Year: 1868

But waving the question whether Congress
can or cannot confer the right Of taxation upon
the States, let us consider Mr.. Pendletons
proposition to have this right conferred after
the bonds have been sold to the people. Mr..
Pendleton will excuse us for saying that this Is
fiat reputation, and we do him the credit to
believe he would abandon the To cory III he had


Of he o gbs snd
ment is that United States bonds shall not be
taxed by States. individuals buy them with
this understanding, and accept q lower rate of
interest In consideration of the exemption.
Hence the bonds can only be honestly taxed by
States when their liability to such tax is made
known at the time OF their issue and sale. To
"change the rule" after the bonds have been
sold to the people is to obtain money under
false pretenses and perpetrate q swindle.


But the exemption of the present United
States bonds from local taxation does not rest
alone on the Constitution and the failure of
Congress to give its assent TO such taxation
The law authorizing the issue OF the present
hvetwenty bonds and constituting the con i
tract between the Government and the public
creditor contains this explicit provision:-


And all stocks, BONDS and other securities Of the
ass sociations within the United States shall be
exem pit from taxation by or under State authority.


This proviso is attached to every loan bill
ton says "there is nothing amounting to a con-
tract that the bonds shall not be taxed above
certain rate" And it is his opinion (held
subject to future modiication) that the Gov
eminent may "change Its rule OF taxat0 a"
(that is repudiate its contracts) after the bonds
are sold. What would q business man OF ordi-
nary notions OF commercial honor say of Mr.
Pendleton's proposition? Mr.. Pendleton knows


Finally in case the present bonds cannot be
legally taxed by the States-and we have shown
that they cannot be-Mr. Pendleton would have
the General Government tax them to an
amount equal to the tax, State and national,
der of the Whole Question at issue. % which is that
the bonds ought TO be taxed in the communities
where they are held m But overlook the surren-
der, what then? The Government already
taxes the interest on its bonds by taxing in
comes. Any other national tax on national
the interest promised to be paid. In order to
tax It's own bonds honestly the General Gov
to do SO when 1t sells the bonds But, then,
1T will gain 40 money by the tax. for those
who have money to loan will demand an
increase OF interest just equal to the rate OF the
proposed tax. In other words, a Government
bond bearing six per cent interest and exempt
from all tax will sell for just as much as bond
bearing eight per cent. interest aid subject to
two per cent. tax. Taxing our own bonds
honestly is simply taking money out of one
pocket and putting 1t into the other, with the
addition that 1t costs something to make the
transfer, and that is so much dead loss. In
bonds we must issue them with the under
standing that they are exempt from tax and
then OBTAIN low low rate OF interest, and thus;
and levy n tax on them as Mr.. Pendleton pro-
poses Whether this sort Of swindling would
the common sense of The people to decide.


:, If any plan can be devised by Democrats or
Republicans whereby Government bonds can
be honestly taxed. and in such q way as to put
any money in the treasury. we shall gladly
favor its adoption; but as we do not believe any
human being can lift himself by his bootstraps,
so we do not believe the United States will ever
become rich by taxing it's own debts. If we
wish to repudiate let as do 1t openly, not CO.
verify. Mr.. Pendleton with his superior INTEL
ligence. sees and understands the fatal objec-
tions we have named. but for the paltry salts
faction of striking the Republican party he is
willing to stultify himself and deal in kind of
argument wholly unworthy his talents and his
name. He is willing to descend from the posi-.
tion OF a statesman, to which many Of his
friends have assigned him, and practice the
arts of the mousipg politician,