The Waynesburg Republican. [volume] (Waynesburg, Pa.) 1867-18??, 1868-07-29
rAxAfIos OF UNITED STATES noxDs
Speech Of Mr.. niaine of linine. o.

| by Mr.. Blaine OF Maine IN the House
of Representatives June %, 1868:
Mr.. BLAINE. The facts that the
bonds of the United States are exemp-
ted from State and municipal taxation
has created widespread discomfort
among the people, and the belief pre-
walls quite generally that if this ex-
emption could be removed the local
burdens of the taxpayer would be i'm
mediately and essentially lighted. Ma
ny persons assert this belief from a
spirit of mischievous demagogism,
|and many do from sincere and consci-
entious conviction. To the latter class
| would beg to submit some facts and
suggestions which may greatly mod
ify, if not entirely change their con-
clusions. r,...., ,... ....s
The total bearing debt of the
United States, the conversion of seven
thirties completed, amounts to little
more than twenty7one hundred mil
lion dollars of this sum total some-
thing over two hundred million dol
lars draw but five per cent. interest, Il
rate not sufficiently 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
to the non-taxation of the five per
cent, it being agreed by common con-
sent that such a rate of interest was
not unreasonable on loan negotiated
at such time.
The agitation may, there, be regard
ed as substantially confined to the six
per cent. gold-bcaring bonds, which
amount to the large aggregate of nine
teen hundred million dollars. Many
people honestly, 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 erron-
cous, and that if the right of local tax
alton existed in its fullest and amplest
extent, but aminor fraction of the total
amount of bonds could by possibility
be subjected to any more local tax than
they already pay. .
The entire amount of the bonds, as
| have stated, is nineteen hundred
million dollars and of this total, by
the best and most careful estimates at
tainable, at least six hundred and fifty
millions are NOW held in Europe. This
amount could not therefore, be reach
ed by any system Of local taxation,
however extended, thorough and
searching Dcducting the amount as
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-thir,l, or to
speak with accuracy, about four hun
dred and twenty-five millions are held
by the national banks, and no form of
property i0the whole United States
pays SO large tax, both local and
general, as these banks. The stock,
the repositories, and the deposits
which these four hundred and twenty
five millions of bonds represent pay
full local tax at the highest rate, be-
besides national tax averaging about
two and a half per cent. Were the
power Of local taxation made specific
and absolute OH 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 million of bonds in this
country, presumptivcly escaping local
taxation, must be reduced by tie
amount represented by the banks, and
hence we find the aggregate fails
to eight hundred and twenty-five mil
lions.
The reduction, however, goes still
futher, for it must be remembered that
the savings-banks of this country have
invested their deposits in these bonds
to the amount of one hundred and
seventy-fvc millions. s1n some States
by local law the deposits of savings
banks are exempt from taxation, as
an incentive to thrift and economy.
In other 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 invest
ed in savings-banks deposits, are eth
er locally taxable, or if exempt, it is
by State law and not by virtue of the
general exemption of the bonds. 1t
thus follows that the eight. hundred
and twenty-five millions must be fur
ther reduced by this sum of one hund-
red and fifty millions not already
embraced within the scope of local tax
alton.
But there is still a further rcduc-
ton of thirty millions held by the life
insurance companies and held on pre-
ciscly the same terms as the deposits
of saviugs-banks-that is either taxed
locally, or, if exempted, deriving the
exemption from the local law The
surplus earnings and reserves OF these
life insurance companies invested to
the extent of thirty millions in Uni
ted States bonds are just as open to
taxation when invested in that form as
though they were in State or rail-