Year: 1867

i


There is somebody, said Burke, more able,
more wise and more competent than any
member of the whole Parliament; il


is the Parliament itself And SO undoubt-
edly there is somebody more capable and
wiser than any American citizen; and
that is the American People, The thorough
discussion which has within a few weeks sift-
ed the whole subject OF taxing national secu-
rites leaves but little more to be said The
ineptitudes and inaccuracies have gradually
dropped out of sight, and the substantial facts,
Illuminated by so many conversi ing rays of in
tellgence, stand out with clearDess and GER
tanty with which no single inquirer could
have clothed them. The main facts, as they
now appear, are these:


i. United States stocks are exempt from
State or municipal tdration, not by act of
Congress. but by series of judicial decisions
under the national constitution, since 1873.


g. The holders of United States securities
are now paying thereon their full share OF ma,
tiOnal tdration--namey, five per cent. OF
their entire income over and above moder-
ate.provision for their families 'ia4Het *iA


8. The Democratic party proposes to rene
dy the inequality of local taxation by in
creasing the national taxes upon the bonds.


These three propositions will not now be
disputed, and it is only necessary to comp9e
them in order to discover how totally made,
quate is the only remedy proposed by the
Democratic party. The complaint is that the
h,,rJoy, n loco TO fion 10 that ha
expenses of our city and State governments
are assessed upon only portion OF the prop
erty held within our city and State limits
To meet this difficulty our advisers in the
Democratic party tell us Congress must levy
an additional tax upon the boDds, and collect
it when the coupons are presented, But this
additional tax, il levied, win find its way, not
into our city and State treasures, but into the
national treasury at Washington. How much
would that operation tighten the burden Of
our local taxation? Would it reduce the ex-
peDses of our State and municipal govern
ments? Not at ALL Would it reverse the de-.
cisions Of the courts, and enable us to tax the
bonds here, where it is said we need to tax
them? by no means. The States and cities
will remain as poor as before, and the national
government will receive an exorbitant tax
which it does not ask for and has no right TO
expect. ~ hm dil


So much for the Democratic plan, which
may now be dismissed. The Republican par
ty has to deal with this question under a
sense OF the responsibility which belongs to a
party in.power, and will it is to be hoped pre-
sent some more satisfactory solution of the
problem than that, we have just been consid
ering. When Congress assemblies, it will con-
slider first whether the exemption OF two bill
lions from local taxation is SO great an evil
as it has been represented. When our Lation-
al debt amounted to only few millions lin
1885 it was only few thousands), it was of
course a small matter compared with the to-
tai valuation OF the country. 1t amounts now
to probably less than ten per cent, but at any
rate TO not ineonsiderable fraction. II Con-
gress should decide that this fraction ought
not to be deducted from the resources Of the
States, how shall the relnedybe applied Plain
ly by issuing new bonds subject to local taxa
tion and paying off tie present bonds, as they
Iall due, with the proceeds In this way only
can. the case be fairly met In this way only
can the taxes be distributed with perfect equal
ity. The provision of the constitution under
which the courts have held that the bonds are
necessarily exempt from local taxation, is the
clause comforting upon Congress power to
raise money. 1t has been held that an ua-
limited power of local taxation might inter
fere with the exercise of this necessary func
tion of the general government On such
terms any State might tax the national bonds
out of the market. But if Congress, defining
the limits Of local taxation, should authorize
the issue Of bonds subject to taxation so lin
tied, it seems clear that the constitutional
difficulty would be avoided. The bonds now
ahoat were issued with the express under
standing that they should not be subject to
State or municipal taxation. Congress is not
competent and we trust has no desire to repu-
date outstanding contracts. If it is necessa-
ry now to provide for better distribution OF
the burden of taxation, it must be done by
recalling and paying off our present obliga-
tions and issuing new bonds on new and
clearly understood conditions. rotEie'esa