The Cincinnati daily star. [volume] ([Cincinnati, Ohio]) 1875-1880, 1876-02-26
Taxing Mortgages.

: Taxing Mortgages.
. In our issue of the 18th inst. we pub
aished an article under the above title In
reference to the proposed action OF the
Legislature of New Jersey on the SUBJ
6ect Of making mortgages taxable. Since
that article was written we have had
our attention directed to the same sub
6ect as agItated in California. In that
State the whole question has been sub
5ected to the test of judicial examina-
tioIi before the courts; and has been
ainally decided by the Supreme Court Of
the State in an elaborate decision, in
which all the Supreme Judges but one
concurred; and that one gave no rea-
sons for his dissent from the opinions OF
the other four. .,s ...-.-.-
| The question arose in the case of The
People vs.. the Htbernia Sactngs and
Loan Society. But, in their DECISION,
the Judges of the Supreme Court did not
limit their opinion to the particular case
at Bar. They considered the whole
matter of the constitutional and legal
power to tax mortgages in any case;
and met the question in its widest pub
lie aspect Their conclusion was that
there was no lawful power to tax mort
..ases; because, as mere credits, they
made no increase to the um of the prop
erty subject to taxation; and that tax
ing them was therefore an unconstitu-
tional imposition of an additional tax
on property already taxed.
In the course Of our article alluded
to, we employed this illustration;-"lt
certainly is correct in principle, that
the taxation OF property should be
uniform. But it would be difficult for
any Legislative genius to show how it
is that the making of mortgage can
create any property. A man may sell
his farm for $4,000 and take mortgage
to secure the whole of the purchase
money. The seller is Immediately taxed
on his $4,000 mortgage, and the buyer
lis also Immediately taxed on his $1O, 200
farm; and yet not a single additional
dollar of property has been created by
the transaction"
This aspect OF the question also came
under the consideration of the Supreme
Court OF California; and concerning
this their Chie!-Justice WALLACE. in de
liveriug his concurring opinion, said:---
"Mere credits are false Quantity II
ascertaining the sum of wealth which Is
subject to taxation as property, ana In
40 lar as that sum is attempted TO be IN
creased by the addition OF those credits
property taxation, based thereon, is moi
only merely fanclful, but necessarily tht
unconstitutional imposition OF an al II
tiorial tax upon portion Of the property
already once taxed"
And in the opinion of the Court as de
livered by Justice Mckinstry it is ar
gued that the taxation of mere credits il
absurd; be cause, though a tax were as
sessed upon q note or mortgage, ant
the same be once paid, the tax immedi
ately ceases, although the public wealth
has not been diminished one iota. Thf
is but the converse of our former propo
sition; and both result in the same con
clIsfon. ........,. .... Il. ...
The Constitution Of Ohio 'expressl
makes ''moneys, credits, Investment
in bonds" &C. taxable; but 1t does no
declare them to be property; for it i'm
mediately after says,-"and also all,rea
and personal property" And the Su
preme Court Of Ohio In the Exchange Bk
of Columbus Us. Hines, l3, o. st. Rep. 1.
declared that property is the sole basi
OF taxation." 4 majority Of our cour'
however, held that 'credits and right
OF actions possess. the inherent element
of property" To this there wasa stron
dissenting opinion by Judge Ranncy.
The Constitution OF California doe
otspecify or itemize the property TO b
taxed; but simply says,-'sAll pfopeft
in this State shall be taxed In propoi
tion TO Its salue.n But their tax law in
cluded s'money, goods, chattels, evl
dence Of debt, and Things In action" |
its definition Of personal property. An
asainstthi their Supreme Court decide
the law to be constitutional, for ii
reason that notes and mortgages, thoua
things in action, are not "property"
the SENSE OF the Constitution. II
court said,-"to assess all things. in a
tion, is to give a construction to II
Constitution which must lead to Il
,grossest absurdities."
In the course OF our former article v
also maintained that, while it was Il
ltheory OF the law taxing mortgages
glacs lhe burden upon the lender, u
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