5 14 POPULAR SCIENCE MONTHLY. 



such corporations, held by individuals here, are simply representa- 

 tives of capital or property employed in business in other States, the 

 title of which is vested in and controlled by the artificial person 

 created by and residing in such States. They represent an interest 

 which is or may become a membership in the corporation and evi- 

 dence of a right to participate in divided profits and in the ultimate 

 dividend of surplus after the payment of debts and obligations of 

 the corporation. The stock certificates are not themselves the prop- 

 erty, but are evidences of the rights just mentioned; to be possessed, 

 enjoyed, and enforced under and in conformity with the laws of the 

 State which created the body corporate." 



The views thus expressed respecting the inconsistency and un- 

 desirability of directly taxing titles, credits, obligations of indebted- 

 ness, and instrumentalities of exchange are so generally and thorough- 

 ly accepted by the statesmen, financiers, and economists of Europe, 

 that no recognition of this form of taxation can, it is believed, be 

 found in any of their fiscal systems. In England the very idea would 

 be scouted; and in France, where the need of great revenues is most 

 imperative, and resort has been had to almost every other device and 

 expedient for collecting contributions from its people, the taxation 

 of titles and credits has never been contemplated. Some years since 

 (1879), when the State of California adopted a new Constitution, and, 

 in virtue of the statutes subsequently enacted under it, made subject 

 to additional taxation bonds, moneys, promissory notes, certificates 

 of indebtedness, and shares of stock in corporations otherwise taxed, 

 the utter absurdity of such action was thus strikingly demonstrated 

 in one of the San Francisco papers by the following humorous 

 illustrations : 



" A has a horse ; B has nothing - , but is honest and industrious. B buys 

 A's horse and gives his promissory note for one hundred dollars. The horse 

 previously taxed as property in A's hands is now taxed as property in B's 

 hands, and A is taxed — just as much as be was before — on B's note, which 

 is property also. That is to say, the new Constitution holds that by a mere 

 stroke of his pen, B, who has nothing, and can give himself nothing, can 

 instantaneously create as much property for others as others may happen 

 to think that he will some day be able to acquire. Truly the performance 

 of the man who causes two trees to grow where but one grew before is of 

 so little comparative benefit that he might be justly censured for a sin of 

 omission. 



u Let us suppose that B had given not a written but an oral promise. 

 Ought not A to be taxed on that ? If not, why not ? Because an oral prom- 

 ise is not an evidence of debt? not a 'credit?' 1 * But how if there were 

 witnesses ? Oral promises are credits, however; nay, even implied promises 

 are. You have to pay — the courts will make you pay — your tradesman's 

 account whether you have ever passed your word or not. 



* Promises, according to Professor McLeod, are property. 



