PRINCIPLES OF TAXATION. 807 



found a place in the tax system of any country other than the United 

 States. Second, the decision next gave a miraculous power to resi- 

 dence, by making it : capable of producing property out of nothingl 

 Third, it sanctioned the right of a State to subject its citizens to 

 double taxation in respect to one and the same property, and in- 

 dorsed the justice and morality of the act. If the situs of the prop- 

 erty — in the sense of an actuality — and the owner of a mortgage upon 

 it, are within the territory of one and the same State, and the actu- 

 ality is fully taxed by it, the separate and duplicate taxation of the 

 mortgage would not be sanctioned except at the demand of the 

 debtor, and which, as equivalent to his asking that the burden of his 

 debt be augmented, he would be not likely to make. But when the 

 actuality and the mortgage are in different States of one and the 

 same nation, as was the situation in the Kirtland case, a different rule 

 is held to prevail, whereby that which in one State was regarded as 

 an incident of property, and as such properly exempt from taxation, 

 becomes by mere transference to another State actual property, and 

 so rightfully subject to taxation. 



Fourth. If debts are property, and rightful subjects for taxation, 

 the sphere of the application of this principle should not be restricted 

 to debts created by a mortgage, but should embrace every form of 

 indebtedness created by the loan of capital — as promissory notes, 

 book credits, and policies of life insurance — which are valuable to 

 just the extent that they represent the indebtedness of the company 

 issuing them to the holder of the policy. But if all the forty-four 

 States of the Federal Union or the different countries of the rest 

 of the world were to undertake to pursue capital in the form of 

 debts due their respective citizens for the purpose of taxation, the 

 resulting inextricable and disastrous confusion would be almost be- 

 yond the power of imagination. 



Fifth. The United States Supreme Court held that there was 

 nothing in the form of taxation involved in this case that interfered 

 with the power of the Federal Government to regulate interstate 

 commerce; but if, as was further held, there was no constitutional 

 limitation on the exercise of the power of taxation by the State of 

 Connecticut, and that the Federal Government can not rightfully 

 interfere with the measure of taxes that a State may impose on 

 credits and choses in action that its citizens may own, it is difficult to 

 see why Connecticut might not impose such taxes on all extrater- 

 ritorial contracts of pecuniary value as would greatly impair or 

 altogether prevent the commercial intercourse of her citizens with, 

 the citizens of other States. Finally, nothing more clearly exhibits 

 the anomalous issues involved in this case than the fact that it could 

 not have come up before any of the courts of England, France, Bel- 



