Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1880-02-28
SENATE.
sAcaAnENTo, February q, 1850.

SENATE.
SACRAMENTO, February q, 1850.
The Senate met in regular session at 10 A. ~,
President Mansfield in the chair.
| Roll called and quorum present.
| The journal OF yesterday was read and approved.
| Mr. JoHNsoN reported hack amended, according to
the instructions of the Senate, Senate Bill No III,
| in regard to orparian ri hts.
Mr. JOHNSTON moved to suspend the special order
and allow the reports OF standing committees
| Lost
REVENUE FILLS.
The Senate took up the special order, SEN
ate Bill No. 397-An Act to amend Sections
3G07 38l7 3627 1928, 3629, $3.50, S63i 36i0, 30 i,
3643, $3.50, 365l 3652 1868, 1913, 1913, 36I9 $780,
1882 1889 aud 3S6l and to a d a new sect on to
be numbered 1864 TO- and to re enact Section sly
Of Title TX of the Political Cpde to provide rev
enue for the support Of the government OF the
State and Senate Bill No. 39S-An Act to amend
Sections 1907. 80 7, 1927, 362S, s629 1863 /, 1854,
$780, 364S $685. 1861, 1852, 36G3 3673, 1878, 3679:
| 37l7 1880 1852 1885, 1899 ard 1851, and to repeal
sections 1850 and 1857 of Act entitled an Act to
establish Political Code, approved March II. 1877,
relating TO revenue, and TO add lwo Lew sections,
numbered 1854 and 36G5.
The question was on the motion OF Ar. MoREIASD,
to substitute senate Bill No. 59S for Senate Bill No.
| 397
| Mr. SEARS said he was rot quite prepared to dis
cuss this question, buS before the vote was taken
| he desired say few words in regard to the mi
nority + port He continued | have listened very
attentively to the arguments wiicn have been made
in regard TO the difference between the two bills
| have read the arguments in tie other house, and
| listened TO those which have been made here. and
| since those arguments have been made have been
! examining the laws OF our State and the Consitu-
lion under which we are called upon 10 act, and
| have come TO the conclusion that the provision in
the minority bill does not cover the ground winch
| its friends claim it viii, and in my Judgment
| If that section should be adopted the prop
erty which it is intended shall be taxed
will escape taxation altogether. l wish
to say here that when this matter was under con-
| sideration in tine committee was Of the opinion,
without any examination, that to tax certain prop
erty in this State would result in greatirjury To
a certain extent | have not changed nv mind. but
after careful examination OF the Constitution OF our
State, and having sworn to support the organic law
/ have arrived at the cluslnn after earnest and
! sincere stuny, that are called upon to tax the
stocks of corporations. Having arrived at that con-
| cluson the question is how shall we tax them in
| order that the tax may be paidt of course,
| in a State like ours, which is so vast in
| extent we have great difficulty in enacting laws
| which shall be benefit to the many, and but light
| injury to the few. Our interests are very much
| diversified. We have climate which is found in
| Italy, in France in Germany and in the Scandina-
Wan countries We havea territory greater in extent
| than half dozen OF the States Of this Union. We
! have climate which produces not only the
products of the tropics, but OF the frigid zones,
and in glancing over the State and these various
Interests members will call to mind the difficulties
which encounter in egislating so that justice
may be done to all parties. Now, MIR President, the
point which | desi to get at is Section OF this
minority bill and will not take UP the time OF the
Senate further, but will ask its friends to carefully
slider it, to carefully listen to what have 60 SAY
aud see ii they will not agree with me, and II we
cannot arrive OF understanding and ad 0pt sec
ton to this bill or rather agree upona section which
| shall cover the points OF difference between us.
Section of the minority bill proposes to tax the
! capital stock Of corporations 10 the corporation
] Il oil i--,ov r,ripp of
that you cannot tax peceoi property except to the
owner You cannot tax piece OF property 20 a
stranger, and C mpel him to pay the tax. On that
/ every member upon this fieOr will agree with I1t;
I that no corporation Owls its stock but on the
other hand, the stock IS owaed by individua s.
! Now, what is a corp0rltionf corporation IS an
association of individuals who combine their capital
and form what is known in law artifi ial per
SON and it is through this artificial body that the
members Of it operate. The stOcs IS distributed
( among the stockholders; I; the corporation does
| not own a share. You might jpst as well Cn-
| dertake TO tax house ard lot belonging to
Senator Zuck to me, as to undertake to lax the
stock of corporation to the corporation which does
not own it. find this principle runs throu1h every
provision OF the Constitution. Artcl All, SeesIon
/ 3, reads: Each stockholder of corporation, or
/ Joint stock association, shall be individually and
personally liable for such proportion Of all Its debts
and liabilities contracted or incurred during the time
| he was s,ockholder." You will by that pro-
vision that the burden OF the debt rests
upon the stakeholder; that they hold him
personally responsible And we go along
through the Constitution, section by section,
and YOU will see that it always makes distinction
between the corporation and the individual stock
nolder. Now come down to the section which IN
our judgment covers this case, and which is our
| guide. 1t is Article KILL, Section l. This call
your particular attention to " All property in the
State not exempt under the laws of the United
States, shall be taxed in proportion to its value, to
be ascertained provided by law The word
property as used in this article and section, is
dan1ar tot alt,la hap
stocks, dues franchises, and all other matters and
things real. personal and mixed, capable Of private
ownership" You will see that the Constitution
directly refers to stocks, makes them subject to
ia alton, and classes them as private ownersh p.
Now these two Words "prIvate ownership" it seems
to me, determines this question, and if we under
take to TAX the stock OF a corporation, and
| the corporation contests it, you will never
be able to collect it. Therefore, instead
| as set forth in the minority report-tf millions OF
! dollars worth Of property being brought under the
law of taxation which heretofore has escaped tax
! ation TN er the old Constitution, they will come
into Court and test the validity OF the law on the
ground that it is taxed to ralty who does not own
it. Now, as we are called upon TO Tux stocks, let
tax them to the owner-the party who is liable aud
responsible for this tax and no5 TO party who does
| not own thern-and from whom you can collect it.
This is the point of difference between those who
advocate the minority bill and the conclusion which
have arrived at after careful study OF thsprop-
osition read from sections of the bill end eabo-
rated the idea should be taxed TO the
and not to the corporation. 1t was claimed tina.
this would not be equal taxation, because the stock
of these corporations are owned in some instances
out OF the state. That very true, but they
could not reach stock owned ont OF the state any
than they could other property outside OF the
State He believed the plan he suggested the only
legal and constitutional way in which they could
reach this class of property.
/ Mr.. WATSON was opposed to the plan proposed
by Mr. Sears. He was satisfied that 1t
would result injuriously to the interests
OF the counties in tais State having cor
poratiops. In his county there many corpora
tions, and large amount OF the stock was owned in
San Francisco If the stock was to oe taxed to in
dividuals twothirds Of the taxable property OF Nc
| vada county would be taxed in san Francisco and
| the result would be that they would have a very
small assessment roll left. He did not believe the
stock ought to be assessed. The capital stocks Of
corporations in his county, in most instances, did
not have market value. They were not sold aud
if sold would not bring much. 1t would be impos-
sbe to determine it. He knew mines that bad been
assessed largely for years the stock of which would
not be worth five cents dollar if any man
wanted to sell. People owned it and paid their as
sessments on it With the hope that it would finally
! be productive. large amount of this kind OF
property in the mining codnue5 OF this STATE IS
such that you could not determine its value unGer
| the rule prescribed by the minority report. The
mine is taxed for all il ID worth and more too. ne
| improvements and m ehineTy is taxed, and he
wanted to know what more could be faxed. The
county of Nevada was taxed for about Sl,000,0JO,
pays her regularly and never asks ior auy ap
psopriations for anything. He believed that 10
adopt the plan of The minority would result il
double taxation and work a great injury the
mining counties. Those VINO had advocated the new
Constitution in his county bad all argued tnat
double taxation was not intended. The aTSum. nt
wAs that the stock only Evidence of owner
ship and that you-ngtt well tax deed 70 pr p
erty alter you h&d taxed the property isei, as 10
tax the stock
Mr. DleKissoN said that tie whole question
seemed 10 center upon two propasitiots-the IN
the majority bill, that there slia be no double
taxailon and the other in the minority BILL that ,he
stock corporations shall be ASSESSED. he gave the
history OF the idea of tsx1tiGn fOr the support u
government, aBd the growth OF corporations, under
which much of the business Of lhe country WIS
now carried He held that insqu quallsy OF taxation
had existed in the State aud led 20 the adoption Of
the new Constitution, not because there vas no laR
by which capital could be taxed, but because the
law was SO indefinite in many respects tiiat 1t was
impossible to enforce the payment. The de
eisisns OF the highest Courts were to tae effect
that there might be taxation Of what nly bs called
| the same property twice sr three times ii
that property was in the bands OF two three df-