and payment of the interest on them from year to year as it falls due, so as to make them equal in the market, or nearly so, to their face value. Therefore, as the proposed increased rate of interest can be of no substantial benefit to any one, except those into whose hands the bonds ultimately fall, I hope that no such increase will be made. It would be giving an additional argument to the opponents of a State Government, which we can now deprive them of, and at the same time we shall be saving to our people the burden of $90.000 a year of interest, which otherwise they will have to bear when the bonds shall be issued. It would be of no benefit, no possible advantage to this roailroad enterprise, and at the same time it would be an unnecessary hardship on the tax-payers of the State. I hope the rate of interest will be permitted to remain at seven per cent. as in the original proposition. The question was taken on the amendment offered by Mr. Warwick, and it was not agreed to. The question was taken on the motion of Mr. Nourse, to strike out all after the words "edu-! cational or charitable purposes," (being the entire proviso relative to the railroad), and it was not agreed to. No further amendment being offered, the section, as amended, was adopted. MUNICIPAL LOANS. Section 10 was read, as follows:SEC. 10. No county, city, town, or other municipal corporation, shall become a stockholder in any jointstock company, corporation or association whatever, or loan its credit in aid of such company, corporation, or association. Mr. BANKS. I move to amend the section by adding the following words "except railroad corporations." It may be well enough to make some restrictions upon the power of counties, cities, and towns, in the way of their lending their credit, though I very much doubt the policy, and more especially do I doubt it in these matters, so far as railroads are conconcerned. For instance, on the other side of the mountains we have the case of the railroad from San Francisco to San Jose, which I think would not have been built up to this time, and probably not for many years to come, without the aid of the counties through which it passes. It is a work of very great importance to those counties, and that is one case among many which might be mentioned where aid of this kind should be permitted to be rendered. There was very strenuous opposition to the passage of the Acts of the Legislature by which that aid was secured; but now, after a very fair and thorough experience in that particular, I think it would be difficult to find a man in those counties which aided the railroad, who would seriously question the propriety of giv-| ing that aid. I refer to this case only because it happens to be a matter within my own knowledge and experience. I believe it would be bad policy in our State to place any restrictions [July 11. upon towns or counties in that particular. It often happens that a town or county is deeply interested in some railroad within its borders. and it is not unfrequently the case that an enterprise of this magnitude cannot be entered upon with success by individuals, because it may be impossible to get capitalists to aid it in the way of private investments. It may be an undertaking in which everybody feels a deep interest, and in which everybody would be willing to invest, provided everybody else would come to its aid in proportion to their means; but still, upon the principle that what is everybody's business is nobody's business, men do not come forward to subscribe, and so the enterprise languishes. I think, in such a case, the people should have the privilege of deciding, as they have done very properly and successfully in the State of California, in many instances, whether they will generally and unitedly go into it, and by a system of taxation, imposing the burden equally upon all, secure the construction of a work which is going to benefit every person in the community. In connection with one of those railroad enterprises in California which have been carried through successfully, I remember a circumstance, which I will mention as an illustration of this truth. I was one of those who very earnestly supported the issuing of the bonds of San Francisco in aid of that road. It so happened that many of my friends began to cherish feelings of hostility towards me, on that account. They wrote me letters, they telegraphed to me, and they did all they could to induce me to change my course. However, I voted and labored for the measure, and when I went home, some of those friends would scarcely speak to me. They thought I had done a monstrous act, and would scarcely exchange a word with me when we met in the street. But, as luck would have it, they all owned more or less of property along the line of that road, and in less than six months time, they were benefited by the increase in the value of that property to the extent of nearly one-fourth of the entire amount of the bonds issued by the county. Now, I do not know that many instances of that kind would be likely to occur here, but I do know that no work of that kind can be constructed in a county without benefiting some of the citizens of that county to a very great extent, and all, to a greater or less degree. All I ask is, that the people, in such cases, shall have the right of deciding the question for themselves, and I hope the amendment will be adopted. Mr. JOHNSON. I suggest that the gentleman modify his amendment so as to read, “except railroad corporations, companies, or associations." Mr. BANKS. I accept the amendment. The question was taken on the adoption of the amendment as modified, and it was adopted. No further amendment being offered, the section, as amended, was adopted. Monday,] DELONG HOVEY-JOHNSON-KINKEAD—FRIZELL. FINANCE AND STATE DEBT. The Committee of the Whole next proceeded to the consideration of Article IX, entitled Finance and State Debt. 1st. THE FISCAL YEAR. Section 1 was read, as follows:- No amendment being offered the section was adopted. Section 2 was read. Mr. DELONG. I move to amend Section 1, by striking out January," and inserting "May." The CHAIRMAN. That section having been adopted, it will be necessary to reconsider the vote. [July 11. in some manner with the collection of the revlaws, to say why the first day of any one month enue, or with the operation of the revenue in the year should not be as good as any other for the beginning of the fiscal year; nevertheless, the remarks made by my colleague, (Mr. Hovey,) that there is a vast difference in different seasons of the year, in the amount of property to be assessed in the several counties, is undoubtedly correct. For instance, if the fiscal year commences on the first day of January, it will be obligatory to commence assessing during January, and the law will give the assessors only eight months to complete the work, and deliver over the assessment-rolls to the County Auditors. Then if the assessment is made during the winter months, gentlemen are probably aware that the amount of property to be assessed would not amount to nearly as much as it would during other months in the year. Another thing; if we commence assessing in the month of January, and deliver the assessmentrolls the first day of September, taxes will beMr. HOVEY. This fixes the fiscal year for the come due under the revenue law, about the revenue department, and it may, perhaps, be first of October, and consequently will require deemed desirable by the Legislature to change to be paid, under the law, in October and the time hereafter, as it has been changed November. Taking into consideration the within the last year from March to May. That time when the taxes must be collected. unchange was made by the last Legislature. der the law, my private opinion is and I am Mr. JOHNSON. I will second the amendment merely that we may hear the reasons given why the time should be changed from the first of January. I suppose there must be some reason for it. The Legislature has changed the time from March to May; but now I understand it is suggested by the gentleman from Storey (Mr. DeLong) that January is an inconvenient period to reach the State Capital. Mr. DELONG. I will make that motion, then. I think May 1st is the best time to commence the fiscal year. January 1st is about the most impracticable time in the year. Mr. HOVEY. There are other reasons, and I think that our Treasurer would be able to give them more fully, perhaps, than I could. Certainly, in the collection of our revenues it might make a great difference, because there are certain seasons of the year when we have twice as much personal property in our Territory as we have at other seasons. I would like to hear from the gentleman from Ormsby, (Mr. Kinkead,) who has paid attention to this question, and should be inclined to defer to his judgment upon it. If we leave it to the Legislature, they can make the change, if necessary, but as the section now stands, we fix the time irrevocably. Mr. KINKEAD. Under the existing revenue laws, I think it would be better to have the fiscal year commence at a later period in the year-say the first of May, or even July. The great bulk of the revenue is now collected during January and February, and it would be satisfactory to the Legislature, perhaps, to have the fiscal year commence later in the season, though I do not know as it is really a matter of very great importance at what particular date the fiscal year does commence. Mr. FRIZELL. Probably it would be difficult for any person who has not been connected pretty positive on that point, from having been connected with the revenue department for the last three years-that this question had better be left to the Legislature altogether. Mr. JOHNSON. I confess that I have some diffidence about speaking on this subject. of which, apparently, others must have more knowledge than I possess. Each of the gen tlemen who have addressed the Committee have occupied, and do now occupy, such positions, that it seems as if they must understand the matter thoroughly. But I take as my text, if you choose to so consider it, the suggestion of my colleague, the Territorial Treasurer, (Mr. Kinkead,) that is to say, that the laws can readily be so changed as to assimilate with the fiscal year as established in the Constitution. That being conceded, unless there be some good reason for a change, I hope none will be made. The revenue laws of the Territory should, and undoubtedly will, under this Constitution be continued, until they are changed or modified by the State Legislature, and I do not now see any reason why we cannot as well fix the fiscal year here, as to leave it to the Legislature. I believe it is usual to fix the beginning of the fiscal year on the first day of the year, and I do not now remember any exception to the rule that the beginning of the fiscal year is fixed in the Constitution. In the State of California the fiscal year is prescribed as commencing on the first day of July, and I can speak with some degree of personal knowledge of the difficulties which we have had to encounter in that State, on account of that provision. I refer to the assembling of the Legislature, and to the out-going and in-coming of Monday,] DELONG JOHNSON-FRIZELL-COLLINS. [July 11. the officers of the State Government, which | commences on the first day of January, gentletakes place about the first of January. Now, men will see that the collection of taxes will what is the effect of a provision like this? Fre- necessarily fall within the months of October quently the Executives of that State have been under the necessity of anticipating the time when the County Treasurers are required by law to make their settlements, and to require them to make them two or three months in advance, in order that members of the Legislature might be able to receive their mileage, otherwise they would have been without a dollar with which to pay their board bills. Mr. DELONG. They were often without a dollar, as it was. taxes. The question was taken upon the motion to reconsider, and upon a division, it was not agreed to-ayes, 9; noes, 11. Section 2 was again read, as follows: SEC. 2. The Legislature shall provide for an annual tax sufficient to defray the estimated expenses of the State for each fiscal year; and whenever the expenses of any year shall exceed the income, the Legislature shall provide for levying a tax sufficient with other sources of income, to pay the deficiency, as well as the estimated expenses of such ensuing year or two years. No amendment being offered, the section was adopted. and November. Now we have all lived in California as well as in this Territory, some a greater and some a less amount of time-I have for the last twelve years-and we know that that is a time of the year when we are called upon for money more than any other. We are then laying in our winter supplies, either as individuals or as merchants, traders, or miners. Therefore, if the section is reconsidered, I hope it may be amended by inserting the word May, instead of January. Then the collections will Mr. JOHNSON. Well, doubtless, that was so, come in January and February, and we shall but that was probably the fault of the legisla- have time enough to recuperate after our tors themselves, rather than of the fiscal year. necessary expenses in the fall. We shall be enNow, these revenue laws can be made to assim-abled to get together money enough to pay our ilate to the fiscal year's commencing on the first of January, as well as if it began on the first of July, and, I think, even better. It occurs to me that there is ample time and opportunity to arrange that matter. Then it may be provided that the taxes shall be assessed during that period of the year when, ordinarily, the greatest amount of taxable property is to be found that is to say, the autumn monthsand so the assessors would be enabled to secure the taxes upon that kind of property, to wit, personal property. There would still be ample time to have the assessment-rolls examined and corrected, and placed in the hands of LIMITATION OF INDEBTEDNESS. the collectors, so that the great mass of the taxes would be collected before the first day of Section three was read as follows:January. I think my colleague (Mr. Kinkead) SEC. 3. For the purpose of enabling the State to will agree with me in that respect. Another transact its business upon a cash basis, from its organargument which I think deserves some consid-ization, or for the purpose of defraying extraordinary expenses, the State may contract public debts; but eration is, that it would rather facilitate the such debts shall never in the aggregate, exclusive of collection of the taxes. I can see many good interest, exceed the sum of three hundred thousand reasons why the section should not be changed, dollars; provided, that the further amount of indebtbut should rather be left as it is now, commenc- tion, shall be deemed legal and valid whenever said edness authorized by Article VIII, of this Constituing the fiscal year on the first day of January. debt shall be incurred in accordance with the provis Then when we come to adjust the accounts ions therein expressed; and said debts shall be separat the out-going of one administration, and ate and independent of the State debt herein provided for. Every such debt shall be authorized by law for the in-coming of another, we can see how those some purpose or purposes, to be distinctly specified accounts stand. When the fiscal year is coeval therein, and every such law shall provide for levying with the life of the administration-with its ten- an annual tax sufficient to pay the interest semi-annuure of office-we can more easily approxi- ally, and the principal within twenty years from the passage of such law, and shall specially appropriate mate to the receipts and expenditures of each the proceeds of said taxes to the payment of said prinadministration; while, if you carry the fiscal cipal and interest; and such appropriation shall not year along from one administration two or be repealed, nor the taxes be postponed or diminished, three months into the next, you necessarily get been wholly paid. Every contract of indebtedness until the principal and interest of said debts shall have the accounts of their respective receipts and entered into or assumed by or on behalf of the State, expenditures somewhat confused and mixed, so when all its debts and liabilities amount to said sum that the people cannot determine as to the state before-mentioned, shall be void and of no effect, exof the accounts and the relative economy ex-suppress insurrection, defend the State in time of war, cept in cases of money borrowed to repel invasion, hibited by the respective administrations. The or if hostilities be threatened, provide for the public accounts become so confused that it is impossi- defense. ble for one of ordinary experience to compre- Mr. DELONG. I would like to ask what hend and illustrate the various inquiries which may be propounded in that connection. The CHAIRMAN stated that the question was upon the motion to reconsider the vote by which Section 1 was adopted. Mr. FRIZELL. I hope the vote will be reconsidered, for the reason that if the fiscal year] would be the consequence if the State debt Monday,] DELONG-JOHNSON-WARWICK. [July 11. contract of indebtedness entered into, or assumed by or on behalf of the State, when all its debts and liabilities amount to said sum before mentioned, shall be void and of no effect, except in cases of money borrowed to repel invasion, suppress insurrection, defend the State in time of war, or if hostilities be threatened, provide for the public defense. Mr. DELONG. Let us look at it and see ially appropriate the proceeds of said taxes to the paywhat must be the construction. It says: "but ment of said principal and interest; and such appropriation shall not be repealed, nor the taxes be such debts shall never in the aggregate, exclu- postponed or diminished, until the principal and intersive of interest, exceed the sum of three hun-est of said debts shall have been wholly paid. Every dred thousand dollars; provided "--and here follows the railroad arrangement, which says, that that three millions loan may be made, and that it shall not be considered a part of this I think aggregate indebtedness of the State. we shall have to amend this first part of the section by incorporating the words, except for public defense;" or we may say, "except as hereinafter provided." That would remove any doubt of the legality of a loan negotiated by the State in a case of invasion or insurrection, though its debt might have already reached the limit of three hundred thousand dollars. Mr. JOHNSON. I suggest whether the transposition of some of the language preceding the proviso would not reach the difficulty, better than to insert the words the gentleman suggests after the words, "three hundred thousand dollars." Mr. DELONG. No, sir; I think it would read better as I have proposed it, at the end, after "three hundred thousand dollars." Mr. JOHNSON. Then you want to strike out the words, "or for the purpose of defraying extraordinary expenses." and let the words except for the purpose of defraying extraordinary expenses, as hereinaiter mentioned," follow the words, three hundred thousand dol lars." Mr. DELONG. I think we had better include the next section, and let it read, "except for the purpose of defraying extraordinary expenses, as mentioned in this and the following section." Mr. JOHNSON. The word "hereinafter " will include that. Mr. DELONG. Very well; that will do. My idea is, that capitalists are very careful when they are loaning their money, and when you put into your Constitution a provision affecting the legality of such a loan, they will scrutinize it very closely before they will make any loan. Let us hear the section read as it will stand with the amendment. The Secretary read the section as proposed to be amended, as follows :— SEC. 3. For the purpose of enabling the State to The question was taken, and the amendment was agreed to. No further amendments being offered, the section, as amended, was adopted. ASSUMPTION OF MUNICIPAL DEBTS. SEC. 4. The State shall never assume the debts of any county, town, city, or other corporation whatever, unless such debts have been created to repel invasion, suppress insurrection, or defend the State in time of war. Section 5 was read, as follows: SEC. 5. No scrip, certificate, or other evidence of State debt whatsoever, shall be issued, for the payment of which there are no funds in the treasury, except for such debts as are authorized by the third section of this article. Mr. WARWICK. I will move to amend, by striking that section out entirely. I will give my reasons for it. There was a provision similar to this among the laws of the State of California, but it was found to work a very great hardship. When there was no money in the treasury it was impossible, under this provision, to issue any certificate or acknowledgment of the indebtedness of the State, and the consequence was, in the case of members of the Legislature who came to the State Capital to serve the people, that although the indebtedness was incurred by the State, yet not being able to receive any acknowledgment of that indebtedness, they were unable to negotiate Although the debt was valid, yet having no certificate or other evidence of indebtedness, the individual members were unable to raise anything upon it, and it was therefore found necessary, at the last session of the California Legislature, in which I had the honor to serve, to abrogate that provision. There is no good reason why, if the State incurs indebtedness, it should not issue the acknowlprovide for levying an annual tax sufficient to pay the ment to the creditor, whether the money to pay interest semi-annually, and the principal within twenty it be in the treasury or not. years from the passage of such law, and shall spec- should at least have some acknowledgment of transact its business upon a cash basis from its organ ization, the State may contract public debts; but such debts shall never in the aggregate, exclusive of inter est, exceed the sum of three hundred thousand dollars, except for the purpose of defraying extraordinary expenses as hereinafter mentioned; provided, that the further amount of indebtedness authorized by Article VIII, of this Constitution, shall be deemed legal and valid whenever said debt shall be incurred in accordance with the provisions therein expressed; and said debts shall be separate and independent of the State debt herein provided for. Every such debt shall be authorized by law for some purpose or purposes, to be distinctly specified therein, and every such law shall it. The creditor Monday,] HAWLEY-WARWICK-DELONG-TOZER-BANKS. [7th day. [July 11. the indebtedness of the State in his hands or he once told me in that connection, which, howin his pocket. If, in the case of a private indi-ever, I will not repeat here. I say that under vidual, an indebtedness has accrued, he has no this provision the Controller is not authorized hesitation in giving to his creditor an acknowl- to issue his warrant for the indebtedness; 80 edgment, so that it shall stand against him and the consequence is, that every member of the be negotiable in the market. For that reason it Legislature, especially those coming from a diswas deemed necessary and expedient, by the tant part of the State, finds himself, as our assembled wisdom of California, to abrogate that chairman said on a former occasion, in a state provision of law. I know, if I may refer to my of impecuniosity. own experience in this connection, that that action of the Legislature had a very healthy effect, because when we had no warrants for our pay we could not negotiate at all, but with the warrants in our hands, we could go into the exchange and negotiate readily. Mr. HAWLEY. I think the gentleman misunderstands the provision. As I understand it, it only provides that a claim which is not authorized by the third section of this article, or elsewhere in the Constitution, shall not be allowed, or scrip shall not be issued for it. If the State incurs indebtedness authorized by this third section, the gentleman cannot suppose that the proper authorities will hesitate for a moment to issue the scrip or certificate of actual indebtedness. But, on the other hand, if any indebtedness is contracted by the State or its agents, outside of that which is authorized to be contracted by Section 3, or elsewhere in the Constitution, even if the scrip were issued it could not be paid. I was about to say that it would seem to be hardly worth while to make this provision at all, as it is merely a matter of extra precaution. I will merely say, however, that it would be useless to issue any evidence of such indebtedness, for it would have no force or effect, as it could not legally be collected in any manner. And furthermore, if such a case should ever arise, it is entirely probable that the only means of obtaining payment, would be by special legislative action, or some similar course. I think the gentleman from Lander labors under a misap prehension as to the effect of the section. hope his amendment will not prevail. Mr. WARWICK. I will endeavor to explain my view of the matter. When the aggregate indebtedness of the State reaches three hundred thousand dollars, then, upon the convening of the Legislature, (to make a practical illustration), the Controller would be bound by this provision not to issue any evidence of indebtedness to the members of the Legislature. I am only guided in this matter by the light of experience-I believe, in fact, that the gentleman now occupying the Chair (Mr. Fitch) has had similar experience as a member of the Legislature of California. The CHAIRMAN. The present occupant of the Chair, being a capitalist, never had any occasion to negotiate. [Laughter.] Mr. WARWICK. I stand corrected. at-Arms' scrip. Mr. WARWICK. But that is not like the offered by Mr. Warwick, to strike out the whole The question was taken upon the amendment section, and upon a division it was agreed toayes, 16; noes, 6. TAXATION. The Committee of the Whole next proceeded to the consideration of Article VII, entitled Section 1 was read, as follows: Taxation. SECTION 1. The Legislature shall provide by law for and shall prescribe such regulations as shall secure a a uniform and equal rate of assessment and taxation, just valuation for taxation of all property, both real and personal, including mines and mining property; excepting such property only as may be exempted by ligious, or charitable purposes. law for municipal, educational, literary, scientific, re by striking out all after the words, "both real Mr. TOZER. I move to amend the section, and personal."' out only the words "including mines and minMr. DELONG. I move to amend, by striking ing property." Mr. TOZER. I accept that amendment. the section, to insert, instead of the words proMr. BANKS. I propose, as an amendment to posed to be stricken out by the gentleman from tion of mines, the proceeds only shall be Storey, the words, "provided, that in the taxataxed." Let those words be inserted at the end, so that the section will read thus: a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such property only as may be scientific, religious, or charitable purposes; provided, exempted by law for municipal, educational, literary, that in the taxation of mines, the proceeds only shall be taxed. SECTION 1. The Legislature shall provide by law for Mr. DELONG. O, strike it out altogether, and put the mines on a footing with other property: that is the best way. Mr. DELONG [in his seat.] And awfully astonished! [Laughter.] Mr. WARWICK. The Chairman's present by the other gentleman from Storey, (Mr. Destatement does not tally exactly with something | Long.) Mr. HAWLEY. I wish to ask, for information, whether the amendment offered by the stitute for the amendment offered by the gengentleman from Humboldt (Mr. Banks) is a subtleman from Storey, "(Mr. Tozer,) as modified |