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NOTE: You may notice textual errors throughout this document, many of which have been left intact from the original text. Should you want to investigate the integrity of the original report, please refer to the original two printed volumes containing the official report of the proceedings and debates.

Journal of the forty-fourth day's session was read and approved.

The following petitions were presented asking that the question of woman's suffrage be submitted as a separate article to a vote of the people:

File No. 319, signed by John H. Hougaard and 250 others, from Manti, by C. P. Larsen, of Sanpete, by request.

File No. 320, signed by D. Hirschi and 50 others, from Rockville, by Snow, of Washington.

File No. 321, signed by W. T. Kyte and 65 others, from Bingham, by Squires, of Salt Lake.

File No. 322, signed by J. H. Ball and 70 others, from Coalville, by Kearns, of Summit.

File No. 323, signed by R. A. Deal and 370 others, from Springville, by Boyer, of Utah.

File No. 324, signed by J. L. Holgreen and 50 others, from Richmond, by Kerr, of Cache.

File No. 325, signed by Robert C. Knell and 11 others, from Pinto, by Ivins, of Washington.

File No. 326, signed by Francis Prince and 53 others, from New Harmony, by Ivins, of Washington.

Ordered filed.

The following petitions were presented asking that an equal suffrage clause be placed in the Constitution:

File No. 327, signed by Geo. R. Hill and 250 others, from Springville, by Boyer, of Utah.

File No. 328, signed by A. D. Bower and 66 others, from Summit, by Chidester, of Garfield.

Ordered filed.

Mr. SQUIRES. I received a communication with that petition (File No. 321) which I would like to read, if I may.

(Read as follows):

Bingham Canyon, Utah, April 15, 1895.

Col. G. P. Squires, Salt Lake City:

Dear Sir: Enclosed some more names. Hope you will be able to convince those fellows that the insertion of that clause will damn either or both parties.

(Signed)

B. B. QUINN.

Mr. SQUIRES. I offer it, sir, as a part of that petition.

Mr. EVANS (Weber). Mr. President, I move that that petition be returned to Mr. Squires as being an insult to this Convention.

The motion was agreed to.

The committee on mines and mining reported as follows:

MR. PRESIDENT:

Your committee on mines and mining herewith respectfully present a proposed article for insertion in the Constitution.

KEARNS, Chairman.

The PRESIDENT. Gentlemen, are there any objections?

Mr. EVANS (Utah). I offer that as a motion, to reconsider that matter. The motion was agreed to.

Mr. EVANS (Utah). Mr. President, I now move you that the report of the committee be received, placed on file, and that the recommendations be not adopted.

Mr. CANNON. Mr. President, I notice that the chairman of the committee is absent, and I think it would be better to postpone it until he is present. For {1085 - TAXATION AND REVENUE} that reason I move to lay this motion on the table.

The motion of Mr. Cannon was agreed to.

The Convention then resolved itself into committee of the whole with Mr. Evans of Utah in the chair, and proceeded to the consideration of the article on revenue and taxation.

Section 5 was read.

Mr. CHIDESTER. Mr. Chairman, I move to strike out section 5.

Mr. IVINS. Mr. Chairman, had a motion to strike out section 5 not been made by some other member of the committee I should have made that motion myself, believing that this section is a very dangerous and improper one to be incorporated in this Constitution, and I desire to ask the indulgence of the committee for a few moments while I shall discuss it, because it seems to me that no question has yet come before this committee or the Convention at large which is fraught, or will be with results of more importance, either for good or for evil, as will be the incorporation of a section similar to this in the Constitution. It seems to be a very innocent provision superficially, but I am pursuaded [*note*], gentlemen, that there is underlying the principle that is involved in this proposition one that is just as important to the people of this Territory and the coming State, one which, if it shall be realized, will result in just as great disaster to this State as did the demonetization of silver to the whole nation, when that was insidiously passed through Congress at the time the act was approved. In discussing the question that you may understand fully my position upon it, it will be necessary for me to review briefly the theory of taxation as it has existed in this Territory and in this nation, and in other states and nations. The claim is that this provision is designed to prevent unjust taxation. That it is designed to prevent double taxation, and that by its incorporation, it will not be possible in the future for the State to twice tax the same property or the values which are represented by the same property.

Now, gentlemen, I wish in the first place to say that there is no just system of taxation. Many different systems have been tried in this and other nations, and there is not one among them all that is not subject to criticism and to serious objection. Four methods of producing revenue have been tried at different epochs in the world's history. First, voluntary contribution; second, tax upon capital or the accumulation of labor; third, a tax upon revenue, and fourth, a tax upon expenditures. In the first place, we take it for granted that properly it is the duty of every citizen to contribute to the support of the State and its revenue in proportion to the ability that he has to do so. That being the case, we all recognize the fact that all men receive equal protection under the law. The law is not greater for the protection of the rich, than it is for the protection of the poor. Upon the contrary, the more of this world's goods a man accumulates, the better able he is to take care of himself. Wealth is better able to protect itself than poverty is, and so it becomes just as necessary for the poor man to contribute for the expense of government as it does for the rich man, in proportion to that which he has. The system adopted in this Territory in the past has been to provide revenues by a taxation upon capital or the accumulation of labor. This seems to be a very just system of taxation, and yet when we come to consider it, this question must naturally present itself to our minds, if a man who is possessed of a large revenue shall spend it all in the gratification of his own desires, his own pleasures, his own wants, and he accumulates {1086} nothing and saves no surplus, he is required under our law to pay no taxes. So it occurs to us if you have a right to use all of your income for your own gratification, why should you, if you save and accumulate a part of that income, lose your right to any portion of it, because of this? and yet that is precisely the conditions which our present system of taxation imposes upon us. On

the other hand, if we tax revenue, the question arises, why should a tax be placed upon industry, and idleness go scot free, for a man may labor early and late and through his industry, his energy, and his ability, he may create a large income, while another_    

Mr. CANNON. Mr. Chairman, I arise to a point of order.

The CHAIRMAN. The gentleman will take his seat.

Mr. CANNON. My point of order is that there is nothing in this provision which provides that mortgages are not to be taxed; the gentleman is not speaking to the question.

Mr. IVINS. If the gentleman will just let me alone I will get around to the question, and I will try and satisfy him fully before I am through.

The CHAIRMAN. The gentleman may proceed.

Mr. IVINS. I am coming to the gentleman a little later on. The idea, gentlemen, is that an unjust system of taxation is designed by this article. I have been in the committee, was a member of the committee where it was adopted and protested against it there, just as I protest against it here, and gave notice that I should fight it, and that is what I now propose to do. Now, then, this system of taxation of revenues is subject to just as many objections as the other system of taxation. That revenue may be accumulated by voluntary contributions, we do not for a moment suppose could be successfully done, and yet in many of the older states that system has prevailed and prevailed successfully. Men were allowed to assess themselves and contribute voluntarily to the support of government. In our Territory in the past_and probably the same will exist in the future, we expect to derive from the accumulations or savings of labor, from capital, from property accumulations. If this is the case, I take it that no one will dispute with me the fact that all the accumulations of labor should be alike subject to taxation, that there should be no exemption, that all property which is used for the benefit of man, all property which is productive, particularly all property except that which is devoted to charitable uses, should be subject to taxation, in order to provide revenue for the State.

The revenue of this State, if it shall be admitted into the Union, cannot be expected to be less than double that which the revenue of the Territory has been. I have been engaged for years of my life in the assessment and collection of taxes and therefore believe I have a right to speak intelligently upon this question. Previous to 1892 the laws of Utah provided that all property should be subject to taxation. They provided distinctly that money loaned, on hand, or on deposit should be taxed as other property.

At the session of the Legislature which was held in 1892, an addition was made to the exemption law, by which it was provided that all notes secured by mortgages upon real or personal property should be exempt from taxation. That was the first onslaught made by the moneyed interests of this Territory, by which they thought to free themselves from any part in the burdens of taxation which the people bore. Following out the lines upon which this battle has been fought, ever since the republican party was founded there has been, gentlemen, a steady and determined effort made

by money brokers, by bondholders, by bankers, {1087} not only in the nation but in this Territory as well, to shift the burdens of taxation off from their shoulders and place them upon the backs of the people, and so I say in 1892 this law was passed exempting money from taxation, for that is what it means. Men will dispute me in this and say it refers only to mortgages. We use the word mortgages in section 5 here. Do you know what it means? It means that all money shall be exempt from taxation, for if money thus secured by mortgage on real or personal property is exempt, money loaners will see to it that all of their loans are secured by mortgages. Now, let me come to the practical workings of this law. In the county in which I was assessor and collector at this time, I had thousands and thousands of dollars of money upon the assessment roll. Men were paying taxes on it just as they should have done. But what was the result? As soon as this law, in 1892 went into operation, those men immediately secured their loans by mortgages; it did not matter, perhaps, the value of the property mortgaged was not one-tenth of the loan negotiated, but from the very fact of its having been secured by a mortgage on a corner lot or upon a few head of horses or cattle, the man claimed an exemption under the law and I was of necessity obliged to strike off from the assessment roll that money, and those men have never paid a dollar of taxes from that day to this.

Gentlemen, there are instances in my county where men have accumulated sufficient means with which to retire from active life and live upon the interest of their money. It is all loaned, it is all secured by mortgages. The laws under which the mortgage is loaned give the broker the greatest security and protection. He cannot possibly be subject to loss, because his mortgages are sufficient. He demands about three dollars to one security; he is protected under the law; he invariably collects his interest; he enjoys every protection that any other class of citizens does and still he is not paying a dollar of taxes. In one county of this Territory alone, under the operations of this law, more than one hundred thousand dollars were stricken off from the assessment roll, and that was not one of these central counties either; it was an outlying county; more than a $100,000 of money secured exemption from taxation under the operations of this law. Well, we came up here in 1894 and tried to change it_have it repealed, but we did not succeed. We did not succeed and so now that this Constitutional Convention is in session, gentlemen propose to incorporate in the Constitution a section providing that a tax upon mortgages secured on either real or personal property shall never be levied, unless a reduction equal to the amount of such mortgage shall be made in the assessed value of the property covered thereby. Why, the gentleman says, this does not provide that money secured by mortgages shall not be taxed. It simply provides that if it is taxed, you shall deduct the value from the property, or vice versa. It means simply this, that if that section is incorporated in the Constitution, the present law under which money is exempt from taxation will never be changed, because there would be no
purpose in changing it. The State could possibly gain nothing by changing it, from the fact that if it should pass a law providing for the taxation of the money, the exemption would be made from the property and consequently there could possibly be no increase in the revenue. Now, in the first place, this law is a discrimination. If you have money on deposit, if you have money loaned on a plain promissory note, the law requires that you shall pay a tax on it. But if that same note is secured by a mortgage, you are exempt from taxation. Is there any justice in the proposition? I have never been able to see it. In our committee, {1088} where this question has been under discussion, men have been called in representing these loan and trust companies here in Salt

Lake City. They have told us what a hardship it would work to their companies if there should be any change in this law. They have threatened that if we shall change the law they will increase the interest and they will make the borrower pay for it in the long run anyhow.

What are the actual facts in regard to these loan and trust companies? Why, in cross questioning them, we found that their investments are very profitable ones; that they are paying dividends, ranging all the way from eight to twelve per cent per annum, compounded semi-annually, so that they are not suffering. They send their agents out into every county in this Territory; they have been away down in Dixie, telling the people of the good investments these loan and trust companies were and soliciting us to put our money into them, not because of any beneficent results, but because they told us they would bring bigger returns than any other investment we could make. Those are the facts. I am a witness of it. They have been to me and solicited that I should invest in these things. There are, gentlemen, in this city alone, six or eight loan and trust companies. They have now loaned and secured by mortgages two million dollars in round numbers. Those loan and trust companies are not paying one dollar of taxes on that money, notwithstanding the fact that they are making a profit, as I have said, of from eight to twelve per cent on their loans. I have investigated this question somewhat carefully. Now, calculate for a moment, and you will find that the State in this one instance alone is deprived of twenty thousand dollars in revenue. I ask you what justice there is in it? And I want to call your attention to the fact that upon every dollar of that money that you exempt from taxation you simply increase the taxes of those who do pay to that extent, because the revenue must be raised. We must have just so much money to meet the demands of government, and if you exempt money from taxation, you must add additional taxation to other classes of property, in order to procure that revenue. This does not refer to loans made by individuals and by local banks in this city and in this Territory, but only to the loans that have been negotiated by these loan and trust companies.

But the gentleman says, Zion's Loan and Trust Company lends all of its money to build homes in this city, and if you tax the home and tax the money, that is double taxation. I want to ask you if both the home and the money is not productive property? The man borrows from Zion's Loan and Trust Company five thousand dollars with which to build a home. He pays them an interest upon that five thousand dollars. It is certainly productive property, to Zion's Loan and Trust Company, from the fact that they are paying good round dividends on it and have been. Now, what about the man that builds the home? He may either rent it to some one else or occupy it himself. In either case it also becomes productive property for if he lives in it himself, he is exempt from paying the rent that he would necessarily pay should he take a house that belonged to another man, and if he rent it to another, it immediately becomes productive property and ought to be subject to taxation. The only difference between that man who borrows the money to build a house to live in and me is that I have, through years of toil, saved up enough money to build a house and put it into that residence. I receive no more benefit or profit from it than does the man that borrows the money to do it, and I should no more be subject to taxation. If it is just to {1089} exempt him from taxation because he borrows money to build his house, why should he be taxed who has been more prudent and saves sufficient money to build a house? Both classes of property are productive. Both ought to be subject to taxation.

Now, let me call your attention to something that will transpire if this clause is left in the

Constitution. Men have property, they want money, they want it for speculative purposes. The majority of money borrowers do not borrow from necessity, some do. The majority borrow for speculative purposes. Now, he wants money to invest outside of this State. He borrows it and gives a mortgage upon his property. The result is that you must either exempt that property from taxation because it is mortgaged, or else you must exempt the money of the broker from taxation, and thus the revenues of the State are depleted and the money was not used to build that house at all. I have in mind now an instance in my own county that will illustrate this matter. A man there with one of the most productive and best pieces of real estate in our county for speculative purposes borrows five thousand dollars upon it. The man who loans him the money is a resident in our county. He is getting one percent. on that money. The money was not borrowed to either improve or build up that piece of real estate. It was there before. And because this man wishes to take off into Arizona five thousand dollars and use it there for speculative purposes and places a mortgage upon that piece of property which is in Utah, are you going to exempt it from taxation? I can tell you that the revenues of the State will be depleted_the burdens of taxation upon the few who cannot escape it will become grievous to be borne, if that section shall be left as it now stands in the Constitution. Another thing, men are prompted to withdraw from all other industries. They are prompted to withdraw from the investment of capital in legitimate enterprises and loan it and the result is a multiplicity of money lenders, the disadvantage of all other investments, from the fact that their money loaned brings them just about as good interest and it is exempt from taxation, and that will be quite an item in the State which is to come_quite an item, and I believe that in order that the resources of the country may be properly developed, it would be better if that section should be stricken out. I am not so extreme that I would desire to see placed in this Constitution a law providing that money should be taxed. I am not so extreme as to ask that a law similar to the California mortgage law be incorporated here, and yet I think it would be a good thing. I want to leave this to future legislation at least, and I submit, gentlemen, that if you will hunt all of the constitutions that have ever been framed and examine them all you cannot find a parallel provision upon the part of the money power to compare with this thing here. Now, let me call your attention to another fact, in the campaign of 1892 this was made a living, burning issue. Men went over this Territory from one end to the other and denounced in the strongest kind of terms the democratic Legislature which exempted money from, taxation. Don't you men from Sanpete know that it was used there and don't you know that it was largely on account of that that Mr. Johnson was sent to the last Legislature. And I want to say to Mr. Johnson's credit that after he got there he worked like a man to have that law repealed and to keep the pledge that he had made to his constituents. I wish I could say as much of the chairman of this committee on revenue and taxation. Ile stumped Salt Lake County from end to. end, no man was stronger in his denunciation of this law_no man was more ready_
{1090}
Mr. CANNON. Mr. Chairman, I would ask the gentleman whether he heard me deliver a speech?

Mr. IVINS. I will answer that, gentlemen, by saying that I was a member of the last Legislature, and one of the first men to come to me and ask that I should use my influence to have that law repealed and to say that it was an unjust and discriminating law, and to tell me that he had stumped this county, was the gentleman himself. [Laughter and applause.]

Mr. CANNON. I would ask the gentleman_I only want to state my position now fully.

Mr. SQUIRES. I would like to ask Mr. Ivins a question. You favor, as I understand, the striking out of section 5?

Mr. SQUIRES. I would ask you then if under the provision of section 2 it would not be obligatory upon the State to tax mortgages? If we strike this out so as to leave the matter as you suggest, to the Legislature, we do not leave it to the Legislature, but we provide that mortgages shall be taxed under the Constitution, is that what you wish?

Mr. IVINS. The gentleman has asked the question and answered it himself. I sincerely trust, gentlemen, that the interpretation that he gives to this section is correct. That is all I can say. If there is any doubt about it, I hope the Legislature will confirm it and provide that mortgages shall be taxed, and I hope that he construes that properly, and that if we strike this out they will be taxed.

Mr. SQUIRES. That is what I wanted to know.

Mr. IVINS. I do not think it is as plain as it might be, but I trust that his interpretation of that section is correct, because that is the way I think it ought to be.

Mr. GOODWIN. Mr. Chairman, these are queer times that we are in. I thought when the salary stopped, members would simply make a statement.

Mr. THURMAN. We reconsidered that.

Mr. GOODWIN. Oh, I beg your pardon, I am liable to take all the fore-noon now. Yesterday we had an entertainment here, in the interests of the poor working man. We heard gentlemen assert that it would be a fearful thing to make convicts work in the penitentiary because it would create competition with the poor. They did not seem to think that if these men in the penitentiary did not work the poor would have to feed and clothe them all the same. That is, the trend of the argument was that while the ordinary man must rustle for a living, if he was only bright enough to steal something or rob somebody or commit a murder, then he is exempt from labor and it was the duty of the State to clothe him well and feed him, even if it did establish a school of crime out at the penitentiary where a young man sent there for his first offense would by three years' schooling graduate a hardened criminal through association with those more accomplished in the profession which he had thus chosen than he was when he went there.

Again, we had many a dissertation on the wrong of permitting railroad companies, for instance, to keep or send to other railroad companies a black-list. That was to keep poor men out of employment. The fact that if a poor man, able to employ four or five men, at last found that all the receipts of his industry did not pay the men at the rate they demanded and he had to make a reduction and they struck and boycotted him, advertised it through the press and through the telegraph that whatever he produced should be boycotted, that was not mentioned. It was all right. This morning, we have a dissertation on the wrongs that money does in the world. I endorse {1092} that heartily personally, but there are certain principles that are at stake. There are very few homes in this town that are not mortgaged. The mortgages are secured at a little lower rate of interest than they would be except that the law protects the matter and says no

property shall be twice taxed. Now, if a man has a lot worth five thousand dollars and he borrows three thousand dollars and puts it in a house on that lot, it makes the assessment roll at the next spring show eight thousand dollars that he has to pay taxes on. He only owns five. He has to pay taxes on eight. Now, if we go back to the man who loaned that money and tax that three thousand dollars over again, it makes double taxation, does it not? A dozen supreme courts have decided that it does. There can be no escape from it. But according to the argument of the gentleman who just addressed the committee, the man who pays the tax on that extra three thousand is served right for not owning it himself. Why, he would have to pay it if he owned it. That is all there is to this article. It is double taxation to tax the man who borrows money and then tax the loaner, and the hardship does not come on the trust company or on the capitalist. If they loan money at seven per cent on the mortgage and they have to pay taxes on that mortgage themselves, they charge eight per cent. That is all there is to it, and the man that borrows the money pays it all. Now, I would vote to have the personal property in this stricken out, because that gives chance for fraud. It is like taking a promissory note. Where that has been tried the man that holds those promissory notes simply transfers them to his clerk, and when the assessor comes around he holds up his hand and swears he hasn't any. But a mortgage is a thing of record. Of course there can be now and then a condition, as was stated by the gentleman. A man can mortgage property that is fully paid for, and that he does not wish to make improvements on, save the money and speculate in another state and thus evade taxation in this State. That money would be subject to taxation in the state he goes to in whatever form he puts it. The article is exactly right, and to incorporate it into the Constitution will save no end of just such oratory as we have been having this morning through every Legislature for years to come. One year they tax mortgages and the next year they will throw it off, until by final adjudication it is decided as courts have in plenty of other states, that it is double taxation and therefore illegal. I would vote for striking out personal property. The rest of the section I would leave just as it is and for the manifest reason that unless such a provision is in the Constitution or in the laws it leaves money to be taxed twice, which is contrary to the spirit of our government, contrary to justice, and while I have very little respect for men that have money to loan, at the same time, under our benign laws they are not criminals. They are entitled to as much protection as though they wanted to borrow. I speak of this particularly because I have seen it tried over and over and through California and Nevada, until public opinion and the sentiment of the state and the laws of the state finally harmonized. Just try it as it is, except I think personal property ought to be stricken out.

Mr. CHIDESTER. Mr. Chairman, some of the reasons that have been assigned by the gentleman who last spoke for opposing the motion to strike out is the reason why I want this article stricken out. Now, in the first place, according to the terms of this section itself, it concedes to a certain extent that mortgages should be taxed. That is a proposition that the friends of this section will make, and that the price of the mortgage should be taken out of {1093} the property that is mortgaged by the mortgagee. Now, I believe that all property in the district should be taxed. I believe that because a homestead secures a mortgage is no reason why that homestead should not be taxed. Now, I live most to the Arizona line, and men borrow money and invest in stock and take it over into Arizona. That is a speculative scheme. They give a mortgage on their homesteads and according to this, value of that mortgage would be deducted out of the homestead. Now, they claim that the man who loaned the money would be taxed and for that reason that the homestead should not be taxed, and that the man who borrows the money gets the

advantage of a lower rate of interest Now, I want to say to you, gentlemen, that that is not the fact. I have made out hundreds of trust deeds in the last few years for men who have been loaning money, and the argument is this every time, and has been from the beginning, that the demand for money is what governs the rate of interest. It does it every time, and when money is plenty, interest is low, and when money is hard to get hold of, and lots of men are after money to borrow it, they take advantage of that and they raise the interest. That is my experience in regard to that. And there is another point that weighs considerably with me, and that is, that this section proposes to settle a question that ought not to be settled by this Convention. In my opinion it should be left open and we can fully trust the Legislature to handle this matter. Suppose that we were to incorporate this section as it stands, it would make it binding from time to time on to deduct the price of the mortgage out of the valuation of the real estate. Suppose that we should find that to be impracticable and we should find that it should not exist, we could not change it. The Legislature's hands would be tied and they would have to pass it by. We know now that the Legislature has been handling this matter or endeavoring to handle it and it has been a question that they themselves could not settle satisfactorily to the people, and for us, with the limited time that we have had here to study this matter, to undertake to settle it, in my opinion would be a grand mistake. I see no reason why this should be considered double taxation. As has already been stated, if a man borrows money to build a house and he rents that house out he is receiving an income from that house. Why should not he pay a tax upon it? Why should not the man who loans money at five per cent. a month interest_that is done in this Territory, that is done in my county, and that man to-day, under the present system, is not paying as much taxes as I do, and I have no money to loan. Now, it is conceded that the man that loans the money, he receives interest and should be taxed according to this section, but it seeks to excuse the man from paying taxes who has built a house and is renting it out and receiving the interest on the money that he has invested from paying the tax. I say that it should all be taxed and it should be made equal.

Mr. PIERCE. Mr. Chairman, I am in favor of the motion made by the gentleman from Washington County. I think that the argument made by the gentleman is one of the strongest arguments that has been made in this Convention, and that the strictures placed upon him by other gentlemen upon this floor are without foundation.

Mr. GOODWIN. Mr. Chairman, I arise to a question of personal privilege. What about the strictures? What strictures do you refer to?

Mr. PIERCE. The matters that have been said that the Convention all know.

Mr. GOODWIN. If I said anything disrespectful of the gentleman or_-

Mr. PIERCE. I withdraw that expression then. I will say the answer to it_    

Mr. IVINS. I wish to say that I take {1094} no exception at all to anything that has been said. I am here to be hit just as hard as I hit others.

Mr. GOODWIN. Perhaps the gentleman from Salt Lake is more used to strictures than others. [Laughter.]

I say to you, gentlemen, that it is a matter that ought to be left entirely to the Legislature. There may be a time, for instance now, when you should not tax mortgages, but should do everything to induce capital to come into the Territory, but when we build up a wealthy rich State in the future, then, sir, we should tax all property that is within the Territory. I believe that taxation should be uniform. If a man owns his house, let him pay taxes on it. If another man owns property in money, and bonds, let him pay taxes upon the money and bonds that he owns. I am in favor of striking this section out provided that section 2 be amended by striking out the words, “under this Constitution,” and inserting the words, “of this State.”

Mr. EVANS (Weber). Mr. Chairman, as I was a member of the committee on taxation and revenue, and also unfortunate enough to be a member of the Legislature of 1892, I desire to make a few remarks on this question. I was somewhat astonished at my colleague, Mr. Cannon, who asked to close this debate. It would seem that having the affirmative, he ought to open it so that the members of the Convention would know what his position is, and assuming that he will not open and that he will close the debate, I shall undertake in the course of my remarks briefly to apprehend the position which he shall take. I want to explain to this Convention, gentlemen, just how the law of 1892 was passed, and it is only a short story. At that time we found the condition of the law such that foreign mortgages were not taxed but domestic mortgages were. We had a report of the board of equalization, of which the Honorable Frank J. Cannon was a member, in which report it was suggested that the amount of money which was paid to the various county recorders for the abstracts of titles and mortgages amounted to as much as the revenue actually received from domestic mortgages, which were taxed, or very nearly so, there was only a few dollars difference. We found that as the law then stood it was a discrimination between foreign money and domestic money.

People who owned money in the Territory {1095} had a tendency to leave the Territory and go outside and loan it in order that their mortgages might be exempt from taxation, and in view of these considerations, the Legislature largely upon that report voted to place mortgages upon the

exemption list. The Legislature then was democratic. There were no republicans in it at all. There were some liberals who are now republicans. But, however that may be, gentlemen_and even if I thought I were wrong in the position which I took then, but I shall not say that I was, because I think I would do the same thing again_but if I were wrong, I would not be afraid or ashamed to correct the mistake. But here is a different proposition. Right in the organic law of our new State we are confronted with a proposition that mortgages shall never be taxed except when the value of the mortgage is deducted from the amount of the property. Gentlemen, let me remind you that if this matter go into the organic law of the new State, we will never be able to repeal it, we never can do it. The money power which will seek to retain it there will be sufficient to engraft it upon our organic law for all time to come. But gentlemen may say that the Legislature might tax mortgages with the provision as it now stands. It is true. But if mortgages be taxed with the provision as it now stands, there must be a like value deducted from the value of the property. Suppose that condition of things came about and suppose the mortgage is taxed and the property owner relieved of a like amount, what will be the result? Is it not as plain as the handwriting upon the wall that thousands of spurious mortgages will be placed upon the property of the citizen for the purpose of evading taxation or reducing the amount of taxes upon the property of the owner. What is there to prevent it? Suppose we take the mortgage; if we do that, we must deduct the amount from the value of the property. What is there then to prevent any individual from securing a mortgage and placing it upon record for the purpose of evading taxation? Do not we know that men are prone to evade taxation whenever an opportunity affords itself? It seems to be a legitimate thing among some people to do that by which taxation might be evaded. And this is throwing the door wide open to relieve pretty much all the real estate in the new State from the burdens of taxation. There is another evil that will come from it, and gentlemen it is the most serious evil that can be suggested, and that is this: Suppose the section goes into the organic law as it is proposed, is there any one who would deceive himself upon the proposition that mortgages would not be taxed? It is inevitable that the property will always be taxed and the mortgage never will be. Then, assuming that to be true, the incentive of the law will be for men to convert their property into cash, take their money and loan it and take securities upon real and personal estate, and the man who is fortunate enough to accumulate money can live in the community, exact his quarterly interest from the people who are compelled to borrow his money, and not contribute one dollar to the public treasury. Will not men do it? Men are naturally selfish with respect to financial matters. What is there to prevent it? Suppose I were fortunate enough to accumulate all that I may have in this world in money and loan it, collect my interest daily and contribute nothing at all to the support of the State, when the State is protecting me, when the State elects and maintains its officers to foreclose my mortgage, lends the process of the law to secure me witnesses, protects my loans, and yet I stand aloof and above the State, so far as the power of taxation is concerned.

Mr. GOODWIN. May I interupt you a moment for a question?

Mr. EVANS (Weber). Certainly.
{1096}
Mr. GOODWIN. If that was your business and you had to pay tax on your money that you loaned, would not you charge just as much more interest as the tax would amount to?

Mr. GOODWIN. Loans were made lower?

Mr. EVANS (Weber). By reason of that?

Mr. GOODWIN. Yes, sir.

Mr. EVANS (Weber). During the year they were exempt? And indeed I am informed that to-day interest is as high as it was then. It has been boldly asserted by the money power of this city_those whose Italian hand is at the back of this section, that they control the chamber of commerce, and that they control each newspaper in this city by reason of the obligations that those papers are under. It is boldly asserted by this money power that they can control all these agencies_    

Mr. GOODWIN. Mr. Chairman, I arise to a question of personal privilege. There is one newspaper that no moneyed institution in this country has the slightest grip in the world on.

Mr. EVANS (Weber). I did not charge they were.

Mr. GOODWIN. You charged a street rumor, and it is easy to get those things up. There is one newspaper here that does not do what moneyed men want it to, or it would have been a good deal richer.

Mr. EVANS ( Weber). Oh, I have no doubt about the virtue of the Tribune. It has always so far as its own utterances are concerned, at least had a very high opinion of itself. [Laughter.] I did not say that these papers were under obligation and could be controlled by this power, but I do

say that it was boldly asserted by the money power that they could control them, and I find that every one of them advocates the exemption from taxation of mortgages.

Mr. CANNON. May I interrupt the gentleman to ask a question? It is in reference to your question concerning the rate of money. I understood you to ask Mr. Goodwin whether the rate of money was lower since the law was {1097} changed. I will state that a loan was made in this city the other day for six per cent_a loan of eighty-five thousand dollars, and would ask you if you know of a loan ever made in Utah prior to the time at which mortgages were exempted at an equally low rate?

Mr. EVANS (Weber). Oh, well, Mr. Cannon, you know well enough that everything has been reduced in price. You know well enough that wheat is reduced nearly one-half, all other commodities in proportion, and we know well enough too, gentlemen, that money can be secured pretty cheaply now, providing the right kind of security is put up, but it must be a gold dollar almost in order to secure a dollar in currency. Gentlemen, it is an indisputable fact that so far as the committee on taxation and revenue is concerned, every man who appeared before that committee, so far as I am informed, for the purpose of securing this clause in this Constitution was a man controlling money, a man controlling corporations, a man who was making his living by loaning money to people. Not a single borrower, so far as I know, ever appeared before that committee and asked that the money power be exempt from taxation. Now, gentlemen, let us put this question a little plainer upon another proposition and that is this: It has been already suggested and I only suggest it again so that we may understand it_and gentlemen may argue all they please and use all the statements they desire with respect to the fact that it is double taxation. One fact remains and that is this, that a note is taxed, money is taxed if it is in the bank, not drawing any interest at all. It is taxed there, is it not? We all agree that it is. ow, when you take that money out of the bank and loan it to the individual and secure it by a mortgage and receive interest upon it, then it is exempt from taxation. Is there anything right about that? Why should you tax money in a form where it is not productive and then exempt it from taxation because it is amply secured and interest being quarterly derived from it? The principle itself is wrong. It ought not to go into this Constitution. The thing is original with the banker. No such provision was ever inserted in any constitution that was ever written upon the globe. Search your constitutions, search your acts of the legislature; you will find nothing as insidious and as mischievous as this section is designed to be and which practical operations will show it to be. We have agreed practically with our friend, Mr. Cannon, the chairman of this committee, upon all other propositions and have complimented him upon his intelligent work. We hoped to pursuade him to leave this matter out of the Constitution and leave it to the Legislature where future Legislatures might deal with it wisely, but we failed to secure his assent. We simply said to him firmly that it would be our intention to move to strike out this matter and hoped that it would not be made political, and I am very glad that it has not been, because the gentleman from Garfield, I believe, moved to strike it out. But we make war upon it, and gentlemen, we will make a mistake not a party mistake perhaps, but will make a serious blunder if we permit this section to go into the Constitution. We will simply permit the moneyed power of the State to take the individual citizen by the throat and strangle out his financial life. It will be one of those instruments in the hands of capital and money which will leave capitalists under the protection of the law and still, so far as the payment of taxes are concerned, above the law. It will work serious injustice to the

State. It will be of no benefit to the individual. It will be an innovation of the most dangerous character. It ought to go out, gentlemen, by unanimous vote, and I {1098} believe that that will be practically the result when the vote shall have been called for.

Mr. GOODWIN. I desire to ask a question. You make one splendid point, Mr. Evans, that money in the bank was taxed, but when it was loaned out, it was not taxed. Now, suppose a man takes it out of the bank himself and puts it in a house, would you still tax it in the bank?

Mr. EVANS (Weber). Why, no; then you tax the house; wherever the money was found it would be taxed.

Mr. GOODWIN. But if he loans it to another man and he builds a house, you tax the house and the money both?

Mr. EVANS (Weber). No, no. I did not answer you on that at all. As I understand that, if a man owns money and puts it into the house, he does not own the money any longer; he simply exchanges it for a house and then the house is taxed, but the money goes into other hands and wherever that is found that should be taxed.

Mr. GOODWIN. You have five thousand dollars in the bank. It is taxed. You loan it to me, I put it in a house and I am taxed for that, is it right to go back and tax you too?

Mr. EVANS (Weber). Certainly, that is just the point I make.

Mr. GOODWIN. Is not that double taxation?

Mr. EVANS (Weber). I am very glad that the gentleman has raised that point. That is true, I will make an illustration. I am a money loaner, I have twenty thousand dollars in cash in the bank; it is taxed while it is in the bank, but Judge Goodwin desires to build him a house; I loan him the twenty thousand dollars and take security upon his lot and on his house in the form of a mortgage. He pays me ten per cent interest, which would be two thousand dollars per annum that I am receiving. He has to pay the tax on his house and his improvements. He pays me two thou sand dollars per annum for the money which I have loaned him, and I stand exempt from taxation. There is the illustration which he gives.

Mr. SNOW. Isn't that mortgage which you have subject to assignment or sale? Couldn't you sell it? Is it not of real value?

Mr. EVANS (Weber). Certainly, it is of the utmost value. It is one of the best securities where it is secured by real estate.

Mr. ELDREDGE. Mr. Chairman and gentlemen, I will be brief upon this proposition, but at the same time I would like to express my views wherein I differ with the gentleman who has just taken the floor. Section 3 of this article under consideration provides for an assessment of all property. Still further down in that section it says, “provided that a deduction of debts from

credits may be authorized.” The same question that is involved in section 5 is also involved in that proviso, and in my mind is clearly a correct principle. I do not view a mortgage as property. I view it as the evidence of property and if that evidence is followed to its logical conclusion, you will find where the property lies that the mortgage represents. Now, the gentleman from Garfield, speaking concerning a circumstance of this kind that a man owned a piece of real estate and that he borrowed on that we will say ten thousand dollars and invested it in cattle and took the cattle into Arizona, that when the assessor under the provisions of this act came around, if the mortgage was exempt that property did not contribute towards the support of the government. If it does not contribute to it in this State it certainly is taxed in the state where the cattle have been taken and thus the value of the money that has been borrowed is represented in the property in which he puts it. And if that money should be taxed in Utah and the property taxed {1099} in Arizona, there is a double taxation upon that amount of property.

Mr. THURMAN. Suppose you would work it so that all the property owned by people in Utah would be held in some way in Arizona, so that they would only have here the evidence of it, how would you keep up a State government?

Mr. ELDREDGE. Well, suppositions may be made that are very foreign to any possibilities. We will draw this matter perhaps a little bit closer. Supposing a man that borrowed the money upon his farm placed it in cattle and kept the cattle within our own Territory. The cattle then are taxed within our own Territory, and thus that money is taxed in the investment where the property lies and as I said, in the first place, the mortgage is not property. It is only the evidence of property. Now, we will suppose that a man has got a farm and that farm is worth five thousand dollars; he goes and borrows of some man here five thousand dollars to put in improvements upon that farm. The assessor comes along and assesses that farm with the improvements for a sum of ten thousand dollars, and then he would assess the man that had loaned the money five thousand dollars, making an assessment upon that property of fifteen thousand dollars, we will say in the year 1895. In the year 1896, the man is not able to pay the five thousand dollars that he borrowed, and hence the man takes the farm in the transaction and pays the individual five thousand dollars for his interest in the farm. A man comes along then and assesses the farm. He assesses it for ten thousand dollars. The amount then that the man has loaned is absorbed in the farm and only represents just the same as it did when he held the mortgage, and hence the State loses five thousand dollars under the transaction, according to the theory of the gentleman from Weber County. Now, he is speaking concerning spurious mortgages. I cannot see where that question possibly takes place. The section here simply provides that if mortgages are taxed the amount must be deducted from the property upon which the mortgage is given.

Mr. SNOW. Isn't that a virtual exception or exemption from taxation?

Mr. ELDREDGE. I understand that to mean this, that if I had a house and lot no which I had borrowed five thousand dollars and that property was worth we will say fifteen thousand dollars, the assessor comes along and says, “How much is this property worth?” “Is it worth fifteen thousand dollars?” He lists it for fifteen thousand, but I say, “By the way, I have got a mortgage on it for five thousand dollars.” Then it is fifteen thousand dollars less the five thousand dollars that I borrowed. “Whom did you borrow this money from?” “I borrowed it from John Jones.” He

then lists the amount of the mortgage to John Jones, and thus between myself and John Jones we pay the fifteen thousand dollars which is invested and is manifested there in that real property. That is the way I view that. Now, in regard to the question that was before the Legislature last winter, I have this to say, in defense of the gentleman from Sanpete County_and should there be any question I can produce the article_that that gentleman's idea of taxing mortgages was just exactly as set forth in this proposition. That if a mortgage should be made subject to taxation, it should be deducted from the value of the property that was given in security, and that was the Honorable Jacob Johnson's position to my knowledge upon the proposition, and I would like to have the gentleman properly represented before this Convention.

Mr. CORAY. Do you consider that proposition is set forth in the article? Mr. ELDREDGE. Yes, sir.

Mr. EVANS (Weber). Mr. Chairman, I understood Mr. Jacob Johnson's position to be that the mortgage should be {1100} taxed but the amount should be deducted from the value of the property, that is not this proposition. It says mortgages never shall be taxed unless_

Mr. ELDREDGE. Yes; his proposition was this, that mortgages should be taxed provided that the amount should be deducted from the assessed value of the property securing the mortgage.

Mr. EVANS (Weber). He had the California provision, didn't he?

Mr. ELDREDGE. I do not know; so far as the California provision, I have the bill that he introduced on file.

Mr. JAMES. Mr. Chairman, I will not impose upon your time very long, but I do feel as if I would like to make a few remarks upon this question. I cannot see the situation from the same standpoint that some gentlemen have that have argued the question this morning. I have had some little experience in my life in business and I have learned what it was to borrow money. I have in the last two years, Mr. Chairman, borrowed in this town large sums of money which I have paid out to the laboring classes and for supplies and other operations of mining. Now, I know that gentlemen do not intend to be unjust when they speak of the Shylock banker. There is some good in all things I believe in this world, and in instances the banker of Salt Lake City has been of great benefit, not only to himself and the rich, but to the poor as well. When I go to the bank and draw out money month after month as I have done in the past two years, without one single dollar of income from the industry which I was operating, and which I am doing to-day, and that banker allows me an overdraft, as I have got it unfortunately to-day, he is doing as much good with his money as it is possible for any individual to do with his money in a business proposition. Now, gentlemen, that is the condition in a great many instances, here in Utah Territory and in Salt Lake City, and for that reason I want to say that I do not want this Convention to be too severe upon our bankers and our business men in this community. Now, as to the gentleman saying spurious mortgages would be put on record if this section was adopted, it seems to me that that is absurd, because under the mortgage the mortgage would either have to be taxed or the property. It is embodied in one. As I understand it, it is simply to prevent the double taxation. I do not think that that needs much argument to understand. The strongest point the

gentleman makes is that there is such a thing as money loaned on mortgages that does not pay a tax.

Now, all things equalize themselves. Water finds its level; nature created things in this world so that they worked for one general object, and that is the equalization of all things. Now, if the mortgage can go without taxation, capital will seek mortgages, consequently the man that is borrowing money upon his land will get it for less than the man who has to borrow it on other collateral where he will pay a tax. Now, that is the natural result and it cannot be gotten away from, Mr. Chairman. That rule will hold good; but here is a point now I want to call the gentleman's attention to. I said to the gentlemen a little while ago that I had been overdrawing in on city. Now, did I pay any tax on that overdraft? No, sir. Now, there is the condition of things, that a man that is fortunate enough to have a credit can go to a bank and borrow money and pay no tax on it, but the poor man that works at the forge, that works at the bench as a carpenter, that has his little farm out here, that does not happen to be known or does not happen to have a credit at the bank, so that he can borrow money if he needs a little money for improvement or some enterprises, what does he have do to? He has to tie up his property {1101} and mortgage it to get this money and the result is the mortgage is taxed and the land is taxed. Consequently that business is double taxation. Where the business men, Mr. Auerbach, or any other merchant of standing in this community, wants to borrow fifty thousand dollars, he goes to a bank and overdrafts it, and the tax collector never thinks of going around and assessing that overdraft, consequently he gets that money without paying a tax. Now, do you not see, gentlemen, in order to equalize this thing you have got to pursue the very course that the committee has pursued in adopting this section, and I want to say to you, gentlemen, there was some question raised here that any other constitution ever had anything that was anything like this? That is, if I understood the language correctly, there was a statement of that kind made. Now, take the state of California, what does it say? A mortgage, deed of trust, contract or other obligation, by which debt is secured, shall for the purpose of assessment and taxation be deemed and treated as an interest in the property affected thereby. Now, they have done the same thing in California, as gentlemen have attempted to do it in this section, as I understand it.

Mr. EVANS (Weber). Beg your pardon, Mr. James, but you certainly do not understand the California provision if you understand it to be the same as this. The California provision requires a tax upon mortgages, but the amount shall be deducted from the value of the property.

Mr. JAMES. Is not that what this section proposes to do?

Mr. EVANS ( Weber.) No. That says there shall never be a tax upon a mortgage unless the amount is deducted from it. The Legislature might put a tax upon mortgages, but the California provision simply taxes the mortgage outright, and I would like also to remind my friend, Mr. James, that I think two-thirds of the members of the Legislature have already passed a law repealing that very provision which you are now reading_that is, in submitting it to the people for a vote, two-thirds of the members of the Legislature, as I understand, have passed an act which would repeal that if the people approve it.

Mr. CANNON. I want to ask the gentleman whether or not under this provision of this section

the California statute could not be enacted by our Legislature?

Mr. EVANS (Weber). It could be. It could be enacted but the constitutional provision in California compels a tax upon mortgages. Ours relieves the mortgage from taxation so far as the the Constitution is concerned, and it would require an act of the Legislature, and whenever an act of the Legislature was passed to tax mortgages, then there would be no tax upon the property owner equal to the value of the mortgage.

Mr. JAMES. Now, I understand, Mr. Chairman, that there are other ways of taking advantage of this system of taxing mortgages. I know that during the time that the statute in Utah imposed a tax upon mortgages that a system of business of this kind was done, because I know the very transaction. I know of one instance where a property was mortgaged in this town in Omaha. It went to a bank. The business was transacted in that bank, the money was loaned there, but it was money of Salt Lake. The arrangements were made through an agent and in that way they avoided this tax, and what was the result? Why, they accomplished in it only this, that it put that poor widow woman to the expense of fifty or sixty dollars to send down to Omaha and get her home mortgaged, to get some money_extra_that is all It accomplished; and when you gentlemen that were hi the Legislature that repealed that act did what you did, I believe {1102} that you did this Territory a great benefit. I felt it at the time. I understood it from my business relations here and I have so believed ever since, and I haven't had anything to convince me to the contrary, but what it was a great advantage to this Territory to allow people that happened to own real estate to be placed on the same basis as the man that owned the municipal bonds. The man that owns municipal bonds or the bank bonds or other collateral that are good can go to the bank and deposit them and get the money and he is not taxed, but the poor man that happens to own a little home somewhere has got to go and mortgage it, then the mortgage is taxed and his home is taxed on that; I say that is double taxation.

Mr. BOYER. May I ask the gentleman a question? Your statement in relation to the poor woman being required to pay fifty dollars_whether that additional expense was an addition of interest upon the money or whether it was attorney's fees_a middle-man that charged her attorney's fees?

Mr. JAMES. That is what it was.

Mr. CANNON. Mr. Chairman and gentlemen of the committee, I was in hopes that when this question came up it would be discussed entirely. upon its merits and that we would discuss it dispassionately with an intention but to arrive at a correct conclusion. I trust gentlemen, you will look at this matter in a fair and dispassionate way. If it is not right to retain the section, I want it stricken out. If it is right, I claim that it should stand there and that you should be open to conviction and listen to that which is to be said. In the first place I was astonished that my friend from Washington County should make a personal attack upon me and state what he did state concerning this matter. I was equally astonished to hear my friend from Weber County claim that the Italian hand of the money power was behind this section. I have been astonished at the position taken by different gentlemen because, while we differ with respect to different sections that may be presented, I will claim, and without fear of contradiction, that in the committee which has reported this article and of which these two gentlemen are members, that every

consideration has been afforded them to express their views, and to bring in their friends, to bring any matter before that committee, and I claim, gentlemen and Mr. Chairman, that a full investigation was made as far as possible of this question by the committee with the intention to receive all the light possible. I took the position that the speaker from Washington County takes when the committee first met. I was in favor of taxing mortgages. I so announced myself, and in order that it might be spread, in order that the people might know it, it was published in the public prints and everybody who saw fit to meet and come before our committee had an opportunity of doing so, for about three weeks. On this bulletin board here the time that that committee met was placed in plain view, and any one could learn what was done in the matter.

I believe that there is something in favor of the position taken by the gentleman from Washington County. I believe that where a tax is not placed on mortgages, I believe that it places a sort of premium upon the money lender and to that extent I am very sorry that it is not wise at this time, in my opinion, to place a provision in the Constitution taxing mortgages. At the same time, the committee had good reasons, as I view it, for not placing such a provision in this, but I desire to call your attention to that which existed here a few years ago. Under the old law a provision was had which provided that from taxable credits, debts due and owing might be deducted. How was that interpreted? {1103} My friend from Washington County interpreted it, so he informs me, that if a man had a mortgage on his home and would give him the name of the party who held that mortgage, that he would except the value of the mortgage from the assessed value of the property and go and assess the money to the other man. In Salt Lake County an entirely different procedure obtained. Here the full value of the property was assessed. And in addition to that the amount held by the mortgagee was assessed to him. There is a case, gentlemen, where there was a discrimination. It was not right for the people of Washington County to allow it and the people of Salt Lake County to refuse to allow it. Taxes should be equitable, should be equal in all parts of the State. The fact that this has existed in that way convinces me among other things that the provision of the law was a bad one.

In the next place I take the position held by Judge Goodwin, that there is not a single case where a tax assessed upon a mortgage and assessed at the full value of the real estate also is not double taxation. To illustrate what I mean, I will take a case of two men who have a thousand dollars each, and desire to buy a farm. Putting it together, they buy a farm worth two thousand dollars. The assessor assessed that farm to its full value, two thousand dollars. That would be the only assessment that there would be. Now, suppose one of those two men did not want to buy a farm, but was willing to loan his money to his friend; the friend borrows the thousand dollars from his companion, takes the same two thousand dollars, to which I referred first, and buys the farm. How will it then be assessed, if we do not put this prohibition in the law? Under the old law, as it was applied in Salt Lake County and in other counties in the central part of Utah, it would be assessed this way, the farm would be assessed to the man who purchased it at the full amount, two thousand dollars. The mortgage would be assessed at one thousand dollars to the man who loaned his friend the one thousand dollars. The total assessment would be three thousand dollars.
                
Now, my friends, is not that a clear case of double taxation? What is the difference? The two men use the same money, they put it into the same farm; the only difference is that one owns a half interest in the form of a mortgage, in the latter case and in the former case, he owned an

undivided half interest in the land itself. There you would be assessing three thousand dollars in one case simply because of the difference in name. Now, another case. Take the case of a man who builds a home for another. If under the law he provided that he would sell it to him on the installment plan, ho w would it be assessed? Assume that it was valued at two thousand dollars, on the installment plan it would be assessed to the man who was selling it, because the title stands in him. It would remain in him and it would be assessed simply two thousand dollars. The man who has agreed to purchase it and who is living in it and making monthly payments on it would not be assessed at all, because the property still stands in the name of the original vendor. Now, suppose that instead of doing that, he has confidence in the purchaser and he says, “Well if you would prefer a deed and would like to give me a mortgage in return I will take a mortgage for the full amount, believing in your integrity and knowing you can pay it eventually.” What would then be the provision? Under the old rule which is designed to be prohibited by this section, they would first assess to the man purchasing the house and lot two thousand dollars. Then, because he has executed a mortgage they assess two thousand dollars to the man who holds it, total assessment four thousand dollars, whereas the same property, the {1104} same interest identically, only covered by another name, exists in both cases.

We will take another case. A man who already has a home of two thousand dollars thinks that it would be to his interest to buy a herd of sheep. Formerly he has been assessed with his home at two thousand dollars. He borrows a thousand dollars and buys sheep with it. What is his assessment under the old plan? Two thousand dollars would be the amount he would be assessed on his home and one thousand dollars he would be assessed on his sheep. Well, you say the sheep were in existence; yes, they are in existence, but that man's interest in his home has decreased the amount he borrowed and he should be allowed that amount of exemption. He should be allowed to deduct from the value of his home one thousand dollars, because he only has in real property, so far as actual value is concerned, one thousand dollars, now in the shape of a one thousand dollar equity in his homestead. I defy any one to present a single case to me where it is not double taxation, where under the operation of the old law, under this provision it did not provide for taxing double.

Mr. EVANS (Weber). What would become of the man who loaned this two thousand dollars on this home? He would not be taxed at all, would he?

Mr. CANNON. In which case are you alluding to_the last?

Mr. EVANS (Weber). I am alluding to the last illustration you made.

Mr. CANNON. That was one thousand dollars.

Mr. EVANS (Weber). Well, one thousand dollars, whatever the amount is, if he loaned it under your provision, he would not be assessed at all, would he?

Mr. CANNON. Under the law which you have passed, my friends, he would not. I did not help pass it. Under the law which you helped to pass, he would not, but under this section_

Mr. CANNON. He would not be assessed unless the Legislature saw fit to tax mortgages.

Mr. EVANS (Weber). Please answer me. Under the constitutional provision which you have written, would he be assessed at all?

Mr. CANNON. He would not until the Legislature assessed him.

Mr. EVANS (Weber). Under this law, he could not be assessed, could he?

Mr. CANNON. No sir; under the law which you passed, and under this law which I am helping to perpetuate, he would not be taxed until the Legislature should see fit to tax him. I do not believe that a case can be cited in which it is not double taxation, in one form or another. The only attempt I have ever heard made to cite such a case was where the man borrowed the money and spent it in mining and lost it. The gentleman said the property was not there to tax, and consequently in that case it would not be double taxation, but would be double taxation so far as the poor fellow was concerned who had borrowed the money. If he had spent it in mining, he would only have that which was left and having his homestead which was worth two and only had an equity of one thousand dollars. The section proposed here does not provide that you shall not tax mortgages, but that is left to the Legislature.

Mr. EVANS (Weber). The Legislature under this constitutional provision could not, under any emergency or circumstances, tax both, could it?

Mr. CANNON. No, sir; they could not have double taxation.

Mr. EVANS (Weber). That is to say, if an emergency should arise, so that revenue was imperatively necessary, the Legislature could not tax the mortgage and the property both?

Mr, CANNON. No more than they {1105} could double tax your land that did not have a house on it.

Mr. EVANS (Weber). That is true, is it not?

Mr. CANNON. That is the purpose of it exactly, so that it shall never under any case permit double taxation in this instance. I desire to call attention to the way that this old law operated. I have in mind a case which actually occurred where a man in Salt Lake County has eighteen thousand dollars' worth of mortgages upon the books of the recorder's office of this county. That man had an overdraft at the bank to the amount of thirteen thousand dollars; when the assessor came around, he said, pointing to this provision of law, “from taxable credits, debts due and owing are allowed to be deducted.” Yes, said the assessor, “what have you got to deduct?” He took his book and showed that on the first day of January, which was the date at that time when they were assessing, he owed one banker so much and another banker so much and the total was thirteen thousand dollars, and the assessor deducted from his taxable credits of eight-teen

thousand dollars' worth of mortgages which he held the thirteen thousand dollars and only assessed him five thousand dollars of it.

Now, at the same time, I know a man who had property, in the form of bonds worth ten thousand dollars, and that was the valuation of it, who owed a mortgage of six thousand dollars, and he went to the assessor and said, here is a provision in the law which says that from taxable credits, debts due and owing may be deducted, and asked the assessor to deduct the six thousand dollar mortgage which he had. Here the assessor says, “No, that is not correct.” He says, “I cannot take in your debts, because yours is real estate and that is not a taxable credit, as interpreted by the law,” and he refused to make any deduction. Now, my friends, I claim that interpretation was an interpretation which discriminates against every farmer, against every house-holder, against every man who borrows in the form of a mortgage, and I claim it would be no more right to exempt a man who happened to have a big credit at the bank, the amount that he owed there, than it was to exempt the man who had a farm and who had his six thousand dollars, and the provision provided by this section would prohibit any such unjust discrimination. Under the present law a man who is a broker on Main street is allowed to deduct from his taxable credits the amounts that he may owe to his depositors, the amounts that he may owe upon his notes. A man may have ten thousand dollars in taxable credits; they might be under the old law in the form of mortgages, and if he could show that he owed nine thousand dollars, he could be allowed to deduct it, but if a farmer having a farm that was mortgaged nearly up to the highest notch, worth, we will say, two thousand dollars and mortgaged for fifteen hnndred dollars (and there have been a good many of that kind) that farmer would be required to pay taxes upon the full amount under the old law and the mortgage be assessed too. I claim that that is unjust and I claim that it is in the interest of equity that it should not be done. Now, one minute with reference to the objection offered by Mr. Pierce, although it is not before the committee. Mr. Pierce stated that he would like to amend if this were stricken out, part of the other which provided that all property shall be taxed, not exempt under the laws of the United States or of this State. Why, gentlemen, how many of you would consent to that? How many would consent to providing that any property which the Legislature might hereafter exempt would be exempt from taxation?

Mr. EVANS (Weber). Very few, possibly.
{1106}
Mr. SNOW. All of us.

Mr. CANNON. Mr. Evans says he would not, Mr. Snow says he would. I do not think there are fifteen members on this floor that would agree to leave that provision in there, which would leave it so that the Legislature might exempt a particular man's property or any class of property if they saw fit so to do. The reason they limit the exemptions is because they want it confined in the Constitution, so that it shall be only certain classes of property. Now, the gentleman made a criticism of the fact or claimed that I had stumped this county and adjacent counties and criticised the democratic Legislature that passed that law. That is a fact, I did that. I believe there are men present who heard me and I am not ashamed of it. What criticism did I utter? I believe in stating an adversary's position, and never giving only part of it. I say that it would be only right if they saw fit to do so, to exempt the homes upon which those mortgages existed. I favored in my speeches, at different places, taxing the mortgages and exempting the property of the man who

had been compelled by circumstances over which he had no control in many cases to give the mortgages, and give the poor man the exemption and not hold it out in that form.

Mr. EVANS (Weber). Mr. Chairman, I would like to ask a question. I would like to know whether you criticised your nephew the honorable Frank J. Cannon for recommending that the Legislature passed that law?

Mr. CANNON. My nephew is not the Honorable Frank J. Cannon, but I do not know why the gentleman singles out Mr. Frank J. Cannon. I would like to ask him if Mr. Frank J. Cannon was chairman of that committee.

Mr. EVANS (Weber). I believe not.

Mr. CANNON. Was Mr. Frank J. Cannon's signature attached to that report?

Mr. EVANS (Weber). It was, according to my recollection.

Mr. CANNON. Have you a distinct recollection?

Mr. EVANS (Weber.) I have a very distinct recollection.

Mr. CANNON. You think it was attached, do you?

Mr. EVANS ( Weber). I do.

Mr. CANNON. But you are not sure of it?

Mr. EVANS (Weber). No, I can produce the report.

Mr. CANNON. He was not chairman, however. I do not know why you single it out. I am afraid the gentleman is trying to attribute a little political tinge to this discussion?

Mr. EVANS (Weber). No, not at all.

Mr. CANNON. The gentleman who first spoke and several who have spoken claim it is not a political question. I believe it is not either. I think politics have nothing to do with it. It is a question of simple business and not polities and I hope the vote will be accordingly. I desire to call your attention to this fact. I favored the provision as provided in the California constitution. The gentleman from Washington County quoted me particularly when he says I took that position, but it is said a wise man may sometimes change his opinion but a fool never. We wrote to California, and we got letters from different classes there, one or two of which I desire to read. One from Mr. J. D. Siebe, assessor. (Reads.)

I have here a copy of the revenue laws of California. We found under that, gentlemen, it was in the form, that they exempted the national banks practically from taxation; that they did not have

anything like the taxation which we have in Utah, and if we would exempt that we would exempt more than the amount loaned on mortgages. And under the old California law, this was the purpose. I have a letter dated Sacramento, March 25, 1895, in reference to this. (Reads. )
{1107}
And there is a provision in the California law exempting free public libraries and free public museums, growing crops, mortgages, trust deeds, property used exclusively for public schools, and such as may belong to the United States, the state, or to any county or municipal corporation within the state.

Mr. EVANS (Weber). That has not yet been voted upon by the people.

Mr. CANNON. No, sir; this was passed by two-thirds majority of the Legislature. I call attention to this fact that after this law had been in operation in California since about 1876, I think it was, after they had tried it there for nineteen years, there is such a division of opinion that the representatives of the people elected to the legislature, by a two-thirds vote, vote to repeal that old law. Now, gentlemen, with that staring them in the face, with that kind of a record from a state that has tried it for nineteen years, was it unwise for this committee to come in here and say we favor leaving it to the Legislature instead of putting that old law in here? The minority of those men, who are making the fight upon this clause, that they would report a substitute_not to strike this out, but they would report a substitute, inserting that California provision. Why have they not done it? Why do not they, if they favor taxing mortgages, provide here a substitute by which we can come right to the root of the matter and tax them as they propose to do. If they want to put that in and there are enough here to make out on the balance, and my vote is the casting vote, I will vote to tax mortgages, because my position is the same as before; but I claim, gentlemen, with this instance of California's experience after a trial of nineteen years, we can afford to leave it to the Legislature, and the only thing I insist shall be put in is this, a provision by which you must exempt from taxation, if you tax mortgages, the property which is covered by it, and which belongs to a poor unfortunate man who has been compelled to borrow. That is the question, and that is the position upon which I stand. I do not care for the arguments which were used casting reflections upon my character. I do not care for reflections which are used here in which bankers are referred to as Shylocks, because I am too poor to feel that I am in that class of bankers. I do not care for that which is used simply for throwing dust in your eyes and not by way of convincing your intellects. But I ask you, gentlemen, to dispassionately look at the facts in this case and then provide that, if they ever do tax mortgages, which the Legislature has full power under this section to do, that they shall grant justice to the man whose property is mortgaged and shall exempt it to that extent that they get it from the other.

Mr. IVINS. Is it true that two-thirds of the members of the California legislature voted to repeal the law taxing mortgages, or is it true that two-thirds of them voted to refer that section to the people to get an expression of their views in regard to it? I want to state that this is an amendment to the California constitution and that the members simply voted by a two-thirds vote to submit it to the people.

Mr. CANNON, The fact in the matter is as follows, the secretary of the state board of equalization sass a constitutional amendment has been adopted by the recent legislature and will

be submitted to the people for ratification at the next general election, exempting such property from taxation. They have adopted and the people simply have to ratify it. It was the opinion of the legislature that it should be adopted or they would not have passed it in that form.

Mr. IVINS. Another thing, the gentleman said that while I was assessor and collector of Washington County, if there was a mortgage on a man's home, that I deducted the amount from his {1108} home and assessed the money to the person making the loan; I want to say that during the six years I was assessor and collector of Washington County there was not a single instance came under my observation, where a home was mortgaged in that county, and I do not think to- day that after a good many years have elapsed since I was assessor, there are a dozen real estate mortgages recorded in Washington County, and there was never one that I know of.

Mr. CANNON. Did you state in our committee that you made the deduction I stated?

Mr. WINS. Yes, but not in homes_not from real estate. The idea was all right. I simply just wanted you to understand that, thank the Lord, Washington County is not mortgaged now and never has been.

Mr. EVANS (Weber). I would like to know how it is in San Juan. [Laughter.]

Mr. LUND. I want {o ask Mr. Cannon a question. Is this the first attempt by the people of California to repeal that law?

Mr. CANNON. I am not conscious of that; I did not ask.

Mr. LUND. I understand that it is; it might work well in Utah for twenty years.

Mr. CANNON. I will tell Mr. Lund that the question has been agitated for a great many years, but I have not gone into the history of California to investigate it. I simply wrote there at the time favoring this proposition and expecting to incorporate it, and this was the result.

The question being taken on the motion to strike out, the committee divided, and by a vote of 57 ayes to 24 noes, the motion was agreed to.

The committee then took a recess until 2 o'clock p. m.

AFTERNOON SESSION.

The committee met pursuant to adjournment and resumed consideration of the article on revenue and taxation.

Section 6 was read.

Section 7 was read.

Mr. CANNON. I thought the gentleman would understand this because it was taken in body from Washington.

Mr. EICHNOR. It is all right.

Section 8 was read.

Mr. KIMBALL (Weber). Mr. Chairman, I move to strike out that section entirely. I do that for this reason, that there may contingencies arise in which the Legislature ought to be entitled to act in this matter. We cannot tell now in advance of legislation what the contingencies may be. I move for that reason to strike out that whole section and leave it to the Legislature to fix the rate of taxation. It will be absolutely necessary in some instances that the Legislature shall fix the limitation.

Mr. CANNON. Mr. Chairman, it has been stated here in the Convention a number of times that one objection to the Constitution would be the increased taxation. By limiting the rate as herein provided the people are insured that no Legislature shall ever increase their present tax which is now five mills, more than three mills, if the property be less than two hundred millions in value. And that when it reaches two hundred millions that the rate shall be dropped to five mills. I think that the amount here given as the maximum amount is sufficiently large to cover any expense that will be incurred. It will yield a revenue on the present valuation of very nearly eight hundred thousand dollars per annum, and the estimated expenses fall very much below that {1109} amount. I do not think that it will be necessary for State purposes with the economy that is being provided for by the Constitution to assess more than six or seven mills, and I certainly favor keeping it in, as I believe it will aid in the adoption of the Constitution.

Mr. KIMBALL ( Weber). Mr. Chairman, I do not think that the gentleman answered the question. There are many instances that I have in mind when the Legislature should be left at liberty to increase the taxation or decrease it. If we put this proposition in the Constitution it would forever forbid the Legislature from going beyond a certain amount. I do not think that is proper. I think it should be left to legislation to fix the amount of taxation.

Mr. SNOW. I would like to ask the chairman a question, whether section 8 harmonizes with the latter part of section 2, beginning on line 16. (Reads.)

Would this provision in section 8 be ample to cover this under all circumstances?

Mr. CANNON. It would by proper economy, because we limit the amount of debt that can be created. It would be sufficient to pay our present indebtedness and the amount that is provided for by our Constitution.

Mr. THORESON. Mr. Chairman, I do not think we are able to legislate for San Juan County. If they want to bond that county there is a provision for that purpose, if the majority of the people vote for it. I am opposed to the striking out of this section. The question of the rate of taxation is the important question connected with statehood for. this Territory. That is a question that people ask, “is it not going to increase our rate of taxation?” And I say unless we have a provision in here guarding that point, there will be more doubt about the people assuming a Constitution, than any other point. The committee has duly considered this. The eight per cent. will cover the ordinary emergencies and if there is more revenue wanted, if you will notice the section provides that the people of the Territory can vote to increase this rate and raise the revenues desired, but the vote of the people with a higher rate of taxation than eight mills is something that shall cause people to vote against this Constitution. I think we should guard our people against any higher rate and I think the section should be retained.

The motion to strike out was rejected.

Sections 9, 10, 11, and 12 were read.

Mr. Allen offered the following substitute for section 12:

State and county boards for equalization of taxes shall be provided by law.

Mr. THORESON. Let me ask the gentleman a question. The boards we provide for here_the State boards at least will serve without pay according to the other parts of the article. Would their mileage and expenses outside amount to as much as the expenses of an outside board and their mileage?

Mr. ALLEN. I think that they would be obliged to travel in order to obtain the information

themselves, and their expenses would be more than-_

Mr. THORESON. Will it increase the expenses?

Mr. ALLEN. I do not think it would increase the expense, but they would not have the knowledge the other board would have.

Mr. EVANS (Weber). Mr. Chairman, I offer the following amendment to the original section:

“Until otherwise provided by law,” to be inserted at the beginning of the section. I am informed that the board of equalization at present costs the Territory about seven thousand dollars. This board would serve without compensation, and if it is found in the future to be inadvisable that this board should continue for that purpose, the Legislature can change it, and I am in favor of leaving the section as it is with that amendment.

Mr. SQUIRES. I want to ask Mr. Evans a question. I understand that we have provided in the executive article so that this State board would not cost the State anything for serving?

Mr. EVANS (Weber). That is exactly what I want.

Mr. SQUIRES. Have we provided that the board of county commissioners would serve without extra compensation?

Mr. EVANS (Weber), I think not.

Mr. SQUIRES. Then, would it not be wise to add after the word county, “who shall receive no extra compensation, for that service?”

Mr. EVANS (Weber). I think it would.

Mr. SQUIRES. I move to insert that then.

The CHAIRMAN. I would hold that the amendment has gone as far as it can go. I do not care to have ourselves tangled up any farther.

Mr. CREER. Mr. Chairman, I simply want to endorse the sentiment expressed by Mr. Evans of Weber County on this proposition. I think that the qualifications of those men are more to be considered than the matter of the saving of the expense. The State treasurer and auditor may have qualifications suitable for that purpose, they may be able accountants, possibly assistant cashier, clerk, or something of that kind, but as to estimating various kinds of property in the Territory, I think that certainly they would not be proper subjects for that position and I am opposed upon this idea anyway, all the way through. I am opposed to it in the way of the executive, that we have passed. The idea of making a treasurer_he is the man that has to handle the funds, and it would give him the power to discriminate for or against in many instances, as it would in regard to making the governor one of the members of the board of the other public institutions. He

would have one-third of the office in endorsing appropriations for those institutions and he may be prejudiced in their favor or in favor of some other. I am opposed to this principle except to the qualification that I am willing it should be tried as an experiment, but to put it in there permanently I think that it would be a great mistake. Therefore, I am going to vote for it as proposed by the gentleman {1111} from Weber County_until otherwise provided by law.

Mr. FARR. Mr. Chairman, I have been opposed all the way through to legislating, excepting where it is absolutely necessary. I think this section, with Mr. Evans's amendment, should be in by all means, “unless otherwise provided by law,” and if the next Legislature sees it necessary to make a change, they can change it, consequently I am in favor of this section with that amendment.

Mr. KIMBALL (Weber). Mr. Chairman, I am certainly in favor of the section as it stands. As now provided the State board shall consist of governor, state auditor, state treasurer, secretary of state, and attorney general. Those gentlemen are all salaried officers. They have no interest whatever in increasing or decreasing of taxation, and they are the proper men to go into this board. The county commissioners are likewise elected to a certain office, they get certain pay, and they have no interest in increasing or decreasing taxation, so I am in favor of the section as it now stands, because I think it is the most equitable thing that we could insert in the Constitution, for the reason that neither of the officers is a salaried officer neither of them get anything for increasing or decreasing the taxation. I submit that is the proper thing to stand.

Mr. HEYBOURNE. I object, Mr. Chairman, to the section as it now reads and am of the opinion that I shall support the amendment offered by the gentleman from Weber County. This matter of taxation is quite important. The equalizing of taxes is a very important matter, and while I have the greatest respect for the ability of the gentlemen that are named here in this section, I am of the opinion that in order to do justice to all parts of this Territory, there should be a representation on the board, so that they might take into consideration the different valuations as they exist throughout the length and breadth of the coming State. We have a county board provided for here, whose duty it is to equalize the taxes of individuals, in the various counties. That seems to work reasonably well and the board of equalization that is provided for at the present time for territorial labors have had a representation in that body from various parts of the Territory, and I think that it has worked first rate. It has given general satisfaction. When we come to concentrate the members of this board here in this city, I believe it would be an injustice to the outlying counties. Therefore, I shall support the gentleman's amendment that provides until otherwise provided by law, leaving the matter then in the hands of the Legislature to look after the varied interests of the coming State.

Mr. SQUIRES. I would like to ask the gentleman a question. I judge from his remarks that he does not expect any officers are going to be elected to State offices, except gentlemen from Salt Lake County.

Mr. HEYBOURNE. Well, I should judge from this section here that provisions are made for certain gentlemen from the officers of the State.

Mr. HEYBOURNE. Judging from the past, I think they will be elected from here.

Mr. THORESON. Inasmuch as you are willing and want to leave it to the Legislature, why not leave it to the Legislature entirely and not go on and put a section in here?

Mr. HEYBOURNE. I understand the gentleman's amendment has that object in view; “Until otherwise provided by law.”

When the Legislature meets they can attend to that matter.
{1112}
Mr. THORESON. Why not leave it then entirely without putting this in if that will suit you?

Mr. IVINS. Mr. Chairman, my objection to leaving it to the Legislature is that I prefer that these officers who are named should act as a territorial board of equalization. Now, if, after trying this experiment, it should prove to be not proper or not a successful experiment, I would be willing then to empower the Legislature to make a change as provided in Mr. Evans' amendment. I want to say that we appropriated about seven thousand dollars for the territorial board of equalization at the last sitting of the Legislature, and I do not believe that the Territory has got value received for it. I think that these public officers can execute this law and fill all the necessities of the case, and if it shall prove that they cannot, then the Legislature will be empowered to make a change. I think that is as far as we ought to go anyhow. If this had been proposed in the committee, I think I should have approved it there, but it was not and we were in favor of the section as it is. I am willing to make that concession, but I do not want to leave it to the Legislature entirely.

Mr. CANNON. Mr. Chairman, the section as reported by the committee is not an unusual one. It is found in a great many of the constitutions of the surrounding states and in other states. I, however, agree with the last speaker, and I believe had this proposal been made in the committee, it would have been adopted by the committee. I favor the amendment offered by the gentleman from Weber, Mr. Evans, and with that amendment I think the section should stand as it is.

Mr. PARTRIDGE. Mr. Chairman, I would like to ask the chairman of the committee where there is any provision made for a board of county commissioners? I have not been able to see where they are provided for?

Mr. THURMAN. That is the select-men.

Mr. CANNON. I believe they are named in the article on municipal corporations.

Mr. IVINS. It is meant to apply to the county selectmen, they are called commissioners, it means the selectmen.

Mr. JOLLEY. Mr. Chairman, I certainly and in favor of the amendment of Mr. Allen. I remember

that this expensive board has been made mention of in the past. It did not give entire satisfaction, and they were selected outside of the capital, but I cannot altogether agree with my friends in Salt Lake that they are apt to be from San Juan or Washington County, or somewhere else that is to be. These officers made mention of_they are more apt to be, men that are living here in Salt Lake City or near about, and they would not be capable of judging in relation to the prices and valuations of the property in the more remote parts of the Territory, and for that reason I am in favor of leaving this matter to the Legislature and shall vote for the amendment of Mr. Evans.

Mr. SQUIRES. Mr. Chairman, I am not in favor of the amendment offered by the gentleman from Piute, and I favor the section as it stands, with the amendment offered by the gentleman from Weber, and I want to say here that the amendment which I proposed I shall not now make and for this reason: that the board of county commissioners as I understand it will be paid a per diem and mileage for all their services. Now, it would be unwise and unjust and unfair to require them to serve certain days as a board of equalization without that per diem and mileage and for that reason I shall not put in the amendment, but shall vote for the section as it stands, with the amendment by the gentleman from Weber.

Mr. CORAY. Mr. Chairman, I am in favor of the amendment made by the {1113} gentleman, Mr. Allen. I have observed the methods of these boards of equalization for sometime, and it appears to me the way they equalize the taxes is the county board ascertains who is taxed the highest_whose property is assessed the highest, and they equalize all the rest with it, and their work is done very easily and very simply. That is the method pursued in Juab County at least, and I think it is the same with the territorial board. When they went down through the Territory, they simply raised the taxes in all the rest of the counties to the standard of the county that was taxed the highest. They raised our taxes down there forty per cent_real estate and merchandise, and that is the method they have pursued heretofore, and I am opposed to all such boards. I think the question should be settled in the Legislature.

Mr. EVANS (Weber). Let me ask Mr. Coray a question. That board of equalization of whom you make mention was composed of men living out in the country as well as those living in Salt Lake, was it not?

Mr. CORAY. I do not know where they lived; I could not tell you. I just say that this was the method pursued by hoards of equalization.

Mr. EVANS (Weber). That is the fact, that the men that composed that board were selected from all over the Territory_from a number of counties?

Mr. CORAY. I remember two of the gentlemen, one was Charlie Richards and another was Elias Smith, Jr. They were not from the country.

The amendment offered by Mr. Evans, of Weber, was agreed to.

The motion of Mr. Allen was rejected.

Mr. CANNON. Mr. Chairman, I have no particular objection to this being stricken out, but at the same time, I see no advantage. It would simply be provided for immediately by the Legislature. And this is in this identical language in several of the states. For that reason, I am opposed to striking it out. It may just as well be left as it is.

Mr. SMITH. Mr. Chairman, it seems to me that there is no necessity for it whatever. It is just simply legislation pure and simple. The taking of it out does not detract from the section a particle; I am in favor of striking it out.

Mr. CANNON. What objection is there?

Mr. SMITH. Because it is just simply legislation; it can be just as well done in a Legislature as here.

Mr. CANNON. Would it cost any more than it would in the Legislature?

Mr. EVANS (Weber). Mr. Chairman, I hope that motion to strike those words out will not prevail. We have defined the duties of the governor, the secretary, the treasurer, school instructor, and all the other officers. This simply defines what their duties shall be. The State board shall equalize the taxes of the State, the county board shall equalize the taxes of the county; that is all there is to it. It is very brief. It is not much legislation, and if it be termed legislation, we might go back and strike out all the duties for the other officers in this Constitution, which we have passed upon. It leaves it fixed and certain just as it should be and just as it always will be. There is no occasion for a change in that at all.

Mr. FARR. Mr. Chairman, I suggest that we elect men to these offices that have got sense enough to know their duties, without telling them what they are. I move to strike out on that ground.

The motion was rejected.
{1114}
Section 13 was read.

Mr. SHARP. Mr. Chairman, I move to strike out the word “used,” in line 5 of section 11.

Mr. CANNON. I would like to hear the gentleman's reasons for such a motion.

Mr. SHARP. My reason for asking to have it stricken out is that I see no good reason for leaving it in, and I made this motion to bring out the reason for leaving it in.

Mr. CANNON. Mr. Chairman, I would state that the committee had in view more particularly

those two words than any of the rest of the section. Our previous sections provide that any property now in the Territory should be taxed, but this “or used” in the Territory was to provide that corporations coming in here, using capital in addition to that which they ordinarily had there should pay a tax on it. It was more especially providing that foreign corporations should pay taxes the same as local. For instance, if a corporation of any kind doing business here with a capital we will say of ten thousand dollars should claim that the balance of the money it had belonged to a corporation in the east and in that way escaped taxation on a hundred thousand dollars, we provide by this the means by which they should pay taxes on the amount they used here, just the same as the local man would pay taxes on the amount he used.

Mr. EVANS (Weber). Is it not also intended that railroad companies using the stock of other corporations in this Territory may be taxed?

Mr. CANNON. Yes, sir.

Mr. EVANS ( Weber). Such as Pullman cars and engines and equipment in the Territory used by a railroad company although owned by some foreign company?

Mr. CANNON. Yes, sir; it would cover all property in the Territory. It was taken from Colorado.

Mr. SHARP. Is it not a fact that railroad companies are assessed so mnch a mile for the railroad and the equipment?

Mr. CANNON. I am not aware of the method of assessing railroads, but I think in addition to that they are assessed on their equipment, so much for the number of cars they have. It would be evidently unjust in my mind to assess a company which had. a hundred cars the same as a company which had two hundred, even if the mileage was the same.

The motion was rejected.

Mr. SHARP. Mr. Chairman, I now offer another amendment, that we insert the words “or persons” after corporations, in the first line of section 11.

Mr. SQUIRES. Mr. Chairman, in view of the fact that section 5 was stricken out of this article in order that the matter of taxing mortgages should be left to the discretion of the Legislature and not made mandatory, I move that section 2 of this article be amended by striking out in lines two and three the words “under the Constitution,” and insert in the place of those words, “of this State.”

Mr. THURMAN. Mr. Chairman, I do not see any necessity for that amendment. In relation to the taxation of mortgages, which was discussed this morning_and I understand the gentleman makes the striking out of that section the basis of this motion_I take this position, that if to tax a mortgage is double taxation, it is illegal, anyhow, because it is not uniform. If it is not double taxation, it ought to be taxed. This section, as it now stands, provides that all property in the State not exempt under the laws of the United States is subject to taxation. That ought to be so. I say

that we cannot indulge in double taxation, as a matter of law, unless we can do away with the principle which provides for uniform taxation. In other words, we cannot say that a man's horse or his cow shall be taxed twice, while some other man's {1115} property shall only be taxed once. So I say the matter is right just as it stands. If to tax a mortgage is double taxation, the courts will settle that. If it is not double taxation, then they ought to be taxed. The sections, as they now stand with that struck out, as it was struck out this morning, it seems to me are exactly right and there can be no question about it.

The motion of Mr. Squires was rejected.

Mr. CANNON. Mr. Chairman, I move to amend section 13, line 3, by adding at the end of the line the word “occupation.” At the time this was before the committee the word occupation was at one time considered, and at that time one of the members of the committee, who was an attorney, thought that it would be covered by the other provision. Since that time, in consultation with the same gentleman, he stated that he thought no harm would come from inserting the word anyway, and I believe it should be in there. I believe the State should have the right, if it sees fit, to tax lawyers, carpenters, bankers, and everybody else.

Mr. THURMAN. And preachers.

The motion of Mr. Cannon was agreed to.

Mr. THORESON. Mr. Chairman, in section 3, line 12, I move to strike out the words “municipal corporations.”

The motion was agreed to.

Mr. EVANS (Weber). Mr. Chairman, I desire to offer an amendment to section 3, by inserting after the word “benefit,” in line 16, the words “or other like property.” This section is designed for exempting certain properties from taxation. There might be some property of a similar nature which ought to be exempt and it is not provided for in the section_something that we have omitted.

Mr. PAGE. What other property do you have in mind?

Mr. EVANS (Weber). I have not any.

Mr. PAGE. That would be likely to come under that head?

Mr. EVANS (Weber). I think all is enumerated there that should be, but there may be property of a like nature which the Legislature might want to exempt, but I would make it of a like nature.

Mr. PETERS. Do you not think this amendment will be more appropriate if inserted after the word “burial?”

Mr. CANNON. I think that would be entirely appropriate.

Mr. EVANS (Weber). Oh, yes, that would not be right, come to look at it. I will recede from that and place it as I had it first, because it would be inappropriate after the word burial.

Mr. CANNON. If I might be permitted to suggest, I suggest to the gentleman if he interline it at all that it be after the word “purposes.” I do not think there are many other like purposes for burial. If you are going to have “other like purposes,” at all, I think it should come after the charitable purposes, in line fifteen.

Mr. GOODWIN. Mr. Chairman, I think after “burial” would be the right place and it would apply to a crematory. I wanted to ask why burial places are exempt from taxation? They are the only ones that do not growl at taxes.

Mr. KERR. Mr. Chairman, while I do not know of any very great reason why this should not be inserted, yet I can see no reason why it should be. That being true, I am opposed to the motion to amend. It seems to me that the proposed section here certainly covered all that ought to be exempt under that section. I can conceive no other kind of property that should be exempt. That being true, I am opposed to the amendment. If the amendment should {1116 - PUBLIC DEBT} prevail, it seems to me the word “and” instead of “or” should be put in. I can see no good that would come from inserting these words.

Mr. EVANS (Weber.) With the consent of my second I will withdraw the amendment.

Mr. CANNON. Mr. Chairman, I move that when we do rise that we report this article and recommend it be placed upon the calendar for third reading.

The motion was agreed to.

The committee of the whole then proceeded to the consideration of the article entitled public debt.

Section 1 was read.

Mr. EVANS (Weber). Mr. Chairman, I desire to offer an amendment to section 1, by adding after the figures one million dollars the following, “including existing indebtedness of the Territory.”

Mr. THORESON. I would like to ask a question. What is the amount of the present territorial indebtedness?

Mr. EVANS (Weber). Seven hundred an