Duke University Libraries 
 Minority report 
 Conf Pam #285 
 
 DTTOaSDBtY 
 
HOUSE OF llEPRESENTATIYES, May 23, 1864.— Liid on 
 the ta,ble aud ordered to be printed. ^ y 
 
 MINORITY RiYPOHT 
 
 or THK 
 
 CUMMrrTEE Of ¥AY8 AAJ) ME AJVS . 
 
 On the lax Bill. 
 
 To t/ie Home of Representatives : 
 
 The undersigned, member of the Committee of Ways and Means/ 
 begs leave to make the following report : 4 
 
 The act passed at the last session, entitled " vVn act to levy addi- 
 tiftnal taxes for the common defence and support of the Government," 
 should be amended so as not to levy a double tax upon the property 
 of baliks or other corporations, by first levying a tax on the " shares " 
 or *' interest,'.' and then upon the assets, in the shape of *' gold and 
 silver coin, gold dust, gold or silver bullion,"' and " upon all moneys 
 held abroad, or upon the amount of all bills of exchange drawn there- 
 for on foreign countries." 
 
 Further than this, the taxes of any bank, banking company or 
 association, canal, navigation, importing and exporting, insurance, 
 manufacturing, telegraph, express, railroad and dry-dock companies, 
 and all other joint stock companies, of every kind, whether incorpor- 
 ated or not, should not be reduced. 
 
 To assess the value of all property taxed under the second section 
 of the act, by prices in 1860, and not at the time of assessment as 
 fixed by the act, would be simply to release all that class of tax-pay- 
 ers from a very large proportion of their taxes,' amounting in the 
 aggregate to many millions. . ' 
 
 The tax act of the last .session, in the time of assessment, malces 
 two classes : the first is'assessed according to the market value of the 
 same or "similar property in the neighborhood in 1860 ; the second is 
 assessed by its value at the time of assessment. This, under the cir- 
 cumstances, is a discrimination in favor of the first class in the pay- 
 ment of taxes, in most cases, of several hundred pencent. ; the rea- 
 son for which, as to property employed in agriculture, is obvious, 
 though the policy may be questioned, but it might be difficult to dis- 
 
cover the reason for taxinj^ other •jjroperty put in that .class at it.-j 
 value in 1860 — such, for instance, as gold and silver wares and plate, 
 jewels, jewelry, cotton, tobacco, kc. 
 
 But, however this may be, the policy of now transferring all that 
 class of taxables mentioned in the second section of the law, from the 
 second to the lirst class, is so manifestly injudicious at this time, that 
 silence in one, looking at it as I do, would be a criminal neglect of 
 public interests. It would be to release from taxes levied by law a 
 class not oppressed — a class who, as a general rule, have made more 
 money since the war than any other class. 
 
 We have classes who are suffering under our system of taxation, 
 and it is only when such suft'e'ring is of the most serious character 
 that our authorities, under a supposed discretion, have ventured to 
 give relief. It has ofte» been the case that persons after using up 
 most of their supplies, have ascertained that one-tenth of all was due 
 the Government, and they have thus been compelled to surrender 
 their last and only family supplies. If any class is relieved from 
 taies, it should be that class who are actually suffering and who are 
 actually oppressed by the law. 
 
 Upop "what principle should a corporation be taxed on a gold basis, 
 and the taxes collected in a currency the difterence between which and 
 gold is two thousand pi?r cent. ? Is this a fair and equitable contri- 
 bution to the support of the Government ? The Government is being 
 carried on upon the currency, and not upon the gold basis.- Every- 
 thing paid for by the Government, except the single item of soldiers' 
 ■wages, is upon the basis of the value of Confederate currency. Now* 
 ■what is to become of a Government that contracts liabilities upon a 
 basis whose proportion to the rule for collecting taxes is as twenty, to 
 one ? If the Government is carried on by paying for all its supplies 
 . an advance of two thousand per cent, on gold prices, and still collects 
 its revenue upon a gold basis, it requires no gift of prophecy to see 
 its end. It may be said, in answer to this, that it would make no 
 difference if the Government would levy a sufficient per cent, to make 
 up for the disproportion ; and this is admitted. But no one will pre- 
 tend that five pfer cent, on property assessed at a gold value would be 
 at all adequate to the wants of the Government. What would it be ? 
 Take a railroad, whose stock wasworth, in 1860, fifty per cent. ; it is 
 now worth two hundred per cent. Upon a share the Government 
 would collect %2 50, instead of '$ H' — that would be one and one-fourth 
 per cent, on the present value, and to be paid in Confederate money, 
 which upon a gold basis would be just one-sixteenth of one per cent. 
 Kow is this a tax at all adequate to our immense expenditures ? The 
 principle adopted, upon full consideration, in the third section of the 
 act passed at the last session imposes a tax oil coin of five per cent, 
 in kind. The report of the committee reduces the taxes, in effect, 
 from five per cent, to one-sixteenth of one per cent. Upon the sup- 
 position that the stock has risen from 50 per cent, to 200 per cent., it 
 is a reduction: of 8,000 per cent. Shall this reduction in the taxes of 
 corporations be mrffte ? If so, the work must not, can not, stop here. 
 We have coutracted-the debt, and it must be paid or repudiated ; and if 
 
taxes once levied be released, sooner or later tliey must be luid some- 
 where else. Now what class will you substitute for corporaticois ? 
 Besides, our appropriations amount to 1-drgely over §50(l,()iM),0(Hi, as 
 reported, and we are required to provide the means of paying it. ]f 
 we release $.50, 001), ()()() of taxes at one blow, the country will say, 
 and rightfully too, Congress is letting down upon the tax (luestiou. 
 and the only remedy is for the Secretary of the Treasury to rauke 
 more mon^y. 
 
 But this is not the only question. It is canceded that a double tax 
 should not be laid upon corporations and joint stock companies, by 
 first taxing the stock and then assets which the stock represents ; 
 and yet technically — as the stockholder is in law one person and the 
 corporation another — it would be difficult to distinguisli between that 
 and the collection of a tax on real estate bought and not paid for, and 
 also a tax on the notes given for the purchase money, which is of 
 frequent occurrence under our system But the questi'cm is, how 
 shall the tax be assessed ? — on what ? The shares or stock, or shall 
 it be levied on the assets ? It is respectfully submitted that a tax on 
 the shares or stock is not such a tax as is levied on the property of 
 individuals, and that a markecl and palpable discrimination is made in 
 favor of corporations as against individuals. What is the rule as to indi- 
 viduals ? Under the act of the last session all the property of individ- 
 uals, including credits, is taxed, and no credit is given for liabilities. 
 No matter what a man is indebted, nor whether his property is bound 
 for the debts by lien or mortgage, the property is taxed without re- 
 gard to the debts. This rule of taxing property without regard to 
 liabilities, which may partially or wholly cover it, has been much dis- 
 cussed, though fully adopted by our Government, and perhaps by all 
 the States. Now, it is submitted that the mode adopted by the com- 
 mittee of taxing shares or stock is a departure from the general prin- 
 ciple, and is a material discrimination in favor of corporations. 
 What does the market value of stocks represent^ not the assets, but the 
 difference between the entire assets on the one hand, and the liabilities 
 on the other. What enters into the consideration which determines 
 the price to be paid for stocks in the market ? First, the assets are 
 ascertained, and if there be no liabilities, then the, aggregate value of 
 the stocks of any given corporation would.be the value of -the assets. 
 But the liabilities of the corporation, of course have much to do in 
 determining the price to be paid. In other words, the market 
 value #f stocks is fixed by bankers and pther dealers in stocks, who 
 take into the estimate the assets upon the one hand, and the liabili- 
 ties upon the other, and with a keenness of perception, .perhaps found 
 in no other profession, they strike the balance and fix the " market 
 value." And this market value thus ascertained, is to be the guide 
 in determining what property shall be taxed ; so that as to corpora- 
 tions and joint sto^ companies, they would be taxed upon the differ- 
 ence between the assets and liabilities, and not upon their property^ as 
 other persons are. ^ 
 
 Upon wfiat principle cap this be justified ? Why discriminate in 
 favor of corporations ? The only argument advanced for this discrim- ' 
 inatiou is, that corporatious are institutions of public interest, and 
 
ibuuded upon the I'lea of public necessity. No vmr should We m<i«ie 
 upon corporations, because they are (rorporations, but certainly ass h 
 general rule, corporations in their dealings with other persons, and 
 ■with each other, as rigidly and as exclusively take care of theiv own 
 interests as any other class to be found. . 
 
 Whatever advantages the public derive from them are paid f<;r. and 
 these advantages are conferred because they are paid for, and for no 
 other reason. 
 
 By the amendments proposed, the taxes of 1664 are reduced many 
 millions. We are not in ccndition to reduce our taxes; however, 
 other expedients may check t'he disease, taxes is the only remedy. 
 
 Take a single bank, with a cnpital of !Si,l>''<),WO(l paid*in, and the 
 taxes would be. under thcamendments, $5", MOO, that is, if the stock 
 was worth par in 1860; a thing not very probable. Now what are 
 the taxes under the present law taxing the assets? After relieving 
 the bank frofn a double tax, this bajik would likely, as bankers would 
 admit, have of assets, say. 
 Specie $20U,l)()0, worth 20 for one, $4,00U,()(M), o per cent. 
 
 taxes, * !$'2(U),0(M) 
 
 Sterling exchange $l()(l,()00, worth 20 for one, $2,000,000, 
 
 5 per cent, taxes, 100,000 
 
 Solvent credits $800;000, worth three for one, $2,400,000, 
 
 5 per cent, taxes, . 120,000 
 
 Taxes under present law, $'420,000 
 
 Taxes under amendments, 50,000 
 
 Difference, ♦ $370,000 
 
 But the friends of the amendment say such a tax is frightful. We 
 reply, if it is, it is neverthdess fa'ir ; it is exactly what that aggre- 
 gate of property belongin»; to individuals yields. But it is not so un- 
 reasonable a tax for the times. $420,000 paid for the protection of 
 $8,400,000, is by no means a heavy sacrifice, when we remember 
 that our enemies, in violation of all the rules of civilized warfare, 
 openly avow, and constantly make good that avowal, as far as possi- 
 ble, that one of the main features of the war contemplates, by fire 
 and cortfiscation, to strip us. of all property. 
 
 The principal reason given, by the friends of the amendments, for 
 not taxing coin belonging to the banks according to its value is, that the 
 law unconditionally requires tlie banks to keep it. And that itw(Tuld 
 be unjust to tax gold according to its value, held by a corporation, 
 when it was only obeying the behests of the law in holding it. Such 
 an argument is erroneous in this, that it assumes this condition of 
 the law requiring banks to keep on hand a certain amount of gold, 
 to be an arbitrary and gratuitous codition imposed, whereas, the 
 truth ig, that the corporators asked a charffered privilege, and which 
 taken as a whole, means simply a right to issue notes and purchase 
 bills, so as to receive interest on ^Jiree dollars for every one dollar of 
 goM in the vaults of the bank. 
 *A11 of which is respectfully submitted, 
 
 ' A. S. COLYAR. 
 
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