Page:Popular Science Monthly Volume 52.djvu/532

 such corporations, held by individuals here, are simply representatives of capital or property employed in business in other States, the title of which is vested in and controlled by the artificial person created by and residing in such States. They represent an interest which is or may become a membership in the corporation and evidence of a right to participate in divided profits and in the ultimate dividend of surplus after the payment of debts and obligations of the corporation. The stock certificates are not themselves the property, but are evidences of the rights just mentioned; to be possessed, enjoyed, and enforced under and in conformity with the laws of the State which created the body corporate."

The views thus expressed respecting the inconsistency and undesirability of directly taxing titles, credits, obligations of indebtedness, and instrumentalities of exchange are so generally and thoroughly accepted by the statesmen, financiers, and economists of Europe, that no recognition of this form of taxation can, it is believed, be found in any of their fiscal systems. In England the very idea would be scouted; and in France, where the need of great revenues is most imperative, and resort has been had to almost every other device and expedient for collecting contributions from its people, the taxation of titles and credits has never been contemplated. Some years since (1879), when the State of California adopted a new Constitution, and, in virtue of the statutes subsequently enacted under it, made subject to additional taxation bonds, moneys, promissory notes, certificates of indebtedness, and shares of stock in corporations otherwise taxed, the utter absurdity of such action was thus strikingly demonstrated in one of the San Francisco papers by the following humorous illustrations:

"A has a horse; B has nothing, but is honest and industrious. B buys A's horse and gives his promissory note for one hundred dollars. The horse previously taxed as property in A's hands is now taxed as property in B's hands, and A is taxed—just as much as be was before—on B's note, which is property also. That is to say, the new Constitution holds that by a mere stroke of his pen, B, who has nothing, and can give himself nothing, can instantaneously create as much property for others as others may happen to think that he will some day be able to acquire. Truly the performance of the man who causes two trees to grow where but one grew before is of so little comparative benefit that he might be justly censured for a sin of omission.

"Let us suppose that B had given not a written but an oral promise. Ought not A to be taxed on that? If not, why not? Because an oral promise is not an evidence of debt? not a ‘credit?’ But how if there were witnesses? Oral promises are credits, however; nay, even implied promises are. You have to pay—the courts will make you pay—your tradesman's account whether you have ever passed your word or not.