The Day Seattle’s Wealthiest Bankers Challenged the Taxman
In a landmark 1876 legal maneuver, Arthur Denny and Dexter Horton petitioned King County Commissioners to stop paying taxes on their mortgage loans, arguing that taxing the debt while the property was already taxed amounted to double taxation.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
County Commissioners' Proceedings.
At the extra session of the County Commissioners' Court of King County, W. T., held Sept. 6th, 1876, the following business was transacted:
In the matter of the petition of Arthur A. Denny, on behalf of the firm of Dexter Horton & Co., composed of Dexter Horton and Arthur A. Denny, for the correction and reform of the assessment roll of said King County for the year 1876, so as to exempt from assessment and taxation all mortgages of real estate when the real estate itself is assessed and taxed.
Whereas it appears from the petition of Arthur A. Denny that the assessment roll of said King County, and the evidence submitted to the board, show that the firm of Dexter Horton & Co. have been assessed for the year 1876, under 'notes,' for the sum of $36,350, money loaned by them to sundry persons upon mortgages upon real estate in said King County, which real estate is also assessed for the full value thereof.
And whereas it is a question of law as yet unsettled and undetermined, whether or not such mortgages are properly subject to assessment and taxation, as well as the real estate itself;
It is, therefore, hereby ordered that an agreed statement of the facts upon which this controversy depends be made by and between King County and the said Dexter Horton and Arthur A. Denny and submitted to the District Court of the Third Judicial District of Washington Territory holding terms at Seattle, to be heard, disposed of and final judgment rendered by said court.
And that Geo. N. McConaha be and he is hereby appointed the attorney of said county and this board, for the purpose of making such agreed case, and prosecuting, arguing, waiting, and submitting the same to the said court. And that in the meantime and until final judgment of said court in said case, the collection of the taxes assessed upon such mortgages be suspended.
This 1876 legal battle highlights a tension that persists in modern property tax debates: the perceived unfairness of taxing financial assets (like loans or stocks) on top of the underlying physical assets. Arthur Denny, one of Seattle's 'Big Four' founders, and his banking partner Dexter Horton were essentially arguing against double taxation—a principle that remains central to discussions about wealth inequality and fiscal policy today.
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