Fayette County herald. [volume] (Washington [Washington Court House], Fayette County, O. [Ohio]) 1860-1???, 1868-08-27
-TAXATION Of I. s. BONDS.
Speech of Mr.. Blaine, Of Maine.

speech OF A4rs IbIalneJ VI S4dln0
IE tadl .e h ----- ' g0v 4t
The following speech was deliy
cred by Mr.. Blaine, Of Maine, in th'
House OF Representatives, June 2S
1868:
4 MIR. Blaine. The facts that the
bonds of the United States are ex
empted from State and municipal
taxation, has created a wide. spread
discomfort among the people, and
the belief prevails quite generally
that if exemption could be removed
the local burdens of the Taxpayer
would be Immediately and essen.
TALLY lightened Many persons as
sert this belief from a spirit of mis-.
chievous demagogueism, and many
do so from sincere and conscien.
tious conviction. To the latter
class / would beg to submit some
facts and suggestions which may
greatly modify ifnot entirely change
their conclusions.
The total gold-bearing debt to
the United States, the conversion
-thirt'es complied, amounts
to little more than twenty-one
hundred million dollars; of this
sum total something over two hun
dred million dollars draw but five
per cent. interest--a rate not sufli-
ciently high to provoke hostility or
suggest the necessity of taxation.
Indeed it may be safely said that
there never has been any popular
dissatisfaction with regard to the
non-taxation of the five per cent. IS,
it being agreed by common consent
that such a rate of interest was not
unreasonable on loan negotiated
at such time.
The agitation may, therefore, be
regarded as substantially confined
to the six per cent. gold bearing
bonds, which amount to the large
aggregate of nineteen hundred mil
lion dollars. Many people honest
ly, but thoughtlessly, believe that
if this class of bonds could be taxed
by local authority the whole vast
volume represented by them would
at once be added to the lists of the
assessor. 1t is my purpose to
show very briefly that this conclu-
sion is totally unfounded and erro-
neous, and that if the right oflocal
taxation, existed in its fullest and
amplest extent, but a minor frac-
ton of the total amount of bonds
could by any possibility be subject
ed to any more local tax than they
already pay.
The entire amount ofthesc bonds
as l have stated, is nineteen nun
dred million dollars; and of this
total by the best and most careful
estimates attainable, at least six
hundred and fifty millions are now
held in Europe. This amount
could not, therefore, be reached by
any system of local taxation, how
ever extended, thorough and search
ing. Deducting the amount thus
held abroad we find the amount
held at home is reduced to twelve
hundred and fifty million dollars.
But of this twelve hundred and
fifty millions more than one third,
or to speak with accuracy, about
four hundred and twenty five mil
lions, are held by the national
banks, and no form of property in
the United States pays so large a
tax, both local and general, as these
banks. The stock, the repositories,
and the deposits which these four
hundred and twenty-five million of
bonds represent pay full local tax
at the highest rate, besides nation
al tax averaging about two and a
half per cent Were the power of
local taxation made specific and alb
solute on these bonds, they could
not yield a dollar more than is now
realized in that direction. 1t thus
follows that the twelve hundred and
fifty millions of bonds in this coun-
try, presumptively escaping local
taxation must be reduced by the
amount represented by the banks,
and hence we find the aggregate falls
to eight hundred and twenty five
millions.
The reduction, however, goes
still further, for it must be remem-
bered that the savings banks of this
country have invested their depos-
its in these bonds to the amount Of
one hundred and seventy-five mil
lions. In some states by local law
the deposits of savings banks are
exempt from taxation, as an incent-
i've to thrift and economy In 9th
er states, where these deposits are
taxed, as in Connecticut, it has been
held by judicial decision that the
fact of their investment in United
States bonds does not exempt them
from taxation. Hence these one
hundred and seventy-five millions,
thus invested in savings banks de-
posts, are either locally taxable, or
if exempt, it is by State law and
not by virtue Of the general exemp-
ton of the bonds, It thus follows
that the eight hundred and twenty
five millions must be further reduc-
ed by this sum of one hundred and
seventy-five millions, leaving but
six hundred and fifty millions not
already embraced within the scope
of local taxation.
But there is still a further reduc-
ton of thirty millions held by the
life insurance companies and held
II = a