The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1881-03-09


Ms EDrros ,--In my last letter on this subject
have said. frs,, that the present state Of human
society renders Government a necessity for the
protection and benefit of all. and that its exist
ence involves expense.
Sccv.S.-rhat all persons and property for
whose benefit and protection it is established
should contribute 10 its support in proportion to
the benefit and protection received.
TRiryl.-That this principle is affirmed by our
Constitution as the fundamental law of the land,
and by the decision Of oar highest Court.
Foarth.-I have shown that notes and Hortgages
ard book accounts are not property, only eondi-
ditional claims upon persons whose property may
be attached by process Of law, and sold for their
81 abstraction. where they not paid Rccording 10
the conditions. That stock certificates like deeds
are only titles 20 the property represented, and
that taxation of both the titles and claims Is dou-
ble taxation and Unconstitutional. that any law or
instructions under she law. necsSsIrfiy involving
construction leading TO such unequal taxation
must be unconstitutional and oppressive TO the
tax-yayers upon whom il Is enforced
Il these positions are correct. neither the Coy
eminent or any Of its officers have authority by
any act instructions 80 violate the principles
represented; but 1t is the duty os the Minister OF
Finance 20 issue such instructions as shall as FAR
as possible assure the execution Of the law N con-
foru,ity with them
Oar tax laws, like most Of our Government
orgauisnl are modelled upon those OF England
and the United States, modified more or less to
meet the different circumstances of the people.
The legal definitions Of notes. debts, etc. as
prpperty were borrowed from the codes existing III
many Of te States and without careful lnFestigS-
ton as the logical results in taxation 10 which
the definition would lead. and which there, has
proved a cause of great discontens and frequent
appeals 10 the Courts
In the early wears after their introduction some,
aud perhaps all. of the merchants were IN the
habit of returning their stock account as the
measure of their property, and TINS was true, out
il was subsequently, considered that although tins
was the true and honest amount of the property OF
the ts,xpayer vet might not IL all cases represent
the amount within the jurisdiction and entitled to
the Government protection upon when taxes
should be paid. For example A. and r. are mer-
chants. A. has $1,000 IN merchandise upon which
be owes 5000 abroad. consequently his stock
account will show his property after his debt IS
deducted at 5000 upon which he pays taxes ;
but he has $1,000 in merchandise within the juris-
diction. and under the protection of the Govern
fueut nd upon this sum be should pay the taxes,
the same as B. who has $1,000 IN merchandise
upon which he owes nothing or else he does not
pay his just proportion 70 the government 5
stock account is $500 aud BIS $1,000. but the
amount each has in possession, and entitled TO the
protection of the State is the same
Ii was TO correct this inequality, 10 secure from
All property its jHSf proportion of Government
dues and to the Government as jast dRSS from the
property IN its jurisdiction that the present rule
for the non deduction of foreign debts, was Issued
by the Minister of Finance some fifteen years ago
For a number of years il accom- plished Its object
Ii secured 10 the Government its Jst dHeS ctthoaf
iajaSties 10 be tdr-pdser But IN process OF tnle
different class Of foreign debts of much larger
dimensions, grew up, 10 which the application OF
the rule would do great injustice 10 individuals
as well as place the Government IL the attitude OF
embracing rules in violation Of the equitable doc
trine Of its own Constitution.
Foreign capital was needed for the development
of the resources of the country and for TINS pur-
rose il Was borrowed abroad and expended in I'M
proyements borrowed chiefly by merchants having
q credit IN other countries, for planters here To
establish plantations. In assessing tue planta-
tons their full value including all improvements
is returned without deduction. In assessing the
merchant then who borrowed for the planter, and
who still owes tie money abroad he should be
allowed to deduct this foreign debt Tor the planter
has already been assessed for the full value OF the
property brought into the Kingdom and repre-
sented by the debt of the merchant, IN the
enhanced value of the plantation, where It has
been expended. 10 illustrate; A. has land valued
at $1,000, Il. has merchandise valued at SIOuVU
A. Is not known abroad. and asks b. who Is, and
has credit. TO borrow for hlm SlO,UOO which he
does and gives his note therefor. be lends A.
the money and II kes his note for the same A
uses il u put up buildings and machinery thereby
increasing the value of his real estate from lOOOO
to 2u.GOO for which sum he Is assessed, and tr'lm
which under the law of 1876 he can make no
deduction for his debt. u. Is assessed Tor his
$1,000 merchandise and for his SlOOVO note
against A.. making the aggregate assessments OF
4 and b. uIon 5000: but how much property
have the sv0 ? A. has $4,000 IN real estate and b
$1,000 in merchandise, which Is the amount
900 upon which t9th should have been assess
ed In this case B. should have been allowed to
deduct his debt for the $1,000 borrowed abroad,
which would have placed the Government and i.
and b IN the right position B. uses his credit TO
assist A. and incidentally increased the taxable
property Sl0.0lQ. He was so much direct benefit 10
the Government, why should the Government IN
turn tax him for $1,000 more on property which
bill for 1oSO taxing property 10 the p,ssessoE
wherever found would have taxed A. upon 29O-ulU
and 3. upon $1,000, equal to SjQ.uJu the true
amount leaving all notes and mortgages and book
debts and stocks out of the taxable list as only
claims and titles to property and not property
itself. henry Clay. the eminent orator, Tyer and
statesman. once said. " whatever the law makes
property Is property : but Daniel Webster. Vii
liam H Seward, Charles Sumner, and others
equally learned In all the departments In which
Mr.. Clay showed cOuspic1ously did not agree with
him. The law may require that to be treated as
property which it has no power 70 make property
Abuses have crept into the administration of the
tax laws here which demand correction, and which
the Minister OF Finance has ample power TO cor
rect and more which it Is his especial duty to cor
rect. except Il think in the single case Of the laws
of 1916 whose necessary Interpretation DietfHf,
perpetuate abuses over which he has no power
and which can only be corrected by legislative
action OF the decision of the Supreme Court.
believe the Minister. and indeed all the Min
isters have the viii to correct al wrongs and
abuses that come within the scope Of their author
IT, and to secure such amendments TO the laws
where needed as fully to carry oGt the principles
Of the Constitution As Just wise and economical
Government and Just and equitable taxation con-
stitute the best conditions Of nation prosperity
50 do an unjust and prOdiSal GoveSnrnent and
unjust and unequal taxation constitute Us worst
/ have written upon .his subject for haze fell
its importance, and hope l have made myself
understood and that II may not be allowed to drop
without righf action. An able writer says, II the
whole range of craftsmanship no subject Is more
important than taxation" IF we may Judge from
the different opinions of statesmen. Iurlsts AID
Legislators announced from time to time, We shall
infer that but few subjects of grave importanee
are 50 little understood
Yours truly. S. N Castle