Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1894-06-26
FIFTY-THIRD CONGRESS.
WASHINGTON. June %
SENATE.

be affected by tariff legislation was TAX
en- up. An effort was made on the
part of the republican Senator'S to have
it referred to the finance committee,
and, after motion TO that effect was
defeated-yeas l6: nays PAL the
democratic Senator'S voting with Mr..
Allen in the negatiye-the resolution
went over without further action. and
the tariff bill was laid before the SEN
ate-the pending question being the in
cone tax provision.
Mr.. Hill withdrew an amendment
which he had offered, before the adj
journment on Saturday, to strike out
the exemption from taxation OF the in
come of United States bonds so exemp-
ted by the law of their issuance: and he
suggested to make the clause read, 1.-THE
principal and interest of which are, by
the law of their issuance, etc. That
suggestion was accepted and the clause
was so modified.
Then Mr.. Hill stated that the reason
why he had offered his amendment last
Saturday was TO call TO the attention Of
the people the fact that $685., 100000 OF
property were By this clause taken out
of the taxable property of the country.
He then offered an amendment to in
clude within the exemption the bonds
OF a State, county, municipality or
town. and he made an argument in
support Of that amendment.
Mr. Vest asked why should the
holder of state or city bonds be exempt
from taxation. Was it not an invest
ment-as much so as any other invest
ment that could be made? a millionaire
might invest his immense fortune in
State or municipal bonds, and thus
have 30 or 100 million dollars exempt
from taxation. The results Of such
legislation would be to put an enormous
premium on those securities, to the dis
advantage of other securities of the
country.
Mr.. Hill argued that with this new
income tax on State and municipal
bonds. the people who buy them would
insist on higher rate of interest.
"And thereby" Mr. Higgins suggest
ed. increase the State taxation to
meet that higher interest"
Mr.. Hill conceded in that suggestion,
and said that States and municipalities
should be put on an equality in that
respect with the federal government, so
that they should not be compelled to
negotiate their bonds at a higher rate
of interest.
Mr.. Plat inquired whether States
could not provide for the issue of bonds
to be free from taxation.
Mr.. Hill had no doubt that they
could.
Mr.. Chandler submitted that the in
come tax would be odious enough with
out making it more so by taxing the in
come from State, county and municipal
bonds. If the income derived from in
terest on United States bonds should
not be taxed, the income derived from
Interest on State, county and municipal
bonds should not be taxed.
Mr.. Higgins said that the income tax
provision not only invaded the domain
of the States, but made the States
themselves instrumental in the collec-
ton of the taxation.
Mr.. Allison thought that the Sen
ator from Missouri should accept Mr..
Hills amendment and yield the
point :" but Mr.. Vest, without rising,
said be had yielded too many points al
ready
Mr. Hoar asked Mr.. Vest tc explain
what difference there was between the
case of taxing the interest on State
bonds and the case wherein it was held
by the Supreme Court of the United
States that where a State had contract
ed to pay certain sum of money to
person for the performance of a public
function, that money could not be
taxed.
Dir. Vest said it seemed to him that
the decision of the Supreme Court did
not touch the question at all. 1.-THE
finance committee were to do what it
was now asked to do, all capitalists
would invest in State, county and mu-
nicipal bonds, which would become
more valuable than any other invest
ment, and the general government
would become crippled.
Mr.. Hills amendment to exempt
from the tax the income derived from
securities of States, counties rnd NUM-
cpalities was rejected-yeas % nays
so. Two democratic Senators Gray
and Pughl voted with Mr.. Hill. Mr..
Irby voted against the amendment, and
so did the populist Senators, Allen and
PETER. Senators Kyle and Smith were
paired with republicans.
Then Mr.. Hill moved an amendment
restricting the exemption of State bonds
(not county or municipaD. In an argu-