The San Francisco call., 1899-09-17
important Case in the
Supreme Court.
MEANS MUCH TO THE STATE
COMPREHENSIVE ARGUMENT BY
ATTORNEY GENERAL.
He Contends That the Securities of
Quasi-Public Bodies Are Prop
erty Under the State
Laws.

A question OF Importance is now before
the Supreme Court in the test case Of the
Germania Trust Company against the
city Of San Francisco. The problem is
whether bonds Of railroads, gas, water,
light. power and other quasi-public cor
poraions held in this State and secured
by all the property real and personal OF
such corporations situate in the State are
proper subjects of taxation. Some time
ago the Board of Examiners applied to
Attorney General TREY L. Ford for his
opinion on the subject and he held that
this class of securities is subject to tax
alton
The Assessor Of this city. acting upon
instructions from the Board of EXamill-
ers given in accordance with this advice,
assessed among other securities several
bonds of the North Pacific Coast Rail
road Company held by the Germania
Trust Company. The money was paid
under protest and action was begun by
the trust company for the return of the
taxes. In the lower court judgment Went
10 the city, and an appeal was taken.
Attorney General Ford and Deputy w.
N. Abbott, representing the interests of
the State, have just finished their brief,
which VIII be nled tomorrow. They con-
tend that their position is supported by
numerous decisions in this and other
States of the Union. The trust company
seems 70 rely upon a California decision
rendered before the new constitution was
adopted, which was that taxation of
credits was double taxation. This was in
the Hibernia Bank case.
A summary Of the brief brings out the
following prominent points:
The constitution of California pro-
vides that where land Is mOrtgaged
the value Of the mortgage must be de-
Quoted from the value of the land.
and the remaining value of the land
assessed TO the land owner and the
value OF the mortgage assessed to the
owner OF the mortgage. The cOnstitu-
ton further provides, however, that
the property of railroad and other
quasi-public corporations shall be as
sessed TO the owners of such property
a. its full value, and though it may be
mOrtgaged the value of such mort
cages are not TO be deducted from the
value Of the property mOrtgaged. In
case at bar the Germanfa Trust Com
pany owns certain bonds secured by
mortgage on the North Pacific Coast
Railroad Company. These bonds have
been assessed TO their owners. but
their value, or the value of the mort
gage securing them, has not been de-
Quoted from the value OF the property
by which they are secured.
Cases are cited from nearly every
State in the Union holding that a cred
it. whether secured or unsecured and
whether in the shape of q bond. a
promissory note or a simple account,
is property, and should be taxed In
fact, since the California cases re-
ferred to were decided the new con-
sttution was adopted. and property
for purposes Of taxation was expressly
declared to include credits, bonds,
etc" In the brief the question is per-
tinently asked: What becomes of the
rule of uniformity and equality which
permits money in hand to be taxed.
but exempts it when invested and
bringing in money!
Again, referring to the deduction Of
the mortgage made in favor of the
land owner, the Attorney General
says:
THE fact that the trainers Of the
constitution saw fit TO lessen the tax
burdens of the land owners of CalifOr-
MIA in no manner signifies a like in
tentiOn 10 so favor those great cor
porations, upon which the State has
conferred a measure of sovereign pow
er; nor can those who loan money to
such corporations shield themselves
behind constitutional provision in
tended solely for the benefit of the
debtor class"