To the Honorable the Senate and Assembly of the State of New-York:

The further memorial of John J. Vanderkemp, general agent of the Holland Land Company, and also of Wilhem and Jan Willink, of Amsterdam, and of Joseph Fellows, general agent of the Pulteney estate,

RESPECTFULLY SHEWETH:

That the bill now before the Assembly, entitled "An act to subject certain debts owing to non-residents to taxation, and to facilitate the discovery of personal property liable to taxation," is both in its principle and details so prejudicial to the interests confided to the care of your memorialists, that they deem it their duty to offer to the Legislature a respectful remonstrance against its enactment.

The principle of the bill consists in the declaration that debts owing by inhabitants of this State to persons not resident therein, shall be deemed personal property within the town and county where the debtor resides, if they have been contracted for the purchase of real estate, or are secured by a mortgage on real estate; and as such shall be liable to taxation, in the same manner, and to the same extent, as the personal property of the citizens of this State. If in this proposed enactment, the general law prevailing through the States of this Union, or in the commercial States of Europe, or in the State of New-York itself, had been pursued, the foreign creditors whose interest it will affect, must have submitted to it as part of a system under which they and all other creditors hold and enjoy what is their own. But it is supposed to be free from all doubt, that this enactment does not follow the general law; that it is in opposition to principles perfectly established and settled, both here and elsewhere, and that the effect of the proposed law will depend not upon the hitherto known and received characteristics of debts, but upon one which the Legislature has created by its own declaration. Debts, however arising, or in whatever way secured, are not personal property within the town and county where the debtor resides. In every part of the world, where the

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principles of law constitute a science, the contrary proposition is adopted and followed out into all its proper consequences. Personal things in general, and debts in particular, have no locality. Of the latter, it may be said, that they are invisible, intangible, altogether without local existence, and indeed without existence of any kind, except in contemplation of law. They are a mere legal right in one man, attended by a legal obligation in another, to demand and to pay what, until demand and payment, has no existence either in one place or another. The only thing which has existence, is the right, attended by the corresponding obligation; and this right is in the creditor, whose person therefore it follows, and in whose domicil, by the universal consent of civilized nations, it has all the locality that is ever attributed to it. The debtor has nothing, and owns nothing in the debt. The creditor has it, and owns it exclusively. This species of personal property, is therefore, in the creditor only, and in his domicil only; and it is a deviation from the universally settled rule to say, that it follows the debtor, or that it is in legal contemplation in the place where the debtor resides.

The proposition here stated is not the less true, because the debt flows from a local source, such as land, or other real estate, or because it has the security of this kind of estate for its payment. The distinction between the debt and the security is obvious, and exists in the nature of things. The character of the debt is not changed by the security. It remains a debt owing to a foreign creditor, as much when land within the home jurisdiction may be resorted to for payment, as when the only recourse is to a person within that jurisdiction. The land and the person of the debtor may equally be resorted to for the purpose of giving effect to an asserted jurisdiction over the debt; but in each case it is but a substitute for that natural jurisdiction over the person of the creditor, which his residence gives to a foreign country only.

These principles are sanctioned every where, and in no State more distinctly than in New-York. In the cases of intestacy, of testamentary disposition, of transfer by the act of the party, whether actually voluntary, or only constructively so, by being the act of the law which governs his person-in all cases in which the acquisition, transmission and transfer of moveables is involved, the law of the domicil of the creditor or proprietor, furnishes the rule; and if this is true of moveables generally, it is more strikingly true of debts, in regard to which a different rule would produce a conflict

of laws, altogether inconsistent with the maintenance of harmony and mutual respect between independent States. It is undoubtedly true, that it is a rule for the decision of courts; and it may be said that this is its only proper character, and that it has no pretensions to be adopted as a rule of jurisdiction for the Legislature.— But to this your memorialists think it may be replied, that it is a rule for the decision of courts, only because it has been respected by the Legislature, who have either disclaimed altogether, or exercised only in the most sparing manner, a jurisdiction over the subject. It is a reciprocal rule of legislation, as well as of law, among the nations of Europe, and the States of America, to leave the subject to the domicil of the creditor and proprietor; and perhaps the only instance in which there has been any thing like a a common practice in opposition to the principle, has been in the case of attachments, to coerce a foreign debtor to the payment of his debts, a case by no means universally approved, and which, at the same time, will be found, upon reflection, to present a peculiarity arising out of the conflict of a domestic and a foreign creditor. For fiscal purposes, your memorialists are not aware, that in any instance, the law of any State of Europe, or of this country, treats debts due to foreigners, whether secured by real estate or otherwise, as forming a part of the available resources of the home State, for the purposes of taxation. A law to this effect, it is respectfully submitted, will stand by itself, and will not only be in conflict with the rule before noticed, but with the rights of hospitality, and the security of commercial intercourse, upon which the peace and happiness of the world depend.

It has been stated by an approved writer, as a leading principle, that the natural use and intention of taxes is to divide the public burthens of a State among the different members who compose it, in proportion, as nearly as may be, to their respective abilities. A division upon this principle, and in this proportion, excludes from among the subjects of taxation debts due by residents to non-residents, and substitutes in their place debts due by non-residents to residents in the country which imposes the tax. The latter constitute part of the abilility of a citizen to pay the tax imposed by his country, the former do not, but they constitute part of the ability of a foreign citizen to pay the just demands of his own country. In this way equality among states is attained. Each State reckons among the resources of its citizens, and among its own resources for revenue, the mass of their personal property consisting

of debts due to them, and every description of moveables, together with the entire mass of real estate exclusively within its jurisdiction; each citizen at the same time pays his own government what it deems right to require towards the public burthens on account of the same mass of personal property, and to the government which permits him to own land within its limits, what it deems fit to impose as a tax upon such land. No man's estate is, by the operation of this rule, taxed twice, nor does any man's estate escape liability to taxation. The mutual good will of States towards each other is preserved and promoted by a reciprocal respect for the rights of their respective citizens, and all inducement to harrassing and retaliating laws is effectually removed. In this rule commercial States find their advantage, because it promotes the unrestrained circulation of every description of pecuniary capital; and perhaps nothing has contributed more essentially to build up the habit of private fidelity to engagements than the public respect paid by nations to the principle now adverted to.

The numerous laws throughout the States of this Union which impose taxes upon corporate, banking and insurance companies, in which foreigners have an interest, are in no respect an exception to the rule. They are strictly defensible as laws regulating a political body or person which derives its existence, and all its capacities from a law of the State within which it acts. A corporation is, politically, a resident of the State which incorporates it. It has no existence any where else. Its property, moveable or immoveable, is, by construction of law or in fact, within that State. There is its domicil. By that law must its transactions, its faculties, its disabilities and its duties, be regulated; and if a foreigner claims any interest in it, he must claim it subject to them all. To tax the dividends or the capital of a bank, is therefore, strictly within the principle that has been deemed, by your memorialists, the true principle; and the foreigner who receives his due proportion of what the law which governs the corporation leaves to him, receives the full extent of what is due to him by that law which created the corporation, and is the law of its domicil. The tax does not operate upon a debt due to him, but upon the property of a corporation, in which his membership is recognized only by virtue of the law which creates, controls and protects the body politic as a member of its own political community.