The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1894-06-26
HILL TURNED DOWN
An Absurd Income Tax
Amendment Beaten by
a Heavy Vote.
REPUBLICANS ALL BACK HIM.
Proposals Which Would Place th'
State and City Boards at.an
Absurd Premium.

WASHINGTON. June 49, 1S94-A resolu-
ton offered on the 18th of May by Mr..
Allen pop, Neb.) calling for information as
! to the total number of persons engaged in
protected industries whose wages may be
affected by tariff legislation, was taken up
| An effort was made on the part of the Re-
publican Senators to have it referred to the
Finance Committee and, after motion to
that effect was defeated-yeas, 16; nays, ~
all the Democratic Senators voting with
| Mr.. Allen in the negative, the resolution
went over without further action, and at
half-past ten the tariff bill was laid before
the Senate, the pending question being the
income tax provisions.
| Mr.. Hill, dem, N. W withdrew an
amendment which he had offered, before the
I adjournment on Saturday, to strike out the
! exemption from taxation Of the income OF
| United States bonds so exempted by the law
| Of their insurance; and he suggested to make
the clause read "1he principal and interest
| of which are by the law of their Insurance."
ETC. That suggestion was accepted by Mr.
| Vest, dem, No. on the part OF the Finance
| Committee, and the clause was SO modified.
| Then Mr.. Hill stated that the reason why
| he had offered his amendment last Saturday
1
| agreed to) was to call to the attention of the
people the fact that e35 millions OF property
| were by Shis clause taken out of the tax
| able property OF the country. He then Of
| fered an amendment to include within the
| exemption the bonds of a State, county,
municipality on town, and he made an argu-
ment In support Of that amendment
NO REASON FOR IT.
| Mr. Vest dem. Mo- argued against it.
| Why, he asked, should the holder of State
or city bonds be exempt from taxation. Was
| it not an Investments much SO as any
| other investment that could be madef A
| millionaire might invest his immense for
| tune in State or municipal bonds and thus
| have fifty or one hundred million dollars ex-
| empt from taxation. The result of such leg
| islation would be to put an enormous prem
| ium on those securities, to the disadvantage
| of other securities of the country.
| Mr.. Hill argued that with this new income
| tax on State and municipal bonds, the peo
pie who buy them would insist on higher
| rate of interest.
s.And thereby Mr. Higgins rep, Del)
[, suggested, ''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.
MT Platt rep, Coun.), inquired whether
| States could not provide for the issue OF
| bonds TO be free from taxation.
| Mr. Hill had no doubt that they could. In
| the CITY of Brooklyn bonds to the amount of
hundreds of thousands of dollars had been
| issued for the erection OF armorles, which
bonds were declared to be exempt from all
| taxation He admitted that Federal taxa
| ton was not in view, but he submitted that
| under the terms of their issue, they should
i ha ayempt from Federal taxation.
| REPUBLICANS WITH HILL.
Mr.. Chandler rep, N. H submitted that
/ the income tax would be odious enough
| without making it more so by taxing the in
come from State, county and municipal
| bonds If the income derived from interest
| on United States bonds should not be taxed,
l the bonds derived from interest on State,
| county and municipal bonds should be
| taxed.
! Mr.. Mitchell rep, Oregon coincided with
the views of Senators Hill and Chandler.
| Mr., Higgins rep, DELI said that the in
| come tax provision not only invaded the do
main of the States, but made the States
| themselves instrumental in the collection of
| the taxation.
Mr.. Sherman rep, Ohio said that the
more he thought about it the more he be-
came satisfied that the provision would be in
\ effective either upon the officers OF State
| or upon State.
Mr.. Allison rep, Iowa. thought that the
| Senator from Missouri should accept Mr.
| Hills amendment and yield the point; but
| Mr. Vest, without rising, said that he had
yielded too many points already.
Mr. Hoar rep, Mass) asked MIR. VeSt to
| explain what difference there was between
| the case Of taxing the interest of State bonds
and the case wherein 1t was held by the
| Supreme Court of the Uaited States that
where State had contracted to pay GER
| tain sum Of money to a person for the per
| formance of public function, that money
| could not be taxed.
| Nlr. Vest said that he had made brief
statement in reply to Mr.. Fill, while Mr.
| Hoar was not in the chamber; and he did not
| care to repeat it. But it seemed to him thAt
| the decision of the Supreme Court in the
case referred to, did not touch the question
at ALL Fl the Finance Committee were to
| do what it was now asked to do, all capital
| lists would invest in State county and muni-
! cipal bonds, which would become more valu-
| able than any other investment, and the
| general government would become crippled.
| After hour and half discussion, Mr.
| Hills amendment was rejected-yeas %;
nays 30 Two Democratic Senator'S Gray
| and Pugh) voted with Mr.. Hill Mr.. 1rby
voted against the amendment, and so did the
| Populist Senators, Allen and PETER. Sem
ators Kyle tpop., S. d. and Smith dem,
| N. j., were paired with republicans.