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NOTE: You may notice textual errors throughout this document, many of which have been left intact from the original text. Should you want to investigate the integrity of the original report, please refer to the original two printed volumes containing the official report of the proceedings and debates.


WEDNESDAY, April 17, 1895.

Prayer was offered by Delegate Maughan, of Cache.

Journal of the forty-fourth day's session was read and approved.

The following petitions were presented asking that the question of woman's suffrage be submitted as a separate article to a vote of the people:

File No. 319, signed by John H. Hougaard and 250 others, from Manti, by C. P. Larsen, of Sanpete, by request.

File No. 320, signed by D. Hirschi and 50 others, from Rockville, by Snow, of Washington.

File No. 321, signed by W. T. Kyte and 65 others, from Bingham, by Squires, of Salt Lake.

File No. 322, signed by J. H. Ball and 70 others, from Coalville, by Kearns, of Summit.

File No. 323, signed by R. A. Deal and 370 others, from Springville, by Boyer, of Utah.

File No. 324, signed by J. L. Holgreen and 50 others, from Richmond, by Kerr, of Cache.

File No. 325, signed by Robert C. Knell and 11 others, from Pinto, by Ivins, of Washington.

File No. 326, signed by Francis Prince and 53 others, from New Harmony, by Ivins, of Washington.

Ordered filed.

The following petitions were presented asking that an equal suffrage clause be placed in the Constitution:

File No. 327, signed by Geo. R. Hill and 250 others, from Springville, by Boyer, of Utah.

File No. 328, signed by A. D. Bower and 66 others, from Summit, by Chidester, of Garfield.

Ordered filed.

Mr. SQUIRES. I received a communication with that petition (File No. 321) which I would like to read, if I may.

(Read as follows):

Bingham Canyon, Utah, April 15, 1895.

Col. G. P. Squires, Salt Lake City:

Dear Sir: Enclosed some more names. Hope you will be able to convince those fellows that the insertion of that clause will damn either or both parties.



Mr. IVINS. I would like to ask Colonel Squires if he offers this as part of his remarks?

Mr. SQUIRES. I offer it, sir, as a part of that petition.

Mr. EVANS (Weber). Mr. President, I move that that petition be returned to Mr. Squires as being an insult to this Convention.

The motion was agreed to.

The committee on mines and mining reported as follows:


Your committee on mines and mining herewith respectfully present a proposed article for insertion in the Constitution.

KEARNS, Chairman.

Mr. EVANS (Utah). Mr. President, I desire to ask unanimous consent to offer a motion that we reconsider the question upon which we passed last night, in regard to the disposition of the balance of the money on hand, first asking unanimous consent to offer that motion.

The PRESIDENT. Gentlemen, are there any objections?

Mr. EVANS (Utah). I offer that as a motion, to reconsider that matter. The motion was agreed to.

Mr. EVANS (Utah). Mr. President, I now move you that the report of the committee be received, placed on file, and that the recommendations be not adopted.

Mr. CANNON. Mr. President, I notice that the chairman of the committee is absent, and I think it would be better to postpone it until he is present. For {1085 - TAXATION AND REVENUE} that reason I move to lay this motion on the table.

The motion of Mr. Cannon was agreed to.

The Convention then resolved itself into committee of the whole with Mr. Evans of Utah in the chair, and proceeded to the consideration of the article on revenue and taxation.


Section 5 was read.

Mr. CHIDESTER. Mr. Chairman, I move to strike out section 5.

Mr. IVINS. Mr. Chairman, had a motion to strike out section 5 not been made by some other member of the committee I should have made that motion myself, believing that this section is a very dangerous and improper one to be incorporated in this Constitution, and I desire to ask the indulgence of the committee for a few moments while I shall discuss it, because it seems to me that no question has yet come before this committee or the Convention at large which is fraught, or will be with results of more importance, either for good or for evil, as will be the incorporation of a section similar to this in the Constitution. It seems to be a very innocent provision superficially, but I am pursuaded [*note*], gentlemen, that there is underlying the principle that is involved in this proposition one that is just as important to the people of this Territory and the coming State, one which, if it shall be realized, will result in just as great disaster to this State as did the demonetization of silver to the whole nation, when that was insidiously passed through Congress at the time the act was approved. In discussing the question that you may understand fully my position upon it, it will be necessary for me to review briefly the theory of taxation as it has existed in this Territory and in this nation, and in other states and nations. The claim is that this provision is designed to prevent unjust taxation. That it is designed to prevent double taxation, and that by its incorporation, it will not be possible in the future for the State to twice tax the same property or the values which are represented by the same property.

Now, gentlemen, I wish in the first place to say that there is no just system of taxation. Many different systems have been tried in this and other nations, and there is not one among them all that is not subject to criticism and to serious objection. Four methods of producing revenue have been tried at different epochs in the world's history. First, voluntary contribution; second, tax upon capital or the accumulation of labor; third, a tax upon revenue, and fourth, a tax upon expenditures. In the first place, we take it for granted that properly it is the duty of every citizen to contribute to the support of the State and its revenue in proportion to the ability that he has to do so. That being the case, we all recognize the fact that all men receive equal protection under the law. The law is not greater for the protection of the rich, than it is for the protection of the poor. Upon the contrary, the more of this world's goods a man accumulates, the better able he is to take care of himself. Wealth is better able to protect itself than poverty is, and so it becomes just as necessary for the poor man to contribute for the expense of government as it does for the rich man, in proportion to that which he has. The system adopted in this Territory in the past has been to provide revenues by a taxation upon capital or the accumulation of labor. This seems to be a very just system of taxation, and yet when we come to consider it, this question must naturally present itself to our minds, if a man who is possessed of a large revenue shall spend it all in the gratification of his own desires, his own pleasures, his own wants, and he accumulates {1086} nothing and saves no surplus, he is required under our law to pay no taxes. So it occurs to us if you have a right to use all of your income for your own gratification, why should you, if you save and accumulate a part of that income, lose your right to any portion of it, because of this? and yet that is precisely the conditions which our present system of taxation imposes upon us. On

the other hand, if we tax revenue, the question arises, why should a tax be placed upon industry, and idleness go scot free, for a man may labor early and late and through his industry, his energy, and his ability, he may create a large income, while another_    

Mr. CANNON. Mr. Chairman, I arise to a point of order.

The CHAIRMAN. The gentleman will take his seat.

Mr. CANNON. My point of order is that there is nothing in this provision which provides that mortgages are not to be taxed; the gentleman is not speaking to the question.

Mr. IVINS. If the gentleman will just let me alone I will get around to the question, and I will try and satisfy him fully before I am through.

The CHAIRMAN. The gentleman may proceed.

Mr. IVINS. I am coming to the gentleman a little later on. The idea, gentlemen, is that an unjust system of taxation is designed by this article. I have been in the committee, was a member of the committee where it was adopted and protested against it there, just as I protest against it here, and gave notice that I should fight it, and that is what I now propose to do. Now, then, this system of taxation of revenues is subject to just as many objections as the other system of taxation. That revenue may be accumulated by voluntary contributions, we do not for a moment suppose could be successfully done, and yet in many of the older states that system has prevailed and prevailed successfully. Men were allowed to assess themselves and contribute voluntarily to the support of government. In our Territory in the past_and probably the same will exist in the future, we expect to derive from the accumulations or savings of labor, from capital, from property accumulations. If this is the case, I take it that no one will dispute with me the fact that all the accumulations of labor should be alike subject to taxation, that there should be no exemption, that all property which is used for the benefit of man, all property which is productive, particularly all property except that which is devoted to charitable uses, should be subject to taxation, in order to provide revenue for the State.

The revenue of this State, if it shall be admitted into the Union, cannot be expected to be less than double that which the revenue of the Territory has been. I have been engaged for years of my life in the assessment and collection of taxes and therefore believe I have a right to speak intelligently upon this question. Previous to 1892 the laws of Utah provided that all property should be subject to taxation. They provided distinctly that money loaned, on hand, or on deposit should be taxed as other property.

At the session of the Legislature which was held in 1892, an addition was made to the exemption law, by which it was provided that all notes secured by mortgages upon real or personal property should be exempt from taxation. That was the first onslaught made by the moneyed interests of this Territory, by which they thought to free themselves from any part in the burdens of taxation which the people bore. Following out the lines upon which this battle has been fought, ever since the republican party was founded there has been, gentlemen, a steady and determined effort made

by money brokers, by bondholders, by bankers, {1087} not only in the nation but in this Territory as well, to shift the burdens of taxation off from their shoulders and place them upon the backs of the people, and so I say in 1892 this law was passed exempting money from taxation, for that is what it means. Men will dispute me in this and say it refers only to mortgages. We use the word mortgages in section 5 here. Do you know what it means? It means that all money shall be exempt from taxation, for if money thus secured by mortgage on real or personal property is exempt, money loaners will see to it that all of their loans are secured by mortgages. Now, let me come to the practical workings of this law. In the county in which I was assessor and collector at this time, I had thousands and thousands of dollars of money upon the assessment roll. Men were paying taxes on it just as they should have done. But what was the result? As soon as this law, in 1892 went into operation, those men immediately secured their loans by mortgages; it did not matter, perhaps, the value of the property mortgaged was not one-tenth of the loan negotiated, but from the very fact of its having been secured by a mortgage on a corner lot or upon a few head of horses or cattle, the man claimed an exemption under the law and I was of necessity obliged to strike off from the assessment roll that money, and those men have never paid a dollar of taxes from that day to this.

Gentlemen, there are instances in my county where men have accumulated sufficient means with which to retire from active life and live upon the interest of their money. It is all loaned, it is all secured by mortgages. The laws under which the mortgage is loaned give the broker the greatest security and protection. He cannot possibly be subject to loss, because his mortgages are sufficient. He demands about three dollars to one security; he is protected under the law; he invariably collects his interest; he enjoys every protection that any other class of citizens does and still he is not paying a dollar of taxes. In one county of this Territory alone, under the operations of this law, more than one hundred thousand dollars were stricken off from the assessment roll, and that was not one of these central counties either; it was an outlying county; more than a $100,000 of money secured exemption from taxation under the operations of this law. Well, we came up here in 1894 and tried to change it_have it repealed, but we did not succeed. We did not succeed and so now that this Constitutional Convention is in session, gentlemen propose to incorporate in the Constitution a section providing that a tax upon mortgages secured on either real or personal property shall never be levied, unless a reduction equal to the amount of such mortgage shall be made in the assessed value of the property covered thereby. Why, the gentleman says, this does not provide that money secured by mortgages shall not be taxed. It simply provides that if it is taxed, you shall deduct the value from the property, or vice versa. It means simply this, that if that section is incorporated in the Constitution, the present law under which money is exempt from taxation will never be changed, because there would be no
purpose in changing it. The State could possibly gain nothing by changing it, from the fact that if it should pass a law providing for the taxation of the money, the exemption would be made from the property and consequently there could possibly be no increase in the revenue. Now, in the first place, this law is a discrimination. If you have money on deposit, if you have money loaned on a plain promissory note, the law requires that you shall pay a tax on it. But if that same note is secured by a mortgage, you are exempt from taxation. Is there any justice in the proposition? I have never been able to see it. In our committee, {1088} where this question has been under discussion, men have been called in representing these loan and trust companies here in Salt

Lake City. They have told us what a hardship it would work to their companies if there should be any change in this law. They have threatened that if we shall change the law they will increase the interest and they will make the borrower pay for it in the long run anyhow.

What are the actual facts in regard to these loan and trust companies? Why, in cross questioning them, we found that their investments are very profitable ones; that they are paying dividends, ranging all the way from eight to twelve per cent per annum, compounded semi-annually, so that they are not suffering. They send their agents out into every county in this Territory; they have been away down in Dixie, telling the people of the good investments these loan and trust companies were and soliciting us to put our money into them, not because of any beneficent results, but because they told us they would bring bigger returns than any other investment we could make. Those are the facts. I am a witness of it. They have been to me and solicited that I should invest in these things. There are, gentlemen, in this city alone, six or eight loan and trust companies. They have now loaned and secured by mortgages two million dollars in round numbers. Those loan and trust companies are not paying one dollar of taxes on that money, notwithstanding the fact that they are making a profit, as I have said, of from eight to twelve per cent on their loans. I have investigated this question somewhat carefully. Now, calculate for a moment, and you will find that the State in this one instance alone is deprived of twenty thousand dollars in revenue. I ask you what justice there is in it? And I want to call your attention to the fact that upon every dollar of that money that you exempt from taxation you simply increase the taxes of those who do pay to that extent, because the revenue must be raised. We must have just so much money to meet the demands of government, and if you exempt money from taxation, you must add additional taxation to other classes of property, in order to procure that revenue. This does not refer to loans made by individuals and by local banks in this city and in this Territory, but only to the loans that have been negotiated by these loan and trust companies.

But the gentleman says, Zion's Loan and Trust Company lends all of its money to build homes in this city, and if you tax the home and tax the money, that is double taxation. I want to ask you if both the home and the money is not productive property? The man borrows from Zion's Loan and Trust Company five thousand dollars with which to build a home. He pays them an interest upon that five thousand dollars. It is certainly productive property, to Zion's Loan and Trust Company, from the fact that they are paying good round dividends on it and have been. Now, what about the man that builds the home? He may either rent it to some one else or occupy it himself. In either case it also becomes productive property for if he lives in it himself, he is exempt from paying the rent that he would necessarily pay should he take a house that belonged to another man, and if he rent it to another, it immediately becomes productive property and ought to be subject to taxation. The only difference between that man who borrows the money to build a house to live in and me is that I have, through years of toil, saved up enough money to build a house and put it into that residence. I receive no more benefit or profit from it than does the man that borrows the money to do it, and I should no more be subject to taxation. If it is just to {1089} exempt him from taxation because he borrows money to build his house, why should he be taxed who has been more prudent and saves sufficient money to build a house? Both classes of property are productive. Both ought to be subject to taxation.

Now, let me call your attention to something that will transpire if this clause is left in the

Constitution. Men have property, they want money, they want it for speculative purposes. The majority of money borrowers do not borrow from necessity, some do. The majority borrow for speculative purposes. Now, he wants money to invest outside of this State. He borrows it and gives a mortgage upon his property. The result is that you must either exempt that property from taxation because it is mortgaged, or else you must exempt the money of the broker from taxation, and thus the revenues of the State are depleted and the money was not used to build that house at all. I have in mind now an instance in my own county that will illustrate this matter. A man there with one of the most productive and best pieces of real estate in our county for speculative purposes borrows five thousand dollars upon it. The man who loans him the money is a resident in our county. He is getting one percent. on that money. The money was not borrowed to either improve or build up that piece of real estate. It was there before. And because this man wishes to take off into Arizona five thousand dollars and use it there for speculative purposes and places a mortgage upon that piece of property which is in Utah, are you going to exempt it from taxation? I can tell you that the revenues of the State will be depleted_the burdens of taxation upon the few who cannot escape it will become grievous to be borne, if that section shall be left as it now stands in the Constitution. Another thing, men are prompted to withdraw from all other industries. They are prompted to withdraw from the investment of capital in legitimate enterprises and loan it and the result is a multiplicity of money lenders, the disadvantage of all other investments, from the fact that their money loaned brings them just about as good interest and it is exempt from taxation, and that will be quite an item in the State which is to come_quite an item, and I believe that in order that the resources of the country may be properly developed, it would be better if that section should be stricken out. I am not so extreme that I would desire to see placed in this Constitution a law providing that money should be taxed. I am not so extreme as to ask that a law similar to the California mortgage law be incorporated here, and yet I think it would be a good thing. I want to leave this to future legislation at least, and I submit, gentlemen, that if you will hunt all of the constitutions that have ever been framed and examine them all you cannot find a parallel provision upon the part of the money power to compare with this thing here. Now, let me call your attention to another fact, in the campaign of 1892 this was made a living, burning issue. Men went over this Territory from one end to the other and denounced in the strongest kind of terms the democratic Legislature which exempted money from, taxation. Don't you men from Sanpete know that it was used there and don't you know that it was largely on account of that that Mr. Johnson was sent to the last Legislature. And I want to say to Mr. Johnson's credit that after he got there he worked like a man to have that law repealed and to keep the pledge that he had made to his constituents. I wish I could say as much of the chairman of this committee on revenue and taxation. Ile stumped Salt Lake County from end to. end, no man was stronger in his denunciation of this law_no man was more ready_
Mr. CANNON. Mr. Chairman, I would ask the gentleman whether he heard me deliver a speech?

Mr. IVINS. I will answer that, gentlemen, by saying that I was a member of the last Legislature, and one of the first men to come to me and ask that I should use my influence to have that law repealed and to say that it was an unjust and discriminating law, and to tell me that he had stumped this county, was the gentleman himself. [Laughter and applause.]

Mr. CANNON. I would ask the gentleman_I only want to state my position now fully.

Mr. IVINS. I object to his stating his position at all. He can do it after I get through; he can have plenty of time. If he wants to ask me a question, I will try and answer it. Now, these, gentlemen, are the facts. I want to call your attention to it, because I believe there is a design in this thing that ought to be uncovered and that the mask ought to be torn off. Another thing I want to call your attention to is that when this committee on revenue and taxation first met_the very day of their session; the chairman gave notice that he should propose to incorporate in this Constitution the California law, which provides for the taxation of mortgages. I thought it was because of the fear that I would anticipate him and make such a motion, because that is what I intended to do, but it passed along. The chamber of commerce met. These boomers met and they sent a protest down there and said, “If you tax money, we will raise our interest and make the people pay it.” And they appeared before our committee, and I want to say that every one of them that appeared in his cross-examination made my position stronger and stronger, and I do not believe there is any other design in it, except that taxation may be evaded. So imagine my surprise when instead of the California law which provides for the taxation of mortgages, that this section which proposes to everlastingly exempt them from taxation, was inserted instead. Those are the conditions that have existed, gentlemen, in regard to this matter. I do not believe that it will result in any increase of interest to the people who are borrowers. I want to tell you that the credit and reputation of the people of Utah is good in the world. All that capital is waiting for is that Utah shall be admitted to statehood and give evidence of her good intentions and capital will flow in here to a degree that any effort that might be made upon the part of the local money lenders to increase the rate of interest will be futile, and now is the time, if ever in the history of the Territory we intend to do it, to establish this one ruling that money in connection with other classes of property shall bear its proportion of the burdens of the expense of this new State. I am opposed to this section. I hope that it will not be retained here. There are many other things that might be said in opposition to it, many other sophistries that might be exploded in discussing it. It is wrong in principle; as I have said, it has no parallel in all the constitutions of the land_not one; let us strike it out. It ought to be stricken out. This question of the taxation of money and other property ought to be left to future Legislatures, who may deliberately and carefully consider this matter, and I am perfectly
willing to trust to the good judgment of the people of this Territory, with the assurance that another Legislature will not meet and adjourn until money will be made to bear its equal part of the burdens of this government, just as it ought to bear them. You cannot call this a political question, gentlemen. You cannot say that I am standing up here advocating democratic doctrine, because it was a democratic Legislature that passed the law exempting money from taxation, and I placed myself in antagonism to my own place when I {1091} fought for its repeal. I stand upon the very same ground to-day. The theory is wrong. There can be but one theory of taxation that will be in any degree just and that is of all available productive property, real estate, money, stocks, bonds, all that is produced by the citizen, shall bear its equal proportion of taxation in this new State. That is all I ask. I do not ask any exemption for myself. Neither do I propose to consent to the exemption of these loan and trust companies. This brokerage system that is making itself fat at the expense of the people now ask us to provide means by which it may continue to do so.

Mr. SQUIRES. I would like to ask Mr. Ivins a question. You favor, as I understand, the striking out of section 5?

Mr. IVINS. I do.

Mr. SQUIRES. I would ask you then if under the provision of section 2 it would not be obligatory upon the State to tax mortgages? If we strike this out so as to leave the matter as you suggest, to the Legislature, we do not leave it to the Legislature, but we provide that mortgages shall be taxed under the Constitution, is that what you wish?

Mr. IVINS. The gentleman has asked the question and answered it himself. I sincerely trust, gentlemen, that the interpretation that he gives to this section is correct. That is all I can say. If there is any doubt about it, I hope the Legislature will confirm it and provide that mortgages shall be taxed, and I hope that he construes that properly, and that if we strike this out they will be taxed.

Mr. SQUIRES. That is what I wanted to know.

Mr. IVINS. I do not think it is as plain as it might be, but I trust that his interpretation of that section is correct, because that is the way I think it ought to be.

Mr. GOODWIN. Mr. Chairman, these are queer times that we are in. I thought when the salary stopped, members would simply make a statement.

Mr. THURMAN. We reconsidered that.

Mr. GOODWIN. Oh, I beg your pardon, I am liable to take all the fore-noon now. Yesterday we had an entertainment here, in the interests of the poor working man. We heard gentlemen assert that it would be a fearful thing to make convicts work in the penitentiary because it would create competition with the poor. They did not seem to think that if these men in the penitentiary did not work the poor would have to feed and clothe them all the same. That is, the trend of the argument was that while the ordinary man must rustle for a living, if he was only bright enough to steal something or rob somebody or commit a murder, then he is exempt from labor and it was the duty of the State to clothe him well and feed him, even if it did establish a school of crime out at the penitentiary where a young man sent there for his first offense would by three years' schooling graduate a hardened criminal through association with those more accomplished in the profession which he had thus chosen than he was when he went there.

Again, we had many a dissertation on the wrong of permitting railroad companies, for instance, to keep or send to other railroad companies a black-list. That was to keep poor men out of employment. The fact that if a poor man, able to employ four or five men, at last found that all the receipts of his industry did not pay the men at the rate they demanded and he had to make a reduction and they struck and boycotted him, advertised it through the press and through the telegraph that whatever he produced should be boycotted, that was not mentioned. It was all right. This morning, we have a dissertation on the wrongs that money does in the world. I endorse {1092} that heartily personally, but there are certain principles that are at stake. There are very few homes in this town that are not mortgaged. The mortgages are secured at a little lower rate of interest than they would be except that the law protects the matter and says no

property shall be twice taxed. Now, if a man has a lot worth five thousand dollars and he borrows three thousand dollars and puts it in a house on that lot, it makes the assessment roll at the next spring show eight thousand dollars that he has to pay taxes on. He only owns five. He has to pay taxes on eight. Now, if we go back to the man who loaned that money and tax that three thousand dollars over again, it makes double taxation, does it not? A dozen supreme courts have decided that it does. There can be no escape from it. But according to the argument of the gentleman who just addressed the committee, the man who pays the tax on that extra three thousand is served right for not owning it himself. Why, he would have to pay it if he owned it. That is all there is to this article. It is double taxation to tax the man who borrows money and then tax the loaner, and the hardship does not come on the trust company or on the capitalist. If they loan money at seven per cent on the mortgage and they have to pay taxes on that mortgage themselves, they charge eight per cent. That is all there is to it, and the man that borrows the money pays it all. Now, I would vote to have the personal property in this stricken out, because that gives chance for fraud. It is like taking a promissory note. Where that has been tried the man that holds those promissory notes simply transfers them to his clerk, and when the assessor comes around he holds up his hand and swears he hasn't any. But a mortgage is a thing of record. Of course there can be now and then a condition, as was stated by the gentleman. A man can mortgage property that is fully paid for, and that he does not wish to make improvements on, save the money and speculate in another state and thus evade taxation in this State. That money would be subject to taxation in the state he goes to in whatever form he puts it. The article is exactly right, and to incorporate it into the Constitution will save no end of just such oratory as we have been having this morning through every Legislature for years to come. One year they tax mortgages and the next year they will throw it off, until by final adjudication it is decided as courts have in plenty of other states, that it is double taxation and therefore illegal. I would vote for striking out personal property. The rest of the section I would leave just as it is and for the manifest reason that unless such a provision is in the Constitution or in the laws it leaves money to be taxed twice, which is contrary to the spirit of our government, contrary to justice, and while I have very little respect for men that have money to loan, at the same time, under our benign laws they are not criminals. They are entitled to as much protection as though they wanted to borrow. I speak of this particularly because I have seen it tried over and over and through California and Nevada, until public opinion and the sentiment of the state and the laws of the state finally harmonized. Just try it as it is, except I think personal property ought to be stricken out.

Mr. CHIDESTER. Mr. Chairman, some of the reasons that have been assigned by the gentleman who last spoke for opposing the motion to strike out is the reason why I want this article stricken out. Now, in the first place, according to the terms of this section itself, it concedes to a certain extent that mortgages should be taxed. That is a proposition that the friends of this section will make, and that the price of the mortgage should be taken out of {1093} the property that is mortgaged by the mortgagee. Now, I believe that all property in the district should be taxed. I believe that because a homestead secures a mortgage is no reason why that homestead should not be taxed. Now, I live most to the Arizona line, and men borrow money and invest in stock and take it over into Arizona. That is a speculative scheme. They give a mortgage on their homesteads and according to this, value of that mortgage would be deducted out of the homestead. Now, they claim that the man who loaned the money would be taxed and for that reason that the homestead should not be taxed, and that the man who borrows the money gets the

advantage of a lower rate of interest Now, I want to say to you, gentlemen, that that is not the fact. I have made out hundreds of trust deeds in the last few years for men who have been loaning money, and the argument is this every time, and has been from the beginning, that the demand for money is what governs the rate of interest. It does it every time, and when money is plenty, interest is low, and when money is hard to get hold of, and lots of men are after money to borrow it, they take advantage of that and they raise the interest. That is my experience in regard to that. And there is another point that weighs considerably with me, and that is, that this section proposes to settle a question that ought not to be settled by this Convention. In my opinion it should be left open and we can fully trust the Legislature to handle this matter. Suppose that we were to incorporate this section as it stands, it would make it binding from time to time on to deduct the price of the mortgage out of the valuation of the real estate. Suppose that we should find that to be impracticable and we should find that it should not exist, we could not change it. The Legislature's hands would be tied and they would have to pass it by. We know now that the Legislature has been handling this matter or endeavoring to handle it and it has been a question that they themselves could not settle satisfactorily to the people, and for us, with the limited time that we have had here to study this matter, to undertake to settle it, in my opinion would be a grand mistake. I see no reason why this should be considered double taxation. As has already been stated, if a man borrows money to build a house and he rents that house out he is receiving an income from that house. Why should not he pay a tax upon it? Why should not the man who loans money at five per cent. a month interest_that is done in this Territory, that is done in my county, and that man to-day, under the present system, is not paying as much taxes as I do, and I have no money to loan. Now, it is conceded that the man that loans the money, he receives interest and should be taxed according to this section, but it seeks to excuse the man from paying taxes who has built a house and is renting it out and receiving the interest on the money that he has invested from paying the tax. I say that it should all be taxed and it should be made equal.

Mr. PIERCE. Mr. Chairman, I am in favor of the motion made by the gentleman from Washington County. I think that the argument made by the gentleman is one of the strongest arguments that has been made in this Convention, and that the strictures placed upon him by other gentlemen upon this floor are without foundation.

Mr. GOODWIN. Mr. Chairman, I arise to a question of personal privilege. What about the strictures? What strictures do you refer to?

Mr. PIERCE. The matters that have been said that the Convention all know.

Mr. GOODWIN. If I said anything disrespectful of the gentleman or_-

Mr. PIERCE. I withdraw that expression then. I will say the answer to it_    

Mr. IVINS. I wish to say that I take {1094} no exception at all to anything that has been said. I am here to be hit just as hard as I hit others.

Mr. GOODWIN. Perhaps the gentleman from Salt Lake is more used to strictures than others. [Laughter.]

Mr. PIERCE. Mr. Chairman, I would like to call the attention of the Convention to section 2. If this section 5 goes out of the Constitution, then we have only section 2 to fall back upon in defining what property shall be taxed. That will make it absolutely necessary under the Constitution to tax mortgages. While I for one do not say that we should at all times tax mortgages, I do say it should be left open to the Legislature to tax mortgages if they desire to do so, and if it seems wise and best that it should be done. My own idea is to strike out section 5 and amend section 2 so as read as follows: “All property in the State not exempt under the laws of the United States or of this State,” and leave it that way so that the Legislature can legislate as to whether mortgages shall be taxed or not. Now, upon the main question. I was in the Legislature that passed the law of 1892 exempting mortgages from taxation. I am in favor of exempting mortgages from taxation and was at that time, in so far as it brings money from abroad into the Territory, but as the gentleman from Washington County has well argued, that its not what the law is accomplishing. Why, if it brings into this Territory say one hundred thousand dollars of foreign capital to develop the resources of this Territory, it retires and places beyond taxation, as he has demonstrated, more than twice that amount that cannot be reached by the assessors of the various counties.

I say to you, gentlemen, that it is a matter that ought to be left entirely to the Legislature. There may be a time, for instance now, when you should not tax mortgages, but should do everything to induce capital to come into the Territory, but when we build up a wealthy rich State in the future, then, sir, we should tax all property that is within the Territory. I believe that taxation should be uniform. If a man owns his house, let him pay taxes on it. If another man owns property in money, and bonds, let him pay taxes upon the money and bonds that he owns. I am in favor of striking this section out provided that section 2 be amended by striking out the words, “under this Constitution,” and inserting the words, “of this State.”

Mr. EVANS (Weber). Mr. Chairman, as I was a member of the committee on taxation and revenue, and also unfortunate enough to be a member of the Legislature of 1892, I desire to make a few remarks on this question. I was somewhat astonished at my colleague, Mr. Cannon, who asked to close this debate. It would seem that having the affirmative, he ought to open it so that the members of the Convention would know what his position is, and assuming that he will not open and that he will close the debate, I shall undertake in the course of my remarks briefly to apprehend the position which he shall take. I want to explain to this Convention, gentlemen, just how the law of 1892 was passed, and it is only a short story. At that time we found the condition of the law such that foreign mortgages were not taxed but domestic mortgages were. We had a report of the board of equalization, of which the Honorable Frank J. Cannon was a member, in which report it was suggested that the amount of money which was paid to the various county recorders for the abstracts of titles and mortgages amounted to as much as the revenue actually received from domestic mortgages, which were taxed, or very nearly so, there was only a few dollars difference. We found that as the law then stood it was a discrimination between foreign money and domestic money.

People who owned money in the Territory {1095} had a tendency to leave the Territory and go outside and loan it in order that their mortgages might be exempt from taxation, and in view of these considerations, the Legislature largely upon that report voted to place mortgages upon the

exemption list. The Legislature then was democratic. There were no republicans in it at all. There were some liberals who are now republicans. But, however that may be, gentlemen_and even if I thought I were wrong in the position which I took then, but I shall not say that I was, because I think I would do the same thing again_but if I were wrong, I would not be afraid or ashamed to correct the mistake. But here is a different proposition. Right in the organic law of our new State we are confronted with a proposition that mortgages shall never be taxed except when the value of the mortgage is deducted from the amount of the property. Gentlemen, let me remind you that if this matter go into the organic law of the new State, we will never be able to repeal it, we never can do it. The money power which will seek to retain it there will be sufficient to engraft it upon our organic law for all time to come. But gentlemen may say that the Legislature might tax mortgages with the provision as it now stands. It is true. But if mortgages be taxed with the provision as it now stands, there must be a like value deducted from the value of the property. Suppose that condition of things came about and suppose the mortgage is taxed and the property owner relieved of a like amount, what will be the result? Is it not as plain as the handwriting upon the wall that thousands of spurious mortgages will be placed upon the property of the citizen for the purpose of evading taxation or reducing the amount of taxes upon the property of the owner. What is there to prevent it? Suppose we take the mortgage; if we do that, we must deduct the amount from the value of the property. What is there then to prevent any individual from securing a mortgage and placing it upon record for the purpose of evading taxation? Do not we know that men are prone to evade taxation whenever an opportunity affords itself? It seems to be a legitimate thing among some people to do that by which taxation might be evaded. And this is throwing the door wide open to relieve pretty much all the real estate in the new State from the burdens of taxation. There is another evil that will come from it, and gentlemen it is the most serious evil that can be suggested, and that is this: Suppose the section goes into the organic law as it is proposed, is there any one who would deceive himself upon the proposition that mortgages would not be taxed? It is inevitable that the property will always be taxed and the mortgage never will be. Then, assuming that to be true, the incentive of the law will be for men to convert their property into cash, take their money and loan it and take securities upon real and personal estate, and the man who is fortunate enough to accumulate money can live in the community, exact his quarterly interest from the people who are compelled to borrow his money, and not contribute one dollar to the public treasury. Will not men do it? Men are naturally selfish with respect to financial matters. What is there to prevent it? Suppose I were fortunate enough to accumulate all that I may have in this world in money and loan it, collect my interest daily and contribute nothing at all to the support of the State, when the State is protecting me, when the State elects and maintains its officers to foreclose my mortgage, lends the process of the law to secure me witnesses, protects my loans, and yet I stand aloof and above the State, so far as the power of taxation is concerned.

Mr. GOODWIN. May I interupt you a moment for a question?

Mr. EVANS (Weber). Certainly.
Mr. GOODWIN. If that was your business and you had to pay tax on your money that you loaned, would not you charge just as much more interest as the tax would amount to?

Mr. EVANS ( Weber). I never yet knew a Shylock who was a patriot. I never knew the man who was fortunate enough to own and accumulate money who would loan it to the individual as a mere patriotic duty. He does it for selfish purposes, the interest goes according to the law of supply and demand and not according to patriotic purposes. Think of our bankers_our Shylocks being patriots in this country. I will tell you, sir, in answer to the gentleman's question, that no man has ever lived who has charged a less rate of interest to the person who is compelled to borrow it because of the fact that he had no taxes whatever to pay upon his money or mortgages.
That is the specious argument that is used by the money power. They tell us, “Tax mortgages and we will tax the consumer, we will tax the borrower. if you tax mortgages, we will withdraw our loans from the Territory. If you tax mortgages, it will retard enterprises and progress.” Why, if I had my way as I now view it, having gone through a disastrous boom, such as we have experienced in this country, I would tax them so that people would not borrow their money at all. I would relieve the people from this insidious indebtedness, which ultimately results in the loss of the homes and roofs that cover their heads. I would have a people free from indebtedness. I would have a State free from indebtedness. I would not do that which would encourage the borrowing of money and the giving of mortgages so that the ultimate and inevitable result would be disaster and suffering. And now, having said as I have in that respect, I would like to ask the gentleman from Salt Lake, who asked me the question whether when mortgages were exempt from taxation the interest was decreased_in 1892.

Mr. GOODWIN. Loans were made lower?

Mr. EVANS (Weber). By reason of that?

Mr. GOODWIN. Yes, sir.

Mr. EVANS (Weber). During the year they were exempt? And indeed I am informed that to-day interest is as high as it was then. It has been boldly asserted by the money power of this city_those whose Italian hand is at the back of this section, that they control the chamber of commerce, and that they control each newspaper in this city by reason of the obligations that those papers are under. It is boldly asserted by this money power that they can control all these agencies_    

Mr. GOODWIN. Mr. Chairman, I arise to a question of personal privilege. There is one newspaper that no moneyed institution in this country has the slightest grip in the world on.

Mr. EVANS (Weber). I did not charge they were.

Mr. GOODWIN. You charged a street rumor, and it is easy to get those things up. There is one newspaper here that does not do what moneyed men want it to, or it would have been a good deal richer.

Mr. EVANS ( Weber). Oh, I have no doubt about the virtue of the Tribune. It has always so far as its own utterances are concerned, at least had a very high opinion of itself. [Laughter.] I did not say that these papers were under obligation and could be controlled by this power, but I do

say that it was boldly asserted by the money power that they could control them, and I find that every one of them advocates the exemption from taxation of mortgages.

Mr. CANNON. May I interrupt the gentleman to ask a question? It is in reference to your question concerning the rate of money. I understood you to ask Mr. Goodwin whether the rate of money was lower since the law was {1097} changed. I will state that a loan was made in this city the other day for six per cent_a loan of eighty-five thousand dollars, and would ask you if you know of a loan ever made in Utah prior to the time at which mortgages were exempted at an equally low rate?

Mr. EVANS (Weber). Oh, well, Mr. Cannon, you know well enough that everything has been reduced in price. You know well enough that wheat is reduced nearly one-half, all other commodities in proportion, and we know well enough too, gentlemen, that money can be secured pretty cheaply now, providing the right kind of security is put up, but it must be a gold dollar almost in order to secure a dollar in currency. Gentlemen, it is an indisputable fact that so far as the committee on taxation and revenue is concerned, every man who appeared before that committee, so far as I am informed, for the purpose of securing this clause in this Constitution was a man controlling money, a man controlling corporations, a man who was making his living by loaning money to people. Not a single borrower, so far as I know, ever appeared before that committee and asked that the money power be exempt from taxation. Now, gentlemen, let us put this question a little plainer upon another proposition and that is this: It has been already suggested and I only suggest it again so that we may understand it_and gentlemen may argue all they please and use all the statements they desire with respect to the fact that it is double taxation. One fact remains and that is this, that a note is taxed, money is taxed if it is in the bank, not drawing any interest at all. It is taxed there, is it not? We all agree that it is. ow, when you take that money out of the bank and loan it to the individual and secure it by a mortgage and receive interest upon it, then it is exempt from taxation. Is there anything right about that? Why should you tax money in a form where it is not productive and then exempt it from taxation because it is amply secured and interest being quarterly derived from it? The principle itself is wrong. It ought not to go into this Constitution. The thing is original with the banker. No such provision was ever inserted in any constitution that was ever written upon the globe. Search your constitutions, search your acts of the legislature; you will find nothing as insidious and as mischievous as this section is designed to be and which practical operations will show it to be. We have agreed practically with our friend, Mr. Cannon, the chairman of this committee, upon all other propositions and have complimented him upon his intelligent work. We hoped to pursuade him to leave this matter out of the Constitution and leave it to the Legislature where future Legislatures might deal with it wisely, but we failed to secure his assent. We simply said to him firmly that it would be our intention to move to strike out this matter and hoped that it would not be made political, and I am very glad that it has not been, because the gentleman from Garfield, I believe, moved to strike it out. But we make war upon it, and gentlemen, we will make a mistake not a party mistake perhaps, but will make a serious blunder if we permit this section to go into the Constitution. We will simply permit the moneyed power of the State to take the individual citizen by the throat and strangle out his financial life. It will be one of those instruments in the hands of capital and money which will leave capitalists under the protection of the law and still, so far as the payment of taxes are concerned, above the law. It will work serious injustice to the

State. It will be of no benefit to the individual. It will be an innovation of the most dangerous character. It ought to go out, gentlemen, by unanimous vote, and I {1098} believe that that will be practically the result when the vote shall have been called for.

Mr. GOODWIN. I desire to ask a question. You make one splendid point, Mr. Evans, that money in the bank was taxed, but when it was loaned out, it was not taxed. Now, suppose a man takes it out of the bank himself and puts it in a house, would you still tax it in the bank?

Mr. EVANS (Weber). Why, no; then you tax the house; wherever the money was found it would be taxed.

Mr. GOODWIN. But if he loans it to another man and he builds a house, you tax the house and the money both?

Mr. EVANS (Weber). No, no. I did not answer you on that at all. As I understand that, if a man owns money and puts it into the house, he does not own the money any longer; he simply exchanges it for a house and then the house is taxed, but the money goes into other hands and wherever that is found that should be taxed.

Mr. GOODWIN. You have five thousand dollars in the bank. It is taxed. You loan it to me, I put it in a house and I am taxed for that, is it right to go back and tax you too?

Mr. EVANS (Weber). Certainly, that is just the point I make.

Mr. GOODWIN. Is not that double taxation?

Mr. EVANS (Weber). I am very glad that the gentleman has raised that point. That is true, I will make an illustration. I am a money loaner, I have twenty thousand dollars in cash in the bank; it is taxed while it is in the bank, but Judge Goodwin desires to build him a house; I loan him the twenty thousand dollars and take security upon his lot and on his house in the form of a mortgage. He pays me ten per cent interest, which would be two thousand dollars per annum that I am receiving. He has to pay the tax on his house and his improvements. He pays me two thou sand dollars per annum for the money which I have loaned him, and I stand exempt from taxation. There is the illustration which he gives.

Mr. SNOW. Isn't that mortgage which you have subject to assignment or sale? Couldn't you sell it? Is it not of real value?

Mr. EVANS (Weber). Certainly, it is of the utmost value. It is one of the best securities where it is secured by real estate.

Mr. ELDREDGE. Mr. Chairman and gentlemen, I will be brief upon this proposition, but at the same time I would like to express my views wherein I differ with the gentleman who has just taken the floor. Section 3 of this article under consideration provides for an assessment of all property. Still further down in that section it says, “provided that a deduction of debts from

credits may be authorized.” The same question that is involved in section 5 is also involved in that proviso, and in my mind is clearly a correct principle. I do not view a mortgage as property. I view it as the evidence of property and if that evidence is followed to its logical conclusion, you will find where the property lies that the mortgage represents. Now, the gentleman from Garfield, speaking concerning a circumstance of this kind that a man owned a piece of real estate and that he borrowed on that we will say ten thousand dollars and invested it in cattle and took the cattle into Arizona, that when the assessor under the provisions of this act came around, if the mortgage was exempt that property did not contribute towards the support of the government. If it does not contribute to it in this State it certainly is taxed in the state where the cattle have been taken and thus the value of the money that has been borrowed is represented in the property in which he puts it. And if that money should be taxed in Utah and the property taxed {1099} in Arizona, there is a double taxation upon that amount of property.

Mr. THURMAN. Suppose you would work it so that all the property owned by people in Utah would be held in some way in Arizona, so that they would only have here the evidence of it, how would you keep up a State government?

Mr. ELDREDGE. Well, suppositions may be made that are very foreign to any possibilities. We will draw this matter perhaps a little bit closer. Supposing a man that borrowed the money upon his farm placed it in cattle and kept the cattle within our own Territory. The cattle then are taxed within our own Territory, and thus that money is taxed in the investment where the property lies and as I said, in the first place, the mortgage is not property. It is only the evidence of property. Now, we will suppose that a man has got a farm and that farm is worth five thousand dollars; he goes and borrows of some man here five thousand dollars to put in improvements upon that farm. The assessor comes along and assesses that farm with the improvements for a sum of ten thousand dollars, and then he would assess the man that had loaned the money five thousand dollars, making an assessment upon that property of fifteen thousand dollars, we will say in the year 1895. In the year 1896, the man is not able to pay the five thousand dollars that he borrowed, and hence the man takes the farm in the transaction and pays the individual five thousand dollars for his interest in the farm. A man comes along then and assesses the farm. He assesses it for ten thousand dollars. The amount then that the man has loaned is absorbed in the farm and only represents just the same as it did when he held the mortgage, and hence the State loses five thousand dollars under the transaction, according to the theory of the gentleman from Weber County. Now, he is speaking concerning spurious mortgages. I cannot see where that question possibly takes place. The section here simply provides that if mortgages are taxed the amount must be deducted from the property upon which the mortgage is given.

Mr. SNOW. Isn't that a virtual exception or exemption from taxation?

Mr. ELDREDGE. I understand that to mean this, that if I had a house and lot no which I had borrowed five thousand dollars and that property was worth we will say fifteen thousand dollars, the assessor comes along and says, “How much is this property worth?” “Is it worth fifteen thousand dollars?” He lists it for fifteen thousand, but I say, “By the way, I have got a mortgage on it for five thousand dollars.” Then it is fifteen thousand dollars less the five thousand dollars that I borrowed. “Whom did you borrow this money from?” “I borrowed it from John Jones.” He

then lists the amount of the mortgage to John Jones, and thus between myself and John Jones we pay the fifteen thousand dollars which is invested and is manifested there in that real property. That is the way I view that. Now, in regard to the question that was before the Legislature last winter, I have this to say, in defense of the gentleman from Sanpete County_and should there be any question I can produce the article_that that gentleman's idea of taxing mortgages was just exactly as set forth in this proposition. That if a mortgage should be made subject to taxation, it should be deducted from the value of the property that was given in security, and that was the Honorable Jacob Johnson's position to my knowledge upon the proposition, and I would like to have the gentleman properly represented before this Convention.

Mr. CORAY. Do you consider that proposition is set forth in the article? Mr. ELDREDGE. Yes, sir.

Mr. EVANS (Weber). Mr. Chairman, I understood Mr. Jacob Johnson's position to be that the mortgage should be {1100} taxed but the amount should be deducted from the value of the property, that is not this proposition. It says mortgages never shall be taxed unless_

Mr. ELDREDGE. Yes; his proposition was this, that mortgages should be taxed provided that the amount should be deducted from the assessed value of the property securing the mortgage.

Mr. EVANS (Weber). He had the California provision, didn't he?

Mr. ELDREDGE. I do not know; so far as the California provision, I have the bill that he introduced on file.

Mr. JAMES. Mr. Chairman, I will not impose upon your time very long, but I do feel as if I would like to make a few remarks upon this question. I cannot see the situation from the same standpoint that some gentlemen have that have argued the question this morning. I have had some little experience in my life in business and I have learned what it was to borrow money. I have in the last two years, Mr. Chairman, borrowed in this town large sums of money which I have paid out to the laboring classes and for supplies and other operations of mining. Now, I know that gentlemen do not intend to be unjust when they speak of the Shylock banker. There is some good in all things I believe in this world, and in instances the banker of Salt Lake City has been of great benefit, not only to himself and the rich, but to the poor as well. When I go to the bank and draw out money month after month as I have done in the past two years, without one single dollar of income from the industry which I was operating, and which I am doing to-day, and that banker allows me an overdraft, as I have got it unfortunately to-day, he is doing as much good with his money as it is possible for any individual to do with his money in a business proposition. Now, gentlemen, that is the condition in a great many instances, here in Utah Territory and in Salt Lake City, and for that reason I want to say that I do not want this Convention to be too severe upon our bankers and our business men in this community. Now, as to the gentleman saying spurious mortgages would be put on record if this section was adopted, it seems to me that that is absurd, because under the mortgage the mortgage would either have to be taxed or the property. It is embodied in one. As I understand it, it is simply to prevent the double taxation. I do not think that that needs much argument to understand. The strongest point the

gentleman makes is that there is such a thing as money loaned on mortgages that does not pay a tax.

Now, all things equalize themselves. Water finds its level; nature created things in this world so that they worked for one general object, and that is the equalization of all things. Now, if the mortgage can go without taxation, capital will seek mortgages, consequently the man that is borrowing money upon his land will get it for less than the man who has to borrow it on other collateral where he will pay a tax. Now, that is the natural result and it cannot be gotten away from, Mr. Chairman. That rule will hold good; but here is a point now I want to call the gentleman's attention to. I said to the gentlemen a little while ago that I had been overdrawing in on city. Now, did I pay any tax on that overdraft? No, sir. Now, there is the condition of things, that a man that is fortunate enough to have a credit can go to a bank and borrow money and pay no tax on it, but the poor man that works at the forge, that works at the bench as a carpenter, that has his little farm out here, that does not happen to be known or does not happen to have a credit at the bank, so that he can borrow money if he needs a little money for improvement or some enterprises, what does he have do to? He has to tie up his property {1101} and mortgage it to get this money and the result is the mortgage is taxed and the land is taxed. Consequently that business is double taxation. Where the business men, Mr. Auerbach, or any other merchant of standing in this community, wants to borrow fifty thousand dollars, he goes to a bank and overdrafts it, and the tax collector never thinks of going around and assessing that overdraft, consequently he gets that money without paying a tax. Now, do you not see, gentlemen, in order to equalize this thing you have got to pursue the very course that the committee has pursued in adopting this section, and I want to say to you, gentlemen, there was some question raised here that any other constitution ever had anything that was anything like this? That is, if I understood the language correctly, there was a statement of that kind made. Now, take the state of California, what does it say? A mortgage, deed of trust, contract or other obligation, by which debt is secured, shall for the purpose of assessment and taxation be deemed and treated as an interest in the property affected thereby. Now, they have done the same thing in California, as gentlemen have attempted to do it in this section, as I understand it.

Mr. EVANS (Weber). Beg your pardon, Mr. James, but you certainly do not understand the California provision if you understand it to be the same as this. The California provision requires a tax upon mortgages, but the amount shall be deducted from the value of the property.

Mr. JAMES. Is not that what this section proposes to do?

Mr. EVANS ( Weber.) No. That says there shall never be a tax upon a mortgage unless the amount is deducted from it. The Legislature might put a tax upon mortgages, but the California provision simply taxes the mortgage outright, and I would like also to remind my friend, Mr. James, that I think two-thirds of the members of the Legislature have already passed a law repealing that very provision which you are now reading_that is, in submitting it to the people for a vote, two-thirds of the members of the Legislature, as I understand, have passed an act which would repeal that if the people approve it.

Mr. CANNON. I want to ask the gentleman whether or not under this provision of this section

the California statute could not be enacted by our Legislature?

Mr. EVANS (Weber). It could be. It could be enacted but the constitutional provision in California compels a tax upon mortgages. Ours relieves the mortgage from taxation so far as the the Constitution is concerned, and it would require an act of the Legislature, and whenever an act of the Legislature was passed to tax mortgages, then there would be no tax upon the property owner equal to the value of the mortgage.

Mr. JAMES. Now, I understand, Mr. Chairman, that there are other ways of taking advantage of this system of taxing mortgages. I know that during the time that the statute in Utah imposed a tax upon mortgages that a system of business of this kind was done, because I know the very transaction. I know of one instance where a property was mortgaged in this town in Omaha. It went to a bank. The business was transacted in that bank, the money was loaned there, but it was money of Salt Lake. The arrangements were made through an agent and in that way they avoided this tax, and what was the result? Why, they accomplished in it only this, that it put that poor widow woman to the expense of fifty or sixty dollars to send down to Omaha and get her home mortgaged, to get some money_extra_that is all It accomplished; and when you gentlemen that were hi the Legislature that repealed that act did what you did, I believe {1102} that you did this Territory a great benefit. I felt it at the time. I understood it from my business relations here and I have so believed ever since, and I haven't had anything to convince me to the contrary, but what it was a great advantage to this Territory to allow people that happened to own real estate to be placed on the same basis as the man that owned the municipal bonds. The man that owns municipal bonds or the bank bonds or other collateral that are good can go to the bank and deposit them and get the money and he is not taxed, but the poor man that happens to own a little home somewhere has got to go and mortgage it, then the mortgage is taxed and his home is taxed on that; I say that is double taxation.

Mr. BOYER. May I ask the gentleman a question? Your statement in relation to the poor woman being required to pay fifty dollars_whether that additional expense was an addition of interest upon the money or whether it was attorney's fees_a middle-man that charged her attorney's fees?

Mr. JAMES. That is what it was.

Mr. CANNON. Mr. Chairman and gentlemen of the committee, I was in hopes that when this question came up it would be discussed entirely. upon its merits and that we would discuss it dispassionately with an intention but to arrive at a correct conclusion. I trust gentlemen, you will look at this matter in a fair and dispassionate way. If it is not right to retain the section, I want it stricken out. If it is right, I claim that it should stand there and that you should be open to conviction and listen to that which is to be said. In the first place I was astonished that my friend from Washington County should make a personal attack upon me and state what he did state concerning this matter. I was equally astonished to hear my friend from Weber County claim that the Italian hand of the money power was behind this section. I have been astonished at the position taken by different gentlemen because, while we differ with respect to different sections that may be presented, I will claim, and without fear of contradiction, that in the committee which has reported this article and of which these two gentlemen are members, that every

consideration has been afforded them to express their views, and to bring in their friends, to bring any matter before that committee, and I claim, gentlemen and Mr. Chairman, that a full investigation was made as far as possible of this question by the committee with the intention to receive all the light possible. I took the position that the speaker from Washington County takes when the committee first met. I was in favor of taxing mortgages. I so announced myself, and in order that it might be spread, in order that the people might know it, it was published in the public prints and everybody who saw fit to meet and come before our committee had an opportunity of doing so, for about three weeks. On this bulletin board here the time that that committee met was placed in plain view, and any one could learn what was done in the matter.

I believe that there is something in favor of the position taken by the gentleman from Washington County. I believe that where a tax is not placed on mortgages, I believe that it places a sort of premium upon the money lender and to that extent I am very sorry that it is not wise at this time, in my opinion, to place a provision in the Constitution taxing mortgages. At the same time, the committee had good reasons, as I view it, for not placing such a provision in this, but I desire to call your attention to that which existed here a few years ago. Under the old law a provision was had which provided that from taxable credits, debts due and owing might be deducted. How was that interpreted? {1103} My friend from Washington County interpreted it, so he informs me, that if a man had a mortgage on his home and would give him the name of the party who held that mortgage, that he would except the value of the mortgage from the assessed value of the property and go and assess the money to the other man. In Salt Lake County an entirely different procedure obtained. Here the full value of the property was assessed. And in addition to that the amount held by the mortgagee was assessed to him. There is a case, gentlemen, where there was a discrimination. It was not right for the people of Washington County to allow it and the people of Salt Lake County to refuse to allow it. Taxes should be equitable, should be equal in all parts of the State. The fact that this has existed in that way convinces me among other things that the provision of the law was a bad one.

In the next place I take the position held by Judge Goodwin, that there is not a single case where a tax assessed upon a mortgage and assessed at the full value of the real estate also is not double taxation. To illustrate what I mean, I will take a case of two men who have a thousand dollars each, and desire to buy a farm. Putting it together, they buy a farm worth two thousand dollars. The assessor assessed that farm to its full value, two thousand dollars. That would be the only assessment that there would be. Now, suppose one of those two men did not want to buy a farm, but was willing to loan his money to his friend; the friend borrows the thousand dollars from his companion, takes the same two thousand dollars, to which I referred first, and buys the farm. How will it then be assessed, if we do not put this prohibition in the law? Under the old law, as it was applied in Salt Lake County and in other counties in the central part of Utah, it would be assessed this way, the farm would be assessed to the man who purchased it at the full amount, two thousand dollars. The mortgage would be assessed at one thousand dollars to the man who loaned his friend the one thousand dollars. The total assessment would be three thousand dollars.
Now, my friends, is not that a clear case of double taxation? What is the difference? The two men use the same money, they put it into the same farm; the only difference is that one owns a half interest in the form of a mortgage, in the latter case and in the former case, he owned an

undivided half interest in the land itself. There you would be assessing three thousand dollars in one case simply because of the difference in name. Now, another case. Take the case of a man who builds a home for another. If under the law he provided that he would sell it to him on the installment plan, ho w would it be assessed? Assume that it was valued at two thousand dollars, on the installment plan it would be assessed to the man who was selling it, because the title stands in him. It would remain in him and it would be assessed simply two thousand dollars. The man who has agreed to purchase it and who is living in it and making monthly payments on it would not be assessed at all, because the property still stands in the name of the original vendor. Now, suppose that instead of doing that, he has confidence in the purchaser and he says, “Well if you would prefer a deed and would like to give me a mortgage in return I will take a mortgage for the full amount, believing in your integrity and knowing you can pay it eventually.” What would then be the provision? Under the old rule which is designed to be prohibited by this section, they would first assess to the man purchasing the house and lot two thousand dollars. Then, because he has executed a mortgage they assess two thousand dollars to the man who holds it, total assessment four thousand dollars, whereas the same property, the {1104} same interest identically, only covered by another name, exists in both cases.

We will take another case. A man who already has a home of two thousand dollars thinks that it would be to his interest to buy a herd of sheep. Formerly he has been assessed with his home at two thousand dollars. He borrows a thousand dollars and buys sheep with it. What is his assessment under the old plan? Two thousand dollars would be the amount he would be assessed on his home and one thousand dollars he would be assessed on his sheep. Well, you say the sheep were in existence; yes, they are in existence, but that man's interest in his home has decreased the amount he borrowed and he should be allowed that amount of exemption. He should be allowed to deduct from the value of his home one thousand dollars, because he only has in real property, so far as actual value is concerned, one thousand dollars, now in the shape of a one thousand dollar equity in his homestead. I defy any one to present a single case to me where it is not double taxation, where under the operation of the old law, under this provision it did not provide for taxing double.

Mr. EVANS (Weber). What would become of the man who loaned this two thousand dollars on this home? He would not be taxed at all, would he?

Mr. CANNON. In which case are you alluding to_the last?

Mr. EVANS (Weber). I am alluding to the last illustration you made.

Mr. CANNON. That was one thousand dollars.

Mr. EVANS (Weber). Well, one thousand dollars, whatever the amount is, if he loaned it under your provision, he would not be assessed at all, would he?

Mr. CANNON. Under the law which you have passed, my friends, he would not. I did not help pass it. Under the law which you helped to pass, he would not, but under this section_

Mr. EVANS (Weber). I mean under this law which you now propose to pursue by enactment.

Mr. CANNON. He would not be assessed unless the Legislature saw fit to tax mortgages.

Mr. EVANS (Weber). Please answer me. Under the constitutional provision which you have written, would he be assessed at all?

Mr. CANNON. He would not until the Legislature assessed him.

Mr. EVANS (Weber). Under this law, he could not be assessed, could he?

Mr. CANNON. No sir; under the law which you passed, and under this law which I am helping to perpetuate, he would not be taxed until the Legislature should see fit to tax him. I do not believe that a case can be cited in which it is not double taxation, in one form or another. The only attempt I have ever heard made to cite such a case was where the man borrowed the money and spent it in mining and lost it. The gentleman said the property was not there to tax, and consequently in that case it would not be double taxation, but would be double taxation so far as the poor fellow was concerned who had borrowed the money. If he had spent it in mining, he would only have that which was left and having his homestead which was worth two and only had an equity of one thousand dollars. The section proposed here does not provide that you shall not tax mortgages, but that is left to the Legislature.

Mr. EVANS (Weber). The Legislature under this constitutional provision could not, under any emergency or circumstances, tax both, could it?

Mr. CANNON. No, sir; they could not have double taxation.

Mr. EVANS (Weber). That is to say, if an emergency should arise, so that revenue was imperatively necessary, the Legislature could not tax the mortgage and the property both?

Mr, CANNON. No more than they {1105} could double tax your land that did not have a house on it.

Mr. EVANS (Weber). That is true, is it not?

Mr. CANNON. That is the purpose of it exactly, so that it shall never under any case permit double taxation in this instance. I desire to call attention to the way that this old law operated. I have in mind a case which actually occurred where a man in Salt Lake County has eighteen thousand dollars' worth of mortgages upon the books of the recorder's office of this county. That man had an overdraft at the bank to the amount of thirteen thousand dollars; when the assessor came around, he said, pointing to this provision of law, “from taxable credits, debts due and owing are allowed to be deducted.” Yes, said the assessor, “what have you got to deduct?” He took his book and showed that on the first day of January, which was the date at that time when they were assessing, he owed one banker so much and another banker so much and the total was thirteen thousand dollars, and the assessor deducted from his taxable credits of eight-teen

thousand dollars' worth of mortgages which he held the thirteen thousand dollars and only assessed him five thousand dollars of it.

Now, at the same time, I know a man who had property, in the form of bonds worth ten thousand dollars, and that was the valuation of it, who owed a mortgage of six thousand dollars, and he went to the assessor and said, here is a provision in the law which says that from taxable credits, debts due and owing may be deducted, and asked the assessor to deduct the six thousand dollar mortgage which he had. Here the assessor says, “No, that is not correct.” He says, “I cannot take in your debts, because yours is real estate and that is not a taxable credit, as interpreted by the law,” and he refused to make any deduction. Now, my friends, I claim that interpretation was an interpretation which discriminates against every farmer, against every house-holder, against every man who borrows in the form of a mortgage, and I claim it would be no more right to exempt a man who happened to have a big credit at the bank, the amount that he owed there, than it was to exempt the man who had a farm and who had his six thousand dollars, and the provision provided by this section would prohibit any such unjust discrimination. Under the present law a man who is a broker on Main street is allowed to deduct from his taxable credits the amounts that he may owe to his depositors, the amounts that he may owe upon his notes. A man may have ten thousand dollars in taxable credits; they might be under the old law in the form of mortgages, and if he could show that he owed nine thousand dollars, he could be allowed to deduct it, but if a farmer having a farm that was mortgaged nearly up to the highest notch, worth, we will say, two thousand dollars and mortgaged for fifteen hnndred dollars (and there have been a good many of that kind) that farmer would be required to pay taxes upon the full amount under the old law and the mortgage be assessed too. I claim that that is unjust and I claim that it is in the interest of equity that it should not be done. Now, one minute with reference to the objection offered by Mr. Pierce, although it is not before the committee. Mr. Pierce stated that he would like to amend if this were stricken out, part of the other which provided that all property shall be taxed, not exempt under the laws of the United States or of this State. Why, gentlemen, how many of you would consent to that? How many would consent to providing that any property which the Legislature might hereafter exempt would be exempt from taxation?

Mr. EVANS (Weber). Very few, possibly.
Mr. SNOW. All of us.

Mr. CANNON. Mr. Evans says he would not, Mr. Snow says he would. I do not think there are fifteen members on this floor that would agree to leave that provision in there, which would leave it so that the Legislature might exempt a particular man's property or any class of property if they saw fit so to do. The reason they limit the exemptions is because they want it confined in the Constitution, so that it shall be only certain classes of property. Now, the gentleman made a criticism of the fact or claimed that I had stumped this county and adjacent counties and criticised the democratic Legislature that passed that law. That is a fact, I did that. I believe there are men present who heard me and I am not ashamed of it. What criticism did I utter? I believe in stating an adversary's position, and never giving only part of it. I say that it would be only right if they saw fit to do so, to exempt the homes upon which those mortgages existed. I favored in my speeches, at different places, taxing the mortgages and exempting the property of the man who

had been compelled by circumstances over which he had no control in many cases to give the mortgages, and give the poor man the exemption and not hold it out in that form.

Mr. EVANS (Weber). Mr. Chairman, I would like to ask a question. I would like to know whether you criticised your nephew the honorable Frank J. Cannon for recommending that the Legislature passed that law?

Mr. CANNON. My nephew is not the Honorable Frank J. Cannon, but I do not know why the gentleman singles out Mr. Frank J. Cannon. I would like to ask him if Mr. Frank J. Cannon was chairman of that committee.

Mr. EVANS (Weber). I believe not.

Mr. CANNON. Was Mr. Frank J. Cannon's signature attached to that report?

Mr. EVANS (Weber). It was, according to my recollection.

Mr. CANNON. Have you a distinct recollection?

Mr. EVANS (Weber.) I have a very distinct recollection.

Mr. CANNON. You think it was attached, do you?

Mr. EVANS ( Weber). I do.

Mr. CANNON. But you are not sure of it?

Mr. EVANS (Weber). No, I can produce the report.

Mr. CANNON. He was not chairman, however. I do not know why you single it out. I am afraid the gentleman is trying to attribute a little political tinge to this discussion?

Mr. EVANS (Weber). No, not at all.

Mr. CANNON. The gentleman who first spoke and several who have spoken claim it is not a political question. I believe it is not either. I think politics have nothing to do with it. It is a question of simple business and not polities and I hope the vote will be accordingly. I desire to call your attention to this fact. I favored the provision as provided in the California constitution. The gentleman from Washington County quoted me particularly when he says I took that position, but it is said a wise man may sometimes change his opinion but a fool never. We wrote to California, and we got letters from different classes there, one or two of which I desire to read. One from Mr. J. D. Siebe, assessor. (Reads.)

I have here a copy of the revenue laws of California. We found under that, gentlemen, it was in the form, that they exempted the national banks practically from taxation; that they did not have

anything like the taxation which we have in Utah, and if we would exempt that we would exempt more than the amount loaned on mortgages. And under the old California law, this was the purpose. I have a letter dated Sacramento, March 25, 1895, in reference to this. (Reads. )
And there is a provision in the California law exempting free public libraries and free public museums, growing crops, mortgages, trust deeds, property used exclusively for public schools, and such as may belong to the United States, the state, or to any county or municipal corporation within the state.

Mr. EVANS (Weber). That has not yet been voted upon by the people.

Mr. CANNON. No, sir; this was passed by two-thirds majority of the Legislature. I call attention to this fact that after this law had been in operation in California since about 1876, I think it was, after they had tried it there for nineteen years, there is such a division of opinion that the representatives of the people elected to the legislature, by a two-thirds vote, vote to repeal that old law. Now, gentlemen, with that staring them in the face, with that kind of a record from a state that has tried it for nineteen years, was it unwise for this committee to come in here and say we favor leaving it to the Legislature instead of putting that old law in here? The minority of those men, who are making the fight upon this clause, that they would report a substitute_not to strike this out, but they would report a substitute, inserting that California provision. Why have they not done it? Why do not they, if they favor taxing mortgages, provide here a substitute by which we can come right to the root of the matter and tax them as they propose to do. If they want to put that in and there are enough here to make out on the balance, and my vote is the casting vote, I will vote to tax mortgages, because my position is the same as before; but I claim, gentlemen, with this instance of California's experience after a trial of nineteen years, we can afford to leave it to the Legislature, and the only thing I insist shall be put in is this, a provision by which you must exempt from taxation, if you tax mortgages, the property which is covered by it, and which belongs to a poor unfortunate man who has been compelled to borrow. That is the question, and that is the position upon which I stand. I do not care for the arguments which were used casting reflections upon my character. I do not care for reflections which are used here in which bankers are referred to as Shylocks, because I am too poor to feel that I am in that class of bankers. I do not care for that which is used simply for throwing dust in your eyes and not by way of convincing your intellects. But I ask you, gentlemen, to dispassionately look at the facts in this case and then provide that, if they ever do tax mortgages, which the Legislature has full power under this section to do, that they shall grant justice to the man whose property is mortgaged and shall exempt it to that extent that they get it from the other.

Mr. IVINS. Is it true that two-thirds of the members of the California legislature voted to repeal the law taxing mortgages, or is it true that two-thirds of them voted to refer that section to the people to get an expression of their views in regard to it? I want to state that this is an amendment to the California constitution and that the members simply voted by a two-thirds vote to submit it to the people.

Mr. CANNON, The fact in the matter is as follows, the secretary of the state board of equalization sass a constitutional amendment has been adopted by the recent legislature and will

be submitted to the people for ratification at the next general election, exempting such property from taxation. They have adopted and the people simply have to ratify it. It was the opinion of the legislature that it should be adopted or they would not have passed it in that form.

Mr. IVINS. Another thing, the gentleman said that while I was assessor and collector of Washington County, if there was a mortgage on a man's home, that I deducted the amount from his {1108} home and assessed the money to the person making the loan; I want to say that during the six years I was assessor and collector of Washington County there was not a single instance came under my observation, where a home was mortgaged in that county, and I do not think to- day that after a good many years have elapsed since I was assessor, there are a dozen real estate mortgages recorded in Washington County, and there was never one that I know of.

Mr. CANNON. Did you state in our committee that you made the deduction I stated?

Mr. WINS. Yes, but not in homes_not from real estate. The idea was all right. I simply just wanted you to understand that, thank the Lord, Washington County is not mortgaged now and never has been.

Mr. EVANS (Weber). I would like to know how it is in San Juan. [Laughter.]

Mr. LUND. I want {o ask Mr. Cannon a question. Is this the first attempt by the people of California to repeal that law?

Mr. CANNON. I am not conscious of that; I did not ask.

Mr. LUND. I understand that it is; it might work well in Utah for twenty years.

Mr. CANNON. I will tell Mr. Lund that the question has been agitated for a great many years, but I have not gone into the history of California to investigate it. I simply wrote there at the time favoring this proposition and expecting to incorporate it, and this was the result.

The question being taken on the motion to strike out, the committee divided, and by a vote of 57 ayes to 24 noes, the motion was agreed to.

The committee then took a recess until 2 o'clock p. m.


The committee met pursuant to adjournment and resumed consideration of the article on revenue and taxation.

Section 6 was read.

Section 7 was read.

Mr. EICHNOR. Mr. Chairman, before we pass on to the next section, I desire to ask the chairman of the committee on revenue and taxation whether under this section the moneys in the various counties are comprehended_the expense of State, counties, cities, or whether it is simply to apply to the State?

Mr. CANNON. I thought the gentleman would understand this because it was taken in body from Washington.

Mr. EICHNOR. It is all right.

Section 8 was read.

Mr. KIMBALL (Weber). Mr. Chairman, I move to strike out that section entirely. I do that for this reason, that there may contingencies arise in which the Legislature ought to be entitled to act in this matter. We cannot tell now in advance of legislation what the contingencies may be. I move for that reason to strike out that whole section and leave it to the Legislature to fix the rate of taxation. It will be absolutely necessary in some instances that the Legislature shall fix the limitation.

Mr. CANNON. Mr. Chairman, it has been stated here in the Convention a number of times that one objection to the Constitution would be the increased taxation. By limiting the rate as herein provided the people are insured that no Legislature shall ever increase their present tax which is now five mills, more than three mills, if the property be less than two hundred millions in value. And that when it reaches two hundred millions that the rate shall be dropped to five mills. I think that the amount here given as the maximum amount is sufficiently large to cover any expense that will be incurred. It will yield a revenue on the present valuation of very nearly eight hundred thousand dollars per annum, and the estimated expenses fall very much below that {1109} amount. I do not think that it will be necessary for State purposes with the economy that is being provided for by the Constitution to assess more than six or seven mills, and I certainly favor keeping it in, as I believe it will aid in the adoption of the Constitution.

Mr. KIMBALL ( Weber). Mr. Chairman, I do not think that the gentleman answered the question. There are many instances that I have in mind when the Legislature should be left at liberty to increase the taxation or decrease it. If we put this proposition in the Constitution it would forever forbid the Legislature from going beyond a certain amount. I do not think that is proper. I think it should be left to legislation to fix the amount of taxation.

Mr. SNOW. I would like to ask the chairman a question, whether section 8 harmonizes with the latter part of section 2, beginning on line 16. (Reads.)

Would this provision in section 8 be ample to cover this under all circumstances?

Mr. CANNON. It would by proper economy, because we limit the amount of debt that can be created. It would be sufficient to pay our present indebtedness and the amount that is provided for by our Constitution.

Mr. HAMMOND. I second this motion with an eye to San Juan. There may occasions arise in that undeveloped country as it now is when we want to enter into large expenditures in the interest of irrigation and to construct large reservoirs, and I would like the Legislature to have power, as I believe they will have the will, to assist San Juan in those enterprises, and with that view, I am in favor of the motion to strike out, that the Legislature shall have power to assess at any rate from one mill to twenty-five, if they think it is necessary.

Mr. THORESON. Mr. Chairman, I do not think we are able to legislate for San Juan County. If they want to bond that county there is a provision for that purpose, if the majority of the people vote for it. I am opposed to the striking out of this section. The question of the rate of taxation is the important question connected with statehood for. this Territory. That is a question that people ask, “is it not going to increase our rate of taxation?” And I say unless we have a provision in here guarding that point, there will be more doubt about the people assuming a Constitution, than any other point. The committee has duly considered this. The eight per cent. will cover the ordinary emergencies and if there is more revenue wanted, if you will notice the section provides that the people of the Territory can vote to increase this rate and raise the revenues desired, but the vote of the people with a higher rate of taxation than eight mills is something that shall cause people to vote against this Constitution. I think we should guard our people against any higher rate and I think the section should be retained.

The motion to strike out was rejected.

Sections 9, 10, 11, and 12 were read.

Mr. Allen offered the following substitute for section 12:

State and county boards for equalization of taxes shall be provided by law.

Mr. ALLEN. Mr. Chairman, my reasons for offering a substitute here are these: in the first place, I do not believe that the board as here named would give satisfaction for the reason that they are most apt to be citizens of the city where the capital of the State is, and they will not be acquainted with the values in the different parts of the Territory, and for them to travel and inform themselves would be expensive. I think the Legislatnre would be able to provide a board that will come nearer understanding the different values throughout the Territory than these named here. In addition to that it appears to me to be unnecessary to go {1110} on and state that these boards shall equalize the tax on real estate and personal property, etc. I think that is legislation and of course it could be for no other purpose only that. Therefore, I think this should be left to the Legislature, with the exception of those few words.

Mr. THORESON. Let me ask the gentleman a question. The boards we provide for here_the State boards at least will serve without pay according to the other parts of the article. Would their mileage and expenses outside amount to as much as the expenses of an outside board and their mileage?

Mr. ALLEN. I think that they would be obliged to travel in order to obtain the information

themselves, and their expenses would be more than-_

Mr. THORESON. Will it increase the expenses?

Mr. ALLEN. I do not think it would increase the expense, but they would not have the knowledge the other board would have.

Mr. EVANS (Weber). Mr. Chairman, I offer the following amendment to the original section:

“Until otherwise provided by law,” to be inserted at the beginning of the section. I am informed that the board of equalization at present costs the Territory about seven thousand dollars. This board would serve without compensation, and if it is found in the future to be inadvisable that this board should continue for that purpose, the Legislature can change it, and I am in favor of leaving the section as it is with that amendment.

Mr. SQUIRES. I want to ask Mr. Evans a question. I understand that we have provided in the executive article so that this State board would not cost the State anything for serving?

Mr. EVANS (Weber). That is exactly what I want.

Mr. SQUIRES. Have we provided that the board of county commissioners would serve without extra compensation?

Mr. EVANS (Weber), I think not.

Mr. SQUIRES. Then, would it not be wise to add after the word county, “who shall receive no extra compensation, for that service?”

Mr. EVANS (Weber). I think it would.

Mr. SQUIRES. I move to insert that then.

The CHAIRMAN. I would hold that the amendment has gone as far as it can go. I do not care to have ourselves tangled up any farther.

Mr. CREER. Mr. Chairman, I simply want to endorse the sentiment expressed by Mr. Evans of Weber County on this proposition. I think that the qualifications of those men are more to be considered than the matter of the saving of the expense. The State treasurer and auditor may have qualifications suitable for that purpose, they may be able accountants, possibly assistant cashier, clerk, or something of that kind, but as to estimating various kinds of property in the Territory, I think that certainly they would not be proper subjects for that position and I am opposed upon this idea anyway, all the way through. I am opposed to it in the way of the executive, that we have passed. The idea of making a treasurer_he is the man that has to handle the funds, and it would give him the power to discriminate for or against in many instances, as it would in regard to making the governor one of the members of the board of the other public institutions. He

would have one-third of the office in endorsing appropriations for those institutions and he may be prejudiced in their favor or in favor of some other. I am opposed to this principle except to the qualification that I am willing it should be tried as an experiment, but to put it in there permanently I think that it would be a great mistake. Therefore, I am going to vote for it as proposed by the gentleman {1111} from Weber County_until otherwise provided by law.

Mr. FARR. Mr. Chairman, I have been opposed all the way through to legislating, excepting where it is absolutely necessary. I think this section, with Mr. Evans's amendment, should be in by all means, “unless otherwise provided by law,” and if the next Legislature sees it necessary to make a change, they can change it, consequently I am in favor of this section with that amendment.

Mr. KIMBALL (Weber). Mr. Chairman, I am certainly in favor of the section as it stands. As now provided the State board shall consist of governor, state auditor, state treasurer, secretary of state, and attorney general. Those gentlemen are all salaried officers. They have no interest whatever in increasing or decreasing of taxation, and they are the proper men to go into this board. The county commissioners are likewise elected to a certain office, they get certain pay, and they have no interest in increasing or decreasing taxation, so I am in favor of the section as it now stands, because I think it is the most equitable thing that we could insert in the Constitution, for the reason that neither of the officers is a salaried officer neither of them get anything for increasing or decreasing the taxation. I submit that is the proper thing to stand.

Mr. HEYBOURNE. I object, Mr. Chairman, to the section as it now reads and am of the opinion that I shall support the amendment offered by the gentleman from Weber County. This matter of taxation is quite important. The equalizing of taxes is a very important matter, and while I have the greatest respect for the ability of the gentlemen that are named here in this section, I am of the opinion that in order to do justice to all parts of this Territory, there should be a representation on the board, so that they might take into consideration the different valuations as they exist throughout the length and breadth of the coming State. We have a county board provided for here, whose duty it is to equalize the taxes of individuals, in the various counties. That seems to work reasonably well and the board of equalization that is provided for at the present time for territorial labors have had a representation in that body from various parts of the Territory, and I think that it has worked first rate. It has given general satisfaction. When we come to concentrate the members of this board here in this city, I believe it would be an injustice to the outlying counties. Therefore, I shall support the gentleman's amendment that provides until otherwise provided by law, leaving the matter then in the hands of the Legislature to look after the varied interests of the coming State.

Mr. SQUIRES. I would like to ask the gentleman a question. I judge from his remarks that he does not expect any officers are going to be elected to State offices, except gentlemen from Salt Lake County.

Mr. HEYBOURNE. Well, I should judge from this section here that provisions are made for certain gentlemen from the officers of the State.

Mr. SQUIRES. But they are liable to be elected from the outlying counties of the State and will come here with a knowledge of the values of the outlying counties.

Mr. HEYBOURNE. Judging from the past, I think they will be elected from here.

Mr. THORESON. Inasmuch as you are willing and want to leave it to the Legislature, why not leave it to the Legislature entirely and not go on and put a section in here?

Mr. HEYBOURNE. I understand the gentleman's amendment has that object in view; “Until otherwise provided by law.”

When the Legislature meets they can attend to that matter.
Mr. THORESON. Why not leave it then entirely without putting this in if that will suit you?

Mr. IVINS. Mr. Chairman, my objection to leaving it to the Legislature is that I prefer that these officers who are named should act as a territorial board of equalization. Now, if, after trying this experiment, it should prove to be not proper or not a successful experiment, I would be willing then to empower the Legislature to make a change as provided in Mr. Evans' amendment. I want to say that we appropriated about seven thousand dollars for the territorial board of equalization at the last sitting of the Legislature, and I do not believe that the Territory has got value received for it. I think that these public officers can execute this law and fill all the necessities of the case, and if it shall prove that they cannot, then the Legislature will be empowered to make a change. I think that is as far as we ought to go anyhow. If this had been proposed in the committee, I think I should have approved it there, but it was not and we were in favor of the section as it is. I am willing to make that concession, but I do not want to leave it to the Legislature entirely.

Mr. CANNON. Mr. Chairman, the section as reported by the committee is not an unusual one. It is found in a great many of the constitutions of the surrounding states and in other states. I, however, agree with the last speaker, and I believe had this proposal been made in the committee, it would have been adopted by the committee. I favor the amendment offered by the gentleman from Weber, Mr. Evans, and with that amendment I think the section should stand as it is.

Mr. PARTRIDGE. Mr. Chairman, I would like to ask the chairman of the committee where there is any provision made for a board of county commissioners? I have not been able to see where they are provided for?

Mr. THURMAN. That is the select-men.

Mr. CANNON. I believe they are named in the article on municipal corporations.

Mr. IVINS. It is meant to apply to the county selectmen, they are called commissioners, it means the selectmen.

Mr. JOLLEY. Mr. Chairman, I certainly and in favor of the amendment of Mr. Allen. I remember

that this expensive board has been made mention of in the past. It did not give entire satisfaction, and they were selected outside of the capital, but I cannot altogether agree with my friends in Salt Lake that they are apt to be from San Juan or Washington County, or somewhere else that is to be. These officers made mention of_they are more apt to be, men that are living here in Salt Lake City or near about, and they would not be capable of judging in relation to the prices and valuations of the property in the more remote parts of the Territory, and for that reason I am in favor of leaving this matter to the Legislature and shall vote for the amendment of Mr. Evans.

Mr. SQUIRES. Mr. Chairman, I am not in favor of the amendment offered by the gentleman from Piute, and I favor the section as it stands, with the amendment offered by the gentleman from Weber, and I want to say here that the amendment which I proposed I shall not now make and for this reason: that the board of county commissioners as I understand it will be paid a per diem and mileage for all their services. Now, it would be unwise and unjust and unfair to require them to serve certain days as a board of equalization without that per diem and mileage and for that reason I shall not put in the amendment, but shall vote for the section as it stands, with the amendment by the gentleman from Weber.

Mr. CORAY. Mr. Chairman, I am in favor of the amendment made by the {1113} gentleman, Mr. Allen. I have observed the methods of these boards of equalization for sometime, and it appears to me the way they equalize the taxes is the county board ascertains who is taxed the highest_whose property is assessed the highest, and they equalize all the rest with it, and their work is done very easily and very simply. That is the method pursued in Juab County at least, and I think it is the same with the territorial board. When they went down through the Territory, they simply raised the taxes in all the rest of the counties to the standard of the county that was taxed the highest. They raised our taxes down there forty per cent_real estate and merchandise, and that is the method they have pursued heretofore, and I am opposed to all such boards. I think the question should be settled in the Legislature.

Mr. EVANS (Weber). Let me ask Mr. Coray a question. That board of equalization of whom you make mention was composed of men living out in the country as well as those living in Salt Lake, was it not?

Mr. CORAY. I do not know where they lived; I could not tell you. I just say that this was the method pursued by hoards of equalization.

Mr. EVANS (Weber). That is the fact, that the men that composed that board were selected from all over the Territory_from a number of counties?

Mr. CORAY. I remember two of the gentlemen, one was Charlie Richards and another was Elias Smith, Jr. They were not from the country.

The amendment offered by Mr. Evans, of Weber, was agreed to.

The motion of Mr. Allen was rejected.

Mr. PETERS. Mr. Chairman, I desire now to offer an amendment to section 12. I move to strike out all after the word “county,” in line 7, down to the word “each,” in line 14, and also to strike out the word “also,” and the word “other,” in line 14.

Mr. CANNON. Mr. Chairman, I have no particular objection to this being stricken out, but at the same time, I see no advantage. It would simply be provided for immediately by the Legislature. And this is in this identical language in several of the states. For that reason, I am opposed to striking it out. It may just as well be left as it is.

Mr. SMITH. Mr. Chairman, it seems to me that there is no necessity for it whatever. It is just simply legislation pure and simple. The taking of it out does not detract from the section a particle; I am in favor of striking it out.

Mr. CANNON. What objection is there?

Mr. SMITH. Because it is just simply legislation; it can be just as well done in a Legislature as here.

Mr. CANNON. Would it cost any more than it would in the Legislature?

Mr. EVANS (Weber). Mr. Chairman, I hope that motion to strike those words out will not prevail. We have defined the duties of the governor, the secretary, the treasurer, school instructor, and all the other officers. This simply defines what their duties shall be. The State board shall equalize the taxes of the State, the county board shall equalize the taxes of the county; that is all there is to it. It is very brief. It is not much legislation, and if it be termed legislation, we might go back and strike out all the duties for the other officers in this Constitution, which we have passed upon. It leaves it fixed and certain just as it should be and just as it always will be. There is no occasion for a change in that at all.

Mr. FARR. Mr. Chairman, I suggest that we elect men to these offices that have got sense enough to know their duties, without telling them what they are. I move to strike out on that ground.

The motion was rejected.
Section 13 was read.

Mr. SHARP. Mr. Chairman, I move to strike out the word “used,” in line 5 of section 11.

Mr. CANNON. I would like to hear the gentleman's reasons for such a motion.

Mr. SHARP. My reason for asking to have it stricken out is that I see no good reason for leaving it in, and I made this motion to bring out the reason for leaving it in.

Mr. CANNON. Mr. Chairman, I would state that the committee had in view more particularly

those two words than any of the rest of the section. Our previous sections provide that any property now in the Territory should be taxed, but this “or used” in the Territory was to provide that corporations coming in here, using capital in addition to that which they ordinarily had there should pay a tax on it. It was more especially providing that foreign corporations should pay taxes the same as local. For instance, if a corporation of any kind doing business here with a capital we will say of ten thousand dollars should claim that the balance of the money it had belonged to a corporation in the east and in that way escaped taxation on a hundred thousand dollars, we provide by this the means by which they should pay taxes on the amount they used here, just the same as the local man would pay taxes on the amount he used.

Mr. EVANS (Weber). Is it not also intended that railroad companies using the stock of other corporations in this Territory may be taxed?

Mr. CANNON. Yes, sir.

Mr. EVANS ( Weber). Such as Pullman cars and engines and equipment in the Territory used by a railroad company although owned by some foreign company?

Mr. CANNON. Yes, sir; it would cover all property in the Territory. It was taken from Colorado.

Mr. SHARP. Is it not a fact that railroad companies are assessed so mnch a mile for the railroad and the equipment?

Mr. CANNON. I am not aware of the method of assessing railroads, but I think in addition to that they are assessed on their equipment, so much for the number of cars they have. It would be evidently unjust in my mind to assess a company which had. a hundred cars the same as a company which had two hundred, even if the mileage was the same.

The motion was rejected.

Mr. SHARP. Mr. Chairman, I now offer another amendment, that we insert the words “or persons” after corporations, in the first line of section 11.

Mr. SQUIRES. Mr. Chairman, in view of the fact that section 5 was stricken out of this article in order that the matter of taxing mortgages should be left to the discretion of the Legislature and not made mandatory, I move that section 2 of this article be amended by striking out in lines two and three the words “under the Constitution,” and insert in the place of those words, “of this State.”

Mr. THURMAN. Mr. Chairman, I do not see any necessity for that amendment. In relation to the taxation of mortgages, which was discussed this morning_and I understand the gentleman makes the striking out of that section the basis of this motion_I take this position, that if to tax a mortgage is double taxation, it is illegal, anyhow, because it is not uniform. If it is not double taxation, it ought to be taxed. This section, as it now stands, provides that all property in the State not exempt under the laws of the United States is subject to taxation. That ought to be so. I say

that we cannot indulge in double taxation, as a matter of law, unless we can do away with the principle which provides for uniform taxation. In other words, we cannot say that a man's horse or his cow shall be taxed twice, while some other man's {1115} property shall only be taxed once. So I say the matter is right just as it stands. If to tax a mortgage is double taxation, the courts will settle that. If it is not double taxation, then they ought to be taxed. The sections, as they now stand with that struck out, as it was struck out this morning, it seems to me are exactly right and there can be no question about it.

The motion of Mr. Squires was rejected.

Mr. CANNON. Mr. Chairman, I move to amend section 13, line 3, by adding at the end of the line the word “occupation.” At the time this was before the committee the word occupation was at one time considered, and at that time one of the members of the committee, who was an attorney, thought that it would be covered by the other provision. Since that time, in consultation with the same gentleman, he stated that he thought no harm would come from inserting the word anyway, and I believe it should be in there. I believe the State should have the right, if it sees fit, to tax lawyers, carpenters, bankers, and everybody else.

Mr. THURMAN. And preachers.

The motion of Mr. Cannon was agreed to.

Mr. THORESON. Mr. Chairman, in section 3, line 12, I move to strike out the words “municipal corporations.”

The motion was agreed to.

Mr. EVANS (Weber). Mr. Chairman, I desire to offer an amendment to section 3, by inserting after the word “benefit,” in line 16, the words “or other like property.” This section is designed for exempting certain properties from taxation. There might be some property of a similar nature which ought to be exempt and it is not provided for in the section_something that we have omitted.

Mr. PAGE. What other property do you have in mind?

Mr. EVANS (Weber). I have not any.

Mr. PAGE. That would be likely to come under that head?

Mr. EVANS (Weber). I think all is enumerated there that should be, but there may be property of a like nature which the Legislature might want to exempt, but I would make it of a like nature.

Mr. PETERS. Do you not think this amendment will be more appropriate if inserted after the word “burial?”

Mr. EVANS (Weber). Well, it probably would. That has already been suggested to me. Then, with the permission of the house, I will add it right after the word burial, in line 15.

Mr. CANNON. I think that would be entirely appropriate.

Mr. EVANS (Weber). Oh, yes, that would not be right, come to look at it. I will recede from that and place it as I had it first, because it would be inappropriate after the word burial.

Mr. CANNON. If I might be permitted to suggest, I suggest to the gentleman if he interline it at all that it be after the word “purposes.” I do not think there are many other like purposes for burial. If you are going to have “other like purposes,” at all, I think it should come after the charitable purposes, in line fifteen.

Mr. GOODWIN. Mr. Chairman, I think after “burial” would be the right place and it would apply to a crematory. I wanted to ask why burial places are exempt from taxation? They are the only ones that do not growl at taxes.

Mr. KERR. Mr. Chairman, while I do not know of any very great reason why this should not be inserted, yet I can see no reason why it should be. That being true, I am opposed to the motion to amend. It seems to me that the proposed section here certainly covered all that ought to be exempt under that section. I can conceive no other kind of property that should be exempt. That being true, I am opposed to the amendment. If the amendment should {1116 - PUBLIC DEBT} prevail, it seems to me the word “and” instead of “or” should be put in. I can see no good that would come from inserting these words.

Mr. EVANS (Weber.) With the consent of my second I will withdraw the amendment.

Mr. CANNON. Mr. Chairman, I move that when we do rise that we report this article and recommend it be placed upon the calendar for third reading.

The motion was agreed to.

The committee of the whole then proceeded to the consideration of the article entitled public debt.

Section 1 was read.

Mr. EVANS (Weber). Mr. Chairman, I desire to offer an amendment to section 1, by adding after the figures one million dollars the following, “including existing indebtedness of the Territory.”

Mr. THORESON. I would like to ask a question. What is the amount of the present territorial indebtedness?

Mr. EVANS (Weber). Seven hundred and sixty-seven thousand dollars, I am informed, is the accurate amount. It would leave us a little less than a quarter of a million that we could borrow in

the future.

Mr. CANNON. Mr. Chairman, I am opposed to the amendment. I do not think it is necessary at all. The provision is that such debt direct and contingent in the aggregate shall not exceed one million dollars. That necessarily involves the present indebtedness. It could not be construed in any other way as I view it. If it never exceeds a million dollars the debt that we now have is provided for by the ordinance and cannot be repudiated, consequently the section as it stands would mean the same thing as the amendment proposed.

Mr. EVANS (Weber). Then your idea is to limit the Territory, is it, to one million dollars in the aggregate including the indebtedness of the Territory?

Mr. CANNON. Yes, sir.

Mr. EVANS (Weber). Well, then, let us have that certain, because this is left so uncertain that I fear the new State would incur a million dollars in addition to what it already has. It can do no harm and may result in much benefit.

Mr. KIESEL. Mr. Chairman, I move to strike out section 1.

(No second.)

Mr. SMITH. Mr. Chairman, it seems to me that the section is sufficient without those words. It seems to me it is amply broad. I should vote for the section to remain just as it is.

Mr. CANNON. Mr. Chairman, one reason why I am in favor of leaving it just as it is, we for all time include in there existing indebtedness. I do not think it is capable of a double construction. I would appeal to the attorneys and ask them if there is any one here who feels that this language would not limit it to one million, including the present indebtedness?

Mr. ROBERTS. Mr. Chairman, I wish to say that that is just my doubt_I understood Mr. Cannon to ask if there was any gentleman on the floor who had any doubt in regard to this section, as it now stands, including the present indebtedness of the Territory. I wish to say that I am one of those that doubt and in order that we may be thoroughly and altogether secure from a greater indebtedness than one million dollars in the State, I think that safety requires the adoption of the amendment of the gentleman from Weber. The State may, to meet casual deficits or failures in revenue or for expenses not provided for, contract debts. It does not provide for the assumption of the debt of the Territory as a part of that indebtedness, that it may incur.

Mr. KIESEL. Mr. Chairman, if it was found necessary to incur a debt of seven hundred and fifty thousand dollars with our present population, if we have a population of a million, why it may be found necessary to create a {1117} larger indebtedness. I move to make it three dollars per capita.

Mr. RYAN. Does that include present indebtedness?

Mr. KIESEL. Yes, sir.

The CHAIRMAN. The gentleman will please get it into shape. Get it in writing and send it up to the secretary.

Mr. THURMAN. Mr. Chairman, I favor the amendment of the gentleman from Weber. I cannot construe this language in any other way than to mean that the State in the future may, to meet casual deficits or a failure in revenues or other expenses, not provided for, contract debts to any amount not exceeding a million dollars. That the State we are about to create is given the power to do that, and it seems to me that it is altogether independent of the existing indebtedness. If we want to include existing indebtedness it only requires about two words to get it in there and it is placed beyond all dispute and I favor putting it in.

Mr. CANNON. That is the object of the committee and I therefore favor it also.

Mr. HART. Mr. Chairman, I was going to make the same suggestion that the gentleman from Utah County (Mr. Thurman) made. The use of the word State there makes it uncertain as to whether it shall include the territorial indebtedness.

Mr. KIESEL. Mr. Chairman, I offer the following amendment. Insert after “exceed,” in line 5, “shall not at any time exceed four dollars per capita.” And strike out one million dollars. Now, Mr. Chairman, if it is found necessary_and evidently it was found necessary to incur a debt of seven hundred and fifty thousand dollars for some 250,000 people, it may be found necessary in the course of time to increase our indebtedness and have corresponding results. I do not wish to see the Territory or the future State handicapped in case they require certain improvements.

Mr. ROBERTS. Mr. Chairman, I cannot support this amendment that is offered by the gentleman from Weber who just took his seat. I believe, sir, that his argument in support of it is based upon wrong premises also. I notice that in the article on revenue and taxation, I think that as the wealth of the Territory increases you provide for a reduction of the percentage of taxation, because the increase of property would yield a larger revenue, at a less percentage, and instead of thinking that we want to increase our indebtedness or make provisions for increasing the State's indebtedness, with the increase of its population, I think the result should be that with the increase of our population there would come an increase of taxes, increase of the State's revenue, and hence a still less and less necessity for providing for the increase of State indebtedness. It seems to me, sir, that the provision made in the article as we now have it, is much better than upon the basis of a per capita indebtedness of four dollars, and therefore I shall sustain the article as now proposed and amended here in the committee as against the proposition offered by the gentleman from Weber. And Mr. Chairman, I make this point also, that we ought to reduce the indebtedness rather than to increase it, and I think, sir, that the true policy for the new State would be to aim at that object; that as soon as we assume statehood in this Territory, in consequence of meeting the first demands upon the public treasury, that the indebtedness that we then incur ought to be the very highest indebtedness that the State will ever look forward to and that from thenceforward we ought to look constantly to a decrease rather than an increase of the State's indebtedness.

Mr. THORESON. Mr. Chairman, we find also, in section 3, the proviso for {1118} the emergency that the gentleman from Weber referred to. If that should occur that for a specific work or single object it may be increased if the people vote for increasing the indebtedness. And I think that the section the way it reads is plainer. Everybody knows the amount of the indebtedness_one million dollars, but if you say four dollars per capita, why some people will be afraid to increase the indebtedness to that extent and they may vote against the Constitution. If there is a special object that the State wishes to accomplish_some emergency, it is provided for there and it provides for an election by the people on that subject. I think section 1 should be left as it is.

Mr. EICHNOR. Mr. Chairman, I hope the substitute as offered by my friend from Weber, Mr. Kiesel, will not prevail. I do not confess to be much of a financier, but I can learn a little from the surrounding states. I think our debt limit is too high. I think it should be less, nine hundred thousand dollars or possibly eight hundred thousand. If you take our neighbors of which my friend, Mr. Farr, has several times spoken_he stated that some of the surrounding states were in debt. It is a mistake. Utah is more in debt than the surrounding states. The debt limit of Montana is two hundred thousand; the debt limit of North Dakota two hundred thousand; of South Dakota one hundred thousand; of Washington four hundred thousand.

Mr. SQUIRES. Mr. Chairman, speaking about the debt of Utah Territory at present, I understand that there is a bonded indebtedness of seven hundred thousand dollars. There is also a deficiency of one hundred and thirty-three thousand dollars, which will make eight hundred and thirty-three thousand dollars, leaving only a margin for the future State to go into debt of one hundred and sixty-seven thousand dollars; and in view of the fact that we are just starting in as a new State, I do not believe we have got the limit too high. But I am opposed to the motion of the gentleman from Weber, because I do not think that the rate of public debt should be based upon population. I do not think it is any fair way to look at it.

Mr. KIESEL. Mr. Chairman, I have been convinced by argument that my motion was wrong, and I withdraw it with consent of the second.

Mr. GOODWIN. Mr. Chairman, I only asked for a provision against a possible great calamity. We had a dissertation the other day that because of high taxation the state of Kansas had been and was in so bad a state that people were abandoning their farms; that taxation has been so terrible that the state this year, I believe, is making a debt of one hundred fifty thousand dollars to provide seed for the farmers and to support them until something can be raised out of the ground. Now, suppose such a calamity as that should come to Utah. Suppose by the recklessness of our State officers this new State should find itself fixed with a taxation so high that the crops could not grow, for a couple of years, and there had to be a provision to buy seed and to buy food for the people even by running in debt. Is there anything in this article that will permit anything of that kind? It seems to me a better plan would be to rate the indebtedness at a percentage of the taxable property in the Territory. If it is a hundred millions this year and two hundred millions fifty years from now or twenty years from now, the people might need for some great public improvement for public purposes_a loan of money_wouldn't it be better to put it where every man would say that it was reasonable and let it rest at that? We owe now, as I understand, about

eight hundred fifty or sixty thousand dollars. That is, that leaves about one hundred forty thousand dollars to go on, which is plenty under ordinary circumstances, {1119} but we live in a land of cloud bursts, in a land of grasshoppers, a land of drouth [*note*], sometimes they come and shut off the water supply; there might come a time when all our lands are under cultivation, when for a series of years such an accident might happen as has happened among these old irrigated communities. I will support the section if that is the best that can be done. I think it ought to be in proportion to the assessed valuation of the property, and I believe there ought to be a provision in there that in the event of a great calamity the people might have the means to extricate themselves. I understand it is a good deal like trying to serenade a deaf and dumb asylum to talk to any such proposition in this house, but at the same time there is a certain pleasure to the musician, even if those in the house do not hear him.

Mr. SPENCER. Mr. Chairman, I move the following amendment to section 1:

After the word “exceed,” in line 4, “not to at any time exceed two per cent. of the assessed value of the property in this State.” I move to strike out all after “exceed,” in line 5, and insert in lieu thereof, “two per cent. of the assessed value of the property in this State.” I do not think we should place too many restrictions on the Legislature. I have more confidence in the Legislature of the future than what many members have. I think they can better afford to leave that to the Legislature. In the past there has been an intimation that they were not too good. There is no reason why they should run in debt, unless they are compelled to do so.

Mr. IVINS. Has the gentleman made an estimate to know what the indebtedness might reach under this proposition?

Mr. SPENCER. understand the assessed value of the property of the State to-day is about one hundred million dollars.

Mr. EVANS (Weber). That would enable us to go in debt about two million dollars.

Mr. SPENCER. That would be the extreme.

Mr. IVINS. Does the gentleman think that we ought to authorize the creation of a two million dollar debt now?

Mr. SPENCER. I do not, and I do not consider this would be authorizing it.

The CHAIRMAN. I beg pardon, but I think it would be in direct opposition to section 8 of revenue and taxation, which provides that the rate of taxation for State purposes shall never exceed eight mills on a dollar.

Mr. SPENCER. Mr. Chairman, that would mean that the tax should not exceed that for one year.

Mr. BOWDLE. Mr. Chairman, I give notice that I want to present a substitute.

Mr. CANNON. Mr. Chairman, I am opposed to the last amendment_that offered by the gentleman on my left. In the first place, I believe that the indebtedness of the State will be quite great enough. The maximum if we reach one million dollars, will give us quite a margin, and you will perceive, gentlemen, that this is only for occasions of failures in revenue. If you turn to section 3, you will find that you provide in that that other debts may be created, if authorized by law, for some single work or object to be definitely specified therein, which law shall provide ways and means for the payment. If we de-desire to build a capitol, or if we desire to do anything of this character, or if a great calamity should come as referred to by Judge Goodwin, it could be provided for under section 3.

I desire to call attention to the experience of Salt Lake City and her indebtedness, not for the purpose of frightening any one, or any thing of that character, but just to show what the effect was. Salt' Lake City at the present time has an indebtedness, exclusive {1120} of her school indebtedness, of about two million and a half dollars. I am informed by the city recorder that to show for that she has only a little in excess of one million and a half of actual assets. The balance of that two million and a half has been used mainly in her operating expenses, and I think it should serve as a warning to us. I think we should limit this indebtedness of the State. I desire to call attention simply to one piece of work that she has on hand. Mr. James the other day called your attention to the fact and he said it came under his personal observation; the time this building was originally designed, it provided for $375,000 or thereabouts. I have in my hand the statement of the cost of the building and it is itemized as follows:

Total cost of main building,                         $777,908.68

Boiler house, including boiler plant,                    48,482.22

Total amount expended to January 31, 1895,

on the ground surrounding the building,                    66,142.80

Approximate amount as yet unpaid on contract,                8,000.00

Total,                                    $900,523.70

I believe that most of that money was well spent in this building. I am not finding fault with that, but I am calling attention to the fact that when any city, municipality, or state incurs indebtedness, there is not always that care that should be used in the expenditure of the funds, and I am in favor of the section as it originally stands, with the amendment of the gentlemen from Weber.

Mr. SPENCER. Mr, Chairman, with the consent of my second, I move that “two per cent of all taxable property in the State,” be inserted in lieu of my motion.

The motion was rejected.

The motion of Mr. Evans of Weber was agreed to.

Mr. Bowdle offered the following as a substitute for section 1:

The State of Utah shall not in any manner create any indebtedness including the present territorial

indebtedness exceeding one per centum of the assessed value of the taxable property in the State as shown by the last general assessment for taxation, except to suppress insurrection or to provide for the public defense.

Mr. BOWDLE. Mr. Chairman, I am aware that you have just voted down the amendment presented by Mr. Spencer, which provides that the rate should not exceed two per cent. As I understand it the taxable property to-day of this Territory is about one hundred million dollars. The limit under that would be one million dollars. But suppose that we go on as we hope to, prospering from year to year and growing and the time should come that our taxable property would be ten hundred million dollars. With that increased taxation there will come increased necessities for the expenditure of public moneys, and you then would have the means under that section of providing for these contingencies. I still have a little faith (although I confess that they have not been absolutely right at all times) in the coming Legislature and in their doing what would be right in the matter. I do not see why they would be any more willing to run into debt than we are. Their interests will be identical with ours at present, and I cannot see why we should so tie them up and bind them that if the emergency occurs they cannot exercise the powers that might be vested in them for the good of the people, and therefore I am in favor of this section. I may say that this is pretty nearly identical with the section from Wyoming. There is only one or two small unimportant changes in the section.

Mr. EICHNOR. Mr. Chairman, I move to amend line 5 of the section by striking out the words “one million” and inserting the words “nine hundred thousand.”

Mr. CANNON. Mr. Chairman, it looks {1121} to me as if this would be making two bites of a cherry. We are very nearly up to that limit now and within the next two or three years it may be absolutely necessary, under State administration, to increase our indebtedness a little. I think it would be unwise to limit it to nine hundred thousand. It seems to me we are splitting hairs. I favor the report as it is.

Mr. ROBERTS. Mr. Chairman, I wanted to speak of the substitute and to express the hope that it will not prevail, because I am of the opinion that the arguments in favor of that, too, are also based upon false premises. The present taxable property of the Territory, which, of course, will be the taxable property of the new State, is about one hundred million dollars. And revenue derived from that amount of property, I am informed, is about two hundred fifty thousand dollars; the revenue for the Territory, which would also be the revenue for the State, at the present rate of taxation. The gentleman offering the substitute suggests that the time might come when our taxable property might be increased probably ten times. Well, if that shall be the case, Mr. Chairman, the revenue of the State will also have increased ten times and hence, less and still less the need of running in debt, and for that reason, I see no necessity for providing for the increase of the indebtedness of the State, since the increased revenue derived from the increase of property in the State will always be sufficient, as I take it, to meet the expenses of the State.

Mr. HART. Mr. Chairman, I am in favor of fixing this by naming some definite sum for the reason that if you have it based upon a fluctuating basis or amount there is never any certainty as to what amount of indebtedness will be created. You will notice the history of the different cities, some of our own in fact in this Territory in particular. I will name Salt Lake and Logan and there

are perhaps some others, who will incur indebtedness and claim at the time that they did not know it was exceeding the amount fixed by the statute for the reason that they did not seem to bear in mind the taxable value of the property at the last assessment, but it seems to me if we fix the debt limit at either nine hundred thousand or one million or any other definite amount, we will have no excuse for passing that limit. I therefore will vote against the substitute and in favor of the original proposition. I believe that it would leave too narrow a margin to work upon if we cut it down to nine hundred thousand, for the reason that we have an indebtedness close onto eight hundred thousand dollars and there would be a large deficiency when the next Legislative Assembly meets, it would be certainly not less than one hundred twenty thousand dollars. I am therefore in favor of putting the limit at an amount that would be reasonable under the circumstances.

Mr. EVANS ( Weber). Mr. Chairman, I do not think it is splitting hairs to knock a hundred thousand dollars out of this article. A hundred thousand dollars is not a bagatelle. It is considerable money, and I am in favor of Mr. Eichnor's motion to make it nine hundred thousand dollars, because I believe that will cover the present deficiency. And if I had my way about it, I would not permit the new State to go in debt one dollar in addition to what has already been incurred.

Mr. KERR. Mr. Chairman, I am not in favor of the amendment offered by the gentleman from Salt Lake, or the substitute. The first two years after our admission into the Union will be the most critical period in our history. While it is true that Congress has granted a great deal of land to the State which shall constitute a fund, the income of which shall be used for the maintenance of the public schools and State institutions, etc., it will require {1122} several years to select and locate the lands and sell them and invest the means so that the State will realize anything on the fund. The indebtedness I understand is already in excess of eight hundred thousand dollars. And we are certain that some of the institutions are exceeding the appropriations made by the last Legislature for the maintenance of those institutions. It does seem to me that with the present indebtedness of the Territory there will be a small enough margin even if we place it at one million dollars. I will state, however, that I personally am in favor of keeping the debt at the lowest taxable point, but I do not think it practicable, I do not think it wise for us to place the limit lower than one million dollars. We must remember that the additional burden of maintaining the State government_the public schools, State institutions, the people of the State will have all they can bear without having to be taxed for all buildings that may be required, and it seems to me that a margin of a hundred thousand dollars would be certainly small enough.

Mr. EICHNOR. If you fix this limit at one million five hundred thousand dollars, you will find that in a few years we have readied the limit of indebtedness. The more credit a man has the more he can run in debt.

Mr. CANNON. Will the gentleman permit me a question?

Mr. EICHNOR. I will try and answer; I am not a Napoleon of finance, like you are, but I will try.

Mr. CANNON. I do not understand that there was any proposition for a million five hundred

thousand before the committee.

Mr. EICHNOR. No, but I say if you were to fix the limit at one million five hundred thousand, in a few years we would have exceeded the limit. Now, gentlemen of the committee, going from a Territory into a State will not be as expensive as some expect or as some think it will be. We have reduced the grand jury, in fact we have almost abolished it. That has been a great saving to the Territory. We have reduced the number of jurors, that will be a great saving. The State officers, as the salaries were fixed the other day, will almost be paid out of the fees that will be turned into the office of the secretary of state. Now, I believe in a good old homely maxim, “live within your income.” I believe in cutting this down to the lowest notch. I believe and I hope that Salt Lake will see the capitol. But I state frankly here that I hope never a pick will be driven for the capitol grounds again until we are out of debt and can afford to build a capitol. [Applause].

Mr. BOWDLE. What rate of interest is the indebtedness drawing at present?

Mr. EICHNOR. I do not know.

Mr. EVANS (Weber). Five per cent.

Mr. BOWDLE. Seven, isn't it.

Mr. IVINS. I would like to tell the gentlemen that we appropriated seventy thousand dollars for interest on bonds at the last session of the Legislature.

Mr. EICHNOR. This may be a strange position for a lawyer to occupy, to speak about cutting down debts, but if there is misery in private life, gentlemen, it is when a man runs into debt. As my friend Snow says, a man is in hell. You just put the limit high enough on the State of Utah, and instead of attracting people, you detract people. These other states I have cited here_Montana, one hundred thousand dollars; North Dakota, two hundred thousand dollars; South Dakota, one hundred thousand dollars; Washington, four hundred thousand dollars_Idaho has the system that my friend, Mr. Spencer proposed. Their limit is one and one-half per cent of the valuation. I believe in coming down to a mathematical certainty and I believe in fixing it nine hundred thousand {1123} dollars, with all due respect to the financiers on this floor.

Mr. CANNON. Mr. Chairman, if the gentleman is going to have a mathematical certainty, when we have run in debt as much as we have, the bonded indebtedness being seven hundred thousand dollars, and the rest of the indebtedness amounting to about one hundred and thirty thousand, how in a mathematical certainty is he going to limit that indebtedness to sixty-six thousand and add increased expenses here in the office of the United States marshal of one hundred and fifteen thousand dollars, in the secretary of the Territory's office of thirty-three thousand dollars in a year?

Mr. EVANS (Weber). I would like to inform Mr. Cannon that under a State government, we will have no United States marshal at all.

Mr. CANNON. I will call the gentleman's attention to the fact that the Utah penitentiary will have to be maintained by the State. The expense of that, including guards, food, clothing, medical attendance, etc., is forty thousand dollars.

Mr. THURMAN. Mr. Chairman, are we going to start this State government right from the beginning on the theory that we are going to borrow money and incur a bonded indebtedness to pay current expenses from year to year?

Mr. CANNON. No, sir.

Mr. THURMAN. We are discussing here an indebtedness, not a rate of taxation.

Mr. CANNON. At the same time, let me state that I do not think it would be wise at first to increase the rate, so that people would be greatly oppressed by it. I think if we can prevent going in debt, the amount that it has been in the past two years_that I scarcely think that with the most rigid economy we can limit it much under the one million dollar mark and get our State fairly launched.

Mr. HEYBOURNE. Mr. Chairman, I would support the gentleman's motion to limit this indebtedness to the sum he has stated, nine hundred and ninety-nine thousand dollars.

Mr. EICHNOR. No, nine hundred thousand dollars.

Mr. HEYBOURNE. I want to state, Mr. Chairman and gentleman, that this is a matter that is going to be very closely watched by the people. The bonded indebtedness for this Territory to- day is causing them some serious reflection, and while I have regard and respect for the gentlemen who have served in Legislatures in Utah Territory in the past in this matter, I have to state here before this Convention that I see a disposition on their part at every session to increase this indebtedness. I am of the opinion of the gentleman, Mr. Eichnor, who has just preceded me, in this matter, that if this indebtedness was put up at a million and a half dollars, it would be a very short time before that limit would be reached. I am not in favor, Chairman and gentlemen, of allowing this latitude to the Legislature. Debt, as has been stated here, is something to be regretted, either personally, nationally, or in any other way, and if we want to progress as we expect to, we will have tee keep this matter down. The gentleman has stated in this regard that there will be an influx of citizens, there would be an increase and that it would be necessary perhaps to increase the governmental expenses of the State. Well, now, when this influx comes here will be an increase in the revenue and I think that that will answer the purposes and meet the ends necessary, and I say if we want to get a good vote, a heavy vote, next November on this Constitution, let us present it before the people in that way that they do not feel as though this burden had been increased upon them, and let us keep it down. I shall certainly vote for Mr. Eichnor's amendment.
Mr. HART. Mr. Chairman, as I view the question the proposition before the people will be simply this, in starting upon the increased burdens of statehood whether they would be permitted to contract a small additional indebtedness or whether they would be required to make that up by

an increase of taxes. Now, I am not in favor of running in debt any more than any other gentleman upon the floor of this house. I am strictly opposed to it, but when you fix it at nine hundred thousand dollars, you are practically giving us no latitude to run in debt. If we had any indebtedness now and some gentleman would propose to fix the limit of indebtedness at two hundred thousand dollars, you would think that was a very small amount, and yet if we had no indebtedness and you would permit your limit of two hundred thousand dollars, you would be giving the State more latitude than you give them now in limiting it to nine hundred thousand dollars. As the situation was last year, we were paying taxes at a rate that necessitated or permitted the running behind of something like sixty thousand dollars. That is the situation to- day. Now, there is either one of two things we have got to do. We have either got to permit a small indebtedness upon starting the State government, or else we have got to largely increase the taxes of the people to begin with. I am in favor of giving them just a little latitude. It will only be about one or one and a half hundred thousand dollars, and I am in favor of giving that much latitude to go on.

The question being taken on the motion of Mr. Eichnor, the committee divided and by a vote of 40 ayes to 34 noes the motion was agreed to.

The substitute of Mr. Bowdle weft rejected.

Sections 2 and 3 were read.

Mr. EVANS (Weber). Mr. Chairman, I move to strike out all of section 3 after the word “be,” in line 3, and insert the word “created,” immediately after the word be. It is said, gentlemen, that the people can always be trusted, and that is in the main true, but there are many times in times of excitement and in times of booms, when some public work is projected or conceived by somebody, and when the Legislature is applied to for money for the purpose of accomplishing that work, the Legislature would pass a law to be submitted to the people in these times of excitement, and possibly the debt be created. My idea about running a public government or state government is just like running an individual business. I believe that it ought to be got up within its means, that we ought not to incur any indebtedness for public buildings or other improvements, except where there is sufficient revenue to carry on that improvement, without going into debt for it. I believe that it is well enough just to stop right where we are and say that we will incur no more indebtedness. Now, if the Legislature should submit a law to the people, it has got to be published in the newspapers for a period of three months next preceding the time it is to be voted on. There is a large expense at once for the purpose of finding out whether the people want the debt or not. I think that if we understood that we could not go in debt at all for any of these public purposes, but that we simply had to live within the revenues derived by way of taxation, that would be the very best and most happy state of affairs that could exist in our new State. I shall therefore favor the striking out of this section.

Mr. KERR. I would like to ask the gentleman from Weber a question. If all of section 3 should be cut out, if sections 1 and 2 are not explicit on that question? That is, would it be possible to contract any debt other than that which is specified in sections 1 and 2, if the entire section 3 would be cut out?

Mr. EVANS (Weber.) I think, probably, that would exclude any indebtedness, but I would like an expression, however, in the Constitution so that there would be no question about it; that that would be our only public indebtedness_that no other debt shall be created.

Mr. CANNON. Mr. Chairman, I am opposed to the motion to strike out. In case the State at any time desires to take up any work or make appropriation for some specific purpose, I think it is a wise provision, when people authorize it, by their vote, to allow the people to incur such indebtedness. There is no single individual in the State, unless it happens to be a very wealthy man, with good securities, who can borrow money at five per cent., and yet the State can borrow it at that rate. It is unwise, in my opinion, to require the State to gradually collect money and keep it in its treasury until it has money enough on hand with which to erect the buildings. If they want to erect the buildings, or to perform any great public work, that requires the expenditure of from one hundred to two or three hundred thousand dollars, it is quite usual for the State to be required to expend such sum, either for its educational institutions or for the capitol building_and I maintain it is unwise for the people to be required to pay taxes when they, in procuring the money for that tax, have to pay a high rate of interest sometimes in borrowing themselves, more than is necessary for the actual expenses; and to gradually accumulate that money until they have enough to build a building; unless they pursued that policy, if the gentleman's motion prevails they never could undertake any great public work; but by this section, if the people can authorize the borrowing of money for some purpose, that money may be borrowed, but it limits it; first, stating that it shall specifically define what the debt is for; and, second, must provide means by which that debt will gradually be paid; and, third, that it cannot be assessed at all until it has been authorized by a vote of the people who shall vote upon it at the election. I think this section should remain as it is. For the benefit of Mr. Eichnor, I will say it comes from Washington verbatim, I think.

Mr. EICHNOR. I will support it.

Mr. ROBERTS. Mr. Chairman, I hope that the amendment to strike out a part of the section indicated will be favorably considered. I hope that the section will be amended as proposed, and I think it is necessary that it should be, in order that this section may be in harmony with the section that was passed in the legislative article the other day, providing that the credit of this State should not be used in aid of private enterprises. I believe that was the principal substance of the section that was passed here in the legislative article the other day. This section, as it now stands, is equivalent to using the credit of the State for private purposes, provided that the matter be submitted, as a separate question, to the people and they vote in favor of it, and in order to maintain intact the principle that was won here the other day, on this floor, that the credit of the State should not be used in aid of private purposes; I believe that this part of the section indicated should be stricken out, and that the principle ought to be asserted right here that except debts specified in sections 1 and 2 of this article, no debt shall hereafter be created in the State.

Mr. CANNON. May I ask the gentleman a question? Provided that in any year it shall be found necessary to build a building costing say three hundred thousand dollars, would you advocate taxing the people sufficiently in one year to build that?

Mr. ROBERTS. No, sir; but I would favor getting out of debt first and then we would have a margin upon which to operate.
Mr. CANNON. I would like to ask how you could have a margin?

Mr. ROBERTS. By the revenue accumulating in the treasury.

Mr. CANNON. You would keep that revenue idle in the treasury until you had sufficient?

Mr. ROBERTS. I do not suppose it is necessary to keep it idle. If the State was building a capitol, it would not have to pay the entire cost of the structure in one year or two years.

Mr. CANNON. I would like to call the gentleman's attention to the fact that no use can be made of public funds by any officer entrusted therewith.

Mr. ROBERTS. Under appropriations of the Legislature it could be used.

Mr. CANNON. It could be loaned?

Mr. ROBERTS. No, sir, but used for public purposes.

Mr. CANNON. I would like to know in what way.

Mr. ROBERTS. I do not see any particular difficulty in seeing how it may be used. We will suppose that the State has on hand in its treasury fifty thousand dollars. It might be appropriated for the purchase of the capitol site, we will say, and if another year it had a hundred thousand dollars, it could begin the structure, and then year by ear appropriate the revenue as we appropriate revenue for the sustaining of our public institutions year by year, until the public work was completed. Or, it is suggested, if we shall be fortunate enough to pay this present indebtedness of seven hundred thousand dollars or eight hundred thousand dollars off, we would then be able to within the limit use the credit for such purposes as the gentleman speaks of.

Mr. JAMES. Mr. Chairman, I did not intend to make any remarks, but this matter seems to be a general sort of a debate. I suppose we all might as well take a hand in it. The mistake in my opinion that gentleman are making regarding this matter is forever tying up the hands of the Legislature. Now, gentlemen do not stop to think that conditions may arise here that are beyond the control of mankind to protect the people. I had a talk not long ago, Mr. President, in your presence, with a gentleman that dug the first ditch that was taken out of City Creek canyon, to put a little water upon a few potatoes, the first ever planted in this valley. That gentleman made a statement to myself, and others that were present, that from where the Templeton hotel stands now to near where the Knutsford hotel stands now, after the ditch was dug, the entire City Creek in the month of July was turned into that creek, it took two days to reach that little potato patch. Now, that was the condition of our water supply at that time. Now, I say to you, gentlemen, suppose that condition should come back upon our people, what will be the result, what will be the duty of the people? Why should you have your hands tied? Why, the duty of the people will

be to start in and build reservoirs that will cost a million dollars in this Territory at once and husband up every bit of water that is now running away to waste during the long winter months and the season of the year when you have no use for it for irrigation. I only mention this for illustration. It may happen. You do not know any of you but it shall. Why should we be so particular about forever tying up the hands of the Legislature and forbidding the people controlling their affairs hereafter? I am sure I have confidence in the people that they will elect legislators that will take care of our affairs and look after them. I am glad I am not a candidate for the Legislature, because I do not think there will be any laws to make for the next twenty years or more after this Convention gets done.

Mr. VARIAN. Mr. Chairman, I want to ask just a question for information. The chairman of the committee probably {1127} can reply to it. What is the purpose of this article in the event of the payment by the State of the seven hundred thousand dollars now existing indebtedness? Will it not leave the State with the power to re-contract a million or nine hundred thousand dollars indebtedness? Is that the intention of it? As far as I read this_of course I am not familiar with it in the sense that I ought to be, perhaps, but I ask for information whether there is any provision now in this article that would provide for the retiring of this seven hundred thousand dollars of indebtedness? I judge from the debate that the intention of the committee was to limit the State in the contracting of new indebtedness to the sum of two hundred thousand dollars; that being in excess of the amount for which the State shall become liable on the old territorial indebtedness, but it occurred to me while listening to the gentlemen and reading tins over that there might be a question as to what the power of the State would be in the event of these bonds being paid. I presume the terri-ritorial bonds are to run fifteen years, are they not_a number of years anyhow, and of course it will be incumbent upon the State to provide for the taking up of the bonds when they shall mature.

Mr. THURMAN. Would the gentleman permit me to just read a line I have here as an amendment that I propose, and see if it meets what you have in mind?

Mr. VARIAN. I will say to the gentleman very frankly, I have not anything very clear in mind, except that one point.

Mr. THURMAN. With your permission, I will read the line.

The State may, to meet casual deficits or failures in revenue, or for expenses not provided for, contract debts, and such debts, direct or contingent, in the aggregate, shall not at any time exceed one hundred and fifty thousand dollars. not including present indebtedness.

Mr. VARIAN. It does not strike me now that that covers the question that I have in mind. Perhaps I do not make myself clear. I will ask the chairman of the committee. Here we have seven hundred thousand dollars indebtedness represented by territorial bonds that will be paid eventually. Here you have a power to create an indebtedness granted and also limited by section I of the article to nine hundred thousand dollars. If we are to assume that the seven hundred thousand dollars in bonds are never to be retired, but are to be continued from year to year and be replaced by new bonds, then it is quite clear that the State is limited to two hundred thousand dollars additional indebtedness. But what I want to know is, when you pay that seven hundred

thousand dollars, is the limit still open for the full nine hundred thousand dollars?

Mr. IVINS. May I ask Mr. Varian a question? I would like to know how Mr. Varian interprets_whether he does not interpret it to mean that after the present indebtedness is paid, if the State may incur an indebtedness of nine hundred thousand dollars?

Mr. VARIAN. It does not strike me that way. But as I said before, I would not presume to discuss it now, without looking it over further.

Mr. IVINS. That is the view I have taken.

Mr. CANNON. I do not know that I would be able to give an interpretation of it other than that which would be conveyed by the reading of the language contained in it. The section as adopted by our committee was adopted by a full committee. There were all fifteen of the members present, I believe, and no objection was raised at that time and it was designed to cover more particularly our existing condition than for the future.

Mr. VARIAN. Do not understand me as raising an objection. I simply wanted to know what the idea of the {1128} article was on the part of the committee.

Mr. CANNON. I presume it would be provided that they could at any time, if they needed to, spend the amount of the revenue for a deficiency, but there is a provision, I think, in our revenue article that would limit this.

Mr. EVANS (Weber). Mr. Chairman, I do not believe there is any doubt but what the section would permit a limit of nine hundred thousand dollars at any time. It is clear from the expression of the language (reads section). In other words, we can keep our debt limit to nine hundred thousand dollars all the time. I do not believe that it is right to do that. I think the article, after it shall have been completed, ought to arrange for the payment of this debt, and put a very much lower limit than that which the section now provides, because if we keep it up at nine hundred thousand dollars at five per cent. per annum interest, the new State would have to pay just forty- five thousand dollars a year interest alone. Well, that is a condition of things that is not desirable. It would be very much better to get out of debt and take the money we would pay out for interest and put it into substantial improvements at home. So that the section will undoubtedly be amended if it pass the amendments that have been proposed, so as to make a lower limit when this indebtedness shall have been paid.

Mr. CANNON. I desire to call Mr. Varian's attention to section 10 of the article on revenue, passed this morning, which provides what appropriations and expenditures may be made, and I do not think that a debt could be incurred under section 10    

Mr. HART. Mr. Chairman, I am in favor of the motion of the gentleman to strike out part of the section. If the section remains as it is you virtually defeat the purpose of the limit you first placed. I am in favor of placing the limit there, whatever it may be, nine hundred thousand or a million, or whatever is finally determined upon, and in that way having some limit to the amount

of indebtedness. If this section goes in you have no limit, because you can bring on first one purpose and then another and increase the State debt in that way.

Mr. CANNON. The purpose of this is not the same as specified in section 1,

Mr. HART. It may be and may not. A special debt may come in and be paid out of the general fund. If this provision goes in you will have first one purpose and then another voted on specially by the people. Now, the representatives in the Legislature are supposed to represent the views of their constituents. They art not supposed to vote an indebtedness unless their circumstances demand it, and when you submit it to the people you do scarcely more than submit it through their representatives in the Legislature. I say that if we have a limit on the people's representatives in the Legislature you should also have a limit upon the people themselves.

The CHAIRMAN. The question will recur upon the amendment of the gentleman from Weber to strike out all after the word “be,” in line 3.

Mr. KIESEL. Mr. Chairman, I hope that motion will not prevail. I think the effect of it will be to stop any internal improvements that may be needed. I think the time will come when large amounts of money will have to be spent and raised otherwise than from revenues or taxation, for the purpose of creating reservoirs and furnishing water for the lands which the general government will give us. Possibly we may want to connect this part of the country with Dixie some of these days.


Mr. KIESEL. Build good roads with San Juan, perhaps. For all such purposes I do not think we can depend on {1129} revenue entirely, and inasmuch as it will be left to the people to vote upon in future Legislatures, and I think that is safe to do. I do not think we are the quintessence of everything_that we have all the knowledge. I think those that come after us as legislators will also know a little of what is to be done and I am not in favor of tying their hands and handicapping this Territory as you contemplate doing by striking out that part which my colleague from Weber suggests.

Mr. ALLEN. Mr. Chairman, some of the members on the floor have not been satisfied and want to tie the hands of the Legislature and they have done that to quite an extent. Now, they are not satisfied and want to tie the hands of the people and say that you people shall not do with your means what you wish to do. When we place ourselves above the people and say you shall not use your means as you please, I think we are coming to a pretty pass.

Mr. THORESON. Mr. Chairman, I think we have notified the people that we expect to raise the rate of taxation from five mills up to eight and that will increase the revenue of our State. We also notified them that we will keep them in debt forever to the tune of nine hundred thousand dollars and I think that ought to suffice, and the balance should be stricken out. I favor the striking out.

Mr. LAMBERT. Mr. Chairman, I have listened here patiently to a great many remarks about our future Legislatures. I have heard slurs thrown out that we cannot trust our Legislature. In the language of the gentleman from Piute, now they want to insinuate that we cannot trust the people to handle their means. I think we ought to leave this as it is and leave the people to choose what they will do with their means and leave the Legislature untrammelled in this matter.

Mr. THORESON. You would then suggest that we ought to leave no limit to the indebtedness?

Mr. LAMBERT. I did not state that at all. We have put a limit to the indebtedness.

Mr. HART. I would like to ask the gentleman one question. If the Legislature or the people are not to be limited or tied up in any way, what is the use of making a constitution? Is not the very purpose of a constitution to put a limit on the people?

Mr. LAMBERT. I presume it is, but have we as constitution makers the right to tie up men and tell them what they shall do with their finances in the future?

Mr. HART. Isn't that what we have been doing all the time?

Mr. BOYER. Mr. Chairman, I wish to state that I am always in harmony with my friend from Weber (Mr. Kiesel), when he is on the right side, and I certainly take him to be on the right side of this proposition. I believe the proposition of leaving this section as it now stands is right; that it comes right from the hearts of the people. When the hearts of the people are desirous of making an assessment upon themselves, they should have the right to do so. It comes home locally and to the State and I am in favor of the proposition of the section to remain as it now stands.

Mr. SMITH. Mr. Chairman, I trust that the proposed amendment will not prevail in this proposition. While there might be reasons why we would desire to curtail the Legislatures or curtail the county courts or town councils, it strikes me that this proposition is a clear submission to the people taxing themselves by their vote. I do not think this body of men want to tie them up so that they cannot do it. So far as I am concerned, I am fully of the opinion that the section better remain as it is in case of a contingency arising that this proposition may be submitted to them, and the results in my judgment {1130} would prove just what would be desired. If the people wanted it they would vote for it; if they did not want it they would vote it down.

Mr. BOWDLE. I want to ask the gentleman from Weber (Mr. Evans) a question. If your amendment would prevail, the section as it stands, would not it preclude the Legislature ever granting a bounty to any enterprise?

Mr. EVANS (Weber). I do not think this section has any thing to do with bounties. I would like to answer that a little further. Ever since I have been in this Convention, in committees, and every place else, everything that has ever been done by your side of the house that I have the honor of being connected with has always been questioned in the same way that the gentleman questions me now. They throw up their hands in holy horror at once and say, “Is not there some bounty

propositions in this section? Won't this cut off a bounty? Will it prevent us from giving the public moneys to private institutions?” There is nothing of the kind intended this section.

Mr. BOWDLE. Now, I ask the other question. The only way that you could grant a bounty would be either to pay it in advance or agree to pay it when the work was done. If this section should stand as you propose to amend it, would not that preclude the Legislature from making a contract to pay a bounty?

Mr. EVANS (Weber). Why, bounties, as I understand it, are appropriated right out of the treasury. The way it already stands you could not make a contract or lend the aid of the State or town or any political subdivision of the State for a bounty or for any other purpose of that kind. That proposition has been settled. But the other question of bounties is not included here at all. I am sorry that it should have been suggested. A bounty is by an act of the Legislature which appropriates a certain amount of money right out of the treasury from the taxes of the people at once. I do not think the gentleman would want to bond the new State for the purpose of creating a bounty. If the State is not able through taxation to give bounties out of its treasury, it certainly does not want to borrow money for that purpose, does it? Is that your idea, Mr. Bowdle?

Mr. BOWDLE. No, sir; that was not my idea, at all.

Mr. EVANS (Weber). This is a proposition to borrow money.

Mr. BOWDLE. If you will allow me to answer the question, I will answer it. If this section should be amended as you want it that no kind of an indebtedness, except as provided in sections 1 and 2, could be created by the State, no obligation to pay anything except as provided by those two sections; now suppose the Legislature should say, “We will pay to any enterprise that may be established a bounty.” In that event, wouldn't that be an obligation, and wouldn't it be precluded by this section?

Mr. EVANS (Weber). I do not think the gentleman understands the section at all.

Mr. BOWDLE. I think I do.

Mr. EVANS (Weber). This section is to preclude the State from incurring any indebtedness even by the vote of the people. It is not designed to prevent the giving of a bounty out of the treasury, for any purpose which the Legislature may design. But it is designed to cut off indebtedness, even though the question for any particular purpose may be submitted to the people. Now, I want to say a word or two further in respect to that matter, and I believe the chairman of the committee on revenue will agree with me that this is designed not for the purpose of aiding private enterprises at all; there never was any such suggestion thought of in the committee, but whenever the State desired to do something_ {1131} engage in some building or the construction of them, such as the building of a capitol, or the erection of a university, or a school, or something for public purposes, that the State might go in debt in addition to the limit of indebtedness named in the first section, but not without first having submitted it to the people. Am I right about that, Mr. Cannon? Was not that the purpose of the section?

Mr. CANNON. I will state that certainly was the purpose. I do not understand the object of the gentleman in now proposing an amendment, because I distinctly understood that he favored the article and the section.

Mr. EVANS (Weber). We made no minority report at all. As I stated this morning, we got along very nicely. There was nothing of a political nature in it. It is a question whether we will saddle public indebtedness on the people in the future. My own idea is to prevent it and save the interest which we will otherwise pay. Keep it at home and make our improvements as we go along. Let our improvements be more gradual and more permanent and without a heavy debt being saddled on the new State. That is the only purpose of it. That I believe ought to be accomplished in the way suggested. Whenever a gentleman on our side of the house or on the other suggests this is of a political nature, I think there must be some mistake about it, because there can be nothing of that kind in this section.

Mr. CANNON. I would like to ask the gentleman whether in his opinion, if a building costing two hundred thousand dollars was to be erected, whether it would be good policy to borrow two hundred thousand dollars and pay five per cent. interest thereon and erect the building and finish it, so that it would be protected from the weather, etc., or whether it would be good policy to build it at the rate of say fifty thousand dollars a year and leave it unprotected and unfinished in that form?

Mr. EVANS (Weber). I forget how long they were building the State capitol at Albany, New York, but I think it was somewhere in the neighborhood of twenty years. They builded it from the surplus taxes, without any bonded indebtedness, and it is one of the most handsome capitols ever built in the United States. It equals, if it does not excel, the great capitol of the United States, and that great state is not in debt one dollar to-day. But my idea is simply to prevent that thing. You people here in Salt Lake, or the people in Ogden, or the people at Provo, if it is left open, will importune the Legislature and say, “Let us go to the Legislature and get them to submit to the people the question of building a capitol, or a school, or a university. We are in a heavy center of the population, and we will get all the votes at least in the locality where the institution is to be erected.” And probably the balance of the Territory will pay little attention to it, and the first thing you know we will have a debt of that kind saddled upon the people and they will hardly realize how it occurred.

Mr. GOODWIN. May I ask the gentleman a question? If your amendment passes, suppose an emergency should arise in the Territory that the farmers throughout the Territory would need fifty thousand dollars to buy seed, wheat, and food, to carry them over until another harvest, how could they get the money if your amendment passes?

Mr. HALLIDAY. Get it out of the Tithing Office. [Laughter.]

Mr. GOODWIN. Mr. Chairman, I move that the gentleman be put out.

Mr. EVANS (Weber). The gentleman from Utah has answered the question. I want to answer the question by saying this: That such a condition of things we hope never will exist. In cases of

public calamity, in cases of absolute {1132} necessity, no law is known and we would be able in the face of the Constitution to meet a contingency of that kind if such a calamity should occur.

Mr. GOODWIN. Excepting the cases specified in sections I and 2 of this article, no debt shall hereafter be created.

Mr. EVANS (Weber). That is my purpose. I do not want any other debt contracted, except this nine hundred thousand dollars.

Mr. MURDOCK (Beaver). I think this is a very important question, gentlemen, and I think there is a very great deal of mistrust manifested in the coming Legislatures, which I think is wrong_not only the Legislature, but the people. This provides that the people may order an indebtedness if they see proper, and to e up the Legislature and to tie up the people, I think it is very incorrect, and I hope that the amendment that is proposed will not prevail. I think that should be left open, for the fact that we are none of us prepared to tell what the future may develop in this country. We are in, as it were, almost untried to a very great extent in the resources of this country, and we might be very sorry, gentlemen.

While I admire caution and economy as has been exhibited by many speakers here upon this floor, I admire that. I have always admired it, but we cannot tell what the future will develop, and hence I think it would be very safe to leave the section as it is, and if anything should arise in the interest of the people that they would feel it necessary for them to vote upon this question, and give the Legislature the privilege of creating an indebtedness that would be a general good; we understand this, that credit is money. It may be abused, but I think the credit of the State should not be impaired by laying an embargo on it, so that it could not be used by the people. I think the people generally are judicious. They are sensitive upon indebtedness, and while I very much admire the feelings that have been exhibited by the speakers in regard to economy and holding indebtedness very closely, yet I think this is taking a step further than we should be guaranteed in doing. We are here to lay the foundation of a State, of course, but to tie the hands of the Legislature and to lay a restriction upon the people_it is their property. The credit of the State belongs to them, as your credit, as my credit belongs to myself, and I may use it as I see proper. I hope that the amendment will not prevail.

Mr. PRESTON. Mr. Chairman, I had not intended to say anything on this subject, but since my friend from Beaver has talked, I will have to say that I cannot agree with him at all; that many of us on this floor here would have been glad to have had some law or something to have prevented us from going into debt quite so much as we are personally, and I think we ought to have some restriction to keep this new State that we are organizing from going into debt. We ought not to go into debt nine hundred thousand dollars. After we get the present debt cleared off, three hundred or four hundred thousand dollars is all the limit that we should have to go into debt. We can build reservoirs without money. We have done it The people should build those reservoirs and then they would own them themselves. They should build their water ditches, then they would own them themselves. Capital would not own them, and be taxing them from year to year to pay interest.

Mr. CORAY. Mr. Chairman, I do not think we need worry over this proposition. The women will undoubtedly vote on this question. If there is any public debt proposed, they will be called upon to vote on it, and I think they are generally economical. I think there is no danger in the section whatever.

Mr. VARIAN. Mr. Chairman, I have {1133} about reached the conclusion since hearing the gentleman from Weber that the result of his amendment would be to deprive the State of the power to go into debt to erect public buildings. Is that the understanding of the gentleman from Weber?

Mr. EVANS (Weber). Yes, sir.

Mr. VARIAN. I want to call attention to the first three lines in section I with a view to suggesting that the power to create indebtedness there is limited to casual deficits or failures in revenues, which are the same thing, or for expenses not provided for. Now, expenses, I apprehend, mean in that sense and in the context here the current expenses of maintaining the State government. It is a question whether it would include the building or erection of State institutions. If that is so, this nine hundred thousand dollar limit only accomplishes this purpose, it permits you pay off the existing indebtedness of some eight hundred and twenty thousand dollars and to incur an additional indebtedness of some eighty odd thousand dollars for the purpose of meeting casual deficits and paying expenses. Now, if that is the true construction of that section, what is the purpose in prohibiting the State in section 3 from providing for other necessary matters, such as erecting buildings? If that is the gentleman's purpose, then he understands the construction of section 1 as I do.

Mr. EICHNOR. Mr. Chairman, I look upon section 3 that it has the same force as an amendment of the section. The Legislature can propose to amend section 1, which we passed a little while ago, and submit it to the people and the people will vote upon it. I think section 3 is in the same line as the article we passed sometime ago to amend the Constitution. Leave it to the people.

Mr. KERR. I would like to ask the gentleman from Salt Lake a question. If section 3 is as you have just stated, why not leave it out entirely? That is already provided for in the section on amendments. If the people of the State desire to contract a debt in excess of the nine hundred thousand dollars and any additional debt under the provisions of section 2, then an amendment to these sections can be submitted to the people and it is provided by the people. Then, if they are as you stated, why not cut it out entirely?

Mr. EICHNOR. Mr. Chairman, I think the people would have the power to raise the revenue, but if the purpose was distinctly stated as this article provides, they would be more willing to vote for it.

Mr. CANNON. Mr. Chairman, answering Mr. Hart's question, I would call attention to the fact that it would require two-thirds of the Legislature to propose an amendment to the Constitution, whereas in this case the Legislature itself can propose the item and submit it to the people.

Mr. SQUIRES. Mr. Chairman, I might be in favor of voting for this amendment of Mr. Evans if it were not that he has already stated that later on he intends to offer an amendment providing that the debt limit of nine hundred thousand dollars shall be materially reduced after the bonded debt of the Territory or State has been taken up. That will leave us no margin whatever for any public buildings we might need, and I believe that this matter should be left just as it is in this section.

Mr. ELDREDGE. May I ask the gentleman one question? You understand that from this section they would be authorized to use any part or portion of the amount herein permitted to be created in a building?

Mr. SQUIRES. That is not specified. I understand from this first section that as fast as the bonds are taken up other indebtedness can be incurred to the amount of nine hundred thousand dollars for any purpose which the Legislature may vote.
Mr. ELDREDGE. I understand this section limits it. I understand from this section that it limits the purpose for which that money may be expended_to meet casual deficits or failure in revenue, or for expenses not provided for. Now, it is simply limited to those three sources. It can be only applied in whatever may be set forth in this particular section and not that it may be used for anything that the Legislature might see fit, which was not included in this section.

The question being taken on the motion of Mr. Evans, of Weber, the committee divided and by a vote of 32 ayes to 50 noes, the motion was rejected.

Mr. ROBERTS. Mr. Chairman, I move to amend section 3, in line 5, by inserting after the word “single,” the word “public,” and after the word “or,” the words, “other public.” I take it, sir, that the principle that was asserted and discussed on this floor a short time ago to the effect that the credit of the State should not be used for private purposes, ought to be protected in this instance. I do not think it necessary to discuss the merits of these amendments at length, as I believe that a recognition of the principle then discussed and accepted by the Convention will be reasserted in this instance, as I conceive that it only provides that the credit of the State shall only be used for public purposes and not for private uses.

Mr. EICHNOR. Does not the section as it was passed day before yesterday make that. entirely unnecessary? What is the use of duplicating this Constitution?

Mr. CANNON. There is none.

Mr. KERR. Mr. Chairman, it seems to me that the amendment proposed by the gentleman from Davis is not necessary. I think the amendment that was proposed and carried the other day in the article on legislative covers this. I do not think it possible for any appropriation to be made or for any debt to be contracted for any other than public purposes. I do not think it is necessary at all.

Mr. ROBERTS. Mr. Chairman, the explanation of the gentlemen on that subject that it is clear to their minds that the matter is covered by the section passed in the legislative article_with the

consent of my second, I withdraw the amendment.

Mr. HART. Mr. Chairman, I move to strike out the word “three,” at the end of line 20, in section 3, and insert in lieu thereof the word “two;” that will make it conform to the publishing of all amendments to the Constitution.

The amendment was agreed to.

Mr. SQUIRES. Mr. Chairman, I suggest a slight amendment to section 3, by striking out the words “for and against it.”

Mr. THURMAN. Mr. Chairman, I want to call attention to that. The question is whether this does not require it to be submitted to the people and not to the taxpayers if it is to create a public indebtedness, and we are elsewhere talking about only having taxpayers voting on a proposition of that kind_I merely call that to the attention of the Convention.

Mr. GOODWIN. Mr. Chairman, I think it is fixed in the next section.

Mr. THURMAN. Well, if it is, then my remarks have no application. I have not compared their.

Mr. HART. Mr. Chairman, why not let that stand? This voting is to be done at a general election. It may be, some who will vote for the general officers will not vote either for or against this proposition, and if this is stricken out, why it might be construed that it would require a majority of all those voting at the general election. That no doubt would be the construction, whereas the proper construction, I take it, would be a majority of those voting upon that proposition, either for or against it. I am opposed to the motion to strike out.
Mr. SQUIRES. Mr. Chairman, I withdraw the amendment.

Sections 4 and 5 were read.

Mr. THORESON. Mr. Chairman, I have an amendment to section 5, by striking out “or other municipal corporations,” and inserting “or” between “town” and “school,” in line 1.

Mr. THURMAN. Mr. Chairman, I am opposed to striking out “or other municipal corporations,” and it ought not to have been struck out of the section that we struck it out of in the revenue act, because there may be municipal corporations not included in these names specified. For instance, a village is not included here at all. Now, what harm does that do? And it certainly saves any possible municipal corporation that exists now or that may hereafter be created.

Mr. FARR. Mr. Chairman, I make a motion that section 5 be stricken out. I will now give my reasons, which will be in keeping with my vote to sustain the gentleman from Utah County's motion to strike out all of section 3 after the word “contracted,” but my reason for that was because I intended to move to strike out all of section 5, because section 4 covers everything that is necessary. That is contained in section 3, that did not get struck out, and covers everything that

is necessary in section 5. The idea of authorizing people to go to work and tax five per cent._why not say fifty or a hundred per cent. and have some liberal money? People will be taxed to death the way they are today. I think section 4 provides everything that is necessary in this article on that subject. If the people vote for it, then they have that permission, consequently I am certainly in favor of it. I do not wish to make any further remarks on it_strike out the whole of section 5.
Mr. SPENCER. Mr. Chairman, I would like to ask the chairman of the committee one question. I understand Salt Lake City now has already issued bonds for about six per cent. How will this interfere with the rights of Salt Lake City or any other municipal corporation that have exceeded five per cent?

Mr. EVANS (Weber). It cannot affect it.

Mr. CANNON. It would not affect existing indebtedness, but it would not permit an increase except as herein provided, and I think they should not increase their indebtedness. All existing indebtedness, if you will look at section 8, is provided for in this article.

The motion of Mr. Farr was rejected.

Mr. SQUIRES. Mr. Chairman, I suggest that instead of striking out “municipal corporations,” we strike out the word “city,” then municipal corporations will cover the organized villages, and when the proper time comes I shall vote to reconsider the motion we passed this morning in section 3 of the article on revenue.

Mr. EVANS (Weber). Mr. Chairman, all the charters that exist in the statutes to-day are called cities_every one of them_cities is a more appropriate word than municipal corporations. They were all designated as such. I am in favor of striking out.

Mr. CANNON. Mr. Chairman, I do not think that it is consistent for us to vote against striking this out now, when we, this morning, voted to strike out the words, “municipal corporations.” I will say the committee had this in view. The objection that has been raised by the gentleman from Utah County was one which was raised in the committee and we thought it better to have those words even if they were redundant than to strike them out and have afterwards some difficulty come up. I think it would be better not to disturb them now and would be better to reinsert them when we come to the third reading of the other article.

The motion of Mr. Thoreson was rejected.

Mr. EVANS (Weber). Mr. Chairman, I move an amendment to section 5, line {1136} 6, by striking out the word and figure five and add in lieu thereof the word and figure three, so that it will not exceed three per cent. I want to call the attention of this Convention to one fact, as this article stands any municipal corporation can go in debt ten per cent. because for some purposes they can go in debt five and then for other purposes, supplying the city with artificial lights and otherwise, they can go in debt five, making an aggregate of ten per cent an appalling amount. We have had a little experience about these things right in this Territory, and I am going to relate a little that occurred in Ogden. The present law of Congress limits these cities to four per centum

of the taxable valuation of the property. We reached that limit very soon. There was an effort made at the time_a good many people agreed to have the Congress of the United States remove that limit and give us an eight per cent. limit. The Congress of the United States did pass it. It went through both houses of Congress. President Harrison, then in the chair, vetoed it, his first official veto.

A good many people were somewhat incensed over his veto, because they thought that it was against progress, that it was quite necessary to borrow a little more money to go into debt about eight per cent. instead of four, but I tell you, gentlemen, that the wisdom of the President of the United States in the veto written to that bill has since proved to be correct, and I believe that the people of Ogden to-day recognize the fact, although they were somewhat incensed over it at the time. We would have had an indebtedness in Ogden to-day had it not been for that veto of something in the neighborhood of one million dollars. To-day the city is burdened and tax ridden until it is scarcely able to stand up under the burdens and you permit us to add another per cent. upon the taxable value of our property there, and then let us add in addition to that, five per cent. for lights and sewers and furnishing the city with water, and we will be saddled with just six per cent. more than we are to-day. I do not believe the people of the city want it. I do not believe that Salt Lake City wants it or ought to have it. I do not believe that any municipality in this State desires a limit as large as that. Why it would simply permit the cities of this Territory to saddle themselves with an indebtedness that they never could shake off. They simply would have to be sold under the hammer of the tax gatherer or the sheriff for the indebtedness which would be incurred. I see my colleague from Weber is somewhat uneasy and desires to get up and make a reply. He will have the opportunity. I have said nothing yet with respect to him.


Mr. EVANS (Weber). I admired his patriotism at the time he secured the act of Congress, but subsequent events have conclusively shown the wisdom of the President in that veto. I am in favor so far as I am concerned of putting this limit to three per cent. and not letting any city go beyond it. To-day, in Ogden, we have about reached that limit and we have warrants floating about in the community selling at a discount_a very large discount, too, of about fifteen per cent., a condition of things that ought not to exist. It is better for the cities to go slow, better for them to make their improvements, with the means they have in hand, and it is far better for the people who have the debt to pay. I think this limit is entirely too large. I think it is beyond all reason. And my friend may ask me why I did not make some reference to this in the committee. Unfortunately I was not in the committee when this public debt was considered. I was in other committees which required all my attention.

Mr. KIESEL. Mr. Chairman, I think my colleague, Mr. Evans, who is usually {1137} right_in this instance, I think he made a very unfortunate allusion. If we at that time had secured five hundred thousand dollars_it would have enabled us to get five hundred thousand dollars at five per cent. Everything was arranged for, if it had not been for the veto of the republican President, Mr. Harrison. Now, that five hundred thousand dollars at that time would have enabled us to own our own water works; it would have enabled us to own our own electric lights, and it would have provided us a revenue of at least one hundred thousand dollars. Instead of that we are paying out

about seventy-five thousand dollars a year. Now, this is one instance, where the veto of the President was not well exercised.

Mr. EVANS ( Weber). The water works were sold before this act of Congress passed.

Mr. KIESEL. The water works were contracted for and we were allowed under the terms of our contract to buy them back and that money would have enabled us to do that, to pay for electric light works and to build our whole sewerage system.

Mr. EVANS (Weber). The object was not to buy the water works.

Mr. KIESEL. That was the principal object and nobody was more in favor of it at that time than yourself.

Mr. EVANS (Weber). Certainly; I have stated that the people were indignant at the time. I believe in every city owning its own water works, but this permits five per centum for general purposes and five per centum for water works.

Mr. CREER. Mr. Chairman, I am opposed to the amendment suggested by the gentleman from Weber, because I think that limit would be too narrow. It includes existing indebtedness, but more particularly am I opposed to it for the reason that it would confine school districts that could not in any event assess more than three per centum of the assessed valuation of the property in that district. I know in my district they are opposed to bonding for the purpose of building school houses and they have now to rent to a large extent, in order to furnish accommodations for the pupils and this would confine it so that they could not assess more than three per centum, in order to build school facilities for the children, and I am opposed to that.

I think we ought to have a right if we wish to assess the district up to the amount of five per centum in preference to bonding the district. I had rather leave it as it is.

Mr. ELDREDGE. Mr. Chairman, I hope that this amendment will prevail, and even if it had been made two per cent. I should have been in favor of it. I notice that it gives the authority to counties to create an indebtedness of five per cent. A city which is a portion of a county, five, and a school district, which may cover right over the same ground, five, thus making in one section of the country fifteen per cent, indebtedness, that may be created by these different organizations, the county, city, and school district, and it is decidedly too much to place in the power of the inhabitants of any section of the country to create an indebtedness in my judgment.

Mr. SNOW. Do you think the city is going to vote indebtedness for a school house?

Mr. ELDREDGE. They may vote a tax for a city hall or some building.

Mr. SNOW. That is not the question. I ask you about a school house.

Mr. ELDREDGE. A school district may.

Mr. SNOW. Has a city municipal authority over school houses?

Mr. ELDREDGE. No, sir.

Mr. SNOW. Then, where does that fifteen per cent come in? Here is a discrimination made between county, school, and city.

Mr. ELDREDGE. It says no city, {1138} county, town, school district, or other municipal corporation. That would be an aggregate of a school district or the aggregate of a county indebtedness or of a city indebtedness.

Mr. SNOW, Five per cent.

Mr. ELDREDGE. No; each one five per cent. in their individual sphere. You may take the indebtedness of Salt Lake City to-day, as a municipal corporation, and that is one thing; you may take it then as a school district, and that is another thing. Although the same class of property that is being held for the indebtedness of the incorporation is being held for the indebtedness of the school district, and then we may carry it on farther and then here comes an indebtedness of the county and Salt Lake City has to bear its proportion to the county as its value is to the value of the county, and then we may carry it one step further, We may take it in a Territory here and the property of Salt Lake City_this identical property has to bear its proportion of each one of these various debts. When you go to work and add them together each comes upon the same property and upon the same individuals; you will find that it will aggregate a big amount.

Mr. CANNON. Mr. Chairman, I am opposed to the amendment for the reason that I believe the provision is a Wise One to leave it as it is and because it is very carefully guarded already. In the first place you will perceive that section 4 provides that no debt shall be created, etc: Now, gentlemen, this is not even left to the general public, but it is to those who have paid a property tax_the qualified voters who have paid a property tax. I think certainly we can trust them in that matter. I desire to call your attention to the ;fact that in Utah they have not been in the habit of going into debt to any great extent, except one or two cities. I have in my hand the report of the governor and the secretary of the interior for 1893, and by examining them I find that there are only seven cities in the Territory that at that time had an indebtedness of more than ten thousand dollars. Twenty-two cities in the Territory had absolutely no indebtedness whatever, and the other cities ranged in amounts lower than ten thousand dollars, down to ninety-eight
dollars_ninety-eight dollars being the lowest, and I think, gentlemen, that when you have provided as we have for safe-guards to the qualified voters that it is well to leave it to the people so that if they want to do something they may do it. Then, again, this specifically provides that it shall be only for public purposes; that is for the purposes specially provided for, and I do not think that on that ground anyone can object to it.

Mr. SPENCER. DO you mean by the adoption of section 5 to give greater borrowing power to Salt Lake City than any other city in Utah?

Mr. CANNON. No, sir.

Mr. SPENCER. Are you aware that by an act of Congress the borrowing power of Salt Lake City was increased to six per cent?

Mr. CANNON. Yes, sir.

Mr. SPENCER. Would not this give five per cent. for construction of sewers, etc.?

Mr. CANNON. We would have the same power that any city would have and the existing indebtedness would have to be taken into account. Salt Lake City would have the same as any other.

Mr. SPENCER. If this article is adopted as it is, I do not see why Salt Lake City has greater borrowing power than any other city in the State. Salt Lake City has, by an act of Congress, the right to borrow six per centum for general improvements. By the adoption of this section we increase that five per centum. Take Provo, Logan, Ogden City, or any other city, they are confined to four per cent., and the most {1139} that could be conceded then would be nine per cent.

Mr. SMITH. If this Constitution is adopted, is not the law of Congress superseded?

Mr. SPENCER. Will not Salt Lake City have already taken advantage of it?

Mr. CUNNINGHAM. Mr. Chairman, I hope that this amendment to strike out will prevail and insert two per cent. I believe two per cent. is enough. As has been stated by the gentleman from Summit, there are four different ways that you can be taxed five per cent. Now five per cent. means that you take one-twentieth of all the property that you tax. Who feels like paying one- twentieth of all the property? And it is possible that they may take eighty per cent. because four times that would mean eighty per cent. Why, it is ridiculous. Who wants to be taxed one- twentieth of all the property for improvements or any other purpose? Why, I do not know what the gentleman from Utah is thinking about. Two per cent. is a heavy tax, that is what the school tax is now. We cannot exceed two per cent., and that is fatal.

Mr. HOWARD. Mr. Chairman, the gentleman's district is already bonded for the amount of about three per cent. and we have not got the facilities that his district has. It would need about twenty thousand dollars to supply buildings or to give sufficient room for the children.

Mr. HART. Mr. Chairman, I am in favor of the five per cent. limit in the first instance; that is in line 6, which is the one that the gentleman moved to amend, as I understand it. Logan City has an indebtedness now altogether equal to that amount. It is in excess of the amount limited by the congressional enactment, which, I understand it, is four per cent. Five per cent. will a little more than cover her present indebtedness. I would, therefore, favor five per cent. for the indebtedness for general purposes, but when it comes to this special tax for sewerage, for water and lighting purposes, I favor a reduction in that of say three per cent.; but the five per cent. is none too high for general purposes for Logan.

Mr. EVANS (Weber). I think gentlemen certainly misunderstand this article. It is not the question of percentage of taxation. It is a question of percentage of indebtedness.

Mr. HART. That is the way I understand it.

Mr. EVANS (Weber). I know you do, but other gentlemen who have spoken did not. They are talking about the rate of taxation, and I think that my colleague from Weber also misapprehends the question when he says it gives Salt Lake greater privileges than any other. It does not. It treats every city, town, county and village exactly the same. For instance, if Salt Lake City has already borrowed up to six per cent., it could go no further under this section for those general purposes, but existing indebtedness is validated by section 8. To take, for instance, Ogden, they have gone up as high as four per cent., to the limit as now provided by act of Congress. It would permit us to go one per cent. higher for general purposes. If any city had no bonded indebtedness at all, it could go as high as five per cent. under this law, so that it is treating every city, so far as that is concerned, with equality. But the thing here I want this Convention to understand before we vote upon it is this, that this section permits cities and towns to create an indebtedness amounting to five per centum of the assessable valuation of their property for general purposes, and then for lights and sewers and water works an additional five per cent. That would make a limit of ten per cent. that each municipal corporation in this State could reach by way of indebted ness. That is, they would be permitted under this section to go in debt ten per {1140} cent. for these city purposes alone. Then, if the county desired it, it could go in debt five per cent. although the city may be situated within the county, and always is of course; the school district could go in debt five percent. Think of it! Think of the indebtedness that we are leaving here, that the people might incur providing they saw fit to vote it. Why, Ogden had no difficulty in voting for eight per cent. at the time we wanted to borrow this money. They were unanimous in favor of it under the circumstances. They thought it was the making of the city. It was then in rivalry with Salt Lake.

Mr. KIESEL. It would have made it.

Mr. EVANS (Weber). And that is just the craze that reaches men's minds. It has reached mine. I understand it. I profit by the experience, and I would put a limitation in the Constitution prohibiting people going crazy under those circumstances. [Laughter.]

Mr. SQUIRES. Mr. Chairman, I wish the gentleman would prepare his amendment.

Mr. EVANS (Weber). There would be such a limitation that though but one citizen remained sane, he could go into the courts and say, “you cannot exceed this constitutional limit,” and if the bondholder took our bonds and paid us the money, they would be invalid. Why, gentlemen, I tell you that this section is too broad. It gives too much room for the people to go into debt. We can create under it right in the locality as high as thirty per cent.; ten per cent. for a city, ten per cent. for the schools, and ten per cent. for the county, for certain purposes. Just think of it. Nearly one- third of one hundred per cent.

Mr. CANNON. Do I understand you to say that the schools can go in debt ten per cent.?

Mr. EVANS (Weber). No, that would be five per cent.; the other five per cent. would be for any city or town when authorized. I was wrong about that. The city could go in debt ten per cent., the county five per cent., which would be fifteen, the school five, which would be twenty.

Mr. CANNON. Could the school go in debt five in addition to the city?

Mr. EVANS (Weber). Yes, sir; undoubtedly it could; that is just the manner in which this section is drawn. If I could get it through, I would say two per cent., and those cities that have reached as high as five and six per cent., I would stop them right where they are until they cancel some of that indebtedness. It would be better for them in the future.

Mr. FARR, Mr. Chairman, I see they are coming around a little on to my proposition. It might as well be fifty per cent. as twenty. You have already got twenty per cent. arranged for, although section 4 submits it all to the people. They have the right to vote on it, but why can't you be liberal and make it fifty per cent. that they can go to as well as to say twenty per cent.? I do not see any reason why we should provide for any emergency of this kind. I cannot conceive how the city and the town and the county and school and the Territory are going to be taxed so much. We have provided that they can tax twenty per cent.; I should certainly favor the gentleman's motion from Weber, to reduce it down to three per cent. I think that is enough, but then I might just as well have it fifty per cent. as three; it is all the same thing; it has got to be submitted to the people first; there is no consistency in it.

Mr. IVINS. Mr. Chairman, the saving clause in this matter is that no tax at all can be levied unless it is consented to by the people who are property holders and who are directly interested in the tax that is to be levied. and it is because of this that I am perfectly willing to vote for this section just as it is without any amendments. It might be that the constructing of a sewer or paving of a street would enhance the value of property {1141} thirty per cent., and if it would, and the people whose property is to be enhanced want to vote to construct that sewer or bring an electric light plant into the city, let them do it.

Mr. EVANS (Weber). I do not object to that myself. I am considering the first provision_five per cent. I believe the city ought to control its water and build its sewers and have its own light.

Mr. WINS. Section 4 applies to the creation of any debt in excess of the taxation for the current year.

Mr. EVANS (Weber). I want to put a limit on the indebtedness for general purposes.

Mr. IVINS. I have nothing more to say except that section 4 seems to give all the protection it needs and I am ready to vote for it just as it is.

Mr. HART. I think that the cities of our county could stand four per cent. and I therefore move an amendment to the motion of the gentleman that the word four be substituted instead of five.

No second.

Mr. CANNON. Mr. Chairman, I desire to call attention to the fact that two or three of our most progressive cities in Utah Territory now approach this five per cent. limit. Brigham City, Logan City, and there are a number of these cities that are in that condition now. I believe that those cities when they went into debt did it for a good purpose. I do not know the individual cases, but I believe they have value received for the money that they expended, and I call attention to this fact, some of the men who are opposing the present rate proposed are men who always claim that they are willing to trust the people and yet when a proposition comes in here to submit it to the people they now want to change it and limit it so that the people cannot have a voice in the matter. We put a reasonable limit upon it, but we want to put it so that they may procure their own water works, their own electric light plants, and anything of this character. And I call your attention, gentlemen, to the fact that in Salt Lake County, which we usually stigmatize spendthrift and boom county, that in this county three times in succession the voters have refused to bond the county, and I believe that you can safely leave this article just as it is and that the Territory will be benefitted more by it than by the amendment proposed.

The amendment of Mr. Evans of Weber was rejected.

Section 6 was read.

Mr. GOODWIN. Mr. Chairman, I move that be stricken out.

No second.

Sections 7 and 8 were read.

Mr. KERR. Mr. Chairman, in order that the provisions of section 3 may conform, I move the following amendment:

That in line 13 the word “people” be stricken out and the words “qualified electors of the State” inserted in lieu thereof. After the word “and” the word “shall” inserted. The words “qualified electors” are used in other sections.

Mr. THURMAN. Mr. Chairman, I wish to offer an amendment to the amendment. I prepared it sometime ago. I call the attention of the Convention to line 13 of section 3, after the word “people,” insert the following, “qualified by law to vote upon the proposition submitted.” The reason I propose this and the reason I oppose “qualified electors,” is because it might leave it open that the ordinary electors of the State would have a right to vote upon this proposition.

Mr. HART. Mr. Chairman, I would like to ask the gentleman where the qualifications are specified in this Constitution? The qualifications named in section 4 do not pertain to a State election. It refers solely to city, town, and county election, in voting upon the question of whether an indebtedness shall be created.

Mr. THURMAN. It means the voters {1142 - PETITIONS AND MEMORIALS} who maybe qualified by the Legislature. If I remember, our article on elections and suffrage or the bill of

rights, it provides that a property qualification shall not be required except in cases of a special tax or an indebtedness. It leaves the Legislature if they see fit, to fix a property qualification in those cases. Now, in view of the fact that the Legislature may or may not provide for a property qualification, this will fit the case.

Mr. HART. Why not use the same language there that is used in section 4, requiring them to be taxpayers?

Mr. THURMAN. Well, it is a question whether you want in the Constitution to do that. If you do, all right. It has been left with the Legislature to provide a property qualification and I made this fit that condition. Section 8 of the elections and suffrage article is as follows: (Reads). Now, if that be construed to fix a qualification absolutely without leaving it to the Legislature in those cases, then this amendment of mine meets that condition. If it be construed that that leaves it to the Legislature and the Legislature may afterwards provide any qualification, then my amendment meets that condition.

Mr. CANNON. I would second the motion of Mr. Thurman.

Mr. SQUIRES. I would like to ask the gentleman from Utah if he has any objection to the transposition of that sentence as made by the gentleman from Cache?

Mr. THURMAN. I have none whatever. I think that is a proper transposition; I thought it at the time. I accept that part of it.

Mr. SQUIRES. Mr. Chairman, I understood a part of Mr. Kerr's motion was t hat the words, “at a general election,” shall come after the words, “have been submitted.”

Mr. KERR. Yes, sir.

The amendment of Mr. Thurman was agreed to.

Mr. THOMPSON. Mr. Chairman, I wish to offer an amendment to section 3, in line 13, after the words, “received a,” to insert the words, “two-thirds majority.” I would like to say that sometimes a bare majority imposes a very heavy burden on a large minority, and I think where such a large tax can be assessed that it would be proper that we have a two-thirds majority.

The question being taken on the amendment, the committee divided and by a vote of 29 ayes to 42 noes, the amendment was rejected.

The committee then rose and reported as follows:


Your committee beg leave to report that they have had under consideration the article on revenue and taxation, and that they have passed the same and recommend that it be placed upon the calendar for its third reading. Also, that they have had under consideration the article on public debt and make the same


The Convention then, at 5:43 p.m., adjourned.

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