Ellsworth American. [volume] (Ellsworth, Me.) 1855-current, 1868-07-03
MiscrllaMe Us.
Taxation OF u. S. Bonds,
SPEECH oF NJ. BLAINE.

HE following Is tiic Gf00e report "a WI
Blainc's speech delivered in the House o
Representatives, June ed.
Mr.. BLAINE The fact that the bond
ii the United States are exempt frnH
State and municipal taxation has created
widespread discomfort among the people
and the belief prevails quite generally TIA
il this exemption could he removed the 10
cal burdens of the tax payer would he9n'
mcdiately and essentially lisiitrned.-
Many persons assert this belief from ;
s1iirit of mseliifvuus dcfiag"gism. an'
many DO SO from sincere and consideration
conviction. 70 the latter class | woul,
beg to submit some facts and Suggestions
which may greatly niaiifv. if not entirely
change their conclusions.
The total gold bearing debt of the United
States the conversion of seven thlrtlrs
completed, amounts to II 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 sufficiently high to pro
woke hostility or suggest the necessity OF
taxation. Indeed it may be safely said
that there never has been any popular dis
satisfaction with regard to the non taxa
ton of the five per cents. 1t being agreed
by common cnnsent that such rate Of in-
terest was not unreasonable on loan ne
gOtiated at such time.
The agitation may. therefore, he regard
ed as substantially confined to the six per
cent. collaborating bonds. which amount to
the large aggregate OF nineteen hundred
million dollars. Many people honestly.
but thoughtlesslv. believe that if this class
of bonds could be taxed by local authority
the whole vast volume represented by them
would at once he added to The lists of the
assessor. Il is my parpose TO show ve y
briefly that this conclusion totally I'M
founded and erro eous. anl that il the
right of local taxation existed in it, fullest
AMI anplest extent. l,nt Il minor fraction
of the total amount OF boals caald by any
possibility be sutjreted 10 any more local
tax than they already pay.
The entire amount Of these bonls. rs
have stated, is nineteen hundred million
dollars an! of this; total. by the hest and
most careful estimates attainablc. at least
six hundred and fifty million are now held
in Europe. This amount could net. there
fore, be reached by any syslr,n OF local
taxation. however extended thorough, and
searching. Drduc.ilg the amount thus
held abroad we fad the amount held at
home is reduced to twelve huadfed and
fifty million dollars.
But of this twelve hundred and fifty
millions more than one third. or to speak
With accuracy, abaut four hundred and
TWENTY-FIVE millions, ART. held ny the IA
ti0nal banks, and no form OF property III
the whole United States pays 50 large Il
tax, both local and neral. IA these hanks.
The stock. the Repositories. aud the d,pos-
its which these four hundred and twenty
five million of bonds represent pay full To-
cal tax al the highest rate, beside a nation
ai tax averaging about two and a half per
cent. Were the pnwes OF local taxation
made specific and absolute on these bonds.
they could not yield dollar more than is
now realized in that direction. II TINS
fellows that the twelve hundred and fifty
million of bonds in this country. presamp-
lively escaping Local taxation, msst be
reduced BY the amount represented hv the
banks, and hence we find the aggregate falls
to eight hundred and twenty five million.
The reduction. however. goes still furth.
er, for it must be remembered that the saw
ings banks of this country have invested
their deposits in these bonds to the amount
of one hundred and seventy five millions
Tn 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 tax
ed. as in Connecticut, it has been held BIZ
Judicial decision that the fact of their in
in TTpttaI Gt.tac hood, l.,ao i,
exempt them from taxation. Hence these
one hundred and seventy five millions. thus
invested in savings banks deposits, are
either locally taxable. or, if exempt, it is
BY State law and not by virtue Of the gen
eral exemption of the bonds. 1t thus fol
lows that the eight hundred and twenty
FIVE millions must he further reduced by
this sum Of one hundred and seventy five
millions, leaving but six hundred and fifty
m lions not already embraced within the
scope of local taxation.
But there is a still further reduction c
thirty millions held by the Life insurance
companies and held on precisely the sane
terms as the deposits of savings banks
fiat is, either taxed locally. or. if exempt
deriving the exemption from the lncal law
he eui lius ti'' iNSt'' 70 vi liitst
life insurance ca npaiiirs invested to tn,
extent Of thirty millions in United States
bonds are just as open to tax ttipa when
invested in that form us lhmlsh they were
in State o. railroad securities. Dedacs
ing these thirty millions WE find the untaxcj
bonds reduced to six hundred aud twenty
millions.
And still there is another large rcdact
ion; for the fire and marine insurance con
panies and the annnliy and trust colnpnn-
les and other corporations which cannot
readily b. casscd, hnld in the aggregat,
over one hundred and twenty five millions
of bonds and these are he'd on precisely
the same bases as those held by the savings
bank and the life insurance companies
These numerous corporations have ihri,
capital stock. their reserves and their sur
plus earnings invested in Government
bonds TO the extent ninled. and they arr
in this form just rs open To taxation am
are actually taxed just as much rs though
they were invested in amy other form O
security. Making the deduction of Iii,
one hunar and twenty-five millions W,
find reminding hut fonf hTntlfcl and nine
~ Eve millions oi the SIX cent. gold
bearing b. n Is that a'c NOT already prnc
tica,y Subjected "a local tiyatipn. Allow
ing Tor the possibility tia. one hundred
millions of til five per c'nis are held in
stead of six per cents in all the channels
of investment have nasmci aud it follows
That mt the untsiJe lignrc there are to da,
in the whole untry hiss than Fix liundrct
mill ms OF Government slX"s. nat fully
suhiecte to the power of lneal taxaii n
And these six hundred millions are rapid
~ growing less as the varons corporate
institutions have ma ned toii,inac to in