The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-07-03
Tho Taxation of National Bonds.


in accordance with positive instructions, which
provides for the retention by the Secretary of
the Treasury Of ten per cent. of the interest
now paid on Government bonds. When the
committee made its report it directly stated
the members of it care opposed to the propo-
sition embraced in this resolution, and report
the bill only in obedience to the positive order
of the House. They reserve to themselves
their rights as members of the House to op-
pose in every possible way the adoption of
measure which they regard as hostile to the
public interest and injurious to the national
character" 1t is hardly necessary for US to
say that we heartily commend the report of
the committee, and hope that the hasty action
of the House does not intimate determine
tion to be guilty of the greatest wrong which
it could possibly inhict upon the country. Such
an action would be more than a political crime;
it would be political blunder. In whatever
light we view the measure, whether as sound
policy or sound morality, it appears alike op-
posed to the doctrine of common sense and
justice. The following is the text of the bill
"Be IL enacted, etc, That fr )m and after the
passage of this act, there shall be levied, col
amount of interest hereafter due and payable
on the bonds and other securities of the United
States. To secure the collection of said tax the
amount OF interest hereafter paid on any bonds
or other securities OF the United States, bearing
interest at six per cent shall be at the rate of
only hve and halt per centum; and bearing
interest at the rate o. five per centum shall be
at the rate of only four and ive.tenGhs per
oent and If bearing interest At the rate of three
per cent. shall be at the rate of only two aud
seven tenths per cent. per annum. No higher
rate of interest than is prescribed shall be paid
United
States now outstanding or authorized to be
Issued, all conditions OF any such bonds or Sc
curity, and laws or parts of laws to the contrary
Notwithstanding"
Viewed first in the light of morality, as that
is the great guiding star of national action, We
cannot but deplore the adoption of such law
as a calamity of no mean magnitude. The
nation, in her darkest days of internal strife,
called on her children to supply her with the
money with which to defend her life. How
readily they responded, history will decide
On receiving their private funds, she engaged
to repay them on certain terms. She agreed
to exempt the principal advanced her, from
taxation, to pay the debt in gold, and to hold
it inviOlately free from all forms of national
taxation. This is her contract. No evasion
can disguise it, no verbal nioeties avoid it.
In honor she is bound not to tax, in any shape,
her bonds, but to pay on them annual interest
of per cent, in gold. She is pledged so
to do.
Now when, by the aid given her by her
citizens, she has successfully overcome her
enemies, and stands once more erect, what do
her statesmen propose to do2 Not to pay the
6 per cent. as agreed upon, but to pay per
cent. minus 10 per cent. Of that sum, or, in
reality, to let the national debt bear but $40
per cent. interest. man has 800 United
States $50 bond, and on it is yearly entitled
to $6 in gold as interest. The Government
does not pay him Sc; it keeps fifty cents and
pays him $3.50. This may be called fnan-
ciering. To our minds however, it seems
like theft of fifty cents. 1t is repudiation,
and whether snch an act be done by private
person or a great nation, it is alike dishonest
and morally wrong.
Looking at it again in the light of said
policy, we cannot but see that such course
is mistake. The future is hid in impene-
trable mist. AS a nation we cannot tell what
is in store for US. 1t is not only possible, but
it is probable that we will want to borrow
money again. Hardly any nation can go
through fifty years of life without needing a
loan of money. II we repudiate, either totally
or partially, and sully our honor and make
doubtful our faith, where will we get money
il we want it again On what terms will it
have to be negotiated, if it can be negotiated
at allS The lesson of Mississippi is to plain
not to be needed. She repudiated, and if
ever State was punished for wrong deed
she was. She could get no money on any
terms, and her very name became a by-word
of reprOaoh throughout all the world. Viewed
then in the light of policy alone, the proposed
measure should receive an overwhelming
defeat.
But it is also unjust to the bondholders.
There is popular misconception in regard to
the taxation of the interest of the United
States securities. 1t is generally thought
that the interest received from Government
bonds Is not taxed. A man says, 'I have an
income of $4,000 from mortgages, and I must
pay tax of 800 to the United States, Yet
my nephew, who has $4,000 a year il bonds,
pays nothing" We have heard this said
again and again; yet it is stupidly false. A
man who has $4,000 a year in bonds pays lust
the same as man who has $4,000 a year in
anything else. AHncomes from ,ohatever source
are tared fve per cent. and that includes all inte.
"overnnlent bonds. So that the Injustice
denounced, is no injustice at all.