Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1886-04-23
STATE BONDS.
A Letter from Governor Foraker
Showing that They Are
Taxable.
constitutional Debates Quoted from TO
Show the Intention of It's Provisions
AN Exhaustive Reply TO Criti-
cIsms of His Recent Message
on Taxation.
co1uMnus, O.. AprIl 10. 1sse.

sage to the Legislature II had never seemed
TO me possible that any Intelligent man fa-
mlliar with the requirements of the Consti-
tuition could honestly believe that tho bonds
of the State were non.taxablo. Since then 1
have been compelled to change my mind and
believe that Mr.. Noble and Mr.. Parsons do
honestly entertain that opinion. 1nasmucb
as they do they must be exoneratcd from ali
Intentional wrong.doing in withholding their
bonds from the assessors and from the ap.
plication OF any criticisms my message may
contain that would otherwise apply to them.
Such criticisms were only for those who
fraudulently defrauded tho State of its rev.
cnue and not for men who honestly believed,
as Mr.. Noble and Mr.. Parsons did. that their
securities were not subject to taxation.
But all this does not settle the question
whether or not those bonds arc taxable.
That remains to be determined. and IL m the
end 1t is established that they are taxable 1t
Is hoped all back taxes that have not been
col, collected, because OF tins mistaken belief.
in that event will be shown to have uninten-
tionally wronged the State.
bonds 20 OF Inc ars aTab Hr mot
conceded by all that IL was competent for
the Constitution to provide that they should
be taxed. although prior to its adoption they
had not been. Conceding, therefore, for the
sake of argument, that the bonds issued prior
TO 1850 wore not taxable but expressly ex-
empt thercfrom by the statutes authorizing
their issue, the only question remaining is as
10 whether or not the provision of section 2,
sa sf That stosRs ee sbs ThSs
taxed" applies to them and makes them sub.
jcct to taxation. No one can question but
that such. is the effect of the language en-
ployed. As to what the convention meant to
aay on the subject, light can be gathered
from the debates that occurred in the con-
yention. II any one will take the trouble to
look at volume of the Debates of the Con-
stitutional Convention of lS5J-5l he will find
that from about page 30 to page l2j of this
volume there Is scarcely any other subject
cons dered. He will also find that the ma.
jority of the convention, following the lead
ership of Judge Ranncy and Mr.. Groesbeck
ablest men of the convent on, voted on sew
erai occasions thatthe constitutional provis
ion to be adopted should provide for the tax.
ation of 'all bonds, stocks, etc, of the State p"
be made absolutely explic I, inserted in
the provision that was to have been adopted,
the language, all bonds. etc, of the State
NOW or hereafter to be issued" 1T was
urged in objection to the adoption of this
language that II adopted II would require
the taxation of such of the bonds and certi0-
Gates as had been issued under statutes ex.
pressly exempting thom from taxation, and
that there would be consequent violation
of the piighted ia tn of tho State; but not
wthstanding this objection the convention
voted, by decisive major ty, so to tax them.
This was done in Committee of the Whole.
When this section was reported to the con-
vention. IL remained the subject of conten-
tion until the last day on which the convep-
aon sat and WAS s,n mot of
fore the convention adjourned on tho
10th day of March, 1851. At that time the
present section above referred to Of the Con.
stltution was agreed upon and adopted 1t
Will be observed that the language "now or
hereafter issued" that had been incorpor-
ated in the Committee of the Whole nnd sew
eral times sustained by the votes of the CON
vention, was el minated But IL any one
will take the trouble TO look Mt page So of the
second volume of these debates. he will see
that just before tho vote was taken upon the
adoption of this section, Mr.. Lawrence spoke
as follows:
MIR. PREsIDENT-I have one word to say
before this report passes beyond our action.
1t will be perceived that the terms bonds and
stocks, where they first occur in the section,
in the orig nal report, which received the
sanction of majority of this convention on
several occasions. Why was this change
hesitation in saying 1t is SO understood by
tins convention, the change In phraseolOgy
was made to obviate the technicdl objections
of certain members, without wishing or In
tend ng to ch hange the Substance of the origi-
nal report. l voted ut the time against the
CHI, change believing, as i did, that much Of
would he the result. now only wish to say,
Mr.. President, that wish clear and un.
equivocal construction OF these terms to go
out from tn convent on. then, here in my
place and in the presence of the members of
this body, declare as the Judgment of this
those terms as used IN this section are under
stood, and Intended to be so understood, to
mean United States bonds and State stocks.
ese m the of s
and, as stated by him. was intended to be
the construction of the convention, and ii
the convention. In view of this record,
Whatever may be claimed as to what was
the effect and intention of the Constitu-
tlon as to bonds that had already been is.
sued and exempted from taxation, 1t was
clearly intended that all bonds thereafter
TO be issued should be taxed. But the
n tpflt
other important facts bearing upon this
question, He will lind that 1t was stated
In, the debates by Mr.. Groesbeck and
equally careful to make only accurate state.
mcnts, that an examination of the several
statutes under which the bonds then in exist.
ence had been issued disclosed the fact that
only two statutes authorizing such bonds
provided for their exempt on from taxation,
AT page 2s. vol. 2 of these debates, will be-
found n statement dated February 10, 1876 by
John Brough, Auditor of State, from which
It, appears that the bonds maturing IN 1856
lS3S-37-3s31-4O.
All the other bonds that were issued in 1899
were issued as per cents redeemable in 1850
and the:bonds issued redeemabe in 1850 were
the only ones issued in pursuance of the act
OF 1889. during that year; and hence t is that
the bonds that matured IN 1855 were none of
them, by the express terms of the statutes
under which they were issued, over at any
time exempted from taxation.
IL
no doubt accurately. although not conceded
by Judge Ranney and those who agreed with
him, that all these bonds, without regard to
whether they were expressly exempted from
taxation or not. were put upon the market
and rold aS exempt from taxation. 1t will
he further observed that almo st without q
single except on the convention was of the
opinion that whatever IN ght be done as TO
taxing bonds already In existence the true
policy was to tax all bonds thereafter to be
9ssuel. 1t viii also be found stated in these
debates that these bonds, excepting the
issue Of 1925, had been sold at q premium
ranging all the way from eight per cont
TO twcnty-four per cent. and II was urged by
those opposed to the taxation of those al.
rendy SO issued that this high premium in
dicated that the state had already been
compensated forts exempt on OF the bonds
from taxation. This Ia significant In view of
the statement of Mr. Noble in one of his
communications that the bonds sold in 1850
brought premium of ~ per cent He
argues from the fact that they brought such
o premium that y was understood
membered iSat there, there was as' never e r be-. be-
Vet than we had in 1855, and that
and better than It was from 1850 to 1850, When
these high premiums of from eight TO twent v
four per cent; were commanded. 1t would
Heem that We have In the low premium of
three and half per cent, at leastvery valua.
BILE. IL not conclusive evidence that the
capitalist who took the bonds understood
and appreciated the fact that new Constitu-
tion had been adopted under which it was
impossible TO Issue u non taxable bond, even
though the Legislature might choose and try
to do SO.
Mr.. Noble has also called attention to the
act OF 1856, under which the bonds he speaks
for were issued, and claims that the issuing
of those bonds was simply in the nature of d
renewal of the pre-existing debt aud con-
tends that because the original evidences of
this debt were exempt from taxation 30
must be these new securities. The statute
bears on it's face conclusive evidence, that
no such transaction as n renewal was In.
tended. It's provision Is that the Commis-
sioners Of the Sinking Fund shall issue Ger.
tihcates and sell them in the markets, and
that the proceeds shall be applied us fol-
lows: "Sec. g. The inonles arising from tho
sale of the certificates authorized by this act
shall be appl ed by the Commissioners of
the Sinking Fund 10 the redemption of
the certificates of The funded debt of the
State" etc, and section appropriates
from the proceeds as follows; First. for
the payment of interest on the debt of the
State: second. for tho payment of interest
on school and trust funds; third, "for the
payment of the foreign debt of the State. pay
able at the pleasure of the Stste after the
year 1856 t2,b ,O00;' and then for other pur-
poses other specific appropriations arc
made. SO that the very language of the stat
Ute proyIder for the payment and not the
exchange or renewal of bonds or the con.
tinuance OF toe old debt II is also claimed
that Notwithstanding the statutes except
those Of 1904 and lfcll dtd mt arnraaaiv nv.