PRINCIPLES OF TAXATION. 519 



ed, is, that it did not take the citizens of New Jersey a great length of 

 time to find out that a borrower of money on a mortgage paid the tax, 

 and that the lender was the tax collector, and only paid his part of a 

 diffused tax, as all other persons living, consuming, buying, or selling 

 in the State must pay ; and that if the borrower could not legally pay 

 the lender a rate equal to other net profits of investments, he could 

 not borrow. A little experimental legislation in other States will, 

 therefore, effectually explode the vague theory that taxes uniformly 

 levied do not diffuse themselves; and although it is true that the 

 persons or property primarily taxed do not charge the entire tax over 

 to others, this very fact nevertheless shows that the tax is diffused 

 with absolute equality upon the persons who originally may pay the 

 tax, and upon those who finally bear their portion of it. 



Loans on Mortgages prohibited in Rome. — Mommsen, in his 

 History of Rome, states that at one period the lending of money in 

 that country on mortgages was prohibited, and it is apparent that a 

 uniform taxation of mortgages would amount to a prohibition as 

 effectual as the prohibition which existed under the Roman law. 

 The Roman patricians, in their legislation, wished to prevent the 

 common people from becoming an independent yeomanry, and 

 owning and acquiring real estate through the facilities of borrowing 

 upon mortgages. ISTo chimerical attempt had then ever been made 

 to tax money at interest, and this purpose of having the soil culti- 

 vated on shares or by dependent tenants could best be obtained by a 

 prohibition of all mortgages. 



ISTow, it needs no argument to show that a system of onerous taxa- 

 tion of mortgages must have a tendency to re-enact the Roman pol- 

 icy, and that it is undoubtedly the true interest of the state, on both 

 political and economical grounds, to encourage occupiers to become 

 owners, who always give better attention and protection to their own 

 property than to the property of landlords. 



Purchasers of Government Bonds not Practically Exempt 

 from Taxation. — The purchasers of United States, State, and muni- 

 cipal bonds or securities, which are nominally exempt from taxation, 

 are in effect taxed, and uniformly taxed in the high price which they 

 are obliged to pay for these securities by reason of their exemption 

 from taxation. It is not only a sound principle of political economy 

 that a tax upon money at interest is simply a tax upon the borrowing 

 price of the borrower, causing an increased rate of interest, or a 

 reduced price to be obtained for the obligation given; but this prin- 

 ciple has been adjudicated by the highest court of the country, so far 

 as a court of last resort can adjudicate a great principle in economic 

 science. Thus, in the case of Weston vs. The City of Charleston 

 (2 Peters, 449), the Supreme Court of the United States, through 



