any positive sentiment on the part of the state, but rather to, a series of legal decisions by its courts, which gradually undermined the whole system of British local tax assessment, until it tumbled down, as it were, imperceptibly, and gradually became replaced, from necessity, by a theory which approximated more closely to the principles of sound political economy and the dictates of common sense.
Thus, one of the first of the old-time maxims which gave way under these decisions was the fiction of law that all property for the purpose of taxation followed the person or domicile of the owner (in virtue of which real estate was once taxed, under the British system, where the owner resided, in place of where the property was situated, used, and protected), and its replacement by the more rational principle that for all purposes of assessment the situs of property is where the property actually is; while other decisions of a similar character, following one another by intervals of years, forbade the taxation, for local purposes, of all evidences of national indebtedness, or "consols"; affirmed the situs of a vessel for taxation to be at the port of its registry, irrespective of the domicile of the owner; and declared that all negotiable instruments are chattels personal, and the like; until the British system of local taxation, like the French, Belgian, and German, has come to be based on the assessment of comparatively few objects, and the avoidance in assessment, to the greatest possible extent, of all personal inquisition and arbitrary treatment.
A case in question determining definitely, as it would appear, the hitherto questionable situs for State taxation of all that large class of personal property comprised under the general term "negotiable instruments"—i. e., State, municipal, railroad, and other corporate bonds, circulating notes of banking institutions, promissory notes payable to bearer, etc.—is reported in the fifteenth volume of Wallace, under the title of State Tax on Foreign-held Bonds, and in brief may be thus stated:
The State of Pennsylvania, by a law passed in 1868, required the officers of every company, except banks or savings institutions, incorporated and doing business in that State, to retain a tax of "five per cent" upon every dollar of interest paid by such company to its bondholders or other creditors, and to pay over the same to the State Treasurer for the use of the Commonwealth. The plaintiff in this specific case—the Cleveland, Painesville, and Ashtabula Railroad Company—denied the legality of the tax, and, appealing to the State courts, alleged, among other things, the following in support of its position:
"That the greater portion of the bonds of the company having been issued upon loans made and payable out of the State to non-
