PRINCIPLES OF TAXATION. 607 



the same thing, the imposing of a discriminating burden of taxa- 

 tion upon persons who, for any cause, may be in debt a denial of 

 equity which public sentiment in every free country will not long 

 tolerate. A further proof and illustration of this averment may 

 be found in the fact that years ago the Constitution of Ohio pro- 

 vided that credits, or evidences of indebtedness, should be subject 

 to taxation by a uniform rule ; and the Supreme Court of Ohio 

 subsequently decided that this did not allow any offset of debts 

 owed against credits owned. But popular opinion was so adverse 

 that by common consent this clause of the Constitution, as inter- 

 preted by the court, was entirely disregarded in making up tax 

 valuations. 



In old English history the division of property into real and 

 personal was wholly unknown ; and all laws regulating this spe- 

 cies of property, with a view to taxation or inheritance, are of 

 comparatively modern origin.* It is also interesting to note 

 that probably full one fourth of all the so-called personal 

 property of this country namely, all railroad, steamship, tele- 

 graph, telephone securities did not have an existence fifty years 

 ago. 



As is the case with direct and indirect taxes, the line of de- 

 marcation between real and personal property, and consequently 

 between real and personal taxes, is very indefinite, and some very 

 nice and curious points in connection therewith have been estab- 

 lished by usages, or court decisions. Thus an apple on the tree is 

 real estate, but when fallen upon the ground it becomes personal 

 property. Running water accumulated in a pond is real estate, 

 though the owner is not permitted to invest it with the peculiar 

 attribute of real estate namely, stability by permanently arrest- 

 ing its flow. In some States the engines, water wheels, shafting, 

 and even belts of factories are real estate, while looms and lathes 

 are personal property. Stone in the quarry is real estate, but 

 when thrown out by a blast and made ready for market it be- 

 comes personal property. Hop-poles, not standing, have been 



* The first authorization of local taxation in England was for the maintenance of the 

 poor, and occurred in the reign of Elizabeth. At that time it seems to have been assumed 

 that there was no personal property in the kingdom capable of being assessed, and that 

 real property was alone valuable property. Hence it was enacted (43 Elizabeth, cap. 2) 

 that overseers should be appointed who were to raise, by taxation of every inhabitant, par- 

 son, " and of every occupier of lands, houses, tithes impropriate, propriations of tithes, coal 

 mines, or salable underwoods in the said parish," moneys for the relief of the poor. No men- 

 tion was made of personal property, and it is probable that every kind of property then 

 known was mentioned in the act. When fresh burdens were necessary the principle 

 adopted by the act of Elizabeth was continued, without much inquiry or opposition, and 

 owners of personalty have remained exempt from taxation, although personal property has 

 gone on increasing until its value has become much greater than all the real property of 

 the kingdom. 



