Year: 1865

Secretary Mccullough in his annual
report to Congress, disposes of the
question of the taxation of Bonds in
the following forcible style. We call
the attention of tax payers to this brief
argument upon this question and ask
them to compare it with the buncomb
declaration of Copperhead orators
about equal taxation:


In view of the fact that the exemption
of Government securities from State taxa
ton is, by many persons, considered an un-
lust discrimination in their favor, efforts
may be made to induce Congress to ,egislate
upon the subject of their taxation. or
course, the existing exemption from State
and municipal taxation OF bonds and Sc.
curties now outstanding will be scrupulous
ly regarded. That exemption is part of
the contract under which the securities
have been issued and the money loaned
thereon to the Government, and it would
not only be unconstitutional, but breach
of the public faith Of the nation, to disre-
gard it. 1t would also, in the judgment Of
the Secretary, be unwise for Congress to
grant to the States the power which they
will not possess unless conferred by express
Congressional enactment, of imposing local
taxes upon securities of the United States
which may be hereafter issued. Such tax
alton, in any form, would result in serious,
if not fatal. embarrassment to the Govern
ment, and, instead Of relieving, would event
ually iniure the great mass OF the people,
who are to bear their full proportion of the
burden Of the public debt. This is sub
.ject 10 relation to which there should be no
difference of opinion. Every tax payer is
personally interested in having the public
debt placed at home, and at low rate of
interest, which cannot be done if the public
securities are to be subject to local taxation.
Taxes vary largely ID different States, and
in different counties and cities Of the same
State, and are everywhere so high that, un'
less protected against them, the bonds into
which the present debt must be funded can.
not be distributed among the people, except
in some favored localities, unless they bear
rate Of interest so high as to make the
debt severely oppressive, and to render the
prospect Of its extinguishment well nigh
hopeless Exempted from local taxation,
the debt can, it is expected, be funded at
an early day at five per cent. if local taxa
ton is allowed, no considerable portion of
the debt which falls due within the next
four years car be funded at home at less
than eight per cent. Tho tax payers of the
United States cannot atford to have their
burdens thus increased 1t is also evident
that the reliet which local tax payers would
obtain from Government taxation, as the
result of low rate of interest on the ma
tional securities would, at least be as great
as the increase Of local taxes to which they
would be suSNcted on account of the ex-
emrtion of Government securities while
if those securities should hear rate Of in
terest sufficient to secure their sale when
subject to local taxes. few, if any Of them.
would long remain where those taxes could
reach them. They would be randlv trans.
farrcd to other countries, into the hands of
foreign capitalists, and thus at last the
burden of paving high rate of interest
would he left upon the people Of this coun.
try without compensation or alienation.