The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-07-16
Taxing Our Own Debt,

Taxing Our Own Debt.
From the ~ y Evening Post
There are still few honestly inquiring why
the national debt should not be- taxed by Con-
gress. They see clearly the disgrace and ruin
proposed by the New York platform, which
demands that there shall be no difference
whatever in taxation between national bonds
and other property. They see that it is nulli-
fcation and reputation in one, for it would
enable each State, acting siugy, to override
the general Government by taxing it's debt,
and would violate the compact under which
the bonds were sold. But they do not see
why Congress may not, while exempting the
debt from State taxation, lay special duty
upon it for the national treasury.
little patient attention will make it clear
that this, TOGO, would be wrong; though not
so scandalous violation of law and honor
as that proposed by the Democratic Conven-
tiop.
The United States cannot levy direct tax
upon persons or property, except by appor-
tiODing it among the States according to popu-
latiOn. Such clumsy method cannot be
thought of in practice; so that the general
government has always avoided direct taxa
tion.
1t taxes manufactures; thus taxing con-
sumers indirectly. 1t levies license dues, thus
taxing trade indirectly. 1t assesses per.
centage upon incomes, thus taxing the pro-
peIty which yields them indirectly. ALI this
it can perhaps constitutionally do. The goods
made, the business carried on, and the income
enjoyed by its own citizens upon its own
territories are parts of its resources, elements
OF the national wealth.
Where income must contribute to support
the Government the income from the public
funds has no right to exemption. 1t is Justly
and properly taxed, equally with income from
all other sources. 1t is just as much part of
-.
which the national revenue is drawn, as any
other income, and ought to be taxed just as
much and no more; and so it is by our excise
law.
But, if Congress should levy an exceptional
or special tax upon this kind of income, and
should thus lay upon it more than its equal
share of the general burden, this would be
precisely equivalent to an arbitrary reduction
OF the interest on the bonds. 1t would be vio-
lating the contract of the nation with its
creditors. The tax would be no longer an in
come tax, but partial repudiatiOn of the
bonds.
So much is true in relation to the citizens
of the United States. But more than third
of our debt is held by foreigners. The credit
ors, in this case, are citizens of Germany,
France and England. The bonds are their
| property, as much so as their farms, houses or
| clothing in their own lands. They have an
| exclusive right to receive and enjoy the in
| come from the bonds in question, a right as
| independent of the United States Government
as the right to till their soil or occupy their
! homes.
| The relation of the United States to these
| men is not that of ruler and subject, not that
| of government and citizen; but simply and
| exclusively that of borrower and lender. They
have lent the United States money, relying on
the promise OF the latter to pay certain in
| terest for its use.
rl,ot hnrs1x Init Gkoka
| tax the citizens of England, France, or Ger
many Within those countries, our Govern
| ment is but debtor; superior in dignity,
credit, and character, as a debtor, perhaps, to
any mere individual, but still debtor, and
not sovereign. 1t has no more right o
| diminish the interest bargained for, under the
| name of tax or under any other name, than
the New York importer has, under similar
| pretence, to deduct part OF the bill due to a
| foreign shipper.
1t is true that the United States have the
power to withhold part of this interest.
| They have the power to withhold it all. So
| has nearly every man in business the power
to sWindle his creditors. But neither in ma
| tiOn nor in private life does the power to cheat
imply the right to cheat. And even the power
is one which generally brings unpleasant re-
| suits when exercised.
There is probably no instance in history in
| which national crime has bsen followed by a
| retIibution more swift, more certain aud more
| terrible than such an act of retribution would
| bring upon the United States.
We have nine hundred millions OF bonds in
| Europe. 1t is safe to assume that more than
half would be sent home in panic, to be
sold for gold, at the first clear indication
that such course would be pursued. The
immediate consequences of this are obvious
| enough.
Gold would rise rapidly to premium as yet
| unheard of. All the necessaries of life would
gradually but certainly follow it. Our currency
would tall to merely nominal value; and our
national credit fail. The owners, not only of
the bonds, but of all debts, public and pri-
vate, would be ruined; general bankruptcy
and wide pread distress would be the beginning
of lorg era of commercial ruin and financial
anarchy.
There is no single aim to which national
statesmanship ought now to direct its energies
more resolutely than that of providing against
a European panic in our bonds. Any step
which looks towards Mr.. Seymour's plat
form is sure to produce such panic. The
taxation of our bonds would therefore be, not
only as shown above, a crime, but a fatal
blunder.
The one sure way to prevent such a panic,
and to save at once our material interests aud
our honor, Ia the payment OF the principal