Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1880-12-31
DRIVING CAPITAL OUT OF THE STATE

of this State. Indeed it would be neees-
sary, for the purpose of those who attempt
to deny this, to assume that capitalists in
California were wanting in business sa-
gacity, for it is perfectly clear that the
Constitution, in its tax system, operates
as direct incentive to the emigration OF
this class OF citizens. and in fact, as now con-
strued, leaves them no option in the prem
Uses. The provision of the Constitution
which defines stocks and shares as prop
erty possesses the peculiar repellent power
referred to. 1t is not at all necessary, in
considering its effects, to plunge into hair
splitting arguments as to what property
actually consists of. A simple illustration of
the working of the law will at once demon
strate its tendencies. Take the case of q
corporation doing business in this State,
and some of the members of which reside
here, and others In Eastern States. Sup
pose that these partners are equally inter-
ested in the property and share equal divi-
dends from it. The Eastern partners are
not taxed upon their stock, and the Cali
fornia partners are. The result is that the
actual profits of the Eastern partners from
the property are annually greater than
those of the California partners, and that
the latter, if they remain here, must do so
at the cost of Impeachment. 1t is very
evident that in case of this kind the
direct consequences of the California law
must be to force the California members of
such corporations as we have described to
place themselves on the same level as their
Eastern associates. They cannot afford to
remain here and let their property be taxed
out of their hands. They cannot afford to
submit to a state of things which puts
| them at so serious disadvantage in COM
parison with their Eastern associates
There is no reason why they should re-
main here to be plundered in such man.
ner, moreover, and as men do not volun.
tarily abandon their plainest interests for
no better purpose than to crafty the COM
munistic itch of a parcel of demagogues
and malignants, all who are in this situa-
ton will unquestionably leave the State,
unless the present unjust and discrimi-
mating law is amended. Again, take the
case of the railroads. They are at present
taxed here on stock which represents the
entire value of their property. That prop
erty, however, is not taxed in California
alone. On the contrary, it pays taxes in
Nevada, and Utah, and Arizona, and Colo
RADIO, and New Mexico, as well. The prop
erty is taxed in all these States and Ter.
ritories, and then the paper representatives
of all this property are taxed again in Cali
fornia. No sane man, no man careful of
his reputation for common sense, will dare
to maintain that this is equal and just tax
alton. Here is property scattered over
half dozen States and Territories, and
taxed in each of them, and yet the stock
which represents the whole of this already
fully-assessed property is declared to be- re-
assessable in California, precisely as though
the whole of the property had been stu
ated within the jurisdiction Of the State.
This is not taxation, but naked robbery
Under no theory of taxation can the
State lay claim to taxes for property stu
ated beyond its boundaries, but this the
State Of California has actually done, and
TINS has forced the railroads not only to
pay taxes upon the representatives of
property as well as upon the property it.
self, but upon the representatives of prop
erty outside of its jurisdiction, and which
has previously been taxed where it has its
shus. In the face of such illustrations of
the way the new scheme of taxation oper-
ates it seems mere wanton impudence for
the supporters of that system to con-
tend that there is no danger of driving any
capital from the State The actual fact is
that it must be impossible to retain in the
State any capital which is exposed to the
nefarious imposts of the new Constitution
Capital has not only to protect it.
self against impositions of this kind, but
against the power which other capital
acquires from being better situated Cali
fornia capital has been handicapped by the
new Constitution. That instrument declares
in effect that it shall not earn as much as
the capital of New York can do. Could
any surer method for banishing capital be
devised? Men will, nay must, go where
the business conditions are the best, and
owing to the new Constitution the business
conditions of New York are better than
those of San Francisco. 1t is not at all
matter of sentiment, but of interest. No
capital either can or will submit to the
determinations imposed upon it by the
new Constitution. No wealthy man is SO
simple as to continue in a State where he
is subjected to double, quadruple, sextuple
taxation, when he can escape these
acts of legislative confscation by chang
ing his domicile. Attempts have been made
by champions of the new Constitution to
question the truth of the reports that cap
ital was leaving the State. All such at
tempts are alike false. dishonest, fatuous.
No choice has been left capitalists in the
matter. They are in fact literally evicted
by the new Constitution and the revenue
law made under it. The Legislature about
to assemble has it in its power to remedy
the most fragrant abuses of the present
system of taxation, and we trust that it
will recognize the need of such change.
But assuredly unless it does, the coming
year will witness such an exodus of capital
! from California as will not only condemn
the State all over the world, but arrest
its progress for the next generation at
least
GARFIELD AND HIS ADVISERS.
Rumors about General Garfield and his
Cabinet, and his relations with the " stall
"warts, continue to be so contradictory
I -.