The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1881-03-04
4itlln,ond dispatch,
FRIDAY.,...""ts..'..'MAh,hf y 1851
rxemnt,nu Bonds from Taxation.

Exempting Bonds from laAa'ioh.
what was The objec, Of the Virginia lie
r,s,a,urc in cxempiing the bords ssueo
under The McCr,Locn bill from 'axs'ioh
PLAINLY II was done as an iuducement TO Tue
States creditors to accep, the reduced ra'es
OF interest provided for In that o''''
When tha, bill was passed there WEI.
q, existence more than fifteen bunore"
millions OF dollars Of United o'a'es
hond. bearing 4, "A, 3, and 6 per cent
interest, aud all exempt from ''A'"o"'
What possible hope could the Leeis'a'u,'
have bad OF placing debi OF tsNao'c oo"o'
a,s 4 and per cent. for single s'''e'
and this NOT by any means one OF the r'cu'
OF, What reason could have been ad'auceo
a. the neIs,os holding the states bonus
hearing 9 per cent. interest a. an "su"."'
es,culaitd 10 induce them 10 acceP' Wv
terms ~ the new Law II The bonds hao NOV
,s.n made non.taxable? None Whatever
Ana therefore. the Legislature had no
,oa, choice in The matter, though ma
,,r;,v NJ ,be members no doubt knew mat
world be next TO impossible 10 sa'is'y inc
average voter that it was right to exempt
The new bonds.
Practically, the Legislature proposed 10
excent from taxation only so much OF inc
tbiriy.odd millions OF debt as was he'o IN
yIrsinia-say some eight or nine mi'''ohs
al dollars. The rest Of the bonds are owheo
outside OF the State. II, therefore, all inc
bonds now In existence were taxable, the
State Of virginia would derive but little re-
venue from them. Valuing them al 80 cenis'
those owned in Virginia would iurnisb Il
tayibie basis not exceeding seven millions
OF dollars, and therefore could not yleio
more than $4,000 a year, sum not worm
disputing abou, ia this connection. IL was
too small a sum 10 constitute valid obiec-
ton on the part OF the State to the coho''
tions OF the McCULLOcH bill.
We showed yesterday that men VINO buy
3 per cent. bonds at par from State 20 IN
effect pay their taxes in advance. rms re-
mark was intended Of course 10 apply Spc'
cially to cases in which the credit OF The
state is so good as to induce The clpilaHsl
10 purchase her bonds at par voluntarily
and of his own motion. UnfOrtuDateiy VIZ
ginla's credit is not good in tbemoney mar
kets of the world, and so she could not oher
the inducement in question to capitalists.
She could not, as Uncle Sam expects soon
TO do, 20 into market overt, aud sell her
2 rer cent. bonds ct par and then give
10 her creditors the option Of either tahin@
the reduced rate OF interest or accepting
,heir money back. This is what England
and the United States do under such CIR
cumstances. Richmond city can DO Inc IKE
whenever any of her or per cent. bohQS
Income ledeemable-she can borrow money
Mt ! per cent, and honorably tell bel ctedl'
tors that tLey must either take back their
money or take 5 per cent. interest. we say
Vlrguia's credit was in such CONDITION
that she could not occupy THIS 0leh
yantaee.cround. The best she could 90
was. not 10 tender TO her creators
their money or a reduced rate OF ln-
teresi. but 10 offer them non-t'Xib'e
bond II they would agree to accept reduced
rates OF interest. This was at least one OF
tbe considerations which led as many OF her
creditors as did so 10 surrender IN 1873
per cent. bonds and accept 3, 4, aud D per
cent. bonds. And let us ask again, how
could she hope TO induce one single bond
holder 10 accept the terms Of the McCUL-
LocH bin il that bill mad not exempted lie
bonds from taxatlons
What has reduced the rates Of interest on
money from the high ones which prevailed
everywhere in this country few years ago
to the low ones which now prevail? Would
this reduction ever have taken pace-cou'u
il ever have taken place-if the United
States Government had continued to pay d
per cent. interest annually on over two
thousand millions OF dollars, as II did not
many years agot OF course not. The peo-
pie. then, who borrow money are benefited
by the low rates OF interest which the action
OF the Government has had hand IN Oring'
ing about. The smallest borrower has had
his intere>t.cbarges somewhat reduced.
The fact that Richmond city with her
high credit cannot borrow money at per
cent. Is owing to the fact that she cannot
exempt her bonds from State or national
taxation. Either the Government OF The
United States or the Government OF NT-
glnia might levy tax upon them. The
man VINO buys her bonds, therefore, cannot
pay his taxes in advance. She eau, as she
does, exempt her bonds from taxation by
the City Councils but Tins fact is not suffi-
cient 10 put them upon an equality with
n IL In oil naYH NJ m.
certainty operates to her disadvantage. No
body can say what the tax might not be.
The United States bonds suffer from no such
element. No county, city, town, or State
can tax them. The man who buys them
can pay his taxes in advance.
Mr.. Hayes's proclamation is already out