Year: 1867




tax on all its bills which circulated in that
State. This originated the celebrated case of
Mccullough VS.. Maryland, which was carried
to the Supreme Court of the United States
The Court decided that the tax was illegal ;
and this in the absence of any statute ex-
empting the bills from taxation. Afterwards
in the New York Court of Appeals, Judge
DEMO, In commenting on that decision, thus
clearly stated it:


: But when it had been settled that the
| bank was a constitutional agency and instru.
nest TOR tile monied operations Of the gorern-
naent. 1t followed, necessarily, that it could no
more be taxed than the Treasury Depart.
ment, the Mint. the Post Office. or the Army
or Navy; and it was upon this ground that
the Maryland Statute was held to be uncon-
stitutional." ="


What have these bonds been but the agen-
cles and instruments of the monied opera
tlons of the Government? How could the
Government have been sustained without
their agency? How, then, can they be
taxed any more than the Treasury Depart.
meat?


Now the point we argue is this, that these
bonds cannot be taxed as such, neither by
the States nor Congress. We do not assert
that the men who have money invested in
them may not be taxed upon the whole of
their annual income, although a part may
accrue from the interest on these bonds
But they cannot be separated from other men
and made to pay special income tax derived
from those bonds. If man has an income
of 81 900 derived from the interest of those
bonds, he stands on the precise footing of
man who has $1,000 income derived from
other sources Both must be taxed alike
This Congress has already done 1t has i'm
posed tax on all incomes from whatever
sources derived, and in filliug up United
States Assessors blanks, the income tax
payer is required to state the amount receiv.
ed as interest on U. s. bonds as a part of his
annual income. This very mode Of taxing
by Congress shows that it did not consider
that 1t had power to impose special tax
upon those bonds as SUCH And we believe
Congress has no such power


What is the real situation of these bonds,
and what can be done about them? 1t is
not true. as asserted, that they are exempt
from taxation. There are s3O0,000,000 of
them held as capital by our National Banks.
These are taxed as bank shares by the States;
$500, 0,000,0 900 more are held in foreign eoun.
tries, where they cannot be reached by tax
alton. The remainder are included in the
income tax. Nor is it true that the vast sum
invested in them has beer Withdrawn from
taxation. Of the sum invested, we doubt if
% per cent. ever saw the Assessors books.
i was boarded and secreted in every possible
way to avoid taxation. The country has not
lost all this sum from taxation by thus being
invested in these bonds


Now, if it seems hard that these bonds
cannot be subjected to greater taxation, we
ask if it would not have been harder to have
had the Government destroyed and every
mans property at the mercy of jeff. Davis
for the want of money to defend it, which





hard to exempt railroad and manufacturing
propertysfrom taxation But this, it is an
swered, is only fer a limited time, with the
expectation that the State will be the gamer
in the end. So these bonds are only exempt
till the Government can hire money at a
lower rate OF interest, to take them up; and
as to the gain has it not been big gain to
save this Nation? A benefit already receiv-
ed is certainly Of no less value than one to be
received. Is there loyal man in the coun-
try who would not have held up both hands
to exempt these bonds from taxaten when
the fate of the Nation hung trembling in the
balance? Thank God the Nation has been
saved, and now let ua discharge our honest
obligations to all through whose money or
blood or heroism it was saved.