The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1877-11-10
To the Editor of the Pacific Commercial Advertiser:

10 the EduOr OF Me F0cyIc commercial advertiser:
SIR II have perused with much interest the
recent decision of the Supreme Court on the " tax
question - and the Attorney Generals letter on
the same subject in the Gazette of the 7th inst.
The learned gentleman states that he knows of no
reason why judgment of Courts should not be
criticized and reviewed and although 1 cannot
claim the ability or knowledge necessary for such
a task, 1 take comfort in the remembrance of Chief
Justice Aliens declaration that common sense and
law usually go together; and therefore,, under
standing nothing Of law, / may be permitted to
look at this matter in the light Of such common
sense as has been allotted to me.
In doing this, 1 am much encouraged by the
Attorney Generals declaration that he regards the
law as defective and impolitic; and 1 only regret
that I bad not earlier discovered his opinion, for it
would have saved me my share of the $500 paid
at the suggestion of Mr.. Hartwell for testing the
question before the Supreme Court. The questions
submitted are virtually as follows:
1-Shall mortgsged property. which has already
paid tax to a certain extent through the MORTGAGE
pay tax again for the amount of said mortgage?
2. Shall corporation property which has already
maid tag on its full value, be taxed again for either
part, or all, or more than all of said value!
But there is q light in which these questions must
be reviewed, to which hitherto unhappily no appeal
has been made, though it is conspicuous amongst
the traditional notices of the Supreme Court-Fiat
~justitia, ruat celum. I read in the decision: The
allegation that the borrower does pay the lenders
taxes in the higher rate OF interest demanded is an
inference only. It does not appear that if mortgage
leans be exempt from taxation they will be placed at
o rate lower BY the amount Of the tax"
And the Attorney General says: "The owner of
mortgaged land 10 not taxed twice.. because the
money lender is also taxed Now this may be and
from the sources given, it must necessarily be good
law, but I am unable to reconcile it with either COM
mon sense or justice. know nothing Of differences
or appearances, but I humbly affirm that these state
ments are unsupported by any evidence which 1 am
able to collect. The rate of interest up to last session
was fixed with the belief that the lender was to pay
the tax, and as soon ss the law taxing mortgages
was passed, the amount Of the tax was at once added
to the interest. It is notorious that in some large
loans recently negotiated at 8 per cent, q specific
addition of I per cent. has been added to pay the tax:
A year ago o loan for o large sum was negotiated
ct 9 per cent as the business was being closed the
lender said. you must pay the tax" So the deed
was completed at 81 per cent. The tax now is added
again, and the mortgagor is paying . per cent. inter-
est and Ii per cent. tax for the same property. L
question whether until the recent decision was given,
there was q single mortgage on record in the king,
dom, that was not understood by both borrower and
lender to be subject to taxation once only.
But be this as it may, any tax laid on either land
or mortgage, uhich is not laid on other classes Of
loans, is an extra burden on the land, and must
ultimately be paid by the borrower. There are per-
sons who hold that the producer pays the duties on
lmD0ItB, Dull IL II A8 Clt6E tuab tuC COoouAiOA
ultimately pay the duties on what he buys--as that
the borrower must ultimately pay the diherential
taxes on what he borrows.
A has $40, 900, and in whatever shape he puts it
he cannot eyade the tax.
B has Q piece of land valued at $4,000, and he
cannot evade the tax.
G has nothing and no tax to pay, and A, B and G
Now G borrows AS so, 600 and buys BIS land.
leaving A with a mortgage for $4,000 B with
cash for $l0, 900 G with nothing but land mort
gagged to its full Uaiue.
The Attorney General claims, and the Supreme
Court decides. that there is $50 ,006 of property
equally divided between A, B and G.
Perhaps L am wrong In my table, but II L am
correct and this is law, then law must give up IFS |
claim to reverence from those who can only look
at it through common sense and fiat justitid.
The Attorney General asks Would q man. ii
his land were mortgaged to its full borrowing
owned no land ~ L venture to ask what the assessor
cares about its borrowing capacity I" and l VEN
to doubt whether the Attorney General would
repeat his question-substituting full value " for
' borrowing capacity"
Mr.. Hartwell likewise says: Wealth is actu-
credits are given" That / admit; but it would
be impairment in me to suggest that all the wealth
30 created and all the values SO arising will be
taxed the moment they appear and that my
friend AS original 800 o will also be taxed until
/ is paid out of Cs " created wealth and new
What / venture to question Is the moral
ty or justice Of taxing wealth before it Is created,
md values before they arise.
Sir, there are three powers to which We look for
he defense Of the just rights of all the people,
he Legislature; the Cabinet the High Court of
Justice.
The Legislature and Cabinet have declared
on the above question, and to the same