The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-07-05
Tax on the Interest Of the Bonds-Report
Of the Committee.

Of the Committee.
The Committee of Ways and Means has not
reported agreeably to the instructions OF the
House on the proposition to tax the interest Of
United States bonds ten per cent, though the
resolution instructing it to do 80 was carried
by the large vote of ninety-two to fifty five.
! It has reported bill, it is true, but not
such one as was wanted, and 1t has
at the same time protested against the mea-
sure Instead of reporting bill simple in
terms, like the resolution, and continIng itself
strictly to performing that duty, it has compll-
Gated the matter az much as possible 80 as to
embarrass the future action of the House, and
has made stupid argument against the mea-
sure. Instead of stating in direct terms that
this is tax on the interest of the bonds, a bill
is reported reducing the interest Though this
amounts to the same thing, so far as the sum to
be paid and collected goes, the principle in
volved is quite different. In principle taxing
the interest and reducing it are two very differ
ent things, and the action of the COMMITTEES
only shows its stupidity and covert purpose in
reporting such bill
The argument of the committee, if it is
| worthy of being called argument, is tallacious,
! far-fetchei and irrelevant. It speaks of pre-
cedent and OF English law, of national honor
of the public credit and of the invested rights
of the bondhoders in the same claptrap phra-
seology that the organs of the bondhoders in
this city do. The report shows what narrow
|
bers of the Committee of Ways and Means
| are.
The question has nothing to do with pre-
cedent it is simply one of public necessity
and convenience. The whole of our ilnancia!
condition is unprecedented, and Congress has
been legisating all along since the war com
menced without precedent. Look at the in
come tax, that has no precedent in our history
and is generally believed by the best lawyers
to be unconstitutional Indeed, Congress has
been doing little else than legislating outside of
the constitution. Yet great hue and cry is
raised now when measure is proposed en-
tirely within the legitimate powers of Con-
gress, simply because it taxes the rich bond
holders for whom the Committee of Ways and
Means has assumed the defence. AS to Eng
lish law and the action of the English govern
ment the argument of the committee is very
lame and displays lamentable ignorance of
history. Nearly all the British debt was con-
tracted at high rate of interest; good deal
Of it at six per cent, and portion higher than
that yet it is well known that the interest now
ic ,Iuf md fhro and hale
this reputation? Was the reduction of interest
from time to time to half of what it was
originally reputation? Our bondholders and
the would-be financial legislators in Congress
are fond of quoting English precedents and
English honesty, yet they seem to forget this
fact It may be said that this was all done
legally and by an exchange of securities
well, we propose to do everything
according to law. The British bondholders
could not resist the action of the government
in reducing their interest, and it was as COM
pulsory upon them as the proposed tax here
would be- They no doubt cried out repudia-
ton just as our bondholders do now All
governments have assumed the same right At
this very time the news comes to us that both
Austria and Italy propose to tax the interest
on their debts. In Austria the tax is to be
twenty per cent-ten per cent more than that
proposedb by Congress.
The twaddle of the committee about our
national credit abroad and the difficulty of
obtaining loans hereafter from Europe should
this measure pass is on par with the rest of
the silly argument. All the enormous loans
and resources required to carry us through the
war were made at home. We did not ask
Europe for loans, though the Europeans did
buy some Of the bonds because they were
cheap, just as they buy our railroad or other
bonds. We do not aud are never likely to want
European loans to the government. We
are better without them. If we could carry
through such gigantic war on our own re-
sources we shall never want the aid of Europe.
United States bonds are exempt from local
taxation, while all other kinds of property
are subject to it. The bondholders now
draw over eight per cent interest in
currency on their bonds-an enormous
rate Of interest-and there is no kind Of
property 30 well able to bear tax. In
fact, it would be only fair and equitable to
make it fifteen per cent instead of ten. The
Committee of Ways and Means and those
members of Congress who oppose the measure
think only Of legislating for the rich and to
make the Industrious classes bear all the
burdens of the government. Few of the work.
ing people have any bonds to tax, while they
are taxed in everything they wear, eat, drink
or use. We hope some sensible and patriotic
member of the House will frame suitable bill
on the simple proposition contained in the reso-
luton passed on Monday and that both houses
of Congress will pass il without delay.