Ms A A 5 6 2 3 7 3 1 : 33 ; m ■ 2 ■ O Savings and Loan Society, Re- spondent, V. Alexander Austin, Appellant, and Bartlett Doe, et al.. Respondents, v. Alex- ander Austin, Appellant. Oral Argument . By J. p. Hoge 1*1'*' c IN THE SUPREME COURT. OF THK STATE OF (JALIFORjSriA. ){ SAVINGS AND -LOAN SOCIETY, KespoxXdent, r. ALEXANDER AUSTIN, Appellant, AND BAKTLETT DOE, ei aL, Respondents, v. ALEXANDER AUSTIN, Appellant. ;) !) ,0 c ORAL ARGUMENT OF J. P. HOGE, or roU^'SKL FOR APPELLAXT, In support of the Coiistitulioimlity of the Revciiiip law of (]iiliforniii. [Transcribed from the notes of J. A. Waymire, Phonographic Reporter of the Supreme Court, by AVhitton & Lyons, Shorthand Reporters, 34 Montgomery Block, S. F.] SACEAMENTO: T. A. SPRINGER, STATE PRINTER. 1873. ^^^< -,.^kj:^s INDEX Page. Questions not presented by the record 4 Motives of -the Board not subject to review 6 Double taxation ^, 31 Questions settled 10 Taxation of credits in California 12 Taxation of credits in other States 15 Delegation of legislative power 16, 20, 53 Constitutionality of the revenue laws 18 Illustrations — conclusion 38 Illegal tax to be refunded 41 Duty of citizens to pay taxes 43 The Act authorizing State Capitol Bonds 46 Constitutionality of the State Board of Equalization 48 For extracts from first argument, sec page 41, et scq. No. 3,729. IN THE SUPREME COURT OF THE STATE OF CALIFOE]N'IA. SAVmOS AND LOAX SOCIETY, Respondent, v. ALEXAI^DER AUSTm, Appellant, AND BARTLETT DOE, d al, Respondents, v. ALEXANDER AUSTIN, Appellant. ORAL ARGUMENT OF J. P. HOGE, OF COUNSEL FOR APPELLAXT, 111 support of the Coustitutioiiality of the Revenue Law of California. [Transcribed from the notes of J. A. 'NVaymirk, Phonographic Reporter of the Supreme Court, by Whitton & Lyons, Shorthand lleporters, 34 Montgomery Block, S. F.] SACKAMENTO: T. A. SPRINGER, STATE PRINTER. 1873. 4 l [ 4 ] QUESTIONS NOT TRESENTED BY THE RECORD. In the present argument the discussion has taken a very wide range, and very many interesting and perhaps difficult questions of political economy, of proper legislation, of the policy of particular legislative provisions, have been very inge- niously and very ably discussed. An indifferent observer, standing in this Court to listen to the argument, would have supposed that this body had resolved itself into a legislative assembly, for the purpose of considering the policy which should govern the State, rather than a Court of law, supposed to be engaged only in the duty of inquiring whether particular jDrovisions of law are in conflict with constitutional limitations which control not only the legislative body but all the branches of the government. In taking this wide range, many questions have been pre- sented and discussed which I think do not arise upon this rec- ord, to which alone, I apprehend, we are to be confined. I propose, so far as I can in the part I shall take in this discus- sion, to go back to the record and take a new departure. I am not willing, even if I were competent to the task, to abandon the record and travel into those difficult, abstruse, and abstract questions bearing upon the general subject of taxation, ujjon the general duties of government as affected by principles of political economy, of governmental policy, or of legislative propriety. I had supposed that those were questions which are not ad- dressed to the judicial cognizance; that this was not the forum for such discussions; that they belong to legislative and not to judicial bodies. In a Court of law we can inquire only whether the particular legislation complained of has exceeded the con- stitutional powers of the legislative body, and whether the record presents the question in such form as to call into action the judicial power; all else is outside of the record, and, in this cause, I shall treat such matters as entirely foreign to the dis- cussion. This is simj)l3^ a proceeding in which officers of the law are sought to be enjoined, at the suit of a citizen of the State, from the performance of public duties which have been imposed ujDon them by the laws of the State. Does the record j^i'esent [ 5 ] a case which calls into operation the judicial powers of this tribunal, either equitable or legal? This is the question, and the only question, I take it, that is open to discussion. Singularly enough, the complaint (though, perhaps, it may be good pleading, notwithstanding,) does not contain a single aver- ment alleging that the law establishing the State Board of Equalization is unconstitutional and void for any reason what- evei*. The complaint only goes against the action of the State Board, and the manner in which they have 2)erformed the duties imposed upon them, alleging that they have exceeded the powers vested in them by law. But it is argued that the law which created the State Board of Equalizatfon is uncon- stitutional and void, and various reasons are assigned in support of that proposition. To these questions, in their proper order, I shall direct my attention. Nor does this complaint (for I propose to get rid of all the questions, if possible, that are not before the Court) present the question of double taxation, which of all the questions presented has been most elaborately discussed. I shall not take time to examine the pleadings, and refer you to the pages and sections of the complaint and of the answer, to satisfy you that no such question is presented on this record; that the ques- tion of double taxation does not arise here at all; that there is no imaginable averment in the complaint which could j)resent it; that there is no proof in the record which raises the ques- tion at all, and that the whole discussion on the subject is en- tirely abstract and outside the record, intended to procure an advisory opinion from this Court which should affect the future legislation of the State. Nor does the complaint in the case of Barilett Doe v. Austin pretend to raise the question in any shape or form; because there is not even an allegation of any case of double taxation in the complaint, nor any proof whatever on the subject. The case in reality comes here precisely in the position of the case of The Ireople v. McCreery. It is the com- plaint of the mortgagee holding that he is not to be taxed on the money loaned, for which he has taken security, and that if he is, it is double taxation. Now, that is the precise condition of the question on the record. L 6 ] MOTIVES OF THE BOARD NOT SUBJECT TO REVIEW. Now, there is another matter that I want to say a few words upon and dispose of, which has been talked of a great deal, and upon which a great many calculations and figures have been produced here that I do not think this Court has anything whatever to do with. I mean the reasons, the arguments, the inducements, the considerations which influenced and governed the minds of the State Board of Equalization when engaged in the performance of their duties. In the absence of any charge, or pretense of charge, of any fraudulent ahuse of authority, I take it that it does not belong to this Court to investigate such questions. The law gives the Board the power to do certain things. The motive which governs the exercise of the power belongs to that body, and to that body alone. The law gives no appeal based upon the reasons which govern them; their decision is final upon all tribunals — pro- vided they do not do more than the law authorizes them to do. All this talk about adding ten per cent for costs of collection, ten per cent for delinquencies, the series of figures gone into to show that this Board have undertaken to raise many hundreds of thousands of dollars more than any provision of law authorized, is not true in fact, and no such state of the case exists upon this record. The State Board, as appears upon the face of the rec- ord, never undertook to raise a dollar more than the actual directions of the Code and of the statute of eighteen hundred and seventy-two required them to raise. They fixed their per- centage of fifty cents on the hundred dollars directly for the object of raising two million three hundred and seventy-two thousand dollars, which they were directed by the Acts of the Legislature to raise and put into the State Treasury. They attempted no more; and the whole talk to the contrary grows out of the fact that in examining two members of the Board, when the counsel on the other side were prepai'ing in open Court to resist the motion to dissolve the injunction, they questioned and examined these gentlemen as to what the}^ thought, what they did, the reasons for their action, what this member and that member thought. It all comes down to the proposition that they did undertake to raise two million three hundred and seventy- C 7 ] two thousand dollars, although some of the members thought they had a right to raise more, while others thought they had not. The whole matter was discussed, and the Board finally settled down to the conclusion to raise the amount directed to be raised — two million three hundred and seventy-two thou- sand dollars — and to fix a percentage which, uj)on examina- tion of all the data the law placed in their hands, and aided by the former experience of the State, would suffice to raise the two million three hundred and seventy-two thousand dollars which the Legislature required to be raised and put into the State Treasury. That is all they did; and the record, if your honors ever come to read it, will show that they did nothing else, and attempted nothing else. And all this talk about the Act of eighteen hundred and fifty-seven and the Act of eighteen hundred and sixty, and the percentage for costs of collection, is entirely out of the case. The testimony of Catlin and Green will show that they never undertook to add any percentage whatever for collec- tion or for delinquencies. The law directed them to raise a given amount of money and to place it net in the Treasury of the State. It said to them: "Make your calculation to pro- duce that result, for you will probably have delinquencies in collection." The law governing the State Board of Equaliza- tion requires all the necessary data from every county in the State, from every Assessor in the State, to be placed before the Board, the description of the property, and the valuations fixed upon it. It requires that everything connected with the subject of assessment should be placed before the Board. They are to take up and examine such data equalizing the assessments, so as to secure equality and uniformity of taxation throughout the State. Then they are directed to raise and jDut into the Treasury a given amount of money. The Legislature says to them: "In making that calculation, in ascertaining what rate will produce that given amount, you must fix the rate so that the amount specified will result to the Treasury; and in getting at that conclusion, you must take into your cal- culations the pi'obable delinquencies, and the charges for the collection." That is the meaning of the term "delinquencies." The costs of collection never go into the State Treasury; [ 8 ] they are paid to the officers who collect the money, or to the counties where the officers are elected, and they constitute in part the fund from which the officer is paid his salary. The net amount of a collection is what remains after deducting the costs of collection. And to get at that sura the Legislature points out the mode and manner: "Make your calculation so as to produce the sum which I demand of you, and fix the rate so as to produce that amount." That is all; and the whole question comes back all the time to the proposition of the coun- sel, that the Legislature cannot constitutionally authorize them to do that thing. Of that hereafter. Judge Bennett, in his argument in this cause, gives us a col- umn of figures to demonstrate that the Board have raised more money than the law authorized — a column of figures in which he takes, as the first proposition, that there were six hundred and thirty-six million dollars of property in the State of Cali- fornia. He then adds to the amount required to be raised by the Legislature, the costs of collection, at the rate of twenty per cent; then takes the fifty cents on the hundred dollars, cal- culates how much money it will raise on six hundred and thirty-six million dollars, and states as the result of that calcu- lation, that this Board has undertaken to raise hundreds of thousands of dollars more than the law authorized them to raise. ISTow, what is the plain simple fact which appears in the record here — in the testimony and the documents? This val- uation of six hundred and thirty-six million dollars of prop- erty includes all the Government property — State and United States — as well as of counties and cities, of all kinds. The whole was assessed by the Assessor, went into his returns, and was before this Board, and constituted a part of tnis grand total. In addition to all this, the assessments ajipearing upon the face of the proceedings before the Board were, in many in- stances, utterly illegal, incapable of being enforced, and many of them were upon personal property, the owner having no real estate — nothing that could be reached by the executive power of the State. All these matters were before this Board for consideration when engaged in the important duty of ascertaining what per- [ 9 ] centfigc would produce the revenue required. So that it is a false calculation entirely, which my friend makes, when he es- timates upon the basis that six hundred and thirty-six million dollars was the value upon which taxation could be levied and collected. It is not true in fact, nor was the calculation made upon any such basis. I do not propose to waste any time upon any question of that sort. I projjose to get it out of the case, so far as I am concerned, and to return to it no more. There is nothing really in it upon which this Court can act in any way, shape, or form. I say that this Court has not the constitutional power to re- view any action of this Board which is within the limits of the authority given them by the law. Of course, in what I say upon this branch of the argument, I am assuming the validity of the law itself, as we must; because the argument, which seeks to induce your Honors to inquire into the manner in which the Board have performed their powers, presupposes the validity of the authority under wJiich those proceedings were had. DOUBLE TAXATION. The counsel, in talking about double taxation, said he relied not upon the proof, for there was none, but that he assumed that it was the presumption of law that the Ass'essor had as- sessed the other party, because the law made it his duty to do so. He therefore contended that there is a case of double tax- ation here, since we are to assume that the officers have done their duty ayd have taxed both parties to these transactions of loan and mortgage. I shall not waste any time upon the ques- tion, of whether the existence or non-existence of mortgaged securities affect the matter in hand. It does not, in the solu- tion of this question, make a particle of difference one way or the other whether a solvent debt is secured by mortgage or not; it has nothing to do with the case; it is a false quantity; it does not aifect it one way or the other. Now, I answer in the first place that the presumption of the law is directly the reverse of what the counsel suggests, and that it appearing on the face of the proceeding that the holder [ 10 ] of a mortgage or the owDcrof a solvent debt has been assessed and taxed, the presumption of the law is that the same officer did not assess the other party to the transaction for the same thing. I meet his presumption by another presumption; and I say, in the second place, that in order to make a case between the State and its cit zens, and its officers, the facts must show a case of actual double taxation in point of fact; not by infer- ences, not by argument, not by presumption — but by actual, indisputable fact reduced to proof and affirmed on the face of the proceedings. All these questions, then, may it please your Honors, I do not think are in this case at all; and I do not propose lo follow the counsel out or attempt to answer their various propositions upon matters which are not in the record. I shall have enough to do to attend to those matters which are in the record. Yet, I shall discuss some of the questions which they have consid- ered, notwithstanding I do not think them presented in the record. QUESTIONS SETTLED. I suppose I shall not be assuming too much when I say that in this ai'gument we are to consider some things as being set- tled; that we are not at sea, having no principle to guide us, and having no decision upon which we can rely as a basis of argument. It will not be asserted that no decision of this or any other Court is to have any weight or authority except that weight or authority which it is entitled to by the force of its argument. I think there are some things that I e,m at liberty to consider as settled finally, upon which argument can safely base itself. If we have no such fixed principles, no ascertained opinions, ujjon questioris of this character, I do not see how we can have any argument whatever. Now, can it be disputed that the whole power of taxation, as to objects, as to purposes, as to amounts, belongs to the legislative authority, without limit, without control, without restriction? No case has ever questioned it here or elsewhere. This Court has repeatedly so determined in every way in which the question has ever been presented. Then, I am at liberty to assume that as a proposi- tion which is indisputable, and upon which I can proceed to [ 11 ] • argne. Is it not equally well settled that the wisdom or the justice of tlie exercise of the taxing power is not a subject of judicial inquiry, nor the purposes to which the State intends to or may apply its revenues? No case has ever disputed that, that I am aware of. I think it is equall}^ apparent that the power of taxation is not confined to property as such, but extends to every conceivable object within the limits and jurisdiction of the State. In The People v. JlcCreery, while the Court reverses the pre- vious decisions in some respects, it affirms them in others; and amongst them, on this particular subject, it affirmed and recog- nized the case of The People v. Naglee, in which the opinion was written hy my learned friend wlio is now arrayed in opposition to his own doctrines, as then announced. That case, followed by the case of The People v. Coleman, so far as they have been sustained and recognized by the present Court, do not seem to me to be liable to attack. They declare the doctrine that the Legislature can tax everything — professions, business incomes, instruments, contracts — everything.' Naj^, all the thousand things that were suggested by the imagination of the learned gentleman (Jeremiah Clark) who leaped so suddenly into the arena the other day, like the goddess of war and of wisdom from the brain of Jupiter, armed cap-a-pie, with his hand against every man, and scattering the preconceived notions of Courts and Legislatures as though they were of mere gossa- mer. I say there is no limit to the power of the Government over the subject of taxation, unless that limit can be found in the exact and particular provision of our own Constitution, or of the Constitution of the United States. No principles of rea- soning, no refined disquisitions, no higher law, has ever been held by any respectable Court to interfere with or control the power of the legislative body — the body that wields all the sovereign powers of the State over this subject. I say that nobody, at this date, pretends that the legislative power is not supreme over these subjects. We are, also, then, I appre- hend, to take it for granted, and I understand it to be yielded — although in the very breath in which they make the admission the counsel go ofi" into abstractions, learned and refined, which defeat the whole force of the admission, and render it nugatory — . [ 12 ] that a solvent debt (I use the expression for brevity), whether secured by mortgage or not, is property, is subject to taxation, and must be taxed. If there is any virtue in decisions — if there is anything in the admissions which the learned gentlemen have made, every one of them, in the course of the argument — then a solvent debt is property and taxable. I might also contend, although it is not necessary for my purpose, nor for my argument, that this whole doctrine of equality and uniformity required by the Con- stitution, applies only to a direct tax upon property alone, as such, and has no application to any other species of taxation whatever. It is not necessary for me to assume any such proposition, and I do not, therefore, discuss it at all; but I intend to meet the gentlemen upon their own ground. These things, which I have attempted to specify, I look upon as no longer open to argument. TAXATION OF CREDITS IN CALIFORNIA. Now, then, may it please your Honors, before taking up the questions we are to discuss, I propose, very shortly, to review the legislative action, as well as constitutional provisions, so far as I have ieen able to look into them, and this, both of our own State and of the other States, upon two propositions: First, upon tlie taxation of what, for brevity, we style credits; and, secondly, upon what has been claimed to be a delegation of legislative power, as contained in the Act under considera- tion. I suppose that this examination, so far as it bears upon the questions at issue, maj' be considered as useful and legitimate matter of argument; it is, certainly, to your Honors, jvpersua- sive argument, if it shall be found that, under all constitutional provisions, all the legislation of the American Governments, so far as we can examine, have been found to be uniform upon propositions of this character, to a greater or less extent; that the practice of our own State, the consti'uetion of our own Con- stitution, and our own legislation, is a legitimate construction, and is correct in princii^le. I shall take but a very little time, but I propose very briefly to go over these matters. I say, and I believe, that the prac- [ 13 ] tice of the State of California is the practice of every State in this Union, and has been sustained by every judicial tribunal before whom the question has been raised, whether upon the same or different constitutional provisions, in this rea'ard. Let us begin with the legislation of California. On the tliirtieth of March, eighteen hundred and fifty, at the first session of the Legislature after the Constitution was adopted, the Legislature passed a pvenue law, and by that law they taxed all property, real and personal. They declared what constituted the per- sonal property of the State: moneys, moneys at interest, solvent debts; thc}^ declared that personal property mortgaged was the property" of the possessor, and must be taxed to him; they declared that real property mortgaged was the property of the mortgagor, and must be taxed to him until the mortgagee took possession (under the ideas prevailing in those days, that the mortgagee had the right, in default of pajnnent, to take pos- session of the mortgaged property); they declared that until that event happened, the mortgagor should be assessed and taxed for the full value of the property. When the mortgagee took possession, it should be taxed to him as the owner. They directed the rates of taxation^ within given limits, to be fixed by Courts of Sessions. They established a County Board of Equal- ization under this, the verj^ first law which they ever passed upon the subject of revenue. In eighteen- hundred and fifty- one they 'passed another law, continuing these same provisions, fixing the State tax at fifty cents, but authorizing the Courts of Sessions to fix a tax not to exceed fifty cents for county purposes. In eighteen hundred and fift3^-two the}- passed ano- ther Act, which is the only Act that has ever recognized any exceptions, as to the liabilities of the mortgagor and the mort- gagee, and which only lasted one year. All the other provis- ions are the same; but by the thirteenth section, they pro- vided that the real estate mortgaged should be assessed to the mortgagor, but he should only pay upon the value above the amount of the mortgage, and the mortgagee should pay the tax on the money which he had loaned, and to secure Avhich, he had taken the mortgage. That is the only instance in the legislation of California where any allowance whatever was made in favor of the mortgagor, as between him and the mort- [ 14 ] gagce. The statute of eighteen hundred and fifty-three imme- diately dropped it, but continued the provisions in relation to moneys and to solvent debts exceeding the indebtedness. All the other provisions are the same. As to real estate, the mort- gagor is required to pay on the full value by the Act of eigh- teen hundred and fiftj'-three. The statute of eighteen hundred, and fifty-four is the same — the same provisions exactly. The Act of eighteen hundred and fifty-seven is the same — money on hand or on deposit, money at interest secured by mortgage, or otherwise, solvent debts. It taxes all property, of whatever nature. The Act of eighteen hundred and fifty-eight is the same; the Act of eighteen hundred and sixty is the same. All property is taxed, real or personal, with the same provisions as to mortgages. Mr. Felton — I call your attention to the fact that the Act of eighteen hundred and fifty-nine, extending over San Fran- cisco, left out solvent debts, and from eighteen hundred and fifty-nine to eighteen hundred and i3ixty-two there was no as- sessment of solvent debts in this city. Mr. HoGE — I find no Act for that year. There might have been some exception for San Francisco, under the i^iebald sj'S- tem in this State of having a different system for every county in the State; there might have been some exception that left out. solvent debts, but contained other provisions amply suffi- cient to cover the case. This Act of eighteen hundred nand sixty went farther, and the forty-seventh section requiredluie Eecordcr should not enter satisfaction of the mortgage upon bis record without an affidavit that all taxes on the money, or debt secured by the mortgage, had been paid. The Act of eighteen hundred and sixty-one contains the same provisions- as to money, and as to solvent debts mortgaged, and required the Recorder to come before the County Board of Equalization and produce his records, to show what niortgages and liens were spread upon them, so that those officers should get hold of them for the purpose of taxation. The only Act that I have found api^lying only to San Francisco is the Act of eighteen hundred and sixty -two, containing the same provisions. The Act of eighteen hundred and sixty-five and sixty-six is the [ 15 ] same as the preceding Act; and so the Act of eighteen hundred and sixty-seven and eight is the same, and, at jjage six hun- dred and seventy-four, it is expressly provided that all prop- erty, of every kind, name, and nature whatever, shall be sub- ject to taxation, and be taxed to the owner or claimant. The Act of eighteen hundred and seventy-one and two, as to Yoio County, authorizes the authorities of that county to tax, for county purposes, not to exceed seventy-five cents, and for roads not to exceed fifty cents. The Act of eighteen hundred and seventy-two provided that all moneys belonging to the State, in the bauds of the Tax Collector, received on notes secured by mortgage in eighteen hundred and seventy and seventy-one, shall be retained for the use of the counties which laid and col- lected the tax, and directs the Tax Collector to pay over the respective amounts to the several counties. Thus, from the foundation of the State, from its first attempt to exercise the taxing power, we find the powers complained of are exercised in both respects — both as to the taxation of what are called credits, and as to the delegation of power. TAXATION OF CREDITS IN OTHER STATES. Now, then, a few words as to other States. First, what are their constitutional provisions? We have looked into the Con- stitutions of Arkansas, Florida, Illinois, Indiana, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Nebraska, Oregon, Tennessee, South Carolina, Texas, Virginia, West Virginia, and Ohio — seventeen States — and find that they all require, by pro- visions almost identical with our own in this regard, that all taxation shall be equal and uniform. Not only is that the case, but it is the settled doctrine of American law and practice, and is the practical construction of every Constitution that has ever been adopted in this Union, that taxation should be levied with reference to equality and uniformity. It is American constitu- tional law. Now, of those States that I have named, I have been able to look into the legislation of Florida, Illinois, Indi- ana, Kansas, Minnesota, Michigan, Oregon, Ohio, West Virginia, and Louisiana — ten States — and I find that they uniformly tax credits as we do, with more or less variation or allowance. That is not all. I have looked into the legislation of States [ 16 ] which have no particular constitutional provisions bearing upon this question, and I find that they have uniformly done the same thing- — Kentucky, Maine, Iowa, Connecticut, Massachu- setts, JSIew York, Maryland, New Jerse}', New Hampshire, Mis- souri, Wisconsin, Georgia, Alabama — thirteen States. Thus we find twenty-three of our sister States, into whose legislation we have had an opportunity of looking, follow the system which California pursues, and I think that I hazard nothing in the assertion that if we could look into the legislation of every State in this Union, we would find that there is not a single State that does not tax property of this description in tiie same way that we do. No case has been cited here, nor, I api^re- heud, can be cited, which holds such legislation to be unconsti- tutional or violative of correct principles, or capable of being attacked by any construction of any constitutional provision, 1 do not care upon what theory their system of taxation may be based. DELEGATION OF LEGISLATIVE POWER. Next, upon the other branch of the proposition as to the delegation of legislative power, supposed to be included in the power to fix the rate of taxation, I have been able, in the short time allowed me, to look into the legislation of o)ily a few States besides our own upon the subject. It will be seen from the review I have already made of legislation in the State of California, that it cannot be questioned that this power has been uniformly given in this State to county authorities for county purposes. The law in question has undertaken to give it to State Boards for State purposes, and to County Boards for county purposes. Whether this is in any sense a delegation of legislative power is a question which will come up hereafter. At present it is simply a question of what is legislative prac- tice. Now, in the State of Illinois, with a similar Constitution to our own, they constantly delegate the power and the duty to fix the rate of taxation — in some instances to the Governor, Auditor, and Treasurer together, in others to the Governor and Auditor, and in some of their legislation the power is given to the Auditor alone. Of course I am familiar with that legisla- tion, because I came from that State. The power has always C 17 ] been so exercised from the foundation of the State government. In Florida they give it to the Controller, a constitutional officer, I presume, under their Constitution; whether he is or not I have not ascertained. In Iowa they give it to the County Boards of Equalization and to the State Board of Equalization, as we do; and Iowa has the same constitutional provision pre- cisely as the provision cited from the Constitution of the State of New York in the case of The People v. Supervisors of Kings County, which was decided recently by the Court of Appeals of New York, and which was supposed to have a bear- * ing upon this case. In relation to that case, I will say that, with the same constitutional provision precisely, letter for let- ter, no Court in Iowa has ever attempteji to hold that such a legislative provision was unconstitutional and void. In the State of Iowa they have had that provision always in their Constitution. It got into the Constitution of New York in eighteen hundred and forty-six, and was, no doubt, aimed at a particular evil. Although the Court, in delivering the opinion, assumed that this was the first instance in which such a delega- tion of power was ever given in a tax law, yet it was demon- strated by a Senator on the floor of the Senate of that State that there were six laws within four years passed by the Leg- islature of the State of New York doing that very thing, and the dates, volumes, and pages were cited; so that when the Court made that decision, although they may have been per- fectly correct in exj)ounding their own Constitution, upon which they decided alone, and upon a provision which does not exist in our Constitution, they were yet so ignorant of their own leg- islation that they asserted that that was the first instance known in the State in which such a provision was ever placed in a tax law! It only shows that, although Supreme Courts are constitutionally supposed to be infallible, the fact does not always bear out the constitutional idea. In Georgia they give this power to the Governor, assisted by the Controller General. In the former argument of this cause, one of the Justices asked if this power could be given to the Governor. I said I thought it could. I did not have the authorities before me, but [ 18 ] answered that I thought it could. I find that the very thing which his Honor the Justice suggested, by way of inquiry, is done in Illinois, in Florida, and in Iowa, without question. I shall not go into this legislation, although I have it here ab- stracted. It will be found to be almost identical with our own. No State has ever held that such a delegation of legislative power — if it is to be styled a delegation of legislative power — is unconstitutional. I find no such case; and the only case that is cited and relied upon is this case in New York, which de- pends upon their own constitutional provision. I shall con- tend, presently, that there is no such delegation of legislative power in these provisions of this law, as violate any constitu- tional principle. I do not think this doctrine, which the coun- sel contend for, can be sustained by authority or reason. It is under these circumstances, and in this state of the legislative and judicial history of our own and other States, that the ques- tions, involving the constitutionality of our existing revenue laws, are presented. The constitutionality of the law under investigation, it seems to me, receives irresistible support from the universal practice, under whatever constitutional provis- ions, so far as we have been able to ascertain. CONSTITUTIONALITY OF THE REVENUE LAWS. I come now, if your Honors please, to discuss the particular propositions which have been made in relation to the constitu- tional validity of the legislation in question. As 1 understand the arguments of counsel who have addressed the Court, the main objections which have been presented, and to which the argu- ment has been directed, are these: That the revenue law, in establishing a State Board of Equalization, violates, first, the provisions of Section 13, Article XI, of the Constitution, in relation to taxation, in giving to that Board, as is supposed, powers that belong to the Assessor to be elected by the peoj^le; second, the provisions of the third and fourth Articles of the Constitution, in relation to legislative powers, and that it attempts to delegate from the legislative body to that Board certain legislative powers. The third Article, as you will recollect, divides the powers of the Government into three de- partments: legislative, executive, and judicial, and j)rovides that [ 19 ] neither shall exercise the powers of the other. The fourth Article provides that legislative power shall be vested in a general assembly; and, third, that the taxation of solvent debts is double taxation, and therefore renders the tax void, as also violating the equality and uniformity required by the constitu- tional provisions of Section 13, Article XI. These are the general questions, shortl}^ stated, as I under- stand them, which liave been discussed. As we have already seen, the general taxing power of the State covers all subjects, and is not limited to property only, whatever may be the defini- tion of the term. The only limitation upon the power is equality, uniformity, and where property is to be taxed Assess- ors shall be elected, that proj^erty shall be taxed in proportion to its value — that value to be ascertained as directed by law. Outside of these restrictions the power is supreme. As to the means and manner, the mode, the form, the shape, in which the power shall be exercised, the Constitution is silent. Keeping within the particular restrictions, all else is of legislative cogni- zance. In our American forms of government, by written Constitu- tions, the provisions are of an exceedingly general character, and are almost entirely mere enunciations of fundamental prin- ciples, supposed to be the distinguishing characteristics of a republican form of government. A general chart of power is laid down, with very little detail. This was the great object, and it is only of late years that the nature of legislative powers, of governmental action, the objects and purposes to which it should be directed, the mode and means, and manner in which the sovereign power should be restrained and limited, and con- fined to purposes and objects consistent with an enlarged idea of public liberty and private rights, have become the subjects of so much discussion, both in legislative and constitutional assemblies. Now, the cardinal object of all constitutional construction is to advance, to secure the harmony, the consistency, the pur- pose, the design, not only of its several provisions, but of the whole, so as to carry out the powers, the duties of a govern- ment, intended to last for all time, to protect and advance all the great interests of a State. It is the chart of a government, [ 20 ] and not to be technicallj, narrowly construed, and confined to the destruction of its power for good — the destruction of the very object of all Constitutions — to give to the government the power to protect the liberties of its people; to protect and secure the rights of property and of individuals. Our Constitution, framed in accordance with this idea, gives to the Legislature power over the whole subject of values, of equality, of uni- formity — gives to the Legislature the power to provide means of ascertaining the information necessar}^ to comply with the constitutional requirement of equality and uniformit3\ This is the great leading idea, not only of our Constitution, but of all American forms of government. "When our Con- stitution provides for the election of Assessors it provides for one of those means ; it employs one of those agencies which it is within the power of the State to use in order to acquire the necessary information upon which it is to act in securing the equality and the uniformity that the Consti- tution demands. But that is only one of the means, one of the instruments, which may be used. We must construe it according to its language, and its very language shows that the Constitution gives to the Legislature the whole subject; the whole means by which shall be secured that equality and that uniformity over the whole State, in every section or 25ortion of the State; over those smaller subdivisions of the Slate government, the counties, cities, and towns — for the subdivisions get all their power from the legislative author- ity, as a portion of the State; as an instrument of the State — as a means of carrying out the great duties imposed upon the government of the State by the provisions of the Constitution. They are one of the means by which the legislative body operates over the people of the whole State. This great power was con- fided entirely to the Legislature. Valuation is onlj^ one means of attaining the great end in view; it is not the thing itself. Ours is not a system of taxation based upon valuation. It is a sys- tem of taxation based upon uniformity, equality between all sections of the State, and over the people and property of the State; and the valuation is but a means to carry out the con- stitutional provision; nothing more nor less. To hold other- wise, is to emasculate the Government of the power to carry [ 21 ] out its duties under the Constitution; to deprive it of all means of arriving at the very cardinal end tluit all constitutional means aim at. All these means, modes, and manners are but subsidiary to the great leading and central idea of the Consti- tution itself To carry out the argument on the other side to its legitimate and necessary conclusion, where would it lead to? The whole power of taxation over the property of the State would be left to the Assessors. Elected by the different subdivisions of the State for the purpose of valuation with a view to taxation, they would control, without limit and beyoAd the reach of any legislative action whatever, the whole subject of taxation. This would be the result if the argument advanced on the other side is to be sustained. The argument of necessity presupposes that the action of the Assessor is final and conclusive upon all branches of the Government. It goes to this extent, and it cannot stop short of it without yielding up the whole question; and my learned friend, Judge Bennett, with his accustomed directness, immediately assumes that as the true proposition. He argued that the power does go to that extent, and the very necessities of his argument compelled him to assume the posi- tion that the action of the Assessor is bej'ond the reach of legislative control, or of control hy any means whatever. Is there any provision in the Constitution which renders the action of the Assessors final and conclusive? If there is not, the whole question is j'ielded. I ask your Honors, whence comes the power of the Legislature to give the County Boards of Supervisors the right to interfere with or control the valuations made by a constitutional officer, who, as is claimed, is elected for that piirpose, and who alone has the power of assessing? That officer is the Assessor. The argument assumes that the Assessor is the constitutional officer to whom is committed the subject of valuation for the purpose of taxation, and upon that theory his action is of necessity final, and can no more be con- trolled by legislative action through a County Board than through a State Board. The Constitution provides for the offi- cer, and the Legislature carried out the constitutional provis- ions at the very first session of the body convened after the adoption of the Constitution, by providing for the election of [ 22 ] Assessors, and for the duties of Assessors. We have, then, the officer provided for by the Constitution and established by law, and how are you going to got any control over his action upon the theory of the learned counsel? For we are now treating of this question upon his theory as to the restriction of legislative power. The whole subject of valuations belongs to the As- sessor elected by the people, says the counsel, and no power to inquire into or interfere with his action is lodged anywhere. That is the inexorable result of his argument. It forces hira to that conclusion, to that position, and without it there is noth- ing in the argument one way or the other. The idea of the Constitution is, of course, that this equality and uniformity shall extend to the whole State; that.no part of the State shall have any advantage over another, but that all shall work harmoniously to the same end. Experience in this and other States shows that such a result cannot be accom- plished by local Assessors alone. To admit that the Legislature can authorize Couut}^ Boards of Equalization — no matter how the members of such Boards are appointed (for I contend that the provision in regard to elections has no bearing upon this question), yields the whole question. It is of no consequence whether the Board to whom the counsel claims the povver is delegated, is elected, or appointed; the object of creating Boards of Equalization is to control the action of the As- sessor — the action of a constitutional officer; and he is as much beyond the reach of a Board whose members are elected as of one whose members are appointed. It is attempted to show that, under the constitutional provisions in relation to the es- tablishment of town and county governments and the election of Boards of SupervivSors, the Legislature might give to County Boards the right to control the action of the Assessor and to review his valuations. I apprehend there is nothing in that position at all; such provisions have no bearing upon the ques- tion as to the power of the Legislature to go back of the action of the Assessor. If the argument that the Constitution gives the Assessor the whole power of assessing be correct, his assess- ments must be final and conclusive. Whence comes the i)ower, then, that has been conferred upon the County Boards of Equal- ization? This Court has always sustained the validity of such C 23 ] Boards and of their action upon the valuations of the Assessors when illegally or imperfectly made. How can the exercise of this power be reconciled with the Constitution, except upon the theory that the whole subject of taxation, the valuations of property, the manner, the time, and all the proceedings neces- sary to meet the requirements of the Constitution, are subject to legislative control? I repeat it, then, that the uniform practice of the Govern- ment, the provisions of the Constitution, the necessary func- tions of Government, are opposed to the theory of the learned counsel. The powers of the State Board of Equalization, as given by this law, are directed towards, and confined to, the valuations made by the Assessors. The assessments must be laid before the Board, and upon such data they must so equalize the valuations as to secure equality and uniformity throughout the State. The object is to secure equality and uniformity in taxation; the data to be acted upon is the valuations made by the Assessors; and the Board is merely the instrument used to attain the object. That object lies at the foundation of the constitutional provision on this subject, and the legislation of this State has been uniformly consistent with it. The argument that this law attempts to give the Board power to assess is utterly unfounded. They have nothing whatever to do with fixing the valuations in the first instance. They cannot assess any property. They do not deal with the property. They act upon the valuations already made by the Assessor. In this regard they have but one duty to perform: they examine what the Legislature requires to be placed before them — the assess- ment rolls of the different counties, prepared by the constitutional officers; the description of all the property in the State, with the names of the persons who own it — in order to see that the assessments in the different jjortions of the State have been made upon correct and like principles. It is their duty to see that the Assessors all follow the same rules; to see that while the Assessors in one section of the State proceed upon a correct plan, the Assessors in other sections shall not follow other and. erroneous rules. Thus, the Board is to secure justice to all tax- payers — equality and uniformity of taxation throughout the State. Thus they are to prevent what the Supreme Court of [ 24 ] Illinois, in the case cited here, from the forty-sixth volume of Illinois Eeports, characterize as "gross inequalities," "mon- strous evils, inflicting injustice upon the individual property owner, and robbing the treasury of the State of its just reve- nue." There, the Court say that if the Legislature have no power to correct such great evils, it is indeed " a feeble instru- ment, and the sooner it is overhauled, and its weak places strengthened, the better." Without a State Board of Equaliza- tion here, the same thing would exist in this State. The object, then, of our Constitution was, not to increase taxation nor to reduce taxation, not to give this Board any power over the sub- ject of taxation, but merely to equalize the assessments so that there shall be a harmonious and equal system of valuation, applicable to all the property of the State. That was the whole object, and there is nothing in the law whatever which gives the Board any power over taxation. The same requirement of the Constitution is applicable to taxation for counties, towns, and cities, as for the State. The same equality and uniformity is required in one case as in the other. According to all the authorities, the Legislature can no more authorize equalization for a county than it can for the whole State. A county is a municipal corporation, having sub- ordinate legislative powers for local purposes. It is created by the Legislature, and derives all its authority from that source. Certainly the Legislature cannot authorize its creature to do a thing which the creating power itself has no authority to do. The Board of Supervisors can do nothing but what the law authorizes them to do. Now, in the case of The People v. Salomon, in the forty-sixth Illinois Reports, which the counsel has not even deigned to notice at all, the Court discusses this question of equalization upon constitutional grounds, and reaches the conclusion that it is not only right, but that it is within the constitutional power of the Legislature to establish a State Board of Equalization, and that it was absolutely essential to do so in order to carry out the mandate of the Constitution to secure equality and uniformity. No case has been cited to the contrary, and no case can be cited. It is well known that in every State in the Union the same inequalities have followed where there has been [ 25 ] DO State Board of Equalization. There is not a State in the Union that does not establish in some form or other a Board of Equalization to secure that equality and uniformity recognized as necessary, either in so many words in the Constitutions, or by the j)rtictical construction of the. Constitutions, of all the States. If there had been any such case, the learned counsel would doubtless have found it out and cited it here. My con- clusion is that there is no such case. I have searched very industriously to find such authority, but I have not found a single case M'here the constitutional right of the legislative body to provide the means, and the mode, and manner of taxation, so as to secure uniformity and equality, has ever been questioned by a Court of justice; yet I know the power has been exercised from the foundation of this Government to the present time. Mr. Felton — Is there any Constitution like ours on that sub- ject? Mr. HoGE — Certainly there is. Mr. Felton — Containing the same clause as to the manner in which Assessors shall be elected? Mr. HoGE — There may be no provision exactly like ours in that respect. There may be no provision in any other Constitu- tion requiring that the Assessor shall be elected by the quali- fied electors of the district in which the property is situated. But 1 have already shown, so far as I think it necessary, that the clause in the Constitution relative to the election of As- sessors does not affect the question of revising and equalizing assessments, for the reason that the Board does not assess. I apprehend that this Court, in the construction of so grave a statute as this, upon which the State depends for its entire revenue for two fiscal years, will not be persuaded into pro- nouncing the law unconstitutional upon a point so technical as that, especially since this law is in conformity with the legis- lative history of this State and of almost every other State of the Union. Courts do not seize upon the merest pretenses for declaring legislative acts invalid. They hesitate long before [ 26 ] annulling a solemn act of the sovereign will, and do it only when the conflict with the fundamental law is apparent and indisputable. But I do not projjose to consume any further time in relation to the proposition as to the Assessor. DELEGATION OP LEGISLATIVE POWER. I come now to the next proposition, under the same general head, which is, as presented by the counsel on the other side, that the power given to the State Board of Equalization to fix the rate of taxation, for State purposes, so as to raise the amount of revenue required, is an unconstitutional delegation of legislative power. As to the manner in which they have exercised the power, I have already said all that I desire to say. I understand that it has been admitted in the argument — I think it is so admitted in the petition for the rehearing, signed by Felton and Patterson, and certainly it was admitted in the former argument — that it would be j)erfectly constitutional — would be no delegation of legislative power — if the Act simply authorized the fixing of a rate suflicient to raise a given sum. It will be my business to show that nothing more than that power is given, and nothing more has been done than the Legis- lature have been in the uniform habit of authorizing the inferior subdivisions of the State Government to do. They have uni- formly required Boards of Supervisors to levy taxes within particular limits, and to fix rates necessary to produce the amounts desired to be raised. The statute books are full of such provisions, and I do not understand the counsel on the other side to question this power. Now, I admit that the taxation must originate with the legislative power; and I think theprojD- osition has that extent, and no more. That is equally true of every political division of the State, as much so as of the State at large. This is the correct principle, and it is so laid down by Cooley, on pages five hundred and seventeen and five hundred and eighteen of his work on " Constitutional Limitations." That is as far as the proposition ever did go: that the jDower of taxa- tion must always originate with the Legislature. How it shall be carried out, what agencies shall effect the design of the State, I never understood to be questioned by anybody until the argu- [ 27 ] ment of this cause, as properly belonging to the legislative power. At least, I have not been able to find any case that does go to any such extent, except the New York case, of which I have been speaking, and that was decided upon a peculiar con- stitutional provision. Sections thirty-six hundred and ninety- six and thirty-seven hundred and thirteen of our Political Code show the extent of the power that has been given to this State Board of Equalization. Section thirty-six hundred and ninety-six provides, " at the same time the Board must deter- mine and transmit to the Boards of Supervisors of each county, the rate of the State tax to be levied, and collected, which, after allowing for delinquencies in the collection of taxes, must be sufficient to raise the specific amount of revenue directed to be raised by the Legislature, for State purposes." Section thirty-seven hundred and thirteen provides that "the State Board of Equalization must, for State purposes, for the twenty- fourth and twenty-fifth fiscal years, fix such an ad valorem rate of taxation upon each one hundred dollars value of taxa- ble proj^erty of this State, as will raise for each of said years" the sums specified therein, amounting in the whole, together with other amounts required to be raised, to two million three hundred and seventy-two thousand dollars. This is the power which is given to the State Board, and the only part that is questioned is that which sa3'8, after allowing for delinquencies, they shall ascertain the rate of taxation necessary to raise the amount required. Now, it is perfectly apparent, in the first place, that this Board has no discretion as to the amount to be raised. They are to raise what the Legislature directs them to raise and put into the treasury — so many thousands of dollars. It seems to me to be very apparent that the only operation the State Board performs is simply to make an arithmetical calculation, after they have ascertained the amount of property upon which taxes can be assessed, of the percentage necessary to I'aise the given amount. That is all that is delegated to it. They cannot go a step further under the law. They are to raise two million three hundred and seventj^-two thousand dollars for particular purposes. How are they to get at it? The Legislature in- structs them, by the various provisions of this Act, how to do [ 28 ] it; instructs them to examine all the lists of property in the State, to see what can be collected; to equalize the assessments throughout the State, so that the tax may be equal and uni- form, and when they have got to the true value of property they are to make the calculation. Now, suppose the word " de- linquent" had been left out entirely, and the section had just read thus (369G): " At the same time the Board must determine and transmit to the Board of Supervisors of each county the rate of State taxes to be levied and collected, which must be sufficient to raise the specific amount of revenue directed to be raised by the Legislature for State purposes." What would have been the operation of it? How would they proceed to raise the amount demanded? By precisely the same process. No other rate was ever fixed in any other way by anybody, either by the Legislature or anybody else. You must first ascertain the value of the property to be taxed, and you must then see what will be the delinquencies in payment, whether the law saj^s so or not. If that is not the whole operation, I am unable to un- derstand the language of this law. Heretofore the Legislature has been in the habit of receiving the estimates of the Con- troller of State. When they were about to pass a law to levy a tax they took his estimates to see how much was required. Then taking his returns of what was supposed to be the taxable property throughout the State, they fixed a percentage that was certain to raise the revenue required, after deducting the delin- quencies. The whole experience of the government from its foundation shows that the returns invariabl}^ fell short about eighteen or nineteen j^er cent. As a matter of course, allow- ance must be made for that, in order to realize the amount required. That has been the practice heretofore. It was an uncertain j)ractice, because the Legislature was operating with- out sufficient light on the subject. They then passed this law, intending to adopt another system, which does not jaeld any legislative power, but by law authorizes the taxation, and pre- scribes the mode, manner, and form in which the calculation as to the rate shall be made. After passing the law authorizing the taxation, and fixing the amount they desire to raise, the Legislature directs these agents to perform the duty which the Controller had heretofore performed; to ascertain what was [ 29 ] likely to bo lost in the collection, and then, making allowances for that, to determine what percentage will raise the amount the State desires. That is the whole of it. If you can make out any delegation of legislative power in that Act, I am un- able to understand the term. What has been the result? It appears in the record in this case, and it was put in evidence, that up to the time of the trial of this cause, there had been collected two million and seventy-nine thousand dollars. There is about one hundred and seventy thousand dollars tied up in these cases. There is one hundred and seventy thousand dol- lars here of the two million three hundred and seventy-two thousand dollars that they were directed by the Legislature to collect. Now, that is the fact, and that is the whole fact. So it appears that the Board have not levied one dollar more than they had a right to levy, and they have not collected one dollar more than they ought. Mr. Felton — Where do you find your figures? Mr. HoGE — I get them from the Controller's office. I am citing them now to show you that when this Board said "fifty cents on the dollar will raise," as one of the Commissioners testified, "a little more than is required, if it is paid up well, but in all probability it will raise none too much," their calcu- lation as to the i^robable delinquencies was correct. Now, I do not see that the citations of other provisions of the State Constitution in relation to counties, have any application whatever to this question. But, one thing is certain, that either they have no application, or this proposition follows: That the Constitution itself, up.jn its very face, contemplated the delegation of the taxing power — the delegation of a legis- lative power; and this very fact is constantly alluded to by Courts in discussing this question of legislative power. Coun- ties — portions of States — have been uniformly authorized to do these things here contended to be legislative powers which it is unconstitutional for the Legislature to delegate, and the Courts have upheld such acts. It does not make a particle of differ- ence whether the power delegated is for a local or a general purpose. We are talking now about the principle that no dele- gation can be made. I am quite at a loss to see what difference [ 30 ] there is between a local and a general law. No Court has ever put it upon that ground. That would have been a short answer to the whole proposition. I think this question has been set- tled by this Court heretofore — that is, if we are to consider questions as settled by legislative practice and judicial decisions, which have been adhered to ever since we have been a State. I think the case of Hardenbergh v. Kldd, in Tenth California Eeports. page four hundred and two, and Hohert v. The Super- visors of Butte County, in Seventeenth California Eeports, page twenty-three, determine the question. Of course your Honors are familiar with those cases. In the latter case the Court cite the case of The Cincinnati, Wilmington and ZanesviUe Rail- road Company v. Commissioners of Clinton County, in the Twenty- first Ohio Eeports, page eighty-eight, (1 MeCook, p. 88). I shall not stof* to read from that case, or from any case, but if your Honors will examine it, you will find that this precise principle is passed upon in the same manner as in our own Supreme Court. As I have said, the Ohio case is cited by our Su- preme Court and approved — and repeatedly cited and approved. The same question is decided in the Thirty-fourth of Bar- bour, page seventy-six, in the case of The Peop)le v. Haics. I will just read a few lines: " It is no objection," says the Court, by Clerke, P. J., " to this, that the Legislature has not declared the precise amount of the claim; being ignorant of the exact value of the service, the Act specifies a maximum amount bej'ond which the relator shall receive nothing, at least, in this way, for the services already rendered; and it indicates the method by which the actual amount due shall be ascertained. This the Legislature has as much authority to do as to specify the exact sum absolutely, in the first instance; and, in neither case, have the Courts power to review the action of that branch of the Government." That is precisely the doctrine laid down by our own Supreme Court when they say that the mode in which the Legislature shall exercise its legislative power belongs to that body to de- termine, and not to the Courts; that the whole power comes, not from the discretion of the ofiicer — not from the discretion of the agent — but comes directly and solely from the legislative [ 31 ] will, which prescribes what shall be done, and leaves the details to other agencies; that the Legislature have a right to do that; that it is a general rule that where a legislative body has the power to act, it ma}' act in its own manner, its own form, and it is all the time the exercise of legislative power by the legisla- tive body; that it is not necessary for the Legislature to go into details and specify particularly all that shall be done under the legislative authority. It has been uniformly held everywhere, and in these very Now York cases now cited, and which have been cited and commented on by this tribunal over and over again, that it is only where a Legislature delegates the power to make a law that they contravene the supposed legislative right to make laws; that nothing short of that is such a dele- gation of legislative power as the Court can interfere with — as a judicial body can take notice of and control. This whole question is very elaborately discussed, and the true doctrines announced by the Supreme Court of Pennsylvania, in the case of Locke et al., reported in the " Legal Intelligencer " of March 21, 1873, No. 12, p. 9.3. DOUBLE TAXATION. The next proposition that I propose to discuss, and which I believe I have stated as the second general ground of complaint to this legislation, is the question of double taxation. I have already shown that this record presents no such question, as I think. I do not propose to stop at that, but I propose to say a few words on that question; not to follow all the arguments specifically, but to consider them generally. It would take too much time to go over all those arguments, and the task would be more tedious than profitable. The very first suggestion that strikes me, when I come to consider this question, is this: IIow can this Court consider this question of a double tax at all, and undertake to say, when there are two distinct pieces of property recognized by law and admitted here in the argument to be property, that one of them shall pay a tax and the other shall not pay it. The counsel admitted that these credits are property, that they should be taxed, that all property, according to the decisions of this Court, must be taxed; but immediately upon making the admis- [ 32 ] sion they undertake to say that they are not property, that they ought not to be taxed, that they are not distinct pieces of property, and that the}^ have already been taxed in another shape. Now, what is double taxation? I understand it to be a taxation of the same property to the same person twice in the same fiscal year. This is the only double taxation that any Court of justice can inquire into, or that any Court of justice ever has inquired into. Nobody pretends that abstract justice can be done in this respect, and no system of taxa- tion ever has been devised by the wit of man that ever did avoid double taxation in some shape or other. In a case in the Supreme Court of Connecticut, reported in the Thirty-fifth of Connecticut Eeports, page twenty, the Court say it is very fre- quent that taxation is double, but the fact that the law imposes it will never justify the Court in disregarding it. That is be- yond the reach of judicial correction. How are you going to escape double taxation? I might give you a few instances, as the counsel have, in which double taxation is inflicted. There is no relief from it, except to ask the proper bodies to have the correct- ive applied. It can be got at in that way, and in that way only. We allow the Assessor from March to August to make his assessment. Now, take this instance: The Assessor assesses a flock of sheep, valuable sheep, with the wool ou their backs — taxes the full value of the sheep to the owner, and in the very next month this wool is in the hands of a merchant in San Francisco, and another Assessor, when he comes around, finding the wool there, taxes it to the merchant. He finds the hides in the possession of another merchant, and he taxes them to him. "With the flock of sheep the hides and wool have already been taxed. The sheep with the wool on are taxed to the owner, and after the wool is taken ofi:' it is taxed again. And so the Assessor assesses goods in a store in this city to the owner of the store. The Assessor in Siskiyou or El Dorado, two months afterwards, finds the same goods there, and he assesses them again. Here is another instance. Why, there is no such thing as any system without more or less direct or indirect double taxation; and I apprehend it will be a long time before you will find a tribunal which will hold that that renders the assessment [ 33 ] void. You cannot avoid it, and tlie argument of the counsel himself shows it. It is said that we have adopted a system of objective taxation, or in rem taxation — a system by which j^rop- erty, and not individuals, is taxed. Very many ingenious and metaphysical arguments are based upon the proposition as it is carried out in all its ramifications. It is said that wo have elected that system and must follow it exclusively. But one of the counsel on the other side contends that under this law we have mixed that sj'stem with the in personam system, and that therefore the tax levy is unconstitutional. Now, I do not agree with the counsel, that the State has adopted the system of in rem or objective taxation, or that taxation has anything to do with the wealth of the State. There is no system that is based upon the wealth of the State. There never wa.s any system of taxation which was based upon the wealth of the indi- vidual citizen taxed. Upon that theory, acting upon the refine- ments of counsel, we may presently find ourselves in a State with nothing to tax at all. Suppose the whole indebtedness of citizens of the State exceeds the value of all the property in the State, what will you have to tax? Nothing. That is the result of the argument. It maintains that the taxable property of the State is the value of the property', less the indebtedness of the individual taxpayers, which must be deducted. The individual banker, if he happens to owe six millions of dol- lars, while he has but five millions, would escape taxation altogether. The balance of his worldly wealth, my friend Judge Lake contends, is the subject of taxation; he, with all this property, therefore, would escape taxation, because the balance is against him. These refinements carried out would leave the State without property to tax, and we would have to resort to direct taxation on the head, which the American peo- ple so much dislike. I think the true position has been taken by the Supreme Court of South Carolina, and I think the whole confusion on this subject comes from confounding property with the person. In the case of Barney v. The Tax Collector (2 Bailey's South Caro- lina Reports, page 688), where, in considering the right of the [ 34 ] State to tax the dividends of stock in the Bank of the United States, owned by citizens of the State, the argument being, not that the State did not have the power as between itself and its citizens to tax such property, but that it interfered with the constitutional powers of the General Government, and was therefore unconstitutional and void, because in conflict with the Constitution of the United States, Judge Johnson snya: ''In McCuUough v. The State of Maryland, the objects of taxa- tion are said to be confined exclusively to subjects over which the sovereign power of the States extends, and that these are things which exist by the authority of the State, or are intro- duced by its permission; and I am persuaded that the difficulties about this question have originated in confounding the person of the citizen with the property which he owns. It is the citizen, and not the property, which paj^s the tax. The property is referred to only as furnishing a rule b}' which the amount which the citizen ought to pay is ascertained. His j)ersonal liability is measured by the number of slaves and the quantity of land he owns; b}' his receipts of interest on money loaned; by the amount of his professional income, or stock in trade, etc. And where, may I ask, is there any rational dis- tinction between a tax imposed, in respect to these sources of wealth and income, and wealth derived from bank and Govern- ment stock?" In the case of the Cleveland, Painesvllle, and Ashtabula B. R. Co. V. The Commonwealth of Pennsylvania, reported in Vol. 5, No. 18, of the Legal Gazette, p. 137, the question was whether the Constitution of Pennsylvania enjoined the Legislature from imposing a tax ujion the bonds of a railroad company which were held by parties out of the State, the bonds themselves not being in Pennsylvania, but beyond the territorial limits of the State. The Court, in the opinion delivered by Judge Field, assumes the proposition as understood and admitted law, that a State can tax everything, bonds, debts, credits, everything with- in the limits of the State; but that it cannot go outside of the State and tax a bond, although it is payable within the State, and secured by a mortgage in the State. The Court says the mortgage does not figure one way or the other. It is assumed. [ 35 ] as a constitutional axiom, that the Legislature may tax the creditor, if it can catch the creditor within the State. Nobody, so far as I find, has ever questioned the right of the State to tax credits within the territorial reach of the State law. Now, the very same idea contained in the South Carolina case is car- ried out and enforced in The People v. Seymour (16 Cal., p. 332), in which the Court goes into the examination of the tax laws of the State to show that a tax is a debt of the person, and that the State can pursue him and compel him to pay in its own time, its own mode, and its own manner. Is not that the case here and everywhere? One of the counsel sought to show that injunction was the proper remedy in this case, upon the ground that the law made this tax, the moment it is imposed, a judgment against a person, a lien against all of his property, an execution upon everything within the reach of the execution. What becomes of your objective sj^stem — your in rem system— if the tax goes against the person? The property measures the liability of the person. The State does not con- fine itself to selling the thing upon which the tax is assessed; it makes the tax a lien, and a judgment, covering every par- ticle of property a citizen may have, subjecting it to execution. It is a debt which the citizen owes the State — which the State ma}' enforce in its own time and manner. Well, now, if you keep this idea in view, these nice re- fined distinctions disappear. The State aims at the person, and the property in his hands; at ever}' man, without regard to any other man. The property of one man is not to be discharged from taxation because the property of another man is reached and taxed. That is the whole of this theory; the whole argument comes to that, if j'ou carr}^ it out. What is the provision of our law as to lands? The system of taxation in this State has no existence, except in reference to owners. In land, we tax the owner; if we cannot find him we tax the occupant; if we find neither owner nor occupant, we tax it to an unknown owner. When we come to personal property, we tax the owner; if we cannot find him, we tax the party in possession, or we tax the agent, or the party having the control of the property. The property is simply made to measure the liability of the person. Now, this runs through our whole revenue sys- [ 36 ] tern. It aims at every person, at everything that 'can be found in the hands of the person — the money loaned, whether secured by mortgage or not, in the hands of the hohJer of the debt in whom it is property, a value, and not the same value, that is in the hands of the land owner. I will read a few pages from the ease of The Exchange Bank of Columbus V. Hlnes (Third Ohio State Keports, p. 2t!), which states the argument stronger than I can make it, on this ques- tion of double taxation. The doctrine of the counsel Ignores the whole of the operations of commerce, of barter, of busi- ness — the very doctrine upon which the creation of property depends, and upon which all our State Governments have acted ever since they were organized. " It is alleged" (say the Court, in tl'e case cited), " that the taxation of credits results in a double taxation; that a credit is the mere representative, the mere shadow of the property in possession, which it requires in payment" — (which is precisely Mr. Felton's argument, though not so eloquently put) — "and that to tax both the credit, and the property which it is said to represent, is double taxation. This is a fallacy. The value of a credit is not identical with the property which it would require to discharge it; but its value consists in the right of the creditor to require payment, and the obligation and ability of the debtor to pay. A valid credit against a responsible person, therefore, is not a mere shadow, but property possessing intrin- sic value within itself. A. sells his farm to B. at the price of ten thousand dollars, and takes B.'s notes for the amount, with a mortgage on the farm for security. B. will pay a tax on the full value of the farm, without deduction, and A. will be very properly required to pay a tax on the full value of the credits against B., which he may choose to hold for many years, being paid interest thereon." That the counsel lost sight of. " The credits which A. holds are profitable, valuable of themselves, transferable at any time in exchange for other proj)erty, and the means with which they may be ultimately paid may be acquired by B. many years after the notes are given. These credits, therefore, are not mere shadows; are not substantially identical with the property in which they are payable, or with [ 37 ] which they maj^ be ultimately paid; but they are valuable, and possess the inherent elements of property. Again, C. sells to D. a stock of goods of the value' of ten thousand dollars, and takes D.'s notes for the amount. D. will be taxed upon the full value of the goods, and C. upon the full value of the notes. And, again, E. has ten thousand dollars in money, which he delivers over, on general deposit, to F., a banker, and takes a certificate of deposit therefor. E. will be taxed on the credit evidenced by the certificate of deposit, and F. will be taxed on the money which, by the deposit, passed absolutely to his do- minion, and became his projDcrty, to use and control for his own purposes. Here, F. is not the holder of E.'s money, but stands indebted to E. for the amount of the money which passed and hecame F.'s property. It is well settled that the right of prop- erty follows the dominion over it, and that in all cases of a mutuum or deposit, where -the mutuary or depositary has the option to return either the same identical article or the same amount in kind, the right of property passes with the control over it, and the mutuary or depositary is indebted to the lender or depositor for the amount." Citing Chase v. Wdshburn, 1 O. S. Eep., p. 24i. This case contains the full argument upon almost all the questions argued here. It does seem to me that whenever you admit that these accounts are property and must be taxed, you admit away the whole question, and then the duty of taxation follows. I am utterly unable to see the force of the argument resorted to here to show that the State does not seek the owner, and does not tax every man's property in his hands, irrespective of every other man's. It seems to me that that is exactly what the State does do; it does tax every man's property, irrespec- tive of every other man's. It is not true, by any manner of means, that the State taxes objects, in absolute disregard of owners. It does the very reverse. How, then, does it ap- pear that there is any double taxation? It appears by the assertion of the counsel, but it does not appear in any other way. It is perfectly manifest that here are separate and dis- tinct items of property; but, says the counsel, "the inexorable Jlli902 [ S8 ] law of trade forces the borrower to pay all the taxes." Now, I do not quarrel with that law of trade, but I do object that it shall be visited upon the State, and I do deny that this Court has the power to relieve against it, or to shift the responsibility in any way. ILLUSTRATIONS — CONCLUSION. Then the counsel, in order to show the exceeding gratifica- tion felt all over the State when it was known that the Supreme Court had determined that there could be no taxation upon credits, money loaned, and mortgages, told us a pathetic story of how he happened in a Clay street bank when a poor woman — • he did not say that she was a widow, but I suppose she was — Mr. Felton [interrupting] — I will give j'ou her address, if you want it. Mr. Hoge [continuing] — I do not want it. — Came there to receive back the tax which this inexorable law had exacted from her. He did not tell us whether she got that tax back. I do not believe she did. If I have any knowledge of the dis- tinguished financier who presides over that institution, I do not think he paid that money back. I do not think he will ever let his grasp go until there is a final decision from which there is no escape. The sympathy was beautiful. It is singular, how- ever, that it didn't operate upon the authorities of that institu- tion when they required of the poor woman who wanted to borrow seven hundred and fifty dollars to protect her home- stead, this iron-clad mortgage which compelled her to pay not only her own tax, but the taxes of the bank also; which com- pelled her, in order to save harmless this sympathetic institu- tion against all possibility of loss, even to bind herself, if the bank should determine to close down upon her and sell her homestead, to pay the counsel of the bank for obtaining the judgment which should drive her and her children out from under the protection of her own roof. It seems to me that there is where the sympathy ought to have come in. It re- minded me of a story told by a friend who went to visit a very rich man, who counted his funds by the millions. While he was at the rich man's place of business a widow woman came [ 39 ] in, and said: "Mr. , I want to see you on a little matter of business. M}'^ husband often told he was very well acquainted with you, and that you were a good friend to him; so I thought I would come to you in my distress, and see if I could get some relief." "Oh, yes, I knew j'our husband; he was one of my best friends. What can I do for you?" " I am in a little trouble; there is a mortgage on my homestead across the Bay, and a creditor is going to foreclose me out. I thought I'would come here, as you were a good friend to my husband, and see if you woukl not lend me the money and take a mortgage on my property, in order to save my homestead until I can get time to turn around and find some way out of my difficulty." " Oh," said the rich man, the sympathy beginning to operate the other way, "I have not got an}' money at all; I have not got a cent; I am overdrawn at the bank; I cannot do anything;" and turn- ing to my friend, he said: "Cannot you raise this money?" "Yes," replied my informant; " it won't take me an hour to do it." "Ah! that's right," said the rich man ; "here is a chance to help this poor woman, and do a great deal of good." "Now," said my friend, "you just take my note and indorse it, and I will step out, get the money, and be back in less than an hour." " Oh," says the man of money, his countenance falling again, "I cannot do that; I am bound not to indorse." And so the woman went out, with an abundance of sympathy, but without help. The millionaire turned to his clerk and said: "John, give me a statement of ray accounts." John looked over the books a moment, and replied: "Sir, 3'our balance to-day is thirty-five thousand dollars." What was the character of that million- aire's sympathy? May it please the Court, I am very sorry that I have not got an orphan here to offset that poor woman. It seems to me, that sjnnpathy would have better manifested itself in declining to enforce that inexorable law of trade which compelled the bank to put all these charges upon these depositors and to make them pay the taxes of the bank. I earnestly hope and trust that there will be some provision of law adopted soon which Avill relieve us, and the borrowers of the country, from some portion of this inexorable law of trade. I do not propose to go into any authorities upon these ques- [ 40 ] tions which I have hecu discussing to any extent at all. It has not only, as I conceive, been determined and definitel}^ settled by the legislative history and practice of the State, but it has been established by the judicial decisions of this State, from the very first time the question was ever presented. I have here a list of nine distinct, deliberate opinions of the Supreme Court of this State establishing the constitutionality of such taxation; and, to cap all, when the State, by legislative action, undertook to relieve this species of property, this Court determined its solemn Act to be unconstitutional and void. I have found no case anj^where that does not recognize the same doctrine; that does not apply the same ijrinciples. So far as it depends upon legislative history and practice — upon legislative authoi'ity, upon adjudications of Courts — there has never been but one way, until the decision of these cases. The question is now presented for a final determination. This Court is asked to interfere, by injunction, to stop the op- erations of the officers of the State; to cripple by literal, verbal construction the great powers of a State Governmoit; to inter- fere with its acts; to so hamper it as to render it unable to carry out the constitutional provisions which require it, in the exercise of its governmental powers, to protect all, to equally tax all. I would not give a straw for the other powers of the State Government, upon the subject of taxation, if the doc- trines which are contended for here are to be established by a final adjudication. How are we to know that this will be a final decision, if the Court overturns its former decisions? We will thereby be given to understand that no series of adjudica- tions, no number of decisions, shall have the weight of a feather even upon the tribunal that pronounces theui, nor upon the people that submit to them. It will be to announce that the questions once decided shall be considered always open, never closed, to those who come after you. If you now make a deci- sion, reversing the former cases, yoii may consider it final, but, at the same time, your example will be an inducement to your successors to disregard it. The main thing is to be right. But how and when, under such a practice, you can ever get to be right, no mortal man can say. You will certainly be no nearer pronouncing excathedra and finally what is right, if you shall [ 41 ] now overturn all the decisions and practice, legislative and ju- dicial, of the State, and take a new departure; make a new deci- sion which shall cripple the constitutional power of the Gov- ernment. Your successors, the people, everybody, will be at libert}' at all times, upon all occasions^and in all cases, to treat your decisions as brutem fulmen — having no force, no authority, no conclusion. ILLEGAL TAX TO BE REFUNDED. [The following are extracts from the oral argument of Mr. HoGE, at the first hearing of this cause, at Sacramento, April fourteenth, eighteen hundred and seventy-three, upon points liot discussed in the second argument.] J. B. Felton, Esq., having concluded the argument on behalf of respondents, Mr. Hoge said: May it please the Court: It is now my duty, on the part of the appellant, to close this argument. Undoubtedly the questions presented here are important. But, in my judgment, they are important, not so much because of any very great ditficulty in their solution, as of the character of the questions, involving, as they do, the constitutional powers of the Legisla- ture. Such questions always are important. In these cases they are still more important, for the reason, that they involve the validity of the entire tax levy for the twenty-fourth fiscal year. If the positions assumed by counsel on the other side are to be sustained by this Court, I do not see but that the conse- quence will be to stop the operations of the Government for one or two years, or else to require the calling of a si^ecial session of the Legislature for the purpose of remedying the difficulty. To be sure, it is very kindly intimated in the complaints in these cases — at any rate, in the San Francisco cases — that certain citizens of the State, who decline from some cause or other to avail themselves of any constitutional quibbles, have paid their taxes according to the provisions of the law, and placed a suf- [ 42 ] ficient fund — or a large fund — in the State Treasury; amount- ing, according to Mr. Patterson's figures — which, I presume, are correct — to something over two millions of dollars. I sup- pose it is intended to argue, from that fact, that the State Gov- ernment will have enough money to get along anyhow; and, therefore, these contesting parties should be let oif without paying anything; and they should be permitted to avail them- selves of their constitutional objections and escape taxation altogether. If this were so, I do not see what becomes of those questions of equality and uniformity which the Constitution of the State seems to lay so much stress upon — the great object which it aims to secure — and about M^hich gentlemen on the other side have talked so much. I do not see what becomes of that principle of the Constitution. If the learned gentlemen are successful in their constitutional objections, and succeed in having the tax levy declared invalid, what would the State be required to do with reference to those citizens who have paid already? They will be in the condition of citizens who have paid an illegal and unconstitutional tax, and with what justice can the State retain their money? Can the State stand by tech- nical objections? Will it say to the taxpayers, "You have paid your tax into the treasurj^, and now that we have got the money we will give you no relief?" That would be unworthy of the Government. Justice and fairness would demand that the money be returned to the citizens who paid it, as so much money illegally and unconstitutionally exacted from them. On this subject the learned Judges of the Supreme Court of Ohio, when deciding an important case of this character, which is reported in the Third Ohio Eeports, seemed to be strongly impressed. They were discussing the policy and pro- priety of a Court of equity, by injunction, stopping the opera- tions of a Govei'nment and determining an entire tax levy of the State to be void. I will read a few sentences from pages thirty-four and thirty-five of that volume. Chief Justice Bartly says: "The question arises here, whether the unconstitutionality of this tenth section of the law invalidates the assessment of taxes, which is the subject matter of complaint in this case. If [ 43 ] this assessment upon the plaintiff's property be void upon this ground, the whole assessment throughout the State for the year eighteen hundred and fifty-two must be void on the same ground, and if those who have resisted its paj^ment be entitled to be relieved from the assessment, those who have already paid, should, in justice, have the amount reimbursed to them by the State; and no revenue for that year could justly and legally have been paid into the public treasury." So the Court will see it is no new idea which I suggest as one of the consequences which is to follow this equitable attack upon the power of taxation — the power of raising revenue for a State government. That is not all. DUTY OF CITIZENS TO PAY TAXES. Several of the learned gentlemen, in the course of their argu- ments, contended that whether the State has levied too much or too little, the same fatal result follows. And long argu- ments, and figures and calculations are indulged in for the pur- pose of showing that the tax levy is either too much or too little, and to maintain that the entire tax levy is void. Now, then, if this tax levy, which the State has jilaced upon the tax- payers, is too little, I am unable to see how these parties are injured. I am unable to see how, when taxes are levied regu- larly, they are rendered irregular and void because they do not go far enough, and do not fix a burden upon the people which might have been legally imposed upon them. 1 do not under- stand that a party would be entitled to come into a Court and get relief, upon the ground that he had been taxed too little. That would be a new argument, never yet advanced in a Court of equity. But, ma}" it please your Honors, that is not the question. These banks and these parties, who have resorted to the strong arm of the law for the purpose of relieving themselves of the tax levy, do not desire to pay any taxes. They have paid nothing. They have not even paid their real estate tax, the legality of which nobody can question, nor have they offered to pay any portion of the tax, which is distinct from that which they contend to be illegal. I think they fall in another cate- [ 44 ] gory. I think they come within the class of people described hy the Suj^renie Court of Wisconsin, in a case of this character. I will read a little from the opinion in this case, for the purpose of expressing what 1 think in better terms than I can m3'self. I refer to the case of Warden v. The Board of Supervisors of Fond du Lac County, which is reported in the 14th Wisconsin Iiej)ortSj at page 618. The Court, by Chief Justice Dixon, say: "It appears on the face of the complaint, as well as by the proofs adduced, that the sum demanded for taxes is not only justly and equitably due upon the land, but that it is in point of fact less tlian it would have been if the strict legal course con- tended for by counsel had been pursued. In addition to this, the plaintiffs were not called upon to pay it until a year after it had been in the public treasuiy. The i:)ayment of taxes equitably and fairly assessed is a duty which every man is under the strongest legal obligation to perform to the Government which affords him jDrotection in his person and property. Gov- ernments cannot exist without their revenues, and taxes are levied and contributions enforced upon the principle that the}' are but just returns for the protection and advantages derived from them. In this sense a proper tax — one which is just and correct in ])riuciple — is a debt due to the Government which the owner of property has no more right in equity and conscience to withhold, than the most sacred debt of a private nature. It is, indeed, when seen in the light of reason and justice, far more sacred and obligatory, inasmuch as the considerations whence it proceeds are the highest and most inestimable rights and privileges enjoyed by the citizen. T'o withhold it, then, is a public wrong which affects the whole community, and which cannot be justified or excused by any rule of equity or sound morality. This may be contray to popular notions, but it is the just and enlightened view of a Court of equity, which never moves except to prevent fraud and injustice, and where the relief asked conforms to the principles of rectitude and honest3\ It is very well known that there are many persons whose moral perceptions are so obscure and confused, and whose sel- fishness is so great, that they seem to regard almost any means by which the revenues of the State may be defrauded, or [ 45 ] moneys in the public treasury got out, as upright and honor- able. One might suppose from their conduct that they con- sidered such practices the highest evidence of public virtue and patriotism. Unfortunately for such projects, Courts of equity take a different view, and that branch at least of the Govern- ment against whose success and prosperity they are aimed will, if applied to, promptly refuse its aid. The collection of a tax under the statute is a legal proceeding to enforce the payment of a debt due the public, and, like proceedings of law upon a private claim, equity will only interfere to prevent injustice by the unfair use of the process of the law. The primary and eon- trolling principle in such cases is that the proceedings to be stated are inequitable and unjust, and that it will be against con- science to allow them to go on. (^Stokes v. Kuarr, 11 Wisconsin, p. 389; Ablemanv.Roth, 12 Wisconsin, p. 91.) It will not be enough to show that they are irregular or even void. Courts of equity do not sit to reverse or correct errors and mistakes of law. To be entitled to their assistance, the party applying must show that he is in danger of unjustly losing a substantial right, and that he is in no fault." May it please your Honors, when money is to be got out of the treasury we do not hear much about constitutions and laws, but when the Government for its purposes seeks to raise by taxation from its people that which will support it and carry on its operations, enabling it to protect its citizens, then these worthy fellows who dislike to \)ay taxes are immediately seized with constitutional scruples. It becomes their constitutional duty then to resist the collection of the taxes upon any quibble which the proverbial ingenuity of the American people are wont to exercise to avoid the payment of money. These remarks are exceedingly applicable, in my judgment, to the grounds assumed in the course of these various argu- ments. I do not projjose to discuss all the questions which have been presented here. I shall not undertake to read the author- ities upon, or discuss the question whether a Court of equity will interfere in a case where the legislative Act complained of is void; or the question as to the extent and mode of relief against illegal taxation; whether a Court of equity will consent [ 'IG ] to interfere when a part of tbe tax is properly levied, and such portion has not been paid; or, whether a Court of equity can go behind the action of the Board of Equalization and inquire into the motives which actuated the members — a Board established by law and vested with peculiar powers. These, and various other questions which arise, I shall not discuss; at least at any length. I ma}^, incidentally, notice some of them. All these points are noted in the briefs, and the authorities pertaining to them are there cited. I shall confine myself, mainly, to the constitutional objections which have been discussed by counsel. [Mr. IIoQE proceeded to argue that the revenue portions of the Code were intended by the Legislature to be general in their application, and thus to supersede the Consolidation Act of San Francisco. Upon the second argument the Court de- clined to hear further argument on the subject, being satisfied, with their opinion on that point as already given, sustaining Mr. Hoge's view.] THE ACT AUTHORIZING STATE CAPITOL BONDS. 1 propose to take up, next, the point presented by counsel on the other side: that this tax levy is void because it includes a tax under an unconstitutional Act. It is argued that the Act of eighteen hundred and seventy-two, authorizing the issue of two hundred and fifty thousand dollars in bonds for the State Capi- tol is unconstitutional, for the reason that the State debt at the time it was passed exceeded three hundred thousand dollars; and this Act was not submitted to a vote of the people, as re- quired by Article VIII of the State Constitution; and, also, for the reason that it makes, or attempts to make, an appropriation for a longer term than two years. My first answer to this ob- jection is, that no such question can arise in this case. There is nothing in the record about it; nothing to show that the debt exceeds three hundred thousand dollars, nor that the Act has not been submitted to the people. But whether this be so or not, I do not think the question is an open one in this Court. I think it was disposed of, finally and effectually, in the case of The People v. Pacheco, 27 Cal., p. 203. There, the Court had under consideration an Act of the [ 47 ] Legislature which undertook to appropriate for the pajnnent of the interest on the bonds authorized to be issued to the Central Pacific Railroad Company, a large amount of money— a hun- dred and five thousand dollars annually — for a long term of years. After elaborate argument, the Court decided that the Act did not create a debt within the meaning of the Constitu- tion; that it provided a fund for its own liquidation, and, there- fore, was not in conflict with Article VIII of the Constitution. I consider that case conclusive of this point, for this Act pro- vides for a fund to liquidate the bonds authorized to be issued by it, as much so as the Act then before the Court. But Mr. Patterson contends that the Act must be held void, because it attempts to make an appropriation for a period longer than two 3'ears, thereby coming within the constitu- tional restriction. I answer, that this does not make an appro- priation at all, but merely levies a tax, and so far as it is before this Court at all upon the record here, it levies a tax for two years only — for the twenty-fourth and twenty-fifth fiscal years — for the purpose of paj'ing the interest and accumula- ting a fund with which to pay the amount of the bonds. There is no appropriation in it like that in the Act before the Court in the 27th Cal. It is a simple direction to levy a tax of a certain amount, to raise a fund to pay the interest upon these Capitol bonds, and to liquidate the principal. That is the whole of the Act. So far as it is before this Court, it is a direction to levy a tax for two j-ears, and for two years only, under the Political Code. What the Legislature may think proper to do with the fund after it is raised and put into the treasuiy, is something the judiciary has nothing to do with. The Legisla- ture has the entire control of that nlatter. But ther'e is still another answer to this argument. This Act was only passed in eighteen hundred and seventy-two, and a levy under it is good for two years, anyhow. The appropria- tion is good for that long a time in any event, even if the Act does attempt to make an appropriation for more than two years. The same point came up in Illinois, and is reported in the 43d Illinois Eeports, page 456. The Court there held, that where a township was authorized to levy a tax of three per cent, and levied a tax of five per cent, the levy was not void, [ 48 ] but was good for the tlireo per cent. I do not wish, therefore, to consume further time on that point. CONSTITUTIONALITY OF THE STAJ^E BOARD OP EQUALIZATION. The counsel on the other side rely chiefly, it seems, upon the point, that the Legislature could not authorize the appointment of a State Board of Equalization and clothe its members with the powers which this Board has exercised. Now, this Board was originally established by the Act of April fourth, eighteen hun- dred and seventy. I do not know that this Act has ever been repealed; I think its provisions have been substantially incorpo- rated in the Political Code, and so continue the law. The seventh section of the original Act (Stats. 1869-70, page 714) provides what the duties of the Board shall be in reference to the mode and manner in which the Assessors and Collectors perform their duty. Sections eight, nine, ten, eleven, twelve, and thirteen, prescribe other duties of the Board. [Eeads the sections rei'cri-ed to.] These provisions show that it was the purpose and design of the Legislature, in establishing the State Board of Equalization, to obey the injunctions of the Con- stitution, to secure equality and uniformity in the taxation of jsroperty throughout the State. Now, I suppose it cannot be disputed, that the power of taxation is unlimited in the Legis- lature as to the objects and purposes and amounts. The wisdom or justice of the law imposing a tax is not a. subject for judi- cial inquiry; nor is the j^urpose for which the Legislature in- tends to-apply the funds raised by taxation a subject of inquiry. There is no power that can review the action of the Legisla- ture upon questions of this character. It is too late to ques- tion tlie power of the Legislature upon this subject in this State, for it has been conclusively determined in 'Blanding v. Burr\ 13 Cal., p. 343, and in half a dozen other cases since. The power of the Legislature, in regard to taxation, is limited only by the restriction, that it shall be equal and uniform; and there is no tribunal which can review, reverse, or control it. How that equality and uniformity shall be produced or secured the Constitution is silent. The means to be used for that purpose, the mode and manner of securing it, is left to the Legislature. The Constitution simply determines or lays dov/n the general [ 49 ] priDciple, that all propertj' shall be taxed in this State, that it shall be taxed equally and uniformly, in the manner prescribed by the Legislature, and that Assessors and Collectors of taxes shall be elected by the people of the distinct in which the taxes are collected. The idea which the learned counsel advances, that the use of the term "Assessor" in the Constitution car- ries with it a whole volume of constitutional law and constitu- tional limitation, that ex vi termini the sovereign power of the Legislature over the subject of taxation was emasculated, is something new to me. Mr. Felton — My proposition was that the word Assessor, as used in the Constitution, means the person who fixes the value of the property for the purposes of taxation — fixes it finally. Mr. HoGE — The language used, as I understood it, was that the word Assessor ex vi termini restricted the valuation of the propert}^ to the man elected to assess the property in the local district where the property was situated. I say the practice of our State government is opposed to the idea, and that the other provisions of the Constitution are opposed to it. I contend that the harmony of the Constitution and its object and design in reference to taxation are interrupted and defeated by such an interpretation of the Constitution. It would at one stroke de- prive the Legislature of all possible power of securing effect- ually the great idea that the Constitution itself inculcates — equality and uniformity — and we would be left forever to the mercy of these hundreds of Assessors in the various districts, each at liberty to value property as his own caprice or interest might dictate, above and bej^ond the reach of legislative action. The counsel appeals to the debates of the Convention which framed our Constitution in order to maintain this idea. I did not suppose we would hear those debates again appealed to after the opinion delivered by his Honor, Justice Ehodes, in the case of The People v. McCreery (34 Cal., p. 434); I thought he had put the ghost of that Convention to rest. If he did not, I will refer him to the case in Third Ohio State Eeports, which I have already cited on that same question. It is the case of The [ 50 ] Exchange Bank of Columbus v. Hines. Judge Thurman, after- wards Chief Justice, says: " The debates of a body that forms a Constitution or law, are proverbially unsafe guides for its interpretation. Those who speak are generally few compared with those who vote, and among the debaters themselves, there is seldom seen a uni- formity of construction. The advocates of a provision are often silent as to some of its necessary results in order to avoid oppo- sition, and its enemies sometimes misconstrue its meaning, or exaggerate its consequences, in order to defeat it. Debates are not always listened to, and a speaker is liable to be misunder- stood or misreported. A brief speech on the floor sometimes acquires a wonderful length in print; and reasons that the body never heard, may first see the light through the agency of the press. In the meantime, the law has been adojjted, each mem- ber voting upon it according to the light of his own judgment." It is the first time I have heard it argued that this Constitu- tion was got uj), and these provisions inserted, for the benefit of the Mexican poiDulation who owned land in this State. I had supposed that the Constitutional Convention, assembled for the purpose of laying broad and deep the foundations of Anglo- Saxon Government upon this coast — to lay the foundations of a free State for the government and protection of all — a complete chart of Eepublican Government. No petty interest of a sup- posed Mexican majority, such as that the counsel has adverted to, had anything to do with restricting the great taxing power of the new State about to be formed. The Constitution must be construed by its own language. No such considerations will lend us any aid in ascertaining the meaning of the constitu- tional provision we are discussing. The language of the instru- ment shows that the great object in view was to secure equality and uniformity in taxation — to protect each and every citizen from bearing more than his just proportion of the burden of taxation. That is the great central dominating idea. Valua- tion is merel}'' one of the means of obtaining the data upon which it could be secured. The Legislature was to have un- limited power to tax, provided only the tax should be equal and uniform. That is the idea of the Constitution — that is the [ 51 ] only liaiitation. The ease of The People v. Salomon, 46 111., p. 333, is directly iu point, as in that case a law of that State, sim- ilar to ours establishing a State Board of Equalization, was attacked upon the same grounds that are urged here. [Mr. HoGE here read the opinion in the case cited in full. It is printed for the most part in Mr. Haymond's argument in this cause.] I could not have better described the conditio^ of things in California if I should attempt it. The same gross irregularities and inequalities in assessments were found to exist in this State as they are said by the Court to have existed in Illinois. And here, as there, it was for the purpose of remedying that great evil that the State Board of Equalization was established. I could not make a better argument in this cause than is made in the opinion I have read if I should talk a month, and I rely with great confidence upon this case. Mr. Felton — I do not dispute the right of the Legislature of Illinois, under the Constitution of that State, to create a State Board of Equalization — but our Constitution is not the same. Mr. HoGE — The Court will see by comparing the Constitu- tions and the laws of the two States, and by examining the facts of the case I have referred to, that there is no substantial dif- ference so far as the principles involved are concerned. In Illinois the omnipotent power of the Legislature is limited by the same requirements as to uniformity and equality in taxation as in this State. It must be remembered that a State Constitu- tion is not to be interpreted like the Constitution of the L'''nited States. It is not a grant of power — it is a limitation of power. A State Legislature is as omnipotent as the Parliament of Eng- land unless you can put your finger upon the restricting clause. If you establish the doctrine contended for upon the other side — that the valuation ^f the Assessor must be accepted as final— you will place that officer beyond the control of any power. The Legislature can have no control over him, and the Courts could not change his valuations. As I understand him, Mr. Felton contends that the law makes the State Board of Equali- zation omnipotent — gives it unlimited power — that they have [ 52 ] j)Ower to reduce the assessments — the valuations — so as, in the end, to throw all the burden of taxation upon a given piece of property. Mr. Felton — My point Avas, that they have the power to add to or subtract from the different species in each county; that in San Francisco, for instance, they could limit the valuation to one dollar. Mr, HoGE — 'That could not bo. Would that be equalizing? Mr. Felton — It would be an abuse of the power, of course. Mr. HoGE — The Legislature did not give the power you sjieak of at all. They did not attempt to do it. The Board simply have the j^ower to examine the valuations of property from each county in the State and get such information as they can, with a view to ascertaining whether the valuations are too high in one county or too low in another. They cannot do anything else, and there is no pretense that they have attempted to do anything else. It is complained that the Board have increased the valuations in some counties and reduced them in others, thereby increasing the burden of these parties. It is true that reductions Avere made in Marin, Alameda, and Monterey Coun- ties. But such reductions were made in justice to those counties, upon evidence showing the necessity for the reduction in order to carry out the command of the Constitution, to secure equal- ity and uniformity. Besides, for the same purjjose, the valua- tions of other counties were increased. The evidence shows the necessity for these changes — for this equalization — and it is a strong illustration of the wisdom of the Legislature, by which this Board was established. How does it ajjpear that these parties can complain of an increased tax upon them? The increase which the Board made in some counties balanced the reductions in others, thus leaving San Francisco unaf- fected by the changes. But if there had been an increase upon the projDerty valuations in San Francisco, based upon evidence showing that in justice to all the counties there should be such increase, how can a taxpaj-er of San Francisco be heard to com- plain in a Court of equity? The Constitution contemplates that very thing, for without increasing the burden of taxation upon [ 53 ] somebody there can be no such thing as an equalization of tax- ation so as to secure equality and uniformity. Mr. Felton has admitted that the Legislature might establish a Board of As- sessors — call them a Board of Assessors — and give them the power to equalize the valuations of property. Mr. Felton. — Provided the members of the Board are elected by the people of the district where the property to be equalized is situated. Mr. Hoge. — How are you going to get at the difficulty in that way? Our County Boards of Equalization have not been elected by all the electors whose property they have acted upon; they are the Supervisors, and are elected in Supervisor districts. In some counties there are several — four, five, and even twelve districts (as in San Francisco) — and they act upon the whole property of the countj^; so that in every case in San Francisco' there are eleven men acting upon property which is not in the district by which they were elected. And yet the constitutionalit}^ of the County Boards is unquestioned. Where ^is the distinction? It is objected that the State Board of Equalization interferes with the county taxes. Now that is not the case. The Board have nothing to do with local taxes; they are confined exclu- sively to the equalization of property for State purposes and to computing the rate of tax for State purposes. This is evident from the language of the statute itself. delegation op legislative power. It Is also objected that this law is unconstitutional, because it attempts to delegate legislative power to the Board. If the Legislature had said to the Board, " You may fix a rate, after the amount of property is reported to you by the Assessors, sufficient to raise a certain sum, which we have specified," that would have been all right, the counsel say; that would have been perfectly constitutional. Now I contend that that is pre- cisely what the Legislature has done and nothing more. Mr, Beatty. — Has the Legislature given the Board no dis- cretion as to the amount to be raised? [ 54 ] Mr. Hoge. — They have done nothing more than has been done by every Legishiture since the foundation of the State government. It has been the uniform practice to allow subor- dinate bodies — Boards of Supervisors, City Trustees, School Directors, and directors of road districts — to fix such rates of taxation as they might deem proper. That has never been held to be an unconstitutional delegation of legislative power. The truth of the matter is, that taxation must originate with the Legislature, because the power of taxation is a sovereign power. All taxation must be authorized by legislative enact- ment. But it does not follow that the Legislature cannot authorize a subordinate body to exercise this power under proper restrictions. As a general principle of government, it is true that the Legislature, being the agent of the people, can- not delegate its power; but, like all general truths, it is not without excej)tions and qualifications. It has never been abso- lutely true, but the contrary is the truth. The Legislature — not only the Legislature of this State, but, so far as I know, the Legislatures of all the States — has constantly been in the habit of delegating certain of its powers to municipal corpora- tions; to County Boards of Supervisors; to cit}'^ governments; to the authorities of school and road districts, and even to pri- vate corjiorations. Private corporations, organized for private purposes, but held by the Legislatui-e to be a public benefit, have long been clothed with the great sovereign power of emi- nent domain — rthe only other power besides the power of taxa- tion by which private property can be taken without the consent of the owner. Legislation delegating such important legislative functions, has uniformly been upheld by the Courts. But, in this case, there is no delegation of any legislative power. The Board is not authorized to make any law. It has not the right of eminent domain. It does not levy a tax. That was done by the Legislature, when it said how much must be raised, and sj^ecified the purposes for which it was to be raised. The Board simply has power to take the sum total of the valua- tion of all the property in the State and divide that sum by the amount which the Legislature demands to be raised. It is a mathematical calculation and that is all. It is a calculation which the Legislature could not make, because, when the Leg- [ 55 ] islature was in session, the assessments had not been made; it was not known how much property there would be to be taxed. It would not do to take the old assessment, for that would not be just to the taxpayers; so the Legislature said, ''We will leave this calculation to the State Board of Equalization." Mr. Beatty. — But the law authorizes the Board to allow for delinquencies — to guess what the delinquencies will be, and levy a tax to cover that. Mr. Hoge. — The Legislature estimated the exact amount that would be needed for the State Government, and directed the Board to raise that amount. It was known, by the experi- ence of all previous levies, that there would be a delinquency, and they authorized the Board to fix the tax high enough to raise the amount needed, over and above the delinquencies. Mr. Beatty. — How was the amount of delinquencies to be ascertained — was not that a delegation of legislative power? Mr. Hoge. — If you will let me alone I will get at your delin- quencies presently. I am coming to them. One thing at a time, gentlemen; keep cool! The Legislature required a cer- tain net sum of revenue, and they ordered the Board to take the valuation of the property of the State, and estimate the rate of tax necessary to raise that sum. Now, the law makes certain allowances for mileage of County Treasurers, and other expenses, which are known as the costs of collection. These costs can be easily estimated. The amounts of delinquencies of previous years form a basis upon which it is easy to approx- imate the probable delinquency for the current year. Of course, in order to put a certain net sum into the State Treas- ury, it was absolutely necessary to consider these costs of col- lection, and these delinquencies, and this the Board did. It was a simple matter of figuring — the determination of a ques- tion of fact, from given figures. There was not an element of legislative or law-making power in such action. Can this Court see in it any such power? Is it anything more than a calculation? What is a delegation of the taxing power? Has not the Legislature the right to authorize an ofiicer, acting under oath, to perform such an act — an act which the Legisla- [ 56 ] ture cannot perform, for want of the data, so well as the officer can? Here we have a hiw authorizing this taxation. Every- thing is done by the Legislature, except the mere fixing of the rate. The amount required is designated in plain language; the Funds are named, and the amount for each Fund specified. All that is left to the Board is to say how many cents on the one hundred dollars will be necessary to put the required sum into the treasury. For the soul of me, I cannot see where there is any delegation of legislative power about it. [Me. Hoge proceeded to argue that the Board had not attempted to raise a greater amount of revenue than the law allowed, citing the provisions of law which authorize the rais- ing of money for the twenty-fourth and twenty-fifth fiscal years. He then took up the question of double taxation and discussed that at some length, relying upon the former decis- ions of the Court that solvent debts are taxable. His argu- ments on these points are omitted, for the reason that they are amplified in his second argument, and in the argument of Mr. Haymond, as published.] 22 8 8 ONIVERSITY OF CALIFORNLi AT LOS AK^.ELES :''■ '■''■■;' '^^''l.'".':rli'il'i'''i-'': ;-,V;S-':'-'''i'l"^(' ,ji- i-,;. /■,( H'l ' UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 562 373 _1< :'' fti>*^ y