Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1868-09-30
Has a Government the Right to Tax
its Bonds?
An INTERESTING DISCUSSION.
To the Editors Of the Erening Post

| 10 tie EdttOrS OF the EUen1n1 Post:
Alexander Hamilton Washington's
chosen Secretary of the Treasury-in his
mastery report of the 10th of January,
1895, on Public Credit prefaces a con-
sideration of this question, which not long
after the organization of the government
had created some uneasiness among the
holders of public securities, by remarking
that he had regarded it as incapable Of
being disputed, and that the negative of
such pretension had acquired in his mind
so much the force of an axiom as TO have
precluded even the mention of the subject
in any one Of his former reports. 1t is
a pretension,' he adds, so unwarranted
by principle or usage so subversive Of
the sound maxims Of public credit, as TO
warrant presumption of the impossibility
of any legislation inhicting SO deep a
wound on the national interest and char
acter or to derogate from principle which
may be placed among the most sacred in
the administration OF government
But the confidence which this illus
trious man believed might justly be re-
posed in the collective wisdom of the gov
ernment, has in these degenerate days of
our political history been rudely shocked
by threat of the leading radicals of the
Democratic party, audaciously proclaimed
in the very platform of their late conven-
ton.
1t may be well then for the considerate
and conservative men of the Democratic
party, and Of all parties, who prize the
honor of their country, at home and abroad
to read, mark, learn, and inwardly digest
the following luminous and unanswerable
arguments from the pen of one of the
choice and master spirits of the golden
age Of the republic.
Is there right IN the government to
tar its Oa0n tundS ?
The pretense of this right of the legisla-
tive power is to make all the property of the
State contributory to its exigencies.
But this right is obviously liable to be
restricted by the engagements of the gov
ernment; it.cannot justly be exercised in
contravention of them they must form an
exception 1t will not be denied that the
general right in question could and would
be abridged by an expressed promise not
to tax the funds. This promise, indeed,
has not been given in name, but it has
been given in substance. When an indi-
vidual lends money to the State, the State
stipulates to repay him the principal lent,
with certain interest, or to pay certain
interest, indefinitely, till the principal is
reimbursed; or it stipulates something
equivalent. in another form. In our case,
the stipulation is in the second form.
To tax the funds is manifestly either to
take or to keep back, a portion of the prin-
cipal or interest stipulated to be paid. To
do this, on whatever pretext, is not to do
what is expressly promised, it is not to
pay that precise principal, that precise in
terest, which has been engaged to be paid
it is therefore to violate the promise given
to the lender.
But is not st:pulation to the lender,
with tacit reservation of the general rights
of the legislature, to raise contributions on
the property of the State?
This cannot be supposed, because it in
wolves two contradictory things; an obIi-
CATION to do, and right not to do. An
obligation to pay certain sum, and right
to retain it in the shape of tax. 1t Is
against the rules both oflaw and reason to
admit, by implication, in the construction
of a contract, principle which goes in de-
struction of it.
The government by such construction
could be made to say to the lenders : L
want a sum of money, for national pur
pose, which all the citizens ought to con-
tribute proportionally, but it will be more
convenient to them and to me to borrow
the money of you. If you will lend it, |
promise you faithfully to allow you cer-
tain rate of interest while [ keep the
money, and to reimburse the principal
within determinate period, d,-except so
much of the one and the other as l may
think fit to withhold in the shape of a tax.
Is such construction either natural or
rational? Does it not, in fact, nullify the
promise, by the reservation of a right not
to perform it?
Let the question be tried by another
analysis.
Public debt can scarcely, in legal phrase