tmmmmmtmmmmmmmmi'mi'>ii*'»''>mmmmmm'm'»'mi» Local Taxation AND Finance G.H.BLUNDEN nrmtitiiStHliV' '-'.V I3Q3 BOUGHT WITH THE INCOME FROM THE SAGE ENDOWMENT FUND THE GIFT OF Mtnv^ W. Sage 1891 AAOIlSi ilMil. Cornell University Library HJ9426 .B65 Local taxation and finance. oiin 1924 030 230 241 The date shows when this volume was taken. To renew this book copy the call No. and give^o the horarian. I* IAN 121909 MAR 9 ■ 1912 HOME USE RULES. All Bvoks subject tolR^call. Books not used for instructioii or research are returnable within ^ /weeks. F? BIAR2 3 191Z: Volumes of periodi- cals and of pamphlets - ' are held iii the library asjnuch as3'possible. For special purposes they are given,, out for ajliinited time. Borrowers should not use their library privileges for the bene- ; "^of other persons. 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The Principles of Social Economy. Yves Guyot. "An interesting and suggestive work."— Spectator. 5. Social Peace. Dr. Schulze-Gaeveenitz. Edited by Geaham-W alias. " A study by a competent observer of the industrial movement."— Times. SWAN SONNENSCHEIN & CO., LONDON. NEW TORK: CHAELES SCRIBNER'S SONS. LOCAL TAXATION AND FINANCE BY G. H. BLUNDEN LONDON SWAN SONNENSCHEIN & CO. NEW YORK : CHARLES SCRIBNER'S SONS 189s A' ^os^s PREFACE. The recent wide extension of popular local govern- mental institutions in Great Britain induces me to hope that a new and comprehensive work on Local Taxation and Finance may be found especially use- ful at the present time. No such work has appeared since the publication of Mr. R. H. Inglis Palgrave's essay in 1871, notwithstanding that very consider- able and important developments of local fiscal and financial organisation have received legislative sanction in the interval. ' The excellent work done by the Local Government Board during the last twenty years in gathering, compiling, and publish- ing the English statistics relating to this subject has, moreover, brought some degree of order out of chaos, and has rendered possible a much more exact exposition and discussion of the details of the system than was formerly attainable. I have given special attention to the fundamental and all-important question of the incidence of rates. Until this is better understood it is almost hopeless to expect remedial legislation of any real value, and the bitter cry of the long-suffering mass of urban ratepayers will receive no satisfactory response. J iv Preface. regret that this portion of the work is unavoidably somewhat controversial in character, and that I am compelled to express a decided dissent from certain of the opinions of some living writers, for whose work I, nevertheless, entertain a sincere respect. I trust, however, that the following pages will throughout be found to display evidences of a conscientious desire and effort to ascertain and set out the true facts, and to arrive at sound con- clusions. I desire to acknowledge my indebtedness to Sir Hugh Owen, Mr. T. H. Elliott, Mr. Chas. Harrison, and many officials of local bodies, for the loan of official documents and other valuable help ; and to return my hearty thanks for the courtesy and kind- ness of these gentlemen. I wish also to record my grateful appreciation of the assistance and counsel which I have received from Professor Edwin R. A. Seligman, of New York, editor of the Political Science Quarterly ; and to state that a consider- able portion of the earlier chapters of the present work, together with the sections relating to Scot- land and Ireland, were first published in that organ in March and June, 1894. These portions have, however, undergone a thorough revision, and the latest available statistics have been incorporated. G. H. B. CONTENTS. PART I. ENGLAND AND WALES. CHAPTER I. Historical Introduction. PAGE Local taxation m ancient boroughs. — Early rural rates.— Church rates. — Sewers rates. — Paving rates. — Repair of highways and bridges. — Origin of poor rates. — Act of 1601.— Basis of assessment. — History of the poor rate. — Unit of area for rat- ing. — Constable's tax. — Hundred rate. — County rate. — High- way rate. — Other minor rates. — Borough rate. — Turnpike tolls. — Sanitary rates. — Cemetery rate. — School rate . . i CHAPTER II. The Existing System. Analysis of receipts. — Rates. — Precept rates. — General district rate. — Rates separately levied.— Meaning of the term "rate." — Private improvement rates. — Profitable undertakings. — Tolls and dues. — Property and investments. — Local debt . 12 CHAPTER III. Rates — Valuation, Assessment, and Levy. Valuation list. — Gross estimated rental. — Rateable value. — Valua- tion of railways, canals, etc. — Public-houses. — Gasworks and waterworks. — Canals. — Metalliferous mines. — Coal mines — Mills and manufactories. — County rate and other assess- ments. — Modifications of rating system. — Metropolitan com- mon poor fund. — Equalisation fund. — Levy of rates. — Compositions for poor rates, etc. — Compositions for general district rates, etc. — Recovery of rates in arrear. — Excusal on ground of poverty 21 CHAPTER IV. Treasury Subventions arid Allocated Taxes. History of grants. — Allocated taxes. — How applied. — Mr. Senior quoted. — Mr. Fawcett quoted. — Grants in aid of poor rate. — Mr. Fowler quoted. — Results of grants in other cases. — Form and nature of grants. — License duties 11 V vi Contents. CHAPTER V. The Incidence of Rates. TAGE Mr. Goschen quoted. — Urgent need of settlement of question. — Rates on agricultural land. — Theory of incidence.— Excep- tions. — Characterof English farm rents. — Oldrates on landare not strictly taxes but rent-charges. — Rates on tithes. — Rates on dwelling-houses. — Theory of incidence. — Adam Smith. — Ricardo. — M'CuUoch and Mill. — Otherauthorities. — Goschen. — Rogers. — Author's own theory. — Seligman. — Author's theory shortly stated. — Chief errors of opposite theory. — Mr. Goschen quoted. — Reasons for dissent. — Builder pays no rates. — Author's theory explained. — Professor Seligman quoted. — Effect of rates on house-rents and ground-rents. — Exceptions. — Summary as to rates on dwelling-houses. — Incidence of rates on shops, etc. — Other cases considered. — Railways. — Canals. — Gasworks and waterworks. — Mines. — Quarries. — Recapitulation 39 CHAPTER VI. The Bases of Local Taxation. Statistics of rating analysed. — How the rates are borne — Rates on personal property. — Rates largely a tax on income. — Quarter- ly Review quoted. — Modern increase of town rates. — Heavy taxation of the poor in towns. — Inhabited house duty com- pared. — Special aggravations. — Special taxation of agricul- tural land. — Its nature. — Decrease of rural rates. — Hereditary burdens. — Effect of modern rates on land. — Compensated by modern grants-in-aid. — Rating of stock-in-trade under Act of 1601. — Proposed taxation of personal property considered. • — General Property Tax in U.S.A. — Local additions to the , income tax. — Grants-in-aid. — Rating system should be re- formed .... .61 CHAPTER VII. Division of Rates between Occupiers and Owners. Division of rates in Scotland and in Ireland. — Recommended for England by select committees. — Grounds of recom- mendation. — Other grounds. — Grounds specially applicable to urban areas. — Capital expenditure out of rates. — Rates for maintenance and administration. — Improvements. — Case of leased property considered. — Application to existing contracts. — Future contracts 74 Contents. vii CHAPTER VIII. The Taxation of Ground- Values. PAGE Effect of special tax on buildings. — Tax on ground-value cannot be shifted. — Illustration. — Unearned increment. — Mainten- ance of estate at public cost. — Owners should pay a com- position. — Modified proposals. — Case of perpetual chief rents. — Site valuation and tax. — Difficulties to be overcome. — Plan of London County Council. — Urgent need for legislation. — Suggestion. — Existing leases and contracts . . .82 CHAPTER IX. Betterment. Definition. — Act of 1662.— Act of 1667.— Extract from "Pepys' Diary." — American experience. — Origin of name. — Recent re- vival in England. — Lords' select committee. — Their report. — Effect of enquiry. — Proposals. — Objections. — Recommenda- tions of committee. — Recoupment. — Worsement . . . 8g CHAPTER X. Conclusion. The rating system..— Its defects. —Remedies.— Reform of valua- tion system. — Conclusion 96 PART II. SCOTLAND. History of local taxation.— Commissioners of Supply.— Rogue money. — Local Government Act, 1889. — Burghal taxation. — Burghal expenditure.— Burghal debt.— Parochial taxation. — Poor rates. — Means and substance. — Class ificatiori. — Parochial finance. — Highway rates. — Ecclesiastical taxation. — Allocated taxes.— Grants-in-aid.— Valuation.— Division of rates.— Collection of rates 99 PART III. IRELAND. Grand jury cess.— Town taxation.— Dublin city police rate.— Poor rates.— Harbours and piers.— Public works.— Dues etc.— Valuation. — Division of rates. — Collection of rates.— Allocated taxes.— Grants-in-aid.— Old tolls and taxes . . 109 viii Contents. - APPENDIX I. ENGLAND AND WALES. PAGE Table I. — Total amount of rates in certain years from 1803 to 1892-93, together with the poor rate valuations and rates in the ^ for the same years 117 Table II. — General view of certain branches of local taxation from 1747 to 1892-93 118 Table III. — Analysis of expenditure out of poor rates and receipts in aid thereof 119 Table IV. — Direct local taxation in 1867-68 119 Table V. — Classified receipts of local authorities, exclusive of loans, in 1888-89, 1889-90, and 1890-91 120 Table VI. — Receipts and expenditure of local authorities in 1890-91 121 Table VII. — Classified expenditure of local authorities in 1890-91 122 Table VIII. — Receipts from rates, 1880-81 and 1890-91 . . 123 Table IX. — Parliamentary grants and votes in relief of local taxa- tion, 1887-88 and 1891-92 124 Table X. — Local debt, 1884-85 and 1890-91 125 Table XI. — Valuations for local and imperial taxation compared 126 APPENDIX II. SCOTLAND. Table XII. — Receipts and expenditure of local authorities, 1889-90 127 Table XIII.— Local debt, 1889-90 128 Table XIV. — Allocated taxes, receipts, and payments, 1891-92 . 129 Table XV. — Apportionment of rates between occupiers and owners, 1889-90 .... .... 130 Table XVI. — Grants-in-aid, etc., 1889-90 to 1892-93 . . . 130 APPENDIX III. IRELAND. Table XVII. — Summary of local taxation, 1893 . . . .131 Table XVIII. — Grants-in-aid, etc., 1889-90 to 1892-93 . . .132 APPENDIX IV. GREAT BRITAIN AND IRELAND. Table XIX. — Allocated taxes, receipts, and payments, 1893-94 . 133 List of books referred to 1^4 LOCAL TAXATION AND FINANCE. PART I. ENGLAND AND WALES. CHAPTER I. Historical Introduction. The history of English local taxation and finance yet remains to be written, Mr. Dowell's admirable History of Taxation and Taxes being almost wholly confined to the impositions of the central government for national and imperial purposes. Without attempting an exhaustive survey, a brief historical sketch may be found useful in this place. Local taxation, like local government and many other English institutions, had its beginnings in Saxon times. Local taiation The privileges of the burgesses of the numerous •" »-«^"nt borough., boroughs of the later Saxon and early Norman reigns were con- ditional upon the paying of scot and the bearing of lot. "Scot " ' appears to have been the local tax of the place, afterwards known as the town ley, and still later as the " constable's tax " ; " lot " was the personal service of various kinds, civil and military, required of the free inhabitants.^ The inhabitants of most of the boroughs were tenants of the royal demesne, and in the twelfth and f_ thirteenth centuries, collectively in each borough, paid an annual i fee-farm rent to the king, known as _^rma burgi, or attxilium j 1 Some few "scot and lot " voters remain to this day. The tax levied by the Commissioners of Sewers is still called a " scot." Local Taxation and Finance. ) burgi. This burden was apportioned among the burgesses by / self-assessment, and no doubt formed part of the local scot or tax. Another of the purposes to which the tax was applied was the payment of the fines for offences, imposed under the system of " pledges " by the local community for the good behaviour of the individuals composing it. It was doubtless also used for raising such funds as were required for the maintenance of highways, bridges, embankments, water-courses, town walls, and, later on, the " wages " of members of Parliament. Outside the boroughs, these expenses were defrayed by a threefold Early rural rates. i i t i system of town rates, hundred rates, and county rates, applicable respectively to the townships, hundreds, and counties. 1 The town ley or rate, however, was imposed not only for township purposes, but also to furnish the township quotas of the hundred and county rates, and, not unfrequently, of the national taxation. For several centuries the mode of assessing i j the individuals within the township for contribution to the old '- town rate was regulated solely by custom, no statute for the pur- pose having been enacted until 1662. But there is good reason for believing that the standards of rateability adopted for the national taxes were applied also to local taxation. From the beginning of the thirteenth to the early part of the sixteenth century, the basis was usually a rough valuation of moveable pro- perty, but the enumerated articles consisted chiefly (even in boroughs) of farm stock. During the sixteenth century a new form of subsidy, based on a valuation of either lands or goods, came gradually into use for national purposes ; and this modifica- tion of the basis extended by degrees to local taxation also. The local taxation for civil purposes was accompanied by an ancient ecclesiastical tax called the church rate. OtLUrch ratea. . ; This was assessed and levied parochially by the ;' churchwardens, and was probably collected in the churches at 1 certain of the annual festivals. This tax has been traced back to I 1 189, but may be older; and it has always been assessed and 1 Vide Report of Poor Law Commissioners on Local Taxation, 1843 ; a work of the highest value in all that relates to the previous history of the subject. Historical Introduction. ' levied according to custom. Owing to the unequal and often I excessive area of the parishes, the church rate remained for several centuries the only parochial tax, A tax called the sewers rate, for the protection of districts liable to floods and kindred purposes, was imposed in „ Sewers rates. certam affected places as early as 1427, and is still levied under the authority of a statute of 1532. This has been supplemented by a general sewers tax imposed in 1841, and a land drainage rate imposed in 186 r. We learn from Mr. Dowell that paving rates began about 1477 ; but Paving rates. they appear to have been confined, until modern times, to a few of the larger cities and boroughs. An Act passed about eighty years later required the repair of the E,j,^,„,Mghways highways by the parishioners' own labour, or andurwgea. through the gratuitous use of their horses — a method which remained largely in operation in rural districts until the present century. In 1530 and 1531 the county justices were empowered \ to levy separate direct taxes for the repair of bridges and the erection of gaols, and to appoint collectors of their own, instead of apportioning the burden among the hundreds and townships. This was a new departure in local taxation, and would appear to have been abandoi::ed in practice later on. But it affords an in- dication of the growing influence of the county justices, whose autocratic rule henceforth superseded the ancient popular forms of county government. During the fourteenth, fifteenth, and sixteenth centuries the relief of the poor had engaged the attention of ^ tj w Origin of poor rates. ; the legislature at intervals, but no general taxation I for the purpose was considered necessary. We learn from the Mirrour of Justice (chapter i., section 3) that " it was one of the ordinances of Edward I. that the poor should be maintained by parsons, rectors of the church, and by the parishioners, so that none of them die for want of sustenance." In the fifteenth year of Richard II. an Act was passed providing for the relief of the poor out of the fruits and profits of the living of each parish church ; and until the dissolution of the religious houses, volun- Local Taxation and Finance. tary measures were found a sufficient supplement to the obliga- tions imposed upon the clergy. From this period, however, the need became increasingly urgent. The cessation of the daily doles at the gates of the monasteries aggravated the difficulty, and was followed by a series of legislative efforts to systematise the giving of weekly alms by the parishioners ; but it was ultimately found necessary to levy a rate in every parish throughout the land, and the Act 43 Elizabeth, chapter ii., was passed in Act of 1601. .,,.,. _-,.. 1 60 1 With this object. By this it was enacted !j that the churchwardens and certain other persons selected : annually, called overseers, should " raise, weekly or otherwise (by ) taxation of every inhabitant, parson, vicar and other, and of every / occupier of lands, houses, tithes, coal mines, or saleable under- woods in the said parish, in such competent sum or sums of money as they shall think fit) a convenient stock of flax, hemp, wool, thread, iron, and other necessary ware and stuff, to set the poor on work. And also competent sums of money for and to- wards the necessary relief of the lame, impotent, old, blind, and such others among them being poor and not able to work, and also for the putting out of such children to be apprentices, to be gathered out of the same parish according to the ability of the same parish." , The Act also gave power to the justices to raise moneys elsewhere J in the same hundred or county to assist a parish not able to sup- port its own poor. No guidance was given to the overseers as to : the mode by which the liability of the individual inhabitants should ; be determined, nor as to the standard by which their " ability " should be measured. This was probably only another way of making applicable the rules and methods already established by usage for raising both national and local taxation. The standards of ability then in use were those known as "lands" and "goods," the assessing authority being at liberty to take that one which would give the highest assessment, but not both. But these standards were applied in a very loose fashion. The taxpayers were " put up or lowered without any reasons that could be reduced to a rule."^ 1 Dowell's " History of Taxation and Taxes,'' vol. a, p. 5. Historical Introduction. Under the Commonwealth an era of somewhat greater strictness and regularity in the assessment of taxes began, and we find for the first time evidence of a more general adoption of the basis of rents, both of lands and buildings, as well as of personal estate. There is little doubt that this increased precision extended to the assessment of the poor rate and other local taxes, and that it was about this time that the standard of assessment began to crystallize, into one of rent or annual value, as it is at present, the assessment of urban householders on this basis being substituted for that in respect of stock-in-trade. The Poor Law of Elizabeth has been singularly little affected by subsequent legislation; but its administration Hutoryorthopoor has been the instrument by which some economic questions of the first order have been practically illustrated on a great scale. Down to 1747, the date of our earliest poor-relief statistics, the administration of poor relief appears to have been conducted with prudence and economy. A reference to Table II. in the Appendix will show that the average cost, which was then probably not more than 2s. per head of the population, afterwards rose rapidly and continuously, until in 181 7 it reached 13s. 3d. per head. Grave abuses, which sprang up and developed with alarming rapidity, had well-nigh pauperised the mass of the English people, when the Poor Law Amendment Act of 1834 stayed the evil. The chief modifications effected by this Act were the group- ing of the less populous parishes into "unions" of considerable area or population, and the transfer of the business of relief and administration from the parochial overseers to boards of guardians acting for the unions. The most populous single parishes were granted the status and machinery of unions, and treated as such. The liability of each parish in a union for the cost of the mainten- ance of its own poor was continued until 1865, when the charge was cast on the union as a whole. The poor rates are, however, still levied by the overseers, under a system of valuation, assess- ment, and levy which will be dealt with in a separate chapter. It is necessary to state that the curious and probably unintentional exemption of the occupiers of all mines except coal mines, and of Local Taxation and Finance. all woods except saleable underwoods, from liability for poor rates, was at length ended by the Rating Act of 1874. Under this law these subjects, together with fishings and shootings, were brought into the categories of rateable property ; and little, if anything, now remains excluded to which the liability for rates could legitimately be extended. The general rule of assessment upon the " annual value " is, in spite of difficulties, applied all round with a uniformity rare in English legislation. The subsequent financial progress of the poor rate will be shown in the statistical tables which follow. The unit of area first adopted for poor rate assessment purposes was the parish, evidently in continuation of the Unit of area tor rating. '^ ' ' voluntary forms of taxation, m the church, and by the officers of the church, which had previously been in operation for this object. This was the first time the parochial area had been adopted, except for church rates, and the inconveniences arising from the excessive size of the parishes in the north of England soon led to its partial abandonment. By an Act of 1662 permission was given for the substitution of the township where found needful, and this area has since been, and is still very gener- ally in use in the northern counties. By the same Act the constable's tax was placed under statutory regula- Conatable's tax. . , , ■ tion, the persons and property assessable being prescribed as those charged with the poor rate. The importance of this ancient tax gradually declined, and as the purposes for which it was originally levied became obsolete or were otherwise provided for, the tax itself fell into disuse. Of the other ancient local taxes, the hundred rate gradually became Hundreil rate. ° ■' merged in the county rate, as the purposes for which it was levied were undertaken by the county authorities or became obsolete ; but the hundred is still liable to be rated for the payment of compensation for damage resulting from riot. The county rate, on the other hand, has not only County rate, . ' •' been applied to new purposes, but has swallowed up a number of subsidiary rates, imposed upon the inhabitants of the counties between the middle of the sixteenth and the middle Historical Introduction. of the eighteenth centuries. The Act 12 George II., chapter xxix., consolidated these in 1739, and directed that the general county rate should be paid by each parish or township in one sum, to be taken out of the poor rate, or raised in like manner thereto. This is the present practice. Church rates maintained their indepen- dent existence, but with gradually increasing difficulty, until 1868, when the power of enforcing payment was withdrawn by Parlia- mentary enactment, save in certain cases where loans were secured upon them. As these loans have been nearly all repaid, the remaining church rates have been almost wholly extinguished, and the tax is now virtually a thing of the past. \,, By an Act of 1691 highway rates were for the first time author- ized by statute, the tax for the purpose being ■' ' 1 i o Highway rate, imposed as an addition to the poor rate. It would seem that, notwithstanding this enactment, the older practice commonly prevailed for a century longer;^ but in 1773 the county justices were empowered to enforce a more adequate performance of the parochial duty of maintaining the highways, and rates for the purpose became more general. Statute labour in lieu of payment of rates was not entirely abandoned until the middle of the present century. Sir John Sinclair estimated the amount of the highway rates in 1803 at _;^i 00,000, but by 18 17 the amount had risen to ;^i,4i 5,000.^ The subsequent progress of this tax may be seen by reference to Table II. in the Appendix. From 1815 to 1865 the highway rate was levied separately from the poor rate, and it has since been so levied in many rural parishes. Under the Local Government Act of 1894, the separate assess- ment and levy of highway rates will, however, soon entirely cease. The present century has been prolific of new rates, among the number being the militia rate, 1802 ; burial of the ^^^^^ „i.„„t„. dead rate (bodies cast ashore by the sea), 1808; gaol fees rate, 1815 ; shire halls rate, 1829 ; and lunatic asylums 1 See ante, p. 3. 2 n appears from Lord Monteagle's Draft Report on Bur- dens on Land; 1846, p. 19, that one-third or more of this latter sum consisted of the estimated value of statute labour. See Appendix, Table IL Local Taxation and Finance. rate, 1829 ; — all of which were subsidiary to the county rate, and have, in practice, become merged therein. The workhouse building rate, 1834, and survey and valuation rate^ 1836, have in like manner become incorporated with the poor rate. The im- position of the borough rate and borough watch Borough rate. . rate m 1835 was mcident to the reform of the municipal corporations upon a representative basis, after a period of usurpation, abuse, and decline, dating back to the evil times of the Tudors and Stuarts. The Municipal Cor- porations Commission of 1835 reported that many corpora- tions possessed revenues " from lands, leases of tithes and other property ; from tolls of markets and fairs ; from duties or tolls imposed on the import and export of goods and merchandise; from quay and anchorage dues, etc.; and from fees and fines." In several boroughs, rates were levied similar to county rates, but some had no revenues whatever. Owing to the debased char- acter and oligarchical constitution of the municipal corporations, no new duties were confided to them by Parliament for more than a century prior to the reform of 1835, such public works as were imperatively needed being entrusted to private persons or specially created commissions. Thus in 1684 an enterprising speculator, named Hemming, obtained exclusive authority to light the metropolis at night with lamps ; and the Watching and Lighting Act of 1833 created special authorities for the perform- ance of these elementary municipal duties within the boundaries of the boroughs and elsewhere. The borough rate and borough watch rate are collected by the overseers with the poor rate, unless otherwise ordered in local Acts. The county police rate, imposed in 1841, is still nominally a distinct rate ; but as it is, like the county rate proper, collected as part of the poor rate, no machinery for its assessment or collection is required. The progress of the rates referred to in the foregoing historical survey, so far as the figures are known to exist for the years selected, is exhibited in Table II. of the Appendix. That table does not, however, cover the whole field of local finance. About Historical Introdtiction. the middle of the eighteenth century the badness of the main roads of England and Wales led to the creation of turnpike trusts, under which the trustees were empowered to levy , . „ I ^ ■' TurnpUEe tolls, \ tolls for the improvement and maintenance of the roads placed in their charge, and for the making of new main roads. The system spread rapidly, the turnpike roads were greatly improved and extended, and large suras were levied in the form of tolls. In 1840 the sum so raised was ;3£^i, 659,154, and in 1843, ;^i,348,o84; but by 1868 the tolls had fallen to ;£9i4,492, and in 1890-91 to ;^2,353. The introduction of railways so diminished the traffic on many of the roads that rates were required to supplement the tolls ; and the latter have been practically abolished by the expiry and non-renewal of the trusts. Prior to 1835 the municipal corporations levied their revenues under the authority of Charters and local Acts, but no record of the amounts so raised was kept for the whole country. There was, indeed, no comprehensive statute requiring the production of annual returns until i860. Mr. Goschen stated that "pre- viously to 1841, neither receipts nor expenditure are chronicled in respect of any of the following branches of local administra- tion : police ; general sanitary improvement of towns ; lighting, watching, and paving ; government of towns ; sewage ; drainage ; and even in the more complete investigations undertaken in 1846, London rates are only entered to the extent of ;^82,ooo." He roughly estimated the rates of which no records were kept at ;^4oo,ooo in 1817, and ;^6oo,ooo in 1840.1 Table IV. shows the progress made in 1870, and furnishes the earliest view obtainable of the heavy modern taxation for sanitary and improvement purposes, which has so seriously g^^j^^^j,, augmented the burdens and indebtedness of urban localities, notwithstanding the relative saving effected under some of the older headings. Items 6, 7 and 8, amounting to over ;^3,ooo,ooo, are almost wholly of this character. The first of a series of Acts relating to the public health and cognate matters, 1 Report on Local Taxation, 1870, p. 9. Mr. Goschen's researches and labours in the domain of Local Finance have been of the very highest value to all subsequent enquirers. lo Local Taxation and Finance. involving the levy of rates and the borrowing of money, was passed in 1848, and has been supplemented at short intervals down to the present time. The country has been mapped out into urban and rural sanitary districts, the authorities of which are invested with a multitude of powers, and charged with a multiplicity of duties. Their expenditure has rapidly attained very large pro- portions (as will be seen later), and has, in urban districts, been met by the levy of rates, based upon the poor rate valuation, but separately collected. In rural districts the general expenses are met by a simple enlargement of the poor rate, but the expenses incurred for the benefit of sectional areas are met by special sectional rates. In corporate boroughs the sanitary authority is usually the town council or a committee thereof; but as the greater part of London has no such council, various metropolitan authorities have been either temporarily created or invested with temporary powers and duties. Since the creation of the London County Council in 1889, a portion of the work has been taken up by that body. Within the small central area known as the City of London, the ancient unreformed corporation still exercises a limited authority in municipal matters ; but a semi-independent body known as the City Commissioners of Sewers has the charge of all the modern departments of administration, except main drainage and the fire brigade, which are in the charge of the London County Council. Outside of London and the corporate boroughs, the local government of urban areas had hitherto been entrusted to local boards or improvement commissioners, but is in future to be in the charge of the newly-created district councils; except that the police arrangements are left in the hands of the county authorities. To the foregoing catalogue it is only necessary to add that the provision of cemeteries has, since 18 1:4, been made Cemetery rate. "^ . j j-tj a matter of civic concern, with the usual result 01 an additional rate ; and that the creation of school boards under the Elementary Education Act of 1870 has led to School rate. . .. .,,, the imposition of a local tax of considerable weight in the metropolis and many other places. The rates for both of Historical Introduchon. ii these purposes are, however, usually collected as additions to other local taxes. Many less important developments of local and municipal activity have been provided for by similar methods, or by the simple enlargement of previously existing rates, and need not be enumerated here. The recent growth of the local burdens and the development of the local finances will be further exhibited in the succeeding chapters, and in the appendix. CHAPTER II. The Existing System. We are now in a position to take a survey of the principal features of the system of local finance which exists in England and Wales at the present time. The number of local authorities whose receipts and expenditure are tabulated, exceeded, in 1891, 28,000. The populations and annual rateable values of the urban and rural districts, according to the poor rate valuations, were in that year as follows : Population. Rateable Value. London .... 4,211,056 31,596,896 293 municipal boroughs . . 10,636,479 43,544,648 715 other urban districts . 5.9SS.23S 23.696.177 Total urban districts . . 20,802,770 98,837,721 The- 575 rural sanitary districts 8,198,248 53,278,287 29,001,018 152,116,008 Table V. shows that of a total receipt (exclusive of loans) amounting to ^51,437,425 in the year 1890-gi, Analyita of receipt!. . „ „ , >to/.T J . , , '' , , ^ ^ ' ;£^27,8i8,642 represented the yield of the rates; that is, of direct taxes levied in respect of the occupation of real property. Of the remainder, ;^8,627,o27 consisted of the revenues from gasworks, waterworks, markets, and other under- takings, mostly of a remunerative, or partly remunerative, char- acter; ;^4,724,340, of tolls, dues, fees, fines, etc.; £1,1/^1,211, of rents and other receipts from property (including sales) ; and 12 The Existing System. 13 ;;£'7, 181,010, of treasury subventions and allocated taxes paid out of, or diverted from, the national exchequer. Table VI. shows the various classes of local authorities to whom the expenditure of these sums is entrusted, and the amount expended by each class j and in Table VII. we see the same expenditure classified according to the objects to which it is devoted. Finally, the amounts of the loans outstanding on the 2Sth of March, 1891, and the purposes to which they have been applied, are set out in Table X., and complete the edifice. The total local debt on that date was ;^2oi,2i5,458. Taking these sections in the same order, and reverting to the revenue from rates, an analysis of the total for 1890-91 will be found in Table VIII. It is, however, a matter for regret that neither Mr. Fowler's report nor the annual local taxation returns furnish an analysis in the form adopted in Table IV., or a modification thereof. Many of the rates set out in Table VIII. are " precept " rates : .. ,.,, ,..,-. Precept rates. that IS, rates levied by one authority in obedience to a periodical demand or precept from another authority. In boroughs and other extra-metropolitan urban districts the rates are usually levied under the two main heads of poor rates and general district rates ; but the lines of division are not uniform. Expenses, which in some places are defrayed out of the proceeds of the poor rates, are, in other places, met from the general district rates, and, in yet other places, are the occasion of special rates. In London the division roughly corresponds to that of the boroughs, but there are considerable differences of detail. The vestries and district boards raise the rates needed for most of the sanitary and improvement purposes, and also for the London School Board. But the London County Council also performs certain sanitary duties and undertakes improvement works, the expenses of which are defrayed out of the moneys raised as poor rates. The county rate, the borough rate, the school board rate, the burial board rate, and the rural sanitary rate are usually levied as precept rates. In some cases the precepts are sent direct to the collecting authority, and in others through an intermediate 14 Local Taxation and Finance. body. Those which ultimately fall to be collected by the parochial overseers are either paid out of, or collected with, the poor rate, and are included under that general title in both popular and official terminology. The sum raised as poor rates in 1892-93 was ;^i6,53i,4o6, which, on a rateable value of ;^i57,722,9i3, was at the average rate of 2s. id. in the £,. Of the sum thus raised, ;£^7, 595,873 was expended by poor law authorities, and the balance of ;^8,935,533 was handed over to other local authorities in obedience to their precepts. These latter sums are equal to iijd. and is. ijd. in the ;£ respec- tively. By far the most important of the rates collected independently of the poor rate is the general district rate levied General district rate. ... by the urban sanitary authorities, ^ with which may be included the rates of the metropolitan vestries and district boards and the commissioners of sewers in the City of London. This rate yielded in 1890-91 a revenue of about nine and one- half millions, exclusive of the ;^i, 360,000 levied therewith in London for the London School Board. No analysis of the ex- penditure of this large sum is published in a concise form, but the purposes to which it is applied include (i) street improvements, repair of urban highways, and street watering and cleansing; (2) sewerage and sewage disposal works ; (3) public lighting ; (4) dust and refuse removal ; and (5) miscellaneous sanitary work. In many places some or all of the following purposes are added : (6) hospitals ; (7) water supply ; (8) fire brigades ; (9) cemeteries ; (10) parks and pleasure grounds ; (11) bridges and ferries; (12) public libraries and museums ; (13) markets and fairs ; (14) baths and washhouses; and (15) artisans' and labourers' dwellings. The remaining rates which are separately levied are the sewers, satei .eparateiy drainage and embankment rates, where such exist; ^ "^°''' county and other rates, usually raised as precept rates, but separately collected in certain cases owing to the over- lapping of areas and boundaries ; and certain special or peculiar 1 See ante, pp. 9 and 10. 3 This relates to lands only ; see ante, p. 3. The Existing System. 15 rates levied under the authority of local Acts of Parlia- ment. Confusion is sometimes created by the carelessness of the legis- lature and of writers of books in the use of „ , , Meanlne of names and terms. The use and misuse of the »« f™ ' ™t«" word " rate " is a glaring instance. Not only is it applied to a book of assessments, to the scale of taxation adopted therein, to the valuation of any one building or piece of land in the valuation list or assessment book, and, finally and most commonly of all, to the tax payable by the individual ratepayer ; but, most culpably, also to charges for domestic supplies of gas and water, and for such matters as the paving and sewering of new streets when the owners of the adjacent properties neglect to perform their duties in these respects. The charges for gas and water supplied for domestic and trade purposes have been already distinguished from taxes ; they are neither rates nor taxes, but prices. It re- mains to be noted that the so-called " private improvement rate " is likewise in no proper sense a tax. Under a prtvato improvement complicated mass of parliamentary and judge- "''°'' made law, the owners of houses in urban districts are required to provide, as part of the equipment of the houses, efficient sani- tary appliances within the premises, and means for the effectual discharge of the sewage ; a satisfactory supply of water ; a pro- perly paved, channelled, and drained street or approach ; and the means for lighting the latter. In rural districts some of these obligations are either not existent or only attach in a modified form or degree. In both urban and rural districts the owners of , land have some minor liabilities of a corresponding character. When the obligations thus imposed on property-owners are ■neglected or imperfectly discharged, the local authority has power Ito perform the duties and to charge the owners with the cost. These charges are recoverable either by summary process or by means of " private improvement rates." The Public Health Act, 187s, imposes one-fourth of the burden of a private improve- ment rate upon the occupiers of the affected houses. The unfairness and impolicy of this arrangement were pointed 1 6 Local Taxation and Finance. out by Sir Hugh Owen in 1884, but although his view passed unchallenged, no action has been taken in the matter. But a further burden of very serious weight is thrown upon the general body of ratepayers in consequence of the frequent inability of the local authorities to make the charges re- covered by either plan cover the cost of the private improvement works undertaken by them. An examination of the printed accounts of many municipal corporations will reveal the existence of a large deficit resulting from such works, which, with the interest and instalments of private improvement loans, value of the services of corporation officials, legal expenses and other costs, imposes a serious charge upon the ratepayers. The methods of valuation, assessment and collection pursued in the levying of rates will be more fully described in the next chapter. The revenue from waterworks, gasworks, markets, and ceme- Profitobieunner- teries is chicfly in the nature of the price of com- takiags. modities or privileges sold or let. Against it must be set the expenditure by which this revenue is earned or otherwise obtained before the profit can be ascertained. This can only be imperfectly done by the use of the figures in Table VII., owing to the inclusion of the interest on loans payable in respect of such undertakings and properties under the general heading of " Payments in respect of Principal and Interest of Loans." It may, however, be taken as a fact that gasworks and waterworks are usually profitable undertakings, which yield a surplus revenue available for the relief of the local rates. Markets and cemeteries are much less uniformly sources of profit, the deficits which result in a large proportion of cases being a charge on the public rates. With the exception of tramways and har- bours, the other undertakings classed in the same category in Table V. are rarely more than partially reproductive. The revenue from tolls, dues, and duties includes market tolls and harbour dues, and a great variety of more or Tolla and duel. " ■' less analogous charges. With a few exceptions there are no longer any taxes of the octroi class in England and The Existing System. 17 Wales, the coal and wine duties in the City of London, which until 1889 formed an important exception, having now entirely ceased to exist. The City authorities still levy a metage duty of three-sixteenths of a penny per hundredweight on all grain brought into the port of London, which yielded a revenue of ;^i8,634 in 1890. The other exceptions are found at Newcastle-on-Tyne and Carlisle, where heavy tolls are levied upon the merchandise which enters or leaves those cities. These relics of the dark ages operate unequally and injuriously upon particular trades, are excessively costly, and should be consigned to oblivion without delay. The local revenues from property and investments consist chiefly of ground-rents and other rents received property and invert- by a small number of municipal corporations °'™'°' which are fortunate enough to be the owners of considerable landed estates ; of rents of portions of municipal buildings and payments for the use of public halls, etc. ; and of the interest and dividends on investments for sinking fund purposes. The local revenues from Treasury subventions and allocated taxes have recently been so largely developed and augmented as to require a somewhat lengthy notice, and they will, therefore, be specially dealt with in a separate chapter. The outstanding debt of the local authorities of England and Wales on the 2i;th of March, 1891, amounted to the large sum of ;^2oi, 215,458. No complete statistics of the local indebtedness were compiled until recent years, and its growth cannot therefore be fully exhibited. In Mr. Fowler's report of 1893, he gave a statement of the debts outstand- ing in 1868 which he had been able to trace. These amount to ;^43,8i3,ooo, of which no less than ^^18,899,000 is debited to harbour, pier, and dock authorities ; but he states that the list is known to be incomplete. The first year for which the official local taxation returns purport to give the total amount of the local debt is 1874-75. In that year it is stated to have been ;^92,820,ioo. In 1879-80 it had increased to ;^i36,934)07o. in 1884-85 to ;£■! 73, 207,968, and in 1890-91 to ;^2oi, 215,458. The allocation of the loans to their respective purposes has only 1 8 Local Taxation and Finance. been accomplished in the returns for 1884-85 and subsequent years, but the figures for 1884-85 and 1890-91 in Table X. will repay an attentive study. Whilst the rapidity of the recent growth and the magnitude of the total of the local debt are, at first sight, somewhat alarming, there are reassuring facts which should also be borne in mind. In the first place, the greater part of the thirty-one and one-half millions owing in respect of harbours, piers, docks, and quays is not secured upon the local rates, and is not, therefore, a public liability in the ordinary sense. Then, too, the debt on gasworks, waterworks, markets, and cemeteries is usually secured primarily upon the revenues of these undertakings, and is only a charge on the rates to the extent to which those revenues may be found insufficient to meet the payments for principal and interest. As these undertakings are mainly commercial enterprises which were originally in private hands, and were then sources of considerable profit to the owners, and as their acquisition has been, in most cases, deliberately undertaken in the public interest, it is fair to assume that, even in those cases where a charge falls upon the rates, there is a balance of advantage to the community arising out of the greater excellence or the lower price of the supplies or conveniences obtained. In the great majority of cases the public management of gasworks is productive of considerable money profits, which are available partly for the redemption of the undertakings and partly for the relief of the rates. This is less generally, but still very largely, the case also with waterworks and markets ; but cemeteries are at present a charge upon the rates in a large proportion of the cases in which they belong to the local authorities. This is chiefly due to the necessity for repaying a portion of the purchase money each year, and to the present provision, as a matter of prudence, for enlarged needs in the future, owing to the growth of population and to the closing of the churchyards for sanitary reasons. It is interesting to learn from Mr. Fowler's report that, of the present total local debt, ;^i83,9i5,i89 is owing by purely urban authorities, ;^i3,393,4io by authorities partly urban and partly The Existing SysteM. 10 rural, and only ;^3,9o6,8s9 by purely rural authorities. From other detailed figures in that report we are enabled to deduce the fact that the bulk of the debt is, indeed, the outcome of a great development of municipal or other public enterprise in recent years, chiefly in the metropolis and the provincial boroughs. This spirit of enterprise is displayed, in a manner equally signi- ficant, both in the commercial undertakings from which profits may be looked for and in those departments which are a recogni- tion of unremunerative public duties. The total debt is almost equally divided between the two classes, and the portion applic- able to the latter class will be seen to fall mainly under the heads of sanitation, education, and public improvements. When it is remembered that the present generation is not only paying the interest, but also repaying a large part of the principal of these loans, the determination of a self-governing people to incur the cost is an evidence of the development of public spirit in a highly admirable degree. The aid of the national government in the raising of loans has been more or less available by the local authorities since 1792, when special Acts of Parliament were passed authorising loans by the Treasury for local purposes. In 18 17 a body called the Public Works Loans Commissioners was constituted by statute for the regular consideration and grant of applications for loans for local public works of certain specified descriptions, and large sums have been advanced by the Treasury on their advice. But owing to the acceptance of as little as three per cent, interest, and of insufficient security in certain cases, considerable losses have been sustained. Since 1876, the rates of interest have been ad- vanced; and in 1887 a local loans stock was created, by which the advances of the government to the local authorities were dis- tinguished from the remainder of the national debt. Up to that time ^106,000,000 had, in all, been advanced throughout the United Kingdom; of which _;^5 7, 200,000 had been repaid, ;^i 1,600,000 remitted as bad debts, and ;^37,2oo,ooo remained outstanding. 1 The bulk of the existing local debt has been ' Mr. Goschen's Budget Speech, 1887. 20 Local Taxation and Finance. borrowed from private individuals under local Acts of Parliament, and in the open market under the Local Loans Act of 1875. The periods formerly allowed for the repayment of local debt were often excessively long, extending in one case to no years; but recently a much greater degree of strictness has been ex- ercised by Parliament and the Local Government Board in requiring more rapid repayment of all fresh loans. On the whole, whilst the magnitude of the total local debt and of the sacrifices imposed by it upon the ratepayers is sufficiently serious, there is no ground for alarm. The very large present sacrifice entailed under the system of comparatively rapid repayment is in itself both a salutary check upon extravagance, and a guarantee of solvency which is likely to become increasingly operative as time goes on. The bulk of the present local debt is held at rates of interest ranging from three to three and one-half per cent-, and is regarded by lenders as a secure investment. Even lower rates of interest are likely to prevail in the future, the Liverpool Cor- poration having lately succeeded in issuing a new af per cent, loan in the open market at the price of 97'. CHAPTER III. Rates: Valuation, Assessment, and Levy. The local rates of all kinds are (with certain exceptions which will . be referred to subsequently) charged to the individual ratepayers I in the form of taxes, calculated at so much in the pound on the '" rateable value " of the premises or property occupied by them as will raise the required amount. Thus, if j^i,ooo be required in a given area, and the " rateable value " is ^20,000, the rate in the pound will be one shilling, and so on. This rateable value is now copied into the ratebooks from parish valuation lists, pre- pared by the overseers under the supervision of the union assess- ment committees of the boards of guardians. The form of valuation list now in use provides for the insertion in two columns of the " gross estimated rental " v^„^t,„„ u.i^oroBi and " rateable value " of each holding ; the former "="™""' ""*'• being based on the yearly rent which a tenant would pay who was required to pay also the tithe and the usual tenant's taxes. In those cases where the tenant undertakes to effect the repairs usually falling upon the landlord or any other of the usual land- lord's charges, a corresponding addition is required to be made to the amount of his rent in assessing the " gross estimated rental." Where, on the other hand, the landlord contracts to pay the tithe or the usual tenant's taxes, a corresponding deduction is made for assessment purposes. Having thus found the gross estimated rental, the rateable value is arrived at by deduct- „ , „ , ' '' Eateablo value. ing therefrom such a proportion as will cover the average outgoings for repairs, insurance, and renewals. Prior to the passing of the Parochial Assessments Act of 1836, there was no statutory regulation of valuations whatever, the practice of the overseers and county justices being theoretically governed 2 2 Local Taxation and Finance. by judges' decisions. But as these decisions were largely of a negative character, and were not always consistent with each other, the utmost diversity of practice prevailed. In some cases the valuations were of very old standing, and, even if they were originally fair and equal, had long ceased to be so. In most cases gross inequalities existed, and no pretence of uniformity of prac- tice was made in parishes contributing to a common county rate. Undervaluation was generally prevalent, not only because the valuations were old, and revaluations were obnoxious to the occupiers and owners of improved properties, but also with a view to the evasion of a due share of the county and hundred rates. The Act of 1836 did something to remedy this, and further progress has been made under the Union Assessment Committee Act of 1862. These Acts partially codified the law of valuation, and provided machinery for the amendment of the valuation lists. But both the codification and the machinery are still extremely imperfect. Questions of interpretation and ap- plication continue to exercise the ingenuity of the judges, and the existing law of rating has been largely made by them. This vataationofriuways. is particularly the case with the rating of railways, canals, etc. tramways, gasworks, waterworks, canals, mines, quarries, and certain other kinds of business premises. The rent which a hypothetical yearly tenant would pay for such properties is often impossible of ascertainment, or even of approximate estimation. It has, however, been settled that wherever the business is in the nature of a monopoly or capable of yielding such a scale of profit as would enable the landlord to raise the rent payable by a hypothetical yearly tenant beyond the rents payable in other trades for premises of corresponding extent or character, the valuation for rates shall include the artificial en- hancement. Thus, free public-houses will let at FubliC'houBes. rents from five to ten times larger than the same premises would command if occupied as shops or private houses. The excess is that part of the profit of the trade which the owner of the premises is able to appropriate, but it is held to be as- sessable for rates. In the case of tied houses the nominal rent is Rates: Valuation, Assessment, and Levy. 23 often very low, the excess being obtained in the prices of the articles which the occupier is bound to purchase from the land- lord. But the valuation is required to be estimated as though the houses were free. This principle has been applied by the judges to the cases of gasworks, waterworks, tram- 8^,„„k» ana water- ways, and lines of railway ; but as a letting value ""'"■ is difficult to estimate by any other method, the profit of the undertaking has been held to be the true basis of valuation. Evidence of trade profit has been held to be admissible, as bear- ing upon the question of value, in considering the assessments for rates of canteens, railway refreshment rooms, race courses, and soke mills. Railway stations and warehouses are rateable separ- ately from the line of railway, upon valuations reached by the rule of letting value applicable to buildings generally. A similar reservation should also be noted in regard to tramways, canals, gasworks, waterworks, and the other cases in which special methods of valuation have been invented. Canals, being open to the use of any carrier who chooses to pay a statutory toll, are valued in relation to the ^ tolls only, but inclusive of those paid in the charges on goods carried by the canal proprietors who are also carriers. Mines of tin, lead, and copper Metalliferous miueB, are valued mainly upon the basis of the rents and royalties payable for such of them as are held on lease under conditions held to be normal. Coal mines and other mines, quarries, pits, and brickfields are valued ^^^^ ^^^^ in proportion to output, but in such a manner as to cover not only the rent and royalty, but the estimated rent of the lessees' works and plant in addition. The cases of mines, quarries, pits, and brickfields are to be distinguished from other rated subjects in one important respect. The rent paid or assumed is very largely the price of the corpus of the material got, and partakes, to this extent, of the nature of purchase-money. The exhaustion of the coal or other material leaves the mine or quarry worthless, and, as no allowance is made in respect of the capital thus consumed, it is clear that these sub- 24 Local Taxation and Finance. jects are rated on a scale much more onerous than that applicable to agricultural land and dwelling-houses, A similar distinction may be made in respect of mills and Miin and mauu- manufactories containing fixed machinery, the lactoriea. \^\xtx being rateable together with the land and buildings to which it is attached. Although the Acts of 1836 and 1862 gradually effected a great improvement, the machinery for carrying this scheme into opera- tion still remains inadequate and inefficient, except in the metropolis. In the remainder of England and Wales no statutory provision exists for the obligatory periodic revaluation of the rated properties, and no effectual mode of ascertaining the rents and conditions of tenancy of the individual holdings has been applied to local tax assessments. A further element of con- fusion is furnished by the absence of uniformity in the scales of deduction for repairs, renewals, and insurance adopted in the provincial unions. No scale is prescribed by statute (except for the metropolis), and considerable diversity prevails in practice. In the metropolis the like unsatisfactory condition of affairs was ended by an Act of 1869, under which the national and local valuation proceedings are unified, and a single valuation list governs all assessments in the parish for rates and taxes in respect of real property. A uniform scale of deductions is also prescribed by the Act for all the metropolitan parishes. The progressive increase of the rateable value in England and Wales is shown in Tables I. and XL, the latter of which gives a comparison of these figures with those of the valuations for the national real property tax in certain years. It has already been stated that the local rates are assessed upon County rate and other the basis of the Valuation lists prepared by the aweasmen s. parochial oversecrs. This is generally true alike of the rates made and collected by the overseers themselves (comprehended under the general head of poor rates) and of those made and collected by other local authorities. Owing, however, to the lack of uniformity in the preparation of the provincial valuation lists, the county authorities have been empowered to Rates: Valuation, Assessment, and Levy, 25 prepare an independent scheme or basis of contribution for the purpose of the county rates in each county, exclusive of the metropolis. The national property tax assessments are utilized for this purpose, and revised quotas or apportionments for the several parishes in each county are fixed at intervals of about seven years. Having determined the parochial quotas, they leave the overseers to levy the individual contributions as a part of, or addition to, the poor rates. The meaning of this is that whilst the parish valuation list is held to be a fair basis for the distribu- tion of parochial burdens and of the common charges of the union, it is not accepted as the basis of contribution by the several parishes to the common county charges. The valuation lists are, however, accepted for the purposes of the general dis- trict rate and the borough rate, notwithstanding that most of the boroughs comprise several parishes within the municipal area, and that some are situate in more than one union. An important modification has been introduced into the practice of rating in connection with the Lighting and uodiiioatioM of Watching Act of 1833, and the series of Sanitary '■»'"'e "y"™- and Improvement Acts which commenced in 1848. Watching and lighting rates under the first-mentioned Act are chargeable only on one-third of the full rate in the pound when levied in re- spect of land and tithes ; lines of railway and canals being com- prehended under the terra "lands." Sanitary rates in urban districts, and those for special sanitary purposes in rural districts, are chargeable in respect of agricultural land, tithes, railways, docks, and canals on one-fourth only of the rateable value. No such concession is made in respect of that part of the municipal taxation of corporate towns which falls under the head of borough rate, although much of the expenditure to which the proceeds are applied is of a similar character. A further modification has been introduced by the creation of the Metropolitan Common Poor Fund in 1867. Each of the thirty-two Metropoutan . , 1. • , •! . i ii_ * Common Poor Fund. London parishes or districts contributes to this fund in proportion to its rateable value, and receives from the fi}nd in return a grant in aid of certain classes of expenditure, the 26 Local Taxation and Finance. grant being proportionate to that expenditure. The effect of this arrangement is that the wealthier districts, having a high rateable value and low expenditure, are taxed to assist the poorer districts where the situation is reversed. In the year 1890-91, the total expenditure charged to the fund was ;^936,479, and twelve districts paid ;^2i3,93i more than they received. In other words, the twelve wealthier districts paid that sum towards the expenses of the remaining twenty. The total amount of the poor rates levied in London in 1890-91 was _^4,35o,oi2, of which ^^2,435,164 was expended in poor relief; and of this latter sum nearly two-fifths were charged to the common poor fund. Having regard to the manner in which the poorer classes are massed together in certain quarters of London, the wealthier classes being chiefly resident at the West End, this appears to be an equitable arrangement. It is idle for the rich and aristocratic parishes of the West End of London to disclaim responsibihty for the relief of the poor in the East End, and objections to the arrangement are usually directed to the fact that, whilst London is taxed as a whole for part of the cost, the expenditure is in the hands of the parochial or union guardians and officials. Under certain circumstances this might easily lead to abuse, and would then give rise to a valid objection ; but the grants from the Common Poor Fund are so arranged as to minimize the danger of extravagance. The principle embodied in the Metropolitan Common Poor Fund has recently received a wider application by EcLualisatlon Fund. x >. j the passing of the London (Equalisation of Rates) Act, 1894. This statute provides for the formation of a fund, to be known as the Equalisation Fund, by the London County Council ; its amount being equal to a rate of 6d. in the jQ, each year, on the rateable value of London. The parishes contribute to the fund on this basis by half-yearly instalments, the distribu- tion of the sum thus raised being made in the shape of grants to the sanitary authorities on the basis of population. Contributions are only actually paid in cases where they are not equalled by the grants, and then only to the extent of the difference. The differ- Rates: Valuation, Assessment, and Levy. 27 ences are added to the London county rate, and are paid over by the county council to the sanitary authorities of those districts in which the grants exceed the contributions. As consequences of this measure, it is anticipated that the City of London will pay 5jd. in the £^, estimated to yield fydjzti, as a net contribution to the sanitary expenses of the less wealthy and more densely populated portions of the metropolis ; St. George's, Hanover Square, will pay 4d. in the £, ; Kensington, 2d. ; and Paddington, ifd. On the other hand, Bethnal Green will receive a net grant equal to 8jd. in the £; Mile End, Old Town, one of 7|d.j and Plumstead one of 7^d. In the three latter parishes the popula- tion is high, but the rateable value low. In Islington, where both are high, the net grant will be 3d. in the £ ; and in St. Pancras, with a nearly equal rateable value but smaller population, id. only. The grants payable under this Act are made dependent upon the efficiency of the sanitary administration of the local authorities, and the Local Government Board is empowered to divert into the fund for the following year the quotas of such authorities as they may judge to be in default. There can be little doubt that the principle upon which the Metropolitan Common Poor Fund and the London Equalisation of Rates Fund are based is destined to have a still more ex- tended application in the future. The general provisions of the rating Acts with regard to the levy of rates are based upon the presumption of the '■ '^ '■ Levy of rates. liability of the occupiers, and, with few unim- portant local exceptions, it is from the occupiers alone that payment can be exacted under the general compulsory powers thereby created. Owing, however, to the great difficulty of collecting heavy taxes from poor people otherwise than in the rent of their dwellings, the legislature has considered it expedient to give a discretionary power to the local authorities, to assess the owners of dwellings of small value, and to collect the rates from them, instead of the occupiers. With regard to the poor rates and the other rates collected by the parochial overseers, the option of adopting the modifying 28 Local Taxation and Finance. Acts is placed in the hands of the parish vestries. The Poor oomporition. for poor ^^'0 Assessmciit and Collection Act, 1869, em- rat«!, etc. powers the vestry of a parish, at a meeting convened for the purpose by notices affixed to the church and chapel doors, to order that the owners of all rateable hereditaments, which include dwelling-houses and which do not exceed a certain prescribed limit of rateable value, situate within the parish, shall be rated to the poor rate in respect of those hereditaments, instead of the occupiers. The prescribed limit of rateable value in the metro- polis is ;£^2o ; in Liverpool £,\2) > ^^ Manchester and Birming- ham ;^io; and elsewhere ^S. The vestry having made such an order, the overseers are compelled to rate the owners of all such properties falling within the prescribed limits in the parish ; but the owners are entitled to a deduction or abatement of 15 per cent, or 3s. in the ;£ from the rates thus falling to be paid by them. A further privilege is given to any owner who is rated in this way by order of the vestry, m'z., that of requiring the over- seers to rate him for all hereditaments of the prescribed descrip- tion and value possessed by him in the parish, whether occupied or not, subject to a further abatement not exceeding 15 per cent. If, as is usual, the overseers grant the full additional 15 per cent, thus allowed to cover empties, the total allowance under this Act will amount to 30 per cent., or 6s. in the ;^. These provisions have been extended to the borough rate and watch rate, where such rates are levied by the overseers, by the Act 45 and 46 Vic. c. 50, and they are also operative as regards the county rate, the rural district rate, and the rural parish rate. In parishes where the powers exercisable by the vestry are not in use, the Act of 1869 permits voluntary agreements between the overseers and owners of property for the attainment of the like objects. These voluntary agreements extend to all rateable here- ditaments, whether dwelling-houses or not, within the prescribed limits of rateable value; but the total abatement authorised is not to exceed 25 per cent. The agreement need not, in such a case, embrace all the hereditaments within the limit of value owned by the same person in the parish, provided the overseers Rates: Valuation^ Assessment, and Levy. 29 and owner agree to the exclusion of some of them. The over- seers cannot be compelled to enter into such agreements, and as they are subject to the control of the vestry, the latter body is really the deciding authority as to what use, if any, shall be made of the powers conferred by the Act. As might be expected, compounding is not extensively adopted in rural districts. In the towns it is in general, although not universal, opera- tion. Compositions for the general district rate are, in the larger cities and boroughs, mostly regulated by local Acts. The provisions of this class of legislation cannot genCTS'Siiti?" rite, be summarised except by the word chaos. In urban areas not governed under special local Acts, the provisions of the Public Health Act of 1875 are nominally in force, and are more or less operative. Under this Act the owner may be assessed to the general district rate, in lieu of the occupier, at the option of the urban authority, (i) where the rateable value of the premises does not exceed ;^io ; (2) where the premises are let to weekly or monthly tenants ; or (3) where the premises are let in apart- ments, or the rent is payable oftener than once a quarter. But he is only to be assessed upon a reduced rateable value, which may be as low as two-thirds, but may not exceed four-fifths of the rateable value on which the occupier would, if rated, be required to pay. If he is rated for all his tenements, whether occupied or unoccupied, the payment is reduced to one-half. These proportions are much too low, the commission allowed in the case of poor rates being found more than sufficient for the attainment of the object in view. The acceptance of any com- position is left to the discretion of the urban authority, and in London and some other places the heavy loss involved has led to a considerable restriction of the practice of compounding. A little-known clause of the Poor Rate Assessment and Collec. tion Act, 1869, gives the occupier of a rateable hereditament of any value, if it be let to him for a period not exceeding three months, the right to deduct the poor rate from his rent. He is, moreover, not compelled to pay at one time, or within four 30 Local Taxation and Finance. weeks, a greater amount of this rate than would be due for one quarter of the year. This provision is not applicable to any rate other than the poor rate, and as the need for its application is largely obviated by the compounding clauses, it is not exten- sively operative. The occupiers of small tenements in towns very generally prefer to pay all rates and taxes, and the charge for the domestic water supply, in the form of rent ; and as the owners find no difficulty in obtaining the extra rent, they {i.e., the owners) are usually the first to set in motion the compounding machinery described above. The payment of rates can be enforced, when necessary, by the BecoveryofmtMin issue of a summons requiring the defaulter to arrear. appear before the local justices or magistrates to show cause why the rate has not been, or should not be, paid. If the rate is, at the hearing, shown to be due and unpaid, the overseers or the urban sanitary authority respectively for their several rates may require the issue of a distress warrant empower- ing them to seize the goods and chattels of the defaulter. The costs incurred by these proceedings, or any of them, are recover- able as part of the debt, unless the validity of the demand can be disproved. The proceedings are practically the same whether the person in arrear be the occupier or the owner of the rated Eicusai on ground of premises, Powcr to excuse from the payment of poverty. ^^^^ ratcs and the rates collected therewith on the ground of poverty is given to the justices or magistrates if the overseers consent. A similar power is vested in the urban sani- tary authority [i.e., the town council or urban district council) in respect of the general district rate. The payment of rates is, in all cases, a personal liability. An occupier is not liable to pay rates due from the previous occupant of the premises, and the owner is not liable unless specially rated under the provisions described above. In no case do the rates become a legal charge on the rated property itself. The system in force in England and Wales for assessing and levying local rates is extremely complex and confusing, and pro- portionally costly, inefficient and vexatious. The defects are the Rates: Valuation, Assessment, and Levy. 31 more inexcusable inasmuch as considerable reforms have long since been effected in London and in Scotland and Ireland with good results. It is of the greatest importance that these reforms shall be supplemented and extended, and applied to the whole of the United Kingdom without further delay. CHAPTER IV. Treasury Subventions and Allocated Taxes. Table IX. contains a list of the Parliamentary grants in relief of local taxation, and a second list of charges of a local nature borne by Parliamentary votes. The dates at which the grants and pay- ments were first voted are also given, in order that the table may have an historical value. A reference to it will show that these grants and charges are wholly of modern origin, and that their present magnitude is chiefly of recent growth. The history of these grants and transferred charges is one of suc- cessive concessions to the demands of the landed History of grant!. interest ; for although the population of the towns has shared in the relief obtained, the agitation in Parliament, and outside, has been conducted almost entirely by the country party. The grants made in 1846 by Sir Robert Peel were avowedly de- signed for the advantage of the agricultural interests, and those conceded in 1874 and 1882 had a similar object. The great ad- ditions in 1888, 1889, and 1890, although made under pressure which came chiefly from the same quarter, were distributed with due regard to the claims of both urban and rural communities. They were also accompanied both by a reform of some of the local authorities and by a change of the form of many of the grants. A comparison of the last two columns of the table will show that most of the grants to the local authorities, except those in respect of education, have been withdrawn, and certain specific taxes substituted. The taxes thus transferred for the year 1893-94 are shown in Table XIX., the English share of the total yield being ;66,io6,i97. The discontinued grants actually received by the local authorities in England and Wales during the financial year ended March 31, 1888 (including 32 Treasury Subventions and Allocated Taxes. 33 ;^249,342 received in that year for the first time), amounted to ;^2,85i,85o. The additional relief given in that portion of the United Kingdom in 1893-94 was therefore ;£'3,254,347. This is rather less than the net gain in 1891-92, in which year the extra aid or relief of the rates thus afforded was equal to 4|d. in the ;^ in London, 6d. in the county boroughs, and s^d. in the administrative counties. The ceded taxes are wholly managed and collected by the officials of the national government, but the proceeds are periodically transferred to special accounts at the Bank of England, and distributed therefrom amongst the local authori- ties. The English distribution is, in the first instance, made to the county councils (created in 1888) and the councils of such municipal boroughs as have had conferred upon them the rank of independent counties; these embracing between them the whole of England and Wales. As these county and borough councils are purely representative bodies, and possess the con- fidence of the people, the expenditure of these large sums of national money by them would appear, on the face of it, to be a less risky experiment than it would have been before the reform of county government in 1888, or if the distribution were made to bodies of a lower rank or of a non-representative character. This is, however, not wholly a correct inference. A large part of the English share of the transferred taxes is passed on by the county and borough councils to boards of guardians and sanitary autho- rities, over whom they have no control or power of supervision, and as to whose fitness for the duty of expending national moneys there is widespread doubt. The purposes to which these moneys are applied embrace the maintenance of the police, main roads, poor law ^ ^ ^ How applied, union officers, pauper lunatics, sanitary officers, vaccination, registration, technical instruction, and intermediate education. With the exception of poor law union officers and pauper lunatics, these purposes are such as may fairly be regarded as matters of national concern, and, if the moneys are judiciously and economically expended by the local authorities, no objection would 34 Local Taxation and Finance, remain to the transfer of the burden to the national exchequer. But in this question of judicious and economical expenditure lies the kernel of the matter. Economists have in general been strongly averse to the plan of entrusting local authorities with the expendi- ture of moneys raised by national taxation. Mr. Senior in his evi- dence before the Burdens on Land Committee in Mr, Senior quoted. 1846, expressed the opinion that the transfer of the cost of poor relief to the Consolidated Fund would be ruinous, especially to the labouring class ; that it would produce laxity of administration, and destroy industry and frugality. He thought that the transfer of even one half of the cost would discourage economy and be a temptation to create charges, ofiSces and patron- age. Mr. Fawcett, writing in IBS'?, was not less Mr. Fawcett quote*. ° . emphatic in his opposition : — " No device [he says] that can be imagined would more effectu- ally weaken all the guarantees for economy. Experience more and more confirms the opinion that the great bulk of the people think that money can be taken out of the Consolidated Fund just in the same way as water is drawn from a perennial fountain, and as if the supply were rained down from heaven." ^ This statement is undoubtedly supported, and the fears of Mr. Senior have been largely confirmed, by the manner in which the grants which existed down to 1888 were made to subserve purely local and private ends. It has also been repeatedly demonstrated in Parliament and elsewhere that no corresponding or adequate reduction of rates has ever followed the grant of national moneys in relief of local taxation. One more objection appears to apply to the grants for union Grants to a.d Of poor ''^''^^^ ^"<^ P^^P^"^ lunatics. These expenses '"■ts- have, in rural districts, for three centuries been a burden on the land, and so far as the grants reduce that burden they are a gift from the nation to the land-owners. Mr. Fowler quoted. ^ Mr. Fowler, the late President of the Local Govern- ment Board, refers to this point in his report on local taxation as follows : — 1 " Political Economy,'' 6th ed., p. 604. Treasury Subventions and Allocated Taxes. 35 " There is another matter to which I must draw attention in con- nection with this table. It shows clearly that prior to the passing of the Local Government Act, the hereditary poor rates had already fallen to a very remarkable extent since 1868. This fall was due partly to the decrease of pauperism, partly to improved poor law administration, and partly to the assistance given to the rates by the government grant for pauper lunatics, instituted in 1875, which had grown in 1889 to ;^49S,64i for the whole of England and Wales. By the Local Government Act of 1888, a new grant, amounting to no less than ;£967,793 a year, in respect of the salaries of certain union officers and the cost of drugs and medical appliances, was made payable to the boards of guardians outside London out of the imperial revenue transferred by that Act to county and borough councils. The relief afforded by this grant was therefore given, not to any of the new rates that were pressing with such constantly increasing severity on householders, but to a rate which for generations had constituted an hereditary burden on the land, the rate in the £, of which was steadily falling, and which apparently stood in less urgent need of extraneous assistance than any of the new rates. " I may add that this rate had already been relieved by no less than four treasury subventions, without including the grant for awards to public vaccinators, mz., the grants (i) for teachers in poor law schools ; (2) poor law medical officers ; (3) pauper lunatics ; and (4) registrars of births and deaths. It should also be borne in mind that the new grant was in no sense an efficiency grant, its amount being determined solely by the amount of the salaries, re- muneration, and superannuation allowances of union officers paid by each board of guardians during a year antecedent to the pas- sing of the Act under which it was made payable. Its effect has simply been to transfer a part of the hereditary burden on real property to the imperial revenue." There is something to be said for the relief of most of the other burdens enumerated above from the national ueB^iij „t grafts ^ , , ,, 1 J J other casea. revenues. There is an easily comprehended 36 Local Taxation and Finance, reluctance on the part of the local authorities and their constitu- ents to tax themselves for new purposes, and for purposes wliich confer no exclusive local benefit. So long, therefore, as the ex- penditure is optional, many localities will elect to forego reforms, improvements, and new departures, rather than incur the cost. Even when made obligatory by Parliamentary enactment, it still remains possible to dwarf them to the smallest permissible limits, or to starve the administration. By coupling the grants for police with the attainment of a fair standard of efficiency, much has been done in the past to increase the effectiveness and raise the char- acter of the local forces. The grants for vaccination and registra- tion have in like manner secured the performance of certain functions which would otherwise have been wholly neglected or very imperfectly effected in a very large number of localities. The grant for main roads is fairly justified by the results secured, but the cost is heavy. The expenditure on sanitary officers is at present largely without result in many places, owing to the lax administration of the sanitary laws by the local governing bodies. The grants for technical instruction and intermediate education (the latter in Wales alone) have only existed since 1890, but they are rapidly building up a great and excellent work, which, al- though much needed, was likely to have remained undone without the stimulus and aid thus afforded. In both directions, a vast amount of voluntary effort and public spirit has been evoked, which only needs wise direction to ensure excellent results before long. It now remains to refer to the form recently given to these Form and nature ot grants. When, in 1 888, the former subventions ^^■^- ^-ere mostly withdrawn and the license duties and probate duty substituted, the change was put forward as a great reform. The grounds for this claim are, however, not beyond dispute. The chief ground of objection to the older form was its encouragement of lax and wasteful expenditure, and this holds good as to the present form in an equal degree. The practical result is the same whether the subsidy is drawn from the national treasury or from one or more of the streams which supply that Treasury Subventions and Allocated Taxes. 37 reservoir. The only real change of importance lies in the fact that, whereas the grants were formerly proportioned to the amount of certain classes of expenditure, they are now primarily propor- tioned to the yield of particular sources of revenue. If this is a gain, it is largely neutralised by the subsequent transfer of part of the proceeds to the lesser local authorities upon the old basis of expenditure, and without guarantees for efficiency or economy. But the gain is otherwise discounted by the restraints imposed upon the operations of the Chancellor of the Exchequer in his management of the national finances. The probate duty grant has been made to bear the character of a contribution from per- sonal property to the relief of local taxation. This is an error. No change was made in the rate of the probate duty, and, as no reduction was either asked for or expected, the relief of local taxation has not been procured at the expense of the payers of the probate duty. The grant was, in fact, made at the expense of the general body of national taxpayers, precisely as in all the other cases. The ear-marking of the probate duty (in future it will be the estate duty) and the beer and spirit duties cannot fail to be attended with undesirable influences (apart from the mere limita- tion of the yield) upon the national revenue and finances. But without presuming to dilate on these, it would appear to be de- sirable, on general grounds, to withdraw the grants out of these duties at the earliest possible opportunity, and to substitute revenues capable of local assessment and collection. The clear distinction between local and national taxes, and the association of the duties of raising and expending the pubhc monies, which all economists agree in recommending, would thus be restored, with distinct advantage to the public interests on both sides. The transfer of the license duties has much to recommend it ; and if arrangements could be made whereby their ^^^^^^^ ^^^^^^ assessment and collection would likewise be trans- ferred to the county councils and councils of county boroughs, the conjoint distribution of responsibility and advantage, so desirable in such matters, would be attained. At present the officials 38 Local Taxation and Finance. of the central government are required to perform invidious and unpopular functions for authorities which should be competent to perform them for themselves ; whilst the latter are deprived of the opportunity of making the duties more productive, which their command of the policCj and, in towns, of collectors who already go over the ground continually, should give them. The one drawback by which the transfer of the license duties may be attended is that it will render the adoption of any scheme of local option, as applied to the sale of intoxicating drinks, very consider- ably more difScult than it otherwise would have been. Possibly some mode of overcoming the difficulty may yet be devised, but, so far as can be now seen, the transfer imposes a penalty upon those localities which may wish to mitigate a great evil in that particular manner. CHAPTER V. The Incidence of Rates. Few, if any, of those acquainted with the subject will be disposed to disagree with Mr. Goschen's opinion that "the i . . Mr. Goachen qnoted. question of the incidence of rates as between \owners and occupiers" is "the most important point in the whole controversy respecting local taxation." ^ Although this opinion was expressed more than twenty years ago, it remains at least equally true at the present time. The need of a speedy solution of the problems involved in the subject is, indeed, rrgent need oi Mttie. far more urgent than when Mr. Goschen wrote ""^'o'lne""""- his well-known report, the burden of the rates in urban districts having grown considerably heavier, and the need for further ex- penditure on a large scale for municipal and other local purposes having become more generally recognised in the interval. Not only is such a solution essential to the successful handling of the numerous proposals for legislation relative to the relief of the rates, the division of the rates, the taxation of ground values and kindred matters; but equally so in relation to town improvements, artisans dwellings, and numerous other developments of a rapidly-enlarging civic life. Until it is known whether the burden of the rates can be shifted by the first payers to the shoulders of other classes, or not ; and, if shifted, in what proportions and to whom ; we remain in ignorance whether our present system of raising thirty millions a year is a just and rational one or a gigantic fraud. The wide- spread doubt which has so long prevailed upon this point has paralysed legislative action in the directions referred to until the sense of injustice has become almost universal, and the consequent 1 " Reports and Speeches on Local Taxation," Preface, v. 39 4b Local Taxation and Finance. discontent is fast assuming grave proportions. A continuance of this uncertainty would leave the country face to face with the alternatives of legislation in the dark or helpless inactivity. In these circumstances, the subject of incidence will be here con- sidered at some length, in the hope of dispelling, in some degree, the obscurity which now enshrouds it, and of assisting to make known the theoretic lines upon which legislative action, where re- quired, should be based. The chief difficulties arise in connection with urban rates, and it is in urban areas that the question of incidence has become most urgent. But it will be convenient to follow the usual and more natural order, and to deal first with local taxation in rural Batea on agricultural districts. This consists mainly of rates levied in "" ■ respect of the occupation of agricultural land, and it may be stated at once, that although these are paid in the first instance by the occupiers, the ultimate incidence is normally upon the property. The theory thus briefly stated is that which has been uniformly held by the leading economists of the past, and it is not less clearly maintained by those of the present day ; except that greater prominence is given by the latter to the disturbing elements which may render the conditions abnormal, and thus create exceptions to the general rule. The general theory is based upon the assumption that whilst the corn- Theory of Incidence. petition of farmers for agricultural holdings will always be sufficiently active to secure to the owner, in the shape of rent, all that the land is capable of yielding after the farmer has received a return on his capital and a remuneration for his labour and skill equal to those obtainable in other trades with which farming may be fairly compared, the farmer will be able, taking one year with another, to secure not less than this return and remuneration for himself. He will, when treating for the farm, or in any subsequent readjustment of the rent, take the rates into account as one of the necessary expenses of his trade, and will measure his ability to pay rent by the relative weight of these expenses. The process and result are similar to those which govern the relations of tithes and rent. Where The Incidence of Rates. 4 1 there are no tithes, the tenant can afford to pay, and com- petition will compel him to pay, a proportionately higher rent for his farm than he would be able to pay, were there tithes to pay also. Rates, like tithes, limit the amount of rent which the landlord can obtain for his land, and are therefore justly re- garded as falling, in ordinary circumstances, finally upon the property. It is, however, riglit to accompany this declaration of theory with a fair statement of the chief exceptions to which it is subject. In those cases where farms are held at rents considerably exceeding the true economic rents, the normal theory of incidence is inapplicable. A remis- sion of rates would not enable the owner to exact a higher rent, and the tenant would get the benefit. Judged by this test, we find that the burden of the rates remains upon the tenant when- ever the actual rent exceeds the economic rent for any length of time and to any serious extent. One small, but not unimportant, deduction from the full rigour of the orthodox doctrine of normal incidence appears to have been overlooked by the previous writers on this subject. It will be seen farther on that the normal incidence of rates on dwelling- houses is on the occupiers. So far as the rates of a farm are levied in respect of the farmer's dwelling-house, it would seem that he would be unable to shift them to his landlord. As all other traders must have dwelling-houses, and the profits of farm- ing are presumed to correspond roughly (on the average of years) to those of other equally desirable trades, his ability to pay the rates on his dwelling-house out of his own income should be equal to theirs, and his power of shifting them would be no greater. The proportion of a farmer's rent payable for his house is difficult to estimate, but may be placed roughly at 6 per cent. ; but it will, perhaps, be fair to place part of this to trade expenses, inasmuch as a portion of the house is frequently used as a dairy or for the storage of seed or produce. If, therefore, we take the net rent for house accommodation to be 5 per cent, of the whole rent of the farm, it will follow that one-twentieth of the rates will ordinarily fall to be contributed out of the farmer's earnings and profits. 42 Local Taxation and Finance. Mr. Goschen, in his draft report for the Committee of 1870, Character of Engush Pointed out that a large number of English farms farm renis. ^^^.^ ^^^ ^^ ^^^ ^j^^^ j^j. ^^ ^^^ ^^jj rack-rents, and he drew the conclusion that the incidence of the rates on such farms was partly or wholly upon the occupiers. This passage has been quoted within the last few years by Professors Seligman and Bastable with expressed or implied approval, but it is ex- tremely doubtful whether any English farm rents can now be said to be below the true economic rent. Unfortunately, the remark- able fall in the value of agricultural products in recent years has swallowed up the margin between the actual rents and the purely competitive rents where such a margin existed, and has created a margin on the reverse side which has eaten up much of the farmers' capital. The action of economic processes has slowly readjusted rents to the level of prices in many cases, — especially in grain-growing districts, where the fall began first to take effect, — but the operation is not yet complete. Landlords and tenants have alike clung to the hope that the fall in prices was only a temporary one ; but instead of rising, prices have con- tinued to fall, and have now reached the lowest general level of modern times. For these reasons, the fall in actual rents has seldom kept pace with the fall in economic rents, and is still, in many other cases, partially or wholly suspended. As the process of readjustment gradually becomes complete, the ultimate in- cidence of rural rates will be much more fully than formerly on the property ; the old semi-feudal relations between landlord and tenant, which tended to the maintenance of easy rents, having given way under the strain of recent economic and political events. Strictly commercial relations will generally prevail in the future. Before leaving this branch of the subject, it is necessary to draw a distinction between the ordinary taxation of Old rates on land are . . , . , , . ,, ,, not strictly taxes but land as part of a system bearmg equally on all rent-charges. , , a i. j Other income-yielding property and special taxes which fall on land only, or in an exceptional degree. The income tax and the death duties belong to the former category, but the local rates are, to a large extent, of the latter class. So far The Incidence of Rates. 43 as they are of old standing, and do not exceed the general average amount of past times, these special taxes on land are not taxes at all in the ordinary sense. Their effect is precisely the same in kind as that of a rent-charge. The land is bought or inherited subject to the charge upon it, and the purchaser gives a smaller price in proportion. If land, which had always, or for a long time previously, been free, were suddenly made subject to such a special tax, the effect would be to diminish the capital value of the land by the capitalised value of the tax. If the land were sold immediately afterwards, the new owner and all succeeding owners would be free of the tax, it having been allowed for in the price. The owner at the time the tax was first imposed would lose (all other things being equal) the full proportion of his capital once for all. If the land has always borne the burden from the time it was last granted by the Crown, there will never have been any such loss, but the tax will be a reservation of a part of the property to the State. The application of this theory to the case of rates on lands in England requires to be qualified by the consideration that their amount has not been precisely uniform from year to year, and, possibly, by other circumstances. But there appear to be good grounds for the conclusion that the burden is mainly, as Dr. Giffen suggested in 1871, ''on the property, and not on the individuals who have incomes from it." This view was strongly combated by Mr. Dudley Baxter, but has been, within limits, supported by, amongst others, Professors Sidgwick and Seligman. Professor Bastable, whilst accepting the general theory as applied to old and stable taxes on land, objects to local rates being so regarded. The subject deserves a fuller investigation than it has yet received. The rating of tithes has always been somewhat peculiar. The gross annual income of the property is assessed, subject only to deductions in respect of rates, ec- clesiastical dues and cost of collection ; and the owner is deemed to be also the occupier. The owner is thus made liable for the immediate and direct payment of the rates levied in respect of his property, in addition to those which he may have to pay as the 44 Local Taxation and Finance. occupier of a house. His position differs from that of the land- owner, inasmuch as the latter only becomes the bearer of the burden of the rates levied in respect of the holdings of his tenants by the operation of an unseen economic process, which is liable to disturbance and arrest. Few questions have been more stubbornly debated in England Rateaon dweiung. i" rcceut ycars than that of the incidence of rates "»">"»• levied in respect of the occupation of houses. The subject has been considered by Mr. Goschen's Committee in 1870, and by the Town Holdings Committee in 1886 and the five following years. The evidence given was in each instance strongly contradictory, and the reports presented were hesitating and in- conclusive. The experience gained in this controversy serves to show that Pariiamentary committees are the worst possible instru- ments for elucidating obscure economic principles and theories. The old and orthodox theory of the incidence of rates levied in respect of dwelling-houses was that they fell partly Theory of Incidence. *■ , . . .- - y upon the occupier and partly upon the ground- owner. Adam Smith argues that this division of the burden is general, but gives no rule for estimating the Adam Smith. . , , ., , ,, respective proportions. Ricardo only accepts this view as applicable to rates of immoderate amount, or in decaying localities ; holding that " in ordinary cases the whole tax would be paid both im- mediately and finally by the occupier." M'Culloch and Mill H'onuoch »nd both agree with Adam Smith as to the division of the burden, but they assume the proportions to be governed by the values of the building and site re- spectively. Both express the opinion that the proportion likely to fall on the ground-owner will usually be comparatively small, Mill asserting that "in the vast majority (of cases) nearly all the tax falls on the occupier." More recently this view has been upheld by Mr. Inglis Palarave, Mr. other mthoritiei. r J o o J M'Neel-Caird, Professor Bastable, and Professor Sidgwick. Professor Munro goes a little further than Mill, believ- ing that the owner of the site only pays so much of the rates as is The Incidence of Rates. 45 proportionate to the agricultural rental of the site, and that the occupier bears the remainder. Mr. Sidney Webb, whilst holding a conclusion practically identical in result, laboured under the delusion that his conclusion was opposed to the theory of the older and classical economists. The processes which he described under the name of " economic friction " are really, in the main, normal ; and the result the natural and normal one. The first writer of any considerable authority to propound an entirely new doctrine was Mr. Goschen, who, in his draft report for the Committee of 1870, pro- mulgated the theory that the whole burden of the rates falls upon the ground-owner, unless the amount exceeds the average of the rates paid in the same locality prior to or at the time of the leasing of the site. When this average is subsequently exceeded, the excess, he says, falls on the house-owner or the occupier, according to the state of supply and demand. ^ This theory has been adopted by Mr. Sargant and a number of less-known writers ; save that they mostly refuse to admit that any portion of the burden falls upon the occupier under any circumstances. Mr. Goschen's view was also largely adopted by the Committee of 1870, and by the more recent Town Holdings Committee ; and as expressing the matured judgment of an economist of the first rank and an expert in questions of local taxation and finance, it has been widely accepted or acquiesced in. It is, however, upon Mr. Goschen's dicta of some twenty-four years ago that the mainten- ance of this theory really rests, no other economist of eminence having endorsed it, and Mr. Goschen having in more recent times refrained from any clear expressions of decided opinion in the matter. Going rather further than the modern authorities quoted above as supporters of the old and orthodox theory. Professor Thorold Rogers has steadfastly main- ° ^ Eogers, tained that the burden of the rates paid by the occupiers of dwelhng-houses remains finally where it is first placed. He has, however, not attempted, either in his books and 1 See p. 47. The expression quoted at p. 6i, note i, appears to vary this de- finition somewhat, but the passages given on p. 47 have been more generally taken to represent his theoretical views. \ 46 Local Taxation and Finance. speeches or in his evidence before the Town Holdings Com- mittee, to argue out the grounds of his conclusion ; rather contenting himself with the rejection of the arguments of the holders of the opposite theory, as resting on unproved assump- tions. The first elaboration of the theory upon which Professor Auihor'.own Rogcrs' couclusion is founded was put forward theory. .^ ^^ article contributed by the present writer to the Economic Review in 1891. It was, however, shortly followed by Professor Seligman's treatise on " The Shifting and Incidence of Taxation," in which the same theory is worked Sellgman. out on similar lines. This theory of the incidence of rates levied in respect of dwell- AutiofB thaory ing-houses is based upon the recognition of the shortly stated. . /- , / \ . i ^ i • r primary facts, (i) that houses are necessaries of life, and (2) that the rent they will command is governed by the state of the market, as in the case of other commodities. These points are well put by Mr. M'Neel-Caird, who says : — " Dwelling-houses, on the other hand \i.e., as distinguished from farm lands], are not instruments of production, but necessaries of life. Demand and supply, in each locality, determine their rent ; but the question of its amount is not embarrassed by any con- sideration, on the tenant's part, of produce to be raised or profit to be made by their use." ^ It follows from this that the rent and rates fall upon the occupier's income precisely as in the cases of food, clothing, fuel and artificial light ; and that the effect, alike of the original quota of rates and of any subsequent increase, upon house-rents is no greater than that produced by the fluctuations in the prices of other necessaries of life. Most of the English writers who oppose, and some who ohiet errors of advocate, an alteration of the existing system, opposite theory. j^^^^ assumed, without evidence, that the amount which each occupier of a house can pay for rent and rates together is rigidly inelastic ; and that any increase of rates, or in- 1 " Local Government and Taxation" (Cobden Club Essays, 1875), p. 155. The Incidence of Rates, 47 I deed any rates at all, must necessarily be met by a reduction of rent. But there is no such relation between the two things, and the error has utterly vitiated the whole mass of argument advanced by them. It seems tolerably clear that the confusion has arisen through the failure of these writers to distinguish, as Mr. M'Neel- Caird has done, between the cases of farms and dwelling-houses. Mr. Goschen, for instance, although advocating a ' JO ° Mr. Goschen quoted. large alteration of the existing system, fails, in his draft report of 1870, to grasp the essential difference in the nature of the two cases. He says : — " To sum up the case of house property generally, it appears / that the owners of building-land, like the owners of other land, I have to submit to a reduction of rent equivalent to the average amount of rates which the builder or other lessee calculates that he would have to pay according to the average of past rates." Elsewhere in the same report he says : — " As a general rule, both in the case of land and houses, when a fresh agreement has to be made with the owner of the soil, the whole of the existing rates comes out of the pockets of the land- lord in the shape of diminished rent." The grounds on which these dicta are based are summed up thus : — " He (/.«., the builder) knows that tenants of a certain class can afford to give a certain rent, and no more, for a certain kind of house ; and, therefore, if building is to take place at all, it is clear that the rates must fall where alone a margin exists to bear them ; that is to say on the price given, or ground-rent promised to the owner of the soil." These grounds will not bear examination. The builder cannot, and does not attempt to, gauge the rent-paying ^^^^^ ^^^ ^^^^^^ capacity of the various classes of occupiers. He is under no compulsion to do so. He finds that a demand exists 48 Local Taxation and Finance. for houses, and he meets it, just as a butcher or baker meets the demand for food. He buys land and bricks, just as the baker buys flour ; and, whilst paying the market price for what he buys, receives the market price for that which he sells. The letting of the land to him, or of the house by him, instead of its purchase or sale, is immaterial, the economic effect of the transaction being the same in either case. There is, moreover, no such rigid limitation of rent-paying capacity as is here assumed. On the contrary, abundant evidence exists to prove that this capacity is extremely elastic. In the rural districts, the rents paid by the labouring classes, inclusive of rates and water, do not usually exceed a tenth of the occupiers' in- comes ; whilst in the metropolis they usually range from a third to a fifth, and in other urban districts from a fifth to a seventh. Surely this proves the elasticity to be both real and considerable in the case of the poorest classes. But if that is so, how much more elastic must the capacity of the middle and upper classes be, when their luxurious expenditure and savings are taken into account ? Again, an examination of either the local or imperial tax assessments will establish the fact that high rates do not necessarily, or even usually, result in lowering rents. On the con- trary, high rates and high rents very frequently go together. This is, indeed, a matter of common knowledge, and goes to prove the non-existence of any such relationship between the two things as is asserted in the above quotations. ■ Another mistake is made in assuming that "the builder or other lessee" of the site will have to pay the rates. Builder pays no rates. Unless he is the occupier also, he will not do so directly, and it is a mere postulate to suggest that he does so in- directly. Mr. Sargant puts it thus: — "The builder knows that he will get so much less rack-rent by reason of the rates which the occupiers will have to pay." But he offers no proof of this, none being possible. The extent to which unproved assertions such as this have been put forward as though they were facts which had been proved up to the hilt is not the least regrettable feature of the controversy. Mr. Goschen recognised the important facts that The Incidence of Rates. 49 houses are commodities, and that the occupiers are in the position of consumers. Dwelling-houses are also necessaries of life, and are equally subject, in respect of price, to the eco- ^^tior-. theory «- nomic laws which fix the market prices of such pi»io««- other commodities as food, clothing, and fuel. The builder is therefore under no greater obligation (in a town or district where the rates are of uniform weight throughout its whole area) to take the rates into account when buying or leasing a site, than the baker when buying flour or the coal merchant when buying coal. Pro- fessor Sehgman puts the general theory of a tax on p„f^^„ g^y^j^ commodities which are also necessaries of life as ''"°'"' follows : — "Prices may rise considerably without appreciably affecting the demand. Such would be the case with absolute necessaries of life. The demand for absolute necessaries of life is not apt to diminish much unless the people starve. The effect of a tax on such commodities would rather cause a diminution in the more elastic demand for comforts, or for the less absolute necessaries."^ The only questions, therefore, with which the builder need con- cern himself are the adequacy of the existing supply of houses and the strength of the demand for new ones. Common experience of the local fluctuations in the activity of the building trade might be appealed to in confirmation of the opinion that these are the considerations which really govern the builder's course of action. But it will be interesting to pursue somewhat further the question of the alleged power of the applicant for a house to regulate bis rent for himself in the inverse ratio to the amount of the rates. As it is a laborious process to trace the possible causes of apprehended effects in a wholly supposititious ^^ - , .. r. Effect of rates on case, it is usual to test the effect of rates upon the "^^^'l^lut"* rack-rent and ground-rent of unbuilt houses by \ the results of a considerable increase of rates in the case of I houses already built and occupied. It is perfectly reasonable to assume, and equally easy to demonstrate, that the causes which 1 "Shifting and Incidence of Taxation," p. 148. D 50 Local Taxation and Finance. would prevent a yearly tenant from paying the rates at the outset would enable him, or compel him, to refuse to pay the subsequent increase also. If the pressure of the original quota of rates, whether its amount be large or small, is such as to enable the tenant to deduct a corresponding amount from the rent which he would otherwise pay, and neither more nor less, it is clear that his power of deduction is exactly proportionate to the amount of rates payable. It follows, therefore, that his power to deduct any subsequent increase of rates also is only limited by the duration of his bargain with his immediate landlord, and, as a yearly tenant renews his bargain annually, there is, if this theory be sound, nothing to prevent his transferring the later burden to his land- lord the next year after its imposition. It can be thus established that, so far as the occupier and house-owner are concerned, the incidence in the case of the original quota is the same as in that of a subsequent addition to the rates, and vice versa. Now, if it can be shown that the tenant has, in an average case and under normal conditions, no power to transfer either the original quota of, or a subsequent addition to, his rates to his immediate land- lord, it will prove that the latter (i.e., " the builder or other lessee ") cannot deduct from the ground-rent either the one or the other, inasmuch as he cannot transfer to the ground-landlord a burden which he does not and is not likely to bear himself. It will prove that no portion of the burden of urban rates in such cases falls upon either the ground-landlord or the house-owner, but that the whole burden is borne by the occupier alone. Let us, then, proceed to consider the question whether the occupier has, or has not, the power to transfer a subsequent in- crease of rates to the house-owner, by making an effectual demand for a corresponding reduction of rent. One upholder of the affirmative view, with a delicious unconsciousness of the demands of logic and of the necessity for, at least, some show of argumenta- tive proof, disposes of the whole matter by saying that the occupier would "insist" on such a reduction. This, of course, simply begs the whole question at issue. What he has to prove is, that the occupier is in a position to give effect to his demand, The Incidence of Rates. 5 1 as otherwise no amount of insistence will suffice to secure the reduction. It is quite clear that the only means of enforcing his demand possessed by the occupier is that of giving up the house and throwing it on the owner's hands. Even if this course were generally adopted throughout a particular town, and the inhabi- tants with one consent determined to suffer the inconvenience and loss of accommodation involved in removal to houses inferior to those to which they had been accustomed, the resulting reduc- tion of rents would be by no means equally general or consider- able. The displacement of a portion of the lowest class of occupiers into the streets or the workhouses would be compen- sated by the descent of a portion of the class next above it, and so on, in varying degrees, through the several succeeding strata of society. Low-class houses would probably suffer no depreciation, whilst the rents of medium-class and high-class houses would gradually regain their original levels through the stoppage of building operations upon property of these classes until the de- mand had once more overtaken the supply. But it is mere waste of time to argue upon such an assumption. There would be no universal or even general economic compulsion on the \ occupiers to adopt so extreme a course. On the contrary, it is ( certain that the great majority of them would do nothing of the kind. In estimating the proportion of occupiers who would remove to inferior houses if the rates were substantially increased, we may safely eliminate the majority of those who are able to save any considerable portion of their incomes, the diminution of the rate or scale of future savings being a smaller evil than the loss of comfort and convenience which would result from the alternative course. We may also exclude those whose means enable them to enjoy luxuries which they value less than the luxury of a good house ; and those who, having no luxuries to surrender, yet prefer to give up some other necessary or decency of life in order to retain the use of a house of the class to which they have become accustomed. There remain those who have been especi- ally extravagant in the matter of house accommodation, and who naturally turn their thoughts in this direction whenever retrench- 52 Local Taxation and Finance. ment becomes necessary from any cause ; those also who, in estimating the value of the comforts and luxuries they enjoy, give their extra house accommodation a low place j and those, finally, who are already on the extreme verge of pauperism. The surrender of some portion of their customary house accommoda- tion is, for many reasons, repugnant to the feelings of the great majority of householders, and would only be resorted to under the strongest pressure, and in a small proportion of cases. Apart from the loss of accommodation and amenities involved, the -trouble and expense of removal are not to be overlooked. But a \ still more powerful deterrent exists in the feeling that removal to * an inferior house is a proclamation of poverty to the world. 'Whatever we may think of this sentiment, there can be no doubt that it is widely prevalent, and would cause a retrenchment of expenditure upon privately consumed necessaries, such as food and fuel, to be preferred in many cases where there are neither luxuries nor savings to surrender. The effect on rents would, therefore, in the absence of other contributory causes, be in- appreciable. The distribution of the burden of the original quota of rates is precisely similar, being, indeed, governed by the same \ laws. In all those towns where the normal growth of population i and degree of prosperity are maintained or exceeded, and the j demand for dwelling-houses continues to make the erection of new ones necessary and profitable, the occupier has no power to shift the burden of the rates, or any part of it, to either house- ) owner or ground-landlord. A very brief examination of the effects which may be expected to result from a sudden and substantial reduction of town rates, accompanied (or quickly followed) by an attempt on the part of the house-owners to exact proportionately higher rents, will further elucidate the subject, and will bring us to the consideration of the more important exceptions to the general rule. Let it be con- ceded that the majority of occupiers, rather than remove to inferior houses, would submit, for the time, to the demand. But the increased rate of profit thus secured by the house-owners would at once stimulate builders to erect new houses in the hope The Incidence of Rates. 53 of sharing it, and this stimulus would continue until rents were reduced to their normal level. The only circumstance which could prevent or retard this result would be such a scarcity or monopoly of suitable building land as would enable the owners of available sites to put in an effectual demand for ground-rents so much higher than those previously paid for similar plots as to absorb the recently acquired increase of rents. Now, with regard to sites for ordinary dwelling-houses, such a scarcity or monopoly is rarely if ever found to exist. The vastly improved means of communication between the centres of large towns and their suburbs, which have been provided in recent years, have brought ■; practically unlimited supplies of building land into the market, I and have also brought the element of competition into active i operation in this, as in the other department of *■ Exceptions, supply, viz., the buildmg trade. It is, however, proved by experience, as it is also deducible from economic theory, that the larger the town and the greater the consequent difficulty of making available the supplies of building land for \ those engaged in business in central situations, the greater is the , control of the market secured by the owners of land-values in the inner portions of such towns. This applies, of course, with especial force, to the case of the metropolis. In most of the larger provincial towns business is less focussed than in London, industrial operations being chiefly carried on in outlying districts, and the pressure on the centre is thus proportionately reduced. Even in London the centrifugal forces are by no means wholly ineffectual to overcome the difficulty presented by the vastness of the urban area. Just as the docks are steadily retreating down the river, and the bulk of the work in the building trades is on the outer fringe of an ever-widening circle, so are many other less important labour-employing agencies and business undertakings being driven outwards, with the result that many of the outlying suburbs of yesterday are virtually subsidiary towns, with many of the elements of independent existence, to-day. But, notwith- 1 standing this partial set-off, and the immense relief afforded by \the efforts of the more enlightened of the railway managers to \ 54 Local Taxation and Finance. increase, cheapen, and accelerate the means of communication between central London and the outer suburbs, the demand for house accommodation of kinds suitable for the occupation of the working classes in portions of the metropolis so far exceeds the supply that the rents obtainable can no longer be regarded as competitive. In these circumstances the rates may be wholly or partially a deduction from the rent which it would be possible ! to obtain were there no rates to pay, and to that extent may be \ said to fall on the landlord. I Land on suburban estates possessing exceptional advantages of situation for residential purposes has usually been let at monopoly rents ; but even in these favoured localities the element of com- petition is fast asserting itself. The wealthier classes, who usually appropriate such sites, are less subject to the necessity of residing near business centres than the middle and working classes ; those members of them who are engaged in, and regu- larly attend to business, having frequently both the inclination and means to travel considerable distances backwards and for- wards. The rapid extention of railway facilities enables them, in some cases, to scour the immense area embraced within a forty or fifty mile radius, in search of locations to their liking, and has notoriously levelled down the rents of suburban residences of the better classes to a very considerable extent. A further exception to the general rule applicable to private , houses may be found to exist in those places, happily rare in ' England, where prosperity is decaying and the population dwindling or stationary. If the supply of houses exceeds the demand for them it will be in the power of the occupiers to shift the burden of an increase of rates to the house-owners, and, perhaps, eventually to the ground-landlords. But here, again, the decay of the existing / houses will gradually adjust the balance of supply and demand, and, \ in time, replace the burden upon the shoulders of the occupiers. Shortly summarised, the conclusions reached by the foregoing snmmMTantorates analytical review of the subject of the incidence ondwe gnoMM. ^f ^^fgg ^^ dwelUng-houses may be thus stated : — (r) The general rule is that the burden is wholly and finally The Incidence of Rates. 55 upon the occupier. (2) The exceptions to this rule are found to \ arise from the absence of competitive conditions, such as in the cases of («) congested areas in the central portions of the metro- polis, if) exceptionally advantageous suburban sites, and (c) , stagnant or dwindling towns ; in the first two exceptions the \ burden will be partially or wholly transferred to the owner of the I ground-value according as his monopoly is found to be relative or absolute, whilst in the latter case this result will depend upon the extent and duration of the excessive supply of houses in the particular locality. The examination of the incidence of rates on shops and other ; buildings used for business purposes is embarrassed -^^^^^^^^ „, ^^^^ '', by the question of the extent to which the trader »" =!>»?=. «*»■ 'i is able to charge his customers with the tax in the prices of the i goods sold or work done. Let us take first the case of a shop 'and warehouse to which no dwelling-house is attached. It is clear that the rates are a business expense, and that the trader will charge his customers with it if he can. His ability to do this will largely depend upon his freedom from the competition of traders not equally subject to the like expense, such as, for instance, shopkeepers and merchants in other towns or abroad, dealers in public markets, and hawkers. The barriers which formerly pro- tected the shopkeeper from the invasion of his market from a distance are more and more giving way, owing to the increasing facilities for every kind of communication; and, so far as the prices of his goods are governed by external considerations, he appears to be in much the same position as the farmer. As these con- siderations do not apply to all trades uniformly, their influence on rents is smaller than it might be were all affected alike. But that they have some influence appears to be probable, and to that extent, whatever it may be, the incidence of rates on shops, etc., may be regarded as upon the owners of the premises, and, finally, upon the ground-owner. There may be, also, the further effect of taxing the profits of the most affected traders. It is scarcely open to dispute that the profits of certain trades have declined in recent years. This is no doubt due to a combination of causes, and 56 Local Taxation and Finance. will probably be partially or wholly adjusted in the course of time. In the meantime, the rates paid by those traders who are unable to recover them in the prices of their goods must, so far as they are not borne by the owners of their trade premises, be paid out of their trade profits. The extent to which prices, rents, and pro- fits are respectively affected by the existing rates on trade premises cannot be estimated, but it is tolerably clear that the whole burden is not upon prices, as might at first sight be supposed. In the case of the shopkeeper who resides in a dwelling-house attached to his shop, it is fair to assume that the rates on the residential portion of the premises will follow the same rule as if the house were separate and distinct from the shop. This will limit the foregoing observations on the local taxes in respect of business premises to (i) cases in which no residence is attached, and (2) the business portions of the combined premises where dwelling-houses are included. It has been usual to confine the examination of the question other cases con- "^ ^^ incidence of local taxation to the cases of ■wered. j^^^j ^^^ houses, to the exclusion of railways, canals, gasworks, waterworks, mines, quarries, pits, brickfields, and other properties used in business to which the term "houses" has no proper application. Some of the forms of property em- braced in the above catalogue had no existence when the older economists wrote, and the others existed only on a comparatively small scale, and their omission was natural and immaterial. This has long ceased to be the case, and the failure of modern writers to deal with these important elements detracts largely from the value of their conclusions. Some statistics, showing the magni- tude of the properties and interests thus ignored^ are given in the next chapter. The opinions of economists as to the real incidence of taxes on railways are somewhat conflicting, and their EaUmys. ' , . . \ precise bearmg on the question before us is difficult to define. No question arises as between occupier, building-owner, and ground-landlord, these interests being generally consolidated and merged in that of the shareholder. The Incidence of Rates. 57 The only other interest concerned is that of general public, and it is clear that, so far as the rates paid by the companies cannot be shifted to the passengers or to the senders or receivers of freight, they must fall on the shareholders. The monopoly which each company possesses in its own district, although tempered by the statutory limitation of the scales of fares and freights, would point to the shareholders as the real bearers of all taxation im- posed upon the companies. They are, according to the theory of the late Professor Fawcett, presumed to be exacting the utmost payment which the law will allow, or the traffic will admit, for all non-competitive traffic; and to be successfully maintaining the charges for competitive traffic at the most remunerative level by agreement amongst themselves. They are, in short, getting as much profit as they can, and have no reserve of unused and, at the same time, profitable charging power by means of which any taxation, new or old, can be transferred to their customers. Where a reserve may nominally exist, as in the case of competitive charges which are below the authorised maximum, any augmenta- tion of these charges by agreement is practically barred by the knowledge which the companies possess that they are already exacting as much as the traffic will, under existing conditions, bear. In the metropolis and large provincial towns, the local traffic is competed for by omnibuses, which have the free use of the streets ; and by cars, which use lightly-rated tramways. The owners of urban local railways are thus, for other reasons, less able to transfer the burden than the owners of trunk lines and rural branches. It does not follow from all this that the existing local taxation of railways is unfair or unwise. The present burdens on this class cf property do not prevent the continuous extension of the railway system of the country, alike by new companies and by old ones. The privileges conferred by Parlia- ment upon railway companies are so valuable that the State is entitled to reserve some advantage beyond its general powers of taxation. In some countries this takes the form of special and peculiar taxes of substantial weight. In England it has taken various forms, which we need not stay to consider. The point to 58 Local Taxation and Finance. be noted here is the apparent inability of the shareholders to transfer the taxation imposed on them to any shoulders other than their own. In the main, it would seem that Fawcett's theory of the inci- dence of taxes on railways applies to canals also. It will be remembered that the basis of the rating of canals diifers from that of railways in being related to the tolls only, and not to the total profits, including both tolls and the pro- fits of the trade of carriers. The weight of the local taxation fall- ing on canals will therefore be relatively lighter than that on rail- ways. But it is difficult to perceive any difference in the inci- dence, the barriers to any transference of the burden being similar in kind, and apparently not less difficult to surmount. The cases of gasworks and waterworks so far resemble the case Gasworks and water- 0^ railways that they are rated on valuations which ''"''°' include profits as well as pure rent, in being local monopolies, and in frequently being limited by statute as to the charges which the owners may make for gas and water. The in- terests of occupier and owner are also usually consolidated and merged in that of the shareholders or public authority who carry on the business. The reasoning by which the incidence of rates on railways is determined must, in the main, be held to apply to gasworks and waterworks also ; and it leads to the conclusion that the tax falls chiefly, if not wholly, on the profits of the undertakings. Mines are usually held on leases of considerable duration, and consist partly of the coal or other mineral for which royalty is paid, and partly of shafts, workings, plant and surface buildings created by the lessees' capital. The tenancy created by a mining lease being undertaken for the pur- poses of trade, and with the object of making profit, it is usual to assume that the existence of rates is taken into account in fixing the amount of rent or scale of royalty to be paid. This may be partly correct, but the extent to which it would affect the rent is not easy to estimate. If the rates can be charged to the consumer in the price of the mineral, when sold, the rent will not be affected. If the price is regulated by external considerations, such as foreign competition, the reverse result may be expected to follow. But The Incidence of Rates. 59 in any case, the effect on the rent will be limited to the rates in existence at the time the lease is granted, and to such portion of the total contemplated burden as would be proportionate to the interest of the freeholder in the mine. All additions of subsequent imposition will clearly fall on the lessee, unless he can shift them to his customers. No general rule can be laid down as applicable to all mines, by which this preliminary question can be answered. The prices of some of the metals appears to be wholly regulated by foreign competition, and no portion of any taxation imposed on those who are raining for such metals at home can be shifted to the consumers. In the case of coal, the price is fixed with less regard to foreign competition. That part of our production which is exported is subject to such competition, but the much larger portion which is consumed in this country is sold at prices which show a considerable degree of elasticity. There is, moreover, nothing in the nature of a permanent monopoly, the supply being ordinarily ample and readily capable of expansion. The local taxation of coal mines being now fairly uniform throughout the kingdom, the circumstances lead to the conclusion that the greater part of it is successfully charged to the consumers, and that the lessors and lessees mostly go free. Stone quarries, pits, and clay-fields, require comparatively little nlant, and, being usually held for short terms, the ^ , _ , _ . Quarries. conditions differ somewhat from those of mmes. But the large slate quarries in North Wales, and, perhaps, some of the larger of the stone quarries, approximate more closely to coal mines in the matter of incidence. Foreign competition is not a factor to be seriously considered, and the nature of the pro- ducts being mainly that of necessaries for which a continuous demand must arise, there seems to be no reason to doubt that the local taxation imposed on these subjects is mainly borne by the consumers. To recapitulate briefly. We find that, as applied to agricultural land and tithes, the local rates are mainly in the Secapltulation. nature of special taxation of these classes of property. Subject to the reservations set out, it may be broadly 6o Local Taxation and Finance. stated that this taxation falls upon the owners; in the case of tithes, directly and immediately, and in that of agricultural land by reduction of the rent at each readjustment or reletting. As applied to dwelling-houses, the local rates are a rough and ready form of income tax on the occupiers. All kinds of income are laid under contribution, no matter what their nature or amount may be. Such rates are in no real sense taxes on pro- perty at all. The fact that house-rent is taken as a measure of the occupier's ability to bear taxation must no longer be allowed to disguise the true character of the tax. As applied to shops and other trade premises in towns, this taxation appears to possess a composite character. So far as the nature and circumstances of the trades are such as to permit of the addition of the tax to the prices of the goods made or sold, and the charges for work done, the rates will fall ultimately on the consumers. Where this cannot be done, the tax will fall either on the profits or the trader, upon the owner of the property, or partly on each. If the trader's profits are not abnormal, and he cannot add the tax, or the excess beyond a general average of such taxation, to the prices of his goods or work, the tax on some part of it would be likely to fall upon the property-owner, and, finally, upon the owner of the site. Rates levied in respect of railways, canals, gasworks and water- works, are mainly taxes on the profits. Those on coal mines may fall partly on the owners of the royalties and rents, but are chiefly a tax on the consumers of the coal. In the case of metal- liferous mines, the incidence is much more largely on the royalty- owners. Rates on quarries, pits, and clay-fields fall mainly on the consumers of the products wrought, but, possibly, to some extent, on the freeholders also, as in the case of coal mines. CHAPTER VI. The Bases of Local Taxation. The examination of the question of the incidence of rates con- tained in the last chapter prepares us to approach the subject of the true bases of local taxation. It has become usual during the last twenty-five years to speak of local taxation as falling wholly upon one class of property, viz,, real estate ; ^ and a considerable capital has been made of the character thus given to it. But, if the foregoing analysis is, in the main, correct, our conclusion must be that the current opinion is erroneous, and that of several bases on which local taxation restSj real estate is by no means the principal. We gather from Mr. Fowler's report of 1893 that the propor- tions of the total annual value of rated property gtotistic. of .rating borne by the several principal classes thereof, in certain years, were as follows : — aual7Bed. 1814 1843 1868 1890-91 Lands and tithes . . Houses Railways . . . . Other property . . . 69-28 27-84 2-88 49-10 41-44 2-82 6-64 33-20 47-27 11*11 8-42 19-24 56-35 14-02 10-39 The amounts and proportions of the local rates borne by lands, houses, and other properties, in 1817, 1868, and 1891, were as 1 Although the whole of the local rates of every kind were, throughout Mr. Goschen's report of 1870 (Parliamentary Paper No. 470 of 1870, reprinted as No. 201 of 1893), described and classed as "Taxes on Real Property," "Taxes falling on Real Property," or " Taxation borne by Real Property," it is right to state that he prefaced his statistics with a warning that these descriptions were misleading. He pointed out, on page 31, (i) that railways and canalsare rated in respect of pro- fits ; (2) that " it has been conclusively shown that a great proportion of the rates, especially in towns, does not fall upon the owner, but is paid hy the occupier, i.e. the consumer of the houses " ; and (3) that the terms referred to by no means meant that the rates were wholly "Taxes on the Owners of Real Property." Unfortunately, the writers and speakers who have quoted Mr. Goschen's figures have, almost without exception, ignored his warning, and have argued the ques- tion as though the whole burden of the rates were borne by what is legally and technically known as real estate. This disingenuous process is still going on. 61 62 Local Taxation and Finance. follows, the differences in the percentages, when compared with those given above, being due to the relatively greater weight of the local taxation in urban areas than in rural districts : — Year. Rates borne by Lands and Tithes. Rates borne by Hotises and other Properties. Amount. Percentage. Amount. Percentage. 1817 .... 1868 . . . 1891 . . . 6,730,000 5,500,000 4,260,000 66-66 33'33 3,370,cx)o 11,000,000 23,560,000 84-69 How the rates are borne. These figures enable us to form a sufificiently accurate judg- ment of the distribution of the burden of the rates in 1891. Following the lines laid down in the last chapter, the total of ;^27, 820,000 should be apportioned approximately as follows : — On Real Property. On Personal Property. On Occupiers' Income. On Consumers' Income. Amount. Per Cent. Amount. Per Cent. Amount. Per Cent. Amount. Per Cent. Lands and tithes Houses . ■ . Railways . . Other property 4,260,000 1,000,000 I5'3i 3'59 £, 3,894,800 782,000 14-0 2-82 15,692,000 S6-4 1,191,200 1,000,000 4-29 3'59 Total 5,260,000 18-90 4,676,800 16-82 15,692,000 56-4 2,191,200 7-88 In this calculation, the fraction of the local taxation of lands (which includes farmhouses) which falls on the occupiers has been set against the fraction of that of houses (which includes shops) which falls on the owners of the freehold interest. As railways and other property are not separated from houses in the second table, they have been taken at 14 per cent, and 10 per cent, re- spectively, to agree with the annual values in the first table. The extra weight of urban, as compared with rural, local taxation, falls The Bases of Local Taxation. 63 chiefly on the occupiers of houses ; railways, canals, agricultural lands and tithes being exempt from three-fourths of the general district rate and some other urban rates. It will be seen that 56'4 per cent, of the total amount of rates is held to fall upon the occupiers of houses as a rough and ready income tax. In addi- tion to this, a sum equal to 7 '88 per cent., borne by the con- sumers of goods sold or produced in shops, mines, etc., mostly falls on those who bear the s6"4, viz., the community at large. The latter, therefore, bear no less than 64-28 per cent, of the whole. Real property bears 18 -90 per cent., and personal pro- perty 16-82. The latter percentage would be very Kates on personal considerably higher if it were permissible to re- ''"^" ^' gard the rates on mills, manufactories, breweries, public-houses, mines, quarries, and other trade premises owned and occupied by limited liability and joint-stock companies and by partnerships as really a tax on the rated properties. All such properties so held, and all leasehold interests, however held, are, like railways, tram- ways, canals, gasworks, and waterworks, personal property both for purposes of taxation and as regards its devolution at the death of the owner. This fact has usually been entirely overlooked or ignored by those writers and speakers who have compared the taxation of realty with that of personalty, and it is only necessary to draw attention to the point in order that the fallaciousness of their conclusions may be made manifest. An enormous mass of personal property is rated, and much of it very heavily rated, as explained in Chapter III. But, with the exception of railways, tramways, canals, gasworks, and waterworks, the bulk of the taxa- tion thus imposed does not appear to remain upon the first payers, nor upon the property at all, but to be transferred to the community in the prices of the commodities produced or sold. This does not make it any the less a delusion to suppose that rates are taxes on real property alone. Whichever way the point under notice may be regarded, that idea remains equally untenable. But a still stronger reason for its final abandonment will exist when it is generally recognised that the rates on jt,t,„„g,,y^t„„ dwelling-houses are really income taxes on the '"°°""'' 64 Local Taxation and Finance. occupiers. This recognition is not likely to be long delayed. In a remarkable article in the Quarterly Review for January, 1894, in which the whole region of controversy regarding local taxation is surveyed from the point of view of the ground-landlord, the "Quarterly Keviow " ^'^'^ incidence of dwclling-house rates upon the quoted. occupiers is, throughout, frankly stated. The writer says : — "Rates are a personal payment, not a tax on things. They are levied on the inhabitants, but not upon the property. The individual is rated according to the annual value of his residence, his occupation rent, to pay for various things the community provide for his convenience, just as he pays his landlord for his house; and if he fails to pay, neither the re- sidence nor the territorial proprietor becomes liable." Further on he says : — " Rates are but a transfer to a joint account of every occupant's expenditure ; a wholesale instead of a retail trans- action, and so, in fact, a great economy, not an increase of outlay, for the accommodation that each household may require." These clear and unequivocal expressions, coming from such a source, are both a refreshing change from the assumptions and special pleading which have usually taken the place of argument in the advocacy of the case of the ground-landlord, and a sign that the true economic doctrine in relation to rates is already gaining acceptance in the quarter where self-interest and natural prejudice would be most calculated to retard its adoption. When once the ground has been cleared by the acceptance of the true doctrines of incidence, their application to the existing facts is not difficult. First of all, we find that it is upon the Modem increase of householders of all classes in the metropolis and town rates. ^^ j^j.gg provincial towns that the weight of the modern increase of rates has fallen. The extent of that increase is partly revealed by the tables already given in this chapter, but The Bases of Local Taxation. 65 will be still more clearly shown by the following ofiScial analysis of the total receipts from rates in certain years : — 1868. i88o-8i. 1891. Purely urban . . . ;,f6,73o,ooo ;^i2,22S,ooo ;ooo Partly urban and partly rural 8,357,000 8,748,000 8,196,000 Purely rural. . . , 1,415,000 1,933,000 2,108,000 Totals . . ;^i6,503,437 ;^22,907,790 ;f27,8i8,6^2 The increase in the rateable value has partly counterbalanced the increased charge ; and there has been a reduction of the average rate in the £^ on the rateable value in the rural districts from 2S. 7^d. in 1868, to 2s. 3d. in 1890-1. In London the increase in the same period was from 4s. 4jd. to 5s. ; but that for the extra-metropolitan urban districts cannot be stated. In 1 890-1 the figures for such districts were : — s. d. County boroughs 4 6| Non-county boroughs 4 4I Other urban districts 311 The corresponding figures for 1868 are not recorded, but it is probable, from a comparison of rates and rateable values, that the increase has been greater in proportion than in the metropolis. The permanent features of the system are of even deeper im- portance. On the one hand, we find that the owners of agri- cultural land and tithes pay twice. First, as occupiers of dwelling-houses, and secondly, as owners of particular forms of property. To this latter feature we shall shortly return. At the other end, we find the labouring and artisan Heavy taxation of the population of our towns contributing an excep- poor m towns, tionally large proportion of taxation, owing to the necessity under which they live of spending from one-third to one-eighth of their incomes in house-rent and rates combined — a proportion far in excess of that similarly spent by the more affluent classes. It will be seen that this conclusion is destructive of a widely-spread opinion that the " working-classes " pay no direct taxes, and of 66 Local Taxation and Finance. the consequential impression that to repeal the breakfast-table duties would leave the " working-class " abstainer from alcohol and tobacco free from taxation of every kind. Instead of escaping all direct taxation, it would appear that the poorer classes in England are paying far too much. Professor Seligman, one of the foremost living authorities on taxation, re- fers to the present mode of levying local taxes as the great blot on the English fiscal system. He says : — " Even in England, where so many reforms have been made in the national revenue, the whole system of local taxation, with its ab- sence of special assessments {i.e., for betterment), its exemption of non-productive realty or land held for speculative purposes, and its imposition in the first instance on the occupier, means the relative overburdening of the poorer classes." The plan of proportioning the share of taxation which a person should pay to the rental value of his dwelling has much to re- commend it, and the commendation bestowed upon it by Mill has frequently been quoted. But in the national Inhabited House inhawtod house duty Duty, the full rigour of the plan has been greatly mitigated. Houses of less than ;^2o rental value are free of tax, and those ranging from _;^2o to ;£6o are taxed at reduced rates. Shops pure and simple are exempt, and those to which dwelling-houses are attached are charged at rates one-third lower than those applicable to private houses. It is thus rarely paid by the poor, and the payments of the lower middle class are somewhat eased. The consequences of the taxation of trade premises are, likewise, minimized, if not wholly avoided. No such mitigation has been attempted in the case of the local rates, and, owing to causes already referred to, they have fallen with especial and increasing severity upon the poorer classes. But, in addition to the general causes which make the rental values of dwelling- houses an unsatisfactory criterion of ability to bear taxation, there are special reasons for the wide-spread dissatisfaction which has arisen in recent years with regard to urban rates. The expenditure of the local authorities in lighting and paving The Bases of Local Taxation. 67 the streets, sewerage and sewage disposal, and analogous matters, whilst adding to the comfort and convenience of Speclskl aggravfttloiu. the occupiers of the adjacent houses, at the same time directly benefits the property-owners by raising the letting and selling-values of the land and houses. The occupiers are first required to pay rates for the performance of these duties, and then to pay a second time in the shape of increased rent. This injustice affects the occupiers and owners of the whole of a town in a relatively equal degree, and has given rise to a demand for the division of the rates between these classes. A similar injustice to the occupier arises in the case of public expenditure on street improvements and such works as the London Thames Embank- ments ; on the purchase of the older Thames bridges and the erection of new ones \ and on the purchase and maintenance of public parks and open spaces. But here the benefit to the owners of adjacent properties is much greater and more direct than that derived by the owners of properties further removed, and the pro- posals for remedying the injustice include the special taxation of the former in consideration of the " betterment " of their estates. These propositions have been the subjects of much controversy, as has also one for the taxation of urban ground-values. Much public interest has been aroused in all these questions, and, as they are of considerable importance from an economic point of view, a separate chapter will be devoted to each. In the British Islands, the local taxation of householders has been, for over three centuries, coupled with taxes spedaitaxation of on agricultural land and tithes j and, by degrees, "s^"^"^*' '*"'*■ such cognate subjects as mines, quarries, canals, and railways were added as they came into existence. It is admitted that so far as they ultimately fall upon the properties rated, these taxes are special imposts or reservations ; the owners being presumed to bear their fair share of taxation as citizens and householders in addition. This apparent selection of certain descriptions of pro- perty for the support of public burdens has been strongly assailed as invidious and unjust, and the matter is one which demands and deserves careful examination. 68 Local Taxation and Finance. If the case were one of newly imposing a considerable weight of taxation on land, over and above the aggregate Itanaturo. . . . , . , , of previous times, and unaccompanied by corre- sponding taxes on other property, it would be necessary to show that land had been unduly favoured, and that its continued en- joyment of a special immunity involved the injury of other interests. But no such necessity exists here. The special taxation of land in England has seldom, if ever, been lighter than it is at the present time. Absolute ownership of land has never existed in England. All through the centuries the reservations in favour of the State have been practically continuous in their operation. That the form taken by the composition or commutation has varied from time to time is not material. The important point is that Eng- lish land has never been free from special and peculiar obligations to the State, and that at no time during the present century have those obligations been less onerous than at the present time. It has been already stated in this chapter that the average local taxation in rural districts fell from 2s. yid. in the Decrease of rural ' ^ rates. _£ jj, ^ggg j^ ^s. 3d. in 1890-1 ; and Mr. Fowler states in his report of 1893 that "at no period in the present century, for which statistics are available for the purposes of comparison, has the rate in the pound of the rural rates been as low as it was in 1890 and iSgi in the great majority of the counties of England and Wales ; and that the counties in which the fall in the rate in the pound has been the great- est have, generally speaking, been the agricultural counties." This portion of Mr. Fowler's report has been subjected to very keen criticism, and his use of the term " hereditary burdens " as applied to rates has been- strongly Hereditary burdenB. ,11 objected to.^ The inquiry is made why the term should not be applied to the taxes on consols, mort- gages, and securities also, but an unprejudiced person will see at least two very obvious answers. Firstly, the State has never had a proprietory interest in these forms of property ; and, 1 See ante, p. 35. This expression was applied by Mr. Goschen to the poor rate in his Report of 1870, p. 41. The Bases of Local Taxation. 69 secondly, they have long been bought and sold free from all liability to bear special and peculiar taxation. To make them liable to such taxation upon equal terms with land would subject the present owners to the immediate loss of a considerable portion of the capital invested in them. This is a very different thing to the maintenance of an obligation of old standing. It has been shown in Chapter V. that the special taxation of land in the shape of rates, so far as it is old standing, does not fall on the present owners, but is largely in the nature of a rent- charge reserved by the State. It has also been repeatedly pointed out by Dr. Giffen and others that to relieve the land of its exist- ing charge for local taxation would be to make a present to the owners of the capitalised value of the sura remitted. There seems to be no reason why the holders of consols or any other section of the community, or even the nation as a whole, should be called upon to submit to new and special taxation in order that a sum of ;^ioo,ooo,ooo may be presented as a free gift to the land- owners of the country. But, say the spokesmen of this class, surely we should be allowed to retain the advantage gained by the Effect of modem rat»s more economical administration of the poor laws and the abolition of church rates, without being required to con- tribute to new rates for elementary education and sanitary purposes ? This claim is more plausible than the larger one for relief from all special taxation, but it will not bear examination. In the first place, the larger portion of the cost of elementary education is already met by the general taxation of the country, and only so much as represents the varying needs of particular localities is raised locally. If this latter portion is rightly treated as a local charge, it is clear that it must, in rural districts, fall mainly on the land, there being little else to bear it. But may it not be urged that the nature of this charge is sufficiently related to that for the relief of the poor to justify the imposition of a portion of it on the same subjects ? Is not the saving in poor rates partly due to the recognition of the public duty in the matter of education ? Whether this be so pr not, the relief afforded by 70 Local Taxation and Finance. the grants from the national treasury, and by the allocated taxes, oompeiiBated ty described in Chapter IV. and set out in Tables mo era grants- -» j^^ ^^^ XIX., far more than counterbalances the extra local charges on land for education and sanitation. Should it be decided at any future time to cast the balance of the cost of elementary education on the national exchequer, the change should be accompanied by the revocation of the probate duty grant or that out of the beer and spirit duties. The charge on land for sanitary purposes (chiefly the provision of water supplies) is much more than covered by the gain resulting from the nationalisation of the prisons, but it is avery proper charge on the real property-owners in anycase. The depression of the agricultural industry has been and is still urgently pleaded as a reason for giving further relief to those affected by it at the present time. The gravity of the position of the farmers is indisputable, and will be further referred to in the next chapter when dealing with the subject of a division of the rates between occupiers and owners. But we must not allow our sympathy for either of these classes to overbalance our judgment. There are two reasons which, if there were no others, would suffice to bar this claim. In the first place, the plea of depression in any of the industries of the country has never been admitted as a ground for a remission of the obligation to pay rates. Its admission could not be restricted to agriculture, and would be followed by a rush of clamorous applicants from all quarters. Each fresh remission would only serve to render the burden on the less favoured sections and industries more intolerable, and to make the whole system unworkable. But the second objection is even more serious. No one who has closely studied the subject can fail to see that the final and inevitable result of the fall in the prices of agricultural produce must be, if the fall proves to be a permanent one, a heavy reduction in rents. In many districts this fall has hardly yet begun, and in many others it is not yet complete. Any permanent transfer of local burdens from the land could only serve to delay or arrest this economic process, and would afford no real benefit to the tenant-farmers. ^ The relief ' $ee ante, pp. 93i 148,379 180,844 312.501 244,760 191,472 338,487 Loans to the amount of ;^i, 140,5 12 were also raised during Bnrghal expenditure. the year. The chief items of burghal expenditure for the same year were : — Roads under Act of 1878 Police .... Lighting, cleaning, and paving Public works . Drainage Hospitals Public parks . Water supply , Nuisance removal Salaries . Interest on loans ;£2i4,926 255.969 414,918 156,629 73.871 67.583 39.336 221,502 31.197 87.357 406,928 Scotland. 1 03 Loans to the amount of ;^'764,536 were repaid during the year. The total indebtedness of the burghal authorities at the close of the year 1891-92 was ="«'^'*»"- ^^12,365,149; but as a setoff they possessed investments of sinking funds amounting to ^^^i, 095, 408. The gross rental of the burghs, as shown in the valuation roll, was ;^i 2,893,985. In urban districts the rates levied for sanitary and general municipal purposes are charged only on one-fourth of the annual value in the cases of agricultural land, railways, canals, mines, and quarries. There are various statutory limits of rating for these purposes which somewhat restrict the powers of urban authorities to undertake costly improvements. The administration of the Poor Law Acts throughout Scotland, and of the Registration of Births, etc.. Acts, and ., . . . Parochial taxation. Burial Grounds Act, in rural parishes, is entrusted to parochial boards, who levy the rates required for these purposes. Prior to 1890 they also administered the Public Health Acts in rural districts and levied the necessary rate ; but this department has now been transferred to the county councils.^ Elementary education is in the charge of parish and burgh school boards created in 1872, but the school rate is raised by the parochial boards. For poor-law purposes the limits of the old civil parishes, 885 in number, are still adhered to ; but there have been sub- divisions for church and educational purposes. There is nothing in Scotland corresponding to the English poor-law unions and boards of guardians, the administration of the poor laws being wholly parochial. The poor-relief system of Scotland appears to have remained upon a voluntary basis down to 1845, and, till 1 1 t 1 1 1 • x-i Poor rates. then, to have resembled that abandoned m Eng- land in 160T. The old system dated from the latter part of the sixteenth century. The system of general parish assessments, introduced by the Act of 1845, was followed by a rapid increase of expenditure, as the following figures will show ; — ''■ 1 In burghs, the Acts relating to registration of births, etc., burial grounds, and public health, are administered by the town councils. 2 Report of Board of Supervision, 1891-92. I04 Local Taxation and Finance, No. of Assessed Parishes. Cost of Relief and Manage-. ment. Rate per Head of Fopulation. Year. & s. d. 1845-46 , 448 292,518 2 3 1846-47 . SS8 433.915 3 li 1847-48 . 600 533)363 3 9^ 1848-49 . 625 562,268 3 "i 1851-52 • 671 514,288 3 6i 1861-62 . 759 680,700 4 4i 1868-69 • 793 821,184 4 "i 1875-76 . 817 797,800 4 5f 1881-82 . 823 844,782 4 Sf 1891-92 . . 839 871,306 4 3i But this system is not universally in operation, there being still forty-six parishes in which the old voluntary system, modified and reformed, is permitted to continue by the Board of Supervision. There are thirteen other parishes in which poor relief assessments are levied upon an old plan which was in partial use before 1845, known as assessment by established usage. An interesting experiment in taxation was worked out in con- ■•Mear. and mi- nection with the Scottish Poor Law of 1845. stance." r^j^^ ^qqx rate was laid in equal shares on the owners and occupiers of the rateable property in each parish ; but the parochial boards were authorised to levy the occupiers' moiety in either of three ways, one of which was by an assessment of " means and substance." No precise definitions of this term were laid down, and it fell out that an English judge was assessed upon his full salary in aid of the poor rate of a parish in Scotland in which he happened to have a residence. This was simply a glaring instance of the general inconvenience and injustice of the method, which was found to be rapidly depopulating some of the parishes to which it was first applied, and was abolished in 1861. Another experiment, having a similar end in view, has met with greater acceptance. This consists of the classification of occupiers for their share of the poor rate according to the nature of the occupancy. Three • OlaBslflcatlon," Scotland. 105 categories are usually adopted: (i) private residences, (2) shops and business premises, and (3) farms. The rent or annual value is taken as a basis in each case ; but the rates in the pound vary. No uniform scale is prescribed or followed, but in the majority of cases the proportions of three, two, and one, or four, two, and one, respectively, are adopted. This plan is still in operation in 174 parishes.^ It is, of course, inapplicable to parishes consisting chieily of holdings of one class ; but for parishes of mixed character there appears to be much to be said for it, both from the point of view of abstract justice and from that of conformity with the laws of ultimate incidence. " Classification " does not apply to the owners' half-share. The total revenue of the parochial boards in 1891-92 (exclusive of loans) was ^ijS^Sjiifi; and from loans, ;^ 6 8,45 8. The chief items were : — Rates ;^i,367,i48 Grants-in-aid 112,948 Other receipts 55,020 The expenditure may be summarised thus : — Under the Poor Law Acts . . . ;^93 5,069 Under Registration Acts . . . i4j479 Under Burial Grounds Act . . . 23,056 Under Valuation Act .... 1,068 Paid over to school boards . . . S9o.o93 Repayment of loans .... 36,346 The loans outstanding at the end of the year amounted to ;^394,593. The gross rental of assessed parishes was _;^23,6i9,998 ; of unassessed parishes, ;^259,568 ; and of the whole of Scotland, ;>^23,879,566. The history of highway and main-road legislation in Scotland closely resembles that of England, the same ex- ■^ o ' Highway rates. pedients of repair by the inhabitants, statute labour, turnpike tolls, rates, and government subventions having J Vide Parliamentary Paper, No. 154 of 1886, io6 Local Taxation and Finance. been in turn resorted to in each case. Turnpike tolls were abolished in 1883, and the cost is now wholly borne by the rates, except so far as these are relieved by the allocated taxes, as in England. An old and peculiar feature of Scottish local finance is the Ecclesiastical taxa. taxation of real property for ecclesiastical purposes. "°''' The assessments are made and the moneys ex- pended by the "heritors of parishes." Their rates for 1891-92 produced ^^32,348, of which ;^i3,i99 were spent on churches and .j^i 7,582 on manses (parsonages). The rates fall wholly on the owners. The sum paid to the Scottish local taxation account in the Allocated ta«s. ^^^'^ ^ 893-94, from the produce of the allocated taxes, was ;^736,74o, as shown in Table XIX. of the Appendix. In 1891-92 the amount was ;^789,953, and the disposition of this sum is set forth in detail in Table XIV. of the Appendix. In addition to the relief of local taxation thus afforded, Grants-in^id further assistauce is given by way of grants out of the Consolidated Fund and charges borne by Parliamentary votes. It is difficult to determine which of these grants and charges are wholly or partly local in character, no official list or statement being obtainable. Some figures are, how- ever, appended in Table XVI., in which the lines adopted in the English return (see Table IX.) have been followed as far as possible. Two matters in respect of which the Scottish system differs from that of England are the existence of a well-made valuation roll for local purposes, and the very large extent Valuation. ... , , . to which the rates are charged directly upon the owners. Prior to 1854, the county assessments were based upon valuations two hundred years old, but in that year an Act was passed requiring the county and burgh authorities, respectively, to make up a valuation roll annually, and to base their future assess- ments upon it. "^ A uniform basis of assessment is thus provided 1 The values entered in these rolls are similar to those known in England as " gross estimated rental." For poor rate and school rate purposes, deductions are made which furnish a net valuation, similar to the English "rateable value," These deductions vary according to local usage. Scotland. 107 for the whole country, which, in practice, has given very general satisfaction. In a large number of counties and burghs the services of the surveyors of taxes have been utilized in the preparation of the rolls, under an arrangement with the Board of Inland Revenue; and the valuations made by them are accepted by the Crown for the assessment of imperial taxes, as in London under the Metro- polis Valuation Act. The general rules for estimating the value of property correspond closely to those theoretically in operation in England ; but an exception exists in a provision that lands let on lease for periods not exceeding twenty-one years, at a yearly rent and without any other consideration, are to be assessed on the rent, regardless of any improvements effected during the cur- rency of the lease. The Act of 1854 further provides that in the case of leases for more than twenty-one years, the lessee is deemed to be the owner, but is empowered to deduct from the rent or ground-rent so much of the rates as corresponds to the proportion which the rent or ground-rent bears to the total valuation. The duty of preparing the valuation roll in royal and Parliamentary burghs is cast on the magistrates of such burghs ; elsewhere, on the county councils. The cost is borne in equal proportions by occupiers and owners. The division of certain of the rates between occupiers and owners extends, in some cases, to the making of ' . DlvlBion of rates. separate assessments on the respective persons of each class, and the separate collection of the respective quotas from those persons or their agents. In other cases the rates are first paid by the occupiers, and the owners' proportion is deducted from the rent. The apportionment of rates between these classes and the amounts borne by each are set out in detail in Table XV. of the Appendix. Under the Act of 1889, county rates for new purposes and in- creases in the old ones beyond the average of the previous ten years fall equally on the owners and occupiers. The older plan, of charging the owner only, conformed to the facts of the ultimate incidence so far as the rates were levied in respect of lands ; but it has evidently been considered desirable to work towards an io8 Local Taxation and Finance. equal division all round. The case for applying the latter method to burghal rates is, as has been shown in Part I., Chapters V. and VI., extremely strong and urgent. It will be seen that notwithstanding the inadequate contribu- tion from property in towns, the Scottish system already concedes much of the relief demanded, but not yet secured, by the occupiers in England. It will presently be seen that Ireland is also con- siderably ahead of England in respect of both uniformity of valua- tion and the liability of owners for a share of the local burdens. In burghs there is a twofold collection of rates by the burgh and parish authorities, as in England ; and in rural districts by the corresponding levies of the county and parish OoUaction of rates, ... \, , , , , , authorities. But to the latter must be added the separate levy of church rates, which are not now existent in burghs. PART III. IRELAND. A REVIEW of Irish local finance is greatly facilitated by the exist- ence of an admirable report on local government and taxation in Ireland, drawn up by Mr. W. P. O'Brien, local government inspec- tor, in 1878 ; and by the reports and returns of Dr. W. Neilson Hancock, of the Irish Local Government Board. The latter also contributed an essay on these subjects to the series issued by the Cobden Club in 1875, i" which much of the matter contained in his ofiBcial reports was collected and lucidly presented. Irish local finance falls naturally into four main divisions, relat- ing respectively to counties, towns, unions, and harbours and other miscellaneous matters. The county rate is known as the " grand jury cess," and is the oldest form of Irish direct Orand jury cess. local taxation. It dates back to 1635, m which year an Act was passed by the Irish parliament authorising the justices of assize and of the peace, with the assent of the grand jury, to tax the inhabitants for the repair of bridges. In the latter half of the last century, this tax was made applicable to the repair of roads, and before the end of that century Ireland had become pos- sessed of a network of unusually good highways. Turnpike tolls 'had come into use for the maintenance of main roads at an earlier date, but during the first half of the present century these were gradually superseded by rates, and in 1857 were finally abolished, Ireland thus took the lead in the British Islands in this important reform. The total amount of the grand jury cess was, in 1856, ;^i,oi8,si5; in 1866, ;^i,oss,482 ; in 1876, ;^i,i3o,723; and in 1893, ;^i,2ii,7oi. There would have been, however, a larger increase in the later years, but for the grants of aid from imperial^ -funds in respect of lunatic asylums, prisons, and roads ; and the 109 no Local Taxation and Finance. decrease of the rural population must also be taken into account. The withdrawal of a number of urban areas from the fiscal control of the grand juries (see below) has also assisted in keeping down the total of the cess. Of the gross presentments of grand jury cess for 1893, ;^7Si>8s8, or rather more than one half, was for roads and bridges; the only other single department of county business which cost over ;^ioo,ooo being lunatic asylums. The charge for police (exclusive of the Dublin Metropolitan Police) which fell upon the Irish rates in 1893 was only ;^2 7,248. The smallness of this sum is due to the fact that the Royal Irish Con- stabulary is a semi-military force, the very heavy normal cost of which is charged to the imperial revenues. ■'^ It is only the cost of extra duties, arising out of local disturbances and special circum- stances, which is charged to the county authorities and raised locally. The grand jury is a non-elective body, chiefly drawn from the landlord class ; and although the expenditure of the cess is first submitted to bodies called " presentment sessions," composed of justices and cesspayers, there are such restrictions as quite to prevent all effective popular control. The authority of the grand juries formerly extended to all the towns, but the cities of DubUn, Cork, and Limerick succeeded, in 1849, 1852, and 1853, in ob- taining Acts by which the non-judicial functions and powers of the grand juries were transferred to the municipal councils in those cities. The grand juries have also ceased to act as the road authorities in all the more populous of the other towns and urban areas, the care and cost of the roads in such places being undertaken by the town authorities. No particulars are pub- lished of the loan indebtedness of the county and union authorities in Ireland, and therefore no total for the whole country can be given. A peculiar and interesting feature of Irish local finance consists of the arrangements under which the construction of railways and tramways may be aided by baronial guarantee. The method is by pledging the rates of the barony (a sub-division of the county), with the consent of the baronial presentment sessions and certain higher powers. 1 See Appendix, Table XVIII. Ireland. in The older municipal bodies of the Irish cities and towns, like those of England, appear, in the last century, or ° , Town taxation. earlier, to have become close corporations, with exclusive privileges of trading, and to have lost whatever powers of imposing direct taxation they may have formerly possessed. This has been remedied by Acts passed in 1828, 1840, and 1854, and by special Acts applicable to some of the larger towns. Under these, representative bodies have been created, with func- tions analogous to those of urban authorities in England, and with similar taxing and borrowing powers ; subject, however, to certain limitations in these latter respects. The receipts of the town authorities in 1893, exclusive of loans, amounted to ;^938,528, of which ;^676j853 was raised by rates. The expen- diture for the same year included ;^ 194,1 72 in respect of water supply, and ;^i54,i87 on paving and repair of streets. The out- standing debt of the town authorities in 1893 was ;^4,630,979. In 1871, the amount was _;^i,6o2,928. The city of Dublin occupies a peculiar position in respect of its police force. This is distinct from the Con- B^iundtypouce stabulary, but is under the direct control of the "*°' Crown. The Dublin City Council is, however, required to levy a police rate of 8d. in thc;^, and to hand the proceeds over to the Metropolitan Police Commissioner. The latter official also re- ceives the proceeds of special and peculiar local taxes on carriages and on pawnbrokers' and publicans' licenses, in addition to fees, fines, and penalties from the city police courts. The total sum received from local sources in 1893-94 was ;i^5i,ioo, but the bulk of the charge rests upon the imperial exchequer.^ Belfast and Londonderry formerly possessed similar local police forces, but these have been disbanded. No statutory provision for the relief of the poor was made until 1771 ; and the law passed in that year, and ex- tended in 1806 and 1818, was merely permissive and practically inoperative. In 1838, however, a comprehensive and obligatory poor law was passed, under which Ireland was 1 See Appendix, Table XVIII. 112 Local Taxation and Finance. mapped out into unions and electoral districts, and a system of relief and administration resembling that of England was in- stituted. There was, indeed, the important distinction that the Irish system at first permitted of no out-relief; but this feature was introduced in 1847, and has since received an extended application. The cost of the system was estimated beforehand at ;^295,ooo, but this sum appears to have been exceeded from the outset. The outbreak of the Irish famine rapidly swelled the outlay, which, for the year ending September, 1849, amounted to no less than ;^2, 17 7,649. In the following year it fell to ;^i,430,io8, and continued to decrease until 1859, when the total was only ;^4i3,7i2. From this point the cost has slowly risen, and for 1893 it amounted to ;^85 7,910. The boards of guardians have been entrusted with many new duties from time to time. These have swollen the expenditure for 1893 to _;^i, 397,032, of which sum ;^i, 028,353 was raised by poor rates, ;^234,oso by Parliamentary grants, and ;^i45!329 by loans. Amongst the items of expenditure is one of ;^i 9,865 under the National School Teachers Act, which is the only entry in the Irish local taxation returns in respect of education. The bulk of the cost of primary education in Ireland is borne by the imperial taxes. ^ Even the trifling sum contributed from the rates is now partly, if not wholly, repaid (see page 115). The poor law guardians consist partly of elected and partly of ex officio members, the latter being magistrates. The cost of the maintenance of paupers was, by the Act of 1838, charged to the ratepayers of the electoral divisions to which they belonged; but considerable modifications of this principle were legalised by an Act of 1876. The harbour and pier authorities are forty-six in number, and their receipts amounted in 1893 to the consider- able sum of ;^44S,i34. The outstanding debt of these bodies in 1893, so far as it is tabulated, was ;^2, 508,458, but only twenty-six of the number are entered in the returns. There appear to be at least five others which are in debt to the imperial treasury, inasmuch as repayments are entered in the 1 See Appendix Table XVIII. Ireland. 113 tables of expenditure. Some of the harbours, constructed with moneys provided from the imperial taxes for the purposes of steamboat traflfic and of carrying the mails, are still under the im- perial authorities, and although these are included in the tables of receipts and expenditure, they are excluded from those relating to debt. The others are controlled by special bodies of commis- sioners, and in no case belong to the town or county authorities. Considerable public works have been undertaken during the great famine and in subsequent periods of distress, f , •,- -i • n . , . ^ ,. Pablic worlu. largely, if not chiefly, with a view to finding employment and affording relief. The principal of these are works of arterial drainage, inland navigation, and light railways. A large share of the cost has been borne by the imperial treasury, and the balance has been lent to local bodies on the security of the rates. The funds required for maintenance are raised by rates on the benefited properties or districts, as prescribed by Acts passed in 1842, 1863, 1866, and more recent years; by treasury grants ; and, in the case of inland navigations, by tolls and other receipts. There are a number of dues, duties, fines, and fees of various kinds levied in Ireland, which are included in the DueBjfltc, returns of local taxation, but are not in all cases properly so described. Some of them are of considerable antiquity, and the arrangements under which they are exacted are bound up with private or professional vested interests. Apart from the tolls and dues levied by the harbour authorities, these miscellaneous receipts are not important (see Table XVII.) and need not be explained in detail. Ireland, like Scotland, is in advance of England in the matter of a uniform valuation for rates and taxes. The Valuation. official valuation, commenced in 1827 by Sir Richard Griffiths and generally known by his name, was com- pleted by his successor, and brought into full operation by the General Tenement Valuation Act of 1852. So far as the valua- tion relates to lands, it was fixed by a reference to agricultural prices, and can only be altered at intervals of fourteen years and 114 Local Taxation and Finance. with the consent of the grand juries. No revaluation has, in fact, been made since 1852. Buildings are subject to more frequent revaluation, and the value is ascertained in a manner more nearly corresponding to the English method. The case of Ireland also resembles that of Scotland, rather than that of England, in the matter of the division Division of rates, ° of the rates between owners and occupiers. The poor rate is equally divided, and provision was made in the Irish Land Act of 1870 for the extension of the application of the principle to all other rates in new lettings of agricultural and pastoral holdings. Owing, however, to the omission of a pro- hibition of contracts to the contrary effect, the operation of this provision has been greatly restricted by agreements imposing the whole burden of the rates upon the tenants. Town rates are wholly borne by the occupiers, as in England. ■■■ The actual pay- ment of rates in Ireland (except in respect of holdings under ;^4 valuation) is by the occupier, who deducts the share for which the owner may be liable from the rent. The collection of rates in Ireland is effected, in rural districts, under the two main heads of grand jury cess and Collection of rates. . . , ^. . poor rate ; and m the smaller towns there is added to these the town rate. In Belfast, Cork, Limerick, and some smaller places, the town rate includes the grand jury cess, and in Dublin there is a complete consolidation of all rates in a single collection. The Irish share of the allocated taxes \ is applied as follows : — Allocated taxes. (') £s,<^°'^ of the probatc duty grant to the Royal Dublin Society annually, for the improve- ment of the breed of horses and cattle ; (2) Half of the balance of said grant (in 1891-92, ;;^i 19,615) to guardians of unions in respect of salaries, etc., of officers ; (3) Remainder of said grant (;^i 19,615 in 1891-92) to road authorities in respect of roads and bridges ; 1 See antt, p. 74. 2 See ante, p. 32, et seq. The disposition is governed by the Probate Duties (Scotland and Ireland) Act, 1888, and the Local Taxation (Customs and Excise) Act, 1890. Ireland. 1 1 5 (4) ;^ 78,000 per annum of the proceeds of the customs and excise duties to the commissioners of education for national schools (including certain repayments to guardians of contribu- tory unions) ; and (5) Residue of last-named duties (;^37,o3o in 1891-92) to the intermediate education board for certain purposes in furtherance of intermediate education. The Irish local charges borne by the imperial funds have long been largely in excess (proportionately) of the ^ '' Grants-in-aid. corresponding English and Scottish charges borne in like manner. This arises partly from the different character and management of the police forces in Ireland, and partly from the poverty of the Irish people. It must also be borne in mind that Ireland receives no revenue for local purposes from liquor and establishment licenses (see Appendix, Table XIX.), and con- tinues to receive grants from imperial funds for some of the pur- poses which in Great Britain are now charged to the license duties. No complete official statement of the Parliamentary votes and consolidated fund charges in aid of Irish local taxation is issued, but some statistics bearing on the subject will be found in Table XVIII. of the Appendix. The relief of local taxation thus afforded is in addition to that provided by the Irish share of the allocated taxes. Table XVIII. may be compared with Table IX. for England and Wales, and Table XVI. for Scotland. A relic of mediaeval taxation still survives at Galway, in the shape of duties on saleable articles passing through '^ r o o 014 tolls and taxei. the gates of the town. The present tariff is regu- lated by an Act of 1853, and consists of "ingate tolls," extending to about one hundred items, and "outgate tolls," extending to about forty items. Similar tolls are believed to exist in other Irish towns, but no details are obtainable. In the Burdens on Land Report, 1846, reference is made (page 12) to a vestry cess for coffins for the poor, a foundling tax and a tax called " minister's money." These no longer appear in the accounts of Irish local taxation, and are no doubt obsolete. APPENDIX I. ENGLAND AND WALES. Table L Total amount of the rates raised in England and Wales for certain years from 1803 to 1892-3, the poor rate valuation in force at the commencement of the year, and the average rate in the /^ for each year of the rates raised as calculated on such rateable values. (Compiled chiefly from Mr. Fowler's Report on Local Taxation, 1893.) Year. Population. Poor Rate Valuation. Amount of Rates Raised. Rate in the £. 1803 9,234,649 (not known) ;£5,348,ooo s. d. 4 5^ 1813-15 (average) 10,649,743 1 (1815) ] i ^40,121,000 ) 8,164,000 3 ^% 1817 11.555,054 (not known) 10,107,000 3 i°K 1826-27 13.247.277 (not known) 9.544.000 3 8 1841 15,562,000 / (1840-41) I \ 62,540,030 ) 8,101,000 2 7 1851 17.773.324 { tCUf } 8,916,000 2 1% 1862 20,371.013 (not known) 12,207,000 2 3 1S71-72 22,788,594 109.447,111 17,646,720 3 2-7 1874-75 23.724.834 115,646,631 19.335.703 3 4"! 1879-80 25.371.489 133.769.873 22,160,099 3 3-8 1884-85 26,921,737 i4S.S27,944 25,666,552 3 6-3 1889-90 28,447,014 150,485.974 27.713,409 3 8-2 1890-91 28,762,287 152,116,008 27,818,642 3 7'9 1891-92 29,081,047 1S5.896.383 (not known) (not known) 1892-93 29,403,346 157,722,913 (not known) (not known) 117 ii8 Appendix I. OS 00 r^ E p O "^ o W 1-1 m ^ s. .a -ft > I s ■ cs ^1 GO'S w o Qvcoro^ ■42-9381 0} lOTid '^§588"2g5S.§ pspxooaj lOH i"'i'^i,'5'i'^t "10 tfl'fl-N O 6 s?;zi «. ^^ 13 A *> S ON N .^ J ■"81 !-i§§iMli;:-^i oijoud git^.^- o cj;o o cK-f N g s (4 M P9PA0D9I g§.^2 -^8 8S;>£-?J>^ r K m '—' ,n ?r __. :her Paymenti of Poor Rate except to ighway Rates o w ■*o\'d-a»'-* i^o N O CTiONO CTiiof^CTi'^O Ot-<00\MOfOu-i li-jvo •p3ure,j90si3?ON ^g^^J^5;«g:o^" VO '^ t^O iO\0 00 00 ■<^>o ^ m" cT rT OS M U) 4^^ bflo o . ^mw C^O OOO wt^ gT3 3 « '^8SS,Sc;?g^;:r& mi°« ■P3UIB113DSE 10^ «- # ^ g; ^^'g pi ^ aid to unty, Rates Poor *g^-0 00 "^ CTj ^ ^ •"• *^ V^ hT i-T « COO 'O' ^c3 1^ o o mO On»-» vOi-i00>-ftrjTj-tr( tJ-\0 OO M* &4 tN. O fOON O O 00 -^^ O ''d- (N ro - >H (<-•<<-: OnOO moo HH00Ot>iONts.OM>.'-ic^\r> 2-^ OnO -^^^ O O « -^VO NOOVO « fOI^ in ooco ot^ irir^Tj--^ i>.vo i^oo O ■^ •-• OpH VQu-j OO O00M-0»J^CN I>-00 HH^'O « (ji"" S?w cT ^ vo tC^ ^ ^ 4intCoooo o\ iS in jrt nJ oJ 13 jr ^ 2 "^ fO moo I^^NO'-|'-'M1HHm S giprp.3;00O '77'^^'^ V^^ *^°? 9^ ?* -s <^ rs. lii «" N M M dnvo ybo>66666« "in •^t>."inO0 o •-<•-•« mfnuTO r-^oo a\ a» 13 tg In. r-» Jg l>.00 OOOOOOOOOOOOOOOOOOOOOO fl V ^«H.„»-.M s ■o ^ ^ 1 0) ft) 1- .5 iJ c g| a " ,<->. i63 Valuation and assessment expenses I04i448 Salaries and pensions of parochial officers, and other ex- penses * - 651*748 Registration (births, deaths, etc.) 98,419 Registration (voters) and jury lists ^97)974 Vaccination 83,709 School fees of non-pauper children ^'^^^ Other expenses 36,089 Total, as per column 4, Table II 2,626,603 Total expenditure ;^i9,4ii,897 1 Equal to 6s. sJd. per head on the estimated population. Of this, 4s. 7d. per head was borne by rates, the balance being met by receipts-in-aid, chiefly from allocated taxes. (See Tables IX. and XIX.) ^ Table IV. Being a copy of House of Commons Return, No. 430, year 1870, showing the direct local taxation levied in England and Wales in the year ended March 25, 1868. 1. Amount levied for poor relief ^7>S2S,592 2. County, hundred, borough, and police rates : («) Contributed from poor rate ...... ^^2,462,922 (5) Levied separately 493»285 2,956,207 3. Highway rate : (a) Contributed from poor rate ;^62i,436 uS Levied separately 9^6,779 1,538,213 4. Church rates . . - 217,482 5. Lighting and watching rates (exc. Metropolis) 79,393 6. Improvement commissioners (exc. Metropolis) 410,105 7. General district rates (exc. Metropolis) 1,683,702 8. General and lighting rates in the Metropolis . . _ . . _ . . . 981,140 9. Rates under courts or commissioners of sewers (including drainage and em- bankment rates) . . . 7I4j734 10. Rates of other kinds : {a) Contributed from poor rate £is-z,oy6 (i>) Levied separately 224.574 376,650 Total I . ;gi6,783v 220 I20 Appendix I. •a c •a a C (3 ri n hJ c^ Iw o o a; .^ .£; f3 3 rJ r> P^ X. C?) en 0) 5 H o ^ -f1 1-1 U O lU N O O VO fO ■* ^00 i-i VO COVO 00 w t-< «^ ON O 00 vrT -^ r^oo CO o o, OS « VO oo Tj- Troo o c» woo CO M !>. a» ■^ a« o o oo" cToo o o t^ w o\ '^t^ i>^ -^lO'-' -^o s? a ■3 1^ P. £ fl c 3 rt OJ fl S? S? >^ C '53 ■ gj O S 2 « I-I S.S 38 g lo S? -2|S S " O I- rt •d rtj3 n jj +j o ^>» VrO h " o a 0\ in c,S "^ ? ^ o«^ j^ S 4) p t^ rt u o (3 n ^ « -4! a . « g -« g.S -Is? ii „ 4) B ,„ K « 'c3 5 )- o — ."S g ra 1) aj _e " ■"■ lU O j_. o *-• hfl-S iJ W bfl ^^ a F— -:; **- fS ,S ^ 73 U O O U otr M B p i Appendix I. 121 < C C '5b s 6 00 cd c o Pil V (4 vi 11° wig WO « )-< 4; cj ■tJ S o S,0o "si^ 5 « O J rtS*' H H 3 o w H t> in o CO M w roio 0\ in N »no in On ih' N en O O 00 M H inco M vo w ■^ CO ^ cfvcT m in w S? POO\ en M w m d'oo" Th CO oo" t>\0 IN. >-< 0\t^ « 00 in ■^ «n M rnin ds\o O m o in in m M N rn hT coin t^ ^ w in a« ino m cTioo \o w o o t^ fn en cn\o ^ On M mm m \o w ^ ^ S^ in o\ OS? S^ Oi t-^O M 00 . iH o\ M cTm t^ -"^ «sO ON «- vo in N 00 in N O m en tCrncOt-T m ■* M ON^ in -- a . .° o •am" 3 S C • 0.2 « O (A (. to r" II g. O O lJ " -Z « CO o-S .a 3 e g ^ S o q S S " wis .S " o 5 5° !•§" >Ua2 1^ _ " ^ o ■ 2.3 ' «'^ O w II .t^ o ^^ 3 OJ 5 "do S OJ 'Ik « 'O 'O rt s s . " s s 14 5 ^f^ I- o cr to '^ to >* in -■ .« OJ g 3 (^.2 g c:S g^ I — ^ O >3i2ooi333a 122 Appendix I. Table VII. Classification of Expenditure not Defrayed out of Loans. (From Local TazaUon Returns, i8go-gx.) Relief of the poor (including salaries, but excluding maintenance of pauper lunatics) . . . ;f 6>737>90l Pauper lunatics and lunatic asylums . . . 1,632,780 Police 4>I4S.S7S Prosecutions, and conveyance and maintenance of prisoners ....... 208,006 Education (including expenses of school boards, school attendance committees, reformatories, and industrial schools) ..... 4,305,286 Highways, street improvements, and turnpike roads 6,162,189 Gas works 3,263i974 Public lighting 973,212 Water works 969,277 Sevperage and sewage disposal works . . . 1,067,364 Markets and fairs 282,724 Cemeteries and burial grounds .... 268,870 , Fire brigades 229,997 Public buildingSj offices, etc. (not included under ' other headings) . . '. . . . 213,666 Parks, pleasure grounds, commons, and open spaces 272,911 • Vublit libraries and museums . . . . . 220,479 Baths, wash-houses, and open bathing-places . . 1S5)S3° . Bridges and ferries » 199)278 Artisans' and labourers' dwellings improvements . 18,158 Contagious diseases (animals) Acts .... 125,491 ' Hospitals . ... . . .' . 187,677 Harbours, piers, docks, and quays .... 1,429,249 ' Slaughter houses . ' . . . . .' ' 14,844 Land drainage, embankment, and river conservancy 252,818 . Tram.ways - • 38,57° Other public works and purposes .... 2,607,453 Private improvement works . . _ . .. . 580,960 Payments in respect of principal and interest of loans (including payments to sinking funds) 1 . . il,393>7lS ' Salaries and superannuation allowances ^ .' . 1,627,849 Establishment charges ^ 484.994 « Legal and ParUamentary expenses ^ . . . 195,658 Other expenditure 396)223 Total . ;^5o.662,678 1 Under this heading are included the payments on account of the principal and interest of the loans raised for all the specific purposes mentioned in the table. 2 Only a portion of the salaries of the officers, estabhshment charges, and legal and Parlia- mentary expenses of the local authorities is included under these headings. In many cases the expendUure of the local authority for these purposes in connection with some particular undertaking or purpose is included in the expenditure on that undertaking or purpose. Appendix I. 123 Table VIII. Receipts from Public Rates in England and Wales. (Condensed from Mr. Fowler's Report on Local Taxation, 1893.) Local Authorities. Receipts from Rates. 1880-81. 1891. Poor law authorities .... ;^7,969.S45 ;^7,474,099 Burial boards 130,229 178,030 Metropolitan board of works . 620,957 County authorities in the Metropolis 1^7,284 — London county council . i . . 1,718,951 Metropolitan vestries and district boards 1,578,666 1,808,777 Commissioners of police in the Metropolis 555.844 790,826 Corporation of London .... 81,653 95.498 City commissioners of sewers 173.780 324,258 Churchwardens (church rate) . 11,99b 5,723 School boards 1.562,385 2,967,421 Highway authorities .... 1,674,848 1,322,091 Municipal corporations .... 1,349.128 1,311,824 Borough sanitary authorities, . 2,917.338 4,913,037 Other urban sanitary authorities, . 2,013,467 2,371,243 Joint boards 1,790 1,710 County authorities (exc. Metropolis) ,i,S?7,9S3 , 1,677,791 Commissioners of sewers 57,817 47,559 Drainage, embankment, and conservancy boards 202,380 244,894 Rural sanitary authorities 220,651 411,971 Miscellaneous 39,779 152,939 Totals . ; . . . ;if 22,907,790 ^27,818,642 Summary. Purely urban . . . . Partly urban and partly rural. Purely rural . . . . ;^I2,225,00O 8,748,000 1,933,000 ;^i7,5i3,ooo 8,196,000 2,108,000 Table IX. Showing the Amounts Voted in Relief of Local Taxation from National Revenues. (Compiled from Mr. Fowler's Report on Local Taxation, 1893.) Parliamentary Grants in Aid of Local Rates. Grant in aid of When First Voted. 1887-88. 1891-92. Teachers in poor law schools • Poor law medical officers . Police, counties, and boroughs . Metropolitan police .... Criminal prosecutions .... Metropolitan lire brigade . Berwick bridge Industrial schools (local authorities) . Elementary education (school boards) — Fee grant Annual grants for day and evening scholars School boards in poor districts Medical officers of health and inspectors of nuisances .... Pauper lunatics Registration of births and deaths Disturnpiked and main roads 1846 • 1846 1856 1833 183s 1865-66 1831 J876 1891 1870 1870 1873 74 1874 1875 1882 ■ i£36,82S 149,506 864,083 575,141 133,732 10,000 32,212 1,255,938 7,167 .73,910 485,169 9,500 498,797 ;£4,3oo 10,000 90 38,800 329,285 1,508,427 8,393 Totals (carried forward) - ^,132,070 ^£1,899,297 Other Local Charges transferred to, or borne by, Annual Votes of Parliament. Charge in Respect of When First Voted. 1887-88. 1891-92. District auditors Clerks of assize Compensation to clerks of the peace, etc. Central criminal court .... Mid(ilesex sessions .... Public vaccinators .... Elementary education (voluntary schoolsj Fee grant Annual grants for day and evening scholars Reformatory schools .... Industrial schools (other than those of local authorities) Rates on government property . County and borough prisons, and re- j" moval of convicts • . Fleiuro-pneumonia. .... 1846 1852 1855 1846 1859-60 1867 1891 1834 1 854-53 1856-57 -1859 - 1835 and 1846 1890 ;^i5.246 10,602 1 1,806 5,i8l 819 16,468 1,927,285 66,920, 103,667 182,459. ■ 398,683 ;(;i4,o69 17,97s 198 1,454 493,155 2,089,473 62,365 109,026 192,344 398,047 140,000 Totals - ;£2,738,136 ;C3,5i8,io6 Total parliamentary subventions (ipclud- ing part x above) . Probate duty and licenses . Customs and excise duties . - ;£6,870,2o6 ;£s,4i7,403 5,313,278 1,115,801 Total relief of local taxation from national revenues . ° - " ;£6,87o,2o6" ;£ii,846,482 1 Including payments to Irish officers, Appendix I. 125 Table X. Local Debt. (From Mr. Fowler's Report on Local Taxation, 1893.) Amounts and Purposes of Outstanding Loans of Local Authorities in 1884-85 and 1890-91, 1884-85. 1890-91. Poor law purposes ' . . ■ . ;^6,36i,i8o ;^7,056,i6e Lunatic asylums 3.326,396 3,686,662 Police stations, gaols, and lock-up houses 720.737 1,122,548 Schools (including reformatories and in- dustrial schools) .... 14,876,928 18,616,269 Highways, street improvements, and turn- pike roads 26,945,772 28,275,890 Electric lighting and supply . 56,942 Waterworks 30,326,906 38,325,912 Gasworks 13,768,690 14,991.197 Sewerage and sewage disposal works I&.569.3S3 19,969,077 Markets 5,004,400 5,380,982 Cemeteries and burial grounds 2,368,638 2,492,185 Fire brigades 308,508 489,741 Public buildings, offices, etc., (not in- cluded under other headings) . 3.751.055 4,315,707 Parks, pleasure grounds, commons, and open spaces 2,441,108 3,992,137 Public libraries, museums, and schools of science and art ... . 374.887 489,693 Baths, wash-houses, and open bathing- places 561,649 950,308 Bridges and ferries 3.112,592 4,053,596 Artisans' and labourers' dwellings im- provements 3.532,383 3,814,035 Cattle Diseases Prevention Act, 1866 . 139.367 76,239 Hospitals 336,184 669,234 Harbours, piers, docks, and quays . 28,537.809 31,466,462 Land drainage and embankment, river conservancy and sea defences . 2,158,452 3,147.417 Tramways 1,167,605 1,317,555 Private improvement works • 890,019 940,969 Loans charged on church rates 18,645 6,100 Allotments 14,164 Public lighting 28,576 46,095 Slaughter-houses 60,325 121,631 5.519,804 5,330,545 Totals ;^i73,207,968 ^201,215,458 ' Including the asylums for imbeciles provided by the managers of the Metropolitan asylums district, loans for which are excluded from the amounts entered under the heading of "lunatic asylums." 126 Appendix I. Table XI. Comparison of the Valuation of the Properties Assessed for Crown Purposes with that of the same Properties Assessed for Local Purposes. ■"■ (From Report of Local Government Board, 1891-92.) The Mkteopolis. The Rest of England. Year. (i) Gross Value in Income Tax Assessment under Schedule A. (2) Valuation under Valuation (Metropolis) Act. - (3) Gross Value in Income Tax Assessment under Schedule A. (4) Valuation by Assessment Committees. 1874-75 1879-80 1884-85 1889-90 1890-91 ;^24,I92,II2 28,444,287 32,895,336 35,122,308 35.533.116 /;f 24, 145,246 \ 19,884,462 / 28,423,199 \ 23,353.813 / 32,895,317 \ 27,128,614 / 35,122,308 \ 28,940,869 f 35.533,116 \ 29,268,945 ^^107,689,995 i23,io'7,i04' 127,047,097 128,210,887 129,175.384 /;.^97,8l2,540 \ 84,049,290 /iii.355,633 \ 95.390,307 / 1 18,025, 1 10 1.100,982,696 '120,499,028 .102,004,910 /i22,i57,6o6 1103,377,558 Note. — In columns (2) and (4) the first of the bracketed figures against each year represent the " Gross Estimated Rental," and the second the *' Rateable Value." These figures show that the valuation of property in respect of income tax under Schedule A is now the same as the gross esti- mated rental shown by the poor rate valuation in the Metropolis, but that, as regards the rest of England, the crown valuation is still largely in excess of the poor rate valuation. In 1890-91 the gross value in the income tax assessment for England and Wales, excluding the Metropolis, exceeded the gross estimated rental for the purposes of the poor rate by 5*7 per -cent., whilst in the Metropolis the assessment and the rental were precisely the same in amount. ^ In 1889-90 the gross estimated rental of property in England and Wales rated, but not assessed under Schedule A, was ^{^27,301, 566. The rateable value of this property was_^2i,93I,257. Appendix II. 127 :alments Loans -epaid ■ing the Year elusive nterest). %^S..2 S8!SS->§5- o» i" VD 00 01 ■^ ►^ 0„ 0^^ H tC cTco" m" cK eT ■-? CO cT cT 1: -a" ^ 0.^ » H H rj ? >g 1 lo«| IXL ■^ ^ *?? -4-> £ .n^ « . « ON H m H i>.vo « ^N 0) H Total Expenditu (excludinj Repaymei of Instalment of Loans), Ov « Cft «_^ 0>iO Ul 10 Xi d. 01 ns CO M in »o m'vcT ci> d\oo co i" h" d; ^ a 1 w m m CO « cnoa tH3\ m cochco en PI t^ hT H M* CO "o ■^^^ ■^hwiOoo ThfONN'O ■* .s »oco 10 On ■* t^ r^ tn H 13 M CO N Oi w (TWO m m JS S^'s^s ^i ^%\ I^ 1 -4-. ..^^HCO W ' CO 3 M <) ^ 10 > «^ xn >< — ' p. CO vo o; «^ "t "^ 'i "_ 9. ^ i3-B iri'O^ ro 00" t^ tC N~ CO w CO V S N \0 CO M t>. t>. --J-OO M 0. 2 H^ «o p^ojcn COM ts e3 3 V s? V ■3 d u .„ M fOVOOOm VOt^OvOiON tn wo-j-ro woMio -^oo <>. i2 H-< ^ 00 ■*-• M -a D 5i ^ J, All othe Source! (excludir Loans). t^ 0" w" cT cT M h" -^ cf t'. •s. 1— I X X H 8 Pi »0 t>.0 M COM -* V 3 Q 0-2 lomiom VD ts a> inco -*■ t^ ONVO >0 M CO C7> « s s ^ 1 ,<; 13 a i Plh < xn H ■a 3 1 lOfOH HCO ho. NCON HCSM rOH N t; ■* »n co« 1 cT »n ■* 1 cT 1- CO =10 S a s? M* iS (8 H fe« V ■s to CM3i00w«-+ o\ a \0 \0 »ni>. ooovooo^ t^ S •r! V ►T 1 m" cT 0" c> tC t o" vo a; « o> coo »o*o*o m H *o U CO ' ■*; N « H ' in ■a p^ V S? en T* g* -4-. (B s 3 s " 1^ "0 " ■ &I s S' § <1 o lifi s? « «5 "O I++I 1 1 + I++ + I-= O m t^ tN, 00 m "O in CO H N t>,Cn o^o t^ ro-^ « «o^ t-.eo^ t^ oo_ w^ VO N «3 ^s 5 i^ ^ ^ •«■ t^ w* "o" m H'rnxo' o" « Cft M 1 t^Cft M H m 00 rt^ « 00 M -^M n CO ro "K u>i S^coH ' cK l« 1 .B 03 VO H M roo* Ol tv.VO O tr\t~ t^vo tJ- CO (7. Oi *c \O00 0\ M Tl-M CO •OS tC pToo" h" cScT ^cn cT « m oi ■* « H M m 0\ 1^ S? vo « o_ >5 v « loco o yn •^ m N ««0 ■* lis o»"e- r^ r^ CO H n « oi « ro \o om VI O tN Oi« tCcS ■^ O t^ fO-O N M 1 VO k^HM I M CO >5 (4 ^VOCO C>M tN. H CO to m 0\ row M -*CO M 0_H^ t^ ? eTio tCdi C^vo" in tfco ^ 'O C 4) VI M ro CO fO « H IN CO M « M « fO S?cSh- cS 1 o w • V • o • a H i ■ • • ft • • i h D >• ••■ll 1 ' * •1. • 5 ST* o S 2 ^ 3 £? ^ la^ « Appendix II. 129 Table XIV. Allocated Taxes. (From Parliamentary Paper C. 7516, 1894.) Summary of the Total Payments into and out of the Local Taxation (Scotland) Account for the Financial Year, ended ^ist March, 1892. Particulars of Receipts and Payments. Payments into the Account. Payments out of the Account. Unspent from Grant. I. Customs and Excise Duties. Receipts. Com mi ss'i oners of Customs .... Ditto Inland Revenue Payments. Technical Education .... Police Superannuation .... Reliefof School Fees Medical Officers and Sanitary Inspectors . Relief of Local Rates . 129,870 9 6 ;^35,iS7 14 II 40,000 40,000 15,010 2 23,265 14 7 £l 12 I Amount unspent transferred to correspond- ing Grant for 1892-93 , . , . 153,423 9 6 153.433 II 6 7 12 I II. Local Taxation Licenses and Probate Duty. Receipts. Local Taxation Licenses Prohate Duty . . . . Payfnents. Highlands and Islands Grant (chiefly ap- plied in relief of Road Rates) . Contribution to Cost of Roads . . . Ditto to Pay and Clothing of Police Ditto to Parochial Boards (Medical Relief) .... Ditto ditto (Pauper Lunatics) ReliefofSchoolFees . 327,299 I 4 309,230 10 6 10,000 35,000 155,000 20,023 3 5 90.450 5 4 366,587 18 9 14 9 160 15 II Amount unspent transferred to correspond- ing Grants for 1892-93 .... 636,529 II 10 677,061 6 9 170 10 8 Customs and Excise Duties, as above Local Taxation Licenses, etc,, do, . 153.423 9 C 636,529 II 10 153.433 II 6 677,061 6 9 7 12 I 170 10 8 Ditto Balances trans- ferred from Grants for preceding year (Customs and Excise Duties, and Local Taxation Licenses, etc.) 789)953 I 4 40,719 19 8 Grand Total .... ;£83o,673 i ;£83o,4g4 18 3 £ll^ 2 9 t36 Appendix It, Table XV. Apportionment of Scottish Rates between Owners and Occupiers in 1889-90. (From Local Taxation Returns.) Local Authorities. Parochial boards (including school rate) Burgh authorities Commissioners of supply , Roads and bridges trust — Counties ..-.., Burghs County road trusts .... Heritors for ecclesiastical purposes District fishery boards .... Totals . . . . Total Amount of Assessment. ^ ;^i,39i,666 1*430.559 201,739 262,058 i6o,88i 69,602 37.884 10,740 ;£3.565ii29 In respect of Ownership. ;£ 695,833 218,150 184,602 144,908 90,932 34.801 37.884 10,740 ;^i,4i7,85o In respect of Occupancy. ^695,833 1,2x2,409 17.^37 "7)15° 69,949 34, Sox ;^2, 147,279 iSee "Rates," Table XII. Table XVI. Scottish Charges borne by the Consolidated Fund and Parlia- mentary Votes, in addition to those shown in Table XIV. (Extracted from Financial Relations Returns, Nos. 93 and 334, of 1893.) Clergy and schools Court-house and legal buildings . Peterhead harbour Caledonian canal .... Rates on government property Reformatory and industrial schools Prisons Law charges and courts of law l . Public education .... Pleuro-pneumonia . Relief of local taxation Public works, etc. (Highlands and Islands) Police Pauper lunatics .... I9-90. ^17.939 9,710 29,922 S.ooo 10,082 70,084 100,281 119,279 562,284 155,076 91,322 1890-91. ;£i7i939 8,547 29,914 S.ooo 9,288 595 99,836 119,888 611.152 16,800 1891-92. I i892-93. ;^i7.939 8,8co 29,914 S.ooo 12.135 71,087 92,446 119,598 636,638 z6,8oo — 20,000 ) Defrayed out of allocated f 1800-91 and after. ;^I7.939 8,350 29,651 S.ooo 10,350 62,800 92,518 92,684 948,854 6,000 25.353 taxes la 1 This item is probably only to a very limited extent a relief of local taxation, if at all. 2 Grants of ;£3S.ooo for main roads, and ;£2o,ooo for medical relief, were made in 1888-89, These are now also defrayed out of the allocated taxes. See Table XIV. Memorandum. — In a communication received from the Treasury, the total amount of Scottish local charges borne by imperial funds in 1891-92 is set down at ;^3Z5,022j exclusive of education. No details are given. Appendix III. 131 Q < c^ 00 M „ , -a h-4 c Q l-H rt > H-l c c p4 < ■4J X H Eh 5 g E5.2 o cd o OJ H ij ■< i- O Q l-l Z O m % % D O II. B; < u N o dv I 00 VO s? >l I H 0«3 lo n 1 si M 00 -i- tN t^ m I CO m" cS cf I s^ m CO M 'I I I I !«l II C bJO E.a 'I 2S n a > ••0-5-3 e M « in « - •Mg"."3 S.H " «) S? ' s s Ck ft " " « &a S 5 IS o o " 3 g.S-S •00 ° S.^-J"_S iS S S tJ o 3 i« C!ix,pi,CLinpuP3 .■3.P • S d cS b tfl t; g S rt bO -71 *, « d 'S ri B u -^.2 >2jaSo-^E:'a ^ d 3 " °^ "^^-e 3 ■JioS-S, °«Sc§3ii6"a S d g M.2-= ^ 0*^5 m CL, I Oi Ol ■* tn*d C-.CO o> o 132 Appeitdix III. •a c rt 73 C 3 (X4 -d (U r! '^ 15, O X W Ki oi^ U-o fl. V. A ?i >>iJ o f t: X) O ■" ■s ?J M S-s (— 1 rt ti^ !zi I— ( J3 >— 1 > o e ^ X ^ >s S ^2 '^ H fii , "^ s^ a □ c o ■ „ to .o^^^^"^ orno S?^ > O 0\Ti- O OssO 00 W CO tN.00 t^ N O «0 >-< H* U-) w OS ^00 00 M O M r>. m CJ 00 M t^o ^00 00 r«^-o IT) I w o" I r^ ro rT c5^ tCvc voodoo I ' f*^00 'ts.Tl-i-.OJO OOw' V^ i-i h-t tJ- 1-1 M 00 !-< OhTJ ■^ £ 1=! g ^ ^ S > w .2 o b ^ o c: " oo 3 c 5 eSS c H « |ii ;c; hJ q p> fi. s s II 1^0 c j3 o - tfl u .ii r in " 5 -^ ■H ° S S o g c a i-^iu :i:„ -o 3 jj -„ c -- £ r-, p, S H P, « I-I Appendix IV. 133 Q < . w > ^. X I— I Q W Ph fin P4 < « <: w o Q |xi < « ;z; H i-l H H 1) ^ <3 <: << -5 ^-1 S .■s^ <; i 1 ^o to » fO H in OS t^ m r». m ,0 s tv CO « n OS H CO r^ w ■^ o__ OS ^« s? \d" ^ ^ pP c? CO ■^ t^ SO H CO t~N "«; CO « ^ « s ~ \o N « fO fO CO h- to 13 c t^ « Z ,1 ■* ^, ■w 1 w 13 S? -O^ 10 1 CO o_^ u 1-. "*^ ol < ^ « 00 so 01 CO „ CO h < m lO fO ■+ ■* m ■* ro ■* m -s o- t^ m kJ " s5 N^ !>• r> r^ < u rn so" w in H VO „ „ ^ SO „ « "C '-' '-' S c >o CO m t^ 00 N \o < A^ ^ t^ so" ca_ 0" 00" vo" H VO 00^ " " 4 H M VO M IN VO tn « DO VO P^ VO ■* >o Q. N « N Ov « H ^* a\ •* VO a\ 0* ■>J- p:; s? 6^ t^ m" vo" fn co" o^ o\ \o VO m c^ ro s ro « ^ ^ ^ ^ ^ z ■ £; d nl Id ^ bfl 13 bO u S ^ b ^ a ^ ' S ft fe ft 13 i a 13 ft •d s VO "S, VO >» ^ >> 'n a >> 3 >» 3 g • >. d P fl P H 3 P P 'G Q U D P 'ft ■ft CIS H m m CQ CO " c ^ 2 < 'rt d "d rt ,-Ph cq h 1 1 C C .2 1 .2 •-3 K ^ G .9 ■-0 td.S Si3 M fc. S ^ -a -rt T3 13 < « J w "■ CJ W hJ S H pi ro LIST OF BOOKS REFERRED TO. ^ Ashley, W. J. " Economic History." 1893. Baxter, R. Dudley. " Taxation of the United Kingdom." 1869. ^ Baxter, R. Dudley. " Local Government and Taxation.' 1874. i'Bastable, C. F. " Public Finance." 1892. .' Bastable, C. F. " Taxation of Ground Rents." Economic Journal, 1893. ''Bear, W. E. "The Agricultural Problem." Economic Journal, 1893. Beken, George. " Taxation of Ground Rents." 1893. V Blunden, G. H. " Incidence of Urban Rates." Economic Review, 1891. f Blunden, G. H. "British Local Finance." Political Science Quarterly, 1894. -'' Brodrick, G. C. " Local Government." Cobden Club Essay. 1875. Burdens on Land (Select) Committee. Report. 1846. Boyle and Davies. " Principles of Rating." 1890. Castle, E. J. " Law of Rating." and edition. 1886. Cox, Harold. " Land Nationalisation." 1892, V DOWELL, Stephen. " History of Taxation and Taxes in England." 1885. . Fawcett, Henry. " Manual of Political Economy." 6th edition. 1883. ' Firth, J. F. B. " London Government." Cobden Club Essay. 1882. Fowler, H. H. " Report on Local Taxation." 1893. ^Giffen, R. "Taxes on Land." 1871. Reprinted in "Essays in Finance." 1880. Goschen, G. J. " Report on Local Taxation." 1870. GOSCHEN, G. J. "Draft Report for Select Committee on Local Taxation." 1870. ■^ GosCHEN, G. J. " Reports and Speeches on Local Taxation." 1872. Goschen, G. J. "Budget Speeches." 1887-8-9. Graham, J. C. " Local and Imperial Taxation and Local Govern- ment." 1 894. Goudy and Smith. " Local Government in Scotland." 1880. 134 List of Books referred to. 135 Hancock, W. N. " Local Government and Taxation in Ireland." Cobden Club Essay. 1875. Housing of the Working Classes (Royal) Commission. Report. 1885. Leslie, T. E. Cliffe. " Incidence of Imperial and Local Taxation.'' Fortnightly Review, 1874. Reprinted in "Essays in Political and Moral Philosophy." 1879. Local Government Board. Reports. Annual. Local Government and Taxation of Towns (Ireland) (Select) Com- mittee. Report. 1878. Local Taxation (Select) Committee. Report. 1870. Local Taxation (Unofficial) Committee. Special Report. 1893. Local Taxation Accounts, England. Annual. Local Taxation Accounts, Scotland. Annual. Local Taxation Accounts, Ireland. 1871 and Annual. London Amalgamation (Royal) Commission. Report. 1894. London County Council. Report of Land Valuation Committee. 1889. London County Council. Report of Local Government and Taxation Committee. 1893. London County Council. Assessments according to Benefit. 1893. M'CULLOCH, J. R. " Treatise on Taxation." 1845. M'Neel-Caird, Alex. " Local Government and Taxation in Scot- land." Cobden Club Essay. 1875. Macdonald, William. " Local Government and Taxation in Scotland." Cobden Club Essay. 1882. Merewether and Stephen. " History of Boroughs.'' 1833. Mill, J. S. " Principles of Political Economy." People's ed., 1891. MONTEAGLE, Lord. "Draft Report for Burdens on Land Committee." 1846. Noble, John. " National Finance." 1875. Noble, John. " Local Taxation." 1876. O'Brien, W. P. " Local Government and Taxation in Ireland." Report. 1878. O'Meara, J. J. " Municipal Taxation." 1894. O'Shaughnessy, Richard. " Local Government and Taxation in Ireland." Cobden Club Essay. 1882. Owen, Sir Hugh. "Manual for Overseers." 8th ed., 1887. Palgrave, R. H. I. " Local Taxation." 1871. .^ Penfold and Glen. "On Rating." 8th edition. 1893. Poor Law Commissioners. Repor: on Local Taxation. 1843. Public Works Commissioners (Ireland). Report. 1894. 136 List of Books referred to. Quarterly Review. " Betterment and Local Taxation." 1894. RiCARDO, David. "Principles of Political Economy and Taxation." 1817. Conner's edition. 1891. Rogers, J. E. Thorold. " Economic Interpretation of History." 2nd edition. 1891. Rogers, J. E. Thorold. Local Taxation Speech, March 23rd, 1886. RosEWATER, Victor. "Special Assessments." 1893. Sargant, C. H. " Urban Rating." 1890. Seligman, E. R. a. " General Property Tax." 1890. Seligman, E. R. a. " Shifting and Incidence of Taxation." 1892. Seligman, E. R. A. " American Income Tax." Economic Journal, Dec, 1894. SiDGWICK, H. " Principles of Political Economy." 2nd edition. 1887. Sinclair, Sir John. " History of the Public Revenue." 1785. Smith, Adam. "Wealth of Nations." 1776. Ward and Lock's re- print of edition of 1812. Supervision, Board of, Scotland. Reports. Annual. Town Holdings (Select) Committee. Report. I892. Town Improvements (Betterment) Select Committee. Report. 1894. Vine, J. R. Somers. " Municipal Institutions." 1879. Printed by Cowan &^ Co., Lhnited^ Fertk. M