TAXING UNITED STATES BONDS.
Mr. MOORE offered the following:
Resolved, That the Committee on Finance be instructed to inquire into and report to this Senate whether or not Government bonds are taxed or not by the laws of this Stae, and if in their opinion they are not, to report a bill taxing the same as other property.
Mr. BENNETT hoped the Senate would not adopt the resolution in any shape. Everybody knows United States bonds are not taxed, nor can they be taxed by the State, and the resolution is presuming that the balance of us are more ignorant than we are willing to admit. Its reference ta a committee would amount to nothing.
Mr. COBB, with due deference to the opinion of the Senator from Union, [Mr. Bennett,] thought it a very grave question whether the State of Indiana can tax United States bonds or stocks. If the Senator were to read the opinion of Judge Denio, of New York, lately published, his mind would not be so clear. While we may not tax the principal of the bonds themselves, there is no question but that we can tax the income upon these bonds. I would reach these bond-holders in every possible shape without violating the true spirit of the Constitution of the United States and rules of law. I am not in page: 71[View Page 71] favor of legislating for capital against labor, Let us have taxation distributed equally among all classes - especially would I favor the laboring classes of community. I would invade the contract itself for the purpose of relieving the people from the burdens of taxation which were forced upon Congress by the capitalists themselves. The time will come when the people will speak out, and then bondholders will have to do one of two things, or repudiation will follow. I am no repudiator and am opposed to it, but I would, for the purpose of preventing that, and protecting these bondholders in future, throw enough of the burden upon them to make it equal, and thereby prevent this uprising of tbe people on account of the burdens of taxation. These capitalists ask the Government to protect their property, and they ought to bear an equal share of the burdens in order to keep up the Government. I would not violate a clear provision of law adopted in the spirit of the fundamental law of the land, but I would go as far as the farthest, if I could see my way clear, in seeing these securities taxed. These men have no right to complain. When they saw tbe country in trouble, they demanded certain rights - to secure them in loaning their money. It was not patriotism in them, and now they should be taxed.
Mr. CASON. A properly drawn resolution of this kind I might be willing to see go to the Judiciary or the Finance Committee, whatever my private opinions might be on the subject, but I am not willing to put myself upon the record in favor of any such foolish thing. I am not in favor of repudiation, in one thing or another, and whenever we tax Government bonds we go that far toward repudiation.
Mr. WILLIAMS. We have a statute telling us what is taxable and what is not. It is a very plain case to me that all Government bonds are taxable, and I would so act until some decision of our courts should be made to the contrary. He read from the statute governing the assessment and collection of taxes, in Gavin & Hord, vol. 1, page 73, sec. 23d.
Mr. CASON. Cannot that provision be set aside by a decision of the Supreme Court of the United States?
Mr. WILLIAMS. Until it is made for Indiana our officers should support this law.
Mr. THOMPSON. Against the General Government?
Mr. WILLIAMS. Against the General Government or anybody else.
Mr. OYLER. This is a question of abstract law, and the Supreme Court of the United States, the highest judicial authority in this Government, has already decided that Government bonds are not taxable. That is in conflict with this law of the State of Indiana.
Mr. COBB (interrupting,) when was that decision made.
Mr. OYLER. Not more than 3 or 4 months ago, and if my memory serves me the decision made by Judge Denio - to which the Senator referred - reviews the whole matter.
Mr. VAWTER, Do you recognize the doctrine that the decision of the Supreme Court is binding upon all the citizens of this Government?
Mr. OYLER. I do, sir.
Mr. VAWTER. Upon what ground, then, do you justify the organization of the party opposed to the Dred Scott decision?
Mr. OYLER. It is not necessary for me to justify it; the people have justified it to the gentleman's satisfaction long since. It is very proper that the Senators from these dark districts should attempt to organize a new party upon that basis, and when they get a majority of the people with them they can have it all their own way. I was opposed to the Dred Scott decision, but I have always obeyed it, as gentlemen will have to do in this instance. But I do not propose to discuss the main question now. As this resolution is not so much a financial as a law question, it should go to the Judiciary Committee.
Mr. BENNETT. These bonds are not taxable, and if we had the power and were to tax them it would be one step toward repudiation. Gentlemen may talk about some men having the burdens of taxation to pay, while some men have not; but I remember that when the Senators' friends had the right to buy them if they chose, they didn't want them; they said the war was a failure, and that these bonds were utterly worthless. But there was a class of men in this country who bad a higher faith, men who had hopes in the army and navy, men who had some love of country about them, who had a hope that this country would come out successfully, and they put their capital in these bonds. They didn't put it in old stocking-legs, like the Senators' friends.
Mr. COBB (interrupting.) As far as I am concerned, I do not propose, in this Senate, on a question of purely financial character to lug in politics, and I will give the Senator to understand that his imputations with regard to love of country do not come with good grace from him.
Mr. BENNETT. I do not make them toward the Senator personally, but to the party with which he acts.
Mr. COBB, But this is a financial question - one in which everybody is interested. It is not a party question.
Mr. BENNETT. It may not be a party question, but I notice the Senator's friends throughout the State, and every place, are trying to make some capital of it. And that is the object of introducing this resolution here. I know the Senator is too good a lawyer to defend this resolution upon any other ground. And, as far as I am concerned, I accept the issue. I am for standing up to that contract, for never was there a more honorable and patriotic contract, than this one made with those men who came in at the time of the country's greatest trial and said, "Here is my money - I will take your notes; I will take your bonds; I don't care how many conventions declare the war a failure."
Mr. COBB (interposing). I will ask the Senator whether the Republican Convention of New York did not take the same position that the Democrats have in their Conventions?
page: 72[View Page 72]MR. BENNETT. I do not remember. If the Republican party ever are in favor of repudiating one dollar of the national debt, then I am no longer a Republican after that.
Mr. CASON. I would ask the Senator from Lawrence if the Republican Convention in New York did not propose to tax bonds issued hereafter?
Mr. COBB. That is not my recollection.
Mr. CASON. That is my recollection.
Mr. MASON moved to amend the resolution so as to request the Committee on the Judiciary, should they think the bonds are taxable, to report a bill to tax the same.
Mr. MOORE. I accept the amendment to refer the resolution to the Judiciary Committee.
Mr. CULLEN. I regard this as purely a judicial question, and I am sorry the Senator from Union [Mr. Bennett] attempts to make it a political one. The question is to be decided by the Supreme Court of the United States, whether Congress has the power to pass such a law. With due respect to my Republican friends, I say that the Congress of the United States have no constitutional power to pass such a law. Gentlemen have referred to several decisions of the Supreme Court upon this question, but permit me to say that the Supreme Court of the United States have never passed upon this question. It passed upon the question under the old United States Bank - when the Government did all her business through the branches of that bank - when the city of Charleston attempted to tax the bonds held by the people, and Chief Justice Marshall decided that a State had no right to tax those bonds. But this is a different question entirely. Here the bonds issued by the United States are purchased by individuals; and I hold that whenever these bonds are purchased by individuals the United States looses all interst and control over these bonds. They become as absolutely the property of the individual who buys them, as a horse that is purchased from the Government; and I never could see the reason why the State of Indiana could not reap revenue from any property a person may have. Can any gentleman produce to me a satisfactory reason why a banker who does business with a hundred thousand dollars, should pay no tax for the purpose of keeping up the State Government, while a man who invests the same amount of money in agricultural pursuits, and thereby opens up an increase of the wealth of the State, has to nay all the taxes and the banker none? There is certainly great injustice about this thing. I have examined this question with considerable care If I were a bond-holder and owned $100,000 worth of bonds, as a matter of right and justice to myself, and looking to my interest for the payment of these bonds when they become due, I would vote to tax them. You may call this repudiation if you will, but I say unless the whole property of the country is taxed, we will never be able to pay the indebtedness of the Government. If you allow, as in this case, one-third of the wealth of the country to remain un-taxed, I give it as a sound proposition, where will you get the money to pay these bonds when they become due? Gentlemen say there is a contract entered into by the general Government with these men who came from everywhere for the purpose of buying these bonds, not for the purpose of investment, but for the purpose of helping the general Government out of a drag. I have no doubt in many instances that was true, but I do not think it was so in a majority of instances. No doubt these bonds will run into the hands of the capitalists of the country; and now let me ask if patriotism led them to invest their money in these bonds, why will not that same patriotism return to them when they shall see financial ruin before the country, and lead them to say, for the purpose of helping the General Government out of this trouble, "tax my property all you tax anybody else?"
I am opposed to this for another reason. I hold that in a Government like ours, based upon the people - kept up by the help of the people - it is the duty of the people to look to this question, and it is their duty to speak in reference to it without regard to party. I am not going to allow this question to take a party chute with me. It is a question, under the act of March the 3d, whether every dollar issued in the shape of greenbacks - whether a man can not keep even these in his pocket and refuse to pay taxes upon them. Then let this question go to the Judiciary Committee, and let them say to the Senate, whether, in their judgment, the Constitution of the United States was violated by the passage of that law. With this view of the matter, if in order, I move to strike out so much of this resolution as questions whether or not Government bonds are taxed by law.
Mr. BENNETT. As a test vote, I move to lay the resolution and amendments on the table.
The motion was rejected by yeas 14, nays 25.
Mr. WILLIAMS made an ineffectual motion - yeas 17, nays 22 - to lay the amendment [Mr. Mason's] on the table.
Mr. WILLIAMS made an ineffectual motion to postpone the further consideration of the subject till 2 o'clock to-morrow afternoon.
Mr. BENNETT made an ineffectual motion - yeas 12, nays 27 - to indefinitely postpone the resolution.
Mr. OYLER moved the previous question. There being a tie, the President, pro tem voted in the affirmative; and so the previous question was ordered.
The amendment [Mr. Mason's] was agreed to by yeas 20, nays 19.
The resolution was then rejected by yeas 18, nays 19, as follows:
YEAS - Messrs. Barker, Bowman, Cobb, Corbin, Douglas, English, Finch, Gifford, Jinkens, Marshall, McClurg, Mason, Moore, Newlin, Staggs, Vawter, Williams, and Wight - 18.
NAYS - Messrs. Allison, Bennett, Brown of Hamilton, Cason, Cullen, Dykes, Fuller, Hyatt, Niles, Noyes, Oyler, Reagan, Richmond, Terry, Thompson, Van Buskirk, Ward, Woods, and Mr. President - 19.
Pending the roll call -
Mr. COBB said he did not like to vote for the resolution in the shape it was - he regretted page: 73[View Page 73] the condition it is in - but he couldn't vote against it.
Mr. CULLEN said the way this resolution now reads he was not willing to put himself upon the record in favor of it. I am not willing that the people shall read to-morrow in the newspapers that I voted for a committee to inquire whether United States bonds are taxed in the State of Indiana. I would be certain that my constituents would send for me. [Laughter.]
Mr. WILES said he thought it only respectful to the Senator that a resolution of inquiry upon this somewhat important question should go to a committee, and he was intending to vote for it; but the wording of the resolution as it now stands compelled him to vote "no."
Mr. VAN BUSKIRK said he thought the resolution was so amended as to ask the Judiciary Committee to inquire whether these bonds are taxable, but upon hearing it read was not willing to vots for so absurd a resolution.
Mr. ALLISON had the same understanding, and for the same reason changed his vote from "aye" to "nay."
The result was then announced as above.
