Another way to withdraw funding from a government is to discourage other institutions from loaning money to it. And one way to do this, if you can credibly do so, is to insist that you will repudiate such debts if you are able to overthrow the government.
The one concrete example that came to my notice when I was reviewing my collection of stories of tax resistance campaigns of yore (there were other campaigns in which this was hinted at) comes from Reconstruction-era South Carolina, where a white supremacist opposition movement supplemented its tax resistance campaign in this way. On , the Charleston Board of Trade met, and unanimously adopted a set of resolutions, including the following:
Resolved, That we, the property-holders and taxpayers of the State, residing in the City of Charleston, do hereby deem it our duty to declare that the bonds heretofore issued without legal sanction; and the so-called sterling loan, or any other bonds or obligations hereafter issued purporting to be under, and by virtue of, the authority of this State, will not be held binding on us, and that we shall, in every manner and at all times, resist the payment thereof, or the enforcement of any tax to pay the same, by all legitimate means within our power.
Resolved, That we deem it our duty to warn all persons not to receive, by way of purchase, loan, or otherwise, any bond or obligation hereafter issued, purporting to bind the property or pledge the credit of the State; and that all such bonds or obligations will be held by us to be null and void, as having been issued corruptly, improvidently, and for fraudulent purposes, and in derogation of the rights of that portion of the people of this State upon whom the public burdens are made to rest.
Here is some more from ’s Charleston Daily News:
The Debt and Taxation.
Important Meeting of the Board of Trade
A Strong Protest Against Illegal Debt and Excessive Taxation — Speeches by Colonel Lathen and the Hon. George A. Trenholm
A meeting of the Charleston Board of Trade was held , at the Board of Trade Rooms. The meeting was one of the largest ever known since the organization of the Board, the members who were present representing the varied commercial interests of the State, as well as the different shades of political opinion.
The meeting was called to order by the chairman, Vice-President Geo. H. Walter, who spoke as follows:
Remarks of Captain Walter
Gentlemen of the Board of Trade – The purpose of your meeting is to take into consideration the present financial condition of the State, and by deliberation to devise such measures as will enable us, by co-operation with our fellow-citizens throughout this Commonwealth, to relieve ourselves of the intolerable burdens which now oppress us in the present, and with an ominous prospect of their being increased in the future, unless prompt and decisive action at once be taken. It is only necessary to look at the alarming increase of the debt of the State, and the reckless expenditure which has marked the history of the State for , to satisfy us at once, that, as taxpayers, we are bearing a burden too grievous to be borne and which must inevitably result in bankruptcy and ruin. It means confiscation, and there are those who do not hesitate to announce that such is the purpose. We are to be taxed out of our property.
I am unwilling, with others, to submit to this condition of affairs, without an effort to remedy the evil.
In , with the taxable property of the State valued in round numbers at five hundred millions, the people of South Carolina supported an economical and honest government at a cost of about four hundred thousand dollars, while the debt of the State was about five millions. we are taxed upon a property which at an over-estimated assessment is less than one hundred and ninety millions, and are told that we will be called upon to raise four millions of dollars to pay the interest on a debt of fifteen million, and the so-called expenses of the State. Thus, while the taxable property has decreased in value about sixty-two percent, our taxes have been increased ten-fold and the debt of the State three-fold in the same period. It is due to ourselves to protest against the continuation of this iniquity, and in unmistakable language to state that we will no longer tolerate it. With this great fraud perpetrated in the past, it is now proposed to create a new loan to be known as the “Sterling debt.” It is only another “turn of the screw,” which is already destroying us, and it is our duty to ourselves, as well as “good faith” with the present honest creditors of the State, publicly and clearly to affirm to them, and to warn the capitalists who may be disposed to make such a loan, that we regard its creation as illegal, and that we will resist its payment by all legitimate means. I trust your deliberations will be marked with harmony and unanimity, and result in promoting the best interest of this Commonwealth.
The meeting is ready for business.
The applause having subsided, Colonel Richard Lathers, of this city, for many years the president of the Great Western Marine Insurance Company, of New York, arose and submitted the following resolutions:
Whereas, Under the operation, of the present State Government, the majority of the property-holders and taxpayers of the State, from whom the public revenue is mainly derived, are excluded from any power in the legislation of the State, and from any practical influence in the imposition of taxes;
And, whereas, The moneys raised by taxation are improvidently and corruptly used and expended by persons who hold office under the State government, and the sums appropriated for alleged public uses are excessive, and extravagant;
And, whereas, The credit of the State has been pledged illegally, and it is now proposed to pledge the credit of the State for further loans, by a new issue of bonds, which may be negotiated in the market to persons who may take them in ignorance of the circumstances under which they are issued. Therefore,
- Resolved, That we, the property-holders and taxpayers of the State, residing in the City of Charleston, do hereby deem it our duty to declare that the bonds heretofore issued without legal sanction; and the so-called sterling loan, or any other bonds or obligations hereafter issued purporting to be under, and by virtue of, the authority of this State, will not be held binding on us, and that we shall, in every manner and at all times, resist the payment thereof, or the enforcement of any tax to pay the same, by all legitimate means within our power.
- Resolved, That we deem it our duty to warn all persons not to receive, by way of purchase, loan or otherwise, any bond or obligation hereafter issued, purporting to bind the property or pledge the credit of the State; and that all such bonds or obligations will be held by us to be null and void, as having been issued corruptly, improvidently, and for fraudulent purposes, and in derogation ot the rights of that portion of the people of this State upon whom the public burdens are made to rest.
- Resolved, That the taxpayers of the State are hereby requested to meet in their respective counties for the consideration of this subject, and the enormous tax levies of the current year, and for the appointment of two delegates to represent each county in a State Convention, to be held in Columbia on , for the same purpose.
- Resolved, That this State Convention of Taxpayers be requested to confer with his Excellency, the Governor, on the dangerous fiscal condition of the State and request his official aid and co-operation in the investigation of the accounts of the Comptroller and the State Agent in New York, so that the amount and character of the bonded debt and all other liabilities of the State can be clearly stated, with a view to such further action as may be necessary for the protection of the public creditors and of the taxpayers of the Commonwealth.
Colonel Lathers then addressed the meeting as follows:
Remarks of Colonel Lathers.
Mr. President – The grave subject we are called on to consider to-night, is one which has no sectional or partisan aspect.
We are here as merchants and business men from all sections of our common country, and holding all shades of political opinions, to contemplate the imminency of the bankruptcy of the State and the ruin of ourselves and our fellow-citizens of all shades of opinion and color, and all varieties of occupation.
The rich are not above the evil consequences of the burden of State credit by fraud and corruptlon, and the poor cannot escape the grinding effects of that form of taxation which virtually confiscates their property, dlscouraging their industry, and dooms them to a slavish poverty hitherto unknown to our country.
A slavish poverty hitherto unknown to South Carolina, ladies and gentlemen. The tone-deafness of these “fellow-citizens of all shades of opinion and color” is astonishing from this vantage point.
The fathers of this glorious Union seceeded from the parent country when Great Britain was at the very acme of national power, because taxation without representation was attempted to be enforced in the Colonies, even in the mildest form of imports known to the British Empire.
Yet, with this glorious example before us, which is the heritage of every American, and in the face of this dangerous invasion of the essential rights of individual freemen, and destructive of the first principles of our national constitution, the people of this State were disposed, in a spirit of profound acquiescence to the national will, to submit to the degrading conditions of the reconstruction policy, which disfranchised the intelligence and honesty of the State, and forced upon the community a horde of corrupt white adventurers and ignorant negroes to discharge the delicate duties of legislating for, and ruling over, a free and intelligent people, without their consent and in violation of the plainest principles of Republican government. Yet, hoping for a speedy return of that sense of justice, if not of liberality and fraternal interest, which a common race and a common heritage were well calculated to produce; encouraged by the conservative elements developing themselves among the intelligent portion of our colored fellow citizens, and the sympathy and intelligent cooperation of citizens of other States who have located among us, and whose influence and enterprise were aiike favorable to the development of the State and the happiness and elevatlon of our people, we are suddenly confronted with a series of corrupt legislative acts, entailing taxation which no industry can survive, and with so reckless a use of the public credit as to seriously threaten the State with bankruptcy. Therefore, as merchants and business men, representing in part the business interest of the State, we have deemed it our duty to call public attention to the practical effect of the present administration of the affairs of the State, hoping that, by a timely and judicious movement in the interest of the public creditors and the taxpayers of the State, the high credit previously enjoyed by our citizens may be restored, and the taxes reduced within the measure of the ability of the people to pay, without starvation or the practical confiscation of their property.
We meet, therefore, under the auspices of the 1st Section of the 1st Amendment of the Constitution of the United States, which permits and guarantees the right of citizens to assemble and petition for a redress of grievances. The authors of that glorious charter of public liberty seemed to contemplate just such a case as ours, when the rights of citizens should be so disregarded by local authority as to leave only the right to discuss their grievances, and to invoke public sympathy in their behalf.
The occasional disturbances in some of the counties of the State are to be deplored and discouraged by every Conservative and law-abiding citizen, yet we cannot disguise from ourselves that these violations of the public peace are the consequence of a generous but unwise effort to suppress the fraud and oppression of corrupt local rulers by parties who not only accept the Union and desire to obey legitimate authority of Federal powers, but would be glad to receive that protection from it in favor of the white man, which now only appears to be extended to the negro.
These “occasional disturbances” were Ku Klux Klan terrorist raids that were prominent in the period.
If a set of adventurers, corrupt and ignorant as those now ruling this State, should attempt to displace the citizens of one of the New England States from their legitimate rights of self-government at home, I am confident that a mass meeting of the old Puritans would be called, Old Hundred would be sung, and the carpet-baggers would find a speedy exit from that State the only escape from an early grave. It is easy to counsel patience and orderly conduct on the part of those who are far from the insults and oppression of an ignorant and irresponsible faction, fastening themselves on the vitals of the people and consuming their substance, under the forms of law; but it is more wise and philanthropic to aid in ridding the community of such an evil; and no generous man can resist the impulse of applause when justice is meted out to such parties, even if done rather irregularly.
He’s made quite a trek from “are to be deplored and discouraged” to “no generous man can resist the impulse of applause” in those two paragraphs…
A pirate, many years ago, on the Mexican coast, pursued a merchantman, and the captain armed his passengers and crew to resist the robber. A Quaker on board refused to arm himself on the plea that he was a man of peace, and must avoid violence. With undisguised disgust, the ship’s company repaired to the side of the ship to resist the robbers, leaving the Quaker coolly contemplating the scene.
The first man to reach the ship’s deck was the captain of the robbers, a bold and daring fellow, who led the assaulting crew. The Quaker immediately confronted him and, seizing the surprised robber by the neck and heels, hurled him into the sea, calmly remarking, “Friend, thou hast no business here. Thou camest for a dishonest purpose.” [Applause.]
I refrain from the application. I will only add that the man of peace saved the ship and cargo. The action was irregular, and cannot be justified by a strict disciplinarian. [Laughter and applause.]
No people can prosper where the fountains of power are corrupt and the law makers ignorant and beyond the control of that class of the people who produce the wealth and bear the burdens of the State. [Applause.]
I have every confidence that the conservative element of the Republican party, white and colored, are heartily with us…
That “us” puts the lie to the earlier claim that this meeting represents “fellow-citizens of all shades of opinion and color” “and holding all shades of political opinions.”
…in condemning the frauds and ignorance of the Legislature which has disgraced us as a people and tends to reduce us to beggary. These resolutions, which I have the honor of offering, meditate a thorough sifting of our entire fiscal system, with a view to defeating the present corrupt practices of that body, and to secure an honest and intelligent administration for the future. The honest creditor of the State, and the hard-working citizen whose industry is so largely absorbed by taxes, will find security and relief under the action proposed by these resolutions. The example of North Carolina is before us, and we wish to avoid the overthrow of public credit by a timely protest against measures and practices which lead to ultimate repudiation and bankruptcy. [Prolonged applause.]
It is therefore but an act of prudence and honesty on our part to give this public notice, that bonds issued against the public interest, for corrupt purposes, and without the consent of those whose property it is proposed to pledge, will not be recognized as binding on the State or the people in any form whatever.
Mr. President, a history of the reconstruction policy in this State and the result of reversing the order of society, even extending the system of its logical conclusions in legislative and judicial matters, will furnish a most instructive lesson to statesmen of all ages. It will standout, sir, as distinctly as the overthrow of order in France during the reign of terror, perhaps less destructive of human life, but more demonstrative of the danger of elevating ignorance to power, and corruption into places of trust and confidence; and the fact that the community has thus far survived the infliction is a bright example of the tenacity of a well established civilization to resist, for a long period, the inroads even of barbarism. But sir, we have a bright future before us, young men are growing up and assuming the direction of the affairs of State; conservative men of all parties, and of both races, are beginning to feel that public plunder reaches private purses, and that fallacious and partisan dissension too often enures to the benefit of the demagogue. Our own race through the country is begin to feel a natural sympathy for the white man. And as old sectional issues pass away, the inquiry will arise, what there is In the black race entitling it to rule the intelligent white man, whose gallantry in war, and culture and enterprise in peace, elevated us to the first rank as a nation. And I desire to say to our colored fellow-citizens, whose rights I respect, and whose genial and friendly co-operation, for the public good I appreciate, I desire to secure for the mutual interest of both races, that they will sow the wind and will reap the whirlwind, if, under the guidance of bad counsels, they use their present power oppressively toward their white brethren. The eyes of over 30,000,000 of white men are upon them, and the superior race will not long permit the oppression of any portion of its members by a minority of another race. [Applause.]
That there is the brass tax. Here Colonel Lathers apparently remembers that they’re pretending to be a meeting of concerned South Carolina businessmen of all creeds and colors, and he goes on to describe the poor financial condition of the state government, mentions “the cases of fraud which have added so fearfully to the burdens of the taxpayers, and which have been so productive of vulgar display on the part of the corrupt members of the Legislature in the way of splendid equipages and such evidences of ill-gotten wealth as thieves and gamblers delight to possess,” and complains of the increasing tax burden during a poor economic climate.
Lathers wasn’t even one of the more fire-breathing of Southern white racists. He’d been actively working for North/South reconciliation in the years before the outbreak of the Civil War, and was in the South presenting a peace proposal when war broke out — whereupon the suspicious Confederacy expelled him. He worked actively for the Union war effort from New York. A few years after giving this speech he moved back North, to Massachusetts, and died a Republican of all things, having abandoned the Democratic party when the populist “Free Silver” faction overthrew its more business-friendly leadership.
George A. Trenholm, who had been the Confederate Treasury Secretary, spoke next, and put the grievances of the group in a concise and non-racially-excited way:
Remarks of Mr. Trenholm.
Mr. Chairman – I rise to second the resolutions proposed by my friend, Mr. Lathers, and I ask the indulgence of the meeting in giving the reasons that induce me to support them. It is one of the evils of our condition that even signs of suffering and cries of despair are converted into expressions of political discontent. In this not only is a great injustice done to our people, but a great imposition practiced upon the country. I do not believe that it is of the deliberate purpose of the American people, of whom we are flesh of their flesh and bone of their bone, that we should suffer the evils we endure. On the contrary, I am sure of their sympathy and support, in every manly, open and straightforward effort we make for our relief. Such, I think, is the one embraced in these resolutions. Reviewing our circumstances with calmness, and in a spirit of candor, I aver, without fear of contradiction, that there is no hostility to the government — no motives of opposition either to the laws or the policy of Congress mingled with the feelings of disquietude that agitate the State. There are no political agitators exciting the people to discontent In respect of any questions connected with the Federal Government. Our troubles are local; they arise out of the administration of our own affairs. It is one of the results of our new constitution — unfortunate, but inevitable — that the legislative power of the State has passed into the hands of men unprepared by education and experience in public affairs to make the laws and manage the finances of the State. Pressed on all sides by designing men, who are intent upon enriching themselves, exposed to the temptations incident to the possession of power, the acts passed by them from time to time, under such influences, have contributed to bring the State to the verge of bankruptcy, and have augmented the taxes to a sum which the income of the people is inadequate to defray. These are the causes of the existing disquietude. As long as capitalists continue to supply money in exchange for or upon the hypothecation of the bonds of the State, no limit can be perceived to the debt for which the property of its citizens shall be pledged. Neither is there any security felt against the ruin in which taxes so enormous as the present must inevitably result. In such circumstances the simple remedy with every free people is to change their representatives; but in our case, as is well understood by the whole country, this change is at present impossible. They who make the laws and levy the taxes have no property and pay no taxes; those who possess property and pay taxes have no representation; and this condition of things admits of no immediate change. In these painful and trying circumstances, the suffering people of the State are driven to despair. They dread the approach of the tax-collector, to whose demands their poverty denies the compliance alarm and agitation is fully justified, and merit the sympathy of wise and good men in all parts of our common country. That sympathy they are sure to receive. I have a well established confidence in the justice and magnanimity of the American people. I am persuaded that they will sustain us in the attitude we propose to assume; that all further credit will be refused to those whose wasteful administration threatens the ruin of the State. I believe, too, that they will sustain us in the effort to relieve ourselves from the enormous taxes that threaten our property with confiscation. [Applause.] It may well be doubted if the entire gross annual income of the people from all sources amounts to $20,000,000. Of this sum, what is expended in the payment of wages contributes nothing to the public resources from the remainder. The monstrous proportion of $4,000,000 is demanded for taxes in a single year — $2,000,000 for , and $2,000,000, by anticipation, for . Every virtuous and patriotic man in the country, of every party, upon a calm consideration of the unhappy condition of our suffering people, will admit the magnitude of our grievances, and the patience and moderation of our conduct. It is to them, to our countrymen, that we appeal for sympathy and support in the effort to save ourselves from ruin. I have no fears of the results of this appeal, and I give my hearty support to the resolutions. [Prolonged applause.]
The chairman put the question and the resolutions were unanimously adopted, the announcement of the fact being received with loud cheering.
The same issue of The Charleston Daily News carried a digest of tax resistance news from other state papers:
Resistance to the Taxes.
Voice of the State Press.
[From the Edgefleld Advertiser.]
The people of Edgefleld are fully determined to pay no more taxes daring , unless they are forced to do so by bayonets in the hands of Federal soldiers. We know the sentiment of our people on this infernal tax business.
[From the Barnwell Journal.]
We have counselled submission thus far, but we do so no longer, for the period has now certainly come when our people should act in an organised and determined manner, and refuse to submit any longer to the present government of incarnate villany and corruption. The most probably successful remedy, without violating the public peace, lies in the absolute refusal of our property-holders to pay one cent of tax to the present State government. The property-holders furnish the means by which the corruption of the officials is encouraged and their robberies are supplied, and by withholding these means the wheels of government can be clogged. They should assemble at certain points in every county, and agree and determine to resist all taxation on the part of the State.
[From the Winnsboro News.]
The State will have to be reconstructed again by Congress, or Congress will have to wink at its practical reconstruction by the white people of the State, in some form or other, whether by getting control of the Legislature, or of a convention, or what not, we cannot say. We only are convinced that the present government is a failure, and there must be a change of some sort. This vile, rotten, wicked, corrupt and degrading regime must be reformed or overthrown, and we see no practical method of accomplishing it except by some form of revolution. Of course we are not so insane as to mean, even to hint collision with the United States government. There can be very effective revolution, like that which, in colonial times, flung off the proprietary government, without any such collision. A refusal, in solid phalanx, to pay further taxes, for instance, would fling light upon the situation. Especially would it bring to light the real disposition of the Federal government, which some people take for granted will forever sustain ignorance, robbery, degradation and vice. We must give Congress another chance for reconstruction, or try our hand at it ourselves.
An edition of the paper had reproduced part of a Barnwell Sentinel editorial that read:
Will the People Submit?
It is well known to all parties that this paper has at all times recommended a strict obedience to the laws, though in many instances the laws are of a partisan character, and oppressive in their nature. The taxes are enormous, and are sucking the life-blood from many of our people, notwithstanding all who can are meeting the demands of the collector promptly. But the point where forbearance has ceased to be a virtue has been reached. The State tax will be sixteen and the county six mills on the dollar. If this thing is attempted to be done, we will not hesitate to advise our people to openly resist it in an organized and efficient way. If the ignorant and heartless majority of negroes in the House of Representatives presume that the white tax-payers of the State will silently submit to their own ruin and degradation without a struggle, they certainly mistake the character of the white race!