e assessment of mortgages upon a valuation equal to, if not higher
than, that upon farms. They forget that the ability to pay taxes from year
to year comes out of the profit or rent from the farm; and if both farm
and mortgage are taxed, the adjustment comes through the interest which
the mortgage must bear. To illustrate, a father sells his farm, worth
$5,000, to his son, taking a mortgage for the entire value. If mortgages
are assessed, the value of that farm for all purposes of taxation is
$10,000; and yet the living of both father and son, taxes included, comes
out of that farm's production. The two have no more property and no more
ability after the transaction than before. Thus the mortgaged farms in
every community where mortgages are taxed bear double burden.

In a similar way the taxation of any form of notes or bonds or stock
doubles the assessment in form without increasing the abilities. _The
actual property in use will finally bear the burden of both assessments._
The road-bed and rolling stock of a railway are property whose value is
readily estimated. The actual ownership is in a corporation which may be
distinctly taxed. Certificates of stock are individual titles in that
corporation whose property has already been taxed. Its outstanding bonds
are simply claims against that corporation, to be paid out of that
property which has already been taxed. So every note, being evidence of
debt simply, is not a representative of property, but simply a claim
against property supposed to exist somewhere else. It may be an absolute
fiction, in being a claim against property only hoped for. The result of
all efforts to treat certificates of indebtedness as personal property are
hardship to debtors and apparent fraud on the part of many creditors. Even
though the creditor escapes taxation by hiding his possession of a
mortgage, the possibility of its being taxed is always counted in his
bargain with the borrower as an important element in interest. The
experience of those states in which such taxation has been abolished
proves that lower rates of interest are sure to follow.

_Income taxes._--A favorite device in some countries, and often advocated
in this, is a direct tax upon incomes above a certain amount, graduated so
as to give a much larger rate upon large incomes than upon more moderate
ones. The most obvious reason for such a distinction against the large
incomes is the evident failure of our national system of