Wednesday,] JOHNSON-FITCH-TOZER-BROSNAN-STURTEVANT-WARWICK. by a most remarkable coincidence, to be all united in opposing what is designed to perfect the instrument, so as to make it acceptable to the people. I have accepted this substitute for Section 2, because I believe it will cover all the ground originally contemplated. It will restrict the action of the Legislature; it will be acceptable to the people, and, if adopted, it will, in my judgment, secure the passage of the Constitution. [Mr. CROSMAN in the Chair.] Mr. JOHNSON. I think the gentleman from Storey. (Mr. Fitch,) has assumed much for those whom he says are opposed to the Constitution. I may, or I may not be one of that number. But as for my opposition to this proposition, gentlemen will bear witness that I stated, so far as the first section is concerned, that I was opposed to it, and he gentleman from Storey concurred with my views in that regard, by withdrawing it and substituting another. That, so far as I have heard from any member who advocates the views of the gentleman from Storey, or from any member who was opposed to my views in the matter of taxation, has entirely met with their concurrence and approval; and no member had spoken to the particular matter when the gentleman from Storey, (Mr. Fitch,) just now arose, except those who concurred with him on the subject of taxation. The gentleman from Humboldt, (Mr. Banks,) had spoken, and the gentleman's two colleagues, (Mr. Earl and Mr. Collins,) and I believe none other, except that the gentleman from Washoe, (Mr. Nourse,) may have said a few words. Mr. FITCH. And the gentleman's colleague, Mr. Lockwood. Mr. JOHNSON. My colleague is abundantly able to defend himself against the charge of inconsistency. The gentleman from Storey has been apparently desirous all the while to leave these various matters to the Legislature Mr. FITCH. I wish to say, if the gentleman will permit me, that I did not fire my gun at the gentleman from Ormsby, at all; nevertheless, the gentleman from Ormsby will remember that the only two members of the Convention who have from the first declined to say on this floor that they were in favor of the adoption of a State Constitution, were the gentleman from Humboldt, (Mr. Dunne,) and the colleague of the gentleman from Ormsby, (Mr. Lockwood.) Mr. JOHNSON. But I understand that the remarks of the gentleman from Storey were not directed to what had been said in the Convention. His remarks, I apprehend, took a much wider range than that. I suppose the gentleman referred not to what has been spoken here, but elsewhere. Mr. TOZER. If the gentleman will allow me-as the time for the special order has arrived--I will move that the committee rise, report progress, and ask leave to sit again. Mr. BROSNAN. I would like to say only [July 20. this, inasmuch as my friend on my right here has had his laugh upon the Hibernian philosopher, that there was an old philosopher once who said that men were endowed with but one tongue and two ears, in order that they may hear more and talk less. [Laughter.] The question was taken on Mr. Tozer's motion, that the committee rise, report progress, and ask leave to sit again, and it was agreed to. IN CONVENTION. The PRESIDENT having resumed the chair, The CHAIRMAN reported that the Committee of the Whole had had under consideration Article XI, entitled Salaries, had made some progress therein, and had instructed him to ask leave to sit again. The report was accepted, and leave was granted accordingly. TAXATION. The Convention resumed consideration, as the special order for eleven o'clock, of Article X, entitled Taxation. The PRESIDENT. The question before the Convention is the motion of the gentleman from Washoe (Mr. Sturtevant) to recommit the article to the Committee of the Whole, with special instructions to amend by inserting before the word "proceeds" the word "gross.” Mr. STURTEVANT. I wish to offer an amendment to take the place of the amendment now before the Convention, because that was proposed merely on the spur of the moment. I move to recommit the article, with instructions to amend the same by striking out the words "proceeds of," and inserting in lieu thereof the words, "bullion produced by," so that it will read, "except mines and mining claims, the bullion produced by which alone shall be taxed." Mr. WARWICK. I presume that there are very few gentlemen in the Convention who have changed their minds on this subject since the matter was previously tested. I have not desired to shut off any debate, and would not wish to do so now if the Convention really deem that any further discussion is necessary; but merely to ascertain what the opinion of the Convention is, and to save valuable time, I move to lay that motion on the table. The motion to lay on the table was not seconded. The question was stated on Mr. Sturtevant's motion to recommit with instructions, as modified by him. Mr TOZER. I most earnestly and sincerely hope that this motion will not prevail. I have, heretofore, when this subject has been under discussion, expressed my views upon it as fully as I deemed that the necessities of the case required, and I have seen no reason whatever to change the views which I then expressed. Since that time I have spent three or four days among my constituents in Storey County, and have taken occasion to converse with them fully and Wednesday,] BANKS STURTEVANT-BROSNAN. [July 20. to great length on this subject, and I find that ceeds can be cut down so that even the Gould the clause, as it was passed to engrossment & Curry will have little or nothing to pay in here after a very lengthy discussion, meets with their approval. It meets with the approval not only of those who represent mining property, but also of those who represent other property there-mining property, real estate, and all other property which is subject to taxation under that provision. Therefore I trust that no amendment will be made, and I will not attempt to present any further argument on the subject. the way of taxation. The Legislature can put it in such a shape that if the net proceeds only are taxed we shall get no revenue whatever from the mines. Now I am satisfied that the people in the counties which are not altogether mining counties, are not willing to enter into a State Government unless this amendment, or some similar one, is adopted. This question has been argued here for days and days, and if we do not settle it, why should it not be argued in the same way in the Legislature? It has been, as I before remarked, made an issue in every election, and it is bound to be made an issue in every election hereafter, and an issue in every Legislature hereafter convened. It will be debated in both branches of the Legislature, and will create hard feelings, as it already has done. I am strongly in hopes that some amendment of this character will be adopted. It really cannot be deemed advisable for us to enter into a State Government, with a large proportion of the people of the Territory directly adverse to it. Certainly that is not good policy, as all who hear me will admit. We are, or at least we should be, a united people; and unless we are a united people it will not be possible for us to sustain a State Government. Mr. BANKS. I am very free to confess, that with all my opposition to taxing the mines indiscriminately, I do not see the very serious objections to this proposed amendment that some gentlemen seem to entertain-that is, as a matter of theory. On the whole, I am rather inclined to think that the wisdom and experience of the Legislature will, in the course of a very short time, if not immediately, lead them to the conclusion to adopt this mode, which has already been adopted by the United States Government. At the same time I do see objections to absolutely prescribing in the Constitution what shall be the mode of action adopted in the taxing of the proceeds of the mines. There is one objection which now occurs to me. It is well known that there are ores which are called "refractory," which can not be profitably worked by processes in use at There is another point on which I was going present within our limits, and it is therefore to speak last night. The figures show, and sevnecessary to send such ores to San Francisco, eral members here are in possession of them, and sometimes even to Europe for reduction. that there is now a Territorial debt of three The value of such ore is very easily ascertained; indeed in practice, it is definitely ascertained, so that the owners are able to obtain advances upon it before it leaves the Pacific coast. There is, therefore, no great difficulty to be encountered in ascertaining the product of the mine, in ore, and the Legislature may hereafter see fit to provide some means of taxing the ore, in cases where the bullion is not produced. I see difficulties coming up which render this proposition more objectionable than the one we originally adopted. That leaves the Legislature full scope to ascertain the best manner, and decide just how the proceeds of the mines shall be taxed; and in my opinion, their experience and observation would be a better rule upon which to act than anything which we should be likely to adopt here, from our knowledge at the present time. Mr. STURTEVANT. My object in introducing this amendment, is that this matter may be finally and definitely settled. It is well known that this same question has been very warmly contested in every Legislature that has convened in this Territory, and if we leave it open it will be made an issue in every future election, as to whether the mines shall be taxed on their gross proceeds, or on their net proceeds. And in case it is determined to tax only the net proceeds, it will amount to a mere nothing. That is the difficulty we have to encounter. By cunning management those pro hundred and ten thousand dollars, and here I will say that there would not have been any such Territorial debt at this time had it not been for an agreement which was entered into by the representatives of the different counties, that the mines should be taxed in order to liquidate that indebtedness. I refer particularly to the act for the encouragement of volunteering, which appropriates a hundred thousand dollars, and I know that act would not have been passed but for such an agreement. Now, sir, by passing this article without the amendment I have proposed you repudiate that action and violate the agreement then entered into, that such and such things should be done. That agreement was fairly made, at that time, and will those mining counties, through their representatives in this Convention, now turn around and say that it shall not be carried out? Mr. BROSNAN. I must confess that I was in favor of the proposition which has been presented by my friend from Washoe (Mr. Sturtevant) up to a certain moment this morning, because I thought it would be the most certain way of getting at the results of the proceeds of the mines, to insert that word " bullion." I learn however from inquiry that the same amount of revenue would not be realized, as would be by leaving the provision as it is. And inasmuch as my vote will be governed, on this question, entirely by my judgment, on the light before me, as to which proposition Wednesday,] EARL COLLINS-HAINES-BANKS-NOURSE-BROSNAN-HOVEY. [July 20. will produce the most revenue to the govern- | man's amendment will be in order, being only ment from the taxation of the mines, and be- an amendment to an amendment. lieving as I do from what I have learned that Mr. EARL. Now under this amendment we much ore of great value-in fact, the first class of ore-has been heretofore, and will continue to be transported to foreign countries for reduction, without having the bullion extracted here, I shall vote, on that ground alone, against this amendment. Mr. EARL. I think I can offer an amendment which will cover that ground. It is to insert after the word "bullion" the words "and ores leaving the State." Mr. COLLINS. I rise to a point of order. It occurs to me that last night, at the time when this subject was made the special order for eleven o'clock to-day, the question was upon an amendment to insert the word "gross" before the word "proceeds," and I think that was the amendment stated this morning. Mr. HAINES. I do not remember that any one referred to the word "gross" in the debate last night except myself. I asked as a special favor that that word should be inserted, and I believe it was at my request that the amendment was offered, as a compromise. The PRESIDENT. The Secretary will state the condition of the question. The SECRETARY. The question last night was on the motion of the gentleman from Washoe, (Mr. Sturtevant,) to recommit the article, with instructions to insert the word "gross." This morning the gentleman from Washoe, the Secretary presumed with the consent of the Convention, modified his amendment, and has presented it in another shape. The PRESIDENT. As no action has been taken by the Convention, giving consent to the withdrawal of the original amendment, the proposition offered by the gentleman from Washoe this morning will be considered as an amendment to his own amendment. can reach the bullion; no person doubts that. There is the ore constantly leaving the State, and we can and should tax it. Under the amendment, as proposed by the gentleman from Washoe, there would be a question of doubt, but by the insertion of the amendment I have offered, I think the entire ground will be covered. Mr. NOURSE. I would like to make a suggestion in regard to that. I would like to inquire of the gentleman from Storey, (Mr. Brosnan,) who has taken certain ground in regard to this matter, whether it is by any means apparent that this will secure a greater amount of revenue than the other proposition? Admitting all that the gentleman says in regard to the ores which are leaving the State, still I understand that the amount, or relative value of those very valuable ores is comparatively small-that by far the greater amount of the proceeds of the mines is from what is called third class ore. That is the case with the Gould & Curry mine, I understand. Certainly a vast proportion of the gold and silver now produced, is from ore which is reduced within the Territory. Mr. BROSNAN. That is because of the great quantity of that class of ore produced. Mr. NOURSE. Precisely. Now I understand from another gentleman from Storey, (Mr. Hovey,) one who has had experience as Assessor in Virginia City, that the Gould & Curry Mining Company returned to him an amount of something over two millions of dollars. as the amount of their gross proceeds, while the amount of bullion really produced was over four millions. Mr. HOVEY. From three to four millions. Mr. NOURSE. Well, nearly four millions, I Mr. BANKS. I will inquire whether leave think their report shows. Now it is claimed by was not given to withdraw the first amend-some, and I know that other gentlemen here ment? I so understood it. Mr. EARL. I understood it so. The PRESIDENT. No motion was made to that effect; but the Chair was not prepared to say what the pending question was, when the amendment was presented this morning, not having heard the minutes of yesterday's proceedings read. Mr. EARL. I understood that unanimous leave was given the gentleman from Washoe to change his amendment, and upon that I have offered this as an amendment to his amendment. Now so far as the proceeds of the mines are concerned, I am perfectly willing that the word bullion" should be inserted, if it be the desire of the Convention; but I think as has been already said, that we should endeavor in some way to reach that finest and best class of ores which is constantly leaving the State. I think the amendment I have offered will cover that ground. The PRESIDENT. In any event, the gentle whose opinions are entitled to the highest respect agree with them, that the decision in regard to what constitutes the proceeds of a mine, was an iniquitous one. It does seem to me, as a matter of law, however, that that decision was correct--and I say it with all due respect for the opinions of gentlemen who differ from me. It seems to me that the ground they took is tenable, and that no other ground is. Clearly, the proceeds of a mines are nothing else than the value of the ore delivered at the mouth of the mine. If after that, by sending the ore to the mills and having it reduced, its value is increased, that increase is the product of the mill and not of the mine; and if you may take the value of the bullion after this additional labor is put upon it, to purify it from everything except the clear metal, if you may add to the value of the ore as it comes from the mine, the labor and material laid out upon it at the mill, why may you not go further, and add the labor which is expended in converting it into watches, Wednesday,] MCCLINTON STURTEVANT-NOURSE. [July 20. upon that same principle he would be taxed upon only five hundred dollars on that which is really worth a thousand dollars. finger-rings, jewelry, and everything of that de8cription? It seems to me that the proceeds of the mines can be, in any point of view, only the value of the ore as it is delivered at the Mr. STURTEVANT. The gentleman from mouth of the mine. The bullion contained in Esmeralda will observe that neither the gross the ore, if it cost one thousand dollars to get it proceeds nor the net proceeds are taxed on out, is not to be taken, it seems to me, as the pro- ranches, but the ranch itself, and all the imceeds of the mine, because it is really the pro-provements, and everything else, are taxed as ceeds of the mine and mill. Now by this amend- we proposed in the start to tax the mines. But ment, the whole value of the bullion, when ex- inasmuch as we could not get that, we propose tracted, is taken into the account. Does it make to tax the proceeds as the next best thing we any difference, practically, whether the reduc- can get. The farmer's crops are exempted, tion takes place in this State or out of it? If it is because his ranch and everything he is worth sent out of the State, and if it is the property is taxed, which includes his crops. of the miner, as of course it is, is it not taxable just the same as if it were reduced in the State? We have no lien upon it, nor have we upon any personal property, unless we happen to get hold of it on a judgment; but is there any impropriety in the taxation of the bullion, even if the reduction is performed outside of the State? Certainly, that is the way it appears to me. Mr. NOURSE. The position which these miners take, and which I think is law, although others say it is not, is, that the product of the mine is ore, and that when you send that ore to the mill, and after it has gone through the mill it is worth twenty five or fifty dollars a ton more, as the case may be, that additional twenty-five or fifty dollars is the product of the mill and not of the mine, just as in the case of the farmer, whom the gentleman from Esmeralda, (Mr. McClinton,) speaks of, who raises a crop of wheat-he is to be taxed on the product. But suppose he chooses to go and get his wheat milled, and barrelled, and put into a shape for market, would he be properly taxed on the flour, after he had paid the expense of milling? Would he not claim it to be a tax on the wheat rather than on the flour? But I will not take up the time of the Convention. I do not expect that this clause will be amended in accordance with my opinions of what is right, but I still have those opinions, notwithstanding they are sneered at. But if we are going to have a State Constitution, I want it as nearly right as I can get it, and then if it does not suit me, of course I shall not sustain it. It seems to me that the result of this proposition will be to tax all the gold and silver taken from the mines after it gets into the Mr. MCCLINTON. I think not. I think if a shape of bullion-its whole value in that stage, farmer raises a crop of wheat, and has it ready which even then is not a third part of the value for the mill, and it is then worth five hundred of the mines while on the other hand, by tax-dollars, and if, by converttng it into flour, he ing the gross proceeds only, those ores in their thereby produces a personal property worth crude state will be taxed without the additional one thousand dollars, it is nothing but justice value acquired in the process of reduction. I that he should be taxed for one thousand dolshould suppose from the information derived lars on that property-that is, that he should from the gentleman from Storey, (Mr. Hovey,) be taxed on the flour, and not on the flour in that the bullion tax would produce double the its crude state, or the grain. amount of revenue that would be obtained from a tax upon the proceeds, or the gross proceeds. I presume no one will deny that I am right in that. : Mr. MCCLINTON. I do not think that the proposition of the gentleman from Washoe (Mr. Nourse) is tenable, nor do I believe that it is either law or equity; because if we say that the Gould & Curry Company in giving in their assessable bullion to the Assessor of Storey County at the sum of only two millions of dollars, when it actually amounted to nearly four millions, was only doing what they had a legal right to do, then it occurs to me-if that may be regarded as the proceeds of the mines, ruling out the gross proceeds entirely-that for the same reason the farmer might be exempted from paying taxes on anything but the net proceeds of his farm. Suppose a farmer raises a crop of wheat; by the time he has it ready for the market it has cost him a good deal of money. Say it is worth one thousand dollars, and it has cost him five hundred dollars to raise it and get it ready for market; then I say Mr. NOURSE. I do not think the gentleman understands me. I say suppose the farm is not to be taxed, except upon the proceeds of it? Mr. MCCLINTON. I think it should be taxed on the state it is in at the time when the assessor levies the tax. If it is flour the farmer should be taxed on the value of the flour, and if it is wheat at the time the tax is levied, he should be taxed on the value of the wheat. And as to the mine, if the bullion is in the ore, let the miner be taxed on the ore for its probable value, and if it has been reduced to bullion before the Assessor levies the tax, then it has become personal property and the Assessor must, according to law, tax the bullion for every dollar it is worth. If he does not do that, it is clear to my mind that he does not fulfil the duties of his office. I have nothing more to say only this: that I believe honestly when we say the proceeds of the mines shall be taxed, it does mean the gross proceeds. I do not see how we can construe it to mean anything else. Because, when we say all property shall be taxed, the crops, Wednesday,] HAINES-WARWICK-EARL-FRIZELL. [July 20. as a matter of course, as soon as they are grown first place that the word "proceeds" would and harvested, must be taxed regardless of the cover the whole ground, and I still think that cost of raising them; whereas, if the net pro- it would unquestionably do so. I shall thereceeds alone have to come under consideration, fore fall back upon the original proposition, the expense of raising the crops would have to not on the ground of expediency alone, but bebe deducted. It is the same way with the tax- cause it is clear in my mind. And I find also ation of the mines. If you say the proceeds of that the other delegations are not even going to the mines shall be taxed, I infer that it neces-be satisfied with this change. I shall fall back sarily means the gross proceeds, and that the whole proceeds will be taxed. upon the term "proceeds," and there remain. Mr. HAINES. I asked this modification yesterday as a favor, but I have concluded to let those gentlemen do as they please, leaving it entirely in their hands. I do not ask any more favors. Mr. HAINES. I asked for this amendment as a favor from those gentlemen who had the power to pass the article as it stood, or to concede to us this modification. I did not think then, and our delegation did not think, that the Mr. EARL. With the leave of the Conventerm "gross proceeds" could be regarded as tion I will withdraw the amendment which I indefinite. But now gentlemen seem to be quite offered. as uncertain what it means as they were in re- The PRESIDENT. If there is no objection, gard to the original proposition. I talked with the amendment will be considered as witha great many members last night, and as a gen-drawn. eral thing they expressed themselves willing to concede this change, but thought that we should insert the word "bullion" instead of "gross proceeds." They mostly expressed themselves satisfied with that, and I thought that at all events the Storey delegation was satisfied with it, from all that was said. Mr. FRIZELL. In regard to a revenue law which will be uniform and equal, and which will bear equally upon all classes of property, and upon all tax payers, I have found that to enact such a law is extremely difficult. I begin to think, in fact, that to enact a revenue law that will bear equally upon all classes of tax The PRESIDENT. The gentleman cannot payers is an impossibility, and I profess, Mr. take up the time of the Convention by refer- President, to be better acquainted with the ring to matters which occurred on the outside. revenue laws than with any other branch of the Mr. HAINES. Now I am myself undecided law. Gentlemen are aware that in practice -and will not take up the time of the Conven- property is often taxed twice. For instance, a tion-I am wholly unprepared to say whether man may hold a mortgage, and that is taxed, the word "bullion or the word "proceeds" and the property which is mortgaged is also would be most clear. I believed, however, taxed; and there are other instances of a simithat the word "proceeds" did not fully cover the ground, and I did desire to place the word "gross" before it, so that the language might be definite, and that there might be no mistaking what was meant. Mr. WARWICK. Will the gentleman allow me to ask him a question for the purpose of making up my own mind, which is now somewhat undecided? Suppose a farmer, say in Douglas County, should buy a ranch for three or four thousand dollars, and should that very season cut from it nine thousand dollars worth of hay, is it the usual practice for him to pay a tax on the three or four thousand dollars, as the value of the ranch, or on the nine thousand dollars? Mr. HAINES. He pays on the whole. They tax him proportionably, on the crop and on the land also. Every thing he possesses that has value he has to be taxed upon, and he has to give in under oath the entire value of his ranch -hay and all. Generally the assessment of taxes comes after the hay is cut, too, and even after the grain is sacked. There is nothing we have but what we have to pay taxes on, and we are assessed under oath. Mr. EARL. I was in favor of this amendment originally, but now I find that it is a question of some doubt-a question upon which there has a considerable diversity of opinion sprung up in the Convention. I thought in the lar nature which I could mention. Now, sir, the section as it stands at present I believe says that the proceeds only of the mines shall be taxed. This provision is general and broad, and of course the taxing of the mines, or the proceeds thereof, is left entirely to the Legislature. Now, Mr. President, the remarks I have to offer on this subject will be addressed principally to the gentlemen from the agricultural counties, because, not to manifest any hypocrisy or deceit, I am willing to admit frankly that I came here to do justice to my constituency. But at the same time I came here to do justice to my neighbors also. Some fear has been expressed on the part of the members from the agricultural counties, as regards the election of members of the Legislature, and the views likely to be entertained by the members of the Legislature to come after us. Now I say to gentlemen from the agricultural counties that we have two interests in Storey County, and at all the elections there, up to the present time, the interest which is in favor of taxing the mines has prevailed. A majority of the men in Storey County may not own largely in the mines of Virginia and Gold Hill, but there are many men who own mills that do not own mines, and there are very many others who own cabins on our hills and in our valleys in Storey County, and they wish to see the mines taxed. Consequently up to the present |
