PRINCIPLES OF TAXATION. 511 



No. 2. " Professor seems to ignore the fact that debtors hold all their property 



which is not mortgaged or incumbered, as trustees to pay their creditors generally, and it 

 is this same principle which gives value to unsecured credits. 



" But the professor says, ' So far as we can sell we make values.' Does he mean that a 

 counterfeit which is so good that it can be sold is a creation of value ? Would a credit 

 sell at all if it was not an inchoate right to the unsold and unincumbered property of the 

 debtor ? Of what value is a claim on a man if the claimant has no rights on the debtor's 

 property ? Such a claim would be no better than a claim on the northeast wind." 



It is also important to note that while a deed to realty, properly 

 executed and recorded, is regarded as the highest form of title, we 

 have the decision of the United States Supreme Court (Fletcher vs. 

 Peck, 6 Cranch, 87) that a deed is but an " executed contract " on 

 the part of the grantor, not to resume the right in the thing granted ; 

 and if, therefore, a State can tax extraterritorial contracts, it may 

 tax her citizens on deeds of land in other States. 



This analysis of the meaning of property, from both an economic 

 and legal point of view might be prosecuted with interest and profit 

 to a much greater extent; but from what has been presented it 

 would seem clear that nothing can not be something; or, in other 

 words, that property is always a physical actuality, which has be- 

 come valuable or property by some form of labor, and can not be 

 created by mere paper documents, except to the extent of the value 

 of the paper and the writing or printing upon it. Or, in other words, 

 a title to property, a representative of property, can no more be prop- 

 erty than a shadow can be a substance: and if this conclusion be 

 true, then it would seem to follow, of necessity, that the act of mak- 

 ing debts, bonds, verbal or written contracts, notes, book accounts, 

 mortgages, warehouse receipts, titles, certificates of stock, or any 

 form of salable or transferable rights, is not a creation or production 

 of any new property, but simply an exchange, by contract or opera- 

 tion of law, of the rights and titles of parties in pre-existing prop- 

 erty; and that any tax on any of these rights or titles is only another 

 form of burdening the property which is the subject of the rights or 

 titles. But some, in answer to the assertion that rights, debts, and 

 titles are not property, for if they were we might make property by 

 making rights and titles, might reply, " But we do make property 

 in that way every day." But we can not do this indefinitely be- 

 cause we can not sell the title indefinitely; and why not? Let us, 

 therefore, stop and think about it, and ask ourselves why we can 

 not sell titles and credits indefinitely. "We can sell property in 

 the sense of embodied labor indefinitely. Why not titles and cred- 

 its? The answer is simply that when we buy a title or credit 

 we pay for and in a legal and economic effect buy the physical 

 actuality, or right of dominion over it, which the credit or title repre- 

 sents, and nothing more. The moment one undertakes to sell titles 



