The herald and news. [volume] (Newberry S.C.) 1903-1937, 1914-02-06
The Matter of Refunding
The States Indebtedness

ion the man who did the eraSlng was
a very dangerous man to have hand
ling public pap rs or public funds, and
that the liquid used By him should not
be allowed to be kept in any Office
where bills, bonds or notes are handl-
ed to any considerable extent. think
you gentlemen will reach the same
conclusion, because if a man can so
completely erase a name, as was done
in this instance, 1 am surprised that
Gibson and Zimmerman got into their
serious trouble in the treasurer's Office.
As to 1912 Refunding Act
AS to the matter of refunding the
bonded indebtness Of the State, which
has been referred to by me in previous
communications to your honorable
bodies, you will recall that in my mes
sage, No. 46, at the session Of the gen.
eral assembly, of 1912, vetoing the act
providing for the refunding of the
State debt called your attention to GER
tain objections to and Deficiencies in
said act The most important was the
lack of provision in the act exempt
ing from taxation so much of the
capital stock of banks or corporations
within the State of South Carolina as
may be invested in such bonds, as
was provided in the acts of 1892 and
1894, in reference to the refunding Of
the State debt at that time
was fully convinced and in my be-
lief that it was to the best interest
of the State and to the advantage Of
the sale of tae bonds that such pro-
vision should be incorporated in the
| act, and after events in connection
with the refunding of these State
bonds have conclusively confirmed my
opinion and justified my judgement in
the matter.
The general assembly failed and re-
fused to heed my recu concentrations,
but, instead left the act as it was,
and without the provision requested
and urged by me. I-presume that this
action on the part OF the general as
sembly was taken and based upon the
report of the comptroller general Of
South Carolina, who, in his annual re-
port to the general assembly for the
year 1912, referring to the, refuhding
of the bonded indebtness, urged
against any such provision lin, the re-
funding act, saying that it would be
discrimination in favor of investments
in State, securities and against invest
ments in national securities; that the
same deduction would have to be
allowed national banks for invest
ments in United States bonds or secur-
! tiles and that such a provision of law
would be construed by the courts to
prevent the State from collecting the
tax due on national bank shares; so
that the State would lose not only the
taxes on the capital stock invested in
State bonds, but also the taxes on
the capital stock invested in United
States bonds or securities, which
would amount to an immense sum each
year.
How well founded such objection
could be or was, or how much truth
there was in such objection, can be
very clearly and easily seen by re-
ference to the opinions of the United
States supreme court, the highest
court of appeals and the court Of last
resort, which have been rendered
where simular questions have been
| involved.
The York Case.
This same question has been raised
in the very recent proceedings which
were heard before Judge Geo. E.
Prince, at Yorkville, and which were
brought by certain banks in York
county, one of which was a national
bank, asking for an exemption from
taxation by reason of the ownership
by the banks of certain nontaxable
bonds, among which were United
States bonds All of the bonds in
volved in the proceedings were, by the
terms Of their issue, exempt from
State, county and municipal taxation.
These banks claimed an exemption Of
their capital stock from taxation by
reason Of these provisions in the bands
owned and held by the banks, and, in
the case Of the national bank referred