Year: 1864




Ing System.


Secretary Chase has addressed the
following letter to the Chairman Of the
Senate Finance Committee


TRgAsUEY DEPARTMENT. May 5. 1864


Sir:-Nothing but my deep sense OF
the Importance Of sustaining by every
possible means the public credit, upon
which the sole dependence of the gov
/ ernment to suppress the insurrection
( must rest, would induce me to address
i you this letter upon a subject which
has already received so much consider.
alton


The bill in relation to the National
banking system, now under debate, Is
in the nature ofan amendment to the
act Of last session. Though a complete
/ bill in itself, it contains few provisions
not substantially embraced in that act,
among which that in relation to the
measure and distribution of taxation
may be regarded, perhaps, as the most
/ important. Under ordinary circum-
/ stances there might be no insuperable
| objection to leaving the property organ



subject, as are almost almost all des-
criptions Of property, to general taxa
I ton, State, national and municipal
But in the present condition of the
i country, respectful submit that this
particular description ofproperty should
I be placed in the same category with
imported goods before the entry into
general consumption and be subject to
! exclusive national taxation


At the present moment the duties on
I imports form the sole reliance of the
government for means to pay the inter
est on the public debt If to these
means the taxes to be paid by the Ma
tional Banks shall be added, most inn
portant addition will be made to these
! measures. The mere fact that these
taxes are made payable to the national
! government, and 50 rendered available
for the payment of interest on the pub
/ lie debt, and for the reduction of its
/ principal, will strengthen the public
/ credit and facilitate the negotiation of
| the necessary loans at moderate rates
of interest. | have no doubt that such
disposition of these taxes would be
worth more to the government during
the present struggle in practical results
than three times the actual value of
taxes themselves


/ do not at all suggest that this de-
scription of property should not be tax
ed as heavily as any other description.
On the contrary, | think it Just that it
should bear its full proportion of the
/ ,,,,I,l5o kt,r1ar,1 I an, or,I,r ap-yt0tra tho
the taxation upon it shall be made 10
contribute as largely as possible to the
general welfare, and it is the conviction
deeply impressed on my mind that it
will contribute more when aggregated
/ in one mass and made to tell upon the
general public credit, than when dis
1 tributed between the nation aad the
I States and numerous municipal cOrpO-
rations, that prompts me to address
/ these views to you.


Under any plan Of partition that may
be adopted, the amount Of taxation
distributable to the several states and
municipalities will be comparatively
small and unimportant, and it is quite
possible that the total taxation Of bank
ing property for all purposes, will be
less than it will if taxed exclusively
for national purposes. The advantages
of partition to States and municipali-
ties will therefore be small, and the
banks may not lose by it. The nation
alone will be injured IL will not be
understood, Of course, that the forego-
ing suggestions are intended to apply
to real estate held by any banking IN
stitutions; that description of property
must necessarily be held by titles un9
der State laws, and should properly be
subjected exclusively to state taxation,
except in the event OF a direct tax by
Congress.


The case is otherwise with the per
sonal property and credits Of the Bank
ing Associations These receive their
organization from national law and for
great national purposes, and may there
fore with great propriety, and-as l
have endeayored 10 show at the present
time-with great public advantage be
subjected to exclusive national taxa
ton. Respectfully yours,


5. p CHASE
The Hon. VIM Pitt Fessenden, Chair


man Of the Committee on Finance


Senate Chamber.