the same thing, the imposing of a discriminating burden of taxation upon persons who, for any cause, may be in debt—a denial of equity which public sentiment in every free country will not long tolerate. A further proof and illustration of this averment may be found in the fact that years ago the Constitution of Ohio provided that credits, or evidences of indebtedness, should be subject to taxation by a uniform rule; and the Supreme Court of Ohio subsequently decided that this did not allow any offset of debts owed against credits owned. But popular opinion was so adverse that by common consent this clause of the Constitution, as interpreted by the court, was entirely disregarded in making up tax valuations.
In old English history the division of property into real and personal was wholly unknown; and all laws regulating this species of property, with a view to taxation or inheritance, are of comparatively modern origin.[1] It is also interesting to note that probably full one fourth of all the so-called personal property of this country—namely, all railroad, steamship, telegraph, telephone securities—did not have an existence fifty years ago.
As is the case with direct and indirect taxes, the line of demarcation between real and personal property, and consequently between real and personal taxes, is very indefinite, and some very nice and curious points in connection therewith have been established by usages, or court decisions. Thus an apple on the tree is real estate, but when fallen upon the ground it becomes personal property. Running water accumulated in a pond is real estate, though the owner is not permitted to invest it with the peculiar attribute of real estate—namely, stability—by permanently arresting its flow. In some States the engines, water wheels, shafting, and even belts of factories are real estate, while looms and lathes are personal property. Stone in the quarry is real estate, but when thrown out by a blast and made ready for market it becomes personal property. Hop-poles, not standing, have been
- ↑ The first authorization of local taxation in England was for the maintenance of the poor, and occurred in the reign of Elizabeth. At that time it seems to have been assumed that there was no personal property in the kingdom capable of being assessed, and that real property was alone valuable property. Hence it was enacted (43 Elizabeth, cap. 2) that overseers should be appointed who were to raise, by taxation of every inhabitant, parson, "and of every occupier of lands, houses, tithes impropriate, propriations of tithes, coal mines, or salable underwoods in the said parish," moneys for the relief of the poor. No mention was made of personal property, and it is probable that every kind of property then known was mentioned in the act. When fresh burdens were necessary the principle adopted by the act of Elizabeth was continued, without much inquiry or opposition, and owners of personalty have remained exempt from taxation, although personal property has gone on increasing until its value has become much greater than all the real property of the kingdom.
