Year: 1868

or in action. 1t is evidently not the first


till it is reduced to possession by payment


To be the second would suppose legal


power to compel payment by suit. Such


a power does not exist. The true defni-


tion of a public debt is, property subsist-


ing in the faith Of the government Its
essence is promise Its definite value de-


pends upon the reliance that the promise
will be defnitively fulfilled. Can it put
its faith under contribution? Where or
what is the value of the debt, if such a
right exist?


Suppose the government to contract
with an individual to convey to him hun
dred acres of land, upon the condition OF
paying one hundred dollars When he
came to pay the hundred dollars, and de-
smand his title, could the government re-
quire of him to pay fifty more, as a tax
upon the land, before it would consent to
give him the title? Would not this be a
breach of contract fraud-which moth
ing could disguise?


This case is parallel with that under
examination, with circumstances that fort
ify the right of the lending creditor.
The government agrees with him that
for one hundred dollars, which he delivers
to the government, it will deliver to him
at the end of each year six dollars. Here
the six dollars to be delivered answer to
the land to be conveyed, with this stronger
ground of right, that the consideration for
them has actually been given and received.
Yet when the creditor comes TO demand his
six dollars, he is told that he cannot have
them, except upon the condition of return
ing one dollar as that of tax. What is
this but to say that his title to the money
In this case, as to the land in the other,
must depend upon his paying, or allowing
further consideration for it, not contempla-
ted in the contract? Can there be doubt
that this also would be a breach of con-
tract-a fraud


a rent or annuity, liable before it
passes, or in the act of passing, or at the
moment Of passing from one proprietor to
another, to a deduction or drawback, at
the pleasure of the party from whom it is
to pass, is an imaginary thing, destitute
both Of shape and substance.


When a government enters into con-
tract with an individual it deposes as to
the matter of the contract its constitutional
authority and exchanges the character of
legislator for that of a moral agent, with
the same rights and obligations as an indi-
vidual. Its promises may be justly con-
sidered as excepted out of its power to
legislate unless in aid of them. 1t Is, in
theory, impossible to reconcile the two
ideas Of promise which obliges, with
power to make law which can vary the
effect of it. This is the great principle
that governs the question, and abridges
the general right Of the government to lay
taxes-excepting out Of it a species of
property which subsists only in its prom
ises


But shall the proprietor of money in
the funds then, be exempt from his pro-
portion of the burden which other citizens
bear This will not be the consequence of
the principle. As consumer, of which
his income Is the instrument, he VIII pay
his proportion Of the taxes on consumption
As holder Of any other species of prop
erty, procured by that income or other
wise, which is liable TO a tax, he must also
contribute his proportion.


But without undue refinement the lend
er Of money to the public may be affirmed
to have paid his tax when he lends his
money. Relying upon the engagement of
the government express or implied, that
he will receive what is promised him with
out defalcation, he is content with less
interest than he would take if fsubject to
any such detalcation, and especially ifit
was to be arbitrary as to its extent In
this lesser rate Of interest he may be said
to pay his tax, or to purchase an exemption
from it,


Here also we find what is decisive on
the point of expediency.


If the Government had right to tax
the funds, the exercise of that right would
cost much more than it is worth. The
money lender would exact exorbitant pre-
miums, not only as an indemnication for
the use which the government might prob
ably make Of its right, and which in prac-
tice would be likely to be qualified by
some regard to equality of contribution,
but as an equivalent for insurance against
the risk or possibility of a more extensive
use. Hence the Government would be
likely to pay more in premiums to possible
loans than it would draw back in taxes
and the former being supposed but equal
to the latter, there would be no advantage
in exercising the right.


. But it will be perhaps, more safe to
affirm that there would be no borrowing at
all upon such terms. The first precedent
of tax upon the funds might be expected
to compel the government to an express
remuneration of the right in every future
loan. But no such remuneration would
heal the wound which an example CT its
exercise would give.


9 The United States must henceforth
tread with the most cautious steps"