ed, is, that it did not take the citizens of New Jersey a great length of time to find out that a borrower of money on a mortgage paid the tax, and that the lender was the tax collector, and only paid his part of a diffused tax, as all other persons living, consuming, buying, or selling in the State must pay; and that if the borrower could not legally pay the lender a rate equal to other net profits of investments, he could not borrow. A little experimental legislation in other States will, therefore, effectually explode the vague theory that taxes uniformly levied do not diffuse themselves; and although it is true that the persons or property primarily taxed do not charge the entire tax over to others, this very fact nevertheless shows that the tax is diffused with absolute equality upon the persons who originally may pay the tax, and upon those who finally bear their portion of it.
Loans on Mortgages prohibited in Rome.—Mommsen, in his History of Rome, states that at one period the lending of money in that country on mortgages was prohibited, and it is apparent that a uniform taxation of mortgages would amount to a prohibition as effectual as the prohibition which existed under the Roman law. The Roman patricians, in their legislation, wished to prevent the common people from becoming an independent yeomanry, and owning and acquiring real estate through the facilities of borrowing upon mortgages. No chimerical attempt had then ever been made to tax money at interest, and this purpose of having the soil cultivated on shares or by dependent tenants could best be obtained by a prohibition of all mortgages.
Now, it needs no argument to show that a system of onerous taxation of mortgages must have a tendency to re-enact the Roman policy, and that it is undoubtedly the true interest of the state, on both political and economical grounds, to encourage occupiers to become owners, who always give better attention and protection to their own property than to the property of landlords.
Purchasers of Government Bonds not Practically Exempt from Taxation.—The purchasers of United States, State, and municipal bonds or securities, which are nominally exempt from taxation, are in effect taxed, and uniformly taxed in the high price which they are obliged to pay for these securities by reason of their exemption from taxation. It is not only a sound principle of political economy that a tax upon money at interest is simply a tax upon the borrowing price of the borrower, causing an increased rate of interest, or a reduced price to be obtained for the obligation given; but this principle has been adjudicated by the highest court of the country, so far as a court of last resort can adjudicate a great principle in economic science. Thus, in the case of Weston vs. The City of Charleston (2 Peters, 449), the Supreme Court of the United States, through
