Why Does Congress Not Tax Bank Notes?

While Congress is taking hold of almost every object that can be made to yield a dollar of revenue for the purpose of subjecting it to a tax, it does not seem to contemplate the laying of a tax on Bank Notes, one of the most legitimate as it could be made a productive source of revenue.

There is about $200,000,000 of bank paper in circulation in the Northern States, and this exists by the sufferance of the people who lose not less than ten per cent. per annum on an average by depreciation of this paper money.  There is a loss of some twenty millions a year sustained by the people at large in consequence of this depreciation, and if Congress would only say the word, this amount would be saved, by superceding Bank Notes by Treasury Notes.  Or, if the Bank Notes would stand the tax imposed on them, so much would be made to the Government.

Then again, the Banks do not pay the people interest on their notes, while the Banks charge interest on the people’s notes.  The Banks issue their own notes without interest and loan them to the people for their notes at interest.

Thus the Banks make money on their own evidences of debt.  Now, all this advantage should be taken by the Government and given to it by the people because every dollar made or saved by the Government is a dollar made and saved for the benefit of the people themselves; while what the Banks make is for the interest of the few who own them.

Congress should therefore tax Bank Notes at once.  Government is not bound to respect the kind of money put in circulation by the Banks.  It is, and always was, an illegitimate, unconstitutional currency.  There is no currency legitimate but that which is made so by the Federal Government, and the Federal Government has not legitimatized nor authorized, in any way, bank paper.

So, then, it is proper to tax it, even if the tax drives it out of circulation.  So much the better for the Government and for the people if such should result.  Government Treasury Notes, of Uniform value all over the country, will take the place of the retired Bank paper, and even if it should depreciate, it will be no worse at worst than the Bank Notes.

– Published in The Dubuque Herald, Dubuque, Iowa, Friday Morning, February 7, 1862, p. 2