Page:Harvard Law Review Volume 32.djvu/639

603 JURISDICTION TO TAX 603: sure, to tax the stock, and this right is not conditioned upon a rigidly accurate valuation; ^' nor would the fact that a certain portion of the capital stock was used outside the state affect the power of the state of charter to tax.^° In the case of an interstate railroad, however, each charter state should tax that part of the capital stock only which is proportional to the length of line within the state.^^ As has been seen, a debt has, properly speaking, no real situs; least of all is it situated with the debtor. To tax the debtor on the debt is taxing a vacuum. The debtor must of course pay a tax upon the borrowed money, or that which represents it in his hands; to tax him again upon the debt is either taxing the same property twice, or taxing a nonexistent thing.^^ In a few au- thorities this principle has been ignored, ^^ notably in a decision of Mr. Justice Holmes in the Supreme Court of the United States.^* This was an inheritance tax upon the property of an Illinois decedent; the bulk of the property involved was a deposit in a New York bank, the small remainder a debt due the deceased from a New York debtor. The court held that the inheritance of these debts was taxable in New York "not because of any theo- retical speculation concerning the whereabouts of the debt, but because of the practical fact of its power over the person of the debtor"; the analogy of the garnishment case of Chicago, Rock Island, 6* Pacific Ry. v. Sturm ^^ was cited. Mr. Justice Holmes continued : "What gives the debt validity? Nothing but the fact that the law of the place where the debtor is will make him pay. It does not matter " Welch V. Burrill, 223 Mass. 87, iii N. E. 774 (1916); Moody v. Shaw, 173 Mass. 37S, S3 N. E. 891 (1899). «» Matter of Palmer, 183 N. Y. 238, 76 N. E. 16 (1905). " Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700 (1907); Welch v. Burrill, 223 Mass. 87, III N. E. 774 (1916); Matter of Cooley, 186 N. Y. 220, 78 N. E. 939 (1906). «* State Tax on Foreign-Held Bonds, 15 Wall. (U. S.) 300 (1872); New York L. E. & W. R. R. V. Pennsylvania, 153 U. S. 628 (1894). ^ Bank of United States v. State, 12 Sm. & M. (Miss.) 456 (1849); Ankeny v. Multnomah County, 3 Ore. 386 (1872); Maltby v. Reading & C. R. R., 52 Pa. 140 (1866); Re Joyslin, 76 Vt. 88, 56 Atl. 281 (1902). And see Commissioner of Stamps v. Hope, [1891] A. C. 476. ^ Blackstone v. Miller, 188 U. S. 189, 205 (1903). « 174 U. S. 710(1898).