426 



GEOKGIA. 



investigation. The reports show that the les- 

 sees, being forced by law to bear the expense 

 of carrying the convicts from the county jails 

 to the various camps, have found it best to make 

 a contract with the keeper to deliver the con- 

 victs at so much per head. This practice has 

 prevailed for many years. The price charged 

 by the keeper was $12 a head. A certain 

 company of the lessees refused to pay what 

 was demanded, and made the charge. 



The committee appointed to investigate the 

 conduct of the State School Commissioner made 

 a long report, in which they presented an 

 itemized account of all the receipts and ex- 

 penditures of the office ; also a statement of the 

 amounts received in the State from the Pea- 

 body fund. The report in the highest terms 

 commended the zeal, efficiency, and good man- 

 agement of the State School Commissioner, 

 and showed how skillful and economical had 

 been his administration of the school interests 

 of the State. 



The investigation of the Agricultural Bureau 

 was unimportant. 



The measures before the Legislature related 

 with few exceptions to local affairs. They were 

 very numerous in consequence of the modifica- 

 tions of the State Constitution. 



The financial condition of the State appears 

 to be most satisfactory. During the last two 

 and a half years the expenses have been re- 

 duced in every department. The floating debt 

 of $350,000 has been paid, and above $200,000 

 has been unexpectedly obtained from claims. 

 The funding of high-rate interest bonds in 

 low-rate bonds has been very successful. The 

 public debt is only one twenty-sixth of the prop- 

 erty, and under the new Constitution can not be 

 increased, but must be steadily diminished. 



At the previous session of the Legislature an 

 act was passed to issue about $3,000,000 in 

 small-sized bonds, some as low as five dollars, 

 at 4 per cent, interest, free from taxes. The 

 cost of the preparation of these bonds was 

 $3,197. The entire issue was sold at the Trea- 

 sury as fast as they could be signed ; and when 

 the last were sold, orders remained that could 

 not be filled. The objection was raised against 

 the bonds that they were bills of credit, and 

 subject to 10 per cent, tax under the internal 

 revenue law. In consequence, one of the Rep- 

 resentatives of the State in Congress, Mr. Hen- 

 ry Persons, asked the following questions of 

 the Commissioner of Internal Revenue, Mr. 

 Green B. Raum : 



1. Will you kindly inform me if there is any law or 

 ruling which can tax any bank, corpqrated or private, 

 for paying out a bond of any sovereign State in the 

 United States in payment of checks upon said banks, 

 when the holders of such checks are willing to receive 

 said bonds in payment of said checks 3 



2. Or is there any law or ruling which can in any 

 manner tax any bank for receiving or paying such 

 bonds in lieu of currency beyond the usual tax on 

 average deposits of any character ? 



3. Would not State, private, and national banks 

 stand on the same footing as to receiving or paying 

 out such bonds ? 



The reply of the Commissioner was as fol- 

 lows : 



The bonds or obligations particularly in question 

 are, as I understand, of various denominations, some 

 of them as low as five dollars. One of them of the 

 denomination of five dollars has been shown me. It 

 was issued by the State of Georgia under an act of the 

 Georgia Legislature, is payable to the bearer by the 

 State, January 1, 1885. with annual interest repre- 

 sented by coupons at the rate of 4 per cent, per an- 

 num, and is signed by the Treasurer and the Gov- 

 ernor of the State. In short, it is an interest-bearing 

 obligation of the State of Georgia, payable to bearer 

 at a definite future time. 



It has never been considered as within the spirit of 

 the internal revenue laws or the policy of Congress to 

 impose a tax upon the bonds or other similar obliga- 

 tions of a State. In fact, the tenor of the decisions of 

 the United States Supreme Court in analogous cases 

 is that Congress has no authority to impose such a 

 tax. However that may be, I am of the opinion that 

 not only has Congress not imposed any tax upon the 

 obligations in question, but that it has passed no 

 statute which purports to impose them. 



The tax imposed upon bank deposits by section 

 3,408 of the Revised Statutes is upon "deposits of 

 money." I do not regard the bonds in question as 

 " money " within the meaning and intent of that 

 word as used in that portion of the statutes. They 

 are obligations which a bank may buy and sell as it 

 buys and sells all bonds and other similar obligations ; 

 but they are not money. 



The only other internal revenue tax to which these 

 obligations may be thought liable is the tax of 10 per 

 cent, imposed upon certain notes mentioned in sections 

 3,412 and 3,413 of the Kevised Statutes, and sections 

 19 and 20 of the act of February 8, 1875 (Abbott's 

 " Statutes at Large," 311). Even assuming the obliga- 

 tions in question to be " notes," they are nevertheless 

 liable to tax neither under said section 3,412 nor said 

 section 19. The tax imposed by those sections is upon 

 the notes of persons, firms, associations. State banks 

 and State banking associations within the meaning 

 and intent of this statute (13 " Opinions of Attorneys- 

 General," 176) ; and it would hardly be claimed that a 

 State falls within either of the classes enumerated in 

 the section cited. 



The tax imposed by said sections 20 and 3,413 is upon 

 the notes of any town, city, or municipal corporation. 

 The expression of one thing implies the exclusion of 

 others. The mention of towns, cities, and municipal 

 corporations implies the exclusion of a State. If it 

 had been the purpose of Congress to impose a tax upon 

 notes issued by a State, States would undoubtedly have 

 been included in the enumeration in the statute. 



In reply to your inquiries, therefore, I have to say 

 that there is no ruling of this Bureau, nor in my opin- 

 ion is there any internal revenue law, which requires 

 a tax from any bank or banker for paying out bonds 

 of the State of Georgia in satisfaction of checks drawn 

 upon such bank, nor is there any internal revenue law 

 which imposes a tax upon any bank or banker for re- 

 ceiving or paying out such bonds in lieu of currency. 

 State banks, private banks, and national banks stand 

 upon the same footingj under internal revenue laws, 

 as to receiving and paying out such bonds. 



The returns to the office of the Comptroller 

 show the amount of property held subject to 

 taxation in the State to be $225,000,000. The 

 returns also show that the property now held 

 by the colored people of Georgia aggregates 

 $5,182,398, against $5,124,875 last year, and 

 this, too, when the bulk of property has de- 

 creased at least 10 per cent, in value. They 

 have added 39,309 acres to their possessions 

 during the last year, making a total of 341,199 

 acres owned by them. There are only four 



