PRINCIPLES OF TAXATION. 371 



investigation must be practically impossible. So, also, in the case of 

 circulating notes of banking institutions: if their title did not pass 

 by delivery, or, in other words, if their situs as property was not 

 under all circumstances accepted as in the hand of the holder, their 

 use as money would be impossible; and the courts, recognizing this 

 principle most fully, ha^e always held that in cases where negotiable 

 instruments or money have been stolen, and in consideration for 

 value received have come into the hands of innocent third parties, the 

 title to such property in the hands of the holders is perfect and irrev- 

 ocable. 



Again, the circumstance that State, municipal, and railroad 

 bonds, and all other strictly negotiable instruments, even ware- 

 house receipts payable to bearer, are subject to attachment by legal 

 process only at the place where they actually are, and without regard 

 to the whereabouts of the owner or his domicile, of itself also clearly 

 defines and limits the situs of such property for taxation; for clearly 

 a State which has the power to make a legal attachment operative 

 against a given property has also the power to tax such property; 

 while, on the other hand, a State which through lack of possession 

 and jurisdiction, can not attach a specific property, certainly can not 

 enforce its tax laws against it, or give protection in case its rights 

 or the rights of its owner are violated. And, again, can the right 

 to tax personal property exist in a State from which the property 

 is so confessedly absent that there is neither right, power, nor possi- 

 bility of passing title to it within the territory of the State by 

 delivery? 



That the view thus taken respecting the situs of negotiable in- 

 struments, and especially of railroad mortgage bonds, for taxation, 

 is in strict conformity with the opinion of the Supreme Court, is also 

 evident from the fact that in summing up the court held that not 

 only was a mortgage bond issued by a railroad chartered by Penn- 

 sylvania, and in the hands of a non-resident, property out of the 

 State, and as such beyond the jurisdiction of the taxing power of the 

 State, but also that the State could not tax such property even when 

 owned by a citizen and resident, unless the bond was at the time 

 of assessment actually within the territory of the State. And as this 

 point is a most important one, it is desirable to ask attention to the 

 exact language of the court establishing it. 



"We are clear," says Justice Field, "that the tax can not be 

 sustained; that the bonds, being held by non-residents of the State, 

 are only property in their hands, and that they are thus beyond the 

 jurisdiction of the taxing power of the State. Even where the bonds 

 are held by residents of the State, the retention by the company of a 

 portion of the stipulated interest can only be sustained as a mode of 



