The weekly democratic statesman. [volume] (Austin, Tex.) 1871-1883, 1879-03-06


only on that point. The holders of our
bonds are business men, IN most in
stances capitalists or bankers, and as
class generally consult pretty closely
their own interests. There are rules
governing money that sre established
and never change. Sir, il Will take
no lengthy argument 10 convince any
one of the fact that the holders of our
z per cent. bonds do not actually re-
ceive z per cent. upon the amount of
the capital they have invested in them.
The State pays yearly on every 800
bond the sum of 81, but at the present
market quotations the holder of z
per cent. 500 bond has $113 invested,
that is he receives only 81 on an invest
ment of $113, or interest at about the
rate of 6 per cent. l hold then, sir,
that there is q point at which
the capitalist will, in consulting
his own interest, part with his bonds,
and that point can be determined &C
curately and with but little labor.
This is demonstrated by the fact that
these bonds have quoted value on
Wall street to-day. 1t may be more
than 1-13, it will hardly be less, but
there is point az which the capitalist
will no logger hold. Then, sir, for
convenience in figures, suppose that
point should advance even 10 1-21.
What calculation should one make on.
it in substituting per cent. for
z per cent. bopd2 1t would be this.
The difference in the interest would
save the State per cent, or on each
800 bond So per year. In seven
years at So the $21 of additional
premium would be met, and as the
bonds have yet twenty-four years to
run there would remain II years at
saving of So or a saving of $51 in all
on this bond. II figures do not falsifY
themselves, aud they are said not to,
surely this is plain proposition and one
which the interests of the State, in
her troubles to-day, should suggest
speedy adoption. But we are told tdst
bonds ct four per cent. cannot be sold.
This is the assertion of gentlemen who
have opposed this bill, but, so far as it
has been supported by proof, it yet re-
mains only bare assertion. It was
the great Patrick Henry who said that
he knew of no other lamp by which to
guide his fees than the lamp of expc-
rience. What lesson has the expert
ence of Georgia taught to the financial
world within the recent past. l. it
not, sir, thst that State, with a debt
more than twice as large as Texas,
with old lands, worn out by loag years
of constant tii!a2e, without the young
and growing spirit of advancement
characteristic of TPxas-with no i'm
migration coming within her borders
that she has recently adopted a scheme
of finance which has worked out
grand results. What, cir, is the rate
of interest she pays to-day on her
bonds2 Ii is four per cent. II Georgia
and North Carolina can invite capital
lists at 4 per cent. interest, explains to
me if you can, why Texas should be
made to pay more. Nor sir, is this
all: The Uuited States bonds find an
eager market at 4 per cent. Since
the flrst day of January last, $780,
000 600 of 4 per cents. have found
anxious and ready purchasers; and
why, sir, because money in the great
commercial centers of London, Am
sterdam and Berlin. is worth only
from to 3 per cent. Indeed. sir, called
loans have been placed, [ am told, in
the city of New York, within the past
month or so, as low as one per cent.
But the principle upon which the
bonds contemplated in the bill before
US is founded, is that the bonds are to
remain at all times within the State of
Texas. Their small denominations
will make them available and useful in
facilitating commercial and business
exchanges. They go out among the
people of Texas, and we shall see the
day when our public debt will be owned
at home. Tue yearly interest will
be retained within our own borders.
Our treasury will not be depleted ev-
cry six months in the interest of the
foreign bonuholder. 1t is for this OBJ
ject and purpose, sir, that would
have the interest low. 1t is for this,
sir, that l would have the bonds ex-
empt from all manner of taxation, so
the poorer classes of our population
could buy them; so that the laboring
man or woman could find safe invest
ment without seeking a savings bank
for the small surplus of bis or her
earnings. have no fear, sir, that our
district judges, our clerks, our sherffs,
our district attorneys; in fact, all
officers of the State, will not invest
readily In them the money due for SAL
ariss from the State; and / am assured
by business men of this city that hun
dreds of thousands of dollars werth
of these bonds will be taken up at
once by the moLeyed men of the State,
But we are told, sir, that the Con-
stitution stands in the way of the tax
am not here to charge
Dor to deny that the Constitution has
the strange fatality of standing in the
way of the material progress, happi-
ness and benefit of the State in more
ways than one, but do not believe,
sir, that the objection raised here Is a
valid one. 1t Is a we'll established and
generally recognized principle in the
ethics of taxation that no nation or
State has the right either in equity or
law to levy tax upon its own obliga-
lions. The holders of our bonds are
creditors of the State; to them she
owes the same peculiar relations which
subsist b,tween the individual creditor
and debtor. She must recognize
every part of her indebtedness. II
would be dishonesty to repudiate
either the whole or part of her debt.
To seizs upon and appropriate any
part OF it by taxation is in fact Iepu-
dating the part SO taken. Thus she
would be borrowing from her creditor
a given sum and then pay him back a
less amount. This question has been
settled by the Supreme Court OF the
United States. Upon it my own con-
victions are clear. am willing to
risk the bill upon this score.
There is another matter growing up
incidently from this discussion and
that is, sir, the policy, 30 to speak, of
the State exemptlng the bonds from
taxation. OF course, sir, we are to
the case for argument seke
that the State has the right to tax these
bonds. Now, sir, desire to put it
plainly as matter of dollars and cents,
is 1t advantageous to the State TO levy
and collect 6 tax on these bonds or per
centra, is it to her interest, weighing
that matter from g pecuniary point of
view, not to assess or collect the taxi
/ would say that waving sill
of principle in the mat
ter, the State would, at the end of
each year, come out of the Transaction
with more money by not taxing than |