366 POPULAR SCIENCE MONTHLY. 



any positive sentiment on the part of the state, but rather to a series 

 of legal decisions by its courts, which gradually undermined the 

 whole system of British local tax assessment, until it tumbled down, 

 as it were, imperceptibly, and gradually became replaced, from neces- 

 sity, by a theory which approximated more closely to the principles 

 of sound political economy and the dictates of common sense. 



Thus, one of the first of the old-time maxims which gave way 

 under these decisions was the fiction of law that all property for the 

 purpose of taxation followed the person or domicile of the owner 

 (in virtue of which real estate was once taxed, under the British 

 system, where the owner resided, in place of where the property was 

 situated, used, and protected), and its replacement by the more 

 rational principle that for all purposes of assessment the situs of 

 property is where the property actually is; while other decisions of a 

 similar character, following one another by intervals of years, for- 

 bade the taxation, for local purposes, of all evidences of national 

 indebtedness, or " consols "; affirmed the situs of a vessel for taxa- 

 tion to be at the port of its registry, irrespective of the domicile of the 

 owner; and declared that all negotiable instruments are chattels per- 

 sonal, and the like ; until the British system of local taxation, like the 

 French, Belgian, and German, has come to be based on the assess- 

 ment of comparatively few objects, and the avoidance in assessment, 

 to the greatest possible extent, of all personal inquisition and arbi- 

 trary treatment. 



A case in question determining definitely, as it would appear, 

 the hitherto questionable situs for State taxation of all that large 

 class of personal property comprised under the general term " ne- 

 gotiable instruments " i. e., State, municipal, railroad, and other 

 corporate bonds, circulating notes of banking institutions, promissory 

 notes payable to bearer, etc. is reported in the fifteenth volume of 

 Wallace, under the title of State Tax on Foreign-held Bonds, and in 

 brief may be thus stated : 



The State of Pennsylvania, by a law passed in 1868, required the 

 officers of every company, except banks or savings institutions, incor- 

 porated and doing business in that State, to retain a tax of " five per 

 cent " upon every dollar of interest paid by such company to its 

 bondholders or other creditors, and to pay over the same to the State 

 Treasurer for the use of the Commonwealth. The plaintiff in this 

 specific case the Cleveland, Painesville, and Ashtabula Railroad 

 Company denied the legality of the tax, and, appealing to the 

 State courts, alleged, among other things, the following in support 

 of its position: 



" That the greater portion of the bonds of the company having 

 been issued upon loans made and payable out of the State to non- 



