The Wheeling daily register. [volume] (Wheeling, W. Va.) 1864-1878, 1876-04-13

C0uft OF the sotate VI o"Ai'o'
principles involved in the taxation OF
mortgages has given rise to some discus
sion and to a good deal Of criticism.
This has long been an intricate
and complex subject, and
the decision of the California
Court is of particular interest, and more
particularly to this State, as the Consti'
tuition of California provides, just as ours
does, that taxation shall be uniform"
The Court held that credits are titles
to the property of debtors, but not prop
erty itself; therefore under the Constitu-
ton mortgages were exempt from taxa
ton. The Supreme Court of the United
States, in the case of Weston, Agt., VS..
the city of Charleston u feters' 44Sh
held that the owners and holders OF U.
s. bonds arc exempt from State taxation
because such tax would in legal effect be
a tax on the borrower-the general
Government-its property and resources
by impairing its borrowing power This
substantially lays down the doctrine that
taxes collected through the agency OF
lenders are primary burden on borrow
ers.
The discussion of this question has
been the means of drawing from that dis
Cuished fnancier and politico-
economist Mr.. DAVID A. WELLS of
Connecticut, letter to the New York
Tribune in which he throws good deal
of light on this vexed questions
although his theories. and conclusions
drawn thcrefrom may not
prove satisfactory to every one. Like
all unadjusted questions each side pre-
sents case, but the authority of as well
informed and able commentator as
Mr.. WELLS will carry great weight, AID
perhaps secure an acquiescence in his
views even when his arguments may fail
to convince.
He says:
.Crude ideas exist about debts being
property; but if the subject is examined
it will be seen that credits are only In
choate titles and the property of debtors.
Credits facilitate the production and
transfer of property, but they are not,
in any economic sense or tor the purpose
of taxation, the property itself. FRO
perty or wealth can not be increased by
making credits or debts; they arc only
the evidences of the transfer OF
property which has been produced
5y labor, the basis of all property. The
right to transfer is incident to ownership,
and tax on a transfer is another form OF
taxing the property transferred. Credits
are only property in the sense of rights
or titles to physical actualities-the pro-
duct of labor-ard if the physical actual
" is taxed as whole, the title TO all or
one of the parts in the form of mortgage,
sim ole debt lease, fee simple, clear or dis
puted title, will be taxed also. 1t Is I'm
possible to tax the whole without taxing
the parts. This Is a simple question OF
mathematics, and not of law or political
economy. 1t would invoke endles
tronble to require the State to tax the
exact am )unt of eacn persons interest
legal or equitable, IN any given subject
of taxation. How could the General
Government collect duties under such a
rule? Property is taxed where 1t is
found, and the State cannot examine
even into the title of real estate before
it taxes it; but taxes the land itself rs
the feo simple value, without reference
to the various forms of equitable, legal
or life interests, household mortgages, or
inchoate debt interests which may exist
on the property. Uniformity and equal
ity of taxation and freedom from multi
plication of taxes BY different States re-
ouire that the State which imposes
the tax on the property as an entirely
should leave these various interests to
adjust the tax by the natural law OF COM
petition and by mutual contract, rs land
lord and tenant adjust their taxes by con-
tract or operation of law. If any other
rule than that adopted by the California
court is adopted, injustice and confusion
will be the result. One State will
tax the title-deed IN the hand of the
resident owner; another will tax resi-
dent leasoholder, and third State may
tax resident MORTGAGE or creditor.
or owner of an equitable interest; and
thus al infnit,m the same property will
be taxed and surcharged without there
being any increase of real wealth or
property. In short, this whole system
of taxing credits and debts is based upon
the false theory that people who trans.
fer property, and even rights ofproperty,
among themselves to the greatest degree,
mlraculously increase their property and
wealth; and that when they pay their
debts and have nothing but unincam-
bered visible property, they will be re-
duccd TO comparative poverty. These
vague and indistinct ideas Of what prop
erty is, one would think would be
practically obliterated in this period of
vast accumulations of individual, mu-
nicipal. State and national debts.
.