The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1879-10-16
Forcible Views.

Hon. r. L. w. Duke, in affirmatively re-
spending to the call to announce himself
candidate for the Legislature from Albemarle
county. gives his views OF the question now
agitating the public mind of Virginia in an
able and exhaustive communication. We
take from it, the. following forcible para
graphs to which we direct the attention of
our readers :, eha
AS to- the exemption Of the bonds from
taxation, it will not be denied by any one
that bonds held out of the State cannot be
taxed, those only in the State can be taxed
as property, and the interest cannot be tax.
ed except as income. In the case Of Murray
VS.. Charleston. decided by the Supreme
Court OF the United States in October, 1877,
the Court says: 'sThe truth is, States and
cities when they borrow money and con-
tract to repay it with interest are not acting
as soVereignties. They come down to the
limits OF ordinary individuals. Their con-
tracts have the same meaning as those of
similar contracts between private persons.
Hence instead OF there being in the under
taking OF State or city to pay,a reservation
of a sovereign right to Withhold payment, the
contract should be regarded as an assurance
that such right will not be exercised. A
promise to pay with reserved right to deny
or change the effect OF the promise, is an
absurdity."
But apart from these, their creditors give
up absolutely one half of the unpaid interest.
They have given up one half of the accruing
interest for ten years, one third for twenty
years, and one sixth for ten years, and in
consideration OF this surrender the McCulloch
Bill relieves the bonds from taxation. But
as mere question of policy would it be jul
dicious to tax the bonds of the residents OF
Virginia, when you cannot tax those held by
non-residents? 1t has always been held by
political economists, that it is best for debt
due by state to be held by citizens of the
state, rather than by foreigners. The En-
gish Government has been enabled to man.
age its enormous debt, because the vast
bulk of it was held by its own people,
and the interest expended at home. The
French Republic was enabled to pay off in
few years the indemnity exacted o: it by
Germany Of IS, 1000, 600, 100000 by borrowing
the money from the French people. The
Government of the United States is converting
it's Foreign debt into domestic debt as rap
idly as possible. Is 1t not obvious to every
man OF common sense that it is better for
us to pay the interest on our public debt 20
our own people to be expended in our midst,
rather than to pay it to those who take it out
of the state? Instead of discriminating against
our own bondholders, and in favor Of the
foreigner, if any discrimination is to be made
it should be made in favor OF our own bond
holders. And yet the Mozart philosophers
com plain, because the McCulloch bill puts our
bondholders on the same footing with bond
holders living out of the state. 1t has hereto
fore been considered wise to invite capital into
the state. The Mozart philosophers have
arrived at the sage conclusion that it is better
to drive capital out of the state. We think
this is a sufficient answer to the objection
raised to the exemption of bonds held by our
own people from taxation.
1 do not claim that the McCulloch bill is
perfect, but it will accomplish the following
good results.
1t reduces the debt, which according to
Mr.. Massey was in July 1875 So, 673, 618 ,23,
upon large portion of which interest has
been accumulating since that date. to the
sum of $31, 739, 225,2S.
1t RENTS 81, 976, 69l % of past interest.
1t enables us, if the whole debt is funded,
to pay the entire interest on the whole debt
for ten years with 1852, 1875 per annum in
place of paying 81 ,2l3, 470. "a on two thirds OF
the debt. In addition to this, it enables US
to pay to the schools their full proportion Of
the taxes and to support the Government
without any Increase of taxation.