XXVIII REPORT OF THE

gage debts to secure the payment of the purchase mosey of
real estate, and the Act of 1870, Chapter 394, which exemp-
ted mortgage debts from taxation altogether. This Act has
always been considered by a large proportion of the taxpay-
ers of the State as an unequal and unjust measure, giving
to capitalists investing in that sort of security an im-
proper advantage over the holders of other property. This
abatement of so large a portion of the personal property from
the tax-books, could not fail to have the effect, to materially
increase the burdens of those owning property of other de-
scriptions, not thus favored. This effect has been continually
increased by the eagerness of capitalists to avail themselves
of this exemption, by procuring mortgages to cover all debts
due them, not so much for the purpose of additional security
to the debts, as for the express and avowed purpose of free-
ing themselves from the burdens of taxation.

By the legislation of the State since 1870, the State has
established the anomaly, that while the capitalist whose
means are invested in obligations not secured by mortgage,
is to be taxed according to the true value of those obligations,
yet immediately he may obtain the additional guarantee of a
mortgage, to give the investments increased value and
security, he shall become, ipso facto, free from taxation, as
to such investments. Why the capitalist who is thus fortu-
nate in having his means invested, so as to possess the
greatest possible security for the prompt payment of his
interest and principal, should be thus favored over his neigh-
bor, whose investments are not thus safely guaranteed, is the
question to be answered. One of the arguments used ordi-
narily by the advocates of this special privilege, is that as
the property mortgaged is taxed, the taxation of the mort-
gage debt, for the payment of which the property is pledged,
would be a double taxation. We will suppose the case of
of nothing but real property. The holder of such property
is taxed, and must be taxed for the full value, whether he owes
more than the property is worth or not, as no sovereignty
could afford to let such considerations operate in deroga-
tion of the taxing power on all the lands held by its
citizens or subjects. The owner of debts due from such