cases
since. 1t SO happens that every
Democratic judge who has sat on the
Supreme bench from 1919 to this
time, has had this question before
him, and each one concurs in the
same opinion. The principle is OBJ,
vious, that the power of Congress
to borrow money is paramount and
cannot be taxed or interfered with |
without destroying it. To allow a
State to tax national loans may en-
able a State to prevent the nation |
from borrowing money. Now, these
decisions are very well known to as
good lawyers as Thurman and Ran
ney, but instead of stating them
fairly they blame the Union party
for exempting the bonds, while all
United States bonds have been ex-
empt from local taxes since the
foundation OF the Government, by /
the Constitution itself, and this has
been acquiesced IN by every admin
istration, including the Democratic
The first loans during the war con
tanned no reference to this Constitu,
tional exemption, but in subsequent
laws, after arecent decision by Judge |
fancy, in December, 1862, that Uni
ted States bonds could not be taxed. /
we inserted a declaration in one of
our loan laws that United States
bonds were not taxable by or under
State authority. This did not change
the law but simply declared the law.
In view of this very question, and
Of the certainty that when the war
was over our restored credit would
enable US to borrow money on more fa-
vorable terms, we always kept in view
in issuing bonds the principle of "re
deemability," at the. pleasure of the
United States, on short time. This
was fixed policy Of your financial
agents. This the reason of your
five twentles and your ten -forties.
The United States may pay off any
portion of our debt within short
time, either by taxes or by borrow
ing money on more favorable terms.
Nothing now stands in the way ex
eept the Treasury notes known as
the seventh thirties, which will be soon
converted. When this is accom-
plished, the whole public debt is in
the most favorable shape, and may
from time to time be funded at
lower rate of interest, and so as to
conditions proper and right,
both to tax payers and public cred
itors, the question Of taxation. Ifl
we can sell them, we can issue bonds
subject to State taxation,
and with the proceeds. pay off our
outstanding bonds, as they accrue;
or we may, and which / think is far
better, retire our present bonds
With bonds at lower rate of inter
est, the reduction of interest being
In the nature of a national tax on
government. securities But, fellow
all these arrang gements must
be upon the basis of the strictest
observance of the public faith. Ma
tional credit is our only reliance in
time Of war and peril. Debts can |
not be enforced against a nation by
courts of law, and rest only upon
honor and faith. We can not afford
to tarhish these. All that may be
done consistently with these to
tighten our burdens will be done by
the Union party, butsthe malignant
whisperings of Copperheads, who
talk about taxes and debt, are in
tended only to prepare you for re-.
pudiation and dishonor. a sss8 az
'tNow, there is good deal said
about our national banking system.
As this is a creation of Congress,
the right to change or modify it is |