5 2o POPULAR SCIENCE MONTHLY. 



Chief -Justice Marshall, held that " a tax on Government stock is a 

 tax on the power to borrow money on the credit of the United States." 

 If, therefore, we except the borrower from taxation in the form of a 

 decreased rate of interest, we grant him no special exemption or ad- 

 vantage, for his property, which is covered by the debt, has already 

 in other forms been taxed, and the exemption will diffuse itself in the 

 form of lower rate of interest, which will be the means of producing 

 a higher price of labor, land, and personal property, until the exemp- 

 tion is completely diffused. Who will then be injured by taking the 

 tax from money at interest? It is probable that he who now adds 

 the tax to the rate of interest, and charges the borrower, and does 

 not pay it to the State, may lose by the change. He will be obliged 

 to enter the open money market and pay the market rate, as the pur- 

 chasers of Government bonds now do, for evidences of debt that will 

 be free from taxation in the hands of all persons; and the laws of 

 trade will regulate his investment as they daily regulate the price 

 of Government bonds, and will bring down his securities to a rate 

 of interest not much above the rate paid by the national Govern- 

 ment. The exemption applied to United States bonds, which is 

 of no practical benefit to the present purchasers, in consequence 

 of the increased price of the bonds, would be of no benefit if 

 applied to the holder of other securities in an established and 

 permanent system, except in freedom from the uncertainties and 

 irregularities attending the exercise of arbitrary and irregular power. 

 If the exemption is an exemption of everything of the same 

 class, it is perfectly equal and fair, and its effect is diffused and 

 equated; and the tax on another article, taxed in lieu of the ex- 

 empted class of articles, is likewise equated and diffused, and if 

 invisible and imponderable evidences of debt can not be taxed 

 equally no injustice will arise if they are all free from primary taxa- 

 tion, and if the taxes of a permanent system are imposed on other 

 things subject to positive and fixed rules of assessment. The daily 

 price of United States bonds, therefore, is a constant lesson that an 

 exemption of a security from taxation is an exemption of the bor- 

 rower, and the same law of political economy will rule in respect to 

 both private and public debts. Each State has, therefore, the power 

 to put its borrowers on an equal footing with the General Govern- 

 ment, and without injustice or inequality toward the borrower or the 

 lender. 



The Old and New Ideas in Taxation. — The first attempt made 

 to tax money at interest was instigated against money lenders because 

 they were Jews ; but the Jew was sufficiently shrewd to charge the full 

 tax over to the Christian borrower, including a percentage for annoy- 

 ance and risk; and now most Christian countries, as the result of 



