, 1876-03-18
MORTGAGES not Taxable.

D
Gently made a decision of the utmost impOr-
tance, If Il Ia TO be taken as precedent II
other States. II has decided by an almost
unanimous bench, only one ont of five dis
senting, and be giving as yet no reasons for
bis dissent, that the taxation of mortgages
or other evidences Of debt 81 property Is
Illegal and unconstitutional. This decision
is on the broadest and elearest terms. 1t
meets the whole subject, rejecting all mere
technicalities and side issues. The particular
case, that of The People vs. the Hiberna
| Savings and Loan Society, is not once re-
frrrrd 10 in the course OF Ihs three elaborate
/ opinions by which the decision of the Court
/ is supported. The Court means TO assert
s1uarely and positively that the taxation of
mortgages is illegel, because. to Use the Ian
gJage of ChiefJustice Wallace, "Mere
credits are d false qauntity in ascertaining
the sum of wealth which Is subject 10 tax
alton as property, and in so far as that sum
Is attempted to be increased by the addition
of those credits, property taxation, based
thereon, is not only merely fanoiiul, but
necessarily the unconstitutional imposition
of an additional tax upon portion OF the
property already once taxed"
II this be good law in California, it Ger
tainly ought TO be in most other States for
the decision is based solely on the common
sense principle enunciated above, and upon
the clause in the constitution which provides
that " taxation shall be equal and uniform
throughout the State" and land all prep
erty in the State shall be taxed in proportion
TO It's value, TO be sscertained as directrd by
law" These rules are of course embodied
IN some shape In the constitution of every
civilized community. In the case Of Califor-
MIA, however, there exists seeming contra
diction of them i'll an expression used in the
political code in the clause defining "per-
sOnal property" as including money, goods,
chaItels, evidence OF debt, and things in ac-
ton This would seem to be more for
midable obstacle TO the exemption OF mort
cages from taxation han exist anywhere
else. But the Court treated it with the dis
respect 1t deserved. Justice McKinstry,
who delivered the opinion OF the Court, re-
fers to this clause IA an attempt" merely,
TO include chooses in action in the definition
ct property, and declares that TO make II the
duty Of assessors a to assess all things IN
action is to give a construction to the con-
stitutiun which must lead to the grossest
absurdiues" He eDumerates at length
many Of the absurditieS to which this con-
struction would lead, and states the broad
principle that ait Is property IN possession or
enjoyment, and not merely in right, which
must ultimately pay every tax" He shows
the inlquity Of taxing the same value twice,
once in the hands Of the debtor and again IN
the hands of the creditor, and proves the
absurdiry of it by the suggestion, that when
the debtor pays his note the tax upon i.
ceases, though there has been no dimuuition
whatever in the sum Of the general wealth.
A. to the practical effect of this kind
of taxation, Chief-Justice Wallac-, IN his
cOncurring opinion, shows with perfect
clearness that it is the debtor after all who
pays the double tax. The contrary Is so
often and 80 passionately asserted by those
who advocate this species Of taxation as
bearing upon the money lenders, that the
Chief-Justice did well TO pay some little at
tention to the matter. He says: The
taxation thus imposed nominally upon credits
having resulted in the double taxation OF the
money, the additional tax must of course be
paid by some one. And here all human ex-
perience, as well as the settled theories Of
| finance. concur that il is not the lender who
pays, but the borrower. The borrower Is
the Consumer. The interest which he pays
TO the lender is the prime cost OF the delay
for which he has contracted. II the govern
meut, by the imposition of additional taxes,
increase the cost, the borrower, being the
consumer, must pay it." This Is OF course
undeuiable, and yet the strongest advocacy
of this tax upon mortgages comes from mel
who are paying from eight to twelve PEI
cent for money which they could readily
get for six OF seven, if the lenders were no'
compelled 10 protect themselves by usuFy
against unjust taxation.
In several Of these opinions the Judges NEE
the objection that If the tax upon evidences
of debt were abolished there would be nC
means of reaching the money lender Ii i
hard To see how. under the laws Of finance
that terrible p-rson Is to be punished 10
lending his money, as the borrower nuSt VI
,imately pay for every imposition which III
Law uTts uuou the CREDITOR. Both Jus.io
CrDckett and Chief-JustIoe Wallace agre
that tho avOcatiOn of money-iendIDg may d
taxed ike other trades, and that stamp tai
upon mortgages and promissOry notes wOui'
not be open to the legal objections which II
AGAINST the assessment and taxation Oi then
a. nropertv. This Is declared 10 be within
the powsr of the legislature, though II l
easy to see that the borrower would IN Prac
tice Psy this tax also
OLD GEoGRAPHY.-An English gentle
man has q geosraphv published in Londoi
in 1749, in which California is described
an island, aud map is given showing it to o
entirely surrounded BY water The bool
tells of tree in Florida - the leaves OF which
! If bruised and thrown into large pond Q
water. all the beasts which drink thereo