The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1891-02-25

Water bill. Picnic Joe's reputation
as a kind of political circus clown is
evidently well deserved.
"
Ruinous to Business-The Monstrous
Tax Bill.
1t is one thing to make corporations
bear their fair share of the public
burdens. 1t is another thing to make
the laws against them so oppressive
that capital is driven out of the State
and that financial operations of any
Importance are a practical impossi-
bility.
This latter is what the Commission
Tax bill would amount to if it should
become law.
The bill proposes the taxation over
and over again OF capital. 1t contem-
plates the most monstrous injustices
in respect to debts, and it impairs the
value of collateral security to a degree
which makes the loaning Of money by
banks all but absolutely impractical
Bile, at least where securities of Jersey
corporations are in question.
Indeed the bill is particularly OPP
pressive to the banks and their Gus
toners. First of all the capital stock
is taxed. Then the real estate, the per-
sonal property Of every sort is taxed.
Then all the outstanding loans are
levied on The bank pleads that the
persons who hold the loans have al
ready paid taxes on them, since they
were allowed no rebate except for
debts of record. 1t does not matter,
the loans are an asset of the bank
and must pay a second tax in hat ca
pacity, This is a clear case OF double
taxation.
A more doubtful claim is that of the
banks that their depositors have al
ready paid tax once on the money
which they loan out. To this it may
be answered that their depositors do
not reap any profit from the banks
loans, and that the money therefore
acquires a new standing as taxable
property. being invested altogether
for the benefit of the banks share
holders.
1t, however, remains an unmistake
able fact that under the proposed law
any given sum of money may be
taxed three times-first as a part Of
the personal estate Of the owner, sec
ond as an asset of the bank in the
shape of money due it on note, and
thirdly as merchandise or real estate
or what you will, bought with it by
the person who borrowed it from the
bank, and who gets no exemption
because his debt is not of record.
We have already pointed out the
difficulties thrown in the way of bor-
rowing from banks by the peculiar
provisions of the bill regarding the
sale OF personal property for delin-
quency. John Doe, let us suppose,
owns a hundred shares in the new
sugar trust, a New Jersey corpora
ton. He goes to the Second National
Bank and borrows ten thousand dol
lars, giving his shares as collateral.
But presently he is short of cash, and
he lets his taxes, let US say to the
amount OF S., 900 on all his property,
run over a few months. The City
Collector goes to the Sugar Trust
officers and compels them to give him
a certificate that Doe owns a hundred
shares in the corporation. The Col
lector sells this at austion to Rich
ard Roe, who at once goes to the
trust officers and compels the transfer
of the shares to himself on the COM
pany's books. Now where does the
Second National Bank come in.
About half its security has been
wiped out at n swoop without a
word of warning.
This illustration is in itself crude
and improbable as an actual business
transaction; but it illustrates the
principle. The bank which lends
money on the security of the stock or
bonds of a New Jersey corporation
must keep constant track of the
state of its borrowers tax bills, and il
he gets in arrears must close him out
if there is still time and if not, must
pay his taxes to protect itself.
OF course, no bank under the sun
will assume any such trouble or risk
and the securities of New Jersey cor
porations will become absolutely use
less as collateral for loans Of money
the moment the bill passes.
But the bill is full of injustiees. II
a man is taxed on the book accounts
due him, why should he not be ex-
empted for his floating debts. Or,
rather. why should he be taxed for his
book accounts when his debtors are
not exempt for them?
Talk Of law. talk of justice, talk of
fairness, talk of equality Was there
ever invented a scheme Of more COM
plicated and ~far-reaching oppression,