Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-02-12
AGRICULTURAL.
MATTER PREPARED SPECIALLY FOR
THE RECORD UNION"
Taxation Of Growing Crops and Double
Observation-Disclosures Of Califor-
mia wheat-summer Fallow.


Among the classes of property exempt
from taxation by the Constitution growing
crops are included. We presume that the
principal consideration which induced the
Convention to exempt growing crops from
taxation was the uncertainty of the value OF
such crops 1t is impossible for the Assessor,
on the first day of March, to fix the value of
any of the leading crops per acre, or to Tx
the value of any of the fruit crops, and any
valuation at that time would be unfair and
unjust. Hence it is very proper that
al growing crops should be exempt
from assessment and taxation. But new
question has lately arisen in connection with
this subject, in consequence of the large
amount of wheat remaining in the hands OF
producers, and likely to still remain in such
hands on the LIST of March next. This ques-
ton is as to when crop ceases to be grow
ing crop for revenue purposes The question
of amount of produce has been settled by the
harvesting and weight # the crop, but if re-
manning in first hands the value of that pro-
duct has not been determined. The farmer
has received nothing for it in other words,
he has realized nothing for his last years
labor and investment. The State Beard OF
Agriculture, in their recent report, hold that
a crop should, for revenue purposes, be con-
sidered growing crop till it has passed out
of first hands. We quote from their report
on this subject:
The State Constitution exempts growing crops
from taxation, but neither the Constitution nor rev.
enue law fixes the time when any given crop shall
cease TO be considered as growing crop for revenue
purposes. We think it the evident intent OF the
Constitution that the farmers crops shall be exempt
from taxation until he saall have realized from
them, or until they shall have been converted INTO
another class of property. The necessity TOR some
legislation fixing the time when such exemption
from taxation shall cease, IS strlkingy illustrated
in the present condition Of the wheat crop harvested
the past summer 1t was estimated that on the first
day of January there ,000 goo t0us of the last
crop in the State OF this amount there will not be
less than coo 600 tons in the State the first OF
March, From 400 900 to 500 900 tons of this amount
will still be in the hands OF farmers and under the
present laws subject to taxation. The delay in the
disposition of the crop has been TO great extent
on account of scarcity of tonnage to carry it away
Thus the producers will be taxed and compelled to
pay on from GOD 10 Sl2, 900 worth OF
property which should equitably be exempt from
tax ltiOn. Legislation upon this subject to affect
tn present situation should be had at an early day.
At the meeting of grain-growers held at
San Francisco last week, we notice the fear
prevailed that the farmers would be COM
PEELED under the Constitution to pay double
taxation on these crops so held over. We
think a proper construction of the Constltu-
ton and revenue laws gives no warrant for
the entertainment of this fear. The loaner of
money on land or any other property upon
mortgage or other form of security is by the
Constitution and laws deemed to have ac-
quired an interest in such property to the
extent of the money loaned, and the borrower
of the money is deemed to have parted with
his interest in the same property to the same
extent, and taxation Is evidently intended to
follow such change Of interest. Any other
construction of the Constitution and revenue
laws would be a perversion of the evident
intent and meaning. We quote from the
revenue law:
A mortgage, deed OF trust contract or other obi
CATION by hieh debt is secured shall for the pur-
poses of assessment and taxation be deemed and
treated as interest in the property affected there
by. In case OF debts SO secured, the value of the
property affected by such mortgage, deed of trust,
contract obligation, less t1e value OF such secu
rty shall be assessed and taxed 81 the owner Of the
property, and the value of such security shall be
assessed and taxed to the owner thereof in the
county city or district IN which the property af-
fected thereby is situated The taxes so levied shall
be a lien upon the property and security (that is,
the tax levied on the security will be lien on the
security, and the tax levied the balance OF the
property, after Jfe Naue OF the
win be lien that balance of the property. Ii
paid by the of the security the tax 30 levied
upon the property affected thereby shall become
part cf the debt so secured. If the owner of the
property shall pay the levied such security
it shall constitute payment thereon, and to the
extent of such payment full discharge thereof.
Thus it will be seen that it is intended to
levy and collect but one tax, and that to the
exact value of the property pledged, and the
law is very careful to place the obligation to
pay the tax where it eQuitably belongs-mak
ing the losner of the money responsible for
the tax On the exact amount of money loaned
and the borrower responsible for the exact
value of wheat Tor other property pledged)
after deducting the value of the security or
the amount of money loaned upon it. So far
as the law and the proper execution of it is
concerned therefore, there is no double taxa
ion, but the double taxation comes in
{uDon the wheat-owner) in the evasion of
ths express provisions and intent of
the law, and we are sorry to see
that the convention of wheat-growers referred
60 actually countenance and assist in such
evasion by the passage of resolution advis-
ing the farmers that it is the best policy to
pay the taxes on the wheat they have been
compelled to hypothecate. Now this resou
ton means Just this and nothing more: That
She farmers think it the best policy to assist
the money loaners to evade the Constitution
and the revenue law and saddle q tax upon
themselves alone which the law intended to
divide between them and money loaners in
other words, they sgree to pay tax upon
the full value of the wheat, and allow the
owner of the security TO go tax free rather
than be compelled TO sell their wheat before
the 1st of March, so that the money loaner
can hide his money from The Assessor. This
Is in fact double taxation to the farmer, but
IL is an evasion OF taxation to the money
ioaner to the same extent so that the State
gets no double amount of taxes. Ia view of
the above explanation, the following pream-
bic and resolution passed by the convention
of wheat growers is a coel evasion of the
facts, from the States standpoint Of least,
while from the forced standpoint of the
farmer, it is q true statement Of the case.
The word construct" however in the pre-
amble should be read "evsded." We give
the preamble and resolution:
WHEREAS, As the law is now construed, taxes
must be levied wheat in store; also on the notes
given by owners of wheat for MONEY borrowed and
secured by said wheat thereby causing double taxa
ton be it, therefore,
Resolved, That = committee of three be appointed
by this Convention t. draft suitlble bill to obvate
the difficulty, and urge upon Representatives in
the Legs allure to secure its passage at early date
possible.
1t will be seen that the preamble purposely
intends deception, for while it is true that
under the law taxes must be levied on
wheat in store, the levy is only on the wheat
remaining after q sufficient amount mas been
set aside or exempted from levy to equal the
amount OF money borrowed on it, and that.
such legal levy does not thereby cause
double taxation" But the evasion of the
tax on the security, or money loaned, causes
double taxation to the farmer, while the State
collects but one tax on the wheat and none
on the security or money.
Deterioration Of California Wheat.
During the last FIVE years we have fire.
quently called attention to the deterioration
of California wheat. and the consequent de-
cline in the grade of our wheat below its
former standard, and below the grade of
many other countries whose wheat was for
merly graded below ours. We have shown