The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1878-06-01
Mortgage Taxation.

Mr.. EDIT6R Our laws declare mortgages and
certificates Of stocks personal property, and as
such, subjected to taxation. This definition is
incorrect. and adapted to mislead, and result
in a double taxatiCn-that is, a tax on the pro-
perry covered by the mortgage and a tax on the
mortgage itself-whereas it is evident that apart
from the property which it describes and covers,
the mortgage is of no more value than a piece Of
of waste paper. The mortgage is simply the
tangible evidence, that the holder has a contin-
gent right in certain property or. in other
words, that the mortgagor owes the mortgage.
and has pledged certain property described in
the mortgage, as security for the payment of the
debt. 1t does not increase the value of the pro-
perty, and without the property it is of no value
itself consequently to tax the property covered
by the mortgage and the mortgage itself is
double taxation, contrary to the spirit if not the
letter of our Institutions and constitution, as by
them all necessary taxation Is to be equally impos-
ed. These principles apply to stock certificates and
any other instruments which are only the evil
dences of rights in property, whether conditional
or unconditional. The mortgage gives no right
TO enter ilto possession, only to sell on certain
conditions and pay the debt due from the
proceeds.
The practice here has been to deduct. from
the assessed value Of the property, all debts
due from the owner within the kingdom; conse-
quently, whilst this equitable and Just practice
prevailed. no Inconvenience has been felt from,
or injustice done by this inaccurate definition.
but the Legislature of 1876 passed an Act, that
all property should be assessed - in the district
where it lies" irrespective of any mortgages
which might cover it. The design of this law
was. simply to give to the tax assessors and
collectors of the districts where the property was
located the pay for the labor they must perform
for the value of the property must be assessed
by the officers of the district where the property
lies-and justice demanded, $50 the Legislature
thought) that those doing the work were entitled
to the compensation. 1t was not the design to
tax the mortgagor and the mortgage. but as no
change was made IN the incorrect definition of
the mortgage and stock certificate, they were
construed as property and taxed accordingly.
In the matter OF stocks the Supreme Court
has set this right, but the subject of mortgages,
involving the same principle, has not come be-
the stock certificates, and yet remains unre-
dressed.
/ noticed with pleasure, Mr.. Editor, that both
the ADVERTISER and Gazette took the plain COM
mon-sense view of this subject, at the time IT
was before the public. such as was taken by
most intelligent business men as far as | know.
but that there may be no more mistakes. l hone
our present Legislature will so amend the law. |
that the most simple may understand and that
there cannot either directly OF indirectly be any
unequal and double taxation without its being |
mdRfesdy Ia violation of the Ialo. This same
question, L am aware, has often arisen in coun-
tries older and far more advanced than we are
and the Empire State of New York has lust been
legislating against the abuses and Injustice
arising out of taxation laws similar to our
own. Yours for
EQUALITY IN TAXATION.