New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-08-12

eould he directly affected how is it possible for him
/ to derive any special benefit from either
| What advantage, if any, could 10 be 10 the Gov
! eminent The Government would be the gamer TO
The amount of the bills lost wOrD out or destroyed
in circulation and that would be all For the inter-
eat it might save on bonds taken up by the
issue of notes il would lose on the coin necessary 10
be kent ON hand for the redemption of its notes. For
unless that was done how could the issue OF paper
| be doubled or trebled without becoming finally as
worthless as the assignats of France under LOUIS
XVI or the Continental money of our fathers ouch
has ever been tine fate of all large issues OF lredeeH
able paper, no matter by what nationality lssue9
| or what legal penalties may nave Deen ehactou
against those who refused 70 receive ~ ,a oo,0-
| In the transaction of business IN trade ana COM
merce is il wise to disregard the wisdom OF the ages
and the experience of all timef But even II no as
aster should follow akin 20 those OF all past expert
snce what other objections can there be to trying
| this experiment IL would convert the OOVern-
ment into an enormous bank OF Issue, with al It's
poses of any Kind, the Government Is the poorest OF
an instrumentalities. If the experiment were TO DC
! aftempted and the National banks were all de-
| stroyed the very first requisite would be 10
double the issue of Treasury notes IN order 70 sup
ply the place of the retired Circulation OF the Danks
and thereafter TO increase them with the grow ana
development of the country the increase TO be de-
| termined by an arbitrary act of Congress, which
! wOuld be settled by majority of body OF men
who as a general rule, would be more competent
TO settle wisely any question of finance or commerce
than any other equal number OF reasonably weiI-ln-
formed men. If the increase was not settled by Con
gress then Ivy the decision of one man, selected by
the amounting power on account OF bis mertorlous
DOlitical service Controller OF the Currency VINO
would thus be clothed with almost absolute power
| over all the monetary affairs OF the people Inc
Democratic party in its better days won It's most
signal triumph in warning against Jhe Dangers 10
liberty and the institutions of the country OF SUCH
power conferred on nine bank directors.
| All monopoly in furnishing circulating medium IS
DESTROYED by the existing free banking law. The
system by its own elasticity would adapt itself TO
the varying wants of trade and commerce free
from the whims and caprices' of scheming pOlit-
cians or the iqnorance and stupidity Of self sufficient
government officials, 1t furnishes 10 the people OF
the whole country q currency OF uniform value, per-
fectly safe and secure against loss, and when the
Government Tedeems ITS legal-tenders, convertible
at Will into money recognized by all commercial
nations of the same market and intrinsic value.
A DIFFERENCE AND THE REASON FOR 1T.
How does it happen that these two pieces of
paper-the United States note and the National
bank bill-both of the same intrinsic value and
both resting upon the same Government security
for ultimate redemption, are not alike
i'm all respects as money Simply because
the Government in time of war; IN the exercise
of its war powers, declared one legal-tender
That fixed its debt-paying value but not ITS value
for trade and commerce. If YOU propose TO buy my
coat Judge for myself TO the value of what you
offer to give me in exchange, But II you owe me
for coat already sold, must take in payment OF
the debt what the laW.maklng power declares
leQal-tender In time of war 10 can make Govern
ment promises egal-tender, for the same reason
that il can seize you and me, our fathers and
brothers, and place us III the lannon's mouth, take
your property without compensation, and quarter
armed men in your dwellings without your consent.
unlimited power to declare war. And Congress IS
not only the sole judge to the declaration but also
as to the measures and means for It's rigorous prose-
cutOn, so as to bring 1t 30 a speedy ana ehectIVe
close. For that purpose II can In ITS discretion de-
clare that the promises of the Government shall for
tho time being have all the uses OF money.
But i'm time Of peace the law making power has
no constitutional authority to make thing Of no
intrinsic value money for the payment OF debts
Such is the dictum and the argument of the
Supreme Court of the United States in its decision
declaring the ega-teuder Acts of Congress consti-
tutOnal. But time of war it is the sole Judge as
to all means appropriate and adapted for its prose-
cutiOn.
Under this same power the Government could
issue its bonds and other securities free IRON local
taxation. But if that was the only authority for
It. then the exemption could only apply 10 those
issued in time of war Exemption OF bonds and
notes of the United States FROM State and local tax
alton rests upon the inherent structure OF the Gov
eminent Itself. IL was so decided long ago by the
unanimous decision of the supreme Court OF the
United States, IN the case OF McCulioeb against
the State of Maryland. Chef-Ju stice Marshall IN
delivering the opinion OF the Court. said: The
Stete Governments have no right to tax any OF the
constitutional means employed by the Government
OF the Union. TO- execute Its constitutional
Wolves the power to destroy; the power to
destroy may defeat and render useless the power to
create. II the State may tax one instrument
employed by the Government in the execution Of its
powers it may tax every other instrument" This
decision has been acquesced IN not only as cOnsti-
tutional law but as necessary to the safety and
istence OF the Nation. Local taxation OF Govern
ment bonds and notes is the the taxation of
ITS credit. In times of danger, were ii constitu-
tOnal, hostile communities could within their re-
spectye Jurisdictions, tax It's credit out OF exist
ehce.
NO ADVANTAGE N TAXING BONDS.
But even if the taxation OF bonds were cOnstitu-
tiOnal, what advantage would Ii be to the Govern
ment TO tax thomf 1t that was 10 BIO done larger
rate Of interest, Of course must be paid. There
would be no such thing as the sale Of bond bear
ing per cent interest II 1t was subject TO taxation
Mat advantage, then, would it be to the Govern
ment to pay or per cent interest ana Then collect
back or per GENT in taxation IL saves in the
rate of interest About the amount 1t would collect
in taxes and the cost of collecting the tax.
While money invested ia bonds exempt from tax
alton paws nothing in local taxes, it contributes
directly the National Government in the reduced
rate of interest and money IN other investments, but
while it subject TO local taxation contributes moth
ing directly to the National Government. One kind
OF investment contributes to The State, the other to
the Naton but neither ono contributes directly to
both State and Nation, yet both kinds are subject
alike TO all the laws for raising revenue by the
United States. whether 1t be income tax tariff or
- The exemption of Government bonds from local
taxation, has been decided and Teaiiirmed by
the highest court TO be inherent in tho fundamental
organization of the Government, so IT cannot be
changed without change Oh tie Constitution.
PAPER AND COIN.
But TO return to the discussion of the question Of
currency from tins digresslOn into which have
been led by this brief reference to the history OF the
war legislation pertaining to IT, The cost OF paper
that is, it's intrinsic vaue-is comparatively moth
ing. in costs no more TO make 900 bill than
| So one. The printing press changes tho amount Of
| the promise simply by changing the numerals that
| marx it, Here is gold com, which reads on its
| face twenty dollars. IL promises nothing, ana says
! nothing, about legal-tender. Yet the law that
authorized it's cOinagethat Is, changed 1t into this
! shape from bulliOn-says 1t IL legal tender 20 the
| amount of $50 for all claims apd demands whatsO-
| ever The bullion out of which this Is taken Is not
| legal tender, yet the same weight of ii has the
same market value. so legal tender creates no real
| yaIne il simply declares what shall pay a debt
| Tins coin is not $50 in value because TIE law says
! IL is Without the law it would be the same in
value or nearly 80. Without the law this piece of
paper in value is nothing. The law makes either
| pay the same debt, but cannot fix the value of
! either for trade or commerce.