CALIFORNIA. 



the law in such a way as to avoid double tax- 

 ation. The bill framed by the majority of the 

 joint Committee on Revenue and Taxation 

 preserved this principle, and did not include 

 in taxable property shares in corporations doing 

 business in the State, or money on deposit with 

 savings and loan corporations. The minority 

 of the committee presented a bill drawn up 

 more completely in accordance with the direc- 

 tions of the Constitution. The revenue law, 

 finally adopted after a prolonged contest over 

 the policy and right of taxing joint-stock com- 

 pany shares, bank deposits, certificates of in- 

 debtedness, and mortgages, and over the prin- 

 ciple of assessing property at its market value, 

 was drawn up in accordance with the princi- 

 ples embodied in the minority bill and plain- 

 ly prescribed in the Constitution. Real estate 

 and improvements are assessed at their esti- 

 mated market value. Mortgages held against 

 real property are deducted from the valuation 

 of the property affected, and that proportion 

 of the tax is assessed against the mortgages. 

 Joint-stock companies are assessed according 

 to a valuation of their property and assets, and 

 a tax upon the market value of their shares in 

 excess of this valuation is imposed upon the 

 individual stockholders. Depositors are taxed 

 upon their deposits in the. banks, and the latter 

 are taxed upon their property, mortgages, un- 

 secured credits, and other assets. In taxing 

 credits the evil of double taxation can no more 

 be avoided than in subjecting bank deposits to 

 a separate taxation. Every solvent creditor is 

 assessed upon the amount of unsecured solvent 

 debts due him in excess of his own liabilities. 

 Debts due outside of the State are, however, 

 not reckoned as an offset ; and in the assess- 

 ment of stocks a like discrimination is made, 

 the holders of shares in outside corporations 

 being taxed according to their selling value, 

 without deducting the value of the taxable 

 property held by the company according to the 

 rule applied to Californian corporations. 



The tax levy made by the Board of Equal- 

 ization pursuant to the new revenue law is 

 based on a total valuation of $666,183,320, an 

 increase of $118,660,551, or about 18 per cent., 

 over the valuation of 1879. The tax-rate was 

 also raised, the new rate being 74 cents on the 

 hundred dollars, instead of 62 cents. The 

 valuation of the county of San Francisco was 

 $243,552.276, an increase of about $26,000,000 

 over the valuation of 1879. The valuation of 

 real estate, with mortgages separately taxed 

 as an interest in the realty, was within a mill- 

 ion dollars the same in both years. The in- 

 crease was in personalty, which was assessed 

 $68,774,195 in 1880, against $43,570,856 in 

 1879. About $5,400,000 of the increased valu- 

 ation consisted of stocks, and nearly $6,000,- 

 000 of unsecured solvent credits. 



In reply to a delegation of savings-bank 

 managers, who requested Governor Perkins to 

 veto the Revenue Bill, the Governor declared 

 that the session was too far advanced to allow 



a new law to be framed, and that the public 

 sentiment outside of the cities was in favor of 

 the bill. He expressed the conviction that the 

 Executive has no right to interpose the pre- 

 rogative under the Constitution in the case of 

 a bill of such a character, unless it is unconsti- 

 tutional, or unless it would produce some great 

 public calamity. In his message approving of 

 the bill the Governor made the following pro- 

 test against this feature of the law : 



Failing to find in it any constitutional inhibition to 

 justify the interposition of the Executive veto, and 

 not deeming myself at liberty to disagree with the 

 Legislature on a question of merely public policy as 

 involved in a revenue bill, especially when the senti- 

 ment of the people appears to favor the measure (for 

 I heartily subscribe to that which lias been so perti- 

 nently said by another, that the Executive should have 

 no policy or plan to enforce against the expressed will 

 of the people), I have, therefore, reluctantly given the 

 bill my official signature. It is indisputable that tax- 

 ation^as it has for years existed in this State, produced 

 well-founded dissatisfaction among those upon whom 

 the burdens of State support fell so inequitably ; that 

 the citizen of moderate means, whose all was invested 

 in a homestead, paid his forced contribution under 

 protest, because his neighbor, having cash assets, was 

 not named on the assessment-roll at all. Herein we 

 find a demand for a change in the fundamental law 

 and the controlling motive for the public approval of 

 the present Constitution. 



The former Constitution was construed by the 

 Courts to prohibit the taxation of mortgages and sol- 

 vent debts, thus withdrawing from assessment large 

 volumes of wealth, and necessarily increasing the rates 

 to be borne by tangible property. The present Con- 

 stitution renders it possible and makes it our duty to 

 correct the unjust system heretofore existing. It 

 ought to be, and doubtless is, a pleasure for every one 

 clothed with the authority to aid in equalizing the 

 burdens of government. 



My objection to the present bill (and I sincerely 

 hope the objection will be avoided by supplemental 

 legislation) is based upon those provisions which more 

 directly relate to savings-banks and the deposits in 

 those institutions. 



The report of the Board of Bank Commissioners to 

 the present Legislature contains the statement that 

 there are upward of 80,000 depositors in the savings- 

 banks of this State, with an average of $672.53 to the 

 credit of each, aggregating more than $50,000,000 of 

 money. Nearly all this large sum is loaned upon real- 

 estate security. These securities will be taxed in the 

 name of the several banks holding them. The banks 

 have issued to each depositor a pass-book showing the 

 amount to his credit, and this will be taxed in the 

 name of the holder of the pass-book. 



No refining of language can deduct any other inter- 

 pretation from the provisions of Bill No. 404 ; and 

 while it may be upheld by the Courts as constitution- 

 ally permissible, it is inexcusably inequitable and un- 

 just. It imposes upon the industrious and economical 

 classes, the many of small means, more than their just 

 proportion of the public charges. It exacts tribute 

 from their savings which arc secured by mortgages 

 held by the banks, who are acting, as it were, but as 

 the agents of the depositor. 



If the party had loaned his money on mortgage in 

 his own name instead of that of the bank, even under 

 this bill, the mortgage only would be assessed. The 

 average deposit, as we have seen, is $672.53 a sum 

 so small that great difficulty woula be experieiiced in 

 finding for it a safe and secure investment. But sev- 

 eral combine their means, and thus both borrowers 

 and lenders are accommodated. Should, then, a pen- 

 alty be attached to established and favorite modes of 

 doing business ? 



