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the tax upon deposits, to double the tax upon to tax United States bonds. Anyone who votes

bill in reference to banks is that it was not

erable ta: Government deposits, and to make the banks for this amendment votes to begin to tax United understood by members when the resolution pay three per cent. Asto Government deposits States bonds and relieve the industry of the of instruction was passed that this subject was I have noihing to say. It is for the Secretary country of its burdens. Who votes against it, included. But I presume the resolution is to Gorenom of the Treasury to make such arrangements as votes to allow the bondholder to hold his bonds | be treated like other resolutions introduced than any he thinks will be best for the interests of the without bearing his proportion of the public and passed without objection. It is not to be country. If he thinks he can get three per burden.

presumed that a resolution of this importance, MOO cent. it is very well. He cannot get four per

Mr. BENTON. I rise not for the purpose introduced in the business hours of the House, cent. He cannot manage to get live. If the of opposing the amendment, but

is to be smuggled through without the notice or banks are to pay at the rate the committee Mr. POMEROY. I rise to oppose the attention of this body. I think that would be recommend it will be impossible for them to amendment.

a pretty extreme presumption for any man to pay the tax upon the Government deposits. The CHAIRMAN. The Chair recognizes make here. I take it, then, that this subject Therefore, if the Secretary of the Treasury is the gentleman from New York.

was properly enough before the Committee of Bestrale now getting, as I understand, in certain quar- Mr. BENTON. I rise to oppose the amend- Ways and Means, and that they have properly ters interest upon Government deposits, the ment of the gentleman from New York, [Mr. enough reported this section to the House. I effect of this will be only to reduce the interest. POMEROY.]

go further, and I take the ground that if there Now, as to the local banks in New York: in The CHAIRMAN. That is not pending. is any interest in this country that can afford

of the bi the town in which I live the local tax is from Mr. POMEROY. The committee will rec. to bear its share of the burdens of taxation it three and a hall to four per cent. and the tax ollect when this subject was under discussion is the very interest now under consideration, for Government and local purposes is from six in the old bill I was unfortunate in not being the banking interest of tbis country. It has to eight, and sometimes runs up to ten per cent. able to take part in the discussion, being chair- been demonstrated here to my satisfaction, and The effect of this legislation upon the banks man of the Committee of the Whole. Now, I believe to the satisfaction of the majority of will be to drive them there to reorganize under when I took the floor this morning I begged the House, that larger profits are made in the -1 the general bankinglaw of New York. Some of the committee before proceeding to amend || banking business in this country than in any have contemplated this during the past year. this soction, to vote upon the question whether other business. Gentlemen talk here about They will do better under the general banking | they would entertain the subject of bank taxa. the depressed condition of the banks. Why, law of New York than under the law of Con- tion in the manner in which it has been brought | sir, it has been stated upon this floor over and gress. For the reasons assigned by my col- before the committee, as an addition to this over again that they make from fifteen to league I hope this provision will be stricken out. bill in relation to the tax on distilled spirits eighteen or twenty per cent. profit annually,

Mr. INGERSOLL. I wish to state there and tobacco. Now, sir, I impugn the motives and no man has stood up here and introduced is no law compelling the banks to receive of no person connected with the resolution any figures or facts or arguments to refute the deposits from the Government. It is at their instructing the Committee of Ways and Means. statements made by those who claim that these option. If they do not wish to do so they | It was properly introduced, and was properly enormous profits are made by the banks. I need not.

passed; but I say it was done at a time in the believe that the country banks make much less [Here the hammer fell.]

morning immediately after the reading of the profit than the city banks, which are favored Mr. BUTLER, of Massachusetts.

Journal, when gentlemen were crowding around with large deposits. I think the taxation proasked to yield to the gentleman from Ohio, who the desk with resolutions and other matiers posed to be imposed on deposits is too small

. wishes to correct some figures. I yield if it which they were eager to have introduced, and It ought to be increased, and, perhaps, the tax does not come out of my time.

in the confusion few members knew what the on circulation should be diminished, because The CHAIRMAN. It will come out of the resolution meant. Now, I attack no man's the country banks are almost entirely deprived gentleman's time.

motive. The committee are technically right of any advantage from deposits, and their eirMr. BUTLER, of Massachusetts. I move, in reporting this bill. But I submit, as a ques- culation is what they have to rely on for their on page 129, to strike out the words " beyond || tion of courtesy to the House, whether we profit, and it is for the accommodation of the the average amount invested in United States should still continue to consider in connection | people. bonds." "Those words in this bill except Uni- with whisky and tobacco, a subject so highly [Here the hammer fell.] ted States bonds held by the banks as part of incongruous as that of the taxation of banks. Mr. HOLMAN. I trust that upon this sectheir capital from taxation, and allow the banks Now, sir, I call the attention of the com- tion the gentleman from Massachusetts will see by investing their capital in United States bonds mittee to the extent to which the banks are now the advantage of obtaining a more direct vote i so far to escape taxation. Therefore I desire, taxed. There is already a license tax on banks than his proposition would-indicate. I offer if we can, to meet the question whether we shall of two dollars per thousand. There is an the following amendment: begin to tax these United States bonds in the additional tax of five per cent. on profits. After the word “bonds," in the eighteenth line, hands of these institutions. I desire to test There is a tax on circulation of one per cent.

insert the following: the sense of the House on this proposition per annum. There is a tax of one half per

And a tax of sixteen and two thirds per cent on

the interest annually accruing on the bonds of the precisely.

cent. on deposits. Then there is in addition Unitnah States held or deposited by such bank, with Mr. Chairman, we have come now to a place to all this a tax for the whole band of Depart- the Treasurer of the United States. where we can try the question nakedly and ment detectives who are constantly traveling Mr. Chairman, this amendment presents the alone, how much we have of real meaning when over the country examining into the condition question directly whether the committee intend we say we are in favor of taxing bonds.

of the banks, whose expenses and salaries the to impose any tax on bonds held by the national Mr. PRUYN. They are taxed as part of the banks have to pay. In addition to that there banks or not.

Heretofore the Committee of capital.

is no interest in the United States which, for the Whole have decided that the bonds shall Dir. BUTLER, of Massachusetts. If they || local purposes, is taxed as clean and hard as not be taxed for any purpose. But the ques. are then this will not do any harm. This bill that of banks. Their capital is known in every tion is now, shall these bonds held by the banks provides taxation only of the capital invested || locality, and the tax which is assessed upon be taxed. The proposition that these banks beyond the average amount invested in United that capital is collected.

are overtaxed, so urgently pressed by the friends States bonds. By striking out these words we Now, I have no reason to believe that the of the banks is the most remarkable proposiallow capital invested in United States bonds taxes on banks in my locality are any more tions ever submitted to a body of intelligent to be taxed. When the proposition of the gen- severe than those of the average of the country gentlemen. The banks overtaxed! Here are tleman from Maine was before this House this banks. Under existing law the tax is over six the banks with near eight hundred million morning we found ninety-eight members voted per cent. on the cash capital in central and dollars capital, having $360,000,000 of bonds, against any proposition to tax United States western New York. And yet that tax is paid, $300,000,000 of circulation, and $70,000,000 bonds; but I observed they all voted on a side and there is no pretense of fraud on the part of surplus fund, and gentlemen come forward issue, which might not involve the main one. of any of those institutions in the payment of here with figures to show the large taxes they I wish now to make the taxing of United States their taxes. Now these banks are dragged

pay. Certainly they do pay very considerable bonds held by banks the straight issue, bold, || into this bill for the purpose of having an taxes; but they bave near eight hundred mildirect. I do not mean, if I can lielp it, to additional tax imposed upon them. Under lion dollars of capital on which those taxes are have any doubt what the question is; but it this bill you propose to tax their circulation to be paid. So that when gentlemen talk of shall go out as the voice of this House whether | $6,000,000, being an increase of $3,000,000. the enormous sums paid, they should take we are willing or not to tax United States bonds You propose a tax on individual deposits of into consideration the enormous capital and in the hands of banks, for if you will not tax $5,287,794, being an increase of $2,643,880. the unexampled privileges possessed by these them in the hands of banks you will not tax You propose to tax Government deposits banks. They should consider the power of them anywhere. There are no widows and $728,750, being an increase of $607,292. I these banks, not only of controlling the entire orphans or savings institutions here now on make this calculation on the basis of the bank moneyed affairs of the country, but of reaping which to avoid the question-none of that returns in April last, at a period of the year unexampled profits. The entire tax proposed dodge. Plain cold steel, gentlemen ; walk up to when the deposits are ordinarily the lowest. Il by this bill on the circulation of the banks is it. Let us have it understood. Let us plainly make the aggregate increase of tax on banks

two per cent.; this, with the amount paid for ascertain what the majority of the House mean $6,251,172 over the present tax imposed by license for banking, say $200 a year, and one to do on this question. I want gentlemen to the Government.

half of one per cent on their surplus capital, understand distinctly what we are about. There [Here the hammer fell.] is no double meaning here; no shelter. Any Mr. BENTON. I move to strike out the vidual deposits the small tax of one half of gentleman who votes against this amendment last word. As I understand it the objection votes not to begin here when he has a chance II inade to the introduction of the sections in this

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erable taxes while the whole country is laboring arguments of gentlemen favoring the proposi- a resolution was, in some surreptitious way, under heavy taxation, more on an average than tion, it is intended to advance.

adopted instructing the Comınittee of Ways two per cent. without any privileges from the Every person conversant with the method of and Means to embrace this subject in the bill, Government. They pay less on their capital moving the produce of the West to market And yet it is complained that banks ought not than any other business of the country pays, and knows that the price of that product is affected to be taxed, even if in order, because the order yet you have graciously and freely given them one, two, and three per cent. by the condition itself ought not to have been adopted. $300,000,000 of capital. A small capital of of the money market; that the price of the

But I do not propose to discuss bank taxa. $60,000,000 excited the apprehensions of An- grain that must be moved to the East is not tion just now. I wish to call the attention of drew Jackson, but he could scarcely have com- only regulated by the demand and supply, but the House to a more important matter, and as prehended the power of $800,000,000 of united | is also affected to the extent of one, two, and this House is at least three fourths Republicanı capital. Talk about the excessive taxation of three per cent, by the amount of money that I desire to remind my party friends of the rethe banks! Their power even in this Congress is is on haud to move it, the rate of interest, and sponsibility of the party legislation that falls illustrated in being able to command such argu- the readiness with which money accommoda- upon them. I presented this amendment this ments in their defense. Their poweris not easily tions can be secured. Now, one of the evils, | morning, and it was based upon the reasons resisted, however virtuous may be the intentions as I understand, of our present financial con- which I beg leave to submit to the House : of the gentlemen. Who has not seen the effects dition, is that in the great money centers, in Sec.-, And be it further enacted, That upon all of the blandishments of wealth and power? | the large cities, there is a surplus of capital, interest arising from the bonds of the United States You pay them their six per cent. interest in wbile in the West and in the interior there is there shall be lovied, collected, and paid a duty of

ten per cent. on the amount of such interest, and tho gold upon their bonds, purchased with paper a stringent money market. If this increased

Treasurer of the United States and such subordinato greatly under par; you keep their bonds safely tax upon circulation and deposits will, as I officers as shall be charged with the payment of such at the risk of the Government; you give them think it will, bear so heavily upon the smaller interest shall assess and collect the duty hereby

levied. $300,000,000 of money and guarantee its sol. banks of the West as to promote the still vency-money which they loan to yonr citizens further accumulation of money in the large The reasons why I propose this method of at from six to fifteen per cent. interest; you centers and render the money market more

taxation are these : have enabled them, after making large divi. stringent in the West, then the class of persons

1. It is the English method. We are exdends annually, to accumulate $70,000,000 of intended to be benefited—the laborer, the ceedingly sensitive on this question of bond surplus fund in three years; and now, when, || farmer, the producer, whose taxes this propo- taxation, and while many demand an unfriendly for all these extraordinary bounties, you pro- sition is intended to lighten by imposing addi.

and an unreasonable rate of taxation as compose to increase the tax on their circulation tional taxes upon the banks—will be subjected pared with the taxation of other property, from one to two per cent. and impose one per to an increased burden by reason of the de.

There are others who shrink from all taxation cent. only on their bonds, which is sixteen and creased price which they will get for their prod.

as if it where a species of repudiation. For two thirds per cent. on the interest, their indig. To this single consideration I wished the benefit of such I cite the English example, nation is actually unbounded. I affirm that there to call the attention of the committee. I yield | feeling satisfied that if we keep within the pale is no interest in this nation that is so lightly the remainder of my time to the gentleman || of the present English law on the subject we taxed, considering the amount of capital in- from Iowa, (Mr. Price.]

shall not lay ourselves liable to this charge. volved, as the banks, without reference to the Mr. PRIČE. Mr. Chairman, I desire to

The income statute of 5 Victoria is very enormous privileges and exemptions which say only a few words, principally in reply to elaborate, occupying a hundred and twenty they enjoy under our legislation. The Gov- the gentleman from Massachusetts, [Mr. BUT. pages, with minute details of different subjects ernment, for their $300,000,000 of bonds, gives LER,] who challenges to a cold-steel encoun

of taxations and modes of collection. these banks $300,000,000 of currency, actually ter the advocates of the proposition to strike

Schedule B provides that upon incomes from makes the money for them and pays the sala- out this section. He maintains that inasmuch

landed estates—and from this source some of ries of the officers who manage their bureau, as the banks pay no interest upon their bonds the largest English incomes are derived-there and on this they are now paying but one per there must be some kind of war instituted to

shall be levied “two and a half pence upon cent.; and when a proposition is made to in- bring them to that point. I would like to every twenty shillings of value." crease the taxation to two per cent., the whole know whether the gentleman has ever con

Schedule C is as follows: financial interests of the country seem to be sidered this question: when a corporation puts "Upon all profits arising from annuities, dividends, brought to bear to defeat it. $100,000 worth of bonds into the Treasury of

and shares of annuities payable to any person, body I trust, Mr. Chairman, that this question the United States, taking out $90,000 of cir.

politic or corporate, company or society, whether

corporate or not corporate, out of any public revwill not be dodged. If gentlemen intend in culation, and is taxed upon that $90,000 one enue, there shall be charged yearly for every twenty good faith to tax the securities, here is the per cent, under the old law, or two per cent.,

shillings of the amount thereof the sum of seven

pence, without deduction."
place to begin to tax them-in the hands of as this bill proposes, does not the bank pay a
the bankers, persons who of all others are most tax on the bonds it puts in there? It holds

During the Crimean war, in 1854, the tax was able to pay taxes, and on whom, in view of the the circulation in lieu of the bonds, and in that

increased fifty per cent., and in 1855 it was extraordinary benefits you have conferred, you way pays tax upon the bonds. This idea does again increased until it got to be sixteen penco may most justly impose a reasonable tax. I not seem to have occurred to the gentleman

on the debt and eleven and a half pence on trust the gentleman from Massachusetts will from Massachusetts.

landed income. After that war it fell back and withdraw his amendment so that the question Mr. BUTLER, of Massachusetts. No; it

was again increased last year in order to pay on this proposition may be directly taken. If never did.

the expenses of the Abyssinian war. During we strike out the words which the gentleman Mr. PRICE. Well, that is honest. The

the Napoleon wars the tax was two shillings in proposes to strike out, the banks will still pay gentleman says it never has occurred to him. the pound or ten per cent of the amount of no tax on their bonds, the tax must be directly So I was right in my impression. I presume

interest. The mode of collection is provided imposed or not at all. Those words stricken the gentleman will now change his opinion in in sections twenty-four to twenty-eight incluout, and the banks are still exempt from this reference to this matter. The chairman of

sive of the same act. Section twenty-four reads taxation. If the voice of the country is heard, the Committee of Ways and Means, when inter

as follows: these bonds, especially in the hands of the rogated as to the increase of taxation contem- "The governor and directors of the Bank of Engbanks will be taxed. If the intelligent con

land shall be commissioners for executing this act, plated by this section, stated it at about four

for the purpose of assessing and charging the duties victions of the whole land are to control the million dollars. My friend from New York hereby granted in respect of all annuities, dividends. action of Congress, these banks will be re- [Mr. POMEROY] has demonstrated, as I think and shares of annuities payable out of the revenue quired to pay a tax, not simply in proportion conclusively, that the amount of increase will

of the United Kingdom to any persons, corporations,

or companies whatsoever, and which shall have been to their wealth, but in proportion to the enor- be over six million dollars.

intrusted to said governor and company for paymous bonus which they realize under the re- [Here the hammer fell.] markable system of legislation wbich we have The question being taken on Mr. HOLMAN'S The other sections make similar provisions heretofore adopted. Capitalists should con- amendment to the amendment, it was not in case of Bank of Ireland, South Sea Com.. sider that a free people will not patiently subagreed to.

pany, East India Company, and commissionmit either to great inequality of taxation or Mr. BUTLER, of Massachusetts. I with- ers for the reduction of the public debt. The to extraordinary favoritism in legislation. draw my amendment.

effect of these English statutes is: [Here the hammer fell.]

Mr. PIKE. Mr. Chairman, I renew the 1. A larger tax is assessed upon the holders Mr. PILE. Mr. Chairman, I would not say amendment of the gentleman from Massachu- of property in the public debt than upon the a word on this subject, but that I desire to call setts, [Mr. BUTLER,] for the purpose of making holders of landed estates. attention to one effect which I fear this legis. one or two statements in relation to the taxation 2. Every holder of the debt, whether resilation would produce upon the banks, partic

of United States bonds. There seems to be a dent in Great Britain or not, is assessed. ularly in my own section of the country—a little difficulty about this matter of taxation. 3. As a portion of the public debt of Engmatter which I have not thus far heard men. When I introduced the proposition this morntioned in this debate. I fear that if this addi- ing it was not in order because of some rule the principal of the debt is taxed, and that tional tax be imposed upon the banks its effect or other; and ninety-eight gentlemen, it seems, whether the holder resides in Great Britain or will be to drive money in large amounts to the either because they were really opposed to abroad. Leon Levi, one of the most eminent great cities, rendering the money market more it or for the laudable purpose of upholding of English writers on finance, mentions this stringent in the interior cities of the West. If the rule, concluded to vote against my prop- speciality of British taxation. this should be the effect, then such legislation osition. It seems now that propositions relat- 4. As the payment of the interest of the debt will injure instead of benefiting the class of ing to the banks are in order, because during is intrusted to ihe banks of England and Irepersons whose interests, as I understand the ilie morning hour, or at some other time, Il land, the East India and the South Sea Coma

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panies, and the commissioners for the reduc- other tax on the list. The English tax has Mr. PIKE. I withdraw the amendment, tion of the debt, the effect of putting this tax ranged from seven pence to twenty-four pence

Mr.WASHBURN, of Massachusetis. I move into their hands to assess and collect is nearly in the pound. Ours may do the same. We tax to strike out “one fourth of one per cent." the same as it would be in our case to deduct the foreign and domestic holder of our railroad Mr. Chairman, I wish to call the aitention of it from the coupons. I have in my amend- bonds five per cent. on bis income and deduct the chairman of the Committee of Ways and ment followed the idea of the British statute it from the coupon. We have taxed him ten Means to this amendment. I want to strike and charged the Treasurer with these duties,


cent. We have power to tax him twenty. out one fourth of one per cent. a mouth upon 5. Schedule C provides for payment of tax The only assurance the holder of such property Government deposits. It was offered by me " without deduction," In case of other prop- can have is in the good sense and honesty of and considered in the Committee of the Whole

cite in erty it is provided by the statute that income the taxing power.

on the state of the Union when this tax bill up to a certain amount is not taxed. In our 2. It is said the foreign Governments do not was up before. I hope it will now be adopted. case all incomes under $1,000 are not taxed. tax their own debts. The statement is entirely | The position of this question is this: by the The English limit is somewhat less.

incorrect. I have already given the English | internal revenue law you oblige every collector It is evident that my proposition is clearly example. The Governments on the Continent, in the country to deposit the money he collects within the English example. It should be so far as I have been able to learn, do the same daily with the Government depositories. In remembered that the larger portion of the Eng. thing. It is not infrequent to see complaints order that the House may understand the matlish debt is but three per cent., while almost in the English newspapers of the amount of ter I will state the circumstances in my own

skatin the whole of ours is at six per cent. A tax of || foreign taxation of Government stock held by district. After we passed the law to which I deriah ten per cent., as in Pitt's time, on the English | British subjects. If we allow the property in have referred the collector of my district was holder, would leave him but two and seven our bonds to be untaxed we shall be alone bound to make his deposits daily in a United st tenths for interest, while in our case it would among the Governments of the world. I doubt States depository. There was none, however, leave five and two fifths-just double. if any other Government, having a well-con- within twenty miles. He violated the law if

they 2. A proposition was made the other day by | sidered system of taxation, fails to tax this he did not deposit his money there daily. the gentleman from West Virginia (Mr. HUB: || species of property.

That bank came to the.conclusion to refuse to BARD} to tax the debt one per cent. and collect 3. Many of the holders of the bonds are become a depository, saying the trouble of

nues by means of the officers of the internal reve. people of moderate means. Trae again, but doing the business was not compensated for at nue department. It was similar to the tax I what of it? Our whole system of taxation, all. The law provided the collector should proposed in December last and bears a near whether by means of a tariff or the internal make his deposits daily, and the bank was analogy to the taxation of State bonds under revenue, gathers taxes from such people, and compelled to give him triplicate certificates of State authority. That proposition failed by a from them mainly. The largest holders of | deposit, one for himself, one to be sent to Washvote of 44 to 52, and, as in a fuller House it || bonds in this country are banks, insurance lington, and one to be preserved. All this made would probably share the same fate, instead of offices, trust companies, and savings-banks. great trouble for the bank, and they refused renewing it, i

propose the English method, || A considerable amount is held abroad, and the | the deposits, saying they were not worth the which has the advantage of certainty both in remainder is scattered everywhere. None of trouble. assessment and collection.

the very poor hold bonds, and although our The law, as I have said, provided that he 3. There is no other method of taxation ex- tariff and internal taxation is obnoxious to the should deposit the money be collected daily, cept this I propose or the one rejected by the || objection that it taxes anybody who consumes, I endeavored to get the bank there made a House. It has been suggested many times | whether of food or clothiug, no matter how depository. It was done. The collector dethat the present bonds may by and by be taken poor he is, this tax is not liable to that objec. posited daily, and the Treasury called for cerup from the proceeds of new bonds which shall tion, because none who are really poor will be tificates daily. There was all the trouble of be expressly wade taxable by State authority. affected by it.

making out all these triplicate certificates. But this cannot be done. Congress has no 4. But it is said we agreed not to tax. That What is the anomaly of our position to-day? authority under the Constitution to issue such

is not so. We not only did not agree not to At the other end of the Capitol the chairman bonds, and should they do so, and the bonds tax, but we have always taxed. We com- of the Committee on Finance has submitted a be taxed, the Supreme Court would pronounce menced at one and one half per cent. and went proposition to abolish all tax upon all deposits the tax unconstitutional.

up to ten, and now have fallen back to five. in banks, and urges it as in the highest interest In the case of Van Allen vs. The Assessors, The difliculty with previous and .present tax: of the country.

Yet, sir, we are here now 3 Wallace, 585,) 1865, the court says: ation is, that we have failed to collect. The proposing to increase the tax upon deposits

" It is said Congress possesses no power to confer method I propose is not only for a reasonable of banks, the deposits of every little bank upon a State authority to be exercised which has tax, but it insures its collection.

throughout the country, when every collector been exclusively delegated to that body by the Con

5. If it be alleged that a part of the propstitution, and consequently that it cannot confer upon

is compelled daily to make his deposits in a State the sovereign right of taxation, nor is a State erty is held abroad, and therefore should not these banks. We are asked to tax the banks competent to receive a grant of any such power from be taxed here, I reply that might be a good three per cent. upon these deposits. They Congress. We agree to this. But as it respects a subjec-matter over which Congress and the States objection if the attempt were to tax the prin. are more trouble than they are worth. The may exercise a concurrent power, but from the exer- cipal. But it is not. It taxes only the income. gentleman says they are not obliged to receive cise of which Congress by reason of its paramount If it be said that this distinction is shadowy, I them. What is the result? Pass this into authority may exclude the States, tbere is no doubt Congress may withhold the exercise of that authority reply that it is the distinction upon which the

law and you will wind up every deposit bank and leave the States free to aet. An example of this whole income tax rests, as decided by the in the country. Then where are we? You relation existing between the Federal and State Gov- Supreme Court in the celebrated carriage case. have collectors. They make collections daily. ernments is found in the pilot laws of the States and the health and quarantine laws. The power of taxa

And while it may well be that we should not What are you going to do with the money? tion under the Constitution, as a general rule, and tax a bond held abroad any more than a ship [Here the hammer fell.] as has been repeatedly recognized in adjudged cases owned abroad, we may tax the income if it be in this court, is a concurrent power. The qualifica

Mr. LOGAN. Mr. Chairman, I understand tions of this rule are the exclusion of the States from

in this country, because it is earned under the the argument of the gentleman from Massathe taxation of the means and instruments employed protection of our laws and comes in its pay. chusetts to be this: because the chairman of in the exercise of the functions of the Federal Gov- ment within our jurisdiction.

the Finance Committee of the Senate is against ernment."

It is to be hoped that while we tax everything this tax therefore we ought not to pass it. This opinion sets at rest all questions of else higher in this country than under almost We are here to act upon our own judgment. local taxation of United States bonds, and as any other Government, we shall not place our: The chairman of the Committee on Finance our Democratic friends have been in the habit of selves in the singular position of being nearly

has reported a great many bills which have complaining that Congress in exempting these alone among the Governments of the earth in failed to pass the Senate. Because he has bonds from taxation has not dealt fairly by the the exemption of the best property in the coun. reported å bill is no reason why we should towns and cities in which they are held, í beg try from all Government burdens. The fourth adopt it. I think the House will agree to no them to notice that this opinion was not given of the Chicago resolutions very well says: such principle in our legislation. I see there 'hy a Republican, nor, by any of the recent Dem

"It is due to the labor of the nation that taxation is upon the Speaker's table one of bis bills ocratic converts on that distinguished bench, should be equalized and reduced as rapidly as national faith will permit."

requiring contracts to be made in gold, making but by a member of the court whose Democracy

the poor in the country the pioneers in specie bas always been of the most unquestionable If the amendment is adopted, the amount payinent. I do not think we are bound by character, Judge Nelson, of New York.

obtained from this source should be between that. I am sure I am not. I introducell & It was entirely a work of supererogation for twelve and thirteen million dollars. Congress to provide that the bonds should not Mr. BENTON. I desire to say in reply to

proposition to tax deposits of the Government

in national banks. I did it for the reason 1 be taxed by State authority, and as the clause the remark made by the gentleman awhile. ago, gave at the time, that the Secretary of the in the loan law has caused so much discussion that of those who voted to sustain the decision Treasury was depositing Government funds in it was a blunder to insert it. The whole effect of the Chair, at least three fourths did so with- a few dead banks to enrich them, while the of it was to declare what the law was, and the

out intending to express any opinion on the Government was paying them a percentage to result would have been the same had it been

gentleman's proposition, but because they bank upon. I stated then and state now, one left out.

believed the decision of the Chair to be correct. of his pet banks in this city has had from six Several objections are made to this taxation.

Mr. WASHBURN, of Massachusetts. to thirty millions of Government money upon 1. It may be said that if this tax is levied

desire to move an amendment in order to sub- deposit for which no interest was paid, while and collected this year another and a larger mit some remarks on this subject.

the Government was paying interest at six per one inay be levied and collected next year. The CHAIRMAN. The pending amendment cent. upon its collaterals. True. And the same thing may be said of every is to strike out certain words.

A MEMBER, What bank is it?

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Mr. LOGAN. Examine his report care- that it should give to the Government three ment afterward if it should not be stricken
fully and you will find what bank it is. I do eighths of one per cent. a month of the interest
not wish to say what bank it is. These are on its own money, the specific produce of its Mr. PETERS. The House may not concur
facts tbat anybody can ascertain by examination. own funds.

in striking it out.
A MEMBER. Give us the name.

I request gentlemen to turn from month to The CHAIRMAN. If the committee requires Mr. LOGAN. Well, if you want to know, month in this official statement, and ascertain to strike it out it will be open to amendments it is Jay Cooke & Co. Now, I say this man- the average deposit in the First National Bank to perfect it. ner of doing business is not to the advantage of Cincinnati, wbich, I think, ranged from eight Mr. INGERSOLL. But if the committee or the interest of the people of the country. hundred thousand to a million dollars through strike it out there is an end of it, If the people can make four per cent, in agri- the seventeen months; turn to the First and The CHAIRMAN. The Chair understands cultural and mercantile business they are very Fourth National Banks of New York, with the object of the chairman of the Committee well satisfied. But the banking interest of the deposits ranging, if my memory serves me, at of Ways and Means to be to get a test vote. country makes from twelve to eighteen per cent. about the same figures. Turn also to the First Mr. INGERSOLL. I withdraw the objection. Tnen if you undertake to tax the banks you National Bank of Philadelphia, where I think Mr. PETERS. I insist on the objection. raise a howl against it. I tell gentleman there the undisturbed balance ranged from four to five Mr. O'NEILL. I rise to oppose the amend. are other interests in this country than banking || hundred thousand dollars during all that long | ment offered by my colleague from the fourth institutions, and you will learn it soon if you | period. But why point to special instances when district, [Mr. KELLEY,] because, sir, I am in undertake to favor the banks to the detriment the whole report will well repay scrutiny? It is favor of letting the banks alone. I am in favor of the people, who have to pay the taxes. an official list of the corporate beneficiaries of of keeping the law just as it is to-day, and I am Now, sir, I do not desire to tax the banks the Treasury, and abundantly illustrates the jus- in favor of letting this national banking system out of existence by any means; but I do desire tice of my proposition. I propose by imposing | remain as it is, for I believe it is the best system that they shall be taxed at a fair rate, so a tax of three eighths of one per cent. per that has ever been inaugurated in this country. as to equalize the burden of taxation. Now, month on these deposits to compel the pet I am not only opposed to the amendment, but as to whether this portion of the bill was banks to give back to the Government some I shall vote to strike out the section, and I brought in fairly under the resolution is not of the largesses that the Secretary of the Treas. | hope the Committee of the whole will not the question before the House; but the ques. ury is bestowing upon them. He has thus sustain the great increase, over six million tion for us to determine is, is it right to tax given them millions of dollars in gold. And dollars, proposed to be made to the now almost the banks in this way or is it not? The bill in the name of justice and the people I demand ruinous taxation drawn from these institutions. came before the House properly, in my opinion, ll that we tax these deposits, if gentlemen will not Why, what are we doing here to-day, and and if it is unsatisfactory to the House let us prohibit them by express statute.

And let me what have we been doing for the last year or amend it until it is satisfactory, and tax this just bere say a word on the question of taxing two relative to banks? It seems to me that interest as well as others.

bonds. Will it be wrong to tax bonds held Congress wants to destroy this banking system, One word further. If the gentleman from by banks with the money of the Government? and all I have to say as to that is that if you Massachusetts [Mr. BUTLER] desires this bank- There is not a well-informed capitalist in the will look at the State banks, State bank sys. ing provision to remain in the bill ard to tax country who does not know that Great Britain tems which have gone down, you may trace United States bonds also, I say to him I am always taxes investments of this kind, in some their destruction in a great degree to inordi. now ready, and ever have been, to vote for instances the principal, and in others the in- nate legislation, such as this appears to be, by taxing the bonds. I am as willing as he or come derived therefrom. There is not an those who are opposed to the banking interest anybody else to vote for that proposition. I intelligent bondholder in the country that does and to the facilities which it affords. am willing to vote for this amendment if it not feel that while his amassed property is freed Now, Mr. Chairman, who are benefited by will secure the object, though I do not think it | from taxation, while it is proposed to make the banks 1 To be sure there are large investwill. I am willing to vote to make it stronger. cigar-maker pay a license for the privilege of ments of capital in banking organizations ; I am ready to tax United States bonds. I following his trade, and the tea, sugar, coffee, that must be. But I can tell you-I suppose thiuk this House ought to do it, and unless molasses, and other essentials of the life of it is known, and I do not state it for informathey do it I think they will make a great mis- the laborer are taxed, his exemption is array. tion, for every gentlemen present knows it take. This idea that because contracts are ing the masses of the people against the owners already, or should know it-there are in this made and money furnished to the Government of realized riches, and the labor of the country country something like two hundred and thirty with the understanding that the bonds should against its capital. There is not an intelligent | thousand stockholders in the national banks. not be taxed is one which has no force in it bondholder that will not feel relieved when you Who compose that large number? Not the in my estimation. Let us see. Some people shall have included his bonds in the taxable great capitalists of the country exclusively, have constitutional objections on this subject. property of the country, and have thus given but the less wealthy men, those of moderate I think we have a right to tax him a guarantee against a popular excitement

And I have known within my expethe bonds, both the interest and the principal, which might terminate in repudiation or a tem- rience when there has been a financial crisis, for the purpose of maintaining the Govern. porary suspension of the payment of interest and banks were shaking, the poorer men have ment. Entertaining these views, I am ready and the depreciation of the value of his in- still, to a great extent, preserved their stock, to vote to maintain this proposition in the bill, vestments. I would do this, and increase the waiting for the time when the country would and to go further, if necessary, and vote for an tax on private deposits also. The banks are become more flourishing, having confidence additional proposition for the taxation of bonds. to be ruined, say gentlemen. If they are so that their investments would not be lost. It is [Here the hammer fell.]

sorely oppressed why do not some of them in certainly true that money invested in bank Mr. KELLEY. I 'propose to amend the the East, where they most abound, surrender stock has been lost; but it is also true that amendment of the gentleman from Massachu- their charters, that the South and the West to this day many of these institutions has setts by inserting three eighths" in place of may get the banking facilities they need? I stood the shock of monetary revulsions, and "one fourth.” Mr. Chairman, I hold in my hand have not heard of one surrendering its charter. that those who owned their stock have found a most instructive public document. It is the More than fifty per cent. of the banking capital it yielding not only a profit, but have been answer of the Secretary of the Treasury to my of the country is located in New York and secured in their investments, when capital own resolution calling for a statement of the New England, and no one corporation dreads | placed in individual enterprises has frequently deposits in the banks, the amount per month, | taxation, present or proposed, sufficiently to entirely disappeared. and the amount in each bank for seventeen con: induce it to yield its charter to escape oppres

There is invested in banks in this country secutive months. We loaned the deposit banks sion, or give banking facilities to the South about four hundred and twenty million dol. nearly thirty million dollars throughout the or West, which are suffering from the need of lars, or on an average some eighteen hundred whole period. We now loan them, it is said, an them.

dollars to each stockholder, and yet complaint average of not more than $23,000,000, but we let [Here the hammer fell.]

is made by gentlemen on this floor that we are them have it in such sums that they can invest Mr. SCHENCK. The first motion sub- legislating for the rich to the destruction of the bulk of it in gold-bearing bonds, and while mitted by the gentleman from New York [Mr. the poorer classes of the community. Sir, we holding them draw an average of from eight to POMEROY] being to strike out the whole sec- are putting upon these banks and upon ihose ten per cent. currency interest. Now, I propose tion subsequent debate upon amendments may who are interested in them what they cannot that they shall pay three eighths instead of one or may not result in something, and although | bear, thus not protecting the property of either fourth of one per cent. tax on these deposits. it is not the regular order of proceeding, and poor or rich men.

I turn to the report to which I have referred, cannot be done except by unanimous consent, The chairman of the Committee on Banking (Ex. Doc. No. 87,) and take one single bank I ask whether the committee will not be willing and Currency [Mr. POMEROY] says that in his as an illustration. In the months of November first to take the question whether this bank own county the tax now paid by the banks and December, 1866, and January, February, section is to stand or not, by having a vote upon amounts to something like six or seven per and March, 1867, its deposits of public money the motion of the gentleman from New York, cent. on their capital. I understand that in amounted in the first month to $2,806,638 19"; | before we consume more time on questions of the city of New York the amount of tax, Gov. in the next month to $6,155,801, in the next amendment. I ask unanimous consent that

ernment, State, and municipal, paid by the to $1,685,619 39; in the next to $2,601,092 26; the vote be first taken as a test question. banks, is from six to ten per cent.,

and I know and in the next to $2,306,461 24. That bank Mr. INGERSOLL. I object.

that in the State which l'in part represent no could have had about two million dollars of Mr. PETERS. I object. If the amend. || city bank gets off with much less than six or this money invested during these five months ment should not be adopted in the House, | eight per cent., while in the rural districts the in six per cent. gold-bearing bonds. Now, I then the section could not be perfected. taxes exacted of them will amount on an averask whether it would have been a hardship The CHAIRMAN. It will be open to amend- age to four or five per cent.

I have none.


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Now, in relation to the taxation of deposits || Then the aggregate amount to be collected of | of Bangor, Maine. These deposits are received

and to a of public moneys, I find, by referring to sec- those institutions by tbe local authorities and in driblets, and are drawn by the Government tion forty.five of the act of June 3, 1864, that under Federal legislation will be $25,000,000 | in large sums, and without notice. If I underit is not merely a privilege given such banks as per annum, one twelfth of the entire amount | stand the provision of the present law, it is are designated by the Secretary of the Treasury of capital represented by the circulation of the mandatory upon the bank; it requires any to be depositories of public money to have in | banks, or eight and one third per cent. per national bank which may be selected as a pub. their vaults the Government deposits, but cer- annum tax on the entire capital so represented. lic depository to receive these deposits. I do taip duties to be performed are imposed upon Now, in addition to that tax of eight and one not think there can be any objection to my them as financial agents, and they are obliged third per cent it will cost say three per cent. amendment, and, therefore, I will say no more to receive at par all the national currency bills, to meet the expenses of the banks. Then you | in favor of it. by whatever' association issued, which have have eleven and one third per cent. to begin Mr. INGERSOLL. Will the gentleman allow

:: SA been paid in to the Government for internal with. I suppose gentlemen will not object to me to correct a statement he has made? revenue or for loans or stocks.

a bank declaring annual dividends of six per Mr. PETERS. Yes; if I have made any Why should we double the present tax upon cent. If they do that, you have as the amount which needs correction.

W: G the money deposited by individuals, making it they must necessarily earn, without taking into Mr. INGERSOLL. I find, upon examina- be Hon: one per cent. per annum instead of one half account any losses, seventeen and one third tion, that the amount of Government deposits of one per cent., as now? And why should the

per cent, upon their entire capital; that is the in the First National Bank of Bangor run from circulation be taxed two per cent. per annum amount which by your legislation you compel | forty-seven thousand to sixty-one thousand when, under the existing laws, the tax is but these banks to earn. Does not every man

dollars; the lowest point being $27,000.

The si one per cent. ?

here know that a system of legislation which Mr. PETERS. I suppose that the gentle. The answer to me seems plain. There is a drives the banking institutions of the country man will allow that I know as much about determination, under the plea of more revenue into a line of business compelling them, with- the matter as he does, or any statement he wanted, to distress these institutions, to take out taking account of losses, to earn seventeen

has got. from them the means of carrying on a paying and one third per cent. in ordinary times is a Mr. INGERSOLL. The Secretary of the business for their stockholders, to put obstacles system which will bring disaster and ruin upon || Treasury says so. in the way of their success, and in the end, now the whole banking interest of the country?

Mr. PETERS. I do not care who says 80; that the time for coming to the aid of the Gov- Does any man believe that any banking sys- I think I understand what I am saying. As ernment when temporarily in want of funds has tem, whether national or State, can exist in the Government draws these deposits without passed, to create distrust in them, to shake con- this country, upon which a burden so onerous any notice, sometimes drawing the whole fidence in them, and thus bring them to ruin. as that is placed ?

amount of the balance, or even overdrawing I say again, let them alone. In general busi- But we are told that some banks are making it, tbe matter is not regarded as worth anything ness transactions they are useful. They con- enormous dividends, and we are also told that to the banks, and the idea that these banks not easily violate the laws under which they these banks are making enormous profits out shall be compelled to receive these deposits are organized, and so long as they are accom- of Government deposits, and two cases have whether they desire them or not, and be remodating the people and are carried on legiti- | been cited by the gentleman from Pennsylvania | quired to pay a high rate of interest upon them, mately let them alone.

[Mr. KELLEY] in support of that statement. I do not think is of any advantage to them. In regard to taxing the interest on Govern. || Now, that statement may be true. But does Mr. PRUYN. No bank is now compelled ment bonds, that question has not come up the gentleman from Pennsylvania propose to

to receive these deposits. regularly to-day. It was not in order when test the whole system and condemn every bank Mr. PETERS. There may be a doubt about introduced by the gentleman from Maine, (Mr. || because the Secretary of the Treasury or some- the construction of the law. My construction Pike.) But still it has been brought into the body else may have made pets of two or three is that the banks are compelled to receive these discussion. Now, wherever we have lawfully of these institutions in the country? Is the deposits. At least the law is doubtful, and my a right to tax anything, let us do so if there be

system to go under because an abuse of that amendment will make it certain. I ask the necessity for it. But first let us see that we kind may be found in the administration of the Clerk to read section forty-five of the currency have the authority. Our duty is to carry out in law ? full faith the promises of the Government to Mr. KELLEY. Can the Secretary of the The Clerk read as follows: its creditors, and not hastily and without proper | Treasury compel a bank to receive Govern. SEC. 45. All associations under this act, when desconsideration and reflection to impose a tax ment funds on deposit?

ignated for that purpose by the Secretary of the where, by common consent and a fair under:

Mr. WILSON, of lowa. I do not care what

Treasury, shall be depositories of public money, exstanding, perhaps, the subscriber to our loans he can or cannot do. I am informed that these

cept receipts from customs, under such regulations

as may be prescribed by the Secretary; and they may took them in the belief that his coupons or banks are compelled to receive the Govern- also be employed as financial agents of the Governinterest were not to be taxed.

ment funds on deposit, when selected for that ment; and they shall perform all such reasonable [Here the hammer fell.]

duties, as depositories of public money and financial purpose. But be that as it may, the gentle. agents of the Governinent, as may be required of Mr. KELLEY. I will withdraw my amend- man from Pennsylvania cited those two cases them. And the Secretary of the Treasury shall rement. for the purpose of basing an argument upon

quire of the associations thus designated satisfactory Mr. PETERS. I object to the withdrawal || them in support of this proposition. I object otherwise, for the sato keeping and prompt payment

security, by the deposit of United States bonds and of the amendment; let it be voted upon and to having a general system run down by a few of the public money deposited with them, and for disposed of, so that other amendments may be isolated cases of wrong that may be found in

the faithful performance of their duties as financial offered. the administration of the law by the Secretary

agents of the Government: Provided. That every

association which shall be selected and designated as The question was then taken upon the of the Treasury. Now, I object to this unpar- receiver or depository of the public money shall take amendment of Mr. KELLEY, and it was not alleled legislation on the part of Congress,

and receive at par all of the national currency bills. by agreed to. which must lead in a short time to the utter

whatever association issued, which have been paid

into the Government for internal revenue, as for loans Mr. WILSON, of Iowa. I move to amend destruction of the present system of banking on stocks. this section by reducing the rates of taxation in this country. If it is followed up it must Mr. SCHENCK. I ask unanimous consent proposed by it one balf in all cases. This bill necessarily drive the banking business into the that all further debate on this section be termrests upon a most peculiar theory. It does not

hands of private bankers, without there being inated in five minutes. rest upon a theory of the Committee of Ways any organized banking institutions under the Mr. INGERSOLL. I wish to state that the and Means, for it is the result of the action of laws of the States of the United States.

figures I gave in reference to the Bangor nathis House. But the theory of the bill is this : [Here the hammer fell.]

tional bank were for 1866. I find on examinathat wherever you tind an interest in the hands Mr. PETERS.


deposits of men who are disposed to defraud the Gov. desire to offer, and unless some gentleman ernment, and who refuse to pay the taxes lev. desires to be heard in opposition to the amend- the bank. ied upon them, then you must reduce their rate ment of the gentleman from Iowa [Mr. Wil- Mr. POMEROY. I wish, before debate is of taxation. But wherever you find an interest SON] I hope the vote will be taken upon it. closed, to explain two amendments I have to in the hands of men who pay their taxes fully, by Mr. WILSON, of Iowa, I withdraw the offer. whom the Government loses nothing, then you amendment.

Mr. BARNES. Is itintended to close debate must increase their rate of taxation. You must

Mr. PETERS. I move to amend section one on all the subjects of the section? relieve the scoundrel and put an additional tax hundred and eight by inserting, after the clause Mr. SCHENCK. Yes, sir. upon the honest man.

That is the theory upon imposing a tax on deposits, the following: Mr. BARNES. Then I object. which this bili is based. For weeks we have had

But no bank shall be obligod to receive the deposits Mr. SCHENCK. I move that the commitdiscussions here denouncing the men engaged of public moneys.

tee rise for the purpose of closing debate, in the whisky frauds and in the tobacco frauds.

If I understand the provisions of this section, The motion was agreed to. And this bill relieves to a great extent those a tax of three per cent. per annum is imposed The committee accordingly rose; and the two interests of the taxation beretofore im

on all public moneys deposited in these banks. Speaker having resumed the chair, Mr. Blaine posed upon them, and proposes to make up a

Now, from my connection, as a director, with reported that the Committee of the Whole on part of the loss resulting thereby by putting a national bank in my State, I know that these the state of the Union, had, pursuant to the a burdensome and ruinous tax upon probably deposits are not worth to the bank one per order of the House, had under consideration the the only interest in the country that pays every cent. per annum. farthing of the tax imposed upon it.

Mr. INGERSOLL. To what bank does the order, being House bill No. 1284, to change

Union generally, and particularly the special Now, suppose this proposed increase of taxgentleman refer?

and more effectually secure the collection of ation is imposed upon the national banks. Mr. PETERS. To the First National Bank

internal taxes on distilled spirits and tobacco,

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