The Hawaiian gazette., 1882-05-17

every debit mast have corresponding credit,
80 il Is automatically true that the sum Of
all the credits and Of all the debts are Just
equal; and if all the credits are counted as
property, and all Of the debts deducted, the
property remaining will be Just what it would
have been if both credit and debit bad been
left out altogether, so by this last and simplest
method both the state and the taxpayers get
their due, and there is less chance for double
taxation.
The first system of taxation has been the one
adopted and practised in this Kingdom from
the first organization of any internal property
tax system. But underit serious abuses have
arisen, demanding correction, and learn that
a ministerial bill, correcting abuses, or inaug-
urating a system less liable to them viii, be
brought. before the House. Until 1876, solvent
debts were taxed, as property, to the creditor,
but he was allowed to deduct all the debts
that he owed, both secured and unsecured.
The taxes upon these, unless specially pro-
vided for, were paid by the creditor. Most Of
the mortgages were held in Honolulu, where
the taxes upon the mortgages were assessed
and collected; this raised the complaint in
other districts from the assessors that, whilst
they had the labor Of assessing such properties,
the Honolulu officers received the pay. The
complaint was just, and the law of 1876 was
designed to correct the injustice.
This was done by striking out moneys
loaned and mortgages" from the definition Of
items of personal property in Section 4s3, Civil
Code, and inserting in place thereof, the words
'RoteS Of hand, unsecured debts" The inten-
ton of the author and legislature was to tax
the property in the district where it lay, and
that the mortgage should not he taxed as per-
sonal property, as before, leaving the rate OF
interest 10 be adjusted between the borrower
and the lender with the knowledge that the
lender would have no taxes to pay. This in
depreciation was fully explained to the Legis-
lature and seemed to give satisfaction, and the
bill passed by unanimous vote. The words
notes Of hand' are redundant and unneces
sary, and rather obscure the meaning, for all
notes are either unsecured or secured debts.
If secured by mortgage, the consideration is
identical with the consideration for the mort
gage, and not subject to be returned for as
sessment; but the assessors have, where a
note was secured by a mortgage, insisted upon
the note being reported for assessment, though
the mortgage given to secure it he exempt.
Thus, the note is taxed, and the property for
which it was given is taxed, equivalent to a
double taxation of the property. If there be
no note with the mortgage, then the property
only is taxed according TO the intention of the
law. The meaning is ebscured by the redund
ant words, and possibly the words may be
construed to admit Of the taxation of such
notes, but it can only be done constitution
ally, by denying that TO tax property and
the mortgage upon it is double taxation
of the only property there is in the case.
The introducer of that act, and the Leg
islature that passed it, considered it double
taxation, and consider it SO now. And if the
words are obscure, the authors Interpretation
of its meaning ought TO be allowed more
weight than an assessors, who interprets
it 10 mean Just the reverse of what the
author intended, however great the OBJ
security of the language he may have
used. But with all the obscurity of language,
any such necessary construction of the law is
not admitted, for it involves an absurdity in
making a note taxable as property when a
mortgage given for the same Identical consider
alton is not taxable, if there does not happen to
be note for the same thing, and unconstitu-
tional if it be double taxation, as is claimed by
many jurists and large numbers of business
men.
As regards returning debts due to one as
property, it Is some guide, but can never be
practically accurate. Where credit is given,
every dealer has many names, and some sew
eral hundred on his books of persons scattered
throughout the Kingdom, and to be any i'm
portant check upon the accuracy of the returns,
the assessor of every district where deduction
for debt is claimed, must write to every as
SCISSOR where the claim is made TO ascertain
from him whether the alleged creditor has
made returns to correspond. This proposes
an extensive correspondence which never can
or will take place, whilst if it could be carried
out, it would produce the same results as the
second method with far more labor and fric-
ton and trouble.
1 ought to add that any change made will
not impair any existing contract. Where the
mortgage has paid interest, and the payment
is transferred to the mortgagor, the latter will
be entitled to charge it as interest or principal
paid upon his mortgage. Yours respectfully,
s. n CASTLE