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 ... Studies In state taxation with parti 
 
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STUDIES IN STATE TAXATION 
 
 WITH PARTICULAR REFERENCE TO 
 THE SOUTHERN STATES 
 
SERIES XVIII NOS. 1-2-^-4 
 
 JOHNS HOPKINS UNIVERSljV STUDIES 
 
 IN r 
 
 Historical and Political Science 
 
 HERBERT B. ADAMS, Editor 
 
 History is past Politics and Politics are present History. — Freeman 
 
 STUDIES IN STATE TAXATION 
 
 WITH PARTICULAR REFERENCE TO THE 
 SOUTHERN STATES 
 
 BY GRADUATES AND STUDENTS OF THE 
 JOHNS HOPKINS UNIVERSITY 
 
 EDITED BY 
 J. H. JHOLLANDER, Ph. D. 
 
 Associate Professor of Finance 
 
 BALTIMORE 
 
 THE JOHNS HOPKINS PRESS 
 
 JANUARY-APRIL, 1900 
 
 25:142 
 
Copyright, 1900, by 
 N. MURRAY 
 
 C5« Boti (§&itimoti (pteee 
 
 THE FRIEDENWALD COMPANY 
 
 BALTIMORE, MD., u. S. A. 
 
TO 
 
 HERBERT B. ADAMS 
 
PREFACE 
 
 The five essays contained in the present volume have a 
 common origin in a series of informal class reports pre- 
 pared by students of the Johns Hopkins University in con- 
 nection with a course of graduate instruction upon Ameri- 
 can commonwealth finance. With a view to supplementing 
 the inadequate material available, certain members of the 
 class undertook to examine and describe the finances of a 
 group of states. Each investigator selected his native state 
 or a state with whose economic life he was in a measure 
 familiar. The problem of taxation was made the central 
 point of investigation. 
 
 The results obtained were so interesting and significant 
 as to suggest presentation in more deliberate and detailed 
 form. Accordingly, additional material was gathered and 
 a uniform plan of statement was adopted. Accident or 
 circumstance prevented the completion of all of the studies 
 originally undertaken, but the five here published are typi- 
 cal both in character and in result of the entire inquiry. 
 Attention was centered, as will appear, upon the Southern 
 States — Kansas being, with respect to fiscal problems, 
 essentially within that category. 
 
 The essays will, it is hoped, prove useful as contributing 
 fresh and instructive material for the study of American 
 commonwealth taxation. In state as in municipal finance, 
 the arrangement and presentation of essential data must 
 
8 
 
 PREFACE 
 
 serve as a preliminary both to scientific study and to prac- 
 tical reform. The way was early blazed by a few earnest 
 workers, and at no time has there been the dearth of access- 
 ible subject-matter which the student of municipal eco- 
 nomics laments. But the field of state taxation is extensive 
 and conditions change quickly, and the utility of a series of 
 descriptive studies made simultaneously and upon an iden- 
 tical plan by competent investigators is self-evident. 
 
 If the several essays possess any particular significance 
 and if there be any unity underlying the volume, it is as 
 emphasizing the impracticability of any universal applica- 
 tion of commonly accepted principles of tax reform. It is 
 upon the fiscal conditions of the more advanced common- 
 wealths, where abuses are greatest, both in kind and in 
 degree, that the attention of writers on American public 
 finance has hitherto been centered. The more careful in- 
 vestigators have been explicit in stating that whatever con- 
 clusions might be reached were applicable only to similarly 
 circumstanced societies. But the caution has not always 
 been respected, and the science of finance like the science 
 of economics is exposed to the danger of mischief-making 
 as a result of rule-of-thumb application of qualified theory. 
 Detailed acquaintance with the fiscal experience of a group 
 of less highly developed states, where corporate organiza- 
 tion is limited and intangible wealth a minor element, can 
 not fail to prove serviceable in this connection. 
 
 In addition to the acknowledgment of special aid from 
 various sources which the author of each essay has made, 
 the editor desires to express cordial appreciation of sugges- 
 tion and encouragement received from his friend and col- 
 
PREFACE 9 
 
 league, Professor Sidney Sherwood, and from Mr. N. 
 Murray of the Johns Hopkins Press. The inscription of 
 the volume to Professor Herbert B. Adams, the editor of 
 the series in which it appears, is insufficient recognition of 
 the stimulus and aid received from this source. 
 
 J. H. Hollander. 
 
 Johns Hopkins University, 
 
 December 23, 1899. 
 
CONTENTS 
 
 PAGE 
 
 I. Taxation IN Maryland, 13 
 
 By Thomas Sewall Adams, Ph. D. 
 
 II. Taxation in North Carolina, ... . ... 77 
 
 By George Ernest Barnett, A. B. 
 
 III. Taxation IN Kansas 115 
 
 By Elbert Jay Benton, A. B. 
 
 IV. Taxation in Mississippi . . 177 
 
 By Charles Hillman Brough, Ph. D. 
 
 V. Taxation IN Georgia, 217 
 
 By Laurence Frederick Schmeckebier, Ph. D. 
 
TAXATION IN MARYLAND" 
 
 By THOMAS SEWALL ADAMS 
 
 .3* 
 
 Industrial Characteristics 
 
 Maryland is a border state, industrially as well as politi- 
 cally, dividing the Atlantic states into two distinct groups 
 and partaking of the industrial characteristics of both." 
 Northern and northwestern Maryland resembles Pennsyl- 
 vania: wheat, hay and corn constitute the principal prod- 
 ucts; there are extensive mining interests; the population 
 is dense, and negroes are scarce. On the other hand, 
 southern Maryland is closely allied, both in political and 
 industrial characteristics, to the south. Population is 
 sparse, tobacco is still one of the chief products, and in 
 two of the southern counties the negroes outnumber the 
 whites. 
 
 ' In the preparation of the following pages special aid has been 
 received from Hon. Robert P. Graham, State Tax Commissioner, 
 and Mr. J. A. J. Medcalf of the Appeal Tax Court of Baltimore 
 City. 
 
 ' The medial position of Maryland with respect to those economic 
 qualities which influence _a system of taxation is illustrated in the 
 following table (see " Statistical Abstract of the Eleventh Census," 
 second edition) : 
 
 True ABsessed 
 
 wealth, wealth, 
 
 per per 
 
 capita. capita. 
 
 United States $1036 $407 39 137 43 
 
 North Atlantic Div. . . 1202 626 51 95 32 
 
 Maryland 1041 S07 49 121 35 
 
 South Atlantic Div... 579 255 34 I34 58 
 
 Percent- 
 
 
 Percent- 
 
 age 
 
 Average 
 
 age 
 
 of true 
 
 size of 
 
 of 
 
 wealth aa- 
 
 farms. 
 
 unim- 
 
 scBBed for (acres.) 
 
 proved 
 
 taxatloQ. 
 
 
 land. 
 
14 Studies in State Taxation [14 
 
 With respect to those resources which furnish useful 
 criteria of the taxable capacity of a community, there is 
 perhaps no more representative state in the Union. Nature 
 has been particularly generous to Maryland in the distribu- 
 tion of gifts. In the northwestern counties of the state, 
 coal and iron mining are carried on with success. In the 
 central counties are found some of the finest marble, 
 granite, and sandstone quarries in the United States. In 
 the eastern portion, Chesapeake Bay offers an inexhaustible 
 source of wealth in its varied shell and fish products. The 
 concurrence of the figures for Maryland and the United 
 States expressing true wealth per capita, was shown in the 
 preceding foot note. This consilience is well maintained in 
 the other groupings of the census reports, which are 
 accurate enough for the present purpose. In 1890 the 
 total (" true ") value of real and personal property in Mary- 
 land was $1,085,473,048; the total value of farm products, 
 $26,443,364; of manufactured products, $171,842,593; of 
 mineral products, $5,089,447; of products of fisheries, 
 $5,654,024. Among the fifty-one territorial districts differ- 
 entiated in the census returns,' Maryland stood nineteenth 
 with respect to the amount of real and personal property, 
 twenty-ninth with respect to the value of farm products, 
 twenty-fourth with respect to the value of mineral products, 
 fourteenth with respect to the value of manufactured pro- 
 ducts, and second with respect to the value of the products 
 of fisheries. 
 
 Passing from this general comparison to Maryland itself, 
 
 ' Forty-five states, five territories and the District of Columbia. 
 The comparison in the text will suffice to give a useful idea of the 
 relative standing of Maryland, Virithout having the various sources 
 of wealth reduced to a per capita basis. Assuming that the neces- 
 sary expenditures of a state are roughly determined by the size of 
 the population, Maryland should occupy a central rank with respect 
 to the various sources of wealth in order to have an average tax- 
 paying capacity. In 1890 Maryland stood twenty-seventh among 
 the fifty-one states and territories with respect to population, the 
 average population per district being about 1,235,000, that of Mary- 
 land, 1,042,000. 
 
13] Taxation in Maryland 15 
 
 the most striking characteristic of the state in this connec- 
 tion is the predominant importance of Baltimore City. So 
 far as taxation is concerned, Baltimore is of more import- 
 ance than the rest of the state combined. In 1890 nearly 
 one-half of the whole population of Maryland lived in 
 Baltimore; the next census will probably show that more 
 than one-half lives in that city. In 1898 the total assessed 
 value of property in Maryland was about $603,000,000. Of 
 this, more than one-half, $332,000,000, was located in Bal- 
 timore. Of the receipts from taxes other than the property 
 tax, Baltimore contributes very much more than one-half. 
 
 Excluding Baltimore City, the interests of the state are 
 chiefly agricultural. Hay, wheat, and corn are the chief 
 crops. But the production of staple agricultural products 
 is undergoing a relative decline. This is shown nowhere 
 so clearly as in the production of tobacco. In 1884, 41,811 
 acres were devoted to tobacco in Maryland, and the total 
 crop was valued at $2,281,615. In 1896, 15,995 acres were 
 planted in tobacco and the crop was worth $398,915. The 
 plantation, the feudal manor, the slaves have passed. 
 Tobacco is no longer king.^ The production of export 
 staples is declining; plantations are being cut up into truck 
 farms, and the farmer directs his efforts toward supplying 
 the wants of urban residents engaged in trade and manu- 
 factures. In many of the farming districts, canning fac- 
 tories have sprung up, and there are often as many people 
 and as much capital dependent upon the prosperity of the 
 factories as upon the success of the farms.^ Agriculture 
 has become a function of commerce and manufactures. 
 
 ^ In i8g6 the potato crop was worth nearly twice as much as the 
 tobacco crop. 
 
 '".... this canning industry has grown of late years to enormous 
 proportions, and has given a great stimulus to truck farming. 
 Maryland has been the leading state, and Harford the leading 
 county, for this industry until i8gi, when from various causes New 
 Jersey took the lead, to yield it again, however, in 1892." " Mary- 
 : land, its Resources, Industries and Institutions " (Baltimore, 1893), 
 ', P- 175- 
 
16 Studies in State Taxation [16 
 
 In 1890 there were but six states in the United States in 
 which the density of population was greater than in Mary- 
 land. In that year 42 per cent, of the whole population 
 (1,042,390) lived in Baltimore City; 46 per cent, in the five 
 towns of more than 5000 inhabitants, and 51 per cent, in the 
 thirty-five towns possessing more than 1000 inhabitants. 
 Of the total male population, 33 per cent, were engaged in 
 agriculture, mining and fisheries ; 3 per cent, in professional 
 service; 18 per cent, in domestic service; 20 per cent, in 
 trade and transportation; 25 per cent, in manufacturing 
 and mechanical industries. 
 
 From this brief survey it may reasonably be inferred that 
 the sphere of public activity in Maryland is moderate, not 
 so extensive as in the richer states of the north, less re- 
 stricted than in the poorer states of the south and south- 
 west. Owing to the medial position of the state, we may 
 expect its tax system to share the characteristics of taxation 
 in both the northern and the southern states, and from the 
 predominance of Baltimore City we may infer that the main 
 dependence will be placed upon the commercial and manu- 
 facturing, rather than upon the agricultural classes. 
 
 General Finances 
 
 The Fund System. The preparation of the budget, the 
 collection of taxes, and the general superintendence of fiscal 
 affairs in Maryland, are entrusted to a comptroller, who 
 is elected at the general state election for a term of two 
 years, and who receives a salary of $2500 per annum. The 
 greater part of the revenues of the state are received and 
 disbursed according to the fund system. The state tax- 
 rate of 17^ cents on each hundred dollars of assessed value, 
 is made up of certain partial rates or levies, the proceeds 
 of each of which are strictly segregated in corresponding 
 funds or accounts. These funds cannot legally be used to 
 defray any other than the respective charges for which they 
 were collected. Many of the non-tax receipts are also 
 credited to specific funds and cannot be used to meet gen- 
 
17] Taxation in Maryland 17 
 
 eral expenses. Thus, oyster fines, oyster licenses, etc., go 
 to the " Oyster Fund" which must be expended in the 
 maintenance of the " oyster navy " and for other allied pur^ 
 poses determined by law. The administrative expenses of 
 the government cannot be defrayed out of the proceeds of 
 the property tax, but must be paid out of the license re- 
 ceipts, inheritance and franchise taxes, etc. The unneces- 
 sary rigidity of the fund system is a standing cause of com- 
 plaint on the part of the comptrollers, but it has never been 
 abandoned. In times of stress the law is sometimes disre- 
 garded by borrowing from one fund for the use of another, 
 but this is the exception and not the rule. 
 
 Expenditures. Some idea of the extent of the state's fiscal 
 activity may be gathered from a summary of the expendi- 
 tures of 1898. In that year there were expended for the 
 purposes indicated, the following amounts: 
 
 Education \ $1,155,815.00 
 
 Legislative and executive departments 371,851.22^ 
 
 Sinking funds 281,000.00 
 
 Interest on debt 301,049.58 
 
 Charities 189,266.88 
 
 Militia 182,563.00 
 
 Judicial department 151,503.07 
 
 Penal and reformatory institutions 78,000.00 
 
 Industrial development 26,475.46^ 
 
 Health 14,325.98 
 
 Maintenance of buildings 10,591.01 
 
 Miscellaneous 8,735.22 
 
 Book-transfers, cities and counties 464,925.08* 
 
 Balance 566,351.30 
 
 Total $3,802,452.80 
 
 ' I have been unable to differentiate the expenditures of the legis- 
 lative and executive departments. 
 
 ' The item " Industrial development " is made up of the expendi- 
 tures of the immigration bureau, the expense of conducting the 
 industrial bureau, etc. 
 
 ' The item " Book-transfers, cities and counties " is made up of 
 two transfers to the free school fund from other funds, plus 
 $404,355.72 returned to Ellicott City and Baltimore as their share in 
 the high liquor licenses collected in those two cities. This money 
 probably never goes to the state treasury. 
 2 
 
18 Studies in State Taxation [18 
 
 As this paper is devoted principally to taxation, no elab- 
 oration of these features can be given. Some idea of the 
 division of function between state and counties may be gath- 
 ered from a comparison of the state and the local tax-rates. 
 The state rate has been 17% cents on the hundred dollars 
 for ten years. The average county rate on the same valua- 
 tion was $1.32 per hundred in 1897.^ The total ad valorem 
 rate would consequently be about $1.50 per hundred, of 
 which 88 per cent, was local and 12 per cent, state. The 
 ad valorem rate, as calculated in the federal census of 1890, 
 was $1.54. 
 
 Of the 17% cents levied by the state, I2j4 cents is levied 
 for the maintenance of the public schools and the purchase 
 of school books. The proceeds of this tax are divided 
 among the counties and the city of Baltimore in proportion 
 to their respective numbers of inhabitants between the ages 
 of five and twenty years. This is of course supplemented 
 by local school taxes. The school tax in Baltimore City, 
 for example, was 45% cents in 1898. 
 
 Revenues. A word of explanation is perhaps necessary 
 in regard to the terminology here employed. The several 
 taxes have been differentiated in accordance with the classes 
 of society upon which they bear. The line of cleavage 
 is personal : between the " subjects " not the " objects " 
 of taxation. Thus, that part of the general property tax 
 collected from corporations has been included under the 
 heading " corporation taxes." 
 
 It has been thought best to treat pure fees as non-tax 
 receipts. When a fee more than pays the cost of the ser- 
 vice for which it is charged, however, the excess constitutes 
 a true tax. The item " excess of fees " is of this nature. 
 The receipts for the fiscal year 1898 were as follows: 
 
 ^ A weighted mean was taken, the several local rates being 
 weighted in accordance with the population of the respective dis- 
 tricts. The Baltimore City rate is included, as Baltimore is not in 
 any county. 
 
19] Taxation in Maryland 19 
 
 Quasi-private receipts 
 
 Dividends on bonds and stocks $100,962.85 
 
 From industries carried on in state institutions. 36,991.61 
 
 Interest on public moneys 16,850.83 
 
 Income from public property i i,377.s8 
 
 Fines and forfeitures 8,763.51 
 
 Fees 5,708.11 
 
 Miscellaneous receipts 631.94 
 
 Military emergency fund 125,000.00 
 
 Balance 707,138.58 
 
 Tax receipts 
 
 Property tax $1,092,899.85 
 
 License taxes 913,876.57 
 
 Corporation taxes 515,690.31 
 
 Inheritance tax 134,279.90 
 
 Excess of fees 64,363.99 
 
 Tax on commissions of executors and adminis- 
 trators 49,875.54 
 
 Miscellaneous taxes 15,041.63 
 
 Total $3,799,452.80 
 
 In view of the practice, more often encountered in muni- 
 cipal than in state finance, of raising a large portion of the 
 ordinary revenue by borrowing, very great interest attaches 
 to the proportion of revenue raised by loans. It will be 
 shown below ' that in the twenty-one years, 1877-97, Mary- 
 land borrowed 12 per cent, of the total amount of revenue 
 raised in that period. 
 
 The proportion of the tax to the non-tax receipts is a 
 question of less importance, but still worthy of notice. In 
 1898, 27 per cent, of the total revenue came from sources 
 other than taxation. The average importance of the non- 
 tax receipts is, however, greater than this. The proportion 
 for 1898 is unduly low because no loans were floated. To 
 secure useful statistics on this point a long period of years 
 must be taken, and according I have calculated the propor- 
 tion of the non-tax receipts to the total revenue in each of 
 the twenty-one years between 1877 and 1897 inclusive. The 
 
 ' See page 25. 
 
20 Studies in State Taxation [20 
 
 average proportion for these years was 41 per cent. The 
 total revenue raised in this period was nearly $67,000,000, 
 of which the non-tax receipts amounted to more than 
 $27,000,000. 
 
 Excluding the two extraordinary items, military emer- 
 gency fund and balance, the largest item which pow appears 
 regularly among the non-tax receipts is the annual mort- 
 gage payment of $90,000 from the Northern Central Rail- 
 road Company. The next largest receipt, $27,871.84, is 
 from the Maryland Penitentiary. In 1897 the receipts from 
 the latter institution were $10,000 less, $17,724.45. A study 
 of the remarkable development of this source of revenue 
 would furnish a valuable illustration of the power of able 
 management to make such institutions self-supporting. 
 
 When one recalls the immense investments of Maryland 
 in private enterprises, it is amazing that the returns from 
 these investments should now be so insignificant. One by 
 one the dividends have ceased. Until 1877 the annual pay- 
 ments from the Susquehanna and Tide Water Canal Com- 
 panies, and from the Chesapeake and Ohio Canal Com- 
 pany, constituted items of great importance in the revenues 
 of the state. But these payments have been long since 
 discontinued. In 1897 the comptroller reported more than 
 $8,500,000 of unproductive stocks; the unpaid interest on 
 these holdings would increase this amount to about $30,- 
 000,000. During the fiscal year 1898, the annual dividend 
 of $27,500 from the Washington Branch of the Baltimore 
 and Ohio Railroad ceased. With the transfer of this stock 
 to the unproductive list is written the last chapter of the 
 history of state aid to internal improvement projects in 
 Maryland — a history of consistent failure and repeated loss. 
 
 Relative Importance of the Several Tax Receipts. From 
 the standpoint of practical finance few questions are of 
 greater importance than that of the relative productivity 
 of the several forms of taxation. An examination of the 
 receipts from the various state taxes for the years, 1877- 
 1898, shows that the order of importance indicated in the 
 
31] Taxation in Maryland 31 
 
 classification of receipts on page 19 is substantially accur- 
 ate, the only difference being that on the average of the 
 twenty-two years noted, the tax on the commissions of 
 executors and administrators is more important than the 
 excess of fees. During the twenty-two years, 1877-1898, 
 44 per cent, of the total tax receipts came from the property 
 tax, 33 per cent, from licenses, 15 per cent, from corpora- 
 tion taxes, 4 per cent, from the inheritance tax, nearly 3 
 per cent, from the tax on commissions of executors and 
 administrators, nearly 2 per cent, from excess of fees, and 
 less than i per cent, from the remaining taxes. 
 
 During the first half of the present century the revenue 
 of the state was derived chiefly from licenses and it was not 
 until after the Civil War that the receipts from the property 
 tax began to show a regular excess over the proceeds of 
 the licenses. The average importance of the license taxes 
 as determined by the receipts for the twenty-two years, 
 1 877- 1 898, shows no signs of abatement. During the first 
 half of this period, 1877-1887, licenses contributed 29 per 
 cent, of the total tax receipts, and the property tax 48 per 
 cent. During the second half, 1888-1898, the license re- 
 ceipts constituted 36 per cent., the property tax 40 per cent. 
 With the growing tendency to impose higher licenses upon 
 the liquor traffic, there is no reason to anticipate a diminu- 
 tion in the relative importance of this source of revenue. 
 
 The corporation taxes, on the contrary, are not increas- 
 ing in importance as rapidly as might be expected. The 
 receipts from this source are indeed increasing, both rela- 
 tively and absolutely. But considering the number of en- 
 tirely new corporation taxes which have been adopted in 
 the last twenty years, the results are somewhat disappoint- 
 ing. From 1877 to 1887, 13 per cent, of the total tax- 
 receipts came from corporations. During the period 1888- 
 1898 this proportion rose to 16 per cent. 
 
 The receipts from the inheritance tax and the tax on 
 commissions of executors and administrators vary greatly 
 from year to year. The actual revenue from each source is 
 
22 Studies in State Taxation [22 
 
 increasing, the relative importance of each is decreasing. 
 In the case of the inheritance tax the decrease is so slight 
 as to be very doubtful. In the tax on the commissions of 
 executors, however, the tendency is marked. From 1877 
 to 1887 this tax yielded nearly 5 per cent, of the total tax 
 receipts. During the period 1888-1898 this proportion was 
 less than 2j4 per cent. 
 
 The excess of fees returned each year to the state treas- 
 ury is increasing both in amount and in proportion to the 
 total receipts from taxation. In itself the item is unim- 
 portant: $46,000 were received from this source in 1897, 
 $64,000 in 1898. But as an indication of the condition of 
 the general financial system of the state, the item is very 
 important. An increase in the relative importance of the 
 amount of fees returned means that the public offices of 
 the state are being managed with greater economy and the 
 officials are being held to a stricter account. 
 
 The State Debt. The financial condition of the State of 
 Maryland, distinguishing state from local conditions, is 
 healthy. The tax-rate is low, the debt small, the sinking 
 funds large and well managed, and the interest payments 
 normal. In general the prospects are decidedly encour- 
 aging. 
 
 The first great internal improvement undertaken by the 
 federal government, the Cumberland or National Road, lay 
 partly within this state, and the example was too much 
 for the people of Maryland. During the second and third 
 decades of the century they were aflfected by the mania for 
 internal improvement in a particularly acute form. Mar- 
 velous expectations were entertained; canals, turnpikes, 
 railroads were to be built and the state treasury was to be 
 enriched by the profits of these enterprises, while the people 
 thrived on the trade they were to bring. Between 1832 
 and 1839 the state expended nearly twelve millions in 
 encouraging internal improvement, and large returns were 
 confidently expected in a few years. 
 
 The crisis of 1837 found Maryland in a state of industrial 
 
23] Taxation in Maryland 23 
 
 demoralization, with an immense debt and a people ignorant 
 of the meaning of state taxation. The situation was faced 
 boldly at first. The state declared its intention of paying 
 all obligations in sound money and a stringent tax law was 
 passed in 1841. But it was the courage of ignorance. The 
 taxes could not be collected, and in January, 1842, the state 
 failed to make the annual interest payment upon the debt. 
 Had it not been for this experiment in internal improve- 
 ment, Maryland would probably have no funded debt to-day. 
 
 The above facts have been given for the purpose of ex- 
 plaining the genesis of the state debt and the revival of 
 direct taxation in 1841. Only a few words can be devoted 
 to the further history of the debt. Owing largely to the 
 strenuous efforts of George Peabody and Governor Pratt, 
 the accumulated interest was funded and the state put upon 
 a sound financial basis again. Governor Thomas, who was 
 inaugurated in January, 1848, was soon able to report that 
 the credit of the state had been wholly rehabilitated and 
 that foreign investors were buying Maryland bonds freely 
 in the London markets. In 1851 a new constitution was 
 adopted. That the people of Maryland had learned a whole- 
 some lesson is shown by the insertion in this constitution 
 of the following section, whose influence in the financial 
 history of Maryland has been almost incalculable. With 
 the exception of the clause enclosed in brackets and the 
 addition of one unimportant provision, this section is re- 
 tained in the present constitution: 
 
 " No debt shall hereafter be contracted by the Legislature 
 unless such debt shall be authorized by a law providing 
 for the collection of an annual tax or taxes sufficient to pay 
 the interest on such debt as it falls due, and also to dis- 
 charge the principal thereof within fifteen years from the 
 time of contracting the same, and the taxes laid for this 
 purpose shall not be repealed or applied to any other object 
 until the said debt and the interest thereon shall be fully 
 discharged [and the amount of debts so contracted and 
 remaining unpaid shall never exceed one hundred thousand 
 
24 Studies in State Taxation [34 
 
 dollars] . The credit of the State shall not, in any mannei', 
 be given or loaned to or in aid of any individual, associa- 
 tion or corporation, nor shall the General Assembly have 
 the power, in any mode, to involve the State in the con- 
 struction of works of internal improvement, or in any enter- 
 prise which shall involve the faith or credit of the State, 
 or make any appropriations therefor. And they shall not 
 use or appropriate the proceeds of the internal improvement 
 companies, or of the State Tax now levied, or which may 
 hereafter be levied, to pay off the public debt, to any other 
 purpose, until the interest and debt are fully paid, or the 
 sinking fund shall be equal to the amount of the outstand- 
 ing debt; but the Legislature may, without laying a tax, 
 borrow an amount, never to exceed fifty thousand dollars, 
 to meet temporary deficiencies in the Treasury that may 
 be necessary for the defense of the State." ^ 
 
 From 1 85 1 until the Civil War the debt was kept well in 
 hand; but during the war the debt was greatly increased 
 by loans necessitated by the peculiarly exposed condition 
 of the state. The importance of the later funding opera- 
 tions, as compared with the general finances of the state, 
 is indicated in the table on the following page. 
 
 From this table some concrete idea of the course of the 
 state debt may be gathered, as well as of the amounts and 
 relative importance of the interest payments. In the 
 twenty-two years, 1877- 1898, Maryland raised an aggregate 
 revenue of more than $70,000,000. Of this, a little less 
 than $8,000,000, or II per cent., was raised by borrowing. 
 In the same period, the aggregate expenditures of the state 
 amounted to about $57,000,000, of which 19 per cent, was 
 devoted to the payment of interest upon the debt. 
 
 The decline of the debt and the variation of the annual 
 interest payment throughout this period are very encour- 
 aging. In 1898 each of these items was less than one-half 
 of what it had been in 1877. During the ten years, 1877- 
 
 ' Art. Ill, sec. 22, Constitution of 1851. 
 
25] 
 
 Taxation in Maryland 
 
 35 
 
 1886, the annual interest payment was on an average 30 
 per cent, of the annual expenditures, and the average net 
 debt was nearly $7,000,000. During the ten years, 1889- 
 1898, the average proportion of interest payments to total 
 expenditures was less than 12 per cent, and the average 
 net debt was less than $3,500,000. It is proper to add that 
 what we have called the " net debt " is obtained by sub- 
 
 Tears. 
 
 Total 
 receiptB. 
 
 Loans. 
 
 Gross 
 debt. 
 
 Sinking 
 funds 
 and 
 other 
 
 assets 
 
 Net 
 debt. 
 
 Total 
 expend- 
 itures. 
 
 Interest 
 
 pay- 
 ments. 
 
 Ratio of 
 int.pay'ts 
 to total 
 expend- 
 iture. 
 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 OOO's 
 omitted. 
 
 Per 
 cent. 
 
 1877.. 
 
 $2,511 
 
 $219 
 
 $10,759 
 
 $4,363 
 
 $6,396 
 
 $3,113 
 
 $645 
 
 31 
 
 1878.. 
 
 2,693 
 
 571 
 
 10,773 
 
 4,736 
 
 6,037 
 
 2,489 
 
 653 
 
 36 
 
 1879.. 
 
 2,330 
 
 269 
 
 11,260 
 
 3,585 
 
 7,674 
 
 1,774 
 
 633 
 
 85 
 
 1880.. 
 
 2,564 
 
 
 11,277 
 
 3,649 
 
 7,628 
 
 3,051 
 
 674 
 
 33 
 
 1881.. 
 
 2,510 
 
 
 11,258 
 
 3,695 
 
 7,563 
 
 1,759 
 
 643 
 
 37 
 
 1882.. 
 
 2,677 
 
 
 11,269 
 
 3,863 
 
 7,406 
 
 3,038 
 
 630 
 
 30 
 
 1883.. 
 
 2,736 
 
 
 11,370 
 
 3,996 
 
 7,274 
 
 1,754 
 
 675 
 
 38 
 
 1884.. 
 
 4,712 
 
 1,686 
 
 10,966 
 
 3,993 
 
 6,973 
 
 3,875 
 
 578 
 
 15 
 
 1885.. 
 
 2,949 
 
 
 10,970 
 
 4,519 
 
 6,451 
 
 2,203 
 
 555 
 
 35 
 
 1886.. 
 
 2,742 
 
 
 10,961 
 
 4,847 
 
 6,113 
 
 3,125 
 
 565 
 
 27 
 
 1887.. 
 
 3,057 
 
 463 
 
 10,961 
 
 5,299 
 
 5,661 
 
 2,375 
 
 553 
 
 23 
 
 1888.. 
 
 2,542 
 
 
 10,371 
 
 4,715 
 
 6,655 
 
 2,010 
 
 473 
 
 33 
 
 1889.. 
 
 2,599 
 
 
 
 10,371 
 
 6,031 
 
 4,399 
 
 3,109 
 
 466 
 
 22 
 
 1890. . 
 
 6,351 
 
 3,400 
 
 10,691 
 
 6,279 
 
 4,413 
 
 5,684 
 
 459 
 
 8 
 
 1891.. 
 
 3,494 
 
 413 
 
 10,723 
 
 6,846 
 
 3,876 
 
 2,953 
 
 375 
 
 13 
 
 1893 . . 
 
 3,548 
 
 100 
 
 8,685 
 
 5,603 
 
 3,083 
 
 3,066 
 
 334 
 
 11 
 
 1893.. 
 
 3,016 
 
 
 8,685 
 
 6,035 
 
 3,660 
 
 2,467 
 
 280 
 
 11 
 
 1894. . 
 
 3,175 
 
 
 8,685 
 
 5,303 
 
 3,382 
 
 3,685 
 
 280 
 
 10 
 
 1895.. 
 
 3,159 
 
 
 8,685 
 
 5,680 
 
 3,005 
 
 3,455 
 
 280 
 
 11 
 
 1896.. 
 
 3,861 
 
 613 
 
 9,385 
 
 5,946 
 
 3,339 
 
 3,945 
 
 280 
 
 10 
 
 1897.. 
 
 3,688 
 
 
 9,385 
 
 6,336 
 
 2,949 
 
 3,981 
 
 301 
 
 10 
 
 1898.. 
 
 3,803 
 
 
 9,385 
 
 6,253 
 
 3,033 
 
 3,236 
 
 301 
 
 9 
 
 Totals 
 
 70,716 
 
 7,734 
 
 
 
 
 57,144 
 
 10,601 
 
 Ifi 
 
 tracting from the debt the productive assets of the state, 
 which are given in the column headed " sinking funds and 
 other assets." According to state law no bonds, stocks or 
 securities of any kind may be counted as assets unless actu- 
 ally bearing interest. It thus happens that the state treas- 
 ury often has valuable assets which cannot be deducted 
 
36 Studies in State Taxation [26 
 
 from the liabilities in the report of the comptroller. This 
 circumstance explains the apparent increase of the net debt 
 from 1897 to 1898. In 1897 the stock of the Washington 
 Branch of the Baltimore and Ohio Railroad owned by the 
 state ($550,000) was paying interest and hence could be 
 subtracted from the gross debt in computing the net debt. 
 In 1898 this stock was unproductive and could not be 
 accounted as an asset. The actual market value of the 
 stock, however, is sufficient to bring the net debt of 1898 
 below that of 1897. 
 
 According to the latest statement furnished by treasury 
 officials, the gross debt of the state amounts to $6,400,000, 
 of which $5,800,000 bears three per cent., and $600,000 
 three and one-half per cent, interest. The present debt of 
 Maryland is so small that it could probably be wiped out 
 by disposing of the stocks and bonds owned by the state. 
 
 Development of Taxation 
 
 First Period, 16^2-1^^6. One of the prime motives of 
 colonization in America was the desire on the part of the 
 sovereign to secure additional sources of revenue for him- 
 self or for favorite courtiers. This force was not absent 
 from the many worthier motives that led to the establish- 
 ment of the palatinate of Maryland. The imposition of 
 taxation, therefore, began almost with the planting of the 
 colony itself. In 1641 a " subsedye," and an export tax for 
 the " better support " of the Lord Proprietor, were passed.' 
 These were followed at short intervals by the imposition of 
 licenses, tobacco and tonnage duties, export and anchorage 
 taxes, etc., payable for the most part to the Lord Proprietor, 
 but in a few instances in the i8th century, levied for the 
 King of England, notwithstanding the fact that he had ex- 
 pressly renounced the right of taxation in the provincial 
 charter. 
 
 ' Most of the material of this sketch has been taken from the 
 unsigned historical sketch published in the Report of the Maryland 
 Tax Commission of 1888. 
 
37] Taxation in Maryland 27 
 
 Our principal concern, however, in this first period of de- 
 velopment — that comprehended between the settlement of 
 the province and the outbreak of the Revolutionary War — 
 is with the direct taxation levied for the payment of the 
 public expenses. Such taxation was almost invariably 
 voted according to the fund system, levied by " even and 
 equal assessment " upon every poll, irrespective of wealth 
 or ability, and paid in tobacco. The " subsedye " of 1641 
 provided that every freeman and free woman and every 
 servant belonging to any one out of the Province, should 
 pay fifteen pounds of tobacco for every person over twelve 
 years of age belonging or residing in his or her family. 
 
 In 1642 the expenses of the burgesses and officers of the 
 General Assembly were levied upon the respective hun- 
 dreds which they represented. At first this constituted the 
 principal public charge and the only valid excuse for direct 
 taxation; but as the population and importance of the pala- 
 tinate grew, additional levies were made. In 1650 every 
 freeman was assessed four pounds of tobacco and cask for 
 the " Muster Master Gen'rall's ff ee " ; in 1662 twenty-five 
 pounds of tobacco per capita were voted for the support of 
 the Lieutenant General; in 1692 forty pounds of tobacco 
 were levied upon each freeman for the maintenance of the 
 clergy, and in 1756, after a bitter struggle, a land tax was 
 imposed. 
 
 The origin of the present fund system is here clearly 
 seen in the gradual development of public functions. As 
 the sphere of state activity grew, additional levies were 
 made for every new expense. Each hundred paid the ex- 
 penses of its burgess, the levy being made by two inhabi- 
 tants selected by the freemen of the hundred and the tax 
 collected by the sherifif. These levies were made without 
 regard to wealth or ability to pay.' With one or two ex- 
 ceptions the archaic mode of levying by poll was strictly 
 adhered to, and the injustice of this procedure led to the 
 
 ' See, however, the acts of 1642 and 1756; loc. cit. pp. cxiii and 
 cxxviii. 
 
38 Studies in State Taxation [28 
 
 insertion in the first state constitution, of that important 
 article which will be considered hereafter: "The levying 
 of taxes by poll is grievous and oppressive, and ought to 
 be abolished; paupers ought not to be assessed for the sup- 
 port of the government." 
 
 Second Period, 1776-1841. The second period in the de- 
 velopment of taxation in Maryland begins with the Revo- 
 lutionary War and extends to 1841, when the disastrous 
 experiments with internal improvements necessitated a 
 reconstruction of the system of taxation. In the interval 
 between the fall of the proprietary government and the 
 creation of the state government, the Provincial Conven- 
 tion resorted to still more archaic forms of taxation than 
 those which had so embittered the people. Contribution 
 lists were passed from hand to hand and the citizens " in- 
 vited " to come to the aid of the new democracy. Refusal 
 to contribute was treated as a declaration of Toryism and 
 the names of the stififnecked recalcitrants were advertised 
 for universal opprobrium. After the inauguration of the 
 state government in 1777, vigorous fiscal measures were 
 taken: new licenses were required, an income tax and a 
 heavy property tax were levied, and an efficient machinery 
 of assessment and collection was devised. The era of 
 modern taxation had set in. 
 
 Direct taxation for state purposes was, however, of short 
 duration. When the military demands of the war had 
 ceased, the property tax tended to disappear and after 1812 
 was only levied five times, and then for small amounts. 
 The public expenses were paid by the receipts from licenses, 
 most of which date from this period, and from fines, taxes 
 on transfers, etc' In the few levies that were made, cor- 
 porations were taxed exactly like individuals. It was, 
 however, customary to impose a franchise tax upon banks, 
 usually 20 cents on each $100 of paid-up capital. 
 
 During this period, great pains were taken to equalize 
 
 '- The notorious stamp tax upon bank circulation, was imposed in 
 1817. 
 
29] Taxation in Maryland ^^d 
 
 the assessments of certain kinds of property. Silvejr plate 
 was valued at the same rate per unit of weight t^^ughout 
 the state; there was a fixed rate for the valu/aRon of land 
 in each county and the state tax upon real estate was ap- 
 portioned among the counties in relative proportions deter- 
 mined by multiplying the several county rates by their 
 respective amounts of taxable land. Until the outbreak 
 of the Civil War slaves were assessed at uniform rates de- 
 termined by age and sex. Except with respect to slaves, 
 all these attempts at equalization were abandoned in the 
 act of 1841. 
 
 The most important feature of this period, perhaps, is 
 found in the development of the local organs of taxation. 
 The regulation of local taxation had originally been vested 
 in county boards called Levy Courts, Commissioners of 
 the Tax, etc. These boards were appointed by the Assem- 
 bly or by the Governor and the Council, and in the begin- 
 ning had no authority to levy local taxes unless specifically 
 authorized by the legislature. During this period there 
 was a continuous growth in the direction of local home rule 
 and by the end of the period the two boards mentioned had 
 been consolidated into the Board of County Commission- 
 ers, the members of which were elected by the votes of the 
 county and were clothed with the general powers of levying 
 taxes and revising assessments which they now possess. 
 The corresponding board for Baltimore City, the Appeal 
 Tax Court, was not created until 1841. 
 
 From 1826 until 1841 no property tax worthy of notice 
 was levied by the state. At the end of the second period, 
 it had become evident that the policy of internal improve- 
 ment was a colossal failure, and the people were confronted 
 with the alternative of repudiating the debt or submitting 
 to onerous taxation. Fortunately the latter plan was ac- 
 cepted, and the burdensome act of 1841 was passed. It 
 aroused a storm of opposition. In seven counties the tax 
 was not levied and collectors were not even appointed. It 
 was not until 1844 that the act could be put into general 
 operation. 
 
t"^ Studies in State Ta-xation [30 
 
 ThiXsi Period, 1841-1898. Details of the growth of taxa- 
 tion in tWieJast period, 1841-1898, are presented in the suc- 
 ceeding pa§^. In brief, this period is marked by the 
 abandonment of " equalization " ; by the extension of ex- 
 emption; by the differentiation of corporation taxes; by a 
 decline in the relative importance of license taxes; by the 
 addition of inheritance, mortgage and other new taxes, 
 and by a firmer application on the part of the courts of 
 Article XV of the Declaration of Rights. 
 
 General Property Tax 
 
 Rate, Levy and Collection. The first real property tax in 
 
 Maryland was imposed in 1756. The first general property 
 
 tax was levied in 1777. The rate of the general property 
 
 tax since 1888 has been 17^ cents on each one hundred 
 
 dollars of assessed valuation. The rate is made up as 
 
 follows : 
 
 ioj4 cents for maintenance of the public schools. 
 2 cents for the purchase of free school books. 
 4% cents for the redemption of outstanding debt. 
 
 il cent for the redemption of the insane asylum loan. 
 
 j\ cent for the redemption of the penitentiary loan. 
 
 Taxes are levied by the county commissioners of the 
 several counties and by the mayor and city council of Bal- 
 timore City before the third Tuesday of April, and are due 
 on or before the first day of January next succeeding. Tax 
 collectors are appointed by the above boards and are paid 
 a per centage of their collections, such remuneration not 
 to exceed five per cent, of the annual collections in the 
 counties, nor two per cent, of the annual collections in the 
 city of Baltimore. The following deductions for prompt 
 payment are allowed: five per cent, if paid before Septem- 
 ber I ; four per cent, if paid before October i ; three per 
 cent, if paid before November i. Taxes in arrear bear in- 
 terest at six per cent., are liens upon property, preferred 
 debts in the settlement of estates, and may be collected by 
 the ordinary processes of distraint and attachment. 
 
31] Taxation in Maryland 31 
 
 One of the salutary provisions of the Maryland law is the 
 levy of local and state taxation upon the same basis. While 
 assessors are appointed from the assessment district which 
 they are to assess, the ofiSce is not elective, and these pro- 
 visions tend to prevent much of the inequality between 
 county and county which might result if separate assess- 
 ments were made for state and local purposes, or if the 
 assessors were elected by popular vote. Whatever ine- 
 qualities of valuation exist, appear not between different 
 territorial units, but between the different classes of prop- 
 erty. One exception to this statement, however, must be 
 recorded. Land in Baltimore City is undoubtedly assessed 
 higher in proportion to its real value than in the counties. 
 This is due to the peculiar ground rent system of Balti- 
 more, and is intensified by certain exemptions granted to 
 residents of those suburbs of Baltimore included in the 
 " Belt." The latter exemptions, however, will largely dis- 
 appear in 1900. 
 
 Another noticeable feature is the stability of the tax-rate; 
 it has varied only one cent in twenty years. During the 
 period 1876-1896, the assessment did not vary greatly either 
 in character or severity, so that the burden upon property — 
 if such a concept be of any service — has been practically 
 unchanged throughout. The benefit of a stable rate is 
 unquestioned; whether this stability is real, however, is 
 open to question. One assertion in favor of its reality can 
 be safely made: the rate has not been preserved by paying 
 current expenses with loans which accumulate as funded 
 debt. On the other hand, there has been a noticeable in- 
 crease in the number of taxes and in the rates of the various 
 corporation taxes. The general burden of taxation is 
 greater than it was twenty years ago, but it is more equit- 
 ably distributed. Taken all in all, the stability of the prop- 
 erty rate is a favorable feature of the system and the habit 
 of maintaining it unchanged has had a wholesome influence 
 upon the legislature. It is now a political necessity making 
 for economy in expenditures and restraining the hasty 
 
32 Studies in State Taxation [33 
 
 extension of state activity. The desirability of such re- 
 straint is unquestioned as long as the character of our 
 General Assembly remains unchanged. 
 
 Taxable Forms of Property. The property tax is the 
 essential commonwealth tax in Maryland. The Declara- 
 tion of Rights asserts that every person ought to contribute 
 his share of the public taxes in proportion to his actual 
 worth in real and personal property. The property tax is 
 thus a constitutional requirement and if strictly enforced 
 would permit of no exemption. Nevertheless, all sorts of 
 exemptions have been granted, the courts reserving the 
 right to annul the exemption if it appears contrary to a 
 beneficial public policy and insisting upon a strict interpre- 
 tation of all acts of exemption. The question as to what 
 property is taxable will be best answered by an enumeration 
 of the persons and property exempt. 
 
 Persons assessed for less than $ioo and the following 
 classes of property are exempt: United States bonds, 
 stocks, or evidences of indebtedness ; property of the United 
 States ; property of the state ; property of any county ; prop- 
 erty of any incorporated city or town; churches; the furni- 
 ture, grounds and parsonages of churches ; grave-yards and 
 cemeteries not conducted for profit; crops or produce in 
 the hands of the producer or his agent; provisions and fuel 
 held for consumption; tools and implements of mechanics 
 or artisans, worked exclusively by hand; farming imple- 
 ments worth less than $300; wearing apparel; fish in the 
 hands of packers and not sold; hospitals, asylums, chari- 
 table or benevolent institutions with adjacent grounds not 
 exceeding forty acres ; buildings, furniture, equipment, and 
 libraries of incorporated educational or literary institutions 
 with adjacent grounds not exceeding forty acres; personal 
 property of corporations whose shareholders are subject to 
 taxation; shares of stock in railroads worked by steam and 
 subject to gross-receipts tax; book-accounts, bills receiv- 
 able, and evidences of such debts held by persons engaged 
 in commercial business. 
 
33] Taxation in Maryland 33 
 
 The list quoted above is taken almost verbatim from the 
 official tax-list. It should be stated in addition that money 
 and bank accounts are not taken into account in estimating 
 taxable wealth. Ground rents are also exempt. There are 
 a few other important exemptions which will be noted in 
 the section devoted to corporation taxes. 
 
 There has been much discussion in Maryland concerning 
 the exemption of church and educational property. Con- 
 servative writers have complained that rich churches which 
 spend the proceeds of their large endowments in ostenta- 
 tious forms of worship, and so-called benevolent institutions 
 whose ends are largely personal and exclusive, escape taxa- 
 tion, while the small property holders of Baltimore City, 
 for instance, are paying a gross public charge of two and a 
 half per cent, upon their little accumulations. 
 
 The question is a delicate, probably an unimportant one, 
 and is best left perhaps to the instincts of the people. In 
 deciding the question many states have effected a compro- 
 mise by exempting the property of such institutions within 
 <:ertain limits; in Maryland, for instance, no taxes are paid 
 ■on landed property which does not exceed forty acres. As- 
 suming that the principle of exemption within certain limits 
 is correct, it seems that a value limit would be far more 
 «quitable. Forty acres may be worth any amount from 
 forty dollars up to four hundred thousand dollars, and the 
 same is true of the plant and buildings of fraternal orders, 
 ■churches, benevolent institutions, etc. The wishes of the 
 people in this matter, so far as they can be discerned in 
 past legislation, would be better carried out by assessing 
 the institutions and then exempting them within certain 
 limits — $20,000 or $30,000 perhaps. 
 
 To the present writer there seems no logical line of 
 division between the richer and poorer institutions of the 
 kinds named. There may be a good reason why benevo- 
 lent and fraternal institutions should be taxed and churches 
 exempt; but it is difficult to see why a church with one 
 hundred members and ten thousand dollars' worth of prop- 
 3 
 
34 Studies in State Taxation [34 
 
 erty should be exempt while another church with one thou- 
 sand members and one hundred thousand dollars' worth of 
 property should pay taxes. Neither should contribute, or 
 both. 
 
 Commercial houses pay taxes upon their stocks of mer- 
 chandise and no deduction for debt is allowed. The ex- 
 emption of book-accounts has been permitted only since 
 1896. The insertion of this provision in the list of exemp- 
 tions accomplished a very desirable reform. The abstract 
 justice of allowance for debt is seldom questioned. On the 
 other hand, it is just as unquestionable that such exemption 
 breeds a host of abuses. Assuming that in the long run 
 the book-accounts of commercial houses will equal their 
 debts, the exemption of book-accounts affords a practical 
 mode of deducting debts without inviting abuse. There 
 is no inducement to manufacture book-accOunts for the 
 pleasure of having them exempted. The passage of this 
 law has also removed a large amount of deception — to avoid 
 the harsher term " perjury " — since before its passage prac- 
 tically nobody listed book-accounts. 
 
 Assessment. The machinery of assessment consists of 
 (i) a State Tax Commissioner who is appointed by a board 
 consisting of the governor, treasurer and comptroller, and 
 who is charged with the general supervision of assessment, 
 and, in particular, with the assessment and management 
 of the corporation taxes; (2) boards of county commis- 
 sioners in the respective counties, empowered to hear ap- 
 peals and to revise valuations; (3) the Appeal Tax Court 
 in Baltimore City, clothed with like powers; (4) a corps of 
 seven permanent assessors in Baltimore City appointed by 
 the mayor and city council. In addition, the clerks of the 
 courts, registers of wills, and the commissioner of the land 
 office render special services for which they receive special 
 remuneration in addition to their regular salaries. These 
 services consist principally of the collection of the inheri- 
 tance, mortgage, and executors' commissions taxes, and in 
 notifying the appeal boards of transfers and alienations of 
 real property. 
 
35] Taxation in Maryland 35 
 
 There has never been any provision for general periodic 
 assessment in Maryland. Since 1812 there have been only 
 five general assessments. The county commissioners and 
 the Appeal Tax Court of Baltimore are directed to revise 
 the valuations of real property every two years, and the re- 
 assessment law of 1896 provided for a biennial hsting of per- 
 sonalty. But this law was repealed soon afterwards, and 
 in 1898 the reassessment of personalty was made only in 
 Baltimore City. 
 
 The method of appointing the appeal boards is important 
 because of its bearing upon the uniformity of valuation 
 throughout the state. The county commissioners are 
 elected by ballot. While this mode of election may operate 
 to make the commissioners unduly susceptible to the in- 
 terests of their constituents, the defect is partly remedied 
 by the fact that the county revenue must be raised on the 
 state assessment. There seems to be no remedy for the 
 evil mentioned above.' The possibility of inequality in as- 
 sessment between county and county is not due to the 
 method of choosing the appeal boards; it is inherent in all 
 ad valorem taxation. Elect the appeal boards by popular 
 vote and they are unduly influenced by the interests of the 
 men who vote for them. If they are appointed by the 
 governor they are unduly influenced by the members of the 
 political party to which they belong. This has been illus- 
 trated again and again in Baltimore City. The nearest 
 approach to a remedy would probably be found in a consti- 
 tutional provision requiring boards of revision and appeal 
 to be appointed by the governor and made up of an equal 
 number of members from the two leading political parties. 
 To accomplish this change in the counties would be diffi- 
 cult, since the boards of county commissioners constitute 
 the general governing bodies in the counties, and as such, 
 should be elected by popular vote. The Appeal Tax Court 
 of Baltimore, however, is appointed by the mayor and 
 
 ' As is so graphically shown in Mr. Benton's paper, the remedy 
 is certainly not to be found in state boards of equalization. 
 
36 Studies in State Taxation [36 
 
 second branch of the city council, and there would be no 
 difficulty in the way of making this board bi-partisan. It 
 is not only desirable that this board should be bi-partisan 
 but past experience has shown that it is absolutely neces- 
 sary. 
 
 In the assessment of 1896 the power of altering assess- 
 ments was vested in Baltimore in temporary boards of 
 control and review. These boards were appointed by the 
 governor and consisted of three members, one of whom, 
 the law provided, " should belong to the political party 
 which casts the next largest number of votes at the last 
 general election in the State." The assessors in this assess- 
 ment were in main appointed by the governor. 
 
 The state — excluding Baltimore City — ^was divided into 
 fifty-seven assessment districts. In each of these assess- 
 ment districts the governor appointed two assessors-at- 
 large, who were selected from the two leading parties from 
 nominations made by the state central committees. The 
 county boards appointed one assessor from each election 
 district, and the latter, in conjunction with the two asses- 
 sors-at-large, assessed the election district from which he 
 was appointed. In Baltimore all the assessors were ap- 
 pointed by the governor. Assessors were required to be 
 registered voters, taxpayers, and residents of the county 
 or city for which they were appointed for at least two years 
 before the appointment. These provisions, together with 
 the peculiar position of the Republican party, which was 
 newly victorious and on probation, conspired to produce a 
 relatively creditable assessment. 
 
 In the act of 1896 provision was made for a biennial as- 
 sessment of personal property; but in 1898, as already 
 stated, this assessment was made only in Baltimore City. 
 The assessors were appointed by the Appeal Tax Court, 
 and as no provision for minority representation was made, 
 the appointments were greatly influenced by political 
 motives. 
 
 The assessment was a failure. " The members of this 
 
37] Taxation in Maryland 37 
 
 court are not favorably inclined to the biennial assessment 
 of personal property," wrote the Judges of the Appeal Tax 
 Court of Baltimore in their annual report for 1898. " The 
 gain is not sufficient to warrant such frequent visits to the 
 homes of our citizens, and the annoyance which it gives 
 them to recount and schedule their personal possessions. 
 A fraction of the time and money spent in that direction, 
 if devoted to the revision of the property already on the 
 tax-books would secure as full results as those now accom- 
 plished by going over the ground anew every two years." 
 In the last few days the Board of Estimates of Baltimore 
 City has confirmed this opinion. 
 
 There is no reason to complain, as the tax commission 
 of 1888 did, that general assessments are so infrequent in 
 Maryland. The annual or biennial assessment is a trouble- 
 some and costly proceeding which benefits nobody but the 
 political hanger-on who is appointed assessor. The assess- 
 ment of 1898 in Baltimore City cost more than $30,000, 
 while it had practically no effect in changing the taxable 
 basis. There can be no doubt of the wisdom of the recom- 
 mendation that a permanent corps of trained assessors be 
 substituted for the biennial assessment of personalty. 
 
 Validation. In listing and valuing property each taxpayer 
 is suplied with a printed form upon which he is directed 
 " to specify as far as may be practicable " the amounts of 
 the different kinds of property which he owns, or manages 
 as trustee, guardian, etc. After having enumerated his 
 property he is directed to enter opposite each item his own 
 estimate of its present value. The property so described 
 must be valued " at its full market value without looking 
 to a forced sale." Opposite the owner's valuation is placed 
 the valuation of the assessor. Real estate and houses are 
 described and assessed on another printed form, and the 
 valuation of the two is kept separate. 
 
 " For the purpose of securing a full disclosure of all 
 taxable property," the State Tax Commissioner is author- 
 ized to print on the blank forms " such interrogatories as 
 
38 Studies in State TaA-ation [38 
 
 he may deem proper." The assessors are not at all inquisi- 
 torial in their work and until now the Tax Commissioner 
 has made scant use of his privilege of interrogation. The 
 only printed questions besides those mentioned concern the 
 amount of property owned in the preceding year, the 
 assessment thereon, and the amount of insurance carried. 
 The last question has aroused some opposition from busi- 
 ness men who quite generally refuse to answer it to the 
 assessor. The law,- however, clothes the assessors with the 
 right to administer oath, and they are authorized to pro- 
 pound " any question which they may deem necessary to 
 enable them to ascertain the location, kind, and character 
 of the personal property in question." Personal property 
 is enumerated under ten heads, and the owner's valuation 
 is almost invariably accepted if he shows any disposition 
 to be fair in the matter. There is some reason to believe 
 that in the counties at least better results would be reached 
 if a more extensive list of inquiries were used. 
 
 The boards of county commissioners and the Appeal 
 Tax Court in Baltimore, act as permanent boards of appeal 
 and revision. There are no other boards of equalization 
 in Maryland. The capital stock of Maryland corporations 
 is assessed by the State Tax Commissioner, and an appeal 
 from his valuation lies to a board composed of the Comp- 
 troller, Treasurer, and Tax Commissioner. Railroads pay 
 state taxation upon gross receipts alone. The amount of 
 these receipts is determined by the Tax Commissioner. 
 Railroads pay local taxes upon real and personal property, 
 which the ordinary assessors of the various local bodies 
 assess. 
 
 Bonds of Maryland corporations are assessed to the 
 individual owner. For almost fifty years the taxes upon 
 such bonds were collected from the corporations, and by 
 them charged to the accounts of the individual owners. 
 But all bonds in Maryland are now assessed to the indi- 
 vidual owner at their market value, though it is provided 
 that " such upon which no interest shall be paid shall not 
 
39] Taxation in Maryland 39 
 
 be valued at all." Upon this valuation the regular rate of 
 state taxation is paid. Local taxation upon this valuation 
 is, however, limited to 30 cents on the $100. Shares of 
 stock in corporations outside of Maryland are valued in 
 the same way and pay only 30 cents upon the $100 as local 
 taxation. The explanation of the changes noted is simple. 
 Many corporations do not know the residences of their 
 bondholders and it is illegal to tax bonds of Maryland cor- 
 porations owned and held outside the state. The limitation 
 of local taxation upon bonds and stocks of foreign corpora- 
 tions owned in Maryland was made with a view of keeping 
 within the state a desirable class of wealthy citizens, and of 
 reducing the amount of double taxation.^ 
 
 Personal property in Maryland is assessed to the owner 
 at his residence, which is held to be in the district where 
 he resides for the greater portion of the year. Real prop- 
 erty or personal property permanently located is assessed 
 at its situs. Bridges forming part of the roadbeds of rail- 
 road and turnpike companies, are valued at the same rate 
 that any other equal portion of such roadbed is valued. 
 Special provision is now made in Maryland for the valua- 
 tion of distilled spirits in the hands of distillers or pro- 
 prietors of bonded warehouses. Such spirits are assessed 
 and valued by the State Tax Commissioner, and not by the 
 local assessors. Upon his valuations — reported to the 
 proper local authorities — the ordinary property taxes are 
 imposed. Where the distillery or warehouse is owned by 
 a corporation with capital stock divided into shares, the 
 assessed value of the distilled spirits which they own and 
 have paid taxes on, is taken into account as a credit in 
 assessing the capital stock. 
 
 ' Since the enactment of this limitation of local taxation upon 
 bonds and stock of foreign corporations, the national banks located 
 in Maryland have refused to pay more than thirty cents per $100 on 
 their capital stocks, claiming that by the terms of the federal statute 
 permitting the taxation of national banks, they should.be given the 
 most favored terms accorded to " other moneyed capital." The 
 district court has recently decided against the banks. 
 
40 Studies in State Taxation [40 
 
 Critical Suggestions. It is unnecessary to dwell upon the 
 inherent defects of the property tax. In Maryland, as 
 everywhere else, the great burden of taxation falls upon 
 land; a large amount of personalty escapes; and small prop- 
 erty holders are overtaxed, in comparison with the large 
 property holders whose bills are considerable enough to 
 enable them in some measure to dictate their own terms, 
 and also in comparison with the immense number who pay 
 no taxation at all in virtue of the $ioo minimum. In the 
 opinions of those best acquainted with taxation in Mary- 
 land, real estate in the counties is assessed at a rate varying 
 from fifty to one hundred per cent, of its true value. In 
 Baltimore City small holdings are assessed at their full 
 value. Large landowners are usually able to make some 
 compromise by which, to say the least, they obtain a more 
 favorable valuation. On the whole, real property is fully 
 assessed in Baltimore. 
 
 The most serious defect of the property tax is the escape 
 of personalty. Tax officials assert that there is no mode of 
 reaching private securities and that intangible wealth in 
 general is not listed. Personally I am inclined to believe 
 that the escape of personalty, in Maryland at least, is exag- 
 gerated. The reasons for this belief follow: 
 
 I. The large ratio which the assessed value of personalty 
 bears to the total assessed value of real and personal prop- 
 erty. In 1897 real estate and improvements were assessed 
 at $455,000,000, personal property at $196,000,000. The 
 personal property assessed is thus about 43 per cent, of the 
 realty and about 30 per cent of the total wealth of the state. 
 
 I am not at all willing to admit that the personal property 
 owned in Maryland and subject to taxation is very much 
 more than 43 per cent, of the realty and 30 per cent, of the 
 total wealth. Definite facts in the matter are hard to 
 obtain, but taking into account the immense amount of 
 personal property which is not subject to taxation, I am in- 
 clined to infer from, these figures that the personal property 
 of the state is assessed nearer its true value than real prop- 
 
41] Taxation in Maryland 41 
 
 erty. A large majority of the persons assessed for more 
 than $ioo, have, I behave, the greatest portion of their 
 wealth invested in houses or land. The first impulse of a 
 thrifty man who has accumulated a little, is to invest his 
 savings in house or lot, or both. And in the aggregate, 
 those who have accumulated a little are of more importance 
 than those who have accumulated large fortunes and have 
 the major portion of their wealth invested in securities. 
 
 II. The immense amount of personal property which is 
 not subject to taxation. A large portion of the personalty 
 which critics have in mind when they condemn the property 
 tax because of the escape of personalty, is legally and 
 justly exempt. The realty exempt by law is insignificant; 
 the amount of personalty exempt is enormous. Subtract 
 from the total personal property of the community, all cash 
 in hand, all mortgages, bank deposits, bonds and all other 
 evidences of indebtedness issued by the United States, book 
 accounts and all evidences of such indebtedness, the stock 
 debt of Maryland, the stock debt of Baltimore, and that 
 portion of the capital stock of every corporation which is 
 represented by these securities; exempt every individual, 
 the actual market value of whose property is less than $ioo,' 
 the tools of artisans, the crops and implements of far- 
 mers, wearing apparel, jewelry habitually worn, provisions 
 and fuel for consumption, the furniture of churches, the 
 libraries and laboratories of educational institutions, the 
 paraphernalia of lodges; deduct besides, ground rents, the 
 personal property of corporations, shares in national banks 
 located outside of Maryland, the capital stock of dorrestic 
 building associations, that portion of the capital stock of 
 corporations which represents land and investments in other 
 Maryland corporations, that portion of the capital stock of 
 railroads which is represented by land, roadbed and bridges, 
 and the wonder is not that the remaining personal property 
 constitutes only thirty per cent, of all property, but that it 
 
 ' Such property is practically all personal, since no one who owns 
 land, owns less than $ioo worth. 
 
42 Studies in State Taxation [42 
 
 constitutes as much as 30 per cent. The credits or claims 
 to a given mass of material property may be multiplied in- 
 definitely. This reduplication of securities increases with 
 the development of trade and commerce. Writers have 
 dwelt upon this increase of personal " property " without 
 considering the fact that it is an ideal of the law, imperfectly 
 realized it is true, to exempt the shadow where the sub- 
 stance is taxed. The result of the multiplication of credits 
 is the multiplication of exemptions. 
 
 The critics of the property tax have been over-anxious 
 to gather illustrations and proofs of preconceived notions. 
 It is acknowledged that the amount of personalty has in- 
 creased in the last thirty years. It is just as true, however, 
 that the need of public revenue has increased, and that the 
 vigilance of tax officials and the morality of the average 
 citizen have not relaxed. When under these circumstances 
 the assessment rolls show that realty has increased 125 per 
 cent, while personalty has increased but 8 per cent., as they 
 did in California for the interval 1880-1896, the reasonable 
 course, it seems, would be to search for other causes than 
 the degeneration of the public conscience and the complete 
 breakdown of the property tax. 
 
 III. The first and most comprehensive explanation of 
 the relative decline of personalty is the improvement which 
 has taken place in the tax laws. There is no doubt that in 
 the last thirty years an immense amount of double taxation 
 has been remedied either by legislative enactment or by 
 court decision. Twenty-five years ago both the property 
 and the capital stock of corporations were assessed at their 
 full market value.' In 1877, however, the Court of Appeals 
 decided (48 Md. 188) that this method of assessment in- 
 volved double taxation, and the legislature, in conformity 
 with the decision, enacted that thereafter the value of the 
 
 ' It is only fair to add, however, that this was done only for a few 
 years in Maryland. I cite the instance for its bearing upon the 
 general aspect of the question: it is probable that in other states 
 the practice continued for a long period. 
 
43] Taxation in Maryland 43 
 
 real property should be substracted from the value of the 
 capital stock. In 1897 the real property of Maryland cor- 
 porations was assessed at $34,000,000. Under the preced- 
 ing law this $34,000,000 would have been included in the 
 personalty column, as well as in the realty column. 
 
 Prior to 1874 corporations received no credit for invest- 
 ments in other Maryland corporations. At present they 
 are permitted to deduct such holdings from the value of 
 their capital stock. Trust companies, which hold stock 
 debt of Baltimore, for instance, pay no taxes, state or local, 
 upon it, and in addition subtract its assessed value from the 
 value of their own stock. The total amount of such credits 
 in 1897 was more than $6,000,000. Thirty years ago this 
 was listed as personalty. At that time the state also listed 
 mortgages and the bonds of Maryland corporations owned 
 outside of Maryland. All these securities have now been 
 taken from the personalty list. The amount thus exempted 
 is enormous. 
 
 To the above list of personal property which has been 
 taken from the assessment rolls in the last thirty years, 
 might be added the book accounts of commercial houses, 
 formally exempted in 1896. It would be useless to go on 
 with this enumeration, as practically no statistics of the 
 relative growth of personalty can be offered. It is sub- 
 mitted, however, that, during the period in which the 
 amount of assessed personalty is alleged to have undergone 
 a relative decline, there has been an extensive growth in 
 the exemption of personalty, accompanied by a qualitative 
 change in the general system of taxation, by which many 
 classes of industry, such as railroads, insurance companies, 
 express companies, have been relieved of the necessity of 
 listing their property, and in lieu thereof, charged with the 
 payment of gross-receipts and other similar taxes. And 
 the greater part of the property of such companies is what 
 would be called " personal." 
 
 IV. The fourth reason for the belief that the escape of 
 personalty has been exaggerated, is based upon the few 
 
44 Studies in State Taxation [44 
 
 statistics of assessed personalty that we have. The differ- 
 entiation of real and personal property in the reports upon 
 the taxable basis, has been introduced only recently in 
 Maryland. In consequence, we are forced to fall back upon 
 the reports of the Eleventh Census. In 1890, according to 
 the section devoted to Maryland in the census report upon 
 " Wealth, Debt and Taxation," the assessed value of real 
 property in Maryland was $411,900,246; that of personal 
 property, $117,594,531. In 1897, according to the last 
 Report of the State Tax Commissioner, real property was 
 assessed at $454,926,856, and personal property at $195,- 
 661,081. In the interval 1890-1897, then, the assessed value 
 of personal property increased 66 per cent., while that of 
 real property increased only 10 per cent. Whether these 
 figures are trustworthy, and whether similar results would 
 be obtained from a longer series of years, are questions 
 which I am unable to answer. But the figures, such as they 
 are, do not sustain the contention that a major proportion 
 of personalty is escaping. 
 
 I have no desire to be taken as a champion of the prop- 
 erty tax. The escape of personal property, particularly 
 private securities, is a serious matter which cannot be 
 lightly dismissed. On the other hand, it is evident that 
 the magnitude of such evasion has been exaggerated. 
 While one can scarcely find a reference to the property tax 
 unaccompanied by some startling illustration of the escape 
 of intangible property, these illustrations contain no refer- 
 ence to the increasing exemption of bonds and stocks due 
 to decisions of the courts, no account of non-interest bear- 
 ing and other unproductive securities which are legally 
 exempt. A large proportion of the securities which are 
 said to " escape " are mere liens upon tangible property 
 upon which the proper taxes are paid. 
 
 The worst defect of the property tax in Maryland is the 
 absence of any provision for the exemption of debt. What- 
 ever be the practical difficulties of debt exemption, nothing 
 short of that reform will ever satisfy our innate ideas of 
 
45] Taxation in Maryland 45 
 
 justice. That a man holding an estate worth $50,000 and 
 mortgaged for $40,000 should pay both state and local 
 taxation upon $50,000, is wrong, ethically and economically. 
 There is a practical remedy for this evil which would, I 
 believe, do away with a large amount of double taxation 
 and at the same time bring to light the greater portion of 
 those securities which now escape the assessor. The crea- 
 tion of a debt implies the creation of a corresponding credit. 
 Exempt debts on the conditions that the debtor bring 
 acknowledgments of such debts from the corresponding 
 creditors and that such creditors are taxable, and an im- 
 mense amount of intangible property will be brought to 
 light. This expedient would necessitate some sort of inter- 
 state agreement by which cognizance could be taken of 
 debts contracted between citizens of different states. An 
 interstate agreement of this kind does not seem hopelessly 
 chimerical. 
 
 License Taxes 
 
 Licenses in Maryland date from an early period, although 
 the most important were first levied in the second decade 
 of this century. In 1780 the marriage license was imposed, 
 and an annual tax of £15 upon billiard tables was levied in 
 the same year. In 1819 the broker's license was introduced 
 in the form of a tax of $500 per annum on every broker 
 dealing in bank notes or lottery tickets. The trader's 
 license, auctioneer's license and ordinary's license date from 
 1827. From this time until about twenty-five years ago 
 the state derived its principal revenue from this source. 
 During the twenty-two years, 1877-1898, the various 
 licenses yielded about thirty-three per cent, of the total tax- 
 receipts. 
 
 Forms of License Taxes. Besides the quasi-license taxes 
 to be treated with the corporation taxes, the following 
 license taxes are imposed in Maryland: 
 
 (i) Auctioneers in Baltimore City pay from $450 to 
 $750, according to the amount of sales. In the counties. 
 
46 Studies in State Taxation [46 
 
 auctioneers pay the trader's license upon the value of the 
 stock on hand. Receipts in 1898, $3822.00. 
 
 (2) Brokers pay special charges ranging from $100 for 
 exchange, insurance, and pawnbrokers, to $18.75 ^°^ grain, 
 coffee, cotton, and sugar brokers. Receipts in 1898, 
 $18,952.65. 
 
 (3) Hawkers and pedlers pay from $100 to $200 for each 
 county in which they sell, according as they travel on foot 
 or with horse and wagon. In eleven counties they pay 
 $300 when they travel with a wagon and two horses. Re- 
 ceipts in 1898, $3012.91. 
 
 (4) Traders' licenses vary from $12 paid on a stock of 
 $1000 or less, to $150 paid on a stock worth $40,000 or 
 more. Receipts in 1898, $188,879.44. 
 
 (5) Billiard-tables. The annual license tax on billiard- 
 tables rented or conducted for a profit is $50. Receipts in 
 1898, $5604.27. 
 
 (6) Liquor-Dealers selling in quantities of more than 
 one pint pay licenses varying from $18 on a stock worth less 
 than $500, to $150 on a stock worth more than $30,000. 
 Dealers taking out an $18 license must pay in addition the 
 trader's license of $12. Receipts in 1898, $10,697.66. 
 
 (7) Ordinary-Keepers pay from $25, where the house 
 occupied has a rental value of $100 per annum or less, up 
 to $450, where the house has a rental value of $10,000 or 
 more. Receipts in 1898, $11,877.89. 
 
 (8) Saloons and Oyster-Houses in the counties pay $50 
 per year. Receipts in 1898, $33,044.44. 
 
 (9) High Liquor license. In Baltimore City and Elli- 
 cott City all liquor-dealers, saloon-keepers, etc., pay an 
 annual license of $250. Receipts in 1898, $546,880.14. 
 
 (10) Oyster-Dredger's license. Owners of boats engaged 
 in dredging oysters pay $3 per ton annually. Receipts in 
 1898, $35,6937S- 
 
 (11) Oyster-Tongers pay from $2 to $5 a year, according 
 to length of boat. Receipts in 1898, $12,925.24. 
 
 (12) Oyster-Canners pay one-tenth of one cent upon 
 
47] Taxation in Maryland 47 
 
 every bushel of oysters shucked. Receipts in 1898, 
 $4853.92. 
 
 (13) Oyster-Measurers pay ten cents per hundred 
 bushels measured. Receipts in 1898, $909.20. 
 
 (14) Net-Fishing. Three cents for each square fathom 
 of seine, and one cent for each square fathom of gill-net. 
 Receipts in 1898, $204.85. 
 
 (15) Commercial fertilizers. Every manufacturer or im- 
 porter of fertilizers is required to pay $5 for the first 100 
 tons sold, and $2 for each additional 100 tons. Receipts 
 in 1898, $9150.00. 
 
 (16) Exhibition licenses. Theatrical companies, shows, 
 circuses, etc., pay, in addition to local licenses, $30 per year, 
 or $1 per exhibition, in the counties. In Baltimore City 
 theatrical exhibitions and circuses pay to the state $3 each 
 night; other exhibitors, $10 per week. Receipts in 1898, 
 
 $3347-71 ■ 
 
 (17) Cigarette license. To sell paper-wrapper cigarettes, 
 dealers are required to pay a special license of $10 per year. 
 Receipts in 1898, $11,160.20. 
 
 (18) Race and Fishery. To sell liquor at horse-races 
 and fisheries, special licenses are issued which cost $4.50 
 and $6.50 respectively. Receipts in 1898, $41.80. 
 
 Critical Suggestions. Judged by McCulloch's empirical 
 standard, the license taxes are the best taxes we have. They 
 are easily and cheaply collected, very productive, and cause 
 little irritation or complaint. Considering how completely 
 the faculty on quid pro quo theory fails to explain some of 
 our most satisfactory taxes (as, for example, the inheritance 
 tax), there seems no reason why we should advocate the 
 abandonment of license taxes because they have no appar- 
 ent philosophical basis. Many of these licenses, notably 
 the high liquor, cigarette, and exhibition licenses, are sump- 
 tuary measures. The first of these has had a most benefi- 
 cial influence in Baltimore, and there seems little reason 
 why we should not regulate by taxation if the measure of 
 regulation desired by the public can be thus secured. The 
 
48 Studies in State Taxation [48 
 
 traders' licenses are not excessive and it is improbable that 
 prices are appreciably affected by them. If the number of 
 such fixed charges could be increased without causing more 
 injustice or irritation than the average license of the pres- 
 ent, the increase would seem, pro tanto, a most desirable 
 substitute for the property tax. 
 
 Many of the licenses are specially devoted to the interests 
 of the particular branch of trade from which they are drawn. 
 Thus, most of the oyster licenses are impose'd for the sole 
 purpose of maintaining the supremacy of Maryland in the 
 oyster trade. The same motive explains the fertilizer li- 
 cense. Baltimore is now the largest manufacturing center 
 of the fertilizer industry in the country. In order to keep 
 the standard of these goods high this license is imposed and 
 the proceeds devoted to the maintenance of a chemical 
 laboratory where the inspection and analysis of fertilizers is 
 constantly going on. 
 
 In glaring contrast to most of the licenses are those re- 
 quired of pedlers, and auctioneers in Baltimore. The latter 
 occupation is a virtual monopoly in Baltimore, only eight 
 licenses being issued in 1898. The law provides that auc- 
 tioneers shall be appointed by the Governor and shall pay 
 $450 per annum if their sales — excluding real estate and 
 houses — are less than $150,000. Where such sales amount 
 to more than $150,000, the license costs $750. Whether 
 this tax meets the approval of those who can afford to pay 
 it, is not plain. But it certainly renders one legitimate 
 vocation inaccessible to the poorer classes and undoubt- 
 edly diminishes the revenue that would accrue from this 
 source if the licenses were of normal amount. 
 
 The excessive license charge required of pedlers fur- 
 nishes another instance of explicable but unjustifiable trade 
 antipathy. Scarcely a session of the General Assembly 
 passes without these charges being increased or extended 
 over counties where formerly they did not apply. If auc- 
 tioneers and pedlers thrive so well and it requires such 
 an effort to repress them, it is only a proof that they are 
 
49] Taxation in Maryland 49 
 
 performing some economic function better than the ordi- 
 nary traders, and they should be encouraged, not discour- 
 aged. The excessive pedler's Hcense is due in some 
 degree to a survival of the Jew-baiting instinct. This 
 charge is undoubtedly aimed at the industrious Jewish 
 itinerant who peddles notions, since hawkers of fish and 
 green provisions are exempt.^ 
 
 Licenses are granted by the clerks of the Circuit Courts. 
 Sheriffs and constables are enjoined to make diligent 
 search for violators of the law and informants in every 
 case are given one-half of the penalty imposed. The law 
 is generally well enforced and there are no wholesale eva- 
 sions. Some of the penalties provided exhibit peculiar 
 prejudices similar to those noted in the case of pedlers; 
 for example, a penalty of $500 is imposed upon people doing 
 a broker's business or keeping a public billiard-table with- 
 out a license, while the pecuniary penalty for selling liquor 
 without a license varies from $50 to $200. 
 
 The more serious problem to be solved in connection 
 with licenses is not whether they should be retained; but 
 whether their proceeds should go to the state or the local 
 division in which they are collected. The state retains one- 
 fourth of the proceeds of the high liquor license collected 
 in Baltimore. It retains the entire proceeds of the traders' 
 licenses collected in Baltimore — nearly $104,000 in 1898. 
 Two questions are frequently asked by the citizens of Bal- 
 timore: why should any of this money go to the state at 
 all, and, if the state has a just claim to the proceeds of 
 license taxes, why should it take a part in the one case , 
 and the whole amount in the other? 
 
 The answer to the latter question is not difficult to find. 
 
 ' Pedlers pay $100 to travel afoot, $150 to travel with one horse 
 and wagon, $200 with two horses and wagon. They are restricted 
 to one county for each license, are adjudged to be selling without 
 license if they do not have the license certificate with them, and a 
 reward of $10 is offered to any person who secures the conviction 
 of a pedler selling without license. In contradistinction to this the 
 traveling salesman pays nothing and the saloon-keeper only $50. 
 
 4 
 
50 Studies in State Taxation [50 
 
 The city of Baltimore in so far as its liquor trade is con- 
 cerned, is subjected to heavier taxation than other local 
 districts. A portion of this taxation, about equivalent to 
 the amount of taxes collected from liquor-dealers in other 
 parts of the state, is retained by the state in order to place 
 Baltimore upon an equality with other local divisions in 
 this respect. The justice of this apportionment must be 
 acknowledged if it be decided that the state has a better 
 claim to the proceeds of licenses than the several local 
 divisions. 
 
 The Mayor of Baltimore has recently criticised the prac- 
 tice of using the traders' and other licenses for state pur- 
 poses. The public expenses entailed by traders are borne 
 by the city; the logical fund for the payment of these 
 expenses, he claims, is that derived from the licenses im- 
 posed upon traders. 
 
 The question involved is clearly one of equity, to be 
 decided by reference to the general principle in accordance 
 with which license taxes are imposed. If licenses are paid 
 in return for and in proportion to public services rendered, 
 the proceeds, speaking generally, should go to the local 
 districts in which they are collected. If they are payments 
 for the grant of public privileges, the proceeds should go 
 to the state. 
 
 In origin, the license tax is closely akin to the modern 
 franchise tax and appears, in its historical aspect, as the 
 price of the privilege to do business; in Mississippi, for 
 example, the tax is still known as the privilege-license tax. 
 The grant of such privileges lies wholly within the province 
 of the sovereign power; it is not within the ordinary power 
 of a municipal corporation either to authorize, prohibit, or 
 circumscribe by license the pursuit of a calling or trade 
 not inimical to the public health, morals, or safety. In 
 consequence of these facts, the payments for the grants 
 mentioned should be retained by the power which con- 
 ferred them; and this power is the state. This interpreta- 
 tion of the nature of the license tax is further supported by 
 
^1] Taxation in Maryland 51 
 
 I 
 
 the difference in the burden imposed upon the several kinds 
 of business. The broker and the pedler have no extensive 
 stocks or estabhshments necessitating the maintenance of 
 poHce and fire departments, yet they pay higher Hcenses 
 than ordinary traders. Moreover, the Hcense charges are 
 substantially uniform throughout the state, irrespective of 
 the degree of protection afforded by the various local gov- 
 ernments. 
 
 It is admitted that the above is an ultra-theoretical view 
 of the nature of the license tax, but the distribution of taxa- 
 tion among individuals and the distribution of the proceeds 
 of taxation among the several governmental divisions are 
 problems which are essentially theoretic. It is also ad- 
 mitted that there are many weighty arguments which may 
 be adduced in support of the justice of the Mayor's plea. 
 But in the opinion of the writer, the distinctive features of 
 the license stamp it unmistakably as a state tax as distin- 
 guished from a municipal charge. 
 
 Corporation Taxes 
 
 Under the above heading the following taxes have been 
 grouped : 
 
 (a) Tax on Gross Receipts of Corporations. 
 
 (b) License and Premium Tax on Insurance Companies. 
 
 (c) Tax on Capital Stock of Corporations. 
 
 (d) Franchise Tax on Savings Banks. 
 
 (e) The Bonus Tax on Corporations. 
 
 (f) The Foreign Corporations Tax. 
 
 In 1898 the tax on the gross receipts of corporations 
 yielded $191,638.98; the license and premium tax, $149,- 
 039.10; the tax on capital stock, $140,673.11;^ the tax on 
 savings banks, $32,353.70; the bonus tax, $5,005.42. No 
 returns from the foreign corporations tax have been pub- 
 lished as it was not imposed until 1898. 
 
 Tax on Gross Receipts. Until 1894 there were no taxes 
 
 ' The tax on Baltimore City stock is included. 
 
52 Studies in State Taxation [52 
 
 on gross receipts in Maryland, save those on railroads, first 
 imposed in 1872. The present taxes which were passed in 
 1896, are as follows : " a state tax as a franchise tax " is 
 levied upon the gross receipts of all steam railroad com- 
 panies doing business in the state, to the amount of eight- 
 tenths of one per centum on the first one thousand dollars 
 per mile of gross earnings, or on the total earnings if they 
 are less than one thousand dollars per mile; one and one- 
 half per centum on all gross earning above one thousand 
 dollars per mile and up to two thousand dollars per mile; 
 when the gross earnings exceed two thousand dollars per 
 mile, two per centum on all earnings above that amount. 
 
 All oil and pipe-line companies, and all title-insurance 
 companies doing business in the state pay a franchise tax 
 of one per cent, on their gross receipts. Every telegraph 
 or cable, express or transportation, telephone, parlor-car, 
 sleeping-car, safe-deposit, trust, guarantee and fidelity 
 company, doing business in Maryland, pays two per cent, 
 on gross receipts. Electric-light companies pay three- 
 fourths of one per cent, on gross receipts. Electric-con- 
 struction companies, gas companies, and fertilizer com- 
 panies pay one and one-half per cent, on gross receipts,' 
 with the exception of fertilizer companies, unincorporated 
 firms or individuals engaged in the businesses enumerated 
 above pay the corresponding taxes on gross receipts. 
 
 Companies subject to these taxes whose lines lie partly 
 outside the state, pay upon such proportion of their gross 
 earnings as the length of their line in Maryland bears to 
 the whole length of their line. The data required for the 
 calculation of these taxes must be reported to the State Tax 
 Commissioner " in any mode satisfactory to and required 
 by " that official. 
 
 The gross-receipts tax is the only state tax imposed on 
 railroads. They pay the local taxes upon their real and 
 personal property. Capital stock is thus wholly exempt. 
 
 ' Only those fertilizer companies pay on gross receipts which are 
 incorporated outside of Maryland. 
 
53] Taxation in Maryland 53 
 
 The boards of control and review and county commis- 
 sioners made the valuation of real and personal property in 
 1896, and no conditions were imposed upon them save that 
 of assessing bridges over streams at the same rate as any 
 other equal portion of the road. There is thus no central 
 board charged with the assessment of railroad property. 
 The assessment of rolling stock furnishes something of an 
 exception to this statement. The rolling stock of a road 
 is assessed by the board of control and review or the county 
 commissioners in the assessment district in which the com- 
 pany has its principal place of business. The valuations 
 made by these boards are then reported to the State Tax 
 Commissioner, who adds them together and apportions the 
 sum among the various local divisions according to mileage. 
 
 About 80 per cent, of the whole amount of gross-receipts 
 taxes received in 1897 came from railroads. The question 
 arises, do the railroads pay as much upon a just valuation 
 of their property as individuals would pay upon the same 
 amounts? This question suggests the difficult problem of 
 finding some quantitive relation between the value of a 
 railroad and its gross earnings. The Maryland Tax Com- 
 mission of 1888 — following the suggestion of the Illinois 
 commission of 1886 — undertook to solve this problem in 
 the following way : It was found that the true net earnings 
 of railway companies were in the long run about seven per 
 cent, of an amount secured by multiplying the gross earn- 
 ings by five. Starting from the gross earnings they thus 
 capitalized net earnings at seven per cent., and assumed the 
 result to be the value of the railroad under consideration. 
 The indirect capitalization from gross earnings was em- 
 ployed because of the greater likelihood of deception in 
 the return of net earnings. 
 
 Railroad statistics show a remarkable connection between 
 gross and net earnings. The net earnings of railroads in 
 the Middle Atlantic States, according to Poor's Manual of 
 
 ' Report of the Maryland Tax Commission of 1888, p. 21. 
 
54 Studies in State Taxation [54 
 
 1898, have been, in the average of the last thirteen years, 
 33 per cent, of the gross earnings/ According to the report 
 of the Interstate Commerce Commission for 1896, net earn- 
 ings, in the average of the last seven years (for the whole 
 United States), have been 32.88 per cent, of gross earnings.' 
 According to the report of the Railway Commissioners of 
 Massachusetts for 1898, the same ratio for the last ten years, 
 for railroads in Massachusetts was 31.06 per cent." These 
 results from three different sources not only resemble each 
 other closely, but the variation of separate returns from the 
 mean is not great. Thus the greatest variation in ten years 
 in Massachusetts was 3.51 (29.53 — 33.04). We may then 
 assume, taking Poor's figures for the Middle Atlantic States, 
 that net receipts are about one-third of gross receipts. 
 
 The Northern Central and the Baltimore and Ohio Rail- 
 roads have special contracts with the state by which they 
 pay only one-half of one per cent, upon their gross earnings. 
 A great deal could be said about the justice of these con- 
 tracts and the methods by which they were secured; but 
 these points cannot be discussed here. Excluding these, 
 the other thirty-five roads in 1897 were assessed $111,769.49 
 upon total gross earnings, which amounted to $6,733,987.11. 
 Computing net earnings as indicated and capitalizing these 
 at seven per cent., we would get $32,066,608 as the total 
 cash value of the roads in question. The regular state tax 
 upon this valuation would be $56,918.22; a little more than 
 half of that actually paid. Considering the risks involved, 
 seven per cent, is not too great a return upon railroad 
 investments. In the opinion of many, however, a higher 
 capitalization should be made, the Ohio commission of 
 
 ' Poor's Manual for 1898, p. 38. 
 
 ' Statistics of Railways in the United States for i8g6, p. 80. The 
 items net and grass earnings are not used by the statistician of the 
 commission, but essentially the same information is reported under 
 the terms " Gross Earnings from Operation " and " Income from 
 Operation." 
 
 ' Railroad Commissioner's Report for 1898, p. 64. 
 
55] Taxation in Maryland 55 
 
 1893, for instance, using six per cent.' In order to give 
 full weight to the public interests we may capitalize at five 
 per cent. At this rate the value of the roads is $44,893,251, 
 upon which the ordinary state tax at 17^ cents would be 
 $79,685. As the roads actually paid $111,769, we see that 
 they are paying about $32,000 more than an individual 
 would on property of the same value. So far as the above 
 method of calculation is concerned, we believe it to be sub- 
 stantially accurate. If the railroads are as honest as the 
 average taxpayer, and the net earnings are fairly estimated, 
 there can be no doubt that the railroads are paying at least 
 1.4 times the ordinary state property tax. The valuation 
 made covers franchises and bonded indebtedness. 
 
 Railroads pay local taxation only upon their tangible 
 property. Their franchises thus escape the heavy burden 
 of local taxation. The extra .4 may then be interpreted in 
 one of two ways. It may be taken as a payment for the 
 original grant of the franchises from the state. Franchises 
 are property. If the state transfers such property, it has a 
 right — in fact is compelled — to tax it as other wealth. It 
 may also take its payment for the original transfer of the 
 property in the shape of a tax. If the extra .4 or $32,000 
 be viewed in this light, the State is getting a fair return for 
 its grants, but the roads are escaping local taxation upon 
 the value of their franchises. If the .4 be regarded as a 
 part payment on account of this local taxation avoided, 
 then the state receives no true franchise tax, and local tax- 
 ation — which in the average is more than seven times as 
 great as state taxation — is still largely avoided. 
 
 From these considerations we might conclude that the 
 railroads were escaping a large portion of taxation in either 
 way we look at the matter. This conclusion must be 
 modified, however, by the fact that the bonds of these roads 
 are assessed to the individual holders resident in Maryland. 
 The capitalized value estimated in the way we have shown 
 
 ' Report of the Tax Commission of Ohio of 1893, p. 53. 
 
56 Studies in State Taxation [56 
 
 includes bonded indebtedness as well as capital stock. If 
 railroads were taxed upon a cash value so estimated, bonds 
 and stock in the hands of individuals would have to be 
 exempt to avoid double taxation. The payment of taxes 
 upon bonds thus necessitates a suspension of judgment 
 upon the question with which we started out. There is 
 no way of discovering how many of these bonds are taxed. 
 
 The one conclusion that may be drawn is this: What 
 constitutes equitable railroad taxation is not ascertainable 
 under the present system. It diflfers too radically from the 
 taxation of individuals to allow intelligent comparison. 
 Two reforms are needed: (a) different kinds of taxes should 
 be devised for railroads; (b) there should be a special com- 
 mission or commissioners in charge of railroad taxation. 
 The surest way of securing justice would be to make the 
 railroads pay state and local taxation upon a cash value 
 ascertained by capitalizing earnings. If desirable, real 
 estate owned by railroads could be assessed separately and 
 subtracted from this capitalized value, as is now done in 
 assessing the capital stock of corporations. In addition 
 to this a small gross-receipts tax might be imposed as a 
 franchise tax. In 1897 the average rate upon gross earn^ 
 ings paid by the railroads was i^^ per cent. This might 
 be reduced to one-third of one per cent, as an annual rental 
 payment for the franchises. 
 
 The necessity for some special official to look after the 
 state's interests in the taxation of railroads is apparent. At 
 the present time the Northern Central has paid no gross- 
 receipts tax for several years, and there is a dispute with 
 this road and the Baltimore and Ohio over the payment 
 of local taxes upon rolling stock. According to the last 
 report of the state tax commissioner, fourteen of the thirty- 
 seven roads in the state owned no rolling stock; reports 
 from three other roads had not been turned in, and the 
 regular apportionment provided for by law had been made 
 for only three roads. 
 
 The gross-receipts taxes levied upon other corporations 
 
57] Taxation in Maryland 57 
 
 amounted in 1897 to a little over $40,ocx5, or about twenty 
 per cent, of the total return from the taxes on gross receipts. 
 The latter constitute franchise taxes in the true meaning 
 of the words, as the corporations subject to them pay in 
 addition the ordinary property tax. 
 
 License and Premium Tax on Insurance Companies. The 
 first tax of this sort — two per cent, on the premiums of for- 
 eign companies — was authorized in 1839. In 1872 the 
 office of Insurance Commissioner was created and charged 
 with the duty of inspecting insurance companies and assess- 
 ing them for taxation. The present law relating to the tax- 
 ation of insurance companies was passed in 1894. 
 
 Every agent of a foreign ^ insurance company doing busi- 
 ness in Maryland is required to pay an annual license tax 
 of $300 plus one and one-half per centum on the amount 
 of premiums actually collected in the state. Foreign com- 
 panies are also required to register their charters, and to 
 make an annual statement of resources, liabilities, prem- 
 iums, etc. For both of these registrations a fee of $25 is 
 charged. The companies are also subject to several other 
 minor charges of the same nature, ranging from $10 to $2. 
 In estimating the amount of premiums upon which the tax 
 of one and one-half per cent, is paid, the companies are 
 allowed to deduct the claims or losses actually paid in the 
 state. 
 
 This tax only applies to foreign companies. Home com- 
 panies pay the ordinary corporation tax upon capital stock. 
 This acts as a distinct encouragement to the formation of 
 home companies. The tax is one of the most lucrative 
 levied by the state, the yield in 1898 being nearly $150,000. 
 
 Tax on Capital Stock of Corporations. The development 
 of corporation taxation in Maryland has been slow. The 
 collection of taxes upon capital stock at the source began 
 in 1 841,. In 1847 the duty of assessing such shares was 
 transferred from the ordinary assessors to the county com- 
 
 ' That is, companies not incorporated in Maryland. 
 
58 Studies in State Taxation [58 
 
 missioners. Itf 1878 this power was vested in a State Tax 
 Commissioner. There have been no essential changes in 
 the law since 1880, save the abandonment of the attempt 
 to collect taxes on the bonds of Maryland corporations 
 from the corporations themselves. 
 
 Companies incorporated by, or located and doing busi- 
 ness in the State of Maryland pay the ordinary state and 
 local taxes upon their real property. Capital stock is 
 assessed by the State Tax Commissioner. In making these 
 valuations the Tax Commissioner is authorized to examine 
 under oath any person who he is advised has information 
 on the subject, and he is assisted in this work by the fact 
 that every corporation doing business in Maryland is re- 
 quired to file in his office a copy of its charter. The presi- 
 dent or other proper officer of every corporation is required 
 to furnish the county commissioners of the several counties 
 and the Appeal Tax Court of Baltimore with a list of all 
 shareholders residing in, and a description of all real prop- 
 erty situated in their respective districts. The real property 
 is then assessed at its situs, and a record of this valuation 
 is returned to the Tax Commissioner. The latter is di- 
 rected to value capital stock as follows: "He shall deduct 
 the assessed value of such real property from the aggregate 
 value of all shares of such corporations, and divide the re- 
 mainder by the number of shares of capital stock, and the 
 quotient shall be the taxable value of such respective shares 
 both for state and local purposes." This valuation is then 
 communicated to the county commissioners and the Appeal 
 Tax Court of Baltimore. The Comptroller and the proper 
 local collectors then collect the state and local taxes respect- 
 ively, from the several corporations. Local taxes on the 
 shares owned by non-residents are paid in the county or 
 city in which the corporation is situated. The valuation 
 made by the Tax Commissioner is reported to the respective 
 corporations by the Comptroller. An appeal may be made 
 within 30 days to a board composed of the Treasurer, Comp- 
 troller and the Tax Commissioner. Any alteration agreed 
 upon by the Treasurer and Comptroller may be made. 
 
59] Taxation in Maryland 59 
 
 Corporations pay no taxes upon personal property, 
 though it is provided that the valuation of the capital stock 
 shall in no case be less than the full value of the personal 
 property " whether the shares of said stock are quoted on 
 the market or not." Corporations holding stock in other 
 corporations upon which the state tax is paid or payable, 
 may report the same to the Tax Commissioner, who credits 
 the amount of such holdings in making the valuation of 
 the capital stock. Homestead or building associations are 
 exempt from taxation upon their capital stock, to the extent 
 that such shares represent investments in mortgages on real 
 estate located wholly within the state, and executed by 
 members of the association. Savings-banks pay a franchise 
 tax upon deposits in lieu of the tax on capital stock. It 
 is illegal in Maryland to tax capital stock both to the cor- 
 poration and in the hands of the individual owners.' 
 
 The tax thus described does not differ from the property 
 tax in its rationale. Capital stock as assessed to corpo- 
 rations corresponds to the personal wealth of individuals. 
 All the assets of a corporation are reflected in the value of 
 the capital stock, so that a large mass of intangible wealth 
 is thus assessed which would probably escape if it were 
 enumerated item by item. It is unfortunate that some 
 similar expedient cannot be employed in the case of indi- 
 viduals. As was pointed out above, the state has abandoned 
 the effort to collect taxes upon bonds from the corporations 
 issuing them. For some years the state tried to tax the 
 whole bonded indebtedness of Maryland corporations and 
 collect the tax from the corporations. In obedience to 
 decisions of the Federal Courts this effort was abandoned, 
 and the state formally exempted non-resident owners of 
 such bonds. In 1896 the corporations were relieved of 
 all obligations in this matter and provision was made to 
 assess the bonds to the individual owners. Local taxation 
 upon such securities is now limited to 30 cents on the $100. 
 
 ' County Com'rs vs. Farmers and Merchants Bank, 48 Md., 188. 
 
60 Studies in State Taxation [60 
 
 The tax under consideration is rather a method of col- 
 lecting the property tax than a distinct corporation tax. 
 Because of this fact, we have included under this head the 
 tax on the funded debt of Baltimore City. Baltimore City 
 pays the regular state tax upon such of its stock debt as is 
 held in the state. The tax paid by the city in 1898 amounted 
 to nearly $49,000. The city pays this tax without sub- 
 tracting it from the interest due the holders and also 
 exempts the stock from city taxation. Notwithstanding 
 these exemptions, corporations holding this stock can have 
 it subtracted or credited in the valuation of their own 
 capital stock. In consequence, Baltimore City bonds have 
 become a favorite security and large quantities are held by 
 Baltimore banks and trust companies. Considerable 
 amounts are also held by the state for the sinking-funds. 
 
 For the purpose of keeping track of the corporations 
 doing business in Maryland, two unimportant corporation 
 taxes have been imposed, which may be mentioned here: 
 (i) The Bonus Tax, upon companies incorporated in Mary- 
 land. Every company, upon incorporation, is required to 
 file a copy of its charter with the State Tax Commissioner 
 and pay him a tax of one-eighth of one per cent, upon its 
 authorized capital stock. Every authorized increase of capi- 
 tal stock must also be registered and a like tax paid on 
 the increase. This tax was imposed in 1894 and yields 
 about $5000 annually. 
 
 (2) The Foreign Corporation Act was passed in 1898. 
 Grave doubts as to its constitutionality are entertained. It 
 provides that every corporation' doing business, but not 
 incorporated, in the state, shall deposit with the Secretary of 
 State a certified copy of its charter, together with a sworn 
 statement from its chief executive ofificer setting forth the 
 amount of its capital stock authorized, the amount actually 
 issued, the amount of its assets and liabilities, the character 
 
 ^ Except telephone, banking, insurance, railroad, electric-light or 
 construction, and oil or pipe-line companies. 
 
61] Taxation in Maryland 61 
 
 of the business to be transacted in this state, and its prin- 
 cipal place of residence in the state. A registration fee of 
 $25 is charged upon the deposit of this information and 
 adequate penalties are provided for violation of the act. 
 Any agent presuming to do business without complying 
 with the requirements stated is subject to a fine of $100 
 for each day of delinquency, and no unregistered corpora- 
 tion is entitled to maintain any action either at law or in 
 equity in the courts of the state. The receipts from this 
 tax have not yet been reported. 
 
 Franchise Tax on Savings Banks. Savings banks pay 
 taxes upon their real property like individuals. In lieu 
 of all other taxation they pay a franchise tax of one-quarter 
 of one per cent, upon their deposits. Of this tax three- 
 fourths go to the local authorities and one-fourth goes to 
 the state. The amount of deposits is ascertained from a 
 statement made by the president of the total amount of 
 deposits held on the first day of January. 
 
 The Inheritance Tax 
 
 The collateral inheritance tax was first imposed in 1845. 
 All estates transferred by deed, or by any kind of a grant 
 intended to take effect after the death of the grantor, are 
 subject to a tax of two and one-half per cent, on every 
 hundred dollars of clear value. Inheritances to mother, 
 father, husband*, wife, child or any lineal descendant, and 
 estates valued at less than $500 are not subject to this tax. 
 The tax must be paid by the executor or administrator 
 within thirteen months from the date of administration, 
 before any legacy has been paid. 
 
 This tax is one of the surest and most satisfactory taxes 
 in use. Estates must be registered at the recorder's office, 
 and the value must be appraised, for the ordinary purposes 
 of settlement. The tax thus becomes inevitable; a careful 
 and unprejudiced valuation is secured, and collection 
 through the administrator is made certain. He is author- 
 
62 ' Studies in State Taxation [63 
 
 ized to sell enough property to pay it, if the heirs do not 
 make provisions for payment in the specified time. This 
 tax has been employed in Maryland for more than fifty 
 years with eminently satisfactory results. A study of the 
 returns from the tax for the last ten years shows that there 
 has been no growth, or at least no apparent growth, in the 
 receipts. Taking the exemptions into account, the rate of 
 two and a half per cent, is too low, and there seems no 
 reason why the state should not increase the rate, particu- 
 larly upon large bequests. Collateral heirs only are affected: 
 those having claims upon the decedent are not touched by 
 the tax. Five per cent., in view of these circumstances, 
 would, perhaps, not be too great on collateral bequests of 
 more than $5000. This tax furnishes the best source of 
 new revenue now left to the state, and even on general 
 principles its rate should be gradually increased from year 
 to year, until a moderate amount of progressivity is intro- 
 duced. The revenue from this tax in 1898 was $134,279.90. 
 
 Tax on Commissions of Executors and Adminis- 
 trators 
 
 Every commission allowed to an executor or administra- 
 tor by the orphans' courts of Maryland is subject to a tax 
 of one-tenth part of the sum so allowed, for the use and 
 benefit of the state. The courts are prohibited from making 
 any allowance for this tax in fixing commissions of admin- 
 istrators, " It being intended that the tax shall be paid out 
 of the said commissions, and not by the estate of the de- 
 ceased." This is one of those eminently satisfactory taxes 
 for which it is hard to find a sound philosophical basis. It 
 seems to have been occasioned by the feeling that executors' 
 commissions are, as a rule, excessively high. The logical 
 action in this event would be a reduction of the commission 
 and not the imposition of a tax. Taken by itself the tax 
 does not seem sound. If administrative commissions afford 
 only a reasonable compensation for the services rendered. 
 
63] Taxation in Maryland 63 
 
 then the tax is an unjust charge upon administrators. If 
 the commissions are too high they should be directly re- 
 duced for the benefit of heirs, not taxed for the benefit of 
 the state. The tax may be partially justified in the latter 
 event by interpreting it as an extension of the inheritance 
 tax. It also might be defended as a license tax on lawyers. 
 But in any event it seems philosophically defective. It has, 
 however, the great empirical virtues of being sure, friction- 
 less, and cheaply collected; its yield in 1898 was $49,875.54. 
 
 Excess of Fees 
 
 Section i, Article XV of the Constitution of Maryland, 
 provides that every ofificial in the state (except justices of 
 the peace, constables and coroners) whose pay is derived 
 from fees, shall keep a detailed account of all payments 
 made to him ; that a copy of this record shall be sent to the 
 comptroller; and that when the amount of fees shall exceed 
 the salary of the ofificial and the authorized expenses of the 
 office, this excess shall be transmitted to the treasurer. 
 
 This tax is rather unimportant as a source of revenue ; the 
 yield in 1898 was only $64,363.99. But, as was noted above, 
 it is one of the surest touchstones of economical adminis- 
 tration that we have, and that the yield was forty per cent, 
 greater in 1898 than in 1897 is a decidedly encouraging 
 sign of the spirit which is pervading our state government. 
 
 Miscellaneous Taxes 
 
 Under this head have been grouped the following taxes: 
 Tax on Protests; Tax on Official Commissions; Mortgage 
 Tax. 
 
 Tax on Protests. Every notary public is required to pay 
 to the state one-half of all protest fees received by him, (a) in 
 excess of $500 per annum in Baltimore, (b) in excess of 
 $350 per annum in the counties. The amount received 
 from this tax is small and fluctuates greatly from year to 
 
64 Studies in State Taxation [64 
 
 year. For the last twenty years the tax has yielded on an 
 average about $4000 per annum. The yield in 1898 was 
 $1170.. 
 
 Tax on Official Commissions. This tax consists of certain 
 fees paid by newly-elected of35cials on receipt of their com- 
 missions. These payments are made by all commissioned 
 officials from judges to justices of the peace, and vary in 
 amount from the $300 paid by the sheriff of Baltimore City 
 to the $2 paid by constables. These charges are only im- 
 posed upon newly-elected officials, and in consequence the 
 yield varies greatly from year to year. The tax was first 
 imposed in 1844, and in 1898 yielded $7294.10. 
 
 Mortgage Tax. Until 1870, with one unimportant ex- 
 ception, debts secured by mortgage were listed and taxed 
 like other securities. The causes which led to the exemp- 
 tion of this important class of personalty are well described 
 in the Report of the State Tax Commissioner for 1884 (pp. 
 X, xi). " At the time of the passage of the Act of 1870, 
 landowners in Maryland were suffering from the terrible 
 effects of the Civil War, an immense debt of the United 
 States was seeking investment at six per cent, interest free 
 of taxation; a variety of railroad bonds and other coupon 
 bonds promising six, seven and eight per cent, interest were 
 offered freely, and other investments were constantly on the 
 market to such an extent that the owners of real property, 
 particularly in the counties, frequently found difficulty in 
 borrowing upon mortgage, while the mortgage debt was 
 liable to taxation." The exemption of mortgages continued 
 from 1870 until 1896, when the present law was passed after 
 a prolonged discussion. 
 
 The law of 1896 provides that the mortgagee of every 
 mortgage of record in the state shall pay annually a tax of 
 eight per cent, of the gross amount of interest covenanted 
 to be paid yearly. No covenant for the payment of the tax 
 by the mortgagor is valid if made subsequent to the passage 
 of the act, and every person lending money upon property 
 in Maryland is required to swear that this charge has not 
 
65] Taxation in Maryland 65 
 
 been shifted upon the borrower. One-fourth of the net pro- 
 ceeds of the tax goes to the state ; the remainder is retained 
 by the local division in which it is collected. In view of the 
 disproportionate per centage paid for collecting this tax, its 
 influence upon the rate of interest, and the tedious discus- 
 sion it provoked, it is disappointing to learn that its yield 
 in 1898 was only $6577.53. It is an eloquent illustration of 
 the wastefulness of half-hearted financial measures. The 
 tax should either be repealed or mortgages should be listed 
 at their full market value and taxed like other personal prop- 
 erty. 
 
 Conclusion 
 
 The most fundamental reform that could be quickly 
 accomplished in the financial system of the State of Mary- 
 land is the repeal of the fifteenth article of the Declaration 
 of Rights. That article reads: [We, the People of the State 
 of Maryland . . . declare] " that the levying of taxes by poll 
 is grievous and oppressive, and ought to be prohibited; that 
 paupers ought not to be assessed for the support of the 
 government; but that every person in the State, or person 
 holding property therein, ought to contribute his propor- 
 tion of public taxes for the support of the government, 
 according to his actual worth in real or personal property; 
 yet fines, duties, or taxes may properly and justly be im- 
 posed or laid, with a political view for the good govern- 
 ment and benefit of the community." 
 
 This article, so reminiscent of the fiscal grievances of our 
 colonial forefathers, constitutes the mould within which 
 every system of taxation in Maryland must be formed. 
 " Quaint, antiquated and unintelligible,'" it constitutes a 
 perennial source of irritation and a serious menace to tax 
 reform in Maryland, because of the uncertainty which it 
 creates: uncertainty on the part of the legislature as to 
 
 ^ A characterization made by the late Mr. Woolford when he was 
 State Tax Commissioner. 
 
66 Studies in State Taxation [66 
 
 what taxes it may impose, doubt on the part of the tax- 
 payer as to what taxes he must pay. The result is litiga- 
 tion which fails to produce any satisfactory interpretation 
 of the article in question. 
 
 It is fairly well established that the taxes which must be 
 imposed according to actual worth in real or personal prop- 
 erty are direct property taxes. Licenses, franchise taxes, 
 mortgage taxes, taxes on gross receipts, have all been sanc- 
 tioned by Maryland courts.' In general, the latter have 
 been very liberal in the freedom which they have given the 
 legislature, and in one very able opinion the court declared 
 that the several cases, in which this article had been re- 
 viewed, establish the principle — and nothing beyond it — 
 " that when taxes are laid directly upon property they must 
 be equal and uniform upon all property in the state." 
 
 But having confined the bearing of the article to the prop- 
 erty tax, it still remains a most prolific source of confusion. 
 An immediate conflict with common sense is occasioned by 
 the fact that this article really debars all exemption. In this 
 conflict it has been the article and not common sense which 
 has given way. Legislative bodies were allowed perfect 
 freedom in exempting property until a few years ago, when 
 the Court of Appeals spoiled the interesting Hyattsville ex- 
 periment with the single tax, because it did not believe in 
 the single tax. " We are not to be understood," said Jus- 
 tice McSherry, " as denying to the legislature the power, 
 when state policy and considerations beneficial to the public 
 justify it, to exempt within reasonable limits some species 
 of property from taxation." ' But the bench reserved to 
 itself the right of deciding what exemption was reasonable 
 and what policy was beneficial. 
 
 No clearer demonstration of the folly and futility of in- 
 serting glittering generalities into state constitutions can 
 be found than in the effect of this clause upon taxation in 
 
 'State vs. P., W. & B. R. R. Co., 45 Md., 378; Germania vs. 
 State, 7 Md., i; Appeal Tax Court vs. Rice, 50 Md., 302. 
 ^ Wells vs. The Commissioners of Hyattsville, 77 Md., 125. 
 
67] Taxation in Maryland 67 
 
 Maryland. The ultimate control of taxation has passed 
 from the legislature. Even their right of controlling local 
 affairs has been infringed. A few years ago a statute was 
 passed directing the county commissioners of Prince 
 George's County to pay back to the commissioners of the 
 town of Laurel all the county taxes levied upon real estate 
 in that town. This act was held to be contrary to Article 
 XV of the Bill of Rights. After this it is impossible to 
 predict what measure of interference the courts will allow 
 themselves. It seems clearly within their province to annul 
 any tax which to their minds is unjust or unreasonable. 
 
 One might view this emasculation of the legislature with 
 equanimity if it were certain that the rulings of the courts 
 would be consistent either with good logic or sound finance. 
 But they are not. In their view it is beneficial to exempt 
 grave-yards and churches, but it was not beneficial to ex- 
 empt the personalty in Hyattsville in order to test the 
 efficiency of a well-endorsed tax reform. In 1842 it was 
 reasonable to impose a special tax upon watches,' but it is 
 now unreasonable to lay a special tax upon all coal mined 
 in the state for transportation. To tax corporate stock 
 both to the corporation and the individual owner is declared 
 double taxation, but mortgagor and mortgagee may be 
 taxed upon the property and upon the debt on the property 
 respectively, and no offense be committed. In the past, 
 Maryland has twice employed the income tax. But now 
 that the income tax has grown " socialistic,'' one cannot tell 
 whether it would appear just and reasonable to our judicial 
 arbiters or not. 
 
 At present tax reform in Maryland is at the mercy of the 
 courts. I do not believe that the framers of the Constitu- 
 tion meant that the power of deciding upon the expediency 
 of proposed taxes should be lodged with the judiciary, and 
 it is a grave question whether it should be so placed. 
 Judges are proverbially bad economists, and from an econ- 
 
 ' i. e., it was never declared unreasonable. 
 
68 Studies in State Taxation [68 
 
 omic standpoint we can count upon little more than their 
 conservatism. But conservatism is a virtue only where the 
 thing conserved is worth conserving, and this worth does 
 not attach to the antiquated and outgrown system of taxa- 
 tion inherent in the fifteenth article of the Bill of Rights. 
 The effective control of taxation should be placed with the 
 legislature, and care should then be taken to send men to 
 the legislature who would not abuse their power. 
 
 To repeal the fifteenth article of the Declaration of Rights 
 would require a constitutional amendment. Such an amend- 
 ment was presented to the people in 1891 and was defeated 
 by a majority of less than 600 votes. But this vote cannot 
 be taken as a permanent indication of the wishes of the 
 people; only thirty-six per cent, of those voting for the 
 governor voted upon the amendment. The masses, with 
 traditional indifference, did not take the trouble to vote. 
 Large property-holders were foolish enough to look upon 
 the article as the bulwark of public financial equity. As a 
 consequence rational taxation was indefinitely postponed. 
 
 There is no reason to disguise the defects of the property 
 tax. Academic writers have fully exposed its weakness 
 and numerous contributions to the steadily growing collec- 
 tion of monstrosities attributable to it will be found in the 
 following papers. The fact remains that in Maryland the 
 property tax is entrenched in the Constitution and until 
 that is amended we must look to reform and not to revolu- 
 tion. Moreover, the writers who have criticised the general 
 property tax have utterly failed to propose a satisfactory 
 substitute. 
 
 There are, however, a number of practical reforms which 
 should be instituted at once. One of the most important 
 of these is the revocation of special class privileges. Such 
 provisions as the exemption from taxation of all persons 
 whose property is assessed at less than $100, or the limita- 
 tion of local taxation upon bonds and stock in foreign cor- 
 porations to three-tenths of one per cent., are inconsistent 
 from a legal standpoint, and as fiscal expedients, acknowl- 
 
69] Taxation in Maryland 69 
 
 edged failures.^ The constitution of the state declares that 
 every person ought to contribute his proportion of the pub- 
 lic taxes according to his actual worth in real or personal 
 property. If it be inconsistent with this clause to exempt 
 all personal property froni taxation, it is also inconsistent to 
 limit local taxation upon a certain class of personal property 
 to thirty cents upon the hundred dollars. If the limitation 
 be defended on the ground that these securities are taxed 
 in other states, a claim that is valid in the case of stock in 
 foreign corporations, they should be exempted in toto, not 
 taxed in part. 
 
 Two arguments have been advanced in defense of this 
 limitation. It is claimed, in the first place, that it stimu- 
 lates the listing of such property or, in other words, that 
 it makes dishonest men honest, and in the second place, 
 that it attracts a desirable class of residents. 
 
 The first claim can be decided only by reference to the 
 opinion of experienced and disinterested tax-ofHcials. The 
 officials with whom I have conversed upon this subject are 
 almost unanimous in condemning the law. Many of them 
 hold that it is an unjust discrimination. They state, almost 
 without exception, that it has not increased the taxable 
 basis in a degree sufficient to compensate for the reduction 
 of rate. As the State Tax Commissioner writes, the in- 
 crease in the assessed value of bonds and stock in foreign 
 corporations since the passage of the limitation, is due to 
 the new assessment act which went into effect at the same 
 time, and not to the limitation. The man who will perjure 
 himself to escape a rate of two dollars will also perjure 
 himself to escape a rate of thirty cents. 
 
 The claim that the limitation of local taxation upon 
 bonds and foreign stocks will attract capitalists is almost 
 too trivial for notice. Differences in local rates may draw 
 men of means from one part of the state to another, but the 
 
 ' It is interesting to note in this connection that the members of 
 the present Appeal Tax Court of Bahimore are opposed to the law 
 exempting the plant of manufacturing companies as it now exists. 
 
70 Studies in State Taxatioii [70 
 
 number of men who can be induced to change their resi- 
 dence from one state to another by the reduction of taxa- 
 tion upon a single species of property, is too small to be 
 seriously considered. Moreover, a large part of the burden 
 which is removed from bonds and stocks must be placed 
 upon other classes of property. The general rate of taxa- 
 tion goes up as the number of special exemptions increases, 
 and this fact deters immigration as much as the special 
 limitation encourages it. It is the general rate of taxation 
 which is considered by the prospective immigrant. 
 
 As a matter of fact it would be very nearly accurate 
 to state that the whole policy of exempting special classes 
 of property in order to attract capital and capitalists is 
 a palpable mistake. The industry that has to be per- 
 manently subsidized by the state is a source of weakness, 
 not an element of strength. When we encourage the 
 establishment of manufacturing plants, we discourage the 
 investment of capital in improvements upon real estate. 
 And what is perhaps most important of all, we divert public 
 opinion from the natural means of attracting capital. The 
 true incentive to capital is a low rate of general taxation 
 and that is to be secured by economy in the expenditure 
 of the public money, not by the grant of special favors 
 which may be retracted at the caprice of the legislature 
 which bestowed them. 
 
 I have included in the class of those specially, and in 
 consequence, unjustly favored, the persons who are ex- 
 empted from taxation because they are assessed for less 
 than $ioo. This has been done because the exemption 
 from state taxation involves the exemption from local taxa- 
 tion, and in local taxation, to invert a well-known phrase, 
 there should be no representation without taxation. In state 
 taxation men may be called upon to contribute in proportion 
 to their ability, and the man who really owns less than $ioo 
 worth of property, may justly be treated as unable to pay 
 any direct taxes at all. This is particularly true when the 
 burden of indirect taxation is taken into account. But muni- 
 
71] Taxation in Maryland 71 
 
 cipal taxation rests upon a different basis. The munici- 
 pality is more akin' to the corporation than to the state, 
 and only those members of the corporation should partici- 
 pate in its government who contribute towards its mainten- 
 ance. Responsibility educates, and the obligation on the 
 part of the poorest citizen to make some sacrifice in return 
 for the important service rendered by the modern city, 
 would be the surest means of securing intelligent voting and 
 purifying municipal politics. 
 
 The most " satisfactory " taxes we have are those of 
 secondary importance. Many of the evils of the property 
 tax arise from the fact that we are accustomed to raise such 
 a large proportion of the public revenue by this agency. 
 One remedy would seem to lie in the further diffusion of 
 taxation. Whether or not the " diffusion " theory is cor- 
 rect, it is certain that several of the minor taxes could be 
 increased with benefit, if this increase were subtracted from 
 the property tax. The first of these is the inheritance tax; 
 there is no reason why the present rate upon collateral 
 bequests should not be increased, particularly where these 
 bequests are large. On the other hand, part of the burden 
 upon individual property might be shifted upon corpora- 
 tions with advantage. 
 
 Under the present constitution, the shifting of a larger 
 part of the burden upon corporations can only mean an 
 increase in the franchise taxes on gross receipts. We have 
 already given reasons for believing that this should be done 
 in the case of railroads. The increase of rate should, how- 
 ever, be made all along the line, particularly upon quasi- 
 public industries and upon the trust companies of Balti- 
 more. For its monopoly in the city of Baltimore the Con- 
 solidated Gas Company paid in 1887, $12,343.96. The fran- 
 chise is probably worth ten times that amount. At the date 
 of writing no business is in such a flourishing condition 
 
 * I say "more akin " advisedly. I should avoid the general state- 
 ments contained in this paragraph were it not for the limitations of 
 space. 
 
72 Studies in State Taxation [73 
 
 as that of the trust and fidelity companies of Baltimore. 
 Eight of these companies paid the franchise tax of two per 
 cent, upon gross earnings in 1897. Four of these eight 
 companies have each accumulated a surplus greater than 
 their capital stock and the shares of the eight companies 
 noted are worth, on the average, a premium of one hundred 
 and sixty per cent., several of them selling at nearly four 
 times par value. 
 
 The universal prosperity of this class of corporations 
 proves that much of it is dependent upon the peculiar fran- 
 chises granted them. The banking and other privileges 
 conferred are valuable and should be charged for. From 
 either the faculty or the quid pro quo standpoints these cor- 
 porations should be put in a new and advanced class, and 
 be subject to a tax say of three per cent, upon gross earn- 
 ings instead of two per cent. This could be done without 
 the slightest acquiescence in the doctrine that success 
 should be taxed wherever and whenever it appears, simply 
 because it is success. 
 
 Before attempting to relieve the property tax by increas- 
 ing the rates of other taxes, the property tax should be 
 rendered as inexpensive as possible. The assessment of 
 1896 cost $186,000 in Baltimore City alone, and neither the 
 quality of assessors nor that of the assessment was extra- 
 ordinary. The assessment of personalty in 1898 cost much 
 less than $186,000, but in neither case did the results justify 
 the expense. The recommendations of the Appeal Tax 
 Court and the Board of Estimates of Baltimore City should 
 be followed; the biennial assessment should be replaced by 
 a permanent corps of trained assessors holding office dur- 
 ing good behavior. 
 
 One of the most glaring abuses in the financial system of 
 the state is the method of paying registers of wills for the 
 part they take in collecting state taxes. Their services in 
 this connection consist principally in the collection of the 
 inheritance tax and the tax on commissions of executors 
 and administrators, the most easily collected of all state 
 
73] S Taxation in Maryland 73 
 
 taxes. ) Until 1892 the remuneration of the registers was 
 five per cent, of their collections. In that year the legisla- 
 ture was moved to raise this commission to twenty-five per 
 cent. The magnitude of the resultant leakage, to use a 
 mild term, may be gathered from the following statement of 
 Comptroller Goldsborough, who calls attention to this 
 abuse in his report for the fiscal year 1898. " Were this 
 law not in effect we should have received during the present 
 fiscal year, in round numbers, the sum of $233,000, as 
 against $184,000." 
 
 The changes suggested in this section of the paper have 
 at least the merit of practicability. Whether they are ad- 
 visable is of course open to debate, but that they are pos- 
 sible is unquestionable. In conclusion it may be proper to 
 mention one or two more thorough-going reforms whose 
 introduction would be far more difficult. 
 
 The greatest evils of American commonwealth taxation 
 are the escape of personal property and double taxation, 
 and as long as property, and claims to property in one state, 
 may be owned by citizens of another state, these abuses are 
 likely to remain. None of the suggested reforms — cer- 
 tainly not the income tax — strike at the root of these evils. 
 
 I fail to see how they can be remedied except by the 
 creation of an interstate department of taxation — an Amer- 
 ican Zollverein — ^taken in connection with a provision for 
 debt exemption. If taxpayers were allowed to subtract 
 from their assessment every debt for which they could cite 
 a bona Me creditor, to whom the credit could be assessed, 
 the private securities now hidden would be brought to 
 light by the operation of self-interest acting on debtors. 
 For example, an individual, a, holds land in the state. A, 
 which is mortgaged to b, resident in the state, B, The 
 whole value of the land would be assessed to a in A, and 
 the assessment would not be reduced until a had produced 
 evidence of his debt to b. This credit would then be as- 
 sessed, by the interstate bureau of taxation, at its actual 
 value, based upon the amount of interest actually paid, and 
 
74 Studies in State Taxation [74 
 
 it would then be determined whether b acknowledged the 
 credit and whether he could be taxed. If the tax could 
 be collected from b, the value of the debt would then be 
 subtracted from the assessment of a, and transferred to the 
 assessment of b. If the land in question be taken to repre- 
 sent any kind of tangible property, and the mortgage any 
 kind of interest-bearing claim to property, we have a typical 
 instance of the most prolific source of perjury, double taxa- 
 tion, and fiscal injustice in present commonwealth taxation. 
 
 The question immediately arises: which state, A or B, 
 is to receive the taxes on the credit owned by b? The 
 domicile of b is in B, but the property is in A. In which 
 state should he pay? 
 
 Before answering this question it may be well to point 
 out that, irrespective of A's ability to collect the tax from 
 b, it would be desirable to exempt a. The mortgage upon a 
 is a distinct drain upon his ability to pay — negative wealth — 
 and whether A can collect the tax upon the property from 
 b or not, justice and political economy alike demand that a 
 should be exempt. The reason that American states refuse 
 to exempt debt is not because they frequently have no 
 jurisdiction over the owner of the debt; the reason is that, 
 without the interstate intelligence bureau of which I have 
 spoken, fictitious debts can be manufactured at pleasure 
 and the privilege abused. Dismissing all reference to the 
 division of the taxes upon intangible personalty and recur- 
 ring to our illustration, it is seen that this danger of abuse 
 would be avoided if the state. A, simply informed the state, 
 B, of b's ownership of the credit and exempted a only after 
 word had been received from the tax officials of B that b 
 acknowledged the credit and was paying taxes upon it. 
 Debts owned in foreign countries would of course remain 
 a minor source of evil until an international agreement had 
 been reached. 
 
 We may now return to the problem of the distribution of 
 the taxes upon the mortgage. In the first place it may be 
 stated, as a consequence of the preceding paragraph, that 
 
75] Taxation in Maryland 75 
 
 if no state were able to collect taxes upon credits owned in 
 other states, there would be no necessity for a stronger 
 interstate association than the mere intelligence bureau 
 charged with the verification of debts upon which exemp- 
 tion was claimed. Even under existing conditions such a 
 bureavi would be of immense advantage. 
 
 As a matter of fact, however, American states can and 
 do tax a most important class of credits owned by citizens 
 of other states (corporate stocks), and there nowhere exists, 
 even within the boundaries of a single state, a clear idea of 
 the proper distribution of taxation. No one has as yet 
 explained whether taxes should follow the property or the 
 owner of the property. To express the difficulty in con- 
 crete terms: should shares of stock be assessed in the state 
 in which the company is incorporated, or in the state in 
 which owned, or partly in each state, and if partly in one 
 state and partly in the other, how are the proportions to be 
 determined? To do away with all double taxation an inter- 
 state agreement upon these points would have to be con- 
 summated. It is for this reason that I have spoken of this 
 reform as being far more difficult than those suggested in 
 the earlier sections of the paper. 
 
 [Bibliographical Note. — i. Archives of Maryland, Baltimore, 
 1883. 2. Assessment Laws of 1896, Baltimore, 1896. 3. Public 
 General Laws of Maryland. 4. Reports of the Comptroller of the 
 State of Maryland. 5. Maryland: Its Resources, Industries and 
 Institutions; by members of Johns Hopkins University and others, 
 Baltimore, 1893. 6. Report of Maryland Tax Commission, Balti- 
 more, 1888. 7. J. H. Hollander, Financial History of Baltimore, 
 Baltimore, 1899. 8. Report of the Tax Commission of Baltimore, 
 Baltimore, 1886. 9. Henry N. Bankard, Taxation under the New 
 and Old Assessment Laws, Baltimore, 1897. 10. Frederick J. 
 Brown, Short Talks on Taxes, with reference to the Hayes Bill 
 (1892), Baltimore, 1894. 11. Richard M. McSherry, Talks on Taxa- 
 tion in Maryland, Baltimore, 1893.] 
 
II. 
 TAXATION IN NORTH CAROLINA* 
 
 By GEORGE ERNEST BARNETT 
 
 Economic Characteristics 
 
 Few states in the Union have struggled with greater 
 difficulties in the construction of a satisfactory financial 
 system than North Carolina. Omitting from comparison 
 the wealthier and more densely settled states of the East 
 and middle West, let us compare North Carolina with its 
 neighbor on the north. The areas of North Carolina and 
 Virginia are nearly equal; the populations of the states 
 almost exactly the same in number; practically the same 
 needs of government have to be satisfied in the two states; 
 and yet the total assessed value of property in Virginia is 
 nearly twice that in North Carolina.' 
 
 The valuation of assessed property per capita for the 
 United States in 1890 was $407.88, while the valuation for 
 North Carolina was only $145.43. Only one state in the 
 Union had a lower per capita valuation. When it is borne 
 in mind that the cost of state government increases with 
 growth of population while the sources of revenue depend 
 
 ' In the preparation of this paper I have received assistance from 
 Hon. Hal. W. Ayer, State Auditor of North Carohna; from Hon. 
 W. H. Worth, Treasurer of North Carolina; and from Herbert 
 Clement, Esq., of Mocksville, N. C. Mr. Ayer and Prof. J. S. 
 Bassett of Trinity College, Durham, N. C, have done me the favor 
 of reading the proof. It is just to these gentlemen to say that they 
 are in no way responsible for any opinions advanced herein. 
 
 ° According to the census of 1890, the total assessed value of 
 property in Virginia was $415,249,107; and in North Carolina, 
 $235,300,674. 
 
'^8 Studies in State Taxation [78 
 
 most largely on the growth of wealth, the difficulty of the 
 problem presented in North Carolina becomes easily ap- 
 parent. Under such conditions, the general property tax 
 alone cannot defray the expenses of state as well as of 
 county and municipal governments, without becoming op- 
 pressive. Other sources of revenue must be found. 
 
 But when we turn to the corporation tax to find relief 
 for the payer of taxes on real and personal property, we 
 are confronted with the difficulty that the population of 
 North Carolina is distinctively rural. The largest town in 
 the state has barely 20,000 inhabitants. Only about four 
 per cent, of the people live in towns of 8,000 or more in- 
 habitants. Industrial enterprises do not multiply under 
 such conditions. Consequently, although a considerable 
 revenue is derived from corporations, such receipts by no 
 means constitute a chief part of the state's income. 
 
 As a result of these conditions, the forms of taxation 
 employed in North Carolina have been various. The poll 
 tax of colonial and ante-bellum times is still retained; the 
 general property tax has been raised in rate from time to 
 time, and systems of license taxes and corporation fran- 
 chise taxes have been introduced. Besides these taxes, an 
 experiment has been made with an income tax, and for a 
 brief period a tax was imposed on inheritances. 
 
 A study of commonwealth taxation in North Carolina 
 includes a study of some taxes which are in most other 
 states local taxes. Thus the taxes levied for school pur- 
 poses are almost entirely state taxes. Some school dis- 
 tricts and many towns levy special taxes for schools, but, 
 in general, school taxes are state taxes. These taxes, how- 
 ever, are never paid into the state treasury. They are in 
 collection and distribution local taxes, but the General 
 Assembly fixes the rate, which is uniform throughout the 
 entire state. 
 
 This is not the only way in which the General Assembly 
 regulates local taxation. By constitutional limitations 
 the state and county tax rate may not exceed 66^ cents on 
 
79] Taxation in North Carolina 79 
 
 the hundred dollars' worth of property/ As the present 
 state rate, inclusive of the school tax, is forty-three cents 
 on the hundred dollars, only twenty-three and two-thirds 
 cents are left for county purposes. This would be in many 
 cases too small to supply the needs of the county govern- 
 ment. The General Assembly, however, can authorize any 
 county Board of Commissioners to go beyond this rate. 
 Such excess must, however, be by special act of the Gen- 
 eral Assembly. So numerous have been such acts that in 
 1897 the special taxes levied in the counties amounted to 
 more than two-thirds of those levied without specific au- 
 thorization.^ Municipal taxation may not exceed one per 
 cent, unless by act of the General Assembly. 
 
 General Finances 
 
 The annual receipts of the state treasury of North Caro- 
 lina from sources other than taxation are about $400,000. 
 The chief items composing this amount are: (i) interest 
 on various productive stocks and bonds; (2) earnings of 
 the penitentiary; (3) appropriations by the federal govern- 
 ment; (4) various fees collected by state officials; (5) pro- 
 ceeds of the sale of various state publications. 
 
 The state owns 30,002 shares of stock in the North 
 Carolina Railroad Company. The annual income from 
 this stock is at present $195,013 and after 1900 it will be 
 $210,014. The state also holds 12,666 shares in the Atlan- 
 tic and North Carolina Railroad Company. In 1898 these 
 shares paid into the treasury as dividends $12,666.° Be- 
 sides shares in railroads, the state holds $136,750 of its 
 
 ^ This limitation is the joint product of two provisions in the 
 constitution: (a) the combined county and state poll tax must not 
 exceed $2.00; (b) the poll tax must be equal to the tax on $300 worth 
 of property. See Constitution of North Carolina, art. V, sec. i. 
 
 ' Report of Auditor 1897. The amounts were respectively: regu- 
 lar county taxes, $630,478.14; special county taxes, $433,690.56. 
 
 ' This amount is usually $25,332, but one-half of the payment was 
 not made in 1898 before the publication of the Auditor's Report. 
 
80 Studies in State Taxation [80 
 
 own four per cent, bonds, and the state board of education 
 also holds a large amount of the state funded debt. Certain 
 bonds of Alexander county are owned by the state, and by 
 an agreement with that county are being paid off at the rate 
 of $i,ooo per year. From all these sources the state re- 
 ceived in 1898 the sum of $216,854. 
 
 The earnings of the penitentiary are applied to the sup- 
 port of that institution and amounted in 1898 to $94,942.41. 
 The federal government appropriated $39,000 in the same 
 year to the state agricultural colleges and to the North 
 Carolina Experiment Station. The fees collected by state 
 officials, together with the proceeds from the sale of state 
 publications, e. g. journals, laws, codes, colonial records, 
 etc., with various miscellaneous items, were, in 1898, 
 $17,225.08. 
 
 The non-tax receipts thus amounted in 1898 to $368,- 
 021.49. No exceptional item is contained in this amount, 
 and this sum may be taken as the normal amount of the 
 non-tax receipts of the state. 
 
 During the year 1898 the receipts of the state government 
 amounted to $1,334,082.24, so that the amount raised by 
 taxation in that year was $966,060.75.' The various taxes 
 levied to raise this sum are described and discussed in the 
 remainder of this paper. 
 
 Section 4864 of the Code of North Carolina requires the 
 treasurer to " furnish the General Assembly, at the com- 
 mencement of each session, with estimates of the expenses 
 of the State government and the rates of taxation necessary 
 to pay the same for the two years next succeeding the close 
 of the last fiscal year, with a scheme in the form of a com- 
 plete Revenue Bill, to sustain such estimates." The most 
 variable part of the Revenue Act is the rate of the general 
 property tax and of the poll tax. If the General Assembly 
 
 ' Of this sum, $61,377.94 was paid into the treasury for examina- 
 tions of fertilizers by the Agricultural Department. This is a fee 
 rather than a tax, and will not be discussed below. Deducting this 
 amount, the sum raised by taxation proper was, in 1898, $904,682.81. 
 
81] Taxation in North Carolina 81 
 
 finds that existing taxes do not bring in sufficient revenue, 
 the easiest way to make sure of an increase is to raise these 
 rates. 
 
 The state constitution requires that, " Every act of the 
 General Assembly levying a tax shall state the special 
 object to which it is to be applied and it shall be applied to 
 no other purpose." In accordance with this provision, the 
 general property tax is divided into three levies for distinct 
 purposes, viz. state purposes, school tax, and pension tax. 
 The school tax is paid to the county treasurers, and the 
 pension tax is paid to the state treasurer and is kept in a 
 distinct fund, but in general the funds of the state are not 
 segregated for specific purposes. The income from the 
 state's holding of North Carolina Railroad stock is specifi- 
 cally devoted to the payment of certain interest charges, 
 but no separate fund is made of these receipts. So, also, 
 the income of the state from certain license taxes is devoted 
 by law to the payment of the interest on another part of 
 the state debt, but such income is simply added to the 
 income from other sources, and no separate account kept.' 
 The only parts of the state's revenues which are kept en- 
 tirely distinct are the pension fund and the education fund, 
 the latter of which is not derived from taxation. 
 
 A summary of the state's receipts and expenditures in 
 1898 is here appended: 
 
 RECEIPTS. 
 
 Public Taxes per Sheriffs and Tax Collectors $6o5,3So.99 
 
 Tax on Railroad Property 70,598.98 
 
 Tax on Steamboat and Canal Property 631.65 
 
 Tax on Telegraph and Telephone Companies 1,744.17 
 
 Tax on Bank and Building and Loan Stock 12,290.61 
 
 Special Tax to pay Pensions 112,848.49 
 
 License Taxes paid direct to State Treasurer 43,358.27 
 
 Tax on Gross Earnings 57,628.67 
 
 ' " All state taxes levied and collected from professions, trades, 
 incomes, merchants, dealers in segars, and three-fourths of all the 
 taxes collected from wholesale and retail dealers in spirituous, vin- 
 ous and malt liquors shall be held and applied to the payment of 
 the interest on said bonds." Code of North Carolina, sec. 3576. 
 6 
 
82 Studies in State Taxation [83 
 
 Railroad Dividends 207,679.00 
 
 Income from other Investments 9.i7S-So 
 
 North Carolina Penitentiary Earnings 94>942.4i 
 
 Fees (including Tonnage Tax on Fertilizers) 64,399.83 
 
 United States Government Appropriation 39,000.00 
 
 Sale of State Publications 2,828.17 
 
 Miscellaneous 11,606.00 
 
 $1,334,082.24 
 
 EXPENDITURES. 
 
 Interest on the State Debt ' $295,606.00 
 
 Pensions 100,840.50 
 
 Hospitals for the Insane 185,450.00 
 
 Institutions for the Deaf, Dumb and Blind 152,500.00 
 
 Educational Institutions 120,750.00 
 
 Executive Departments, including Boards and Bureaus.. 118,059.59 
 
 Judiciary 63,061.88 
 
 Penal Institutions 95,992.41 
 
 Orphan Asylums 15,000.00 
 
 North Carolina Experiment Stations 15,000.00 
 
 State Guard 31,215.00 
 
 Appropriations to Public Schools 10,586.70 
 
 Miscellaneous 79,9io.03 
 
 $1,283,971.11 
 
 Development of Taxation' 
 
 1^^6-1850. During the colonial period, direct taxation 
 was seldom used in North Carolina. Import duties, espec- 
 ially on wine and spirits, yielded revenues sufficient for the 
 needs of the government except in extraordinary emer- 
 gencies." During the Revolutionary War the principal ex- 
 penses of the state were met by issues of paper money. To 
 the acts authorizing such issues, a clause was usually added 
 providing for the redemption of the notes by the levy of 
 certain taxes. These taxes nearly always took the form 
 
 ' The state debt of North Carolina amounts in all to $6,331,770. 
 Of this sum, $3,370,850 is in four per cent, consolidated bonds; 
 $2,720,000 is in six per cent, construction bonds, and the remainder 
 is the old debt of the state, exchangeable into four per cent, consols 
 before Jan. i, 1899. 
 
 ' So far as I have been able to ascertain, the history of taxation 
 in North Carolina has never been written. 
 
 ^ Iredell's Revisal (1791), p. 117, f. 15; p. 169, f. 3; p. 223, f. 4. 
 
83] Taxation in North Carolina 83 
 
 of an excise duty or a small poll tax.' Taxation within the 
 parishes was upon property and by poll, as is shown by 
 the provisions of the Poor Law of 1777/ which enacted that 
 the overseers of the poor " may lay a tax, not exceeding 
 one shilling for every hundred pounds of taxable property." 
 This property tax was joined with a poll tax levied upon 
 every one not owning property worth one hundred pounds. 
 
 With the surrender of the right to lay import duties at 
 the adoption of the federal constitution, freer resort was 
 necessarily had to the taxation of land and polls. Land 
 outside of towns was taxed by area, irrespective of quality 
 or value; but town lots were taxed according to value." 
 Unmarried freemen, of legal age, were required to pay a 
 poll tax equal to the tax on one hundred pounds.' In 1783 
 the General Assembly taxed cattle and slaves at a certain 
 fixed valuation, cattle being rated at twenty shillings per 
 head and slaves at from twenty to forty pounds according 
 to age. Carriages, phaetons, stage wagons and other 
 " carriages of pleasure " were taxed five shillings specie per 
 wheel. But in 1784 all freemen were taxed and in place of 
 the taxation of slaves according to a fixed value, the same 
 poll tax was placed on them as on freemen, except that 
 slaves above the age of fifty were not taxed. The taxes 
 on cattle and carriages were abolished. 
 
 Such a system of taxation was adapted only to a com- 
 munity where wealth was evenly distributed among the 
 taxpaying class and to a condition where the public 
 charges were so light that inequalities in the burden borne 
 by different persons were inappreciable. The state con- 
 fined itself to the function of governing. It provided 
 neither hospitals nor common schools. Land was the chief 
 form of wealth, and in value slaves were far in excess of 
 
 ^Ibid., p. 16, f. 14; p. 194, f. 17; p. 223, f. s. 
 
 ' Laws of the General Assembly, ch. 117 (Martin's Revisal). 
 
 " The same tax was paid on every hundred pounds' value of town 
 lots as on 300 acres of land. Laws of the General Assembly, 1784, 
 ch. I, sec. I (Iredell). 
 
 * Laws of General Assembly, 1783 (Iredell). 
 
84 Studies in State Taxation [84 
 
 any other form of personal property. To meet the small 
 fiscal needs of the government, the General Assembly taxed 
 the commoner forms of wealth to the exclusion of other 
 kinds. These represented tax-paying faculty in a crude 
 way and had the eminent advantage of being easy to reach." 
 
 The system of assessing all land at a uniform rate per 
 acre could not last long. As the poorer lands were taken 
 up, the inequality became more and more glaring. Taxa- 
 tion according to value came into vogue and a new system 
 of assessment was devised. Landowners were required in 
 1819 to list their lands at a sworn valuation, which was 
 required to be at least as high as that put thereon by the 
 Congressional Assessment of 1815.' 
 
 For thirty years after 1819, there was hardly a change in 
 the tax laws of North Carolina. With some increase in 
 the number of occupations subject to a license tax,' and 
 with unimportant changes in the amount of the poll tax, 
 the system remained in vogue until 1850." The rate of 
 taxation during this time remained fixed at six cents on 
 the hundred dollars for property and twenty cents on each 
 taxable poll. 
 
 Several times between 1825 and 1850, the prevailing 
 
 ^The tax returns were made in the following form: (a) name of 
 tax payer; (b) quantity in each tract of land; (c) town lots; (d) 
 number of free polls; (e) number of .black polls; (f) amount. See 
 Laws of General Assembly, 1784, ch. i, sec. 7. 
 
 While land and slaves were the chief subjects of taxation in this 
 period, license taxes were not unknown. Each revenue act changed 
 these taxes, but in general they were imposed on inns, pedlers, play- 
 ing cards and stud-horses. The General Assembly in at least one 
 instance in these early days used its taxing power to destroy: "A. 
 B. C. & E. O." tables were taxed $250 per annum. (Laws of North 
 Carolina, 1785, ch. 8.) 
 
 " Laws of General Assembly, 1819, ch. i. 
 
 ' Some of the license taxes introduced during this period were 
 those imposed upon merchants, itinerant players, negro-traders and 
 auctioneers. 
 
 * During this period the inheritance tax was introduced, but its 
 returns were very small. For description of this law, see below 
 under " Inheritance Tax." 
 
85] Taxation in North Carolina 85 
 
 system of taxation seemed on the point of failing to fur- 
 nish adequate revenue, but some lucky chance always gave 
 the old system a new lease of life. The first occasion of 
 trouble was the necessity of redeeming the notes issued in 
 1814, 1823 and 1827, the proceeds of which had been appro- 
 priated to the Literary Fund. The finances of the state 
 were in such poor condition that it became necessary to 
 borrow largely from the Literary Fund, which had been 
 created for educational purposes.' 
 
 1850-1898. Until about 1850, not only in the state of 
 North Carolina but throughout the South, tax receipts 
 were derived in the main from three sources: (a) land; 
 (b) polls; (c) licenses. The growth of towns, with their 
 trade and small manufactures, and the increase of wealth 
 in the shape of personal property had early suggested to 
 many minds, the advisability of a redistribution of the 
 burden of taxation. The treasurer of North Carolina in 
 his report for 1834 strongly urged the taxation of personal 
 property. The necessity for any change was, however, 
 temporarily averted by the dissolution of several banks in 
 which the state had large interests. The money paid over 
 
 'The expenses for 1827-1828 amounted to $80,890.41. The chief 
 items were: 
 
 General Assembly $36,658.23 
 
 Judiciary 20,799.47 
 
 The receipts from taxation in the same year were: 
 
 Land Tax $24,867.49 
 
 Town Property Tax 1,402.86 
 
 Poll Tax 26,932.21 
 
 Stud-Horse Tax 1,484.82 
 
 Gate Tax 202.40 
 
 Store Tax 6,271.68 
 
 Artificial Curiosity Tax 507.60 
 
 Pedler Tax 935-30 
 
 Billiard Table 47o.oo 
 
 Fines 1,200.00 
 
 $61,883.16 
 See Auditor's Report for 1828. 
 
86 Studies in State Taxation [86 
 
 by the general government in 1838 was also devoted in 
 part to supplying deficiencies of state revenue. 
 
 In 1850 the fiscal demands of the state had, however, 
 grown too pressing to permit of longer delay. The Gen- 
 eral Assembly in this year began the taxation of person- 
 alty by imposing (i) a tax of three cents on each dollar 
 of net interest received from loans, if such interest amounted 
 to more than six dollars; (2) a tax of three cents on each 
 dollar of profits, and (3) a tax of twenty-five cents on each 
 hundred dollars employed in the slave trade. Plate, jew- 
 elry, and watches were also taxed.^ 
 
 Since the Civil War the tax rate has been raised and 
 two important changes have been made in the existing 
 system: (i) the taxation of personalty of all kinds exactly 
 as realty; (2) the introduction of corporation taxes. These 
 changes are described below in connection with the partic- 
 ular taxes affected. 
 
 General Property Tax 
 
 Contrary to the tendency in many states, taxation of 
 property has been of increasing importance in the financial 
 system of North Carolina, from its inception to the present 
 time. Up to 1850, the poll tax rivaled it in productiveness; 
 but when, in that year, what had been a real property tax 
 became practically a general property tax, its return to the 
 state treasury soon outstripped the yield of the poll tax. 
 Since the war, the poll tax has not been paid to the state 
 treasury, and the general property tax has been the main- 
 stay of North Carolina's fiscal system. The increasing im- 
 portance of this tax is shown by the rise in its rate from 
 time to time. From 1819 to 1855 the rate on property 
 remained stationary at six cents on the hundred dollars. 
 In 1855, this was raised to twelve cents and in 1856 to 
 fifteen cents. An increase in the kinds of taxable property 
 has accompanied the increase of rate. 
 
 ' Public Laws of North Carolina, 1850, ch. 121. 
 
87] Taxation in North Carolina 87 
 
 The present rate is forty-three cents/ apportioned to 
 various funds as follows: 
 
 General state purposes 21% cents. 
 
 Pensions 31^ " 
 
 Public schools " 18 
 
 The present constitution of North Carolina provides 
 that " Laws shall be passed taxing by a uniform rule all 
 moneys, credits, investments in bonds, joint-stock com- 
 panies or otherwise, and also all real and personal property 
 according to its true value in money." ° Prior to the adop- 
 tion of the present constitution in 1868, there had been no 
 constitutional principles governing the property tax. The 
 amendments of 1835 had enunciated certain rules with 
 regard to the capitation tax but had left the General As- 
 sembly free to levy other taxes as it might see fit. The 
 clause of the present constitution providing for the exemp- 
 tion of certain forms of property is as follows : 
 
 " Property belonging to the State, or municipal corpor- 
 ations shall be exempt from taxation. The General Assem- 
 'bly may exempt cemeteries and property held for educa- 
 tional, scientific, literary, charitable or religious purposes; 
 also, wearing apparel, arms for muster, household and 
 kitchen furniture, the mechanical and agricultural imple- 
 ments of mechanics and farmers; libraries and scientific in- 
 struments, or any other personal property, to a value not 
 exceeding three hundred dollars." * 
 
 '■ The rate was fixed at forty-six cents by the General Assembly of 
 1897, but as the rate was not in such proportion to the poll tax as 
 the Constitution requires, the Supreme Court of North Carolina 
 held that the clauses of the revenue act fixing such rate and the rate 
 of poll tax were void and the corresponding clauses of the Revenue 
 Act of 189s still in force; vide Russel, Gov. vs. Ayer, Auditor (North 
 Carolina Reports, Feb. term, 1897, No. 151, Wake Co.). 
 
 ' As has been said above, the tax for public schools while levied 
 by the General Assembly is a county tax in collection and distribu- 
 tion. 
 
 ° Constitution ot North Carolina, Art. 5, Sec. 3. 
 
 ' Constitution of North Carolina, Art. I, Sec. S. 
 
88 Sttidies in State Taxation [88 
 
 Over two-thirds of the total amount raised by taxation 
 for state purposes in North Carolina is from the general 
 property tax. More than one half of the school revenue 
 and the larger part of county and municipal revenue is 
 from the same source. 
 
 Assessment and Collection. The system of assessment 
 used in North Carolina is that popularly known as the 
 " listing system." Every fourth year, the board of commis- 
 sioners of each county appoints "three discreet freeholders" 
 in each township who " ascertain the true value in money 
 of every tract or parcel of land or other real estate with 
 the improvements thereon and personal property." This 
 board of three assessors is empowered to administer oaths. 
 The assessment thus made continues in force for four years 
 unless structures of the value of $ioo are erected or de- 
 stroyed on the lands thus assessed. In such case, the 
 assessment is to be changed. The assessors must adver- 
 tise at five places in the township and must attend at two or 
 more places for the purpose of receiving lists and assessing 
 property. The property owner must appear before them 
 and list his property, which they shall value. The assess- 
 ment made by this board must be returned to the county 
 commissioners, who with the chairmen of the township 
 boards form a " board of equalization," with power to raise 
 or lower any valuation put on any piece of real or personal 
 property by the township boards. 
 
 In years other than assessment years, the county com- 
 missioners appoint one list-taker for each township. All 
 lands in the township are listed by him at the valuation pre- 
 viously assessed on the same by the board of assessors. 
 Personalty, however, is listed anew each year, and its val- 
 uation may be changed. 
 
 Every property owner must appear before the list-takers 
 and assessors and file a list of his property.'' This list in- 
 cludes the following items: 
 
 " The only persons who can fill up the list by agents are females, 
 non-residents of the township, and persons physically unable to 
 attend and file their lists. 
 
89] Taxation in North Carolina 89 
 
 1. Quantity of land owned in township. 
 
 2. Horses, mules, jacks, jennies, goats, cattle, hogs and sheep, 
 separately with the true value thereof. 
 
 3. Farming utensils, tools of mechanics, furniture, firearms, pro- 
 visions, libraries and scientific instruments, separately, with the value 
 thereof. 
 
 4. Money on hand, including all funds invested within thirty days 
 before in United States bonds or other non-taxable property. 
 
 5. The amount of credits, including interest, whether in or out of 
 the state. Bank deposits and property in the hands of commission 
 merchants are deemed credits. If any credit be not regarded as 
 entirely solvent, it is given in at the market or current rate. The 
 party may deduct from the amount of credits owing to him the 
 amount of collectable debts owned by him as principal debtor. 
 
 6. Building and loan association stock. 
 
 7. Money investments, stocks and bonds of whatever nature ex- 
 cept bonds of the United States and of North Carolina, and such 
 other bonds as may have been expressly exempted from taxation 
 by law in this state. 
 
 8. All other personal property whatever. 
 
 9. The gross income of the party the twelve months preceding, 
 not derived from property already taxed, and also income beyond 
 one thousand dollars, derived from salaries or fees or both. 
 
 The law further provides that the taxpayer must swear 
 that the list handed in by him contains all the property 
 which he is required to list and that the value fixed thereon 
 is a true valuation. It is a misdemeanor punishable with 
 fine or imprisonment or both for a taxable person to refuse 
 to list, or to refuse to answer any questions respecting his 
 property. The board of county commissioners of each 
 county reviews the tax lists returned and has power to 
 raise or lower valuations. If any property escapes taxation 
 and such escape is afterwards discovered, back taxes for 
 five years may be collected, and in the case of lands twenty- 
 five per cent, extra tax may be added. Any person failing 
 to list poll or property is charged twice the amount of what 
 would otherwise be exacted. 
 
 The sheriff is the officer of collection; he is required to 
 enforce collection by the sale of personal property if suffi- 
 cient, and if not, by selling the real estate of the delinquent. 
 A new instrument for the collection of taxes was introduced 
 
90 Studies in State Taxation [90 
 
 by the General Assembly of 1897, viz., imprisonment. The 
 law proving impracticable was repealed in 1899. 
 
 Defects of the Property Tax. The system of assessment 
 outlined above is free from some of the conspicuous defects 
 of the general property tax in other states. The assessors 
 are appointed by the county commissioners and are not 
 elected by the people. Hence, they do not have that in- 
 ducement to curry popular favor by undervaluation, which 
 has become in many places one of the gravest evils of the 
 general property tax. Then, again, the assessment for 
 county purposes being based on the same list as the state 
 assessment, there is lacking the temptation to undervalue 
 property in order to lighten the state tax on the county in 
 proportion to that in the rest of the state. " Boards of 
 Equalization " in the Western sense, are not needed. The 
 valuation of all railroad property in the state has been 
 placed, as described below, in the hands of a single com- 
 mission, and irregular assessment has thus been prevented. 
 
 Many defects do, however, appear in the listing of prop- 
 erty. In his report for 1897, the auditor states that only 
 one county in the state had returned a uniform number of 
 acres of land for taxation during the previous five years.' 
 Slight variations in the number of acres of land returned 
 are, however, of little importance as compared with the 
 great question of the proper return of personalty. There 
 can be no doubt that in North Carolina as in most other 
 states in the Union an enormous amount of personal prop- 
 erty escapes taxation. This happens in two ways : (i) visi- 
 ble personal property, such as furniture, cows, etc., is 
 grossly undervalued; (2) much invisible personal property 
 is not listed. The first happens to some extent with respect 
 to all kinds of property but more largely with personalty, 
 since the value of a particular horse is not usually known 
 to the assessor and the animal is less valuable to many 
 
 ^ The auditor believes more regularity in the returns can be 
 secured by employing better men as list-takers and assessors, 
 receiving a higher salary. 
 
91] Taxation in North Carolina 91 
 
 owners just at listing time. The second manner of escape 
 is peculiar to personal property. Stocks, bonds, and 
 credits are difficult to reach and the memory of the owner 
 is apt to prove treacherous. The following table will show 
 how the amount of stock varied in certain counties: 
 
 Conntv W83, 1894, 1SS5, 1S96, ■ 1897, 
 
 uuuiiL;r. Stock, etc. Stock, etc. Stock, etc. Stock, etc. Stock, etc. 
 
 Cabarrus $99,ooo $103,000 $81,000 $31,000 $20,811 
 
 Guilford 93,000 42,000 9,000 78,000 13,725 
 
 Forsyth 50,000 140,000 32,000 18,000 267,579 
 
 Rowan 444,000 42,000 16,000 299,000 12,685 
 
 Durham 265,000 104,000 1,028,000 1,344,000 1,410,000 
 
 New Hanover .. . 195,425 37,937 114,508 67,650 10,200 
 
 Catawba 30,779 40,804 21,817 2,296 4,709 
 
 One part of the North Carolina listing act appears to 
 have been especially intended to aid the " tax-dodger " in 
 accomplishing his designs. Paragraph 7, section 16, of 
 the assessment act declares : " The party may deduct from 
 the amount of his credits owing to him the amount of col- 
 lectable debts owing by him as principal creditor." This 
 provision may be attacked from two sides. In the first 
 place, why should a taxpayer be allowed to deduct his debts 
 from his solvent credits more than from any other item? 
 He can only reduce his taxes on account of his debts, if 
 his property happens, in part at least, to take the form of 
 solvent credits. This is an injustice to other taxpayers. 
 If allowance is to be made for debt, it should be made in 
 all cases. In the second place, such an exemption furnishes 
 a cover for evasion of taxation. If a taxpayer owns a mort- 
 gage, he may set off against this credit his real or fictitious 
 debts. If this privilege were not allowed him, he would 
 be obliged to list his mortgage, since it is a matter of public 
 record and he would not dare to neglect to give it in to the 
 assessor or list-taker. But as it is, who can say what a 
 man owes? Even though the assessor knows of many sol- 
 vent credits belonging to such taxpayer, he can have no 
 means of ascertaining the offsetting indebtedness, since 
 the taxpayer is not required to enumerate or state his 
 
93 Studies in State Taxation [93 
 
 debts. He simply makes a sworn statement that his sol- 
 vent credits exceed his debts by a certain amount. 
 
 Undoubtedly, the property tax in North Carolina is more 
 nearly a measure of ability than in many American com- 
 monwealths. In a state so largely rural, where much is 
 known of neighbors' affairs, tax-dodging must of necessity 
 be less than in states with more and larger cities, where 
 the public inspection of tax-books is neither common nor 
 practicable. 
 
 License Taxes 
 
 The license tax on inns was one of the sources of colonial 
 revenue in North Carolina. During the greater part of the 
 slavery period, licenses furnished the only means by which 
 the business element in the community was made to share 
 the burdens of government. Since the Civil War, the 
 number of license taxes has been largely increased and 
 almost every form of business now bears its tax. The tax- 
 ation of corporations in North Carolina has proceeded 
 farthest along this line.^ 
 
 Most license taxes are imposed for the sole benefit of the 
 state. Some of them, however, are paid partly to the 
 county. The total amount received by the state for licenses 
 in 1898 was $206,321.60. Of this amount $100,986.94 was 
 paid directly into the state treasury by licensees while the 
 remaining $105,334.66 was collected by sheriffs in the 
 various counties. The several license taxes ' and the rev- 
 enue derived from each are as follows: 
 
 (i).* Merchants' tax;' an annual tax on all persons con- 
 
 ' While such taxes are really license taxes, since they are levied 
 on a particular form of business, whether carried on by a corpora- 
 tion or by an individual, yet for convenience I have classed all 
 license taxes on business, usually carried on by a corporation, as 
 corporation taxes. 
 
 ' Taxes marked by an asterisk were imposed for the first time by 
 the General Assembly of 1899. No returns of these taxes will be 
 procurable until December, 1899. 
 
 ' This tax is the successor of a tax of two per cent, on the pur- 
 chases of merchants, which yielded, in 1898, the sum of $27,686.11. 
 
93] Taxation in North Carolina 93 
 
 ducting the business of buying and selling merchandise. 
 The amount of the tax is dependent on the capital invested, 
 ranging from one dollar on a capital of $500 or less to $250 
 on a capital of $150,000. 
 
 (2). Liquor dealers' purchase tax; a tax of two per cent, 
 on the purchases of such dealers. Amount of revenue in 
 1898, $7,712.95. 
 
 (3). Druggists dealing in liquors; annual tax of $50 or 
 in some cases $25. Revenue in 1898, $659.40. 
 
 (4). Liquor dealers; a semi-annual tax ranging from $10 
 to $100 according to kind and quantity of liquor sold. 
 Only the amount collected from wholesale dealers is paid 
 into the state treasury. Revenue from the other classes 
 goes to the county school fund. Amount of revenue in 
 1898, $1,200. 
 
 (5). Commission merchants; one per cent, on all com- 
 missions received by such merchants. Revenue in 1898, 
 $631.70. 
 
 (6). Dealers in cigars, cheroots, manufactured smoking 
 and chewing tobacco, and cigarettes; these pay a tax regu- 
 lated in amount by their sales. Revenue in 1898, 
 $12,717.70. 
 
 (7). Mercantile agencies; an annual tax of five dollars 
 for every state and territory embraced in their reports. 
 Revenue in 1898, $505.00. 
 
 (8). Sewing-machine manufacturers, selling their goods 
 in the state; an annual tax of $350 per annum. Revenue in 
 1898, $2,564.50. 
 
 (9). Livery stables; a semi-annual tax of 50 cents for 
 each horse or mule kept. Revenue in 1898, $1,049.84. 
 
 (10). Traders in horses or mules; an annual tax of $25. 
 Revenue in 1898, $2,915.90. 
 
 (11). Dealers in pianos and organs; an annual tax of 
 $10 on each brand sold. Amount of revenue in 1898, 
 $409.14. 
 
 (12). Pedlers; an annual tax of $5 to $50 for each county 
 in which they do business. Revenue in 1898, $1,424.75. 
 
94 Studies in State Taxation [94 
 
 (13). Pawnbrokers; an annual tax of $50. Revenue in 
 1898, $50. 
 
 (14). Lightning-rod dealers; an annual tax of $20 for 
 each county in which they sell. Amount of revenue in 
 1898, $240. 
 
 (15). Itinerant clock and stove pedlers; an annual tax 
 of $100 for each county in which they sell. Amount of 
 revenue in 1898, none. 
 
 (16).* Feather-renovaters ; an annual tax of $5 for each 
 county in which they do business. 
 
 (17).* Cotton-compresses; an annual tax of from $10 to 
 $100 according to number of bales of cotton pressed. 
 
 (18).* Cotton-factors; $2.50 to $10.00 per annum accord- 
 ing to the population of the town in which the business is 
 carried on. 
 
 (19). Auctioneers; $2.50 to $15.00 per annum according 
 to population of town. Amount of revenue in 1898, $51.34. 
 
 (20).* Bicycle dealers; an annual tax of $5 or $10, accord- 
 ing to population of town. 
 
 (21).* Real estate dealers and rent collectors; an annual 
 tax of $2.50 to $15.00 according to population of town. 
 
 (22).* Buyers and sellers of fresh meats; an annual tax 
 of $3.00 to $7.50 according to population of town. 
 
 (23).* Wood and coal dealers ; an annual tax of $5 to $20 
 according to population of town. 
 
 (24).* Collectors of accounts; an annual tax of $10. 
 
 (25).* Photographers; an annual tax of $5. 
 
 (26).* Ice manufacturers; an annual tax of $10. 
 
 (27).* Laundrymen; an annual tax of $10. 
 
 (28).* Lumber dealers; an annual tax of $10. 
 
 (29).* Undertakers; an annual tax of $10. 
 
 (30). Hotels; an annual tax of twenty-five cents per room 
 if the charge for transient custom is less than two dollars 
 per day. If the charge is two dollars per day or more, the 
 tax is fifty cents per room. Revenue in 1898, $1,014.96. 
 
 (31). Lawyers, physicians and dentists; an annual tax of 
 $5. Revenue in 1898, $12,227.81. 
 
95] Taxation in North Carolina 95 
 
 (32). Theatres; an annual tax of $15 to $200 according 
 to the population of the town in which it is situated. Rev- 
 enue in 1898, $787.50. 
 
 (33). Theatrical companies performing in unlicensed 
 halls; a tax of $10 for each exhibition. Revenue in 1898, 
 $43.00. 
 
 (34). Concerts and musical entertainments in unlicensed 
 halls; a tax of $3 for each performance. Revenue in 1898,, 
 $207.75. 
 
 (35). Lectures for reward in unlicensed halls; a tax of 
 $3 for each lecture. Revenue in 1898, $6. 
 
 (36). Museums, waxworks or curiosities of any kind; a 
 tax of $3 for each exhibition. Revenue in 1898, $282.50. 
 
 (37). Circus or menagerie; a tax of $200 for each day or 
 part of day. Amount of revenue in 1898, $2,539.00. 
 
 (38). All companies exhibiting for reward other than 
 those mentioned in the preceding sections; a tax of $5 for 
 each performance. Revenue in 1898, $454.50. 
 
 (39). Gift enterprises; a tax of $20. Revenue in 1898, 
 $916.92. 
 
 (40). Lotteries; a tax of $1000. No revenue in 1898. 
 
 (41). Slot machines where return is uncertain; a tax of 
 $100. No revenue in 1898. 
 
 (42). Billiard and pool tables, bowling alleys, etc.; a tax 
 of $20 unless kept in connection with a place where liquor 
 is sold, in which case the tax is $50. Revenue in 1898, 
 
 $i,529-37- 
 
 (43). Skating rinks, merry-go-rounds, switch-back rail- 
 ways, etc., or stand or place for any other game or play 
 with or without a name; a tax of $20. No revenue in 1898. 
 
 (44). Dealers in theatre tickets; a tax of $5. No revenue 
 in 1898. 
 
 (45). Public ferries, bridges and toll gates; a tax of 
 one per cent, of, gross receipts. Revenue in 1898, $275.52. 
 
 (46). Gypsies or any other persons offering to tell for- 
 tunes for reward; a tax of $150 for each county in which 
 they offer to practice their craft. No revenue in 1898. 
 
96 Studies in State Taxation [96 
 
 Besides the license taxes enumerated above, there are 
 some others which will be treated under the head of cor- 
 poration taxes, since they are levied mainly on corporations. 
 The taxes the treatment of which is thus postponed are 
 those on (i) private business corporations, (2) insurance 
 companies, (3) banks, (4) telegraph and telephone com- 
 panies. 
 
 It is obvious that the license tax in North Carolina is not 
 solely a fiscal measure. To make, for example, an itinerant 
 clock-pedler pay $100 for each county in which he trades 
 is simply a declaration that there shall be no clock-pedlers. 
 Many of the objects of license taxation are luxuries; e. g., 
 tobacco and liquor sales and public amusements. These 
 taxes are frequently said to operate to some extent to keep 
 shows and theatrical companies out of the state and so to 
 keep the people from " wasting their money." In other 
 words, they are in some degree sumptuary legislation. 
 The most productive license taxes are those upon ordinary 
 businesses. Such a tax as that on sewing-machine manu- 
 facturers seems based on a wrong principle, since it tends 
 seriously to limit competition. Not only must the pur- 
 chaser of a machine pay part of the license tax of $350 but 
 the fact that such a license is imposed, tends to establish 
 an even higher figure; for the sewing-machine manufacturer 
 before he pays his tax must have the hope of a larger gain 
 than he would otherwise require. 
 
 The license taxes are collected, for the most part by the 
 sheriff. Any person who practices any trade or profession 
 or uses any franchise taxed by the laws of the state with- 
 out paying the tax is subject to a fine or to imprisonment 
 and to an additional penalty of fifty dollars. The license 
 taxes on shows, curiosities and lectures are poorly col- 
 lected. The auditor in his report for 1896 jocosely but 
 pertinently remarks : " I am satisfied that these taxes are 
 not looked after as they should be. Sheriflfs are humane 
 people generally and of most kindly disposition. I respect- 
 fully suggest that some method be devised by which county 
 
9'J'] Taxation in North Carolina 97 
 
 authorities can be impressed with the importance of read- 
 ing carefully the revenue act, then inwardly digesting it. 
 The State Treasury will I am sure be much the gainer 
 thereby." 
 
 Corporation Taxes 
 
 Under the present constitution of North Carolina, the 
 property of corporations and individuals must be taxed 
 alike. Corporate property is assessed for state, county, 
 and municipal purposes. But, although the rate is the same 
 for all property, the methods of assessing corporations 
 differ from those used in the case of individuals. The mode 
 of collecting many corporate taxes differs also from the 
 ordinary methods used. And, finally, certain taxes have 
 been levied on corporations, or rather on businesses usually 
 carried on by corporations.' These taxes are called license 
 taxes and as such are within the constitutional provisions. 
 
 Assessment of Corporations. The property of railroad, 
 telegraph, telephone, sleeping car, refrigerator car, freight 
 car, canal and steamboat companies is assessed by a board 
 of state railroad commissioners. In the case of railroad, 
 canal and steamboat companies, the method of procedure is 
 as follows: All real and personal property, belonging to 
 the corporation, and situated outside of the right of way, 
 is listed in the county where located. The valuation of all 
 other property belonging to any such corporation is made 
 by the commissioners. The companies are required to file 
 with the commissioners, answers to a series of questions. 
 The commission may also " summon and examine wit- 
 nesses and require books and papers to be submitted to 
 them." ' 
 
 On the basis of such reports and testimony, the commis- 
 sioners determine the valuation of the property, " ascer- 
 
 ^ There is no double taxation of stock and property in North 
 Carolina. Sometimes, as in the case of banks, the stockholder is 
 made to pay local taxes, but in such cases the company is untaxed. 
 
 ' Machinery Act, 1899, Sees. 44 and 49. 
 
 7 
 
98 Studies in State Taxation [98 
 
 taining such value from the earnings as compared with the 
 operating expenses and taking into consideration the value 
 of the franchise as well as other conditions proper to be 
 considered in arriving at the true value of the property 
 as in case of private property." ' The aggregate value of 
 each company's property is apportioned to each county in 
 the same proportion that the length of such road or line in 
 each county bears to its entire length.^ 
 
 The method of assessing telegraph and telephone com- 
 panies varies somewhat from that described above. These 
 companies are required to file annually with the auditor 
 of the state a sworn statement/ showing: 
 
 (i). The total capital stock. 
 (2). The number of shares. 
 (3). The principal place of business. 
 (4). The market value of its shares. 
 
 (S). The real and personal property subject to local taxation. 
 (6). The real estate of the company, situate outside the state. 
 (7). All mortgages on its property. 
 
 (8). The length of the lines both in and out of the state and in 
 each of the counties and townships of the state. 
 
 If the auditor deems the statements filed insufficient, he 
 may call for further information. The reports, collected by 
 the auditor, are submitted to the board of railroad com- 
 missioners, which ascertains first the value of the entire 
 property of the company. The valuation is made on the 
 basis of the market value of the shares. If the property is 
 encumbered by a mortgage, the amount of the mortgage 
 indebtedness is to be added to the value of the shares. 
 Having ascertained the value of the entire property, the 
 value of real estate owned by the company and situated 
 outside of the state is deducted from the total valuation. 
 The board next assesses the property within the state by 
 considering what proportion the length of the lines operated 
 by the company within the state bears to the total length 
 
 ^ Machinery Act, 1899, Sec. 4S. 
 
 ' Ihid. 
 
 ° Revenue Act, 1899, Sees. 37, 39, 46 and 47. 
 
99] Taxation in North Carolina 99 
 
 of such lines.' In the case of express, refrigerator car and 
 sleeping car companies, the method pursued is the same as 
 that followed in taxing telegraph and telephone companies, 
 except that in place of the " length of lines of such com- 
 panies," the question considered is the " length of lines over 
 which such company operates." The value of each com- 
 pany's property is apportioned to each county in the pro- 
 portion that the length of such road or line in each county 
 bears to the entire length. 
 
 The taxable valuation of all other corporations except 
 insurance companies is based upon answers to the follow- 
 ing questions: 
 
 (a). Name of corporation? 
 
 (b). Amount of capital stock authorized and the number of 
 shares? 
 
 (c). The market value, or if no market value, the actual value of 
 the shares? 
 
 (d). The assessed valuation of all real and personal property? 
 
 (e). Amount of capital stock paid up? 
 
 The assessed valuation of the real and personal property 
 of the corporation is deducted from the aggregate value of 
 its shares and the remainder is listed as the value of its 
 capital stock. It is very plain that by this system a consid- 
 erable portion of corporate property may escape taxation. 
 No account is taken of bonded indebtedness which may 
 represent a large part of the tax-paying ability of the cor- 
 poration. Let us suppose, for example, a corporation with 
 a paid-up capital of $50,000 and a bonded debt of $50,000. 
 Now, clearly this represents a business which ought to pay 
 taxes on $100,000. If this corporation requires large build- 
 ings and other visible property, its chance of dodging taxa- 
 , tion is small. But, if a large part of its capital is in forms 
 which can be converted into a " credit " by depositing it in 
 bank, the bonded indebtedness may be offset against this 
 credit. In this way many corporations may escape taxation 
 on large portions of their property. 
 
 ^ Revenue Act, 1899, Sec. 42. 
 
100 Studies in State Taxation [100 
 
 License Taxes on Corporations. A license tax is imposed 
 on certain kinds of business conducted almost exclusively 
 by corporations. The charge is either a fixed sum or a 
 percentage of gross receipts. The corporations subject to 
 such charges, are: (i) insurance companies, (2) banks, 
 (3) telegraph companies, (4) telephone companies, (5) ex- 
 press companies. 
 
 Insurance companies, both fire and life, pay an annual 
 license tax and also a gross-receipts tax. The annual fee 
 is two hundred dollars for a fire insurance company and 
 two hundred and fifty for a life insurance company. Both 
 kinds of companies pay a two per cent, tax on their gross 
 receipts, but if one quarter of the entire assets of the com- 
 pany is invested in certain prescribed securities, viz. : North 
 Carolina state, county or municipal bonds, or mortgages 
 on real property in the state, the rate of taxation on gross 
 receipts is only one per cent. 
 
 With the exception of National Banks, every person or 
 company doing a banking business is taxed according to 
 the capital employed, as follows: On a capital of ten thou- 
 sand dollars or less, twenty-five dollars and two dollars for 
 each additional thousand dollars of capital; also twenty- 
 five dollars additional for each county in which any of said 
 banks may have an agency. 
 
 Telegraph, telephone, and express companies pay a two 
 per cent, tax on gross receipts. No county or corporation 
 may impose any additional tax except an ad valorem tax. 
 
 A franchise tax of fixed amount is levied on all " private 
 business " corporations, except railroads, banks, and insur- 
 ance companies, in proportion to their capital stock. This 
 tax ranges from five dollars, for corporations having a 
 capital stock of $25,000 or less, to $500 for those whose 
 capital exceeds one million dollars. 
 
 Collection of Corporation Taxes. Taxes in North Carolina 
 are ordinarily collected by the sheriff, who accounts with 
 the county treasurers and the state treasurer. In general 
 license taxes are also collected by the sherififs, but the 
 
101] Taxation in North Carolina 101 
 
 license taxes on corporations are paid directly to the state 
 treasurer. Certain corporations, viz.: railroads, banks, 
 building and loan associations, telephone and telegraph 
 companies, also pay the property tax directly to the treas- 
 urer. 
 
 State, county and municipal taxes on corporations in 
 North Carolina are ordinarily " stopped at the source." In 
 the case of state and national banks, the stockholders pay 
 the county and municipal taxes while the banks pay the 
 state tax. 
 
 Productivity of Corporation Taxes. Just what part of the 
 state's revenue is derived from corporations cannot be as- 
 certained since only certain kinds of corporations pay 
 directly to the state treasury. In 1898, banks, building and 
 loan associations, railroad, telegraph, telephone, canal and 
 steamboat companies paid a general property tax amount- 
 ing to $98,385.87 directly to the treasurer of the state. In 
 the same year, banks, building and loan associations, insur- 
 ance, telegraph, telephone and express companies paid 
 license taxes amounting to $98,848.90. So the corpora- 
 tions paid in 1898, nearly $200,000 directly into the state 
 treasury. 
 
 The great number of corporations, such as cotton mills, 
 lumber mills, tobacco factories, etc., do not pay directly but 
 indirectly through the sheriff as individuals do. They are 
 therefore not included in the figures just cited. It would 
 probably be an under-estimate to say that, out of nearly one 
 million dollars of public taxes paid to the state in 1898, 
 corporate property paid $300,000, or nearly one-third. 
 
 Poll Tax 
 
 In origin the poll tax is coincident with the beginnings 
 of taxation in North Carolina. Until near the middle of 
 the century, it furnished more revenue than the general 
 property tax.^ This was in large measure due to the fact 
 
 ' In 1827, for instance, the tax on lands and lots yielded $25,948.41, 
 while the poll tax yielded $27,446.82. 
 
102 Studies in State Taxation [103 
 
 that the taxes on slaves could be collected by sale of the 
 slaves. The great importance of the tax is clearly shown 
 by the fact that all of the constitutional amendments of 
 1835 concerned the poll tax. These amendments provided 
 that the capitation tax should be equal throughout the state, 
 and that all free males over twenty-one and under forty-five 
 years of age, and all slaves over twelve and under fifty 
 years of age, should be subject to a capitation tax, and that 
 no other person should be subject to such tax. The capita- 
 tion tax on slaves was in lieu of any other tax on such 
 property. 
 
 In 1852, a part of the revenue derived from the poll tax 
 was applied to the support of a state asylum for lunatics 
 and idiots. In the constitution adopted in 1868, the poll 
 tax was devoted to the support of the public schools and 
 of the poor.' 
 
 The state treasury no longer derives any revenue from 
 this source, but the proceeds of the tax form a part of the 
 school and poor fund of the county in which it is collected. 
 Since, however, the rate is prescribed by the General As- 
 sembly, it may properly be considered a commonwealth 
 tax. 
 
 Rate. The provision of the constitution authorizing the 
 poll tax is mandatory. It declares, " The General Assem- 
 bly shall levy a capitation tax on every male inhabitant in 
 the state over twenty-one and under fifty years of age, 
 which shall be equal to the tax on property valued at three 
 hundred dollars." The Supreme Court has recently held 
 that if a revenue act does not preserve this proportion, the 
 tax on both property and poll is void. 
 
 The present state poll tax is $1.29. The counties also 
 have the privilege of levying a poll tax, but the state and 
 county tax together must not exceed $2.00.^ Not more 
 than one-fifth of the revenue thus raised can be appro- 
 priated to the support of the poor. By the Constitution 
 
 ' Constitution of North Carolina, Art. S, Sec. i. 
 ■ Constitution of North Carolina, Art. 5, Sec. I. 
 
103] Taxation in North Carolina 103 
 
 of 1868, the county commissioners are empowered to ex- 
 empt from this tax any persons who are too poor or infirm 
 to pay it. 
 
 Collection. Much difficulty is experienced in the collec- 
 tion of the tax. The law provides that, " if any poll tax 
 or other taxes shall not be paid within sixty days after the 
 same shall be demandable it shall be the duty of the sheriff, 
 if he can find no property of the person liable, sufficient to 
 satisfy the same, to attach any debt or other property in- 
 capable of manual delivery due or belonging to the person 
 liable or that may become due to him before the expiration 
 of the calendar year." By means of such attachments in 
 the hands of employers and others, many poll taxes which 
 would not otherwise be collectable are paid. But even with 
 the aid of this device the tax is poorly collected. The 
 auditor in his report for 1896 estimates that only two- 
 thirds of the whites and one-half of negroes above the age 
 of twenty-one pay poll taxes. So difficult is the collection 
 of this tax that in 1897 the General Assembly enacted that 
 persons or corporations failing to pay any tax laid on them 
 by law shall be guilty of a misdemeanor and punished by a 
 fine not exceeding five hundred dollars or imprisoned not 
 exceeding six months. This law was aimed, of course, at 
 the man without property, the citizen who is liable only to 
 the poll tax. Taxes due by any citizen with property are 
 collectable without fines or imprisonment. It is quite pos- 
 sible that this act did not fall within the Constitutional 
 provision prohibiting imprisonment for debts, but the law 
 does not seem to have been practicable and was repealed 
 by the General Assembly of 1899. 
 
 The amount raised by the poll tax is next in amount to 
 that raised by the general property tax. In 1898, the 
 return from state and county poll taxes amounted to $365,- 
 738.27, or nearly one-half of the sum raised for public 
 schools, exclusive of sums raised in the larger towns for 
 graded schools. Besides the poll tax levied by state and 
 county, incorporated towns also impose poll taxes in North 
 
1G4 Studies in State Taxation [104 
 
 Carolina. In some cases, in fact, in most of the larger 
 towns, the municipal poll tax is far in excess of the com- 
 bined state and county poll tax/ 
 
 Criticism. The poll tax of North Carolina is clearly a 
 regressive tax of a very heavy kind. It amounts frequently 
 to doubling the rate on small property owners. Let us 
 suppose, for instance, two property owners, one owning 
 property worth $10,000 and another owning property worth 
 $300. If we levy on each a property tax of one and two- 
 thirds per cent, (an average municipal tax in North Caro- 
 lina) and a poll tax of $5, this amounts to taxing the richer 
 man at a rate slightly above one and two-thirds per cent., 
 while the poorer man has to pay $10 tax, or at the rate of 
 three and one-third per cent. If a poor man has no prop- 
 erty and thus escapes the payment of the poll tax the very 
 existence of this tax is an inducement to him never to 
 acquire any property, since from his first savings, the state, 
 county and city take away as much as the savings bank 
 would pay him, if he had $300. If he only saves $100, 
 they take far more than such bank would pay him. That 
 this is a real and an important consideration is revealed by 
 statistics from Wake County given by the auditor in his 
 report for 1896. Over sixty per cent, of the tax payers 
 of this county pay on less than $500 of real and personal 
 property and the auditor estimates that eighty per cent, of 
 the tax payers of the entire state pay on less than $500 
 worth of property. 
 
 On such persons the poll tax weighs heavily. The richer 
 man does not feel it, the man with no property largely 
 escapes it, but upon the small property owner it hangs as 
 an incubus. It is not a tax proportioned to ability. It is 
 not even, according to the theory of the general property 
 tax, proportioned to wealth. In what manner its advocates 
 
 ^ The rates in some of the largest cities in North Carolina are as 
 follows: Raleigh, $3.70; Winston, $4.05; Charlotte, $3.00; Wilming- 
 ton, $3.96. These are the municipal poll taxes; to them must be 
 added the state and county taxes, nearly always equal to $2.00. 
 
105] Taxation in North Carolina 105 
 
 would justify the retention of the tax, is not clear. To 
 most people who favor poll taxes, the old idea of paying 
 the state for a service rendered probably constitutes the 
 best argument in its behalf. 
 
 As has been said above, the poll tax is mandatory and 
 no General Assembly can refuse to levy it. There is urgent 
 need of a change in the constitution permitting the tax to 
 be laid only on persons not paying an equal sum on prop- 
 erty. While such a tax would be theoretically far from a 
 just tax, it would yet be an improvement on the present 
 system and would lift the dead weight which hangs so 
 heavily on the small property owner. 
 
 Income Tax 
 
 For a considerable period before i860, the income tax 
 was an important element in the fiscal system of North 
 Carolina. Taxation of personal property was at first a tax 
 on the income from such property; but since the adoption 
 of the present constitution, personal property has been 
 taxed in all respects as real property. The present im- 
 portance of the income tax is slight. 
 
 The constitution of North Carolina authorizes the taxa- 
 tion of incomes, provided that no income may be taxed 
 when the property is taxed from which the income is de- 
 rived. Acting under the limitations of this provision, the 
 General Assembly has imposed the following taxes on 
 incomes :' 
 
 " On the gross profits and the income derived from prop- 
 erty not taxed, five per centum; on the gross incomes de- 
 rived from salaries and fees, public or private, one-half of 
 one per centum on the excess over one thousand dollars; 
 on the gross incomes derived from other sources except 
 such as are derived solely from property taxed, one-fourth 
 of one per centum on the excess over one thousand to five 
 thousand dollars, one-half of one per centum on the excess 
 
 ' Revenue Act of 1898, Sec. 6. 
 
106 Studies in State Taxation [106 
 
 over five thousand to ten thousand dollars, one per centum 
 on the excess over ten thousand to twenty thousand dollars, 
 and two per centum on the excess over twenty thousand 
 dollars." 
 
 The purpose of the law seems to be to divide taxable 
 incomes into three classes: (i) Incomes from property not 
 taxed, e. g. State and United States bonds; on this class 
 the rate is very high — five per cent. (2) Incomes from 
 salaries and fees; in this class, only the excess above one 
 thousand dollars is taxed and at the fixed rate of one-half 
 of one per cent. (3) Incomes from other sources, except 
 such as are derived solely from property already taxed. 
 
 The " machinery act " which always accompanies the 
 ■' revenue act " requires that the tax list of each individual 
 shall contain: "The gross income of the party the twelve 
 months next preceding the first day of June in the current 
 year derived from property not already taxed by the laws 
 of this state with a statement of the source or sources from 
 which it was derived and also his income over one thousand 
 dollars derived from salaries or fees or both." Here taxa- 
 ble incomes are classed in two groups only: income from 
 untaxed property and income from salaries and fees above 
 one thousand dollars. This is the construction of the 
 revenue act followed in the lists sent out through the state 
 to the list-takers. 
 
 ' It is evident that one important form of income has been 
 neglected in this system, e. g. the income from business 
 profits. The professional man and the wage earner are 
 taxed upon incomes of more than one thousand dollars. 
 The third kind of income enumerated as taxable in the 
 " revenue act " would apparently include the income from 
 business earnings, since such earnings are not derived 
 solely from property taxed. Actual procedure is based 
 upon an arbitrary interpretation of the clause of the " ma- 
 chinery act " quoted. It has always been the custom, under 
 the present constitution, to regard all profits from business 
 of any kind as derived from the capital invested in the 
 
107] Taxation in North Carolina 107 
 
 business, and since the capital is taxed, the income is re- 
 garded as faUing under the constitutional exemption. This 
 question has not been brought before the courts because 
 of the common opinion that the General Assembly has not 
 taxed such incomes. 
 
 Criticism. It may be seriously questioned whether the 
 construction of the constitution commonly held is the true 
 one. The merchant or manufacturer with a capital of 
 $5000, who makes an annual profit of $2000, pays taxes on 
 his goods and hence is exempt on his income. The interest 
 on $5000 is $300 and the excess of the merchant's gain 
 above the ordinary return to his capital is $1700; but the 
 state imposes no tax on his income, while his clerk receiv- 
 ing a yearly salary of $1200 must pay $1.00 to the state 
 treasury. In both cases the income is the return to ability. 
 It is difficult to see why one kind of ability is taxed and 
 another exempted. 
 
 The income tax has a place to fill in the fiscal system of 
 North Carolina. It should measure the tax-paying capacity 
 of personal skill and ability of all kinds. It is now im- 
 posed only upon productive skill of certain kinds. Can 
 there be any reason why the tax should not be imposed on 
 business skill, even though such skill be exerted with the 
 aid of some form of property? The return is no less a 
 return to the skill. The property used has its value easily 
 ascertainable and the interest on it can be deducted from 
 gross earnings and the return to ability be thus ascertained. 
 
 A consistent income tax would affect all citizens, farmers, 
 merchants, manufacturers, the return to whose skill ex- 
 ceeded a certain amount. If in addition the tax were made 
 gradually higher as the income increased in amount, the 
 income tax would be a valuable adjunct of the inheritance 
 tax in introducing the principle of progressivity into the 
 tax system of North Carolina. As stated above, the ques- 
 tion of the legality of such a tax has never been before the 
 courts, but it is difficult to see how the constitutional pro- 
 vision would interfere with the recommendation here made. 
 
108 Studies in State Taxation [108 
 
 Business incomes are not incomes from property but from 
 skill. 
 
 The income tax yielded in 1898 only $3,876.20. In con- 
 siderably more than one-half of the counties of the state, 
 no person was reported as in possession of a taxable in- 
 come! 
 
 Inheritance Tax 
 
 In 1847, the General Assembly passed an inheritance tax 
 law which with many changes remained in force until 1874, 
 when it was omitted from the revenue act. By the original 
 act, the widow and lineal decendants of the decedent were 
 exempt from the tax.^ In 1855, the exemptions were ex- 
 tended to include the following: (a) lineal descendants, 
 (b) widow, (c) father or mother, (d) wife or widow of a son 
 of the decedent, (e) husband of a daughter of the decedent. 
 By the law of 1855 the tax was graduated according to the 
 degree of relationship : one per cent, for brothers and sisters, 
 two per cent, for uncles, aunts, or their descendants, and 
 three per cent, for more remote relatives and strangers." 
 
 The law of 1847, imposed a tax on inheritance only 
 when the real estate was of the value of $300 and upwards 
 and the personal property equaled or exceeded $200. Just 
 before the war, the exemption was decreased to $100 and 
 in 1866 it was entirely dropped. The rate of the tax varied 
 from time to time. During the war it was doubled, but in 
 the main the rate imposed by the Code of 1855 was retained 
 by successive Assemblies. 
 
 Under this law very small returns ' were made although 
 the method of collecting the tax was eminently practicable. 
 Administrators and executors were required to pay the tax; 
 
 ^ Laws of i846-'47, ch. 72. 
 
 ' Revised Code of 1855, ch. 99. 
 
 ' The amount of the returns cannot be determined because of the 
 method in which the auditor's report was formerly made, but the 
 present auditor informs me that the returns were " practically 
 nothing." 
 
109] Taxation in North Carolina 109 
 
 but the great difficulty was that the law exempted nearly 
 every possible devisee from its payment. 
 
 In 1897, a new inheritance tax law was enacted by the 
 General Assembly, which promised to be much more pro- 
 ductive as a fiscal measure. It imposed on all legacies and 
 inheritances, devised or descended to persons in the direct 
 line, a tax of two-thirds of one per cent., and on all legacies 
 and inheritances devised or descending collaterally, except 
 such as were for charitable uses, one and one-half per cent. 
 No administrator or executor was permitted to file his final 
 account unless and until such taxes were paid. In 1899, 
 the General Assembly repealed this law and there is no 
 inheritance tax in North Carolina at the present time. 
 
 Criticism. While the inheritance tax of 1897 was far 
 better than none, it does not seem to have been planned in 
 accordance with any sound theory of taxation. There 
 seems to have been no attempt to make the new tax in any 
 way supplementary to the forms of taxation at present in 
 use in North Carolina, viz., the general property tax and 
 the poll tax. Can the inheritance tax be made to supply 
 the deficiencies of such taxes to any extent? We have at- 
 tempted in discussing the poll tax to show that this charge 
 falls more heavily on the poor man than on the rich one. 
 The same thing is true of the general property tax. To 
 tax a poor man's holdings at the same rate as the richer 
 man's can only be justified by the fact that the general 
 property tax is a tax on property and not on ability. If 
 taxation is to be just, the poll tax and the general property 
 tax, the one a regressive tax and the other a constant tax, 
 must be compensated for by some tax which will fall more 
 especially on the property of the rich. The taxes which are 
 especially fitted for use as compensatory or equalizing taxes 
 are the inheritance and the income tax. The income tax 
 is not used as an equalizing tax in North Carolina on ac- 
 count of supposed constitutional limitations. The inheri- 
 tance tax is consequently left as the sole tax available for 
 this purpose. 
 
110 Studies in State Taxation [110 
 
 In order that the inheritance tax may accomplish its pur- 
 poses as an equalizing tax, it is necessary in the first place 
 that there should be an exemption of estates up to a certain 
 amount, and that, in the second place, the rate should be- 
 yond that amount be progressive. There can be little doubt 
 that the Supreme Court of North Carolina would declare 
 such a tax constitutional. In the case of Pullen vs. Com- 
 missioners,^ the court held that the inheritance tax was not 
 a tax on property but was a tax on the succession. In this 
 case, objection was made to the inheritance tax on the 
 ground that it violated the constitutional provision requir- 
 ing all property to be uniformly taxed. The court declared 
 on this point: 
 
 " Undoubtedly if the tax in question must necessarily be 
 regarded as a tax on property, the objection would be irre- 
 sistible, since this property is not only taxed uniformly with 
 the other property, but is subjected to taxation as a legacy 
 in addition. But we do not regard the tax in question as 
 a tax on property, but rather as a tax imposed on the suc- 
 cession, on the right of the legatee to take under the will, 
 or of a collateral distribution in the case of intestacy. . . . 
 Is there any reason why the state shall be denied the power 
 to tax a succession whether it be by gift inter vivos or by 
 will or intestacy? Property itself as well as the succession 
 to it is the creature of positive law. The legislative power 
 declares what objects in nature may be held as property; it 
 provides by what forms and on what conditions it may be 
 transmitted from one person to another; it confines the 
 right of inheriting to certain persons whom it defines as 
 heirs, and on the failure of such, it takes the property to 
 the state as an escheat. 
 
 " The right to give and take property is not one of those 
 natural and inalienable rights which are supposed to pre- 
 cede all government and which no government can right- 
 fully impair. There was a time at least as to gift by will, 
 when it did not exist; and there may be a time when it will 
 
 ' 66 North Carolina Reports, 36. 
 
Ill] Taxation in North Carolina 111 
 
 seem wise and expedient to deny it. These are the uncon- 
 tested powers of the Legislature upon which no article of 
 the Constitution has laid its hands to impair them. If the 
 Legislature may destroy this right, may it not regulate it? 
 May it not impose conditions upon its exercise? And the 
 condition it has imposed in this case is a tax." ' 
 
 Under this decision there is ample scope for the adoption 
 of an inheritance tax to act as the much-needed balance 
 wheel in the tax system of the state. The distinction which 
 the court has so forcibly drawn between a tax and a regu- 
 lation of inheritance, leaves the General Assembly free to 
 fashion an inheritance tax without being cramped by con- 
 stitutional provisions. The inheritance tax ought to be- 
 come in North Carolina the safety-valve of the tax system. 
 It is impossible to estimate the probable yield of such an 
 inheritance tax. But we may be sure that the returns would 
 be sufficient to lighten appreciably the heavy load of re- 
 gressive taxation.'' 
 
 Conclusion 
 
 The basis of state taxation in North Carolina must re- 
 main for some time to come the general property tax. 
 Constitutional provisions and economic conditions both 
 lead to that conclusion. The practicable reform of the tax 
 system of the state is along two lines: (i) the better assess- 
 ment and collection of the general property tax itself; (2) 
 the adoption and extension of such taxes as will counter- 
 balance the lack of progressivity characterizing the general 
 property tax. . 
 
 The chief fault of the general property tax in North 
 
 ' Quoted in Dr. Max West's " Inheritance Tax," pp. 98-99, in 
 Columbia College Studies in History, Economics and Public Law, vol. 
 iv. 
 
 ' The return for 1898 from the now repealed inheritance tax law 
 passed in 1897 was only $98.18, but there is reason to believe that 
 the smallness of the amount was largely due to the lack of famil- 
 iarity with the law on the part of the ofScers charged with its 
 execution. 
 
113 Studies in State Taxation [113 
 
 Carolina is, as has already been shown, the allowance of 
 an exemption of debts to the taxpayer. With this re- 
 moved, there is every reason to believe that a more honest 
 return of solvent credits would be made than under the 
 present system wherein the law favors fraud by rendering 
 it impossible of detection. Even with this loophole of 
 fraud closed, evasion of taxation will undoubtedly go on 
 to a considerable extent. So long as large gains can be 
 made by perjury, some personal property will go untaxed. 
 It might be worth a trial, to see if lower rates of taxation 
 would not bring in larger net revenues. In other words, 
 might it not be better to differentiate the forms of taxable 
 property, and to tax personalty at a lower rate than realty? 
 The greater part of the personal property escaping taxation 
 is undoubtedly held in the towns and pays a high municipal 
 tax in addition to the state and county charges. For ex- 
 ample, in 1897, the rates for state, county, and municipal 
 purposes paid by citizens of Raleigh, Charlotte, Wilming- 
 ton, and Winston, are, respectively, $2.28, $2.10, $2.52 and 
 $2.31^ on the $100.00. Thus, in the towns, where the bulk 
 of property which can escape taxation exists, the temptation 
 to list falsely is strongest. If, on such property, the tax 
 was exclusively a state tax, very much lower than at pres- 
 ent, it might reasonably be hoped that the returns would 
 be greater. Such a change would require a constitutional 
 amendment in North Carolina and is not to be looked for 
 in the near future.' 
 
 As an abstract principle of justice it may be held that 
 personal property should always pay exactly the same tax 
 as real property. At any rate, the constitution of North 
 Carolina so asserts. But abstract principles and practical 
 measures are frequently at variance, and it is surely of little 
 satisfaction to the honest taxpayer to have the consola- 
 tion of knowing that whether his neighbor escapes or not, 
 still the abstract truth is enunciated by the constitution. 
 
 ' The first taxation of personal property in North Carolina was 
 made in the manner recommended here, an income tax being 
 levied on the returns from money invested in certain ways. 
 
113] Taxation in North Carolina 113 
 
 The taxes which may be regarded as counterbalancing 
 the lack of progressivity in the general property tax are 
 the inheritance and the income tax. The need for these 
 taxes is still further increased by the presence of the poll 
 tax, characterized not only by lack of progressivity but by 
 positive regressivity. The manner in which the poll tax is 
 imbedded in the constitution, and the central position which 
 it holds in the tax system of North Carolina indicate that 
 the likelihood of its repeal is not imminent. The prevalent 
 sentiment is that every person, however poor, should con- 
 tribute something to the support of the government. But 
 even if we admit this contention, it by no means follows 
 that the rate of taxation on the poorer members of the 
 community should be higher than that on the richer ones. 
 A simple method by which the regressivity of the poll tax, 
 a fault inherent in that fiscal devise, may be corrected, is 
 the inheritance or the income tax or some other tax equally 
 capable of being made progressive. Under existing cir- 
 cumstances, the inheritance tax would seem to be the one 
 best fitted to perform this service in North Carolina, and 
 it is to be hoped that the tentative inheritance tax law of 
 1897 may be reenacted in a better form. As has been 
 pointed out in discussing the income tax, a tax on business 
 incomes would also help to counterbalance regressivity. 
 
 In the matter of corporation taxes, the future develop- 
 ment is probably foreshadowed by the present situation. 
 The taxation of certain corporations, such as railroad, tele- 
 graph and telephone companies, is peculiarly fitted for state 
 purposes. Although the provision of the constitution re- 
 quiring the " uniform taxation of real and personal prop- 
 erty " prevents the special taxation of corporations by the 
 state, yet the methods of assessment need not be the same 
 as those for other forms of property. Railroads are as- 
 sessed by a board of commissioners, banks are assessed 
 on a valuation of capital stock, and it is not a far step in 
 the future to the assessment of the property of all corpor- 
 ations by methods more adequate than those now employed. 
 8 
 
114 Studies in State Taxation [114 
 
 When this is done, all corporation taxes can be paid di- 
 rectly into the state treasury. Thus the way will probably 
 be paved in time for the exclusive taxation of corporations 
 by the state. 
 
 [Bibliographical Note. — i. Laws of North Carolina, col- 
 lected by James Iredell, Esq., Edenton, N. C, 1791. 2. Revisal of 
 " Laws of North Carolina," by Frangois Xavier Martin, 2 vols., New- 
 bern, N. C, 1804. 3. Collection of the Statutes of the Parliament of 
 England in Force in the State of North Carolina, by Francois Xavier 
 Martin, Newbern, N. C, 1792. 4. Laws of North Carolina, revised 
 by H. Potter, 2 vols., 1822. 5. Revised Statutes of the State of 
 North Carolina, by James Iredell and William H. Battle, 2 vols., 
 Raleigh, N. C, 1837. 6. Revised Code of North Carolina, by B. F. 
 Moore and Asa Biggs, Boston, 1855. 7. Acts of the General As- 
 sembly of North Carolina. 8. Reports of the Auditor of North 
 Carolina. 9. Reports of the Treasurer of North Carolina.] 
 
III. 
 TAXATION IN KANSAS' 
 
 By ELBERT JAY BENTON 
 
 Economic Characteristics 
 
 The industrial development of Kansas bears a close rela- 
 tion to the physical characteristics of the state. There are 
 few great river valleys and almost no navigable rivers, yet 
 here as elsewhere the first lines of settlement followed the 
 streams. Along the Missouri river on the west bank early 
 arose such towns as Westport, Leavenworth, Atchison and 
 Wathena, while along the Kansas river extended a line of 
 settlements marked by Lawrence, Lecompton, Topeka and 
 Pawnee. To a less extent the valleys of the Neosho and 
 the Osage rivers with their tributaries directed the exten- 
 sion of civilization into the new territory. The building 
 of railroads across the plains turned the lines of settlement 
 from the rivers and led to the more speedy settlement of 
 the entire region. This fact is clearly shown to-day in the 
 line of towns that extends across the state along the rail- 
 roads first built. A map of Kansas shaded to show the 
 
 ' In addition to the acknowledgment made in the bibliographical 
 note, the author wishes to express his obligation to those who have 
 kindly assisted him in gathering material for this study. Special 
 thanks are due to Mr. F. G. Adams, Secretary of the Kansas State 
 Historical Society, and his assistants, for valuable aid in making 
 accessible all matter in their charge; for the same reason, to Mr. 
 James L. King, State Librarian, Topeka, Kansas, and to the 
 authorities in charge of the Law Institute, Chicago, Illinois, for the 
 use of their valuable collection of Kansas statutes; and to many 
 others, the unofficial character of whose aid renders this public 
 acknowledgment impossible, but whose assistance is none the less 
 remembered. 
 
116 Studies in State Taxation [116 
 
 density of population discloses several dark bands running 
 the entire length of the state, with here and there cross 
 bands. These in each case mark some railroad line. The 
 Gulf, the Sante Fe, the Union Pacific, the Missouri Pacific, 
 and the Rock Island systems show this grouping of settle- 
 ments most clearly. 
 
 The economic interests of the people of Kansas until re- 
 cently have been confined almost wholly to agriculture and 
 grazing. The development of irrigation systems in the 
 western part has only augmented this condition. The fed- 
 eral census of 1890 reported 61.42 per cent, of the male pop- 
 ulation of Kansas as engaged in agriculture. The remain- 
 ing 38.58 per cent, was distributed among various pursuits; 
 4.14 per cent, in the professional class; 8.66 per cent, in 
 domestic and personal service; 14.45 P^i" cent, in trade and 
 transportation; leaving 11.33 P^r cent, engaged in manu- 
 facturing and mechanical trades.^ 
 
 The population of Kansas is mainly rural. In 1890 only 
 about 12 per cent, of the people lived in cities of 8000 popu- 
 lation or more. This small proportion of urban popula- 
 tion becomes apparent when it is remembered that the 
 average proportion for the entire United States is 29.20 
 per cent. Recently the urban population of Kansas has 
 increased very rapidly, doubling in the last ten years. In 
 1870 the proportion of urban to rural population was 7 per 
 cent.; in 1880 the proportion was 6 per cent.'' The recent 
 opening up of valuable zinc and coal deposits in the south- 
 eastern part of the state, and the rich gas belt now being 
 developed have attracted manufacturing plants and point 
 to great possibilities in industrial activity. 
 
 The character of its population has affected the economic 
 history of the state to a marked degree. The territory was 
 born amid the throes of civil strife and raised to statehood 
 when revolution threatened to destroy the Union. For 
 more than a decade it was the scene of a bitter war, during 
 
 ' nth Census, Vol. 50, part 4, p. 379. 
 
 ' Statistical Atlas of the United States (1898), p. 15. 
 
117] Taxation in Kansas 117 
 
 which people from all sections immigrated thither. In 
 many cases these were men with lost fortunes to regain; 
 young men without capital and often without family inter- 
 ests who had come there to carve out new careers. In 
 every case they were the bolder, restless adventurers of 
 the East. 
 
 The early years were years of hardship, political unrest, 
 and slow progress, and even now Kansas has not entirely 
 outgrown these necessary accompaniments of the begin- 
 nings of every commonwealth. It is still a new state. Its 
 cities are small; its farms are large, and everywhere the 
 comforts of the North and East are just being introduced. 
 Farming is done on the extensive rather than the intensive 
 plan, and thoroughness is often lacking. The people are 
 prone to undertake new and bold business adventures. 
 Enterprises are projected that never get any farther than 
 the magnificent charter of promise that is filed with the 
 secretary of state or the paper which is wasted in planning 
 them. That conservatism for which the older sections of 
 a country are noted is still in a great degree absent. 
 
 Undoubtedly the character of the people has been greatly 
 influenced by climatic conditions. The extremes to which 
 this region is subject, both in temperature and moisture, 
 have developed popular disquiet, and the spirit of unrest 
 has often lead to radical political changes. But this striv- 
 ing after new things has not proven harmful to fundamental 
 institutions, and the peace and prosperity of the state have 
 at no time been seriously endangered. The financial affairs 
 of the state, on the contrary, stand practically as they were 
 first instituted. The financial policy of Kansas was mod- 
 eled in the beginning after eastern and northern states, and 
 it has changed little in the years that have elapsed. 
 
 At times mortgages on the farms have been heavy, but 
 these have been paid off rapidly during the past years. 
 Eastern capital was necessary to develop the resources of 
 the state, but now that these have been opened up, capital 
 from the east is no longer indispensable, and the state is 
 
118 Studies in State Taxation [118 
 
 undoubtedly entering upon a period of unusual financial 
 prosperity. For a long time an unequal struggle was in 
 progress in the western sections/ The farmers were strug- 
 gling to make the soil bring forth the products of the middle 
 north. This was not possible. Now that the new genera- 
 tion is becoming acclimated, as it were, the old story of 
 absolute failures is not likely to be repeated. The farmers 
 are learning to raise the right thing in the right place. 
 Progress in irrigation, in subsoiling, and in working the 
 soil so as to conserve most of the rainfall, are other ele- 
 ments in bringing about economic prosperity. The depres- 
 sion resulting from unnaturally rapid expansion of cities 
 has been overcome. The " boom towns " have adjusted 
 themselves to the resources of their environment and are 
 now steadily growing. These conditions indicate increas- 
 ing economic stability. 
 
 General Finances 
 
 The eleventh biennial report of the state treasurer for 
 the fiscal year ending June 30, 1898, shows that the total 
 receipts for the year were $2,760,322.15, while the total 
 expenditures for the same period were $2,672,083.36. Of 
 the total receipts, $1,413,695.08 was derived from the gen- 
 eral property tax. The insurance department contributed 
 in license fees $33,380.02 and the fees paid to the various 
 other executive officers increased the amount by $62,434.27. 
 Thus the total state income from sources which may be 
 
 ' It is not uncommon to find entries like the following in the 
 legislative annals of Kansas: 
 
 " April 16, 1861, Report of W. F. M. Arny to the Legislature 
 that relief goods have passed through his hands weighing 9,197,300 
 lbs. Of this amount, 3,051,304 lbs. were for seed. The money was 
 furnished by the legislatures of New York and Wisconsin and the 
 New York City committee. In addition $22,481.93 has been ex- 
 pended " (Annals of Kansas, p. 261). Even to this day the treasurer 
 keeps a seed-grain fund which is the payment of seed-grain war- 
 rants, i. e. loans to the western sections of the state to purchase 
 seed grain. During the year 1897 there was paid to the state on 
 this account $6401.19. 
 
119] Taxation in Kansas 119 
 
 classed under the head of state taxation, was $1,509,509.37. 
 The state penitentiary earnings for the year were $48,030.05. 
 The state board of charities contributed from the various 
 institutions under its control, $4,579.94.' The United States 
 contributed to the aid of the Soldiers' Home $12,450, and 
 to the agricultural college $23,000. From the payment of 
 principal and interest upon state bonds held to the credit 
 of the various school funds was received $844,283.74. 
 During this same period the income derived from the public 
 school lands was $220,929.13. The municipal interest ac- 
 count was $43,301.34. These statements show that about 
 54 per cent, of the state revenue was derived from taxation 
 in one form or other, and that about 40 per cent, accrued 
 from the bond and land account. As the greater part of 
 the receipts from interest on bonds and lands go directly 
 to the public schools, it is clear that the state must depend 
 almost wholly upon taxation to maintain its charitable and 
 penal institutions, to pay its legislative, judicial, and execu- 
 tive expenses, and to defray all other expenditures. 
 
 Of the total disbursements for the fiscal year 1898, 
 $1,281,805.81 was charged to the general revenue account; 
 that is, was expended for the support of state charitable and 
 penal institutions and the executive and judicial depart- 
 ments. $39,689.55 was expended upon the state capitol 
 building; $1,130,421.30, for educational purposes; $34,- 
 21 1. 14, for the Soldiers' Home; $50,000 of the state bonds 
 were paid; $40,651.90 was paid as interest upon the state 
 debt; $33,913.04, on state grain inspectors' warrants; and 
 $30,142.88, for the municipal interest account. As there 
 was no session of the legislature during 1898, the general 
 expenditures were considerably less than for the year pre- 
 ceding. On June 30, 1898, there was a balance in the 
 treasury amounting to $412,151.63. 
 
 'This merely means that it paid into the treasury all receipts 
 accruing during the year. In this case, as in that of the fees paid 
 to state officers, all moneys were paid into the general revenue fund 
 and from that allotted to the various purposes of state expendi- 
 ture by legislative appropriation. 
 
120 Studies m State Taxation [120 
 
 The public debt of Kansas is insignificant when com- 
 pared with the debts of many of the older states. The con- 
 stitution provides that the state may contract public debts 
 for the purpose of defraying extraordinary expenses and 
 making public improvements. But such debt must never 
 exceed in the aggregate, one million dollars, unless the 
 proposed measure for creating the debt shall have first been 
 submitted to a direct vote of the electors of the state at 
 some general election and have been ratified by a majority 
 of the voters. A law creating a debt must at the same time 
 provide for levying an annual tax sufficient to pay the 
 annual interest of the debt and the principal thereof when 
 due. The state is also prohibited from ever becoming a 
 party to carrying on any works of internal improvements.' 
 
 The present state funded debt is $632,000. Of this the 
 permanent school fund owns $589,000, and the university 
 permanent fund $9000, leaving $25,000 in the hands of 
 individuals and corporations. The $25,000 held by indi- 
 viduals and corporations will fall due January i, 1899, and 
 the last legislature provided that the bonds be refunded at 
 four per cent., and authorized the school fund commis- 
 sioners to purchase them should the revenue fund be insuffi- 
 cient money to pay them off.' 
 
 ' Acts of the legislature authorizing counties to subscribe for 
 stock in railroad companies, and to issue bonds to pay for them 
 have, however, been declared constitutional and valid (Leavenworth 
 Co. vs. Miller, 7 Kansas, 479; Morris vs. Morris Co., 7 Kansas, 576). 
 In this way a great majority of the railroads of Kansas have been 
 assisted in construction. Thus indirectly the legislature of the 
 state has defeated the ends of the constitutional limitation. For it 
 was clearly designed that the people of the state should not be 
 burdened with taxation to pay for enterprises which could be con- 
 ducted by private persons. In consequence the local debts and not 
 the state debts of Kansas are burdensome. 
 
 " See Report of State Treasurer, Sept. i, 1898. In response to an 
 inquiry, the State Treasurer, under date of September 25, 1899, 
 states " that the $25,000 that you particularly inquire about being 
 an indebtedness held by individuals or corporations has been paid 
 and that the state owes no money at this time, except what it owes 
 to the Permanent School Fund. The state owes the Permanent 
 School Fund at this time $484,000." 
 
121] Taxation in Kansas 131 
 
 The state debt of Kansas is thus in excellent condition. 
 The rate of interest is reasonable. The amount and dis- 
 tribution of the dates of maturity render the speedy pay- 
 ment of the total debt possible if it is desired, while within 
 a very short time the whole will be in the hands of the 
 school fund commissioners. Thus whatever interest is 
 paid returns directly to the people in the support of the 
 public school system. With the state debt so well disposed 
 of, the state capitol practically finished, the state institutions 
 well established and supplied with buildings, and the re- 
 markable growth of state resources, state taxation in Kan- 
 sas should cease to be onerous. 
 
 The real burden of indebtedness in Kansas is in the form 
 of municipal debts and mortgages on real estate. Muni- 
 cipal indebtedness in 1898 amounted to $30,301,202.' In- 
 deed, so serious has this craze for local improvements be- 
 come that every governor's message to the legislature from 
 1885 to 1 89 1 contains strong words of condemnation and 
 warning on account of the increase.^ No statistics of real 
 estate mortgages later than the federal census of 1890 are 
 obtainable. At that time the aggregate mortgages on 
 Kansas real estate was $243,146,826. Only five states. 
 New York, Pennsylvania, Illinois, Massachusetts and Ohio 
 exceeded this amount. 60.37 per cent, of the taxed area 
 was covered by mortgages. No state exceeded this, Ne- 
 braska and South Dakota coming nearest with 54.73 and 
 51.76 per cent., respectively. The mortgage debt was 
 26.83 P^r cent, of the true value of the real estate. 
 
 A summary of state expenditures and receipts for the 
 year 1897-98 is here appended: 
 
 ' See Report of Auditor, 1898, p. 186. 
 
 * The Governor of the state addressing the legislature, Jan. 16, 
 1889, when the aggregate county, township, city and school indebt- 
 edness was $31,107,646.03, with an average interest of 6 per cent., 
 says: "This means an annual tax of $1,866,458, or a levy equal to 
 five and one-fourth mills on the dollar on the present assessed 
 value of all taxed property in the state. This interest charge alone 
 exceeds the state levy for the year 1888 by $418,140.63." Docu- 
 ments of House, 1887-8, p. 20. 
 
1S3 Studies in State Taxation [132 
 
 Expenditures. 
 
 General Revenue Warrants $1,281,805.81 
 
 State-house Fund Warrants 39,689.55 
 
 Current University Fund Warrants 11,766.06 
 
 Permanent School Fund Warrants 546,522.96 
 
 Annual School Fund Warrants 438,672.31 
 
 University Permanent Fund Warrants 20,150.00 
 
 University Interest Fund Warrants 5,684.92 
 
 Normal School Permanent Fund Warrants.... 25,118.00 
 
 Normal School Interest Fund Warrants 15,250.00 
 
 Agricultural College Permanent Fund War- 
 rants 41,640.55 
 
 U. S. Endowment Warrants 23,000.00 
 
 Agricultural College Interest Warrants 25,616.50 
 
 U. S. Aid State Soldiers' Home 34,211.14 
 
 State Bonds paid , 50,000.00 
 
 State Coupons paid 40,651.90 
 
 Receipts. 
 
 Direct Tax $1,413,695.08 
 
 Insurance Department 29,517.52 
 
 Seed-grain Warrants 7.793-30 
 
 Secretary of State, Fees 2,188.75 
 
 Auditor of State, Fees 942-45 
 
 Bank Commissioner, Fees 6,742.40 
 
 Penitentiary Earnings 48,030.05 
 
 Oil Inspector, Fees 9,384.46 
 
 State Board of Charities 4,579.94 
 
 Grain Inspector 4i.977.8s 
 
 U. S. Aid, State Soldiers' Home 12,450.00 
 
 U. S. Aid, Agricultural College 23,000.00 
 
 Payment of Bonds, Permanent School Fund... 412,815.19 
 
 Payment on Lands, Permanent School Fund. . 85,799.31 
 
 Interest on Permanent School Bonds 315,426.00 
 
 Interest on Land Sales 121,711.68 
 
 Insurance Department 3,862.50 
 
 Payment of Bonds, University Bond 16,330.33 
 
 Payment on School Land, University 2,030.26 
 
 Interest on Bonds, University 7,381.25 
 
 Payment of Bonds, Normal School 15,811.20 
 
 Payment on Lands, Normal School 2,764.85 
 
 Interest on Bonds, Normal School 7,265.95 
 
 Interest on Land, Normal School 7,774-57 
 
 Payment of Bonds, Agricultural College 41,994.25 
 
 Interest on Bonds, Agricultural College 27,259.49 
 
123] Taxatimi in Kansas 133 
 
 Development of Taxation 
 
 The settlement of Kansas was a part of that westward 
 movement which followed the discovery of gold in Cali- 
 fornia. The route of travel to the gold fields of the Pacific 
 lay across this region, then a large Indian reservation. 
 During the year 1849, 30,000 people are estimated to have 
 crossed this district, and in 1850 the number increased to 
 60,000.' This was the beginning of an immense prairie 
 commerce. Up the valleys of the Platte and Arkansas 
 rivers passed an unbroken stream of immigrants and freight 
 wagons. The result was to acquaint the North and South 
 with this long unknown section just at a time when the 
 South was desperately in need of more territory if it were 
 to retain its balance of power in the Senate. The territory 
 included in Kansas had been acquired by the acquisition 
 of Louisiana and by purchase from Texas. After the 
 admission of the state of Missouri that part of the territory 
 of Missouri now in the state of Kansas had no distinct 
 government until 1854,'' while the part of the present state 
 south of the Arkansas river and west of 100° west longi- 
 tude had no organized government of its own after the 
 admission of Texas in 1845. The act of Congress finally 
 passed in 1854 provided for the organization of that portion 
 south of the 40° parallel into Kansas Territory.' This 
 precipitated the contest between the North and the South 
 for the privilege of giving to the new territory the insti- 
 tutions peculiar to each section. 
 
 No attempt can here be made to follow this contest, nor 
 the guerrilla warfare, waged upwards of ten years, which 
 accompanied it. It is sufficient for our purpose to note 
 that out of this struggle Kansas emerged into statehood 
 with all her institutions practically organized. Three un- 
 successful attempts were made before a constitution was 
 finally adopted by the people and accepted by the Federal 
 
 'J. N. Holloway, History of Kansas (1868), p. 93. 
 ^ Poore's Charters and Constitutions, p. 1164. 
 ' Ihid., p. 569. 
 
134 Studies in State Taxation [124 
 
 Government. Indeed the sanction of Congress could not 
 then have been obtained had not the southern members 
 withdrawn. In these instruments can be traced certain 
 definite evidences of the contest of the South and North 
 for control in methods of taxation and finance. 
 
 The Kansas and Nebraska Bill of 1854 limited the legis- 
 lative power of the territory. " No tax shall be imposed 
 upon the property of the United States ; nor shall the lands 
 or other property of non-residents be taxed higher than 
 the land or other property of residents." ^ In addition to 
 this the usual provision was made for the payment of the 
 salaries of territorial officials out of the U. S. Treasury, 
 and the promise was inserted that the customary appropria- 
 tions for the erection of suitable buildings at the seat of 
 government and for the purchase of a library would follow.' 
 The United States Congress in carrying out this promise 
 seems to have had in view a definite policy with respect to 
 territories, and appropriations were made corresponding 
 with those for the territory of Minnesota. Notwithstand- 
 ing the good intention of Congress the tnoney was ex- 
 pended injudiciously by the territory and even the work on 
 a state capital at Pawnee was soon abandoned." 
 
 The first census of Kansas showed a total taxable popu- 
 lation of not far from 3000.* The legislature met for the 
 first time July 2, 1855, at Pawnee, and to this assembly is 
 to be credited the beginning of fiscal legislation. The bulk 
 of the general laws enacted were exact transcripts of the 
 Missouri code. Provision was made for the exemption 
 from taxation of all widows and minor orphans, possessing 
 
 ' Poore's Charters and Constitutions, p. 576. 
 
 ' Ibid., p. 579. 
 
 ' A contemporary record for Nov. 7, 1855, states " Owen C. 
 Stewart is discharged as Superintendent of the Capitol. The $50,- 
 000 appropriated by Congress had been expended but the walls of 
 the building had been abandoned only a few feet above the founda- 
 tion." (Annals of Kansas, p. iii.) 
 
 ' The census of i8ss, made by order of the Governor, gave a 
 total population of 8601, with 2905 voters. Census completed Feb. 
 28, 1855. (Kansas Report in Doc. of H. of Rep. 1856.) 
 
135] Taxation in Kansas 135 
 
 property worth not more than $1000.' The payment of 
 a tax was made a qualification for voting, the act stipulat- 
 ing that " Every free white male citizen of the U. S. and 
 every free Indian who is made a citizen by treaty or other- 
 wise, and over the age of twenty-one years, and who shall 
 be an inhabitant of the Territory, and of the county and 
 district in which he offers to vote, and shall have paid a 
 Territorial tax, shall be a qualified elector for all elective 
 offices." ' The spirit of this law was practically evaded. 
 Any man of proper age who was in the territory on the 
 day of the election, and who had paid one dollar as a tax 
 to the sheriff, who was required to be at the polls to re- 
 ceive it, could vote as an inhabitant," although he had break- 
 fasted in Missouri and intended to return there for supper.* 
 Manifestly as a source of revenue this measure was of no 
 importance, and it is only in its political significance that 
 it is worthy of record. At the election of October i, 1855, 
 for delegate to Congress where citizens of Missouri voted in 
 great numbers, there is evidence that many of them failed 
 to pay the dollar tax required." Everywhere the tax was 
 unsatisfactory in operation. In many cases it was the 
 cause of grievous complaint and later it even led to organ- 
 ized military preparations to prevent its collection alto- 
 gether.' 
 
 The revenue law of 1855 provided for a levy on real and 
 personal property to the amount of % per cent, of the as- 
 sessed value, and for a poll tax of 50 cents upon all persons 
 between the ages of 21 and 55 years.' At this time the 
 assessment was made by a county assessor appointed by 
 
 ' Statutes of Kansas Territory, 1855, p. 658. 
 
 ' Act passed Aug. 29, 1855; repealed Feb. 20, 1857. Code of 1856, 
 p. 322. 
 
 ' Code of 1856, p. 33. 
 
 * Kansas AfTairs, 1856, Documents House of Rep. No. 200, p. 44. 
 
 ' At Baptiste Paola, Lykins county, some Indians voted, the 
 whites paying the dollar tax for them. Ibid., p. 45. 
 
 'See letter of Gov. Walker to Sec. Cass, Aug. 19, 1857; found 
 in Kansas Historical Collections, Vol. V, p. 376. 
 
 ' Laws of i8ss, Sec. I, Art. II, Ch. 137, p. 658. 
 
126 Studies in State Taxation [126 
 
 the county court for a term of one year/ The sheriff was 
 ex officio collector within each county of all revenue, and 
 paid over the proceeds to the county treasurer/ Then as 
 now the county court constituted a board of equalization to 
 hear and determine finally all appeals and to correct and 
 adjust the tax book accordingly/ But at this time condi- 
 tions did not require the raising of much revenue, nor 
 could any considerable amount have been raised if it had 
 been required/ 
 
 While the first two sessions of the territorial legislature 
 were busily trying to organize a territorial government 
 modeled after the southern states and particularly after the 
 near neighbor Missouri, the anti-slavery party was attempt- 
 ing to frame a constitution at Topeka and to secure its 
 ratification. This constitution which failed to be accepted 
 by the United States was a strong anti-slavery document, 
 and declared against the policy of limiting electors to tax- 
 payers/ An examination of its fiscal provisions shows 
 that the political leaders in the West had profited by the 
 experience of the older states, for the state is forbidden to 
 give or loan its credit to any individual, association or cor- 
 poration, or to contract a debt for extraordinary expendi- 
 tures exceeding one hundred thousand dollars unless au- 
 
 ' Statutes of Kansas Territory, 1855, p. 659. 
 
 ' Statutes of 1855, pp. 665, 670. 
 
 ' Statutes of Kansas Territory, 1855, p. 664. 
 
 * " Levying public taxes at this time at least to any considerable 
 extent, before our people have secured title to their lands, or 
 realized their products, vjfould be undesirable, unless absolutely 
 necessary." Extract from Gov. Reader's Message to Ter. Leg., 
 July 31, 1855; in Pub. Kan. St. Hist. Soc, Vol. V, p. 195. 
 
 " Desolation and ruin reigned on every hand; homes and firesides 
 were deserted; the smoke of burning dwellings darkened the atmos- 
 phere; women and children, drawn from their habitations, wan- 
 dered over the prairies and among the woodlands, or sought refuge 
 and protection even among the Indian tribes." (Gov. Geary in 
 Senate Doc. 1st Sess. Thirty-fifth Cong., No. "17, p. 200.) 
 
 ° " The payment of a tax shall not be a qualification for exercising 
 the right of suffrage." Sec. 19, Const. 1855; Poore's Charters and 
 Constitutions, p. 580. 
 
127] Taxation in Kansas 137 
 
 thorized by a direct vote of the people.' The exemption 
 list included personal property to an amount not exceed- 
 ing one hundred dollars for each head of a family. In other 
 particulars the list did not vary greatly from the present 
 exemption law. The instrument also affords striking evi- 
 dence of the reaction against the loose commonwealth bank- 
 ing laws of the preceding period. One clause went so far as 
 to declare that " every bank or banking company shall be 
 required to cease all banking operations within twenty years 
 from the time of its organization and promptly thereafter 
 to close its business.'" An issue of script to the amount of 
 $15,265.90 to provide for general expenses was also author- 
 ized by this first free state legislature (" Topeka Legisla- 
 ture "). This legislature was never recognized by the Fed- 
 eral government; its laws were inoperative and the script 
 was never paid.' 
 
 In 1857 another attempt was made to form a constitution 
 acceptable to Congress, and this tirlie the pro-slavery party 
 was responsible.* By this constitution the state debt that 
 could be contracted for extraordinary expenditures was 
 limited to $50,000. The legislature was vested with power 
 to levy an income tax, and to tax all persons pursuing any 
 occupation, trade, or profession. This was undoubtedly 
 due to the influence of the settlers from the southern sea- 
 board and indicates how during these years not only slavery 
 but the whole fiscal as well as political system of Kansas 
 was in the balance. In another clause* provision was made 
 that, " The legislature shall levy a tax on all railroad in- 
 comes, proceeding from gifts of public lands, at the rate 
 
 ^ Poore's Charters and Constitutions, p. 589. 
 
 ^ See Art. XVII, Sec. 7, Constitution of 1855; in Poore's Charters 
 and Constitutions, p. 589. 
 
 ° See Annals of Kansas, p. 70. 
 
 * The attitude of the new constitution upon the slavery question 
 was expressed in the clause in the Bill of Rights reading, " Free 
 negroes shall not be permitted to live in this state under any cir- 
 cumstances." (Poore's Charters and Constitutions, p. 610; Const. 
 1857, Bill of Rights, cl. 23.) 
 
 " Art. X, Sec. 6, Poore's Charters and Constitutions, p. 607. 
 
138 Studies in State Taxation [128 
 
 of ten cents on the one hundred dollars." The state gov- 
 ernment was pledged to carry on improvements in relation 
 to road, canals, and navigable rivers at public expense to 
 whatever practicable extent the development of the country 
 might demand.' For the assessment of real property the 
 legislature was required to classify the lands of the state 
 into three distinct classes, to be styled respectively, class 
 one, two, three; and land in each of these classes was to 
 have a fixed monetary value upon which there was to be 
 assessed an ad valorem tax." A capitation tax upon all 
 able-bodied men from 21 to 60 years was imposed," and a 
 single state bank of discount and issue with not more than 
 two branches was to be incorporated if the majority of the 
 electors were favorable.' 
 
 The third attempt to form a constitution was made in 
 1858. All the influence of the older southern states so 
 conspicuous in the previous attempt of the pro-slavery 
 party was entirely absent from this instrument. The limit 
 of the state debt for extraordinary purposes was therein 
 fixed at $100,000,° and the state was forbidden to contract 
 any debt for purposes of internal improvements." The in- 
 strument even went so far as to declare, " the levying of 
 taxes by the poll is grievous and oppressive, therefore the 
 general assembly shall never levy poll tax for county or 
 state purposes," and this in opposition to the pro-slavery 
 party poll tax system as then levied.' 
 
 In the next year, 1859, was framed the constitution fin- 
 ally accepted by Congress and ratified by the people. This 
 was the anti-slavery constitution of Wyandotte. Examina- 
 tion of its financial provisions will be deferred to the con- 
 
 * Constitution of 1857, Art. X, Sec. 6, Poore's Charters and Con- 
 stitutions, p. 607. 
 
 ° Constitution of 1857, Art. X, Sec. 4; ibid., p. 607. 
 ° Constitution of 1857, Sec. S, Art. X; ibid., p. 607. 
 
 * Constitution of 1857, Sec. S, Art. X; ibid., p. 607. 
 "Constitution of 1858, Art. X, Sec. 3; ibid., p. 623. 
 'Constitution of 1858, Art. XI, Sec. S; ibid., p. 623. 
 'Constitution of 1858, Sec. I, Art. XI; ibid., p. 623. 
 
129] Taxation in Kansas 139 
 
 sideration of existing tax methods in Kansas. It should 
 be noted at this point, however, that northern and western 
 influences prevailed here as they have since done, and so far 
 as its fiscal system is concerned Kansas was made a north- 
 ern and not a southern state.^ 
 
 The early reliance upon the general property tax was 
 continued during the territorial period. In 1858 the legis- 
 lature imposed a general property levy of 3 mills on the 
 dollar and a capitation tax of $1.00.'' This law exempted 
 personal property to the amount of $200,° and permitted 
 the deduction of all debts from taxable property. Two 
 years later the capitation tax was reduced to 50 cents upon 
 every white male over 21 years of age.* In 1858 the old 
 law making the sheriff the collector of taxes was repealed 
 and the town and township treasurers became the collectors 
 of all taxes, local and territorial. At the same session of 
 the legislature the county assessor appointed by the county 
 court was replaced by township assessors elected for a term 
 of one year.° This system of assessment only continued 
 two years when a county assessor elected annually at the 
 November election was created. Deputy assessors, author- 
 ized by the county commissioners, were appointed by the 
 county assessors." An additional tax exemption to the 
 amount of $500 was accorded by the same revenue laws to 
 the property of all widows.' 
 
 ' The constitution of Kansas was modeled after that of Ohio. 
 This fact is undoubtedly explained by the composition of the 
 Wyandotte convention. The distribution of the members was as 
 follows: Pennsylvania 6, Massachusetts 2, Ohio 14, Kentucky 5,, 
 Ireland i, Maine 2, New York 4, Germany i, Indiana 6, Virginia I, 
 New Hampshire 3, Vermont 4, England i and Scotland i. Thus 
 Ohio had by far the largest representation, in addition to the fact 
 that the chairman of the committee on finance and taxation was an 
 Ohio lawyer. 
 
 " The Constitution of Ohio is adopted as a model or basis of 
 action, receiving 25 votes to 23 for Indiana and one for Kentucky." 
 Proceedings of Const. Convention, in Annals of Kansas (1859). 
 
 ' Laws of the Territory of Kansas, 1858, p. 344. 
 
 'Ibid., p. 350. 'Ibid., 1858, p. 388. 'Ibid., p. 114. 
 
 * Ibid., i860, p. 176. " Ibid., i860, p. 65. 
 
130 Studies in State Taxation [130 
 
 As early as 1858 the attempt was made to equalize the 
 territorial taxes among the various counties by a regularly 
 constituted board. This territorial board of equalization 
 was composed of the secretary of state, the treasurer and 
 the auditor. Then, as later, the board could equalize but 
 not reduce the aggregate amount.^ This board has re- 
 mained unchanged in composition and duties throughout 
 the years that have followed. The law was reenacted in 
 iSfo,"" and in 1861 the body was made a state board.* 
 
 The trend of territorial legislation was thus towards the 
 development of the general property tax as the main source 
 of revenue. Kansas was entirely dependent upon agricul- 
 tural and grazing interests and consequently could look no 
 where else for public revenue. The capitation tax never 
 formed an important source of income. A statement of 
 the state taxes for the year 1861 will illustrate the relative 
 amount of state income from the two taxes at the beginning 
 of the statehood period: 
 
 Total valuation $24,737,563.09 
 
 Capitation tax 4,iiS-7S 
 
 General property tax 74,233.53 
 
 Total tax receipts $78,328.28 
 
 It will be seen that 95 per cent, of the tax income was 
 derived from the general property tax. At that time the 
 levy was 4 mills on the dollar and the proceeds of the capi- 
 tation tax formed the highest amount paid during any one 
 year. 
 
 Prior to 1861 domestic feuds made possible the escape of 
 large numbers of persons from taxation.* The capitation 
 tax was especially odious to the opponents of the anti- 
 slavery government, and on the other hand the free state 
 
 ' Ibid., 1858, p. 379. ' Ibid., i860, p. 218. 
 
 'Ibid., 1st Session, p. 156. 
 
 * " Yesterday resolutions were adopted by a public meeting at 
 Lawrence to resist the assessment for a territorial tax." Letter of 
 Gov. Walker to Secretary of State Cass, Lecompton, June 2, 1857, 
 in Kansas State Historical Collections, Vol. V, 326. 
 
131] ' Taxation in Kansas 131 
 
 men never paid a cent of the territorial tax levied by the 
 bogus legislators of 1855. The tax then imposed remained 
 charged against the various counties, with interest accumu- 
 lating until the legislature of 1867 canceled it. During the 
 entire period, the treasury suffered from the unstable con- 
 dition of the state government. Several of the counties; 
 contended that the county board of supervisors had the- 
 power to remit the territorial taxes on account of illegal 
 assessments, without supplying the deficit thus created. 
 One county authorized the county treasurer to withhold 
 two hundred dollars of the territorial taxes then in his 
 hands to be refunded to such persons as had paid a 
 double tax. Another county relinquished the territorial tax 
 on account of irregular assessments. Neither of these 
 counties took steps to supply the deficits thus occasioned.' 
 The inauguration of the state government may thus be 
 said to have taken place at a time most inauspicious for 
 the establishment of public credit. The people of the terri- 
 tory had been impoverished by the misfortunes of a bitter 
 
 ' This refusal of counties to furnish their quota of the tax con- 
 tinued to be a source of great financial embarrassment to the 
 officials until well down into the state period. A statement of ter- 
 ritorial finances from 1856 to 1861 is here presented: 
 
 To amount revenue paid into Treasury in 1856 $ 1,811.38 
 
 " " " " 1857.... 3,383-09 
 
 " " " " " 1858 681.12 
 
 " " " " 1859. ■ . • 26,544.06 
 
 " " " " i860.... 3,197-53 
 
 By amount warrants, 1856 $ 5,211.48 
 
 1857 11,604.47 
 
 1858 4,502.93 
 
 " " " 1859 64,400.26 
 
 i860 41,234.14 
 
 Outstanding warrants, 1861 89,344.80 
 
 During 1861 this last aggregate was diminished to $87,390.84 
 (Auditor's Report of 1861). The large increase in the expenditure 
 for 1859 is accounted for by the fact that the account of the legis- 
 lature for 1858, the Leavenworth Constitutional Convention in 1859, 
 the cost of the Board of Commissioners to investigate frauds in 
 1857 and 1858, and sundry other accounts of 1858 were all audited 
 during the year 1859. 
 
132 Studies in State Taxation [132 
 
 civil strife, by financial panic, and by threatened famine. 
 In addition, the country was in the throes of a great 
 national revolution and public confidence was shaken/ 
 
 The laws relating to assessment and taxation were 
 revised under the state government in 1861, in 1866, in 
 1876, and in 1897. As the expenditures of the state in- 
 creased and its resources became more varied, attempts 
 were made to render the yield of the general property tax 
 adequate and at the same time to subject all lines of indus- 
 try to an equitable burden of taxation. Taxation in Kansas 
 during these years reflects conditions which have prevailed 
 and still do prevail in the average western state. Lack of 
 variety in sources of revenue throws the burden on those 
 portions of the state most affected by varying economic 
 conditions, and upon the score of instabiUty, least able to 
 bear it. The history of taxation in Kansas is, then, practi- 
 cally the history of the working of the general property tax 
 in a western state. In so far as a study in methods of 
 commonwealth taxation is concerned, the data of 1898 pos- 
 sess as much value as those of 1862. In the gradual 
 changes in the methods of assessing the general property 
 tax and in recent attempts to adjust itself to new economic 
 conditions, Kansas seems to be typical of the ordinary 
 western state. There has been a gradual unconscious evo- 
 lution. 
 
 'These facts are graphically described by a contemporary author- 
 ity (Auditor's Report, January, 1862, Topeka, 1862): 
 
 " Inheriting the eflfects of a territorial government, practically 
 destitute of both a treasury and a financial system, and which had 
 signalized its dissolution by stamping upon its credit the ineflEaceable 
 stigma of repudiation, the new state was not only without funds 
 for the payment of current expenses, but found itself excluded from 
 those money markets which are the ordinary resources of needy 
 governments. Notwithstanding the rebellion, which cause draws so 
 largely from the ranks of our producing classes, necessitating a 
 considerable decrease in the area of cultivated lands, and effectually 
 putting an end to improvements generally; the drought of i860 — 
 from the eflfects of which the state yet suffers in reputation to some 
 extent — she has been steadily increasing in wealth, and her revenue 
 has had an average yearly increase of 30 per cent." 
 
133] Taxation in Kansas 133 
 
 The capitation tax was abandoned in 1863. The last 
 levy of this occurred in the revenue act of 1862 where a tax 
 of 50 cents on all male persons between 21 and 50 years of 
 age was imposed. Throughout the early history of Kansas 
 there was no fixed policy as to the method of selecting the 
 assessing officer. It has been stated that the assessment 
 was made under the territorial government by a county 
 assessor appointed by the county tribunal, until 1858 when 
 for two ; rs a township assessor elected annually was 
 tried, onft 1 .0 be superseded in i860 by a county assessor 
 elected sf ually. This continued until the legislature of 
 1869 abolished the office of county assesssor and made the 
 township trustee also the township assessor.' Cities of the 
 first and second class elected annually a city assessor. In 
 1868 the township trustee had been required to list and 
 value the personal property of his township but the real 
 estate was still listed by the county assessor.^ This act also 
 provided for the annual election of a city assessor to list and 
 value personalty. In the laws of 1876 the assessor in cities 
 of the first and second class was made an appointive officer 
 of the mayor and council with a term of one year." The 
 special session of 1899 made the city assessor in cities of 
 the second class an elective officer for a term of one year.* 
 Thus it appears that the short term has characterized this 
 office throughout the entire period. 
 
 It can hardly be said that the institution of a county 
 assessor has had a fair trial in Kansas. As an appointive 
 office, the term was too short and at the time when this 
 method was used there was a total lack of system in all 
 fiscal matters. Little less than anarchy prevailed through- 
 out the entire time. An elective county assessor was only 
 tried two years and a term of one year was entirely un- 
 satisfactory. 
 
 * Laws of Kansas, 1869, p. iii. 
 
 ' General Statutes, 1868, p. 1036. 
 ' Session Laws, 1876, Art. VIII. 
 
 * Laws of Special Session, 1898-9, p. 23. 
 
134 Studies in State Taxation [134 
 
 Early in the period of statehood the rapid development 
 of the railroads of the state with their enormous landed 
 wealth led to dissatisfaction with the method of assessing 
 such property by local authorities. In 1869 was taken the 
 first step towards independent assessment by the appoint- 
 ment of a board of appraisers and assessors for each rail- 
 road.^ Where a railroad was located entirely within the 
 limits of one county the county commissioners constituted 
 the board. Where two or more counties were concerned, 
 the board was made up of the county clerks of the counties 
 along the line. The boards apportioned the assessed value 
 of the road among the several counties in proportion to 
 the mileage located in each. Appeal from the assessments 
 of the board might be taken to the supreme court of the 
 state. Finally, the state board of equalization had the 
 same power over the assessments of these local boards as 
 over ordinary property assessments, and where the supreme 
 court ordered changes it became the duty of the state 
 board to reapportion the railroad assessments among the 
 counties. Two years later a new railroad assessment law 
 was passed. A state board of railroad assessors was there- 
 in created, consisting of one member from each judicial dis- 
 trict elected by the people for a term of two years. As 
 there were then twelve districts the number of members of 
 this board was twelve.^ But as early as 1874 this law was 
 repealed and railroad property was assessed again by the 
 township assessors ;° the assessment was, however, equal- 
 ized by the state board of equalization. The present state 
 board of railroad assessors, composed of the lieutenant 
 governor, secretary of state, treasurer and attorney general, 
 was created in 1876." The same tendency has recently ap- 
 peared in the assessment of telegraph and telephone com- 
 panies. Until 1897 they were assessed by the same author- 
 
 '- Laws of Kansas, 1869, p. 244. 
 
 ' Ibid., 1871, p. 329. 
 
 ^ Ibid., 1874, p. 149. 
 
 ■* Session Laws of 1876, p. 53. 
 
135] Taxation in Kansas 135 
 
 \ 
 
 ities as other property, but at that time a special board of 
 assessors was created for this purpose. 
 
 The attempt was made in 1872 to permit the taxpayer 
 listing his personal property to deduct his debts from his 
 total credits.' This law only remained in force four years. 
 It was probably a conscientious attempt to tax only what 
 was actually owned. But quite a dififerent spirit led in the 
 next year (1873), to the exemption of mortgages and other 
 securities from taxation. The title of the acts asserts its 
 purpose to be : " to promote the improvement of real estate 
 by exempting mortgages and other securities from taxa- 
 tion."^ The repeal of the act of the legislature at its next 
 session is probably sufficient commentary on the attitude 
 of the people of Kansas upon the exemption of mortgages. 
 
 The history of the direct state tax for public schools is 
 brief. In 1861 the original act permitting the legislature 
 to levy an annual tax of one mill upon the dollar for the 
 benefit of the common schools was passed." This tax was 
 collected in the same manner as other state taxes, and con- 
 tinued to be levied until the repeal of the law in 1879.'' 
 
 The first step in the taxation of insurance companies 
 occurred as early as 1863, and was indeed the beginning of 
 the slow process of differentiation in state taxation. The 
 act of 1863,' however, was not an attempt to derive revenue 
 but rather to protect the citizens of Kansas against wild-cat 
 insurance companies and to regulate those companies or- 
 ganized under Kansas laws. This act permitted the secre- 
 tary of state to collect the following fees: $5.00 for filing 
 the initial record and the same amount for the annual state- 
 ment, and $2.00 for every certificate of agency. The county 
 clerk was permitted to collect 50 cents for every paper 
 filed. This only affected those companies organized tinder 
 
 ^ Laws of Kansas, 1872, p. 104. 
 ' Ibid., 1873, " Act exempting mortgages.'' 
 'Ibid., 1861, p. 27. 
 
 * Ibid., 1879, p. 270. It yielded in 1878 to the common school 
 fund $144,930.27. (Documents of Kansas, 1879, p. 126.) 
 " Laws of Kansas, 1863, p. 59. 
 
136 Studies in State Taxation [136 
 
 state laws. Since then changes have been made, as the 
 imposition of a tax for the benefit of fire-departments, addi- 
 tional license fees, reciprocal fees, and a rate upon pre- 
 miums of foreign companies. But it was not until the 
 special session of 1898-9 ^ that a definite state charge beyond 
 that required for the support of the insurance department 
 became the deliberate policy of the legislature. The exam- 
 ination of this law is deferred to the study of the corporation 
 tax as it exists in Kansas. 
 
 From this brief historical survey of tax legislation in 
 Kansas it will appear that while some progress towards 
 more varied sources of revenue has been "made, yet the 
 movement has been slow. There has been a gradual diiier- 
 entiation in assessment. Railroad companies first secured 
 the privileges of separate assessment and recently telegraph 
 and telephone companies have followed. The direct state 
 tax upon insurance companies will probably be the opening 
 wedge for a wider corporation tax. In the practical work- 
 ing of the general property tax it is hard to see any definite 
 advance. In the method of choosing assessors the only 
 conclusion possible is that the earlier methods have not 
 been improved. One cannot help but believe that a state 
 board of equalization composed of representatives chosen 
 from judicial districts was better than a board made up of 
 state officials with their hands already full of routine execu- 
 tive business. However, the present number of judicial 
 districts (35) would make such a board unwieldy. If there 
 is to be a state board, it would probably be well to substitute 
 Congressional districts as the basis of representation. After 
 all, considerable experience has been gained by the state, 
 and a careful study of past measures and actual experiences 
 should precede any attempt to formulate further improve- 
 ment in tax methods. 
 
 There is probably no factor in the development of Kansas 
 more interesting from a fiscal standpoint than the dispo- 
 
 ' Laws of Special Session, 1899, p. 72. 
 
137] Taxation in Kansas 137 
 
 sition of public lands and the aid which has been given to 
 railroads. By acts of Congress the state received for public 
 purposes 1,459,840 acres of land. Of this amount it is 
 estimated 800,292 acres came from the sixteenth and thirty- 
 sixth sections given to the common schools of the state; 
 46,080 acres from the seventy-two sections given to the 
 state University; 6400 acres from the ten sections devoted 
 to public buildings ; 46,080 acres from the six sections adja- 
 cent to twelve salt springs. The act of Congress of Sep- 
 tember 4, 1841, gave to the state 500,000 acres and the act 
 of February 26, 1859, 60,988 acres.' In addition to these 
 grants the state was to receive five per cent, of the proceeds 
 accruing from the sale of public lands. An act of the state 
 legislature in 1868 directed that this amount be paid into the 
 state treasury to the credit of the school fund.'' I have 
 been unable to ascertain the total amount of this fund, but 
 the claim of the state, granted by Congress, estimated it 
 for the years from 1851 to 1877 as $190,566.08. In striking 
 contrast with what has actually been done in the way of 
 state aid to the common schools by public land grants is 
 the intent of the constitution drawn in 1857. Here it was 
 proposed to set aside for the support of the common schools 
 sections 8, 16, 24 and 36. In addition to this there was to 
 be assigned for the same purpose three-fifths of the five 
 per cent, of the proceeds from the sale of public lands. 
 
 Aid to railroads in Kansas has been given by the federal 
 and state government in the shape of land grants and by the 
 various counties, townships and cities in the form of bond 
 subscriptions or outright bonuses. About 80 per cent, of 
 all county, township and city bonds have been issued in 
 aid of railroad construction.' To such an extent has this 
 practice been carried that the legislature of 1887 enacted a 
 law reducing the limit of such aid from four thousand 
 to two thousand dollars per mile. But the craze was at its 
 
 ^ State Documents, Jan. 14, 1862; Annals of Kansas, p. 266. 
 
 ' Statutes of Kansas, 1868, p. 972. 
 
 ° Governor's Message, 1891, in Documents of Kansas, 1889-90, p. 9. 
 
138 Studies in State Taxation [138 
 
 height and this legislation does not seem to have sufficed. 
 The governor in his message to the legislature in 1889 
 urged stringent limitations and restrictions upon this form 
 of aid, indeed going so far as to ask that all authority to 
 issue bonds be revoked, except in the case of counties 
 having no railway lines within their limits.^ While this 
 local aid to railroads undoubtedly hastened the growth of 
 the state, it also resulted in feverish development, over- 
 speculation and final collapse in many places. Many rail- 
 roads were built where they were not demanded, and it is 
 the common conviction of residents of Kansas that all the 
 roads that were actually needed would have been built 
 without this aid." 
 
 To a considerably less extent the state has been a party 
 to the policy of public aid to railroad systems. The ques- 
 tion of the relation of the state to railroad construction was 
 brought before the people during the territorial period. 
 One governor recommended a liberal grant of state lands 
 and a reservation of seven per cent, of their gross annual 
 
 ' Governor's Message, 1889, p. 10, Documents of Kansas, 1887-88. 
 
 " The federal government was in tfie midst of its railroad aid 
 policy when Kansas was admitted to the union, and a statement of 
 the federal grants to Kansas railroads is here appended: 
 
 Date of Law. NameofKoad. '^"'"inlcS's'.'"^* 
 
 Mch. 3, 1863. Leavenworth, Lawrence & Galveston 800,000 
 
 July I, 1864. Atchison. Topeka & Santa Fe 3,000,000 
 
 July I, 1864. Union Pacific — So. Branch 500,000 
 
 July 23, 1866. St. Joseph & Denver City 1,700,000 
 
 July 25, 1866. Kansas & Neosho Valley, now known as 
 
 Missouri River, Ft. Scott & Gulf R. R. 2,3So;ooo 
 July 26, 1866. South. Branch Union Pacific, now Mis- 
 souri, Kansas & Texas R. R 1,520,000 
 
 T , ' oc ' Central Branch — Union Pacific 245,166 
 
 July 2, 1864. ^^' 
 
 July I, 1862, j^^j^ggg 72.cihz 6,000,000 
 
 July 2, 1864. 
 
 See Annals of Kansas, p. 628. 
 
139] Taxation in Kansas 139 
 
 receipts. This was suggested by the Illinois method.' 
 Another advocated a great state railroad to run to the Gulf.^ 
 But as a matter of fact the state government has never 
 given more than the 500,000 acres granted by the federal 
 government in the act of 1841.* At one time the state 
 senate had under consideration a bill which proposed a 
 five-million state railroad debt," but fortunately this measure 
 was defeated. 
 
 State and Local Taxation 
 
 State and local sources of revenue are so interwoven in 
 Kansas that it is difficult to consider either apart from the 
 other, while the results of such a consideration would in 
 any event seem incomplete. There is not that variety 
 found in many of the older states, making possible the use 
 of distinct taxes for state and for local purposes. For the 
 most part the state tax is collected through the same chan- 
 nels and has the same origin as the local tax. The pro- 
 portion required for state purposes is comparatively light," 
 
 * " Now if Kansas, like the state of Illinois, in granting hereafter 
 these lands to companies to build these (rail) roads should preserve, 
 at least 7 per cent, of their gross annual receipts, it is quite certain 
 that, so soon as these roads are constructed, such will be the large 
 payments into the treasury of our state, that there will be no neces- 
 sity to impose in Kansas any state tax whatever, especially if the 
 constitution should contain wise provision against the creation of 
 state debts." Gov. Walker's Inaugural, May 27, 1857, in Kansas 
 State Hist. Collections, Vol. V, p. 330. 
 
 ' Gov. Geary's Message, January 12, 1857, in Annals of Kansas, 
 p. 113. 
 
 ' Annals of Kansas, p. 437. 
 
 * Annals of Kansas, p. 458; State Senate Documents, Feb. 23, 1867. 
 ° Statement showing proportion of state and local taxes levied in 
 
 1897 (Report of Auditor, 1898, p. 226) : 
 
 State tax $1,358,417.64 
 
 County tax 3,784,088.12 
 
 City tax 1,948,564.53 
 
 Township tax 1,493,969.16 
 
 School district tax 4,008,411.33 
 
 Total levy $12,593,540.78 
 
 The amount levied on railroad property in 1897 2,119,875.38 
 
140 Studies in State Taxation [140 
 
 forming about one-ninth part of the whole amount of taxes 
 collected.' In the following pages attention will be cen- 
 tered upon state taxation. Consideration will be given to 
 other forms of state revenue and to local finances to the 
 degree made necessary by clearness of statement and com- 
 prehensiveness of grasp. 
 
 General Property Tax 
 
 This tax, as has already been noted, has been almost the 
 sole source of the state's compulsory revenue since the 
 organization of Kansas in 1854. The method of assess- 
 ment has been modified to suit varying conditions; but the 
 changes have been in detail and not in principle. The 
 auditor's report for the first year of statehood, 1861, esti- 
 mated the yield of the general property tax to be about 94 
 per cent, of the total proceeds from taxation. A compari- 
 son of the proportion in the years that have elapsed since 
 1861, shows that this ratio has changed little. Thus during 
 the fiscal year of 1898 $1,413,695.08 was collected from the 
 general property tax, while the total income from taxation 
 was $1,505,646.87. That is, the general property tax yielded 
 93 per cent, of the whole revenue from taxation. 
 
 Levy. The amount and the rate of the tax for state pur- 
 poses are determined by the state legislature. At each 
 regular session this body passes a revenue act for the two 
 succeeding years. By this act such a rate, expressed in 
 number of mills on the dollar, as will yield the amount ap- 
 propriated for the various state needs, is fixed as the levy 
 for each of the two following years. As the act is passed 
 before the assessment for the current year is completed, the 
 rate is based on the assessment of the preceding year.' The 
 
 ' Cf. estimate of Gov. Humphrey in Message of January 16, 1889 
 (Documents of Kansas, 1887-8, p. 21). 
 
 ' It would be better for the legislature to merely fix the aggregate 
 amount to be raised by taxation for state purposes, leaving the rate 
 to be determined by the state board of equalization. The rate 
 could then be based upon the assessment of the current year. Cf. 
 Governor's Message, January 9, 1895, p. 7, in Documents of Kansas, 
 1893-94; also Treasurer's Report of same date. 
 
141] Taxation in Kansas 141 
 
 state levy has remained about the same for a number of 
 years, faihng indeed to vary with the change in property 
 valuation, or with the increase in state expenditures. 
 
 Fund System. The tax rate for each year is made up of 
 several levies. The fund system is in force; but the number 
 of funds has been gradually reduced until now there are 
 only two in receipt of income from taxation. These are the 
 general revenue fund and the interest fund. Prior to 1897 
 there was a special levy at each biennial session and a cor- 
 responding fund known as the " Current University Fund " 
 to provide for the expenses of the State University. Now 
 appropriations for the University are taken out of the gen- 
 eral revenue fund. There is still a statehouse fund, and 
 also a sinking fund. The last levy, however, for the state- 
 house fund was made in 1896 and the only receipts now 
 accruing thereto are taxes in arrears. A separate levy for 
 the sinking fund has not been made for several years, and 
 only unpaid taxes upon past levies now accrue thereto.'' 
 
 The tax levies for the three fiscal years ending June 30, 
 1900, have been as follows:' 
 
 1895 and 1896: general revenue fund, 2ri mills; inter- 
 
 ' The legislature of 1899 made a levy of j4 mill on the dollar for 
 the completion of the state house. This is for the years 1899 and 
 1900, and the fund is only temporary. See Session Laws, 1899, p. 
 433- 
 
 ' Aside from the regular funds for which taxes are levied, there 
 are several special funds still in existence kept open because of 
 back taxes still accruing to them or because the legislature has not 
 provided for their transfer. In some cases these funds have sources 
 of income other than general property taxation, thus the insurance 
 fund arises from a direct tax upon insurance companies. In the 
 Treasurer's Report for June 30, 1898, p. 12, there are a total of 
 twenty-six funds given as follows: General Revenue, State-house, 
 Sinking, Interest, Current University, Militia, Veterinary, Perma- 
 nent school. Annual school. University permanent. University in- 
 terest. Normal permanent. Normal interest. Agricultural college per- 
 manent. Agricultural college interest. Insurance, Library, Stormont 
 library permanent, Stormont library interest, Seed-grain account, 
 United States aid to soldiers' home. United States endowment ag- 
 ricultural college. State grain inspector, fiscal agency interest ac- 
 count. Court Stenographer's fees, and Municipal interest. 
 
143 Studies in State Taxation [143 
 
 est fund, ^ mill; current University, ^ mill; statehouse, 
 ^ mill; total state levy, 4^^ mills. 
 
 1897 and 1898: general revenue fund, 4 mills; interest 
 fund, ^ mill; total state levy, 4iV mills. 
 
 1899 and 1900: general revenue fund, 5 mills; interest 
 fund, J4 mill; statehouse, J4 niill; total, 5i% mills. 
 
 The aggregate state levy for a term of years is shown in 
 the following table: 
 
 1861 4 mills. 1881 
 
 1862 8 " 1882 
 
 1863 7 " 1883 
 
 1864 7 " 1884 
 
 186s 7 " 188s 
 
 1866 6 " 1886 
 
 1867 6 " 1887 
 
 1868 654 " 1888 
 
 1869 10 " 1889 , 
 
 1870 8U " 1890 
 
 1871 6 " 1891 , 
 
 1872 854 " 1892 
 
 1873 6 " 1893 
 
 1874 6 " 1894 
 
 187s 6 " 189s 
 
 1876 s'A " 1896 
 
 1877 554 " 1897 
 
 1878 s'A " 1898 
 
 1879 5'/^ " 1899 
 
 1880 SJ4 " 1900 
 
 .S I 
 
 nil 
 
 4'/2 
 
 " 
 
 4A 
 
 *' 
 
 4^ 
 
 (( 
 
 4^% 
 
 it 
 
 4tV 
 
 '* 
 
 4t^ 
 
 K 
 
 41^ 
 
 (1 
 
 4t% 
 
 (( 
 
 4'/4 
 
 [( 
 
 SU 
 
 " 
 
 3A 
 
 tt 
 
 3 A 
 
 it 
 
 sA 
 
 U 
 
 4Va 
 
 tt 
 
 454 
 
 tt 
 
 4tV 
 
 it 
 
 4tV 
 
 tt 
 
 SV^ 
 
 
 554 
 
 " 
 
 Taxable Property and Exemptions. Unless expressly ex- 
 empted all property, real and personal, is subject to taxa- 
 tion. Real property includes not only land, but all build- 
 ings, fixtures, improvements,- mines, quarries, mineral 
 springs and wells. Personal property includes " every tan- 
 gible thing which is the subject of ownership, not forming 
 part or parcel of real property; also all. tax-sale certificates, 
 judgments, notes, bonds, and mortgages, and all evidences 
 of debt secured by lien on real estate; also the capital stock, 
 undivided profits, and all other assets of every company, 
 incorporated or unincorporated and every share or interest 
 in such stock, profit, or assets — also all property owned, 
 leased, used, occupied or employed by any railway or tele- 
 
143] Taxation in Kansas 143 
 
 graph company or corporation in this state situated on 
 the right-of-way of any railway." ^ 
 
 The statutes exempt from taxation, all property used 
 exclusively for state, county, municipal, literary, educa- 
 tional, scientific, religious, benevolent, and charitable pur- 
 poses; personal property to the amount of two hundred 
 dollars for each family; the wearing apparel of every per- 
 son; all public libraries; and family libraries and school 
 books of every person and family not exceeding in value in 
 any one case, fifty dollars/ 
 
 Assessment. The township trustee is the assessor for 
 his township. In cities of the first and third classes, an 
 officer called the assessor is appointed annually by the 
 mayor with the approval of the council. Cities of the 
 second class elect at the annual municipal election a city 
 assessor. Railroad property is assessed by a special state 
 board, composed of the lieutenant governor, secretary of 
 state, treasurer, auditor and the attorney general. For the 
 assessment of property of telegraph and telephone com- 
 panies, the same members comprise a board of appraisers 
 and assessors. 
 
 It is the duty of every person of age and sound mind to 
 list for the assessor, when called upon, all personal prop- 
 erty of which he is the owner or user. The property of 
 every company or corporation must be listed by some 
 person designated by it. Such property is listed at the 
 place where it is situated on the first day of March. The 
 assessor may require the person listing personal property 
 to verify his return by oath. Money and credits, not be- 
 longing to a business, are assessed at the place where the 
 owner resides on the first of March. Where personal prop- 
 erty is in the possession of the mortgagor on the first day 
 of March, it is subject to assessment and taxation as the 
 property of the mortgagor." 
 
 At the time the return is made to the assessor, that officer 
 
 ^ General Statutes of Kansas, 1897, Vol. II, p. 874. 
 ' General Statutes of Kansas, 1897, Vol. II, p. 875. 
 ' See Field vs. Russel, 38 Kansas, 720. 
 
144 Studies in State Taxation [144 
 
 may make such changes in the valuation of the property 
 as seem to him just. In order better to secure equahty in 
 valuation, it is the duty of the assessors to meet in their 
 respective county-seats on the first Monday in March, and 
 there agree upon an equal basis for valuation. The statutes 
 distinctly declare that such property shall be valued at the 
 usual selling price in money at that time and place. The 
 listing of personal property is done between the first day 
 of March and the first day of May of each year. If the 
 assessor discovers that any property subject to taxation has 
 escaped, he is required to list and value it at twice its real 
 value. However, there are very few assessors willing to 
 make an extra effort to discover concealed property. In 
 case of a refusal to deliver a statement of property, or to 
 make oath to the truth of the statement, the assessor has 
 power to take such steps as may be necessary to ascertain 
 the valuation of all the taxable property. Whatever costs 
 accrue from the employment of witnesses and constables 
 or any other necessary procedure, are collected as a part of 
 the taxes. Thus the costs in obtaining an assessment of 
 the property become the penalty for refusal to list it. In 
 addition it is the duty of the county clerk to add 50 per cent, 
 to the valuation of all property which the owner has re- 
 hxsed to list. I have never known of a case in Kansas 
 where this power has been exercised. It is not refusal to 
 list personal property, but concealment thereof that causes 
 the evil. 
 
 Banking, loan and insurance companies are assessed on 
 the market value of their capital stock, and stockholders 
 are individually liable for taxes which may remain unpaid. 
 The capital stock of banks is reached by assessing the 
 shares of the individual stockholders, though the tax is 
 collected through the corporation.^ In general, it may be 
 
 ^ In several cases the courts have decided that a bank may pay 
 the tax assessed upon its stockholders, and that an unpaid tax con- 
 stitutes a lien on such shares. If, however, the tax levied upon the 
 different stockholders be not paid by the bank, the property of the 
 individual stockholders is liable for it. (See Revised Statutes, 1897, 
 p. 387, note.) 
 
145] Taxation in Kansas 145 
 
 said that all corporate shares are taxed in this manner. 
 The assessed value, based on the capital stock, covers in 
 practice everything, buildings, fixtures, money and credit 
 papers. 
 
 The assessment of real property is made every second 
 year. Here again the statutes provide that all real prop- 
 erty shall be assessed at its true value. The assessor de- 
 termines the value of all real estate and improvements by 
 actual examination, and returns this, together with a full 
 description of the property, to the county clerk. In actual 
 practice, much reliance is put upon the land records in the 
 register's office and upon previous assessment returns, and 
 little efTort is made to secure an entirely new valuation. 
 Especially does this hold true in the cities, where revision 
 is most needed. 
 
 The aggregate valuation of various classes of property 
 for a term of years is shown in the following table :^ 
 
 Tear. 
 
 Land. 
 
 Personal Property. 
 
 Town lots. 
 
 KailroaiB. 
 
 1880 
 
 $87,510,028 
 
 $31,921,835 
 
 $20,922,021 
 
 $20,547,702 
 
 1881 
 
 91,207,146 
 
 34,437,195 
 
 22,493,321 
 
 22,671,911 
 
 1882 
 
 96,741,02s 
 
 38,087,359 
 
 26,203,733 
 
 25,086,156 
 
 1883 
 
 99,899,559 
 
 48,030,492 
 
 27,739,202 
 
 27,290,214 
 
 1884 
 
 117,325,342 
 
 56,890,513 
 
 34,836,990 
 
 28,460,905 
 
 188s 
 
 122,871,239 
 
 56,502,333 
 
 38,420,301 
 
 30,367,820 
 
 1886 
 
 142,668,463 
 
 55,491,779 
 
 46,967,259 
 
 32,453,776 
 
 1887 
 
 152,200,666 
 
 60,796,746 
 
 56,646,873 
 
 41,222,605 
 
 1888 
 
 168,558,547 
 
 56,441,763 
 
 73,862,136 
 
 52,829,664 
 
 1889 
 
 173,801,010 
 
 53,187,371 
 
 76,330,671 
 
 57,494,849 
 
 1890 
 
 168,285,199 
 
 48,750,913 
 
 72,814,873 
 
 57,866,232 
 
 189I 
 
 170,160,308 
 
 47,401,227 
 
 74,303,916 
 
 50,865,825 
 
 1892 
 
 171,167,129 
 
 46,315,463 
 
 65,317,432 
 
 51,404,544 
 
 1893 
 
 173,077,920 
 
 47,227,073 
 
 65,756,543 
 
 61,731,035 
 
 1894 
 
 173,075,265 
 
 40,854,934 
 
 61,835,141 
 
 59,764,683 
 
 1895 
 
 173,296,813 
 
 35,031,849 
 
 62,076,828 
 
 59,503,654 
 
 1896 
 
 166,623,312 
 
 36,156,224 
 
 59,043,785 
 
 59,333,155 
 
 1897 
 
 167,766,793 
 
 38,242,266 
 
 59,207,508 
 
 59,445,669 
 
 1898 
 
 163,296,148 
 
 45,371,367 
 
 56,606,286 
 
 ' 58,371,663 
 
 ' Compiled from Reports of State Auditors, 1880-1898. 
 
 " This includes the valuation of telegraph and telephone companies. 
 Before 1898 the valuation of such companies was included in the 
 lists of real and personal property. 
 
146 Studies in State Taxaticm [146 
 
 County Equalization. To secure an equal apportionment 
 of the tax among the different portions of the county, the 
 county commissioners are constituted a board to hear com- 
 plaints and petitions from dissatisfied property owners. 
 The board meets on the first Monday of June to equalize 
 the returns of the assessors. At this time all parties feeling 
 themselves aggrieved by the assessment can appear and 
 have errors corrected. Individuals make free use of this 
 opportunity to threaten and persuade the board to modify 
 valuations. Often the privilege is a means of righting a 
 wrong; often it is a means of shirking the payment of a just 
 share of taxation. 
 
 State Equalization. The State Board of Equalization, 
 consisting of the auditor, treasurer, and secretary of state, 
 meets annually at Topeka on the second Wednesday in 
 July. It examines the abstracts of property assessed for 
 taxation in the various counties, and equalizes the county 
 assessments by adding to or deducting from the assessed 
 valuation. But in these changes the board cannot reduce 
 the aggregate amount. It is essential that the total valua- 
 tion be sufficient to yield, at the rate levied by the legisla- 
 ture, the amount needed for state purposes. The final 
 assessments of the Board of Equalization are reported by 
 the auditor to the county clerks, who determine the rate 
 per cent, necessary to raise their respective portions of the 
 state tax. The practice prevails among the counties of 
 using the valuation fixed by the state board for state taxa- 
 tion only and of employing for local purposes the valua- 
 tion fixed by the County Board.' 
 
 Assessment of Railroad Companies. The property of rail- 
 road corporations is assessed annually by a board consist- 
 ing of the lieutenant governor, the secretary of state, the 
 treasurer, the auditor and the attorney general. It is the 
 duty of this board to appraise and assess at its actual value 
 
 'The Attorney General in his report for 1883-4 states that such 
 is the practice. Documents of Kansas, Topeka, 1883-4, P- 76. 
 
147] Taxation in Kansas 147 
 
 the track, road-bed, right-of-way, water and fuel stations, 
 buildings, land, machinery, rolling stock, telegraph lines and 
 instruments, material and supplies, moneys and credits, to- 
 gether with all other property used in the operation of the 
 railroad. The board makes up its reports from the sworn 
 statements of railroad ofificials and from personal examina- 
 tion and inspection. In case of failure on the part of the 
 railroad to make the required statement to the state audi- 
 tor, a penalty of not less than $1000 for each ofifense is 
 incurred. In fixing the valuation of roads situated partly 
 outside of the state, the valuation of that part within the 
 state is determined by the ratio to the total valuation which 
 the mileage in the state bears to the total mileage. It is 
 customary to give the railroads an opportunity to appear 
 before the board, and skilled representatives are sent to 
 endeavor to secure a reduction of assessments.' 
 
 Through the auditor the board makes return of valua- 
 tions to the county clerks in proportion to mileage in each 
 county. The county clerks in turn place the assessments 
 upon the county tax-rolls and thus the property becomes 
 subject to the same rate of levy as other property for state, 
 county, township or city and school district taxation. 
 
 Telegraph and Telephone Companies. In like manner the 
 board of appraisers and assessors makes returns to the 
 county clerks of the property of telegraph and telephone 
 companies. The penalty for a refusal of these companies 
 to file the proper statement with the auditor is $500, and 
 an additional sum of $100 for each day's omission after 
 
 * It is a noteworthy commentary upon the relative merits of 
 assessment by local authorities and by a state board constituted as 
 the Kansas board, to find in the proceedings of the board frequent 
 requests that prices of land or property be assessed by the state 
 board rather than by the local assessors (Proceedings for May 27, 
 1897; April 26, 1898). It is not possible to present any conclusive 
 opinion, but the little evidence at hand convinces me that the rail- 
 roads very much prefer assessment by a state board; that the valu- 
 ation is on an average less than when made by the local authorities, 
 and that on the other hand a greater degree of uniformity is 
 obtained by the present method. 
 
148 Studies in State Taxation [148 
 
 March 20. In determining the assessment of telegraph and 
 telephone companies' property, the auditor deducts from 
 the total valuation the value of any real estate owned by 
 the company, and also of all personal property located in 
 the central or exchange offices. Such deducted property 
 is assessed by the local assessor as real and personal prop- 
 erty.' 
 
 Collection. The collection of the property tax is vested in 
 the county treasurer. Taxes are payable on and after the 
 first day of November. The entire amount may be paid 
 on or before December 20, or half may be paid then, and 
 the remainder on or before June 20. In case all is paid at 
 the first date a rebate of five per cent, is allowed on that 
 portion due in June. If any portion is not paid when due, it 
 may then be collected according to law and a penalty of five 
 per cent, may be added. If half the personal tax is not paid 
 by December 21, the whole then becomes due and the 
 sheriff may be directed to sell sufificient personal property 
 to cover the tax. In the same way the second half is col- 
 lected when due. 
 
 If the taxes on real estate remain unpaid by June 20 of 
 each year, the land may be sold at public auction and the 
 amount due be paid into the county treasury. Land thus 
 sold may be redeemed at any time within three years upon 
 the payment of the amount for which it was sold, together 
 with all the subsequent taxes, and interest on all at fifteen 
 per cent. The taxes are paid over as collected to the state, 
 city, township, and school treasurers. The state taxes are, 
 
 ' Prior to 1898 all property of the telegraph and telephone com- 
 panies was assessed by the local authorities. As the board for 1898 
 only held three daily sessions, it is hardly probable that anything 
 more than a general estimate could have been made. The telegraph 
 companies were assessed for the first wire, including poles, sixty- 
 five dollars per mile; for each additional wire, twelve dollars per 
 mile; tools, material, and office furniture, one dollar per mile on 
 pole mileage. (Proceedings of Board of Telegraph & Telephone 
 Appraisers and Assessors for May 20, i8g8, in Auditor's Report, p. 
 250.) Telephone companies were usually assessed according to the 
 returns of the various reporting agents (ibid., June 13, 1898, p. 251). 
 
149] Taxation in Kansas 149 
 
 however, paid into the state treasury, semi-annually, in 
 July and January. 
 
 Criticism. Undoubtedly the worst feature in the prac- 
 tical operation of the general property tax in Kansas, is 
 inequality of valuation. Were the true value of prop- 
 erty taken as the basis for assessments, much of the evil 
 of the present system would be obviated.^ 
 
 The feature of the code responsible in large part for the 
 mischief is the section reading:' "The several townships 
 and city assessors shall meet at the county seat in their 
 respective counties on the first Monday in March in each 
 year, and then agree upon an equal basis of valuation of 
 such property as they may be called upon to assess. It 
 will be the duty of the county clerk of each county to notify 
 such township or city assessors at least ten days previously 
 to the date of such meetings." At this meeting the assessors 
 determine the taxable basis; it rarely coincides, however, 
 
 ' Equitable valuation has always been the intent of the tax laws, 
 as may be gathered from the following extracts from the General 
 Statutes of 1879 (Chapter 158, Sects. 44, 74 and 76) : 
 
 " Personal property shall be valued at the usual selling price in 
 money at the place where the same may be held; but if there be no 
 selling price known to the person required to fix the value thereon, 
 it shall be valued at such price as is believed could be obtained 
 therefor in money at such time and place. Current money, whether 
 in possession or on deposit, subject to be withdrawn on demand 
 or within one year from date of deposit, shall be entered in the 
 statement at the full amount thereof. Depreciated bank notes shall 
 be entered in the statements at their current value." 
 
 " The assessor shall, from actual view and from the best sources 
 of information within his reach, determine as nearly as practicable 
 the true value of all taxable real property in money within his town- 
 ship or city, as the case may be." 
 
 " Each parcel of real property shall be valued at its true value in 
 money, the value thereof to be determined by the assessor from 
 actual view and inspection of the property; but the price at which 
 such real property would sell at auction or forced sale shall not be 
 taken as the criterion of such true value. All the real property 
 belonging to religious, literary, scientific, benevolent or charitable 
 institutions or societies, as well as all school or university lands 
 leased or held for profit, shall be valued at such price as the assessor 
 believes such estates would command in money." 
 
 ' Section 42, chapter 158, of General Statutes of 1879. 
 
150 Studies in State Taxation [150 
 
 with the true value of property.' It is not an uncommon 
 practice to assess personal property at about one-third of its 
 actual value; but the variations in the rate of assessments as 
 compared with the true valuation are great. In 1897 the 
 assessors of Atchison County decided to rate personal prop- 
 erty at 25 per cent, of its true value; Chase County, at ^3/6 
 per cent.; Elk County, at 40 per cent.; Rice County, at 30 
 per cent. ; Franklin County, at 50 per cent. ; Phillips County, 
 at 60 per cent.; Staunton County, at 75 per cent.; Decatur 
 County, at 100 per cent. So far as I can find only three 
 counties followed the plain instruction of the law and 
 assessed property at 100 per cent, of its actual value.' The 
 conditions in regard to the assessment of real property were 
 even worse. The rate for real property in Brown County 
 was fixed at 20 per cent.; in Dickinson, at 25 per cent.; in 
 Sedgwick, at 30 per cent. ; in Shawnee, at 33 J^ per cent, ; in 
 Osborne, at 40 per cent.; in Franklin, at 50 per cent.; in 
 Graham, at 80 per cent.; in Hodgeman, at 100 per cent.; in 
 Gove, at 200 per cent, of the actual value. Only eight coun- 
 ties report 100 per cent, of the actual value as the rate of 
 assessment. 
 
 The returns for 1899 which are coming in while these 
 pages are being written, show that the assessors continue 
 flagrantly to violate the law and to place fictitious values on 
 personalty. Horses are valued in Jefferson County as low 
 as $6.97; in Grant, at $5.45; Stevens, $5.30; Marshall, 
 $7.51; and Doniphan, at $20. Sheep are assessed at 20 
 cents a head in Ellsworth; mules in Logan County, at $4.27 
 each. In Lyon County, which is a large cattle district, 
 
 ' " The assessors invariably interpret the last-quoted provision 
 (Sect. 58, ch. 107, Laws of 1879) as authorizing them to fix any 
 basis of valuation they may deem proper, and, as a rule, agree on a 
 basis of one-third or one-fourth of the real cash value. But in 
 actual work, even this basis is frequently disregarded by assessors, 
 and numerous instances can be cited, in nearly every county, where 
 property is assessed at not to exceed ten per cent, of its real value." 
 Governor's Message, January 9, 1889, in Documents of Kansas, 
 1887-8, p. 18. 
 
 ^ Report of Kansas Bureau of Labor (Topeka, 1898), p. 14. 
 
151] Taxation in Kansas 151 
 
 cattle are valued at $10.67; while in Jefferson County with a 
 better grade of cattle the rate is only $6.40. Nor is the 
 farmer alone affected by this tendency toward under-valua- 
 tion. The same reports show that gold watches are valued 
 ^t $3-35 in Stafford; in Stevens, at $4.46; in Comanche, at 
 $4.42. Pianos are even held lower: Jefferson, $16.66 each; 
 Stafford, $17.04; Ellsworth, $19.66; Grant, $20.' 
 
 The practice of under-valuation " pervades every tax de- 
 partment in the state." " It is due most largely to the desire 
 of counties and townships to shift the burden of taxation.^ 
 Together with this strong temptation, always present, there 
 is another factor tending in the same direction. Low assess- 
 ments and a high tax rate mean less friction between the 
 assessor and assessed, than a low rate and a high assessed 
 valuation. The statement that the owner sees and contests 
 before the board of equalization is the assessed value. If 
 this is only a fraction of the real value of the property, he is 
 slower to complain. There is more or less uncertainty in 
 
 ^ An article in the Kansas City Journal of June 29, 1899, contains 
 a typical list of these valuations. 
 
 ' " I suppose the counties of the state are primarily responsible 
 for the present system of low valuations. A desire to lessen the 
 proportion of certain counties in state tax, no doubt, caused the first 
 departure from the law, and being, we may say, contagious, the 
 pernicious system has grown until it now thoroughly pervades every 
 tax department in the state. Having become general in its applica- 
 tion, in the various counties of the state, it necessarily controlled 
 the action of the assessors of the railroad property. Even the leg- 
 islatures of the past became parties to it. The levies provided by 
 law for last year, if applied to the actual value of all property in 
 the state, would raise — no person can say how much — certainly three 
 millions of dollars; whereas, with the present valuation, but about 
 one million is raised. It would, therefore, seem as if the reform 
 should be commenced with the legislature." Report of Treasurer, 
 p. 94, in Documents of Kansas, 1885-86. 
 
 ' " The causes which have operated to bring about these inequali- 
 ties in assessment appear to be, first, a desire on the part of town- 
 ship assessors, and county boards, to diminish as much as possible, 
 the proportion of their respective county and state tax; and, second, 
 to avoid the restriction upon tax levies provided in Sec. 220, ch. 
 25, Laws 1877." Message of Governor, 1885, in Documents of 
 Kansas, 1883-4, P- 9- 
 
153 Studies in State Taxation [152 
 
 the mind of the average taxpayer as to the injustice of a 
 high tax rate, while there is none as to the iniquity of a 
 high assessment. In other words, the assessors are able to 
 hide behind the glamor of under-valuations, whereas a true 
 valuation gives the owner two criteria for knowing whether 
 he is justly assessed, the value for which he can sell his 
 property and the amount at which his neighbor is assessed. 
 
 The practice of under-valuation has been repeatedly con- 
 demned by those best acquainted with local conditions. In 
 his message to the state legislature in 1883, Governor 
 Martin said: " Our laws on the subject of assessment and 
 equalization of property values for taxation need thorough 
 revision. Assessors not only pay no attention to the laws, 
 but, by formal agreement, assess property at from 20 to 50 
 per cent, of its true value, and, as a consequence, the state 
 board of railroad assessors adopts the same rule in apprais- 
 ing the value of railroad property. If it were possible under 
 such a system to obtain a uniform assessment of property 
 values throughout the state, there could not, perhaps, be 
 serious ground for complaint, but the valuation of property 
 in the several counties, and often in different sections of the 
 same county, are grossly unequal, ranging from 25 to 60 
 per cent, of actual value." ^ A state treasurer who had given 
 the subject careful study and who just prior to his death was 
 preparing for publication a report on existing methods of 
 assessment, stated : " That a thorough reform in the vicious 
 system of assessment which now obtains in Kansas is very 
 necessary must be evident to every person who has given 
 the matter thought." " The majority of state officers speak- 
 ing in their official capacity as members of the state board 
 of railroad assessors made the following plea in 1889: 
 
 "This Board respectfully asks that the basis of taxation 
 on all property in Kansas shall be its actual value, to the 
 end that every incentive shall be given to honestly acquire 
 
 ' Message of Gov. Martin, in Documents of Kansas, 1883-4, P- 8. 
 ^ Treasurer Howe's Report, in Documents of Kansas, 1885-6, pp. 
 92-3- 
 
153] Taxation in Kansas 153 
 
 the blessings and equally share the burdens of the common- 
 wealth." ' Finally the Supreme Court in a recent decision 
 renews its strong condemnation of inequitable assessments." 
 In the case of real estate there is a marked tendency to 
 assess small tracts of land relatively higher than large or 
 valuable estates. For example, in Brown County, land with 
 a selling value of $1000 and with an average value of $10 
 per acre, is given an assessed valuation of $665, and pays a 
 tax of $25.23; while land with actual selling value of $11,000 
 and with an average value of $50 per acre, is given an 
 assessed valuation of $2045 and pays a tax of $75.55. That 
 is, the owner of a small tract pays one-third as much tax as 
 the owner of a tract worth eleven times as much. In Shaw- 
 nee County, land with an actual selling value of $3770.50 
 and an average acre value of $24.37, is assessed $1344.75, 
 and pays a tax of $35.24; while a tract with an actual selling 
 value of $8500 and an average acre value of $34.10, is 
 assessed at $2073,75, ^"d pays a tax of $62.14. Here the 
 smaller land owner pays more than half as much tax as the 
 other, with much less than half as much property. In 
 Franklin County a small piece worth in the market $400 at 
 the rate of $30.76 per acre is assessed at $260 and pays a tax 
 of $8.55; and in the same county a tract worth $3481.25 at 
 the rate of $25.00 per acre, is assessed at $1091.25, and 
 pays $27.54 in taxes. The man with almost nine times as 
 
 ' Report of Railroad Assessors for 1891, in Documents of Kansas, 
 1889-90, p. 21. 
 
 ' " The constitution ordains that the legislature shall provide for 
 a uniform and equal rate of assessment and taxation. To compel 
 uniformity and equality of assessment and taxation, the statute pro- 
 vides that all property shall be assessed at its true value. The 
 habitual disregard of the statute relating to the valuation of prop- 
 erty for taxation by local assessors has been continuously con- 
 demned in the decisions of this court from Adams vs. Bernan to 
 Chaliss vs. Riggs. The injustice of the system of taxation growing 
 out of the constant and continued disregard of the proper valuation 
 of property, becomes more and more apparent. Here there has 
 been a gross discrimination in the taxation of railroad property. 
 The law has not been observed. The taxes complained of are not 
 equal and uniform." Railroad Company vs. Commissioners of 
 Atchison County, 54 Kansas, 787. 
 
154 
 
 Studies in State Taxation 
 
 [154 
 
 much property pays only three times as much tax. Nor 
 are these isolated cases. They are taken at random. Many 
 more striking instances might have been chosen, but the 
 intention has been to show average, not exceptional, con- 
 ditions.' 
 
 In the first case cited, if the larger holder paid $75-55 tax, 
 the smaller should have paid about $7.00 tax instead of 
 $25.23. But $7.00 means a small tax-bill and the assessor is 
 inclined to raise the amount. On the other hand, if the 
 smaller holder paid $25.23, the larger should have paid 
 about $277.53; but $277.53 seems to be an impossible 
 amount and the assessor is inclined to lessen the burden. 
 The anomalous results following from the practice of under- 
 valuation are again shown in the following table, com- 
 piled from the Thirteenth Annual Report of the Kansas 
 Bureau of Labor and Industrial Statistics : 
 
 Per Cent, of Assessed Valuation to Real Valuation. 
 
 County. 
 
 Atchison . . 
 Barber .... 
 Bourbon . . . 
 
 Brown , 
 
 Butler 
 
 Chautauqua . . 
 Comanche. . . . 
 Doniphan . . . 
 
 Douglas 
 
 Ellsworth. . . 
 
 Ford 
 
 Franklin 
 
 Hamilton. . . . 
 Leavenworth . 
 
 Mitchell 
 
 Sherman . . 
 
 Shawnee 
 
 Wabaunsee. . . 
 
 La>'d. 
 
 Less 
 than 
 $250. 
 
 159.1 
 178.1 
 
 88.7 
 313.0 
 180.0 
 153.0 
 
 33.0 
 
 93.1 
 373.3 
 165.6 
 
 65.0 
 142.9 
 
 36.1 
 1.50.0 
 121.3 
 
 89.5 
 300.8 
 
 $500 
 
 to 
 
 $1,000 
 
 31.3 
 57.1 
 45.4 
 66.6 
 30.4 
 39.8 
 31.2 
 36.0 
 26.4 
 55.9 
 34.8 
 39.4 
 34.5 
 36.6 
 47.6 
 22.1 
 55.3 
 27 
 
 $2,600 
 
 to 
 $5,000 
 
 $5,000 
 
 to 
 $10,000 $25, 
 
 16.5 
 
 30.1 
 17.2 
 30.3 
 21.8 
 30.7 
 33.6 
 21.4 
 56.5 
 38.0 
 31.2 
 11.3 
 32.7 
 35.7 
 
 35.6 
 
 19.7 
 
 $10,000 
 to 
 .,000 
 
 13.1 
 
 19.5 
 17.0 
 13.7 
 
 16.6 
 23.3 
 
 10.3 
 
 35.4 
 19.1 
 
 34.3 
 
 14.3 
 
 18.5 
 
 18. 
 23. 
 
 10.6 
 
 Lots. 
 
 Less 
 than 
 $260 
 
 44.9 
 
 103.5 
 
 59.9 
 
 41.4 
 
 53.7 
 
 87.5 
 
 106.0 
 
 46.3 
 
 44.0 
 
 100.9 
 
 176.6 
 
 39.7 
 
 74.6 
 
 52.4 
 
 60.0 
 
 106.6 
 
 81.2 
 
 35.6 
 
 $250 
 
 to 
 
 $500 
 
 35.8 
 16.5 
 44.2 
 30.5 
 15.1 
 39.6 
 56.0 
 29.8 
 39.5 
 51.4 
 67.5 
 35.6 
 90.7 
 40.9 
 25.0 
 28.1 
 63.2 
 23.5 
 
 »500 
 
 to 
 
 $1,000 
 
 25.1 
 8.6 
 38.7 
 19.1 
 53.8 
 25.3 
 
 36.0 
 32.6 
 50.6 
 38.2 
 24.8 
 60.0 
 30.6 
 51.7 
 34.6 
 53.9 
 12.6 
 
 $1,000 
 
 to 
 $3,500 
 
 39.3 
 21.8 
 35.7 
 19.1 
 33.6 
 16.8 
 
 24.9 
 
 23.0 
 
 1.5 
 
 27.8 
 
 43.4 
 38.0 
 
 42.3 
 
 $2,600 
 
 to 
 $5,000 
 
 32.5 
 
 50.6 
 23.0 
 
 'e.i 
 
 27.3 
 
 33.5 
 
 47 ."8 
 
 37.8 
 19.5 
 
 ' These illustrations are taken from the Thirteenth Annual Report 
 of the Kansas Bureau of Labor and Industrial Statistics. The 
 figures given are authentic, i. e. in each instance an actual sale has 
 taken place during the year at the selling prices given. 
 
155] Taxation in Kansas 155 
 
 Here the actual value of agricultural land and building 
 lots in eighteen counties is tabulated. The real value of each 
 group determined by an actual sale and the total assessed 
 value as shown by the assessors' returns have permitted a 
 computation of the percentage of assessed value of each 
 group to its real value. The same tendency to under assess- 
 ment of large holdings appears again. In several counties, 
 notably, Jackson, Smith, Wyandotte, and Russell, this is 
 not so apparent, but I am convinced from personal exam- 
 ination of actual sale values as compared with assessed 
 values extending over several years and including the re- 
 turns from fourteen townships, that unusually high assess- 
 ments in special cases, irregularity everywhere, and a gen- 
 eral tendency toward over-assessment of the small, cheap 
 tracts are prevailing conditions. 
 
 Especially is it certain that almost worthless lots in small 
 towns are assessed proportionately higher than valuable 
 lots in the cities. The judgment of the assessor is usually 
 the cause of the evil. One township was examined where 
 excessive irregularities were shown. In such cases very 
 much more severe criticism could be made; but as these 
 abuses are solely the fault of the electors in choosing inef- 
 ficient officials and are probably not very common cases, 
 further comment may be reserved for a criticism of the 
 method of selecting assessors. Sometimes it is sympathy 
 that changes the assessor's report, sometimes it is fear. In 
 either case there is little uniformity in land valuations in 
 the same locality.^ What has been said of inequality in 
 
 ' There is an almost universal expression of dissatisfaction with 
 our present mode of assessing property for taxation. That it is 
 unequal, and consequently unjust, no one familiar with it would for 
 a moment deny. — The only safe rule to follow is to assess all prop- 
 erty at its actual cash value, without regard to its character or the 
 use to which it is applied. The inequality arises, not from the fact 
 that the property of the state is assessed too low, but because it is 
 assessed unequally. When one piece of property is assessed at lo 
 per cent, of what it is really worth and another piece is assessed at 
 its full value, and other property is not assessed at all, great in- 
 justice is done to some of the taxpayers; and yet that condition of 
 
156 
 
 Studies in State Taxation 
 
 [156 
 
 real estate valuation holds true of personal property. In- 
 deed, the conditions are even more unsatisfactory. The 
 accepted rates of assessment for certain classes of per- 
 sonalty in 1898 are shown in the following table: 
 
 County. 
 
 Allen 
 
 Barber. . -j 
 
 Brown. . . . 
 
 Bourbon ■) 
 
 Clay 
 
 Decatur. . . 
 Doniphan . 
 Jackson . . 
 Johnson . . 
 Mitchell . . 
 
 Wilso 
 
 "•! 
 
 Gold 
 Watches. 
 
 $5-^25 
 
 Disoretion 
 of Assessor, 
 
 One- 
 
 $15-S75 
 
 S5-S25 
 value 
 
 $i-$20 
 $10-$25 
 
 $10 
 $10 and 
 upward. 
 
 Wagons. 
 
 $5-$ 50 
 
 $5-$15 
 
 third cash 
 
 $5 and 
 
 upward. 
 
 X value 
 
 value 
 
 $0-25 
 
 $5-20 
 
 $10-$ 15 
 
 (new) $40 
 
 Pianos. 
 
 $25-$200 
 
 $10-$50 
 
 value 
 
 $15-$200 
 
 $15-$100 
 value 
 
 $25l$100 
 $25-$100 
 $10-$250 
 $75 and 
 upward. 
 
 Wheat. 
 
 45c. per liii. 
 
 10c. " 
 
 6c. " 
 
 value 
 
 25c. pm ba. 
 
 30-35C. 
 
 25c. 
 
 40c. 
 
 30c. 
 
 30c. 
 
 75c. 
 
 Com. 
 
 10c. per bu. 
 
 20c. " 
 
 22X " 
 
 value 
 
 5c. per bu. 
 5-8c. " 
 6c. " 
 
 10c. 
 
 7c. 
 
 15c. 
 
 Hogs. 
 
 IJ^o 
 Ic. 
 Ic. 
 l-8c. 
 
 Ic. 
 
 IXc. 
 
 Ic. 
 
 li^c. 
 
 iKc." 
 
 3>^c. 
 
 per lb. 
 
 These details do not reveal the worst features of the 
 system, namely, the extent to which the assessor's discretion 
 permits him to depart from the agreed basis for the county. 
 It does show that the owner of 1000 bushels of corn in Clay 
 County has it assessed at $50.00, while the less fortunate 
 owner of the same amount in Wilson County will probably 
 be charged with $150 on his corn account; that in paying 
 the tax on hogs the Brown County man will only have to 
 pay one cent per pound, while the Wilson man will have to 
 pay 3J4 times as much. One thousand bushels of wheat in 
 Brown County would have an assessed valuation of $60.00; 
 while in Bourbon, this would be about $750; in Jackson, 
 $400; in Baker, $100; in Wilson, $750. Even worse con- 
 ditions exist in many other counties and upon other articles. 
 
 things actually exists in our state to-day. Millions of dollars worth 
 of property escape taxation entirely as a result of ignorance, in- 
 efficiency or wilful dishonesty on the part of assessors. Other 
 property is assessed at from 10 per cent, to 100 per cent, of its 
 actual value according to the judgment or whim of the assessor." 
 Governor's Message, January 15, 1895, in Documents of Kansas, 
 1893-4, P- II. 
 
157] Taxation in Kansas 157 
 
 For local purposes of taxation this would not matter so 
 much; but where each city or township must contribute its 
 quota of state taxes there is a constant tendency to under- 
 value property in order to shift the burden. The county 
 reporting the lowest valuation is called upon to pay the 
 least state taxes. Nor does the state board of equalization 
 counteract this tendency. The board is constituted of offi- 
 cials incapable, from the various other duties imposed upon 
 them, of giving the subject of equalization necessary time 
 and consideration and without intimate acquaintance with 
 local conditions. As a matter of fact, but three or four days 
 are devoted to this work,' and even then all that the law 
 permits the board to do is to increase or decrease the total 
 returns from particular counties by such percentage as may 
 be agreed upon. But the aggregate amount for the state 
 must not be decreased. It is evident that inequalities due 
 to any individual assessment cannot be rectified. 
 
 Another weakness already noted, is the fact that the 
 equalization only aflfects the assessment for state purposes. 
 The original assessment as fixed by the county board is 
 retained for local taxation. Under the present law, the 
 board is handicapped by a lack of power. But even with an 
 increase of power it would still be impossible to attain any 
 satisfactory degree of equality in the case of counties striv- 
 ing by every means to reduce their assessments. Such an 
 increase might be beneficial; but it would by no means 
 enable the board entirely to correct the inequalities of local 
 assessments."" 
 
 ' Proceedings of State Board of Equalization, p. 128, in Docu- 
 ments of Kansas, 1889. 
 
 ' " There is absolutely no way for the state board of equalization 
 to correct this evil. The only thing it can do when it believes the 
 assessment of a county as a whole is too low, is to raise the assess- 
 ment on all property, both real and personal. It cannot equalize 
 individual, personal or real property under the present law. A bill 
 will no doubt be passed at the next session of the legislature giving 
 it authority to revise the equalization as fixed by the county com- 
 missioners. This would take the assessment out of the influence of 
 local surroundings and would enable the state to have a just assess- 
 ment " (Kansas City Journal, June 29, 1899). 
 
158 Studies in State Taxation [158 
 
 From available statistics it appears that in the majority 
 of counties, the assessed valuation of both real and personal 
 property is about 33^^ per cent, of the actual value. For 
 some reason hardly clear to me, manufacturing and indus- 
 trial concerns escape with a much lower basis of assessment. 
 The figures presented in the Thirteenth Report of the 
 Kansas Bureau of Labor are so suggestive in this particular 
 that they are here quoted in entirety. While these figures 
 are representative and not exhaustive, they may be taken as 
 typical and approximately correct: 
 
 IndQstrieB. "g »S b o 
 
 t- - o a 
 |£rai*g 
 
 ^ ^ a 
 
 Packing-houses $9,667,202 
 
 Salt-works 725,000 
 
 Coal-mining 1,908,089 
 
 Milling 1,641,074 
 
 Cement manufacturing. . 130,000 
 
 Miscellaneous mnfg. ... 928,069 
 
 Planing-mills 93,000 
 
 Foundries 124,700 
 
 Brick manufacturing. . . 122,250 
 
 Cooperage 55,6oo 
 
 Creameries 210,742 
 
 Grain and elevators 86,377 
 
 Plumbing 38,600 
 
 Carriage mnfg 21,000 
 
 Bakeries 35,6oo 
 
 Printing and publishing, 362,980 
 
 Bottling-works 52,100 
 
 Laundries 50,523 
 
 Marble and granite 3S,6oo 
 
 Merchant tailoring 16,300 
 
 Cigar manufacturing . . . 27,250 
 
 ir 
 
 Per cent, of 
 ASBesBed valu 
 tlon to capita 
 Invested. 
 
 
 3 
 £ 
 
 $581,075 
 
 6.0 $2,416,800 
 
 4 
 
 48,145 
 
 6.6 
 
 181,250 
 
 4 
 
 251,145 
 
 13- 1 
 
 127,206 
 
 15 
 
 341,265 
 
 20.7 
 
 36,468 
 
 45 
 
 11,096 
 
 8.5 
 
 32,500 
 
 4 
 
 104,226 
 
 11.2 
 
 27,297 
 
 34 
 
 12,560 
 
 13-5 
 
 23,250 
 
 4 
 
 17,280 
 
 13.8 
 
 20,783 
 
 6 
 
 15,051 
 
 12.3 
 
 13,583 
 
 9 
 
 5,895 
 
 10.6 
 
 11,120 
 
 S 
 
 33,757 
 
 IS.9 
 
 11,091 
 
 19 
 
 8,190 
 
 9-4 
 
 .10,797 
 
 8 
 
 4,680 
 
 12. 1 
 
 7,720 
 
 S 
 
 3,678 
 
 174 
 
 7,000 
 
 3 
 
 2,996 
 
 8.4 
 
 5,933 
 
 6 
 
 64,979 
 
 17.9 
 
 5,671 
 
 64 
 
 4,9" 
 
 9-4 
 
 4,736 
 
 II 
 
 7,495 
 
 14.8 
 
 4,593 
 
 II 
 
 2,584 
 
 7.2 
 
 4,450 
 
 8 
 
 2,990 
 
 18.3 
 
 4,075 
 
 4 
 
 5,497 
 
 21.7 
 
 1,362 
 
 20 
 
 Totals and averages. $16,333,256 $1,529,495 8.1 $56,516 289 
 
 The conditions prevailing in Kansas as to the assessment 
 of personalty are similar to those existing in other states. 
 Returns are incomplete and unfair. The possibility of de- 
 ceiving the assessor places a premium on dishonesty, and a 
 
159] Taxation in Kansas 159 
 
 large percentage of personal property escapes taxation en- 
 tirely. The system of township assessors is largely respon- 
 sible for the worst evils in local conditions. Uniformity 
 cannot be obtained where there are many assessors, each 
 with his own ideas as to valuations and property rights, 
 and with his own and his neighbor's interests to protect.' 
 Finally the assessment is often the work of men utterly 
 unqualified for the task undertaken. Much less pains are 
 taken in selecting a city assessor than a city street commis- 
 sioner. Yet the former can, by ignorance, damage the 
 public infinitely more than the latter by wilful plunder. The 
 general defect in the present method is well stated in a recent 
 governor's communication to the legislature:^ " Now we 
 have about i,6oo assessors, largely men with little practical 
 experience, selected more because they have little else to 
 do and are good fellows, each trying to keep his assessment 
 down so that his township may pay less than its honest 
 share of the taxes. These men are elected for one year and 
 are dependent for their re-election upon the men whose 
 property they are valuing." 
 
 The general property tax fails in Kansas to accomplish 
 the true aim of all equitable taxation. Yet it is evident 
 that its operation is attended with less unfairness than in 
 many states of the Union. Kansas has fewer large cities 
 and less diversity in industries than almost any other com- 
 monwealth. In so far as the agricultural interest is dom- 
 inant, one of the worst features of the general property tax 
 is avoided. But as a matter of fact, even in Kansas, the gen- 
 eral property tax is becoming a single tax, and a single tax 
 
 ' " So long as township trustees are employed as the assessors, 
 just so long will unequal and unjust assessments be the rule. It is 
 absurd to expect that these officers, holding their positions by the 
 votes of those whose property they assess, will not each endeavor 
 to secure for his neighbors and constituents all possible exemption 
 from the burdens of taxation." Governor's Message of January 9, 
 
 1889, p. 17. 
 
 ^ Governor Morrill's Message of January 15, 1895, in Documents 
 of Kansas, 1893-4, P- 12. 
 
160 Studies in State Taxation [160 
 
 on the farmer's property at that. An examination of the 
 returns of the assessors speedily reveals the fact that those 
 who own no real estate are, as a rule, not taxed at all 
 unless engaged in some mercantile business. In view of 
 this circumstance it is impossible to escape the conclusion 
 that there is a direct connection between the depression in 
 Kansas farming lands so long complained of, and the undue 
 burden of taxation falling upon this form of property. The 
 burden of Kansas taxation falls upon the farmer as his prop- 
 erty is tangible, upon the guardian, executor and trustee 
 whose accounts are matters of public record, and upon 
 the scrupulously honest man everywhere. Bonds, stocks, 
 money, credits, notes and mortgages evade taxation regu- 
 larly. 
 
 Mortgages in Kansas must be recorded at the Register's 
 office and it would seem that with a little effort on the part 
 of the assessor these might always be listed; but as a matter 
 of fact they often escape taxation. In most cases the asses- 
 sor fails to find them, and even when located it is difficult to 
 determine from the Register's reports whether the mort- 
 gage has been paid in part or not. Many mortgage pay- 
 ments are in three or four payments and the mortgage is not 
 cancelled until the expiration of the entire time. No one 
 recognizes more fully than do the assessors themselves the 
 fact that a large portion of personal property escapes assess- 
 ment; but they realize fully their helplessness. If a man 
 returns an incomplete list of his personal property the 
 assessors are practically unable to discover or force him to 
 disclose the true amount. True, there is recourse to the 
 courts and the summons of witnesses; but the methods of 
 concealing and removing personal property are so numer- 
 ous that this ordinarily means only an additional burden 
 upon the honest taxpayer.^ 
 
 ^The Fourteenth Annual Report of the State Bureau of Labor 
 (Topeka, 1899) has appeared since the above was written. This 
 report contains definite and conclusive evidence upon the escape of 
 personalty in Kansas in the form of a comparison of the valuations 
 
161] Taxation in Kansas 161 
 
 Corporation Tax 
 
 There has never been any distinct corporation tax in 
 Kansas. Corporations are taxed, at the ordinary rate of the 
 property tax, on the value of their capital stock over and 
 above the value of their realty and tangible personalty. 
 There is a special law for taxing insurance companies, which 
 may for convenience, be classed as corporation tax. This 
 tax is imposed on the gross receipts of the companies as 
 distinct from the assessed valuation of their property. The 
 law requires every fire insurance company doing business 
 in a city having an organized fire department with an equip- 
 ment to the value of $1000 or upward, to pay to the Super- 
 intendent of Insurance two dollars upon every one hundred 
 dollars received from premiums on fire and lightning poli- 
 cies within the city. The money is paid into the funds of the 
 Firemen's Relief Association of the various cities. In 
 1897, $16,239.90 was derived from this source.^ 
 
 Prior to the special session of 1898 the law required all 
 foreign insurance companies doing business in the state to 
 pay annually to the insurance department, two per cent. 
 
 of probated estates with the assessors returns thereupon. Sixty- 
 four estates, covering data from five counties, are shown to have 
 included real estate appraised at $98,822.85 by the probate courts 
 while the assessors valuation was $40,691.50; that is, the assessed 
 value was 41. i per cent, of the appraised value. With respect to per- 
 sonal property of the class known as goods and chattels, two hun- 
 dred and forty-seven estates were examined from nine counties. 
 These had a total appraised value of $371,577.74 and an assessed 
 value of $38,725.60, making the appraised value 10.4 per cent, of the 
 assessed value. In the case of bonds, mortgages, notes and other 
 securities, one hundred and fifteen cases from seven counties yielded 
 a total appraised value of $430,608.01, and an assessed value of 
 $4045.00, or an assessed valuation of 9 per cent, of the appraised 
 value. Debts and accounts to the amount of $48,893.72 from thirty- 
 four cases covering four counties reporting were not assessed at all. 
 Moneys, bank-bills and other circulating medium, from one hundred 
 and thirty-two estates of eight counties, were appraised by the 
 probate courts at $109,701.55 and were assessed by the local asses- 
 sors at $1763, or 1.6 per cent, of the appraised value. 
 ' Report of Insurance Department, pp. 45-8 (Topeka, 1898). 
 II 
 
162 Studies in State Taxation [163 
 
 on all premiums received during the year.' The law was, 
 however, designed to regulate the business of the insur- 
 ance companies, rather than to provide a distinct source of 
 revenue. Its immediate purpose was to make the insurance 
 department self-supporting. If in any year the revenue 
 thus derived proved insufficient for this purpose, the Super- 
 intendent of Insurance was authorized to assess upon the 
 insurance companies such additional amount as might be 
 required, subject to the provision that the assessment must 
 be for an equal amount upon each company. 
 
 At the legislative session of i8g8 an additional tax was 
 imposed upon insurance companies. All foreign insurance, 
 guaranty, and accident companies now pay an annual tax 
 of four per cent upon all premiums instead of two per cent, 
 as formerly required. Domestic companies not organized 
 under the laws of the state pay a state tax of two per cent, 
 upon all premiums received, whether in cash or notes or on 
 account of business done in the state. These taxes are 
 assessed and collected by the state Superintendent of In- 
 surance, who is made an elective officer with a term of two 
 years. The taxes thus collected ultimately go to the general 
 revenue fund. At the regular session of 1899 the legislature 
 passed a law providing for the taxation of contracts of in- 
 surance made with companies not authorized to do business 
 in Kansas. " All such insurance contracts shall be taxed in 
 a sum equal to ten per cent, of the amount of premiums 
 paid or contracted to be paid thereon." ° This tax, when 
 collected, is applied as follows : Three-fifths to the payment 
 of the expenses of the insurance department and two-fifths 
 to the treasurer of the city or township in which the prop- 
 erty insured is located, for the benefit of the fire department. 
 If no such department is organized, either paid or volunteer, 
 this fund is devoted to the ordinary expenses of the city or 
 township. 
 
 ' This fund amounted to $17,005.39 in 1897, and was credited to 
 the general revenue fund. 
 
 ^ Eleventh Biennial Session Laws, Topeka, 1899, " Act to provide 
 for the taxation of contracts." 
 
163] Taxation in Kansas 163 
 
 The corporation laws of Kansas, in so far as they relate 
 to taxation, need thorough revision. As the laws now 
 stand corporations are taxed through the local agencies 
 under the general property tax. "The Hberality of the 
 state permits the creation of corporations for nearly every 
 conceivable purpose, conferring great power and valuable 
 franchises upon them, without any direct charge or expense 
 whatever."' The result has been to flood the state with 
 many corporations existing only in name, but possessing 
 valuable privileges for future exigencies. A further abuse 
 rests in the fact that many residents of other states became 
 incorporated in Kansas and, engaging in business princi- 
 pally outside of the state, avoid taxation altogether.^ 
 
 License Taxes and Fees 
 
 Properly speaking there are no state license taxes in 
 Kansas. The charges which are sometimes so called are 
 either fees or insurance taxes,. The statutes, however, per- 
 mit cities to levy license taxes, and a considerable local 
 income is obtained from this source. The mayors and city 
 councils have almost unlimited power in this respect. They 
 may levy license taxes upon all " callings, trades, profes- 
 sions and occupations," including everything from a dog 
 tax to a public lecturer's license.' 
 
 * Governor's Message, Jan. i6, 1889, Documents of Kansas, p. 23, 
 1887-8. 
 
 ^ " In Kansas it costs only the mere nominal fee charged for 
 filing the charter to create a corporation conferring important pow- 
 ers and valuable franchises. For this privilege many states require 
 all corporations organized for profit, in the prosecution of business 
 enterprises, before chartered, to pay a bonus or fee to the state, 
 based upon the capital stock. Such a law in this state would yield 
 some revenues, cut oflf many of the abuses complained of and ex- 
 clude parties who take advantage of our present law to incorporate 
 here without expense to do business in other states." Message of 
 Governor, 1891, in Documents of 1889-90, p. 26; see also Report of 
 Secretary of State for same date, p. 6. 
 
 ' As a rule all scientific and literary lectures and entertainments, 
 together with concerts and musical or other entertainments, given 
 by " home talent " are exempt from such taxation. In cities of the 
 third class these are exempted by the state law. 
 
164 Studies in State Taxation [164 
 
 License fees constitute an important source of state in- 
 come. The treasurer's report for 1898 shows the following 
 receipts of this kind: 
 
 Secretary of State $ 2,188.75 
 
 Auditor 942.45 
 
 Bank Commissioner 6,742.40 
 
 Oil Inspector 9,384.46 
 
 Insurance Department [1897] 19,316.07 
 
 Total $38,574.13 
 
 The fees paid to the secretary of state are charges for 
 making copies of laws, resolutions, bonds, records, docu- 
 ments, or papers deposited in his office, and attaching 
 thereto his certiiicate and his official seal.' The fees re- 
 ceived by the bank commissioner are in accordance with the 
 law requiring an annual examination of every bank doing 
 business in the state, except national banks, subject to a 
 charge varying from fifteen to thirty-five dollars according 
 to the amount of the capital stock of the bank. The fees of 
 the state oil inspector are paid by the owner of oils for test- 
 ing, and vary from forty cents for a single barrel to ten 
 cents per barrel for lots of over fifty barrels. Neither here, 
 nor in the case preceding, is it designed that the fees should 
 be a source of state income, beyond the amount required to 
 defray the expenses of the respective departments. 
 
 By far the larger portion of state revenue from fees comes 
 from the department of insurance. Every insurance com- 
 pany doing business in the state pays for the filing and ex- 
 amination of its charter and the issuance of a certificate of 
 authority, the sum of fifty-five dollars; for filing the annual 
 statement required, fifty dollars; for each license granted to 
 agents, two dollars; for every copy of a paper filed in 
 the Superintendent's office, twenty cents per folio; and for 
 affixing the seal of office and certifying any paper, one 
 
 ' For making the copy he is entitled to ten cents per folio, and for 
 certificate and seal, fifty cents. The auditor may likewise be re- 
 quired upon payment of the same fees to make copies of records 
 in his office, and to certify to them with his signature and the seal 
 of his office. 
 
165] Taxation in Kansas 165 
 
 dollar. In addition, each company is required to pay each 
 year a license fee of fifty dollars into the school fund.' 
 
 As a means of raising state revenue this method is of 
 doubtful propriety. There is constant danger of abuse and 
 the principle has been repeatedly criticised by state officials. 
 In cities and counties it serves to defray a considerable por- 
 tion of the salaries of officials. Thus the salaries of the dis- 
 trict clerk, sheriff, county treasurer, probate judge, county 
 attorney, surveyor, register of deeds, and coroner, are 
 largely paid by fees. The salary of each officer is fixed in 
 amount, and the fees exceeding that amount are paid into 
 the treasury to the credit of general fund. 
 
 Poll Tax and Road Tax 
 
 The poll tax has been abandoned in Kansas. Cities of 
 the second and third class have the power to levy such tax, 
 but it must be by city ordinance. The city council may 
 impose a tax not exceeding one dollar on all able-bodied 
 males between the ages of 20 and 50 years. I have not 
 been able to find any record of such a tax having been im- 
 posed in any city within recent years. Under the terri- 
 torial government, as has already been pointed out, a terri- 
 torial poll tax was employed. Its collection was difficult 
 and its use, as in other states, unsatisfactory. Upon the 
 organization of a state government, the poll tax was aban- 
 
 ' These fees apply to all foreign insurance companies, life and 
 fire, and to all insurance companies organized under the laws of 
 Kansas, respecting which no special charges or fees are prescribed, 
 except joint stock fire insurance companies, mutual fire and mutual 
 life companies organized under Kansas laws. The former pay 
 twenty-five dollars for filing and examination of charter and issu- 
 ance of certificate of authority by the superintendent of insurance; 
 for any other certificate required, fifty cents; for filing the annual 
 statement, ten dollars; for copies of papers filed in the office of 
 department of insurance, ten cents per folio. Mutual fire companies 
 are required to pay the same fees excepting the fifty cent fee. 
 Mutual life companies pay one hundred dollars for the filing and 
 approval of papers necessary for organization; for each licensed 
 agent, fifty cents. These fees are in lieu of all other state fees. 
 
166 Studies in State Taxation [166 
 
 doned and the permission given to cities has remained, in 
 practice, a dead letter. 
 
 The poll tax, which may only be employed to secure 
 municipal revenue, is, however, wholly independent of tlie 
 county road tax of $3.00 which is authorized under the 
 general statutes. Throughout the state all male persons 
 between twenty-one and forty-five years of age, who have 
 resided thirty days in the state, are required to perform two 
 days' work on the public roads or streets, or furnish a sub- 
 stitute, or pay the sum of $3.00 to the road overseer or 
 street commissioner. The refusal to comply with this is a 
 misdemeanor subject to a fine of five dollars upon convic- 
 tion before any justice of the peace. In addition to this 
 regular tax, the county commissioners of each county may 
 levy a road tax of not more than three mills on the dollar, 
 on all taxable property except on the real estate in cities 
 of over 2000 inhabitants. 
 
 Conclusion 
 
 In the preceding pages the effort has been made to show 
 the actual status of taxation in Kansas. Not all the methods 
 in use are evil ; nor, on the other hand, are they all worthy of 
 a large, growing, and progressive commonwealth. The gen- 
 eral property tax might have served as the exclusive form 
 of taxation in days when population was small, when dif- 
 ferences in tax-paying ability were slight, and when the 
 opportunities and incentives to evade taxes were less fre- 
 quent. But now what seems most needful is greater variety 
 in taxes to correspond with the various sources of individual 
 income. The problem is to find taxes which cannot be 
 avoided, which are not regressive, and which have stood the 
 test of experience in older states where similar conditions 
 have prevailed. Whatever changes are made in the im- 
 mediate future should be such as will tend to develop in the 
 state a broader and more equitable system of raising rev- 
 enue. Legislation should be so shaped as to evolve new tax 
 methods rather than to inaugurate an outright revolution 
 in the existing system of taxation. There is no reason why 
 
167] Taxation in Kansas 167 
 
 Kansas need pass through the period of costly experimenta- 
 tion which characterizes the experience of so many of the 
 American commonwealths. There has been comparatively 
 little tax legislation in the state. In most respects the 
 earliest methods continue to prevail and consequently there 
 are no local prejudices. There is a general feeling of dis- 
 satisfaction, but there is no unanimity of opinion as to what 
 should be done. Public opinion will probably crystallize 
 slowly, and as a result all essential reform must be gradual. 
 There are certain changes, remedial in nature, that can be 
 made at once, and it is to these that attention should first 
 be directed. 
 
 For some time to come the general property tax will 
 doubtless continue to be used as a prime source of state 
 revenue, and the earliest possible legislation should contem- 
 plate an improvement of this tax. The county clerks, at a 
 convention recently held, adopted a resolution urging the 
 election of a county assessor for each county.' The officials 
 making this suggestion have a knowledge and experience in 
 regard to the practical working of existing assessment laws, 
 that entitle their opinion to consideration.' In order to 
 make the office as nearly non-political as possible, the 
 assessor might more properly be appointed for a term of 
 four years by the judge of the district court. The judge 
 should have power to remove for cause and to fill vacancies, 
 and by his advice and consent the assessor should have 
 authority to appoint deputies.' Such a change if inaugu- 
 rated would bring the most efficient men into the really dif- 
 ficult work of valuing property. It would tend to equalize 
 valuations and would fix responsibility for any inequalities 
 in county assessments to a degree not now attained. It 
 would free the work from most of the local influences and 
 
 ' Gov. Martin's Message, Jan. 9, 1889, Documents, 1887-8, page 18. 
 
 ' In 1881 such a bill obtained the approval of the Senate commit- 
 tee on Finance and Taxation, but was defeated in the Senate cham- 
 ber. Senate Journal, 1881, p. 741. 
 
 ' This plan was, in substance, included by Gov. Humphrey in 
 his recommendations to the state legislature, see Message of Jan. 
 16, 1889, p. 22. 
 
168 Stiidies in State Taxation [168 
 
 jealousies now impeding it/ and finally the assessment of 
 property at its actual value could be effected more quickly 
 than under the present method.' 
 
 To secure the taxation of bonds, notes, mortgages, judg- 
 ments and credits, a law providing that the county assessor 
 should stamp all such papers and that they should not other- 
 wise be received as competent evidence and hence not col- 
 lectible would probably be effective. Any attempt to pass 
 an unstamped paper should render the person subject to a 
 fine not to exceed fifty dollars.' The only possible objec- 
 tion to this device would be that occasionally valueless 
 papers would be taxed. This consideration seems to have 
 been responsible for the defeat of the measure in Indiana. 
 The objection is weakened by the fact that at the present 
 time the attempt is everywhere made to tax such papers at 
 their face value regardless of their actual value. The prime 
 purpose of the added provision is the enforcement of a law 
 almost universally approved. Whether the paper is of any 
 real value is the concern of the holder and its taxation will 
 only tend to decrease the amount of valueless notes and 
 credits in existence. 
 
 Insufficient publicity is given the assessment records in 
 Kansas at the present time. Nothing hinders the county 
 clerk from making public the returns of the township asses- 
 sors nor, on the other hand, does any law require him to 
 expose such records for public examination. As a matter 
 of fact when the county clerk does do this it is as an accom- 
 modation and not as a duty. The county assessors should 
 be required to keep the assessments in a convenient form 
 
 ' Compare the conclusions of the Revenue Commission in a state 
 where conditions similar to those in Kansas prevail: "The county 
 assessor, free from township jealousy, acting for the whole county, 
 with a longer term, more time in each year, better equipped for. 
 finding out and valuing property, better paid, and more conspicuous 
 in the eye of the people, ought to, and we believe will, do his work 
 better than it is now being done by township assessors." Report 
 of Revenue Commission for Illinois, p. viii. 
 
 ' Gov. Stanley's Message of Jan. lo, 1899, p. 11. 
 
 ° Similar bills have been introduced and barely failed of passage 
 in the legislature of Iowa (1896) and Indiana (1899). 
 
169] Taxation in Kansas 169 
 
 and place for public examination. Publication in the offi- 
 cial county newspaper would strengthen still further the 
 work of equitable assessment and is here recommended. A 
 final recommendation for the improvement of the general 
 property tax is the strengthening of the present method of 
 county equalization, so that the present board should be- 
 come a board for the review of the assessments of the county 
 officer. The present limit of ten days should be extended 
 threefold. The county commissioners have the time for 
 such service and, generally speaking, , are best qualified to 
 act as a check upon the work of the county assessor who is, 
 in turn, to be removed from local influences. Thus the 
 county board becomes the immediate representative of the 
 people. The services of the county clerk on this board 
 should in that event be dispensed with. The county board 
 is at present unable to add to any particular tax assess- 
 ment personal property not already listed there.' This 
 should be modified so that property not listed by the county 
 assessor could then be included. 
 
 Such legislation would by no means perfect the system 
 of taxation in Kansas; but it would improve very mate- 
 rially one source of revenue. It has been repeatedly stated 
 in this paper that what the western states need at present 
 is the development of more varied sources of public income. 
 This can be accomplished gradually as conditions permit or 
 demand. In Kansas an opportunity already exists for a 
 considerable increase in variety of sources of revenue and 
 the constantly increasing importance of intangible wealth 
 will only accentuate this condition. The further develop- 
 ment of the state's resources and the general industrial 
 progress of the West will in time demand even further 
 changes. These facts must be kept in mind in constructing 
 a broader basis of taxation. 
 
 The taxation of other forms of wealth than those now 
 actually taxed will make possible the separation of state 
 and local taxes. This is an end much to be sought. It will 
 
 ' Coal Co. vs. Emlen, 44 Kansas, 117. 
 
170 Studies in State Taxation [170 
 
 remove the largest incentive toward low valuations and 
 relieve the state of the necessity of equalizing the county 
 assessments, a task most unsatisfactorily performed at 
 present.' The suggestion is no new one. As far back as 
 the early territorial period we find Governor Walker writ- 
 ing: " Now if Kansas, like the state of Illinois, in granting 
 hereafter these lands to companies to build (rail) roads 
 should reserve, at least seven per cent., of their gross annual 
 receipts, it is quite certain that so soon as these roads are 
 constructed, such will be the large payments into the 
 treasury of our state, that there will be no necessity to im- 
 pose in Kansas any state tax whatever, especially if the con- 
 stitution should contain wise provisions against the creation 
 of state debts." ' 
 
 The first step towards providing the state with distinct 
 sources of revenue should be the development of a common- 
 wealth tax on certain corporations, leaving all others to be 
 taxed for local purposes. Under present conditions the 
 state might impose a corporation tax upon the gross receipts 
 of railroads, telegraph, telephone, express, insurance and 
 irrigation companies.' The application of this method 
 would necessitate an amendment to the constitution of 
 Kansas,. With the present disposition of the people toward 
 enterprises controlling large capital it is probable that this 
 
 ^ The separation of state and local sources of revenue is recom- 
 mended in the Report of the Revenue Commission for Illinois, p. 
 ix, the Report of the Tax Commission, Oregon, Salem, 1886, and 
 Taxation in Iowa, Noble, pp. 6, 7. The Report of the Committee 
 appointed by the Tax conference of Pennsylvania Interests to ex- 
 amine the tax laws of the American states finds that the best 
 feature of the Pennsylvania system as compared with other states 
 lies in the separation of state and local taxation (Harrisburg, 1892). 
 Five states, viz., Delaware, New Jersey, Pennsylvania, Wisconsin 
 and Vermont, have more or less completely accomplished this 
 separation. Seligman, American Statistical Assn., Vol. I, p. 412. 
 
 ^ Inaugural, May 27, 1857, in Kansas State Historical Collections, 
 V, p. 330. 
 
 ^ Preliminary to the development of the corporation tax it is 
 essential that the corporation laws be so amended that no cor- 
 poration could be created or organized under the laws of Kansas 
 for purpose of profit except the incorporators have paid into the 
 
171] Taxation in Kansas 171 
 
 could be secured.' Such a program would necessitate the 
 surrender on the part of the townships and counties of all 
 local taxes upon railroads except upon real estate holdings. 
 The compensation to such localities would lie in their relief 
 from the state property tax.'' 
 
 Telegraph, telephone and express companies should be 
 taxed in the same way.' Probably three per cent, of gross 
 receipts, apportioned on the mileage basis would be ade- 
 quate at first. The state is just beginning to tax the former 
 companies while the express companies are scarcely taxed 
 
 state treasury a specified rate per cent, on the capital stock and a 
 further rate per cent, whenever the capital stock is increased. One- 
 tenth of one per cent, is suggested as a rate. The object in- view is 
 less to secure revenue than to prevent foreign or bogus corpora- 
 tions from taking advantage of the present tax laws. The pay- 
 ment is made once and is not in the nature of an annual tax, but 
 rather of a franchise tax. Cf. Message of Governor Humphrey of 
 Jan. i6, 1889. 
 
 ' " If the capital of individuals and corporations or their incomes 
 should be taken into account in arriving at assessed value of their 
 property for taxable purposes, then the people through a constitu- 
 tional convention and their representatives in the legislature should 
 provide by law that such a basis should be made for assessments." 
 Report of Board of Railroad Assessors (John N. Ives, Attorney- 
 General). 
 
 The Constitution of the State of Kansas, Article XI, Section i, 
 requires the legislature to provide for a uniform and equal rate of 
 assessment and taxation. 
 
 ^ The gross earnings of the railroads of Kansas for 1897 were 
 $25,331,768.77 (Fifteenth Annual Report, Board of Railroad Com- 
 missioners, Topeka, 1898, pp. 23 and 29), and the total assessed 
 value of all railroad property was $59,210,883.80. For the same 
 year the railroads paid as general property tax, $2,030,175.20. This 
 would require a rate of 8 per cent, to yield a sum equivalent to the 
 present amount. 
 
 ' "The Treasurer ventures the opinion that there should be devised 
 a more perfect system for the assessment and taxation of telegraph, 
 telephone, express and other companies of like character. The tele- 
 graph company is taxed only upon the cost of construction of its 
 wires. The other companies are presumably taxed locally. The 
 franchises of all these companies are valuable. Just what system 
 would be best can be determined only after careful investigation. 
 Possibly a per cent, of the gross earnings paid into the state treas- 
 ury, if the legislature has the power to order it, would be the 
 simplest way. The matter is worthy of consideration " (Treasurer's 
 Report, 1885-6, p. 95). 
 
172 Studies in State Taxation [1112 
 
 at all. For this reason there are no available statistics 
 upon which to base estimates for the amounts that may be 
 expected therefrom. 
 
 Insurance companies are now taxed two, four and ten 
 per cent, upon the premiums received. The Superinten- 
 dent's report for 1897 states the total premiums of all com- 
 panies — life and fire — as $2,846,183.80. Four per cent, tax 
 here yields $113,855.36. This will probably be approxi- 
 mately the direct tax income of the state under the new 
 law. It is too early yet to make a more definite estimate 
 from this source. The irrigation tax, a percentage rate 
 upon the receipts of irrigation companies should be the next 
 to be applied to state purposes. The development of the 
 irrigation system of the state should, however, not be crip- 
 pled and present conditions hardly warrant the taxing of 
 such companies more than for local purposes. Here a pos- 
 sibility of further extension in the future is all that is sug- 
 gested. 
 
 Turning from the development of a state corporation tax 
 there still remains open for Kansas as a lucrative and legiti- 
 mate source of revenue the tax upon inheritances. No tax 
 is more in accord with the democratic tendencies of the day, 
 and toward no other tax has there been a more decided 
 movement in western commonwealths during the recent 
 years. In Iowa where conditions closely resemble those 
 in Kansas, a three per cent, collateral tax is levied.^ Mis- 
 souri in 1895 adopted a progressive collateral inheritance 
 tax of five per cent, on amounts up to $10,000 and seven 
 and a half per cent, on all amounts in excess of $10,000.' 
 Illinois has a tax on direct inheritances of one per cent, on 
 amounts in excess of $20,000. For collaterals the rates are 
 for uncles, aunts, nephews, nieces and their descendants, 
 two per cent, on excess over $2,000. In other cases, after 
 an exemption of $500, the rates are three per cent, on 
 
 ' Noble, Taxation in Iowa (New York, 1897), p. 6. 
 ' Seligman, Essays on Taxation, p. 134. 
 
173] Taxation in Kansas 173 
 
 amounts from $500 to $10,000; four per cent, on amounts 
 from $10,000 to $20,000; and from $20,000 to $50,000 a 
 rate of five per cent. ; above $50,000 the rate is six per cent.' 
 The Illinois law, with its progressive features, seems to be 
 particularly commendable. The revenue in Kansas from 
 this source would hardly be comparable for some years 
 with that derived in older states, yet there is no reason why 
 this tax should not be employed immediately. With some 
 such legislation as has been here suggested Kansas would 
 be placed in line with the most progressive commonwealths, 
 so far as taxation is concerned. State and local taxes would 
 then be entirely separated. The state levy on general prop- 
 erty would be aboHshed; taxes for local purposes would be 
 raised by the assessment of real and personal property and 
 by license taxes. Taxes for state purposes would be dis- 
 tinct taxes, such as the tax on gross earnings of certain 
 corporations, and the inheritance tax. When it is remem- 
 bered that the direct state tax is only $1,413,695.08,' and 
 that the railroads during the same year paid in a general 
 property tax of $2,395,551.73,' there can be no doubt of suf- 
 ficient state revenue. Indeed, a considerable surplus would 
 be realized either for distribution among the counties for 
 local purposes or for application to the annual school fund, 
 thus lightening the burden in the more sparsely settled 
 portions for school purposes and making possible a more 
 uniform school support. Not a change is here suggested 
 that has not been tried in the crucible of experience. Not 
 a suggestion is made which has not received the endorse- 
 ment of skilled writers upon commonwealth taxation. In- 
 deed, each provision is to-day in operation in many of the 
 older states. Undoubtedly the result would not savor of 
 perfection, but it would improve existing conditions. 
 Democratic institutions are given to us to improve as our 
 measure of intelligence and experience increases. 
 
 ' Ibid., p. 134. 
 
 ' Report of State Auditor for June 30, 1898, p. 146. 
 
 ' Ibid., p. 308. 
 
174 Sttidies in State Taxation [174 
 
 Public School Taxation 
 
 A discussion of taxation in Kansas seems incomplete 
 without some reference to the method of raising revenue for 
 the support of the public school system. No portion of the 
 state tax goes to the school fund, but it is at this point that 
 state and local taxes overlap. What the annual interest 
 upon the permanent state school fund does not supply must 
 be made up by local levies upon general property. It is 
 only a few years since the one mill levy by the state was 
 abandoned, and now it is proposed to restore the old state 
 levy. This suggestion which would make taxation for 
 school purposes a part of state taxation, and the close man- 
 ner in which local and state revenue are here made to sup- 
 plement one another, will probably justify a brief discussion 
 of the matter in connection with a study of commonwealth 
 taxation. 
 
 The present system of school taxation is unsatisfactory. 
 The main revenue is derived from the levies made by the 
 different school boards. In some districts a levy of two or 
 three mills on the dollar will keep a good school for nine 
 months, while in another almost adjacent to it, because of 
 difference in amount and assessed valuation of property 
 thirty or forty mills will only keep the school open four 
 months, and then with an underpaid or cheap teacher and 
 with insufficient furnishings and accommodations. 
 
 With a low property assessment the school board is 
 obliged to levy a large rate in order to provide funds. There 
 is, therefore, the same inequality in levying school taxes as 
 in the general taxes,. It is less grievous inasmuch as no 
 part is paid as a state tax, and each district is independent 
 of any other. If a district does not make an adequate levy 
 it alone suffers, although the schools of the sparsely settled 
 districts are more seriously injured. To show the existing 
 inequalities, several district levies for 1897 are here given: 
 Rice County levies range from 4^ to 40 mills; Wabaunsee, 
 4 to 32; Wilson, 3 to 34 J4; Barber, 2 to 323/^; Saline, 3 to 
 29; Reno, 5 to 30; Butler, 4 to 31; Washington, 4 to 30J/2; 
 
175] Taxation in Kansas 175 
 
 Woodson, I to 20; Shawnee, 3 to 27. It is not strange that 
 where such gross inequalities exist in the tax rate required, 
 there is a general dissatisfaction among educators. There 
 seems to be no unanimity of opinion, however, as to the 
 most satisfactory substitute. Several State Superintendents 
 have urged in their reports that the one mill levy by the 
 state should be restored and that it would be better if this 
 were made two mills or even three. The same criticism 
 would apply to this as to the present method of raising the 
 state revenue. It would not rest equally on the different 
 portions of the state. Equalization of the school tax would 
 be as difficult as the equalization of the state tax is at 
 present. A wiser suggestion is that the state turn to other 
 sources of revenue than the general property tax, and then 
 devote a portion of its income to the aid of the public 
 schools. Such a plan would be in harmony with the earlier 
 criticism that there should be an entire separation of state 
 from local taxation. With a distinct state tax on corpora- 
 tions, insurance companies and inheritances, there would 
 probably result a surplus over the needs of the state suf- 
 ficient to provide for a large part of the expense of the 
 schools. 
 
 In addition there should be a county school tax. This 
 has been tried in California and is the basis of one of the 
 best supported and most progressive common school sys- 
 tems in the Union. In Kansas the county tax might take 
 the shape of a levy of four or five mills on the dollar. This 
 might be laid on all the property of the county (cities of the 
 first and second class excepted) by the county commis- 
 sioners, and be collected as are other taxes. It should then 
 be the duty of the county superintendent to apportion the 
 funds thus raised among the school districts in proportion 
 to the number of teachers required to supply the schools of 
 the district. A limit to the number of pupils under one 
 teacher is desirable, and where two teachers are employed 
 the superintendent might be authorized to apportion twice 
 as much of the county fund. The same ratio of increase 
 
176 Studies in State Taxation [176 
 
 should be made for each additional teacher required. Thus 
 the districts of the county would have equal facilities of sup- 
 port. It certainly would be possible for the county superin- 
 tendent then to bring about uniformity of school work, a 
 thing which every good superintendent in Kansas is now 
 vainly striving to obtain. To supplement the county tax, a 
 district tax might be levied as at present to provide for the 
 erection and maintenance of school buildings. But this 
 district charge should be in the nature of a special tax, and 
 should not be devoted to the general maintenance of the 
 schools. In this plan provision has thus been made for 
 three regular sources of school revenue: 
 
 1. The county tax, i. e. a levy on the property of the 
 county by the county commissioners, distributed equally 
 among the^ districts. 
 
 2. The district tax, i. e. a levy on the property of the 
 district by the district meeting, as a supplementary tax or 
 for special purposes. 
 
 3. The annual school fund distributed as at present, but 
 increased by the state setting aside annually a portion of its 
 receipts from the regular state tax. In such a scheme the 
 county and district levies ought not to exceed twenty mills 
 on the dollar. 
 
 [Bibliographical Note. — i. Statutes of Kansas, 1855-99. 2. 
 Public Documents of Kansas, Topeka, 1881-99. 3. Auditor's Re- 
 ports, Topeka, 1861-79. 4. Reports of Railroad Commissioners, 
 Topeka, 1896-98. 5. Report of Superintendent of Insurance, Topeka, 
 1897-98. 6. Reports of Bureau of Labor, Topeka, 1897-99. 7. Kan- 
 sas State Historical Collections, Vols. I-V, 1881-92. 8. Holloway, 
 History of Kansas, Lafayette (Ind.), 1868. 9. Wilder, Annals of 
 Kansas, Topeka, 1875. 10. Spring, Kansas (in Commonwealth 
 Series), Boston, 1894. 11. Giles, Review of the Tax System of 
 Kansas, Topeka, 1872. 12. Taylor, Tax Laws and Decisions, To- 
 peka, 1884. 13. Blackmar, Taxation in Kansas, Lawrence, 1897. 
 14. Daniels, Problems of Taxation, Topeka, 1894. 15. Marshall, 
 The Industrial Hand Book, Winfield, 1890. 16. Poore, Charters 
 and Constitutions, Washington, 1877.] 
 
IV. 
 TAXATION IN MlSSlSSlPPr 
 
 By CHARLES HILLMAN BROUGH 
 
 Economic Characteristics 
 
 Fiscal conditions in Mississippi have always been in har- 
 mony with the external structure of the state and with the 
 internal conditions of its economic life. From April 7, 
 1798, the date of its organization as a territory, to thfe 
 present time, Mississippi has been a commonwealth of 
 landed proprietors and its fiscal policy has been largely 
 shaped by the dominant class. Although land has always 
 been the primary source of revenue, it was but naturs^l that 
 in the absence of industrial centers, the owners of landed 
 estates should shift a portion of the tax burden upon the 
 artisan and the tradesman. This is the explanation of the 
 license-privilege system, which in 1897 contributed $352,- 
 113 to the state's revenue. 
 
 The type of land-tenure, as well as the predominance of 
 landowners, shaped the state's fiscal policy. The owners of 
 large plantations, requiring slave labor for their cultivation, 
 sought to discourage free, hired labor by placing a higher 
 capitation tax on free negroes than on either whites or 
 slaves. Thus, we find in the laws of 1822 a provision to the 
 effect that the sum of seventy-five cents should be assessed 
 and collected on each slave; the sum of seventy-five cents 
 on every white male between the ages of twenty-one and 
 fifty years; and the sum of three dollars on each and every 
 
 * For assistance in gathering materials for this study my special 
 thanks are due Hon. A. Q. May, State Treasurer; Col. J. L. Power, 
 Secretary of State; and Mrs. Helen D. Bell, State Librarian. 
 
178 Studies in State Taxation [178 
 
 " free male of Color " ' — a discrimination which continued 
 in kind and became more intense in degree until the aboli- 
 tion of slavery, the system in which it was conceived. 
 
 But an influence vastly more important than the character 
 of the people and the peculiarity of their industrial economy 
 has shaped Mississippi's system of taxation. This influence 
 is the Mississippi River. Like the Nile in Egypt, the 
 Mississippi enriches its valley by a deposit of sediment; but 
 unlike the Nile, its inundations occur at irregular intervals, 
 and frequently when the cotton crop is in full bloom and 
 ready for harvest. These overflows have necessitated the 
 construction of levees, and the construction, maintenance 
 and repair of levees have necessitated the creation of sepa- 
 rate units of taxation and the levy of special taxes within 
 these units. Thus, the alluvial land of the state has been 
 divided into two separate levee districts, viz.: the Yazoo- 
 Mississippi Delta Levee District, and the Mississippi Levee 
 District,' both under the supervision of levee boards, having 
 powers of eminent domain, bond issue, and taxation, within 
 limits prescribed by the state legislature. 
 
 The legislature is empowered by the constitution of the 
 state to impose, for ordinary purposes of maintenance and 
 repair, a uniform ad-valorem tax of not less than two nor 
 more than five cents per acre upon every acre of land within 
 these districts, and a privilege tax upon every railroad oper- 
 ating within the districts; and for construction purposes an 
 ad-valorem tax on all cotton grown within the districts is 
 also authorized.' In accordance with the latter provision, 
 the revenue laws of 1892, amended in 1896, impose a tax of 
 one-fifth of one cent per pound on all lint cotton an- 
 nually grown within the Mississippi Levee District, and 
 a tax of one-fifteenth of one cent per pound on all seed 
 cotton grown and not ginned therein, the proceeds from 
 
 ^ Revised Code of Mississippi, p. 285. 
 
 " The Yazoo-Mississippi Levee District embraces the counties of 
 Couhoma, Desoto and Tunica; the Mississippi Levee District, the 
 counties of Bolivia, Issequena, Sharlcey, Warren and Washington. 
 
 ° Constitution of Mississippi, Art. 12, Sec. 236. 
 
179] Taxation in Mississippi 179 
 
 both taxes to be used in the payment of a six per cent, 
 interest charge on a bonded indebtedness of $50Oj0oo in- 
 curred for construction.^ These types of levee taxes, resem- 
 bling special assessments in so far as they are payments for 
 special benefits conferred,, have their origin in the peculiar 
 geographical and industrial conditions of the state. 
 
 Many of the radical constitutional provisions relating to 
 taxation in Mississippi are explained by the political and 
 economic traditions; of the state. The taxation of corpora- 
 tions in the same manner as individuals may be regarded* 
 as the application of the democratic, leveling idea, to fiscal 
 affairs. The appropriation of the proceeds from the state 
 poll tax: to the support of the common school system and 
 the constitutional right given a school district: to levy addi- 
 tional ad-vaJorem and poll' taxes in aid of its schools, illus- 
 trate the importance attached to dementary education in 
 Mississippi. The exemption of maimed and infirm Con- 
 federate soldiers from the payment of most of the privilege 
 taxes, is virtually a supplement of the state's pension system. 
 
 General Finances 
 
 Economic conditions have had as much influence in 
 molding the machinery as in determining the forms of 
 taxation in Mississippi. The existence of large plantations 
 has caused sparse settlement, and sparse settlement has 
 made the county the fiscal unit of the state. Since 1799, 
 when the law provided that the general court of quarter 
 sessions should make an estimate of necessary county ex- 
 penses,^ the county has been the unit in the apportionment, 
 assessment and collection of taxes in Mississippi. State 
 taxes are, indeed, levied directly upon the persons and prop- 
 erty of individuals by the state; but county officials are held 
 responsible for their assessment and collection. 
 
 Taxes have not only increased largely in amount within 
 the past decade of Mississippi's history, but they have also 
 
 ' Mississippi Laws, 1892, p. 48-; ibid., 1896, p. 167. 
 ' Mississippi. Laws, 1799,, p-. 121. 
 
180 Studies in State Taxation [180 
 
 assumed a place of relatively increasing importance in the 
 budget of the state. For the fiscal year ending December 
 31, 1887, the total receipts into the state treasury were 
 $1,069,568; of which taxes, state and privilege, supplied 
 $808,062, or 75.5 per cent, of the whole. For the fiscal year 
 ending September 30, 1897, the total receipts into the state 
 treasury were $1,840,754, of which taxes, state and privilege, 
 supplied $1,440,684 or 78 per cent, of the whole. This in- 
 crease, both in the quantity of tax receipts and the propor- 
 tion which they bear to total receipts, is due partly to an 
 increase in the rate of taxation, and partly to an increase in 
 the assessed valuation of property. In 1887 the rate of the 
 state tax on property was 3.5 mills on the dollar; in 1898, 
 6.5 mills on the dollar. The average rate for the decade 
 was 5.2 mills on the dollar. The amount of property 
 assessed in 1887 was: of realty $90,270,135, of personalty 
 $39,617,119, making a total of $129,887,254. The amount 
 of property assessed in 1897 was: of realty, $113,210,931, of 
 personalty, $44,994,791, making a total of $158,205,722, or 
 an increased valuation within ten years of $28,318,468, or 
 21.3 per cent. The gross privilege-tax receipts only 
 amounted to $352,113 in 1897, as compared with $392,415 
 in 1887; but this discrepancy is explained (i) by the repeal 
 in 1890 of the option theretofore given railroads of paying 
 either privilege or ad-valorem taxes, (2) by the recent re- 
 duction in privilege charges and (3) by the enactment within 
 the past ten years of rigid prohibition laws. 
 
 There is no hazard in the prediction that the recent indus- 
 trial progress of Mississippi, as revealed by the records of 
 incorporation filed in the office of the Secretary of State' 
 will greatly increase the revenues accruing from the privi- 
 lege-license system in the future. This is especially true be- 
 cause the industrial progress of the state has not meant an 
 extension either of the industrial domain or of municipal 
 
 ' Between January and December, 1898, five railroads, eight banks, 
 three manufacturing establishments, six telephone companies, five 
 compresses, six oil-mills and four steamboat and packet companies, 
 all subject to the payment of privilege taxes, have been incorporated. 
 
181] Taxation in Mississippi 181 
 
 functions. The enterprises incorporated have been private 
 concerns, and as such are subject to the payment of a privi- 
 lege tax. 
 
 But decidedly the most potent influence making for both 
 an absolute and relative increase of taxation in the state's 
 budget is the rigid enforcement of the back-tax collection 
 law by the State Revenue Agent. This officer, fortified 
 by the law authorizing the collection of back taxes from 
 corporations and individuals escaping assessment' and by 
 a recent decision of the Supreme Court of Mississippi 
 against the constitutionality of charter exemptions, has in- 
 stituted and is prosecuting to a successful conclusion suits 
 involving approximately $1,500,000. Already several of 
 the largest railroad companies in the state have offered to 
 compromise the back-tax suits pending against them; and 
 so sure are the people of the ultimate result that the dispo- 
 sition of the surplus revenue expected to accrue from back 
 taxes has been made an issue in the gubernatorial cam- 
 paign. 
 
 Pari passu with the increased importance of taxation in 
 the state budget there has been a gradual displacement 
 of the fee system by the privilege-license system. This is 
 the result of the natural merger of the license fee into the 
 license tax, and the conversion of the special benefit con- 
 ferred into a special burden. This absorption of license 
 fees by license taxes has so minimized the budgetary import- 
 ance of fees that in 1897 they furnished only $2,110 out of a 
 total revenue of $1,840,754. 
 
 A most gratifying effect following in the wake of the 
 increase in the volume of taxation has been the shrinkage 
 in state indebtedness. Within the last decade the indebt- 
 edness has been reduced from $1,345,226 to $1,105,780, 
 this, too, in spite of constantly increasing appropriations for 
 common schools. Confederate pensions, asylum construc- 
 tion and repair of penitentiary farms. Greater complexity 
 in civil life has necessarily enhanced the cost of regulation; 
 
 ' Mississippi Laws, pp. 29 et seq. 
 
182 
 
 Studies in State Taxation 
 
 [183 
 
 tut it is a hopeful sign that out of this necessity there has 
 sprung the theory that sinking funds should be substantial 
 surpluses and not sinking debts. 
 
 A suirrmary of the fiscal status of Mississippi at the close 
 -of the last fiscal year is here appended: 
 
 State Budget for Piscal Year 1897.' 
 
 Ifame of Account, Keceipts. Expenditures. 
 
 State Property Tax , $1,088,571.34 
 
 State Privilege Tax , , 352,112.56 
 
 State Poll Tax 250,057.00 
 
 Insolvencies 466.99 
 
 State Tax, Special Loan 85,000.00 
 
 Pees 2,109.93 
 
 Land Redemptions 604.86 
 
 Two per cent. Fund 98.59 
 
 Three per cent. Fxmd , 147.88 
 
 Chickasaw School Land Fund 1,868.78 
 
 General Fund 13,057.45 
 
 Supplement Peabody Pund 1,500.00 
 
 A. & M. College U. 5. Pund 33,000.00 $20,791.83 
 
 Certificates of Indebtedness , 1,800.00 12.00 
 
 Land Sales of Escheated Property 84.92 
 
 Rents on Escheated Property I95.6s 
 
 Sales of Reports, Laws and Code 1,241.10 
 
 Collections by Revenue Agent — 355-65 
 
 Land-Office Receipts 18,470.60 
 
 Miscellaneous 10,75 3.563.46 
 
 Common School Appropriation 923,5oox)o 
 
 Judiciary 90,884.30 
 
 Executive 30,144.69 
 
 Legislative 36,216.97 
 
 Pensions 73,311.00 
 
 Pailroad Commission 6,902.15 
 
 Commissions for Assessing 50,394.26 
 
 University of Mississippi 37,643.00 
 
 Lunatic Asylum 82,576.66 
 
 Blind Institute 9,455-59 
 
 Deaf and Dumb Institute 32,021.27 
 
 East Mississippi Insane Asylum 43,085.46 
 
 A. & M. College 39,085.04 
 
 Industrial Institute and College 23,410.00 
 
 Alcorn University 18,960.09 
 
 Holly Springs State Normal School 2,000.00 
 
 Natchez City Hospital 8,750.01 
 
 Vicksburg City Hospital 12,309.97 
 
 ' Compiled from Report of State Treasurer, 1897, pp. 29-30; cor- 
 rected by Treasurer',": books. 
 
183] Taxation in Mississippi 183 
 
 Name of Account. Receipts. Expenditures. 
 
 State Board of Health 14,894.35 
 
 Library Fund and Expenditures 1,096.13 
 
 Interest on Mississippi four per cent. Bonds, 4,120.00 
 
 Interest on Mississippi five per cent. Bonds, 19,325.00 
 
 Interest on Mississippi six per cent. Bonds, 29,976.00 
 
 Interest on Mississippi Special Warrants.. 22.99 
 
 County Tax on Land Purchases 3,636.44 
 
 Public Printing 4.479-53 
 
 Express, Postage and Stationery 4,119.45 
 
 Supreme Court Reports 4,272.00 
 
 Canceled Land Patents 11,327.39 
 
 Light, Heat and Water Co 4,000.00 
 
 Jackson Fire Department 1,000.00 
 
 National Guard 2,095.75 
 
 Mansion Repairs 
 
 Contingent Offices 576.00 
 
 Total $1,840,754.05 $i,649,95a98 
 
 Balance 190,797.07 
 
 Total Indebtedness of the State on October ist, 1S97.' 
 
 PAYABLE DEBT. 
 
 Bonds, Series " B," January i, 1878 $ 450.00 
 
 Mississippi 6 per cent. Bonds, Act March 18, 
 
 1886, due January i, 1907 500,000.00 
 
 Interest on same due and not paid 416.00 
 
 Mississippi 4 per cent. Bonds, Act March 7, 
 
 1888 103,000.00 
 
 Interest on 8 per cent. Bonds past due and 
 
 not paid . 202.00 
 
 Mississippi 5 per cent. Bonds, Act March 18, 
 
 1896, due January i, 1906 400,000.00 
 
 Interest on same past due and not paid 682.95 
 
 Special Loan under Act May 15, 1897 85,000.00 
 
 Certificate of Indebtedness 2,463.00 
 
 Railroad Tax Distributions 929.22 
 
 Outstanding Warrants 12,637.24 
 
 $1,105,780.41 
 
 NON-PAYABLE DEBT (INTEREST ALONE TO BE PAID). 
 
 Chickasaw School Fund $856,300.81 
 
 Seminary Fund, University of Mississippi. . 544,061.23 
 Agricultural 5 per cent. Bonds, due January 
 
 I, 1896 212,150.00 
 
 $1,612,512.04 
 
 $2,718,292.45 
 
 " Compiled from Amended Report of State Treasurer, 1897, p. 33. 
 
184 Studies in State Taxation [184 
 
 Development of Taxation^ 
 
 The history of fiscal legislation and development in Mis- 
 sissippi is comprised within five distinct periods. These 
 periods, with rough chronological indices, are (i) Terri- 
 torial, 1798-1817; (2) Ante-bellum Statehood, 1817-1861; (3) 
 Confederate and Post-Confederate Governments, 1861-1867; 
 (4) Reconstruction, 1867-1876; (5) Modern, 1876-1898. 
 
 1798-1817. By an Act of Congress, approved April 7, 
 1798, that tract of land which to-day includes the states of 
 Alabama and Mississippi, was constituted one district and 
 called the Mississippi Territory. Major Winthrop Sar- 
 gent, a native of Massachusetts, was appointed governor, 
 and three territorial judges were named. The governor and 
 judges were empowered to frame a code for the territory on 
 the basis of the statutes of other states. This code, known 
 as " Sargent's Code," has been characterized as " directly at 
 variance with all statute law in America, and utterly repug- 
 nant to any known system of jurisprudence derived from the 
 common law of England." ' Certainly this is true of tbat 
 part of it " directing the manner in which money shall be 
 raised and levied to defray the charges which may arise 
 within the several counties." ' 
 
 According to its provisions, the court of general quarter 
 sessions in each county was authorized to make an estimate 
 of the county's average annual expenditure, and this esti- 
 mate was submitted to the governor and one or more of the 
 territorial judges for approval. The amount approved was 
 apportioned among the several towns in the county by com- 
 missioners biennially appointed by the court of common 
 pleas. If the town numbered sixty or more citizens, two 
 commissioners were appointed; if one hundred or more, 
 three commissioners. These commissioners received the 
 
 ' This portion of the essay appears in substantially the same form 
 in the Publications of the Mississippi Historical Society, Vol II, 
 pp. 1 13-124 inclusive. Published by the Society, Oxford, Missis- 
 sippi, 1899. 
 
 ' Lowry and McCardle, History of Mississippi, p. 71. 
 
 " For provisions see Mississippi Laws, 1799, pp. 121-123. 
 
185] Taxation in Mississippi 185 
 
 returns of taxables in each township, and assessed the prop- 
 erty therein. It was specified that the commissioners should 
 ascertain " the names of all freemen, inmates, hired male 
 servants (being twenty-one years of age) whether profitable 
 or chargeable to the employers " and obtain " a list of all 
 lands not being the property of the United States or appro- 
 priated to public uses, the tenements, houses, cabbins or 
 other buildings wherein people dwell and which are rented 
 and afford an income to the owners, and all ferries, stores, 
 shops, warehouses, mills, gins, keel or batteaux boats of the 
 burthen of twenty barrels and upward producing a yearly 
 income, and of the bound male servants and male slaves 
 above the age of sixteen and not exceeding fifty; draught 
 oxen, saddle and draught horses, cows penned or kept up 
 and immediately productive to the owners; together with 
 the stock of cattle, including sheep and swine intended for 
 market and thereby productive of annual income and 
 profit." Lands were to be assessed " in just proportion to 
 their value." Those not having visible property to the 
 amount of one hundred dollars could not be assessed more 
 than $1, " save by a due proportion of labour in the opening 
 and keeping in repair highways and public roads." 
 
 This enumeration viewed in the light of modern inter- 
 pretation, meant a graduated income tax, for the support 
 of town and county government. The valuation of real 
 estate was determined not by its intrinsic worth or actual 
 selling value, but by the annual income (profit) which on 
 the average it was deemed likely to produce. Taxation 
 was altogether local, there being no territorial levy as dis- 
 tinguished from the biennial county and township levies. 
 Localization of fiscal activity, an income valuation, and the 
 fact that visible specific property bore all the burden, formed 
 the characteristics of Mississippi's primitive tax system. 
 
 The collection of taxes, at this time, was vested in the 
 county sheriff, who was ex officio the county collector. 
 The commissioners appointed by the county court as asses- 
 sors were allowed $i.oo per day, and the sheriffs were 
 
186 Studies in State Taxation [186 
 
 authorized to keep one per cent, of their collections before 
 making their reports to the county treasurer. 
 
 This crude fiscal device of Sargent remained in effect 
 without substantial modification until 1815. In that year 
 a law was passed,' which provided for a district territorial 
 tax and specified that county taxes should be levied upon 
 the property and objects enumerated in the territorial 
 schedule/ Henceforth there was to be commonwealth 
 taxation as distinguished from purely local taxation. 
 
 The territorial schedule comprised a general list of ratable 
 objects with fixed valuations. Land was divided into six 
 classes, each class having three qualities. The principal 
 bases of classification were proximity to commercial cen- 
 ters and distances from watercourses. Thus, Class I con- 
 tained all lands l)dng within eight miles of Natchez, the 
 first quality of which was rated at $12 per acre; the second, 
 at $8.00 per acre; and the third, at $3.00 per acre. Class II 
 contained all lands lying within fourteen miles of the Mis- 
 sissippi River, with valuations according to quality, ranging 
 from $7 to $10 per acre. Class III contained all lands 
 lying not less than fourteen nor more than twenty miles 
 from the Mississippi, with valuations ranging from $5 to $2 
 per acre. 
 
 Lands, lots and buildings within any city, borough or 
 town were subject to a uniform ad-valorem tax of two mills ; 
 bank stock and merchandise, to an ad-valorem tax of two 
 and one-half mills. Capitation taxes of fifty and sixty-two 
 and one-half cents, respectively, were levied on slaves and 
 white males above the age of twenty-one. Slave-traders 
 were taxed five dollars on each slave brought into the ter- 
 ritory, and this primitive privilege-license system was 
 further strengthened by a tax of one dollar and twenty-five 
 cents on " pleasurable carriages." The assessors and col- 
 lectors were appointed by the governor and not by the 
 
 ' Digest of the Statutes of the Mississippi Territory, 1816, pp. 415- 
 424. 
 ' County taxes could not exceed one-half of the territorial tax. 
 
187] Taxation in Mississippi 187 
 
 county courts, as theretofore, a change probably due to the 
 differentiation of commonwealth from county taxation. 
 
 j8j/-i86i. For lack of a better term, the period from 
 1 817, the date of Mississippi's admission into the Union, to 
 the outbreak of the Civil War may be designated " the 
 period of ante-bellum statehood." Such a division in fiscal 
 history is justified by the fact that during this period the 
 tax system of the state underwent substantial change. The 
 increasing expenses of state administration, the accumula- 
 tion of state indebtedness, marked differentiation in industry 
 giving rise to numerous classes of wealth, and progress in 
 democratic thought, all demanded an extension of the 
 state's fiscal system. Personal property bec^ne as im- 
 portant an object of taxation as land. The personal prop- 
 erty list was no longer limited to slaves, pleasure carriages 
 and bank stock, but included gold and silver plate, pianos, 
 ■weapons, watches, clocks, cattle in excess of twenty head, 
 saddle and carriage horses, money loaned at interest, mer- 
 chants' and brokers' capital. 
 
 The taxation of personal property was supplemented by 
 the hcense-privilege system with charges partly rated and 
 partly specific. Thus in 1857 auctioneers and pedlers were 
 taxed three per cent, on the amount of their sales; saloon- 
 keepers, one-fourth of one per cent, on all sales of vinous 
 and spirituous liquors by the gallon; traders in slaves, 
 horses and mules, three per cent, on the amount of their 
 sales; keepers of ferries, toll bridges and turnpikes, one- 
 fourth /of one per cent, on all receipts; circuses, $25 per 
 each day's performance; nine-pin alleys, theaters or places 
 for theatrical performances, $25 each.' Even the poll tax 
 was widened in its application so as to include free negro 
 males between the ages of twenty-one and fifty years. 
 
 Simultaneously with this external expansion the tax 
 system underwent internal change. Land classification was 
 abolished. Annual income was rejected as a device for the 
 valuation of land, and a method substituted which is still 
 
 ^ Revised Code of Mississippi, 1857, pp. 72-73. 
 
188 Studies in State Taxation [188 
 
 in vogue, viz., assessment according to actual value, sworn 
 to by the owner or person in charge. In the process of 
 assessment account was to be taken of improvements, prox- 
 imity to navigation, towns, cities, villages or roads, and any 
 other circumstance that might tend to enhance value. 
 
 The distinction between state and county taxes was pre- 
 served, but it was not the same as that between territorial 
 and county taxes. County police boards were now author- 
 ized to levy a variable per centum rate on the amount of the 
 assessment of the state tax and also a special tax for the 
 erection and repair of county buildings. Under the terri- 
 torial regime, county taxes could never exceed half the 
 territorial tax; in the state period, county taxes frequently 
 exceeded the state tax. 
 
 This period was also marked by a radical change in 
 the machinery of assessment and collection. During the 
 territorial period, the assessing and collecting officers were 
 either appointed by the county or by the territorial gov- 
 ernor; during the period of ante-bellum statehood, they 
 were chosen directly by the people.' The county sheriff 
 was ex oMcio the county collector, but the assessor was a 
 separate officer with distinct functions. Both were bien- 
 nially elected, and the compensation of each was fixed at 
 five per cent, on the amount of the state tax assessed and 
 collected. This per centum remuneration could not ex- 
 ceed a fixed sum; the assessor's maximum being $500 and 
 the collector's $3,000 per annum. The fiscal machinery 
 thus set in motion differs little from that in use at the 
 present time. 
 
 Although the ante-bellum period witnessed the establish- 
 ment of some of the main features of the modern system of 
 state and local taxation in Mississippi, it cannot be desig- 
 nated as transitional in the sense Professor Ely uses the 
 term transitional.^ There was no change from the taxation 
 
 ' Revised Code of Mississippi, 1857, pp. 70-72. 
 
 ' Ely (" Taxation in American States and Cities," p. 131) desig- 
 nates the period from 1796 to the outbreak of our Civil War as 
 transitional. 
 
189] Taxation in Mississippi 189 
 
 of specific kinds of property at varying rates to the taxation 
 of the collective mass of property at one uniform rate. More 
 kinds of property were taxed, but there was no disposition 
 to group them under a common category at a uniform rate. 
 The objects taxed were as specific, and the rates imposed 
 were as variable as ever. The period was characterized 
 by an extension of the tax system, but not by its simpUfi- 
 cation. 
 
 1861-1867. War demands extraordinary revenue and 
 especially was this true of our Civil War. It is not strange 
 that the Constitutional Convention of 1861, in which Mis- 
 sissippi's allegiance to the Union was formally renounced, 
 supplemented the ordinance of secession by " an Ordinance 
 to Raise Means for the Defence of the State." ' This rev- 
 enue ordinance provided for the collection from each tax- 
 payer of an additional special state tax of fifty per cent, on 
 the regular state tax and also for a tax from every inhabitant 
 of three-tenths per cent. uj>on all money owned or controlled 
 by such inhabitant, the moneys so collected to constitute a 
 Military Fund. In 1863, it was further enacted that an 
 additional special tax of fifty per cent, on the regular State 
 tax be levied, to be known as the Military Relief Tax, the 
 proceeds to be used for the relief of the destitute families of 
 Confederate soldiers. 
 
 In 1865, in order better to provide for the families of sol- 
 diers, a direct tax in kind was imposed on the gross amount 
 of all corn, in excess of one hundred bushels; of all wheat, 
 in excess of twenty-five bushels ; and of all bacon, in excess 
 of one hundred pounds; on the tolls from all grain mills; 
 on the gross profits of leather, whether manufactured for 
 sale or received on shares as commission by tanneries; and 
 on all woolen and cotton fabrics manufactured for sale.' 
 
 " For provisions, see " Proceedings of the Constitutional Conven- 
 tion," 1861, pp. 12-15. (Only one copy of this valuable document is 
 in existence, this being the property of the Secretary of State of 
 Mississippi). 
 
 ' Mississippi Laws, February and March, 1865, pp. 3-10. 
 
190 Studies in State Taxation [190 
 
 For the benefit of the County Indigent Fund,' the boards of 
 police of the several counties were also empowered to levy 
 a tax in kind of one-half of one per cent on all corn, wheat 
 and bacon gjowm and produced in the state. 
 
 The exigencies of war and the depreciation of the Con- 
 federate treasury notes, in which taxes were paid, necessi- 
 tated not only the levy of special taxes but also an exten- 
 sion of the existing taxes. Notable among the additions 
 were taxes of five cents per pound on all seed cotton over 
 one bale of five hundred pounds lint, raised by a single 
 hand ; of two per cent, on the gross profits of iron foundries, 
 machine shops, dealers in grain, provisions, etc. ; of fifty 
 per cent, on the wages of mechanics in excess of seventy- 
 five per cent, profit above the actual cost of labor and ma- 
 terial; of twenty cents on every $ioo of railroad stock pay- 
 ing three per cent, per annum.' 
 
 Before the war, the state had encouraged railroad enter- 
 prise by tax exemption and had even gone so far as to 
 levy special railroad taxes in the several counties in payment 
 for stock subscriptions to these enterprises. During the 
 war, financial expediency made necessary the withdrawal 
 of all premiums upon industrial progress, and the husband- 
 ing of the state's resources for the conduct of military oper- 
 ations. Emergency taxation was supplemented as a fiscal 
 device by the use of Confederate currency, depreciated 
 cotton money and Mississippi treasury notes. This extreme 
 economic tension was only relaxed after the last troops of 
 the Confederacy had surrendered. 
 
 Upon the downfall of the Confederacy in 1865, the Con- 
 stitutional Convention called by Governor Sharkey organ- 
 ized Mississippi as a state government. The financial 
 problem confronting the post-confederate government was 
 
 ' " Indigent beneficiaries " were divided into three classes, viz. : 
 (a) those entirely dependent, (b) those deficient in bread&tuffs, (c) 
 those deficient in bacon. No beneficiary could receive more than 
 six bushels of corn, one bushel of wheat and fifty pounds of bacon 
 during the year. 
 
 ^ Mississippi Laws, 1862-63, pp. 153-1SS. 
 
191] Taxation in Mississippi 191 
 
 as difficult as that which confronted the Confederacy itself. 
 Land was useless as an object of taxation, because it had 
 no market value. Industries were paralyzed and needed 
 bonuses rather than increased burdens. The debt con- 
 tracted during the war had not been repudiated, and there 
 was a new state government to support. How was the 
 difficulty to be solved? 
 
 The legislatures of 1865, 1866, and 1867 acted in a sen- 
 sible and direct way in dealing with the situation. A direct 
 tax of one dollar per bale was levied on all cotton brought 
 to market and sold; an inheritance tax of one per cent, on 
 the gross amount of all collateral inheritance; a tax of 
 three-tenths of one per cent, on annual rents and tenements. 
 Privilege taxes were exacted from the larger corporations. "^ 
 
 This selection of taxable objects proved most fortunate, 
 the cotton tax alone yielding sufficient revenue to support 
 the whole state administration. The state indebtedness 
 was scaled and Mississippi recovered rapidly from financial 
 despondency. 
 
 i86j~i876. The rule of " Reconstruction and Radical- 
 ism " fastened upon the state in 1867 meant signal retro- 
 gression in fiscal policy. This reign of ignorance and inef- 
 ficiency was formally ushered in by a motley assemblage 
 known as the " blaek-and-tan convention," so-called from 
 the negroes and carpet-baggers who composed it. The 
 special taxes levied to cover the proffigacy and extrava- 
 gance of this convention, whose expenses for a period of 
 less than five months aggregated nearly a quarter of a mil- 
 lion dollars, foreshadowed the future. Cotton, grist mills, 
 sawmills, grocery, drug, and provision stores, ferry and 
 wharf boats, railroad and steamboat companies, banks and 
 hotels were all subjected to taxation. Even the inviolability 
 of the press was not respected, and sums ranging from $20 
 to $50 were exacted from each daily, tri-weekly and weekly 
 newspaper published in the state. The plunderers modestly 
 
 ' Mississippi Laws, 1866-1867, pp. 412-414. A notable instance is 
 the tax of $2000 per annum imposed upon express companies. 
 
192 Studies in State Taxation [193 
 
 concluded their outrageous schedule with the provision 
 " that a special tax of fifty per cent on the State tax be 
 levied in addition to the State tax now assessed upon real 
 and personal property.'" 
 
 The rejection of the Constitution framed by this " black- 
 and-tan convention " and the conservative administration 
 of Governors Alcorn and Powers, both property-owners 
 and tax-payers in the state, served in a measure to check 
 fiscal excesses. However, this improvement was but tem- 
 porary. In 1869 the state levy was only one mill on the 
 dollar of the assessed value of land; in 1870, five mills; in 
 1871, four mills; in 1872, eight and one-half mills; in 1873, 
 twelve and one-half mills. This was only the state tax. 
 In many counties a county tax of one hundred per cent, on 
 the state tax was added, besides a special tax in some coun- 
 ties to pay the interest on their bonded debts, and a special 
 tax in the incorporated towns of from five to ten mills 
 on the dollar for town purposes. The total tax paid by citi- 
 zens was two and eight-tenths per cent, outside of the cities, 
 and from three and one-half to four per cent, in the cities." 
 
 With the election and inauguration of Adelbert Ames as 
 governor in 1874, the spirit of plunder animating the aliens 
 and negroes burst forth with a fresh fury. The tax on land 
 was increased to fourteen mills, a rate which virtually 
 amounted to confiscation. Cotton was taxed $10 per bale 
 and the proceeds invested in the Freedmen's Savings Bank. 
 The poll was increased from two dollars to six dollars per 
 capita, and the responsibility for the payment of the negro's 
 poll was saddled on his white employer. This fiscal comedy 
 reached its climax in the imposition of a one per cent, tax 
 
 ' Mississippi Laws, 1868, pp. 215-220. This convention dropped 
 the provision found in the Constitution of 1832 restricting the 
 origination of revenue bills to the lower house. The Constitution 
 of 1890 expressly declares that all bills may originate in either house 
 and be amended and rejected in the other. 
 
 " Lowry and McCardle, History of Mississippi, p. 230. See also 
 Barksdale, Reconstruction in Mississippi (Noted Men of the Solid 
 South, p. 339). 
 
193] Taxation in Mississippi 193 
 
 on all amounts expended by the citizens of the state in 
 travel.^ 
 
 The people simply could not pay these taxes, and over 
 6,400,000 acres of land were forfeited. Driven to poverty 
 by this confiscation, the tax-payers, in convention assem- 
 bled, presented to the legislature a most respectful prayer 
 for relief. The legislature treated the petition with con- 
 tempt, an action which resulted in the organization of tax- 
 payers' leagues over the state and the speedy overthrow of 
 the carpet-bag government. This struggle between tax- 
 payers and tax-layers in Mississippi is but another illus- 
 tration of the truth of the saying of Edmund Burke that 
 " from the earliest times the great battles for freedom have 
 been fought out on the question of taxation,." 
 
 But the price of victory was dear and the penalty paid for 
 experience was great. In addition to an interest-bearing 
 debt of $984,200, the carpet-baggers left outstanding on 
 January i, 1876, non-interest paying auditor's warrants 
 amounting to $414,958. During the last six years of their 
 short regime, they spent $8,501,438, nominally on account 
 of the expenses of state government, an average of $1,484,- 
 699 per annum." They collected nearly a million dollars of 
 what is known as the " Common School Fund," and spent 
 it all, except $57,000, in United States bonds left in the 
 treasury to the credit of that fund. This money was not 
 spent on common schools, the purpose for which it was col- 
 lected, but was misappropriated in ways never accounted 
 for, and a debt against the state on account of that fund was 
 left on January i, 1876, amounting to $830,378. This, too, 
 in spite of the fact that the average rates of state and county 
 taxation during the six years in question were 8.87^^ and 
 12.49% mills respectively, making a combined average of 
 $21.37% o" $1,000. 
 
 i8/6-i8p8. Indebtedness was thus the legacy which the 
 modern period received from the period of reconstruction 
 
 ' Mississippi Laws, 1874, p. 46. 
 
 ' Reports of State Auditor and Treasurer, 1870-1876. 
 
 13 
 
194 Studies in State Taxation [194 
 
 and radicalism. Although burdened with this incubus and 
 threatened with increasing expenditures for educational and 
 eleemosynary institutions, the modern period in Missis- 
 sippi's fiscal history has been characterized by a decrease in 
 both state and county tax rates and by a proportionate 
 reduction in the amount and interest rates of the state in- 
 debtedness. 
 
 The first year of the new period, 1876, gave earnest of 
 fiscal reforms. State taxes were reduced from nine and 
 one-half mills on the dollar to two and one-half mills. The 
 taxing power of county boards of supervisors was re- 
 stricted by the passage of a law prohibiting such board from 
 levying taxes for county purposes to an amount which, 
 added to the state tax, would exceed sixteen and one-half 
 mills on the dollar, except for indispensable purposes.' 
 Unnecessary officials were dismissed, the common school 
 system improved, sinecures abolished and salaries reduced. 
 
 This policy of economy in state administration has 
 yielded substantial results. The average rate of state taxa- 
 tion for the past twenty-two years is 4.66 mills, as com- 
 pared with 8.87^4 mills for the six years preceding The 
 average rate of county taxation for the same period is ii.i 
 mills as compared with 12.49^^ mills for the six years pre- 
 ceding. Combining averages, we find a saving of 5.60J/2 
 mills on the dollar, or $5.60!/^ on $1,000. 
 
 Reduction in tax rates has meant a reversal of the policy 
 of confiscation. Of the 6,400,000 acres of land forfeited for 
 non-payment during reconstruction rule, all but 250,000 
 acres have been redeemed. Property valuation has largely 
 increased, the value of real and personal property in the 
 state to-day being estimated at $156,432,328. Conservative 
 capital is seeking investment in all branches of industrial 
 enterprise and economic progress is following in the wake 
 of fiscal reform. 
 
 Although the total funded debt of the state has increased 
 from $830,750 in amount and $45,507 in interest charges, 
 
 ' Mississippi Laws, 1876, p. 94. 
 
195] Taxation in Mississippi 195 
 
 in 1876, to $1,105,780 in amount and $53,421 in interest 
 charges, in 1897, this increase is not without warrant. The 
 obligations, amounting to $876,257 in principal and interest, 
 handed down from reconstruction times have all been paid. 
 During the past twenty-two 5^ears $6,755,708 have been ap- 
 propriated for and actually paid to common schools, as 
 opposed to $1,323,766 appropriated and $327,742 paid dur- 
 ing the six years preceding 1876. Higher education has 
 been liberally supported, eleemosynary institutions estab- 
 lished and equipped, and the Confederate pension fund, 
 largely increased. 
 
 Yet these extraordinary expenditures have only caused 
 an addition of $282,944 to the state's payable debt. This 
 fact alone gives character to the present administration of 
 Mississippi's finances and gives promise of a wise use of the 
 commonwealth's taxing power in the future. 
 
 Present Tax System 
 
 The principal taxes now employed in Mississippi for 
 commonwealth purposes are, in the order of their import- 
 ance, the general property, the privilege, and the poll taxes. 
 The tax on corporations which is found in many American 
 commonwealths as a distinct tax, has not been differentiated 
 in Mississippi from the general property and privilege- 
 license taxes.' The tax receipts of the state for the fiscal 
 year ending September 30, 1897, are shown in the appended 
 table:' 
 
 Assessed Valuation. Receipts. 
 
 General Property Tax: Realty $113,210,931 $73S,87i-OS 
 
 General Property Tax: Personalty 44,994,791 292,466.14 
 
 General Property Tax: Railroad, Tele- 
 graph, Express and Sleeping-Car Com- 
 panies 24,682,876 160,438.70 
 
 State Privilege Tax 352,112.56 
 
 Poll Tax 529,694.00 
 
 Total $182,888,598 $2,070,592.45 
 
 '■ The constitution of Mississippi requires that the property of 
 corporations be taxed in the same manner as that of individuals, 
 which means the assessment of real and personal property by local 
 officials. (See Constitution of Mississippi, Art. 7, Sec. 181.) 
 
 ' Compiled from Report of State Auditor, 1897, p. 347, and from 
 books of State Treasurer. 
 
196 Studies in State Taxation [196 
 
 General Property Tax 
 
 From the admission of Mississippi into the Union in 
 1817, through the successive revisions of the state consti- 
 tution in 1832, 1869, and 1890, the general property tax has 
 remained de jure supreme as a fiscal expedient. During 
 this period the tax has suffered few variations from its 
 original form. The tax on land has always been rated 
 rather than specific; while the tax on personalty has been 
 rated, in so far as personalty has been subject to a general 
 property tax, and specific in so far as personalty has been 
 subject to a privilege tax. Until 1846, the tax on land 
 was a percentage charge imposed according to quality. In 
 that year land classification was abolished. 
 
 Classification according to quality was again adopted as 
 a basis of assessment under the provisions of the famous 
 " Madison Law," but was abandoned in 1890 when this law 
 was declared unconstitutional.' The state levy has varied 
 from two mills in 1822 to six and one-half mills in 1898, 
 attaining a minimum of one mill in 1869 and a maximum 
 of 14 mills in 1874. The latter year, it will be remembered, 
 marked the apogee of financial mismanagement during the 
 reconstruction era. 
 
 Before 1876, the rate was not uniform on those articles 
 of personal property, now listed in the personal property 
 blanks and subject to the regular state and county property 
 tax. Of recent years, however, a tendency toward uni- 
 formity is perceptible and to-day the levy on all personal 
 property for state and county purposes is the same as that 
 on real property. 
 
 ' The " Madison Law," so called from the name of its author, 
 divided the lands of the state into five classes of eight qualities each. 
 The classes were grouped according to counties, the object being 
 " to equalize assessments in the diflferent counties of the state." In 
 1890 the Supreme Court of the state held that grouping lands on 
 this basis was in violation of section 112 of the constitution, declar- 
 ing that taxation shall be equal and uniform throughout the state. 
 For fuller provisions of the Madison Law, see Mississippi Laws, 
 1888, pp. 24-27. 
 
197] Taxation in Mississippi 197 
 
 Profiting from the excesses of the reconstruction period, 
 the legislature not only fixes the state levy but also imposes 
 a limit beyond which the county board of supervisors can- 
 not go for any purpose. The revenue laws of 1898 fix 
 this limit at 15 mills for state, county and school purposes 
 with the proviso that " counties having an outstanding in- 
 debtedness may levy an additional tax for paying interest 
 thereon, and a sinking fund to pay the principal if necessary, 
 but the whole amount levied shall not exceed eighteen 
 mills." ' 
 
 Although the extent of the levy is thus rigidly prescribed, 
 this limitation does not in any wise lessen the importance of 
 the general property tax as a fiscal device. School districts, 
 whether they be counties or municipalities, are dependent 
 on the general property tax for the continuance of their 
 schools beyond the term of four months guaranteed by state 
 appropriation out of the poll tax receipts.^ Levee districts 
 are protected from overflow by a special ad valorem prop- 
 erty tax of five mills, supplemented by a tax of one-fifth of 
 one cent per pound on all lint cotton and one-fifteenth of 
 one cent per pound on all seed cotton grown within the 
 district.' In short, every unit of political and administrative 
 organization in the state has adopted the general property 
 tax as necessary to its institutional life. The machinery 
 of the assessment, imposition and collection of the general 
 property tax in Mississippi is complex and necessitates de- 
 tailed treatment. 
 
 Exemptions. All taxable property brought into^ the state 
 before the first of February is liable to the payment of 
 taxes for the current year.. " Taxable property " is a term 
 
 ^ Mississippi Laws, 1898, p. 7. 
 
 ^ The revenues accruing from the poll tax are used for this appro- 
 priation; but, when these are not sufficient, the deficiency is sup- 
 plied by the general property tax. In municipalities, this special 
 levy cannot exceed three mills without the consent of a majority of 
 the taxpayers. (See Annotated Code of Mississippi, 1890, ch. 119, 
 Sec. 4014.) 
 
 " Revenue Laws of Mississippi, 1896-97-98, p. 45. 
 
198 Studies in State Taxation [198 
 
 of relatively limited content in Mississippi because of the 
 long list of exemptions.^ This list includes : 
 
 1. Public property, real or personal. 
 
 2. Private property, real or personal, belonging to any 
 religious or charitable society or incorporated educational 
 institution, when not used for profit. 
 
 3. Property held and occupied by the trustees of schools; 
 also, township school lands used for the benefit of public 
 schools. 
 
 4. Farm products raised in the state, when in the hands 
 of the producers; farming implements, and all property of 
 agricultural and mechanical associations and fairs held for 
 the promotion of agricultural objects. 
 
 5. Wearing apparel, not including jewelry or watches; 
 provisions on hand necessary for family consumption; 
 household furniture, not to exceed $250 in value; libraries 
 and works of art not kept or ofifered for sale as mer- 
 chandise. 
 
 6. Poultry, two cows and calves, ten head of sheep or 
 goats, ten head of hogs, and all colts foaled in the state 
 under three years old. 
 
 7. Permanent factories established in the state before the 
 first of January are exempt for a period of ten years.' 
 
 Assessment. The law provides that every person shall be 
 assessed in the county and municipality where he resides at 
 the time of assessment." Real property is assessed in the 
 county in which it is situated, as is personal property having 
 a situs distinct from the person of the owner.* Banks and 
 other corporations are assessed in the county in which the 
 principal office is located; if there be no principal office, 
 then in the county or counties in which the business is 
 transacted. Money loaned at interest or employed in dis- 
 
 ^ Annotated Code of Mississippi, ch. 116, Sec. 3744. 
 
 ^ Until 1894, factories belonging to a trust, combine or pool did 
 not enjoy this exemption. In that year the discrimination was with- 
 drawn. (See Mississippi Laws, 1894, p. 26.) 
 
 ° For provisions relating to assessment of taxes, see Annotated 
 Code of Mississippi, 1890, ch. 116, Sees. 3744-3801. 
 
 ■* Colbert vs. Leake Co., 60 Mississippi, 142. 
 
199] Taxation in Mississippi 199 
 
 count is taxable in the county where the capitalist resides 
 or has a place of business, or is temporarily located. But if 
 a loan be made to a person in the state by a non-resident, 
 who has no place of business, location or agent in the state, 
 the courts have decided that this is not taxable in the 
 state, notwithstanding negotiations for the loan be made 
 by persons in the state and the loan be secured by property 
 in the state.^ 
 
 On the first day of February of each year the state 
 auditor is required to furnish the clerk of the board of 
 supervisors of each county with three copies of assessment 
 rolls, and four books each of land and personal rolls to 
 counties having two judicial districts. One of the per- 
 sonal assessment rolls and four books each of land and 
 personal rolls, are delivered to the assessor; the others are 
 kept by the clerk of the board of supervisors to be used in 
 making copies. Personal property and polls are assessed 
 between the first day of February and the first Monday in 
 June of each year; real property, between the same dates 
 every four years. 
 
 Cash value at the time of assessment usually fixes the 
 taxable basis of property in Mississippi. Thus, capital 
 stock is the basis adopted in the assessment of corporations. 
 Banks and railroads furnish notable exceptions to this rule. 
 
 Banks. This system of taxing banks may be summed up 
 as the separate taxation of real estate plus the taxation of 
 the shares in the hands of the individuals, whose tax is 
 generally paid by the bank and then withheld from the divi- 
 dends. Formerly there was a distinction made between 
 banks that were corporations or joint stock companies, and 
 those that were not. In the one instance, capital stock was 
 taxed; in the other, "the sum of all undivided profits or 
 surplus or accumulations of any sort constituting a part of 
 the assets of the bank." This distinction was abolished 
 by an act approved February ii, 1898.'' 
 
 ^ State vs. Smith, 68 Mississippi, 79. 
 ^ Mississippi Laws, 1898, p. 8. 
 
200 Studies in State Taxation [300 
 
 Railroads. Railway companies are required to list their 
 real and personal property, capital stock, gross earnings, 
 equipment, investments, cash assets and the value of their 
 franchise, all of which must be taken into account by the 
 State Railroad Commission' in assessing railroads. It is 
 provided that the assessment rolls distinguish between the 
 railroad property in counties, cities, towns, villages and 
 levee districts, so that the tax may be justly apportioned 
 between the state and its local units. We shall see later that 
 this railroad property tax is supplemented by a railroad 
 privilege tax. 
 
 Land is assessed according to its actual value as estimated 
 by the owner or person having it in charge. The law pro- 
 vides that improvements, proximity to navigation and any 
 other circumstance that tends to enhance the value of the 
 land be taken into consideration in making up the assess- 
 ment roll, which, in addition to the lands of private indi- 
 viduals and corporations is also to include lands sold for 
 taxes and school lands when leased. The assessment roll 
 must be completed and delivered to the clerk of the county 
 board of supervisors on or before the first Monday of July, 
 and must remain on file subject to objection for at least 
 two weeks. 
 
 Equalization. On the first Monday of August the board 
 of supervisors sits as a county board of equalization. 
 Although this board has no power, under the state constitu- 
 tion to raise or reduce, in solido, the assessment of a par- 
 ticular class of lands in a county; " it can change the assess- 
 ment in cases of over-valuation due to clerical errors or to 
 change of ownership after assessment, and it can take 
 account of increase of value due to the erection of buildings 
 or the supply of improvements. 
 
 Collection. On receipt of the assessment rolls, the sherifif 
 begins the collection of taxes.' The county tax is added to 
 
 ' An elective commission, composed of three members, having 
 general powers of supervision over common carriers. 
 
 ' Anderson vs. Ingersoll, 62 Mississippi, 73. 
 
 ' For provisions relating to collection of taxes, cf. Annotated 
 Code of Mississippi, 1890, ch. 116, Sees. 3801-3851. 
 
201] Taxation in Mississippi 301 
 
 the state tax and collected with it. Both the assessment and 
 collection of taxes are vested in the collector, where land 
 liable to taxation has been left unassessed by the assessor, 
 or where it has become liable to taxation since the last 
 assessment. Again, certain taxes may be paid directly to 
 the state auditor, especially by persons having taxable prop- 
 erty in counties where they do not reside. 
 
 After January 15 the collector is authorized to advertise 
 for sale all land on which taxes are unpaid, the sale to occur 
 on the first Monday of the March following. If the taxes 
 remain unpaid at that time, the land is sold to the highest 
 bidder. Property owned by a person in one county is 
 liable for delinquent taxes in another, and the collector is 
 authorized to collect such taxes, with five per cent, interest 
 thereon. Land may be redeemed within two years by the 
 payment of the total amount for which it was sold, together 
 with all costs, twenty-five per cent, damages upon the 
 amount of all state and county taxes that may have been 
 imposed on the land since the sale, and five per cent, of the 
 redemption money. If sufficient real and personal property 
 cannot be found to cover delinquent taxes, the debts due the 
 delinquent may be sold by the collector, subject to redemp- 
 tion six months from the date of sale. 
 
 Each county collector is required to make monthly settle- 
 ments with the state auditor, and final settlement with the 
 auditor between the first and fifteenth of September of each 
 fiscal year. As compensation, the collector receives from 
 the state five per cent, on the state taxes, exclusive of the 
 poll tax, collected by him and three per cent, on the poll 
 taxes; from the county, five per cent, on the first ten thou- 
 sand dollars or less, and three per cent, in excess of that 
 amount. The assessor receives five per cent, of the amount 
 of the state tax on his assessment roll, the same to be not 
 less than $300 nor more than $3000. 
 
 Criticism. With this description of the general prop- 
 erty tax as it exists in Mississippi, we are in a position 
 for objective criticism. The tax is strongly intrenched in the 
 
203 Studies in State Taxation [203 
 
 traditions of the people, yet it has manifest weaknesses. 
 In the rural and timbered districts of the state the general 
 property tax is virtually a real property tax. Personalty is 
 concealed and land bears the brunt of the burden. Specu- 
 lators in warrants escape unscathed, while investors in tim- 
 bered lands pay a heavy penalty for their confidence in the 
 state's future. This tendency of personalty to evade taxa- 
 tion is not as pronounced in Mississippi as in other Ameri- 
 can commonwealths; indeed, the opposite tendency of a 
 proportionate decline in real property values is rather to be 
 noted. Thus in 1897 the valuation of personalty was $173,- 
 394 greater than 1896, while the valuation of realty had 
 remained stationary. Yet evasions of personalty are ap- 
 parent here as elsewhere, and farmers owning depreciating 
 land feel keenly the incidence of the shifted burden. For 
 this reason, it is the belief of the writer that the general 
 property tax in Mississippi should be supplemented by a 
 graduated income tax. 
 
 That provision in the state constitution which makes cor- 
 porate property subject to the payment of the general prop- 
 erty tax does not work well in actual practice. Railroad, 
 telegraph, sleeping-car and express companies, which pay 
 a state privilege tax in addition to the state and county 
 property tax, naturally complain of double taxation and 
 seek to evade the payment of the property tax by securing 
 charter exemptions.^ If successful, the evasion plainly 
 
 ' Section 13 of Article XII of the constitution of 1869 provides 
 that " the property of all corporations for pecuniary profit shall be 
 subject to taxation the same as that of individuals." Section 21 of 
 Article XII provides for a uniform ad valorem tax on all property. 
 
 Soon after the adoption of the constitution of 1869 there was con- 
 siderable railroad activity in Mississippi, and the new corporations 
 organizing in the state employed skilled legal talent to secure for 
 them the best advantages consistent with the provisions of the 
 organic law. One of the first companies seeking a charter under 
 this constitution was the Mobile and Ohio North Western Railway, 
 and one of the most complex and skillful instruments ever drawn 
 is the charter of this company granted by the legislature of 1870. 
 Under the terms of the now famous " section 21 " of this charter, 
 all taxes to which the said company should be " subject " for a 
 
303] Taxation in Mississippi 203 
 
 means a loss of revenue to the state that could be saved by 
 the imposition of a more equitable corporation tax; if un- 
 successful, unwilling payment produces contagious an- 
 tipathy and retards the state's industrial growth. The value 
 of property, even when modified by other criteria, is a poor 
 basis of corporate assessment, for when used as such it dis- 
 courages improvements and is weakened by local inequali- 
 ties. To the adoption of this false criterion, and to double 
 taxation must be charged the fact that the railroad mileage 
 of Mississippi has only increased 293 miles within the last 
 eight years. 
 
 The withdrawal of corporate property from the scope of 
 the general property tax is imperative. That done, the way 
 
 period of thirty years, were " appropriated and set apart,'' to be 
 applied to the payment of the debts and liabilities of the company, 
 incurred in the construction of the road. It was provided, how- 
 ever, that whenever the profits of the company enabled it to pay an 
 annual dividend of eight per cent, upon its capital stock, over and 
 above the payment of its debts and liabilities, then the appropria- 
 tion of the taxes was to cease and the taxes were to be paid. 
 
 This section twenty-one was afterward adopted by all other 
 corporations entering the state, and was copied into nearly all the 
 charters thereafter granted by the legislature. 
 
 But a more dangerous mode of evasion than " section 21 " of the 
 charter mentioned, has been created by the interpretation of sec- 
 tion 13 of the Constitution of 1869 given by the Supreme Court of 
 Mississippi in 1878. The court took the plain and simple language 
 of this section and announced that the framers of the constitution 
 meant that the property of all corporations for pecuniary profit 
 should be "subject" to taxation, the same as individuals; instead 
 of the obvious meaning that such corporations should be "subjected" 
 to the same taxation as individuals. On this word the court held 
 that the legislature had the right to " subject such subjects " to 
 taxation or not, as it chose. This practically annihilated section 13 
 and left the legislature free to grant exemptions, ad libitum. 
 
 It has not been difficult for railroads to secure charters granting 
 exemption from the property tax so long as the annual dividends 
 are below 8 per cent., and as it is an easy matter to refrain from 
 paying 8 per cent, dividends, the railroads of Mississippi have 
 practically escaped the ordinary property tax. In June, 1898, how- 
 ever, the Supreme Court denied the right of the legislature to grant 
 specific exemptions, and declared that only temporary immunity 
 from taxation can be granted, by way of encouraging home indus- 
 try. Upon the strength of this decision, the State Revenue Agent 
 is prosecuting the well-known back-tax suits. 
 
204 Studies in State Taxation [204 
 
 will be clear for either the creation of a separate corporation 
 tax or the use of the privilege-license system in lieu thereof. 
 Either method would remedy the evil, and, if properly ad- 
 justed, insure a more equitable basis of assessment and a 
 larger revenue. 
 
 Again, the non-existence of a state board of equalization 
 has led to inequalities in the assessment of the general prop- 
 erty tax in different counties. Very few counties in the 
 state have a common standard, and where property over- 
 laps contiguous counties the result may be described in the 
 phrase which Mr. Goschen has employed in another con- 
 nection : " a chaos as regards authorities, a chaos as regards 
 rates and a worse chaos than all as regards areas." 
 
 Some degree of uniformity is observed in the assessment 
 of different individuals within the same county, by reason 
 of the fact that the county board of supervisors is consti- 
 tuted a county board of equalization. However, it is ques- 
 tionable whether the appointment of five representative 
 taxpayers from different parts of the county to serve as 
 county board of equalization — a method in vogue prior to 
 1884 — would not secure a greater degree of uniformity than 
 the present device. Certainly it is true that variety in rates 
 and in assessments in different districts is as great an evil 
 as unequal assessment within the same district. For the 
 betterment of the general property tax in this particular the 
 writer would suggest the establishment of a state board of 
 equalization with powers analogous to those possessed by 
 the Railroad Commission. 
 
 There is also a degree of rigidity and complexity in the 
 machinery of the general property tax in Mississippi which 
 is always annoying and sometimes expensive. A typical 
 illustration of the annoyance caused by the rigidity of the 
 system is seen in that provision which requires the county 
 collectors to make their final settlements with the auditor 
 " on or within ten days after the first day of September." ' 
 The auditor informs the writer that it is a physical impos- 
 
 ^ Annotated Code of Mississippi, 1890, Sec. 3840. 
 
305] Taxation in Mississippi 205 
 
 sibility for him to settle with seventy-five collectors within 
 ten days. According to law, the tax-collections on both 
 the realty and personalty rolls must be in by the first Mon- 
 day of August, and the fiscal year closes September the 
 thirtieth. This leaves a margin of two months in which 
 settlements might be made. An obvious improvement 
 would be to give the auditor and sheriffs at least half this 
 time to make their settlements. 
 
 A notable illustration of the expensive complexity of the 
 system occurs in connection with the annual state appro- 
 priation for common schools. The poll tax receipts, which 
 are diverted exclusively to the common school fund, never 
 cover this appropriation. Thus, in 1897, the amount appro- 
 priated for common schools was $923,500, while the poll 
 tax receipts for the same year amounted to $250,257. This 
 deficiency, as we have seen, is supplied by the state tax on 
 the property. The Code of 1890 provides that " the county 
 and municipal treasurers shall report to the auditor of public 
 accounts the amount of state poll tax collected, which 
 amount shall be a credit on the sum due the county or sepa- 
 rate school districts from the (school) distribution fund." ' 
 But all state ad valorem taxes, for whatever purpose used, 
 must be forwarded by the county collector to the state 
 auditor to be apportioned by that official among the coun- 
 ties.^ This involves delay and expense items of no slight 
 moment in connection with the distribution of the school 
 fund. It would seem to be perfectly practical to treat that 
 part of the general property tax, diverted for school and 
 other specific purposes, in the same way as the poll tax, 
 simply requiring the county collectors to make a report of 
 the amount collected by them and held for distribution. 
 This would mean a saving in expressage and a gain in 
 simplicity. 
 
 The complexity characterizing the machinery of the gen- 
 eral property tax in Mississippi appears even in the laws 
 
 ^Annotated Code of Mississippi, ch. 116, Sec. 3745. 
 ' Idem., Sec. 3850. 
 
306 Studies in State Taxation [206 
 
 fixing the compensation of the tax officials. Recently a test 
 case was argued before the State Supreme Court involving 
 the construction of the act which fixes the compensation of 
 an assessor at five per cent, of the amount of the state tax 
 on his assessment roll, the same not to be less than $300 nor 
 more than $1000.^ The Attorney General contended that 
 the assessor was entitled to five per cent, on the state tax, 
 whether on the personal assessment roll or on both the real 
 and personal rolls. The argument of the assessor's attorney 
 was that each roll was separate and distinct from the other, 
 and that the minimum of $300 was due on the realty roll 
 every fourth year, even though both compensations should 
 together be more than the maximum. Variance in the 
 construction of law is only a typical illustration of the con- 
 fusion resulting from a maximum and minimum fee-com- 
 pensation system. The writer believes that this confusion 
 might be avoided by substituting for the maximum and 
 minimum fee system a scale of graduated salaries. 
 
 With these practical defects demanding correction, the 
 general property tax in Mississippi seems to invite sweeping 
 reform. Yet its absolute abolition in a state, where in- 
 comes are small and property holdings large, is out of the 
 question. An income tax might supplement it, but could 
 not supplant it. Corporate property might well be with- 
 drawn from its inclusion, but individual property could be 
 reached in no other way. 
 
 Privilege Taxes 
 
 Mississippi, in accord with the general practice of south- 
 ern commonwealths, imposes a privilege-license tax on 
 well-nigh every occupation. An examination of the pres- 
 ent revenue laws, reveals the fact that there are one hun- 
 dred and nineteen occupations to which licenses must be 
 issued as a condition precedent to the transaction of busi- 
 ness." 
 
 ^ Mississippi Laws, 1884, p. 17; also Annotated Code, 1890, Sec. 
 2017. 
 ^ Mississippi Laws, 1898, pp. 8-29. 
 
307] Taxation in Mississippi 207 
 
 The importance of the privilege-license system in Mis- 
 sissippi is conspicuous. From the time when the dominant 
 landed proprietors of an ante-bellum regime demanded the 
 taxation of other objects than their farms and estates, to 
 the present day, when the need of revenue and a sentiment 
 in behalf of local protection sustains what would seem to be 
 a fiscal anachronism, the privilege-license system has been 
 an important source of revenue. 
 
 Of recent years the number of occupations subject to the 
 payment of licenses has multiplied and the charges have 
 increased. In the early laws we found the privilege 
 schedule limited to auction sales, billiard tables, bowie- 
 knives, nine-pin alleys, pedlers, race horses or tracks, 
 taverns, groceries and theaters. An examination of this 
 list shows that the articles specified are principally luxuries, 
 the restricted consumption of which v/as deemed desirable. 
 
 In striking contrast to this limited use of the privilege 
 system is that implied in the revenue laws of 1898. Here 
 the predominance of the idea of revenue over regulation 
 permits of no discrimination between necessary goods and 
 luxuries, and between useful and useless occupations. Rail- 
 roads and lawyers are placed on the same footing with 
 merry-go-rounds and dealers in hopfenweis. Bed-spring 
 dealers are as important in the eye of the law as boarding- 
 house keepers. 
 
 This enlargement of the scope of the privilege-license sys- 
 tem indicates a gradual movement away from sole de- 
 pendence upon the general property tax, a movement accel- 
 erated by the practical defects of the latter and the need of 
 applying a fiscal differential to the modern complex indus- 
 trial organization. The rigidity of the state constitution has 
 necessitated the taxation of corporations in the form of a 
 privilege-license tax. That the taxation of corporations has 
 taken definite form in the privilege-license system may be 
 seen from the fact that railroad, express, sleeping car, tele- 
 phone, telegraph and insurance companies are subject to 
 the imposition of a privilege tax on those elements sup- 
 posed to represent their taxable capacity. 
 
208 Studies in State Taxation [208 
 
 Accident-insurance companies pay $250 per annum; life 
 insurance companies a graduated tax of $250 for the first 
 year, $500 the second, $750 the third and $1000 for the 
 fourth year and thereafter. Insurance agents are also sub- 
 ject to a privilege tax, rated according to the size of the 
 city or town where their business is transacted. Thus, an 
 insurance agent doing business in a city of 5000 or more 
 inhabitants, pays $40; in a city of more than 2000 and less 
 than 5000 inhabitants, $25 ; in a town or village of less than 
 2000 inhabitants, $20; other insurance agents, $10. 
 
 Express companies pay a privilege tax of $500, together 
 with a tax of one dollar for each mile of railroad along which 
 they operate, and a local property tax according to charter 
 exemption and gross earnings. Railroads are divided into 
 four classes according to gross earnings.^ The first class 
 pays $20 per mile; the second $15; the third $10, and nar- 
 row gauge $2. An interesting provision was inserted in the 
 laws of 1898, whereby railroads claiming exemption from 
 state supervision under maximum and minimum provisions 
 in their charter are compelled to pay an additional privilege 
 tax of $10.'' Sleeping and palace-car companies pay $200 
 each. Telegraph companies pay $250; or if the line is 
 less than one thousand miles, twenty-five cents per mile. 
 Telephone exchanges are graded according to the number 
 of subscribers. Thus, an exchange with twenty subscribers 
 or less pays five dollars, while one with more than one hun- 
 dred and fifty subscribers, pays one hundred dollars. 
 
 Other corporations following specified lines of business 
 fare the same as insurance, transportation and transmission 
 companies, paying a privilege tax, either fixed or graduated, 
 on some element of some taxable capacity. The element of 
 
 X — — 
 
 ' The classification must be made by the Railroad Commission 
 annually, on or before the first Monday of August, and the taxes 
 be paid on or before the first day of December. (See Mississippi 
 Laws, 1898, p. 23.) 
 
 ^ This provision is simply a means of reaching through the privi- 
 lege tax railroads claiming charter exemption from the general 
 property tax. 
 
209] Taxation in Mississippi 309 
 
 taxable capacity varies greatly according to the nature of 
 the business. On cotton-gins the tax is fixed; on cotton 
 compresses it varies with baling capacity; on cotton-seed 
 oil mills, with the amount of capital stock. Auctioneers, 
 barber-shops, bicycle dealers, brokers, coal dealers, ferries, 
 hotels, junk dealers, livery stables, meat markets, photo- 
 graph galleries, restaurants, theaters, warehouses, electric 
 light, gas and water supply companies, pay in proportion 
 to the size of the city, town or village in which they are 
 located. Building and loan associations, fertilizer com- 
 panies, and stores pay in proportion to the value of their 
 stock. Brick-yards, ice-factories, liquor dealers, lumber 
 yards and saw-mills pay in proportion to their output. Bil- 
 liard and pool tables, bottling establishments, breweries, 
 bands of gypsies, circuses, cigarette dealers, dealers in 
 deadly weapons, dentists, druggists, guarantee companies, 
 hack-lines, horse traders, lawyers, lightning-rod agents, live- 
 stock insurance companies, piano factories, second-hand 
 clothiers, stave and spoke factories pay a fixed amount. 
 
 Pedlers and railroad eating-houses furnish interesting 
 exceptions to the four bases of classification enumerated, 
 i. e. location, value of stock, output and fixed amount. Ped- 
 lers pay in proportion to their transportation facilities. 
 Thus, a pedler with one horse, or mule, and wagon, is 
 taxed twice as much as a pedler on foot; a pedler with 
 two horses or mules,- and wagon, twice as much again. 
 Railroad eating-houses pay in proportion to the number of 
 daily trains making stops for meals. Where two or more 
 passenger trains are running on trunk lines, the privilege 
 tax is $125; where there is only one such train, $50. 
 
 However variable may be the basis of assessment, the im- 
 position and collection of the privilege tax are compara- 
 tively simple.' The law provides that insurance, telegraph, 
 express and sleeping-car companies, building and loan asso- 
 ciations and commercial agencies shall pay the tax directly 
 to the state auditor. All other corporations and persons 
 
 ' For provisions relating to, see Mississippi Laws, 1898, pp. 29-33. 
 14 
 
210 Studies in State Taxation [310 
 
 obtain their license from the county sheriff. In any case 
 where it is inconvenient to obtain the license from the 
 sheriff, it may be procured from the auditor. The auditor 
 is required to prepare license blanks and issue them to the 
 sheriff of the county, who is held responsible for the col- 
 lection. Privilege taxes thus collected must be reported 
 monthly and paid into the state treasury as other taxes, and 
 any defalcation by a delinquent collector must be published 
 at once by the auditor. Licenses are good from the day 
 of issue, except in the case of dram-shops, where they date 
 from the granting of the license. No license can be 
 granted in a " dry " county, or where the majority of the 
 legal voters petition the board of supervisors to prohibit the 
 opening of saloons, A failure to exhibit a license on de- 
 mand is considered a prima facie evidence that it has not 
 been paid and that the privilege is unlawfully exercised. 
 For non-payment or forfeiture a penalty is imposed not less 
 than double the tax imposed, or imprisonment in the county 
 jail not more than six months or both. 
 
 Under no circumstances can any privilege be taxed by a 
 county or municipality to an amount exceeding fifty per 
 cent, of the state license; and a privilege tax imposed on 
 insurance, telegraph, and sleeping-car companies, building 
 and loan associations, is entirely exempt from county and 
 municipal taxation. With the exception of the fifty per 
 cent, local tax referred to, the privilege-license system in 
 Mississippi is solely a source of commonwealth revenue. 
 
 As a supplement of its pension system the state exempts 
 indigent Confederate soldiers and sailors, their wives or 
 widows, from the payment of the tax on all privileges save 
 those on dealing in liquors, cigarettes, deadly weapons, jen- 
 ny-lind or pool tables, or like contrivances kept for amuse- 
 ment, second-hand clothing, and hotel keeping. Thus, the 
 privilege-license system in Mississippi operates directly as a 
 means of local prohibition and as a source of commonwealth 
 revenue, and indirectly, as a bounty to Confederate soldiers 
 and sailors. As a supplementary fiscal device levied on 
 
311] Taxation in Mississippi 311 
 
 general categories, the system is popular and practically 
 beneficent. Especially is this true of the railroad privilege 
 tax. 
 
 Until very recently it has been well-nigh impossible to 
 collect any property tax from railroads because of, their 
 claims of charter exemption. The privilege tax has been 
 the only way of reaching them. Thus, in 1888, a typical 
 year, the percentage receipts from railroad property 
 amounted to only $210, while the railroad privilege tax 
 aggregated $140,792. 
 
 Recent reductions in the rate per mile of the railroad tax 
 imposed,^ and the legal compulsion placed upon railroads 
 to pay both privilege and percentage taxes, have reduced 
 both the absolute and relative importance of the railroad 
 privilege tax. Thus, in 1898, the percentage receipts from 
 railroads were $109,833, while the railroad privilege tax was 
 only $26,625. It may, however, be confidently predicted 
 that the decline in the importance of the railroad privilege 
 tax is only temporary. An estimate of gross earnings is 
 more satisfactory to all parties concerned as a basis of 
 assessment than valuation of property. An increase in the 
 rate per mile to its old proportions would place the railroad 
 privilege tax on an independent footing, and avoid the 
 double taxation to which railroads are now subjected. 
 
 Although regressive, easily shifted and undemocratic in 
 theory, the privilege-license system is warranted in Missis- 
 sippi by its practical results. It furnishes the state a rev- 
 enue of over $300,000 per annum, and is regarded favorably 
 by business men as a license charge rather than a business 
 tax. Criticism is to be directed, not against the system 
 per se, but against some of the bases of its assessment. 
 
 In many instances, the criterion is purely arbitrary, se- 
 lected without any reference to the ability of the persons 
 
 ^ In 1888 the average state railroad privilege tax per mile was 
 $83-33^^, besides a county railroad privilege tax of $41,665^. In 
 1898, the state railroad privilege tax on first-class roads was only 
 $20, and there was no county tax imposed. (Compare Auditor's 
 Report, 1888, p. 106, with Mississippi Laws, 1898, p. 23.) 
 
212 Studies in State Taxation [212 
 
 taxed. Thus, all fire, accident, and life insurance com- 
 panies, which are members of any traffic association, are 
 assessed fixed amounts; while non-traffic companies are 
 taxed two per cent, on their gross premiums. With few 
 exceptions, the solvent companies of the state are members 
 of traffic associations; and because of their agreements to 
 maintain rates, the amount of business transacted, gross 
 earnings and other elements of their taxable capacity are 
 utterly ignored. This is a useless display of anti-trust 
 demagoguery. 
 
 In other instances, the criteria selected, while not arbi- 
 trary, leave room for evasion and bear no relation to earn- 
 ing capacity. Thus, heavily bonded cotton-seed oil mills 
 can escape entirely the tax levied in Mississippi on the 
 capital stock of cotton-seed oil mills. Large cotton ware- 
 houses, which pay in proportion to the size of the place 
 in which they are located, may profit at the expense of the 
 smaller competitors located in a larger place. On the basis 
 of taxation according to output, lumber yards having a 
 large output obtained at great expense, may sufifer in com- 
 parison with those having a smaller output obtained at 
 proportionately less expense. These are merely typical 
 illustrations of some of the practical defects in the bases of 
 privilege assessments in Mississippi. 
 
 While it would be hazardous to fix arbitrarily upon a test 
 of taxable capacity applicable to all cases, nothing but good 
 could result from making the bases selected more thor- 
 oughly applicable to their particular cases. If the standard 
 cannot be made uniform, it can at least be made correct. 
 This must be done, if the license privilege system in Missis- 
 sippi is to serve to any extent as a corporation tax. 
 
 The Poll Tax 
 
 Although Mississippi is aristocratic in its economic sub- 
 stratum, its attitude in regard to the poll tax has always 
 been democratic. The landowners never objected to bear- 
 ing the burdens of this tax, and they used it as an instrument 
 
213] Taxation in Mississippi 313 
 
 to encourage slavery. This was accomplished, as we have 
 seen, by a discrimination in the rate charged " free males of 
 color " and white males. After the abolition of slavery and 
 the enfranchisement of the freedmen, this discrimination 
 was abolished and a uniform rate levied without regard to 
 color or previous condition of servitude. The poll which 
 during the reconstruction period, was as high as $6,.oo per 
 capita, is now fixed at $2.00 and is imposed on all males 
 between the ages of twenty and sixty years. 
 
 The importance of the poll tax in Mississippi may be 
 appreciated frojn the fact that it is the principal fiscal device 
 of the school districts in the state during the four months' 
 pjiblic school term.' Furthermore, the payment of the poll 
 tax is made an implied condition of suffrage by that pro- 
 vision in the state constitution requiring two years' resi- 
 dence and the payment of all taxes during that time, as two 
 of the necessary qualifications of an elector.'' 
 
 No concealment need be made of the fact that the poll tax 
 is used in Mississippi as a means of disqualifying the negro 
 in national elections and controlling his vote in local elec- 
 tions. That the poll tax is more important in the state as 
 an adjunct of suffrage than as a source of revenue is 
 revealed by the fact that in 1897 out of a capitation of $529,- 
 694, only $250,057 was collected. Property owners are will- 
 ing to pay a penalty for their ownership of property, in order 
 to maintain white rule to protect their property. However 
 barbarous the poll tax may be as a fiscal anachronism, 
 social conditions in Mississippi are not yet ripe for economic 
 reform in this direction. 
 
 Conclusion 
 
 The study of taxation in Mississippi reveals much sub- 
 stantial progress, many admirable features and a local genius 
 for practical innovation. Democratic thought has been tem- 
 pered by economic expediency. Thus, we can trace a 
 
 ' Annotated Code of Mississippi, 1890, sees. 374S and 4046. 
 'Art. 12, sec. 241. 
 
214: Studies in State Taxation [314 
 
 movement away from the popular principle of the taxation 
 of corporate property by local officials in at least two direc- 
 tions: (i) The property of transportation companies is 
 assessed separately by a special board and according to well- 
 defined rules; (2) Certain classes of corporations, of which 
 banks and railroads are types, are taxed, not solely on their 
 property, but on their property, together with other ele- 
 ments supposed to represent roughly their taxable capacity. 
 A well-adjusted privilege-license system has been devel- 
 oped, which only needs change in the bases of assessment 
 to become an equitable corporation tax. Much has been 
 done but much more remains to be done. Mississippi has 
 not yet learned how " to pluck the goose — i. e. the people;^:- 
 so as to procure the greatest amount of feathers with the 
 least amount of squawking." As contributing something 
 to a satisfactory system of taxation in his native state, the 
 writer submits the following constructive suggestions, based 
 on an objective criticism of the system in vogue: — 
 
 1. A graduated tax on all incomes over $500 should sup- 
 plement the state tax on the real and personal property of 
 individuals. This would have the three-fold effect of de- 
 creasing the rate of the general property tax, of increasing 
 revenue, and of reaching those who now escape the tax on 
 personalty. 
 
 2. Corporate property in the state should be withdrawn 
 entirely from the scope of the general property tax, and be 
 made subject to a general corporation tax. This is merely 
 a further illustration of the economic principle already 
 partially recognized in Mississippi, that corporations should 
 be taxed separately and on different principles from indi- 
 viduals. 
 
 3. The license-privilege system should be converted into 
 a general corporation tax by enlargement and radical 
 changes in the bases of assessment. Although no uniform 
 principle could be applied, gross earnings and volume of 
 business transacted would serve well as general criteria. 
 
 4. A State Board of Equalization, composed of five mem- 
 bers from different sections of the state, should be created. 
 
215] Taxation in Mississippi 215 
 
 This board should be given general powers of adjusting 
 differences of assessment as between different counties and 
 of maintaining a uniform assessment within the same 
 county. 
 
 5. That part of the state property tax appropriated for 
 specific local objects — the school fund — should remain in 
 the hands of the county collectors for disbursement; and 
 should be reported not forwarded, as at present, to the 
 auditor, and then prorated back. 
 
 6. The maximum and minimum fee system, now used in 
 the remuneration of county assessors and collectors, should 
 be abolished, and the officers should be paid fixed salaries. 
 The salary should be large enough to secure efficiency in 
 service. 
 
 7. There should be a tax on corporate charters levied as a 
 percentage charge on the amount of the capital stock. At 
 present only a license fee of $3.00 is charged for the privi- 
 lege of incorporation, and this is charged without any 
 regard to the amount of capital stock involved, or whether 
 the corporation is organized for profit or not.^ 
 
 [Bibliographical Note. — i. Laws of Mississippi, 1799-1898. 2. 
 Toulmin's Digest, Natchez, 1897-8. 3. Turner's Digest, Natchez, 
 1815-16. 4. Poindexter's Revisal, Natchez, 1821-24. S- Howard 
 and Hutchinson's Digest, New Orleans, 1840. 6. Hutchinson's 
 Code, Jackson, 1798-1848. 7. Sharkey's Code, Jackson, 1857. 8. 
 Proceedings of Constitutional Convention, Jackson, 1861. 9. Pro- 
 ceedings of Constitutional Co.nvention, Jackson, 1868. 10. Camp- 
 bell's Code, Jackson, 1880. 11. Thompson, Dillard and Campbell's 
 Code (annotated), Nashville, 1890. 12. Reports of State Auditor, 
 1870-98. 13. Reports of State Treasurer, 1870-98.] 
 
 ' This tax on corporate charters is found in sixteen American 
 commonwealths, most of which possess a corporation tax proper. 
 (Sehgman, " Essays in Taxation," p. 175.) Wherever it has been 
 levied as a percentage charge on the amount of capital stock, it 
 has yielded substantial revenue. The Secretary of State of Illinois, 
 in his last annual report, makes the significant statement that, out 
 of the proceeds of this tax of 1897 he paid the expenses of his 
 office and handed the treasurer a balance of over $300,000. The 
 Secretary of State of Mississippi, Col. J. L. Power, in a recent con- 
 versation with the writer, said that, " in his opinion, the salaries 
 of all the state officers of Mississippi could be paid by the imposi- 
 tion of a reasonable tax on corporate charters." 
 
V. 
 TAXATION IN GEORGIA' 
 
 By LAURENCE FREDERICK SCHMECKEBIER 
 
 Economic Characteristics 
 
 Georgia has been termed the Empire State of the South, 
 and the variety of its soil and dimate aiifords a certain justi- 
 fication for the term. From the low-lying marsh land along 
 the coast, with its product of sea-island cotton, the country 
 gradually rises through a rolling district in the center of 
 the state to the wooded heights of the mountains in the 
 west with their resources of timber and stores of mineral 
 wealth. Among the states of the Union, Georgia is twelfth 
 in population, fourth in the value of marble products, sixth 
 in granite production, and twelfth in iron production. The 
 general character of the state might be described as rural. 
 There are nineteen cities of three thousand inhabitants and 
 over, but of these only five have a population of more than 
 ten thousand. Before the Civil War agriculture was almost 
 the sole occupation. The war demoralized industrial life, 
 but Georgia was one of the first states to recover from the 
 effects of the great conflict. Since the war, manufactures 
 have been slowly developing, and now the production of 
 cotton goods in the state is considerable. In 1880 the num- 
 ber of spindles in Georgia was 198,656 and at the present 
 
 ' For information received, I desire to express my obligations to 
 Hooper Alexander, Esq., of the Atlanta bar; Hon. John D. Little, 
 Speaker of the House of Representatives; James E. Brown, State 
 Librarian; Forest Adair, Commissioner of Roads and Revenue, and 
 Professor John D. McPherson, of the University of Georgia. — 
 L. F. S. 
 
218 Studies in State Taxation [318 
 
 time (1899) the number is estimated at 524,244. Outside 
 the cities the country is rather sparsely settled, and agri- 
 culture is still by far the most important industry. 
 
 General Finances 
 
 The total receipts of the state of Georgia for the year 
 ending September 30, 1898, were $3,121,216.55. Of this 
 amount $2,588,783.53 or eighty-two per cent, was raised 
 by taxation. Of the remaining $532,433.02, $420,012 was 
 the rental of the Western and Atlantic Railroad ; $56,402.22 
 was received from fees; $56,018.80 was derived from miscel- 
 laneous sources. The receipts are presented in detail in 
 the following table : 
 
 Total Receipts $3,121,216.55 
 
 By Taxation 2,588,783.53 
 
 Rental of Western and Atlantic R. R 420,012.00 
 
 Fees 56,402.22 
 
 Miscellaneous Sources 56,018.80 
 
 Taxation: 
 
 General Property Tax $1,909,233.84 
 
 Poll Tax 234,431.99 
 
 Railroad Tax 215,921.76 
 
 Street Railroads 8,279.37 
 
 Insurance Companies 56,006.07 
 
 Express Companies 3,646.63 
 
 Telegraph Companies 3,5S8.20 
 
 Telephone Companies 6,073.32 
 
 Sleeping-car Companies 748.24 
 
 Liquor Tax 408.39 
 
 Insurance Agents 7,570.00 
 
 Show Tax 6,176.64 
 
 Tax on Lands 6,143.50 
 
 Tax on Futures 4,950.00 
 
 Pistol-dealer's Tax 5,269.40 
 
 Tax on Packing-houses 1,260.00 
 
 Tax on Brewing Companies 1,260.00 
 
 Tax on Sewing-machine Companies 1,600.00 
 
 Tax on Sewing-machine Agents 1,010.00 
 
 Tax on Artists 1,197.00 
 
 Tax on Auctioneers 315.00 
 
 Tax on Pawnbrokers 1,440.00 
 
 Tax on Specialists 118.80 
 
 Tax on Agents 747-00 
 
 Tax on Pedlers 2,499.40 
 
319] Taxation in Georgia 219 
 
 The expenditures in detail were as follows : 
 
 Education: 
 
 School Fund $1,393-873.56 
 
 State University 26,657.70 
 
 State Normal School 12,500.00 
 
 School of Technology 26,875.00 
 
 North Georgia Agricultural College 6,000.00 
 
 Georgia Normal and Industrial College 23,900.00 
 
 Academy for the Blind 18,333.31 
 
 School for Deaf 34,201.38 
 
 School for Colored 4,000.00 
 
 Lunatic Asylum 289,550.73 
 
 Legislature 83,305.81 
 
 Department of Agriculture 10,000.00 
 
 Civil Establishment 127,845.83 
 
 Library Fund 3,329.88 
 
 Fertilizers' Fund 9,290.41 
 
 Geological Fund 7,149.67 
 
 Military Fund 16,314.53 
 
 Penitentiary 13,211.81 
 
 Pensions 610,120.00 
 
 Printing 16,425.28 
 
 Public Buildings 20,000.48 
 
 Public Debt 605,034.55 
 
 Insurance 8,659.89 
 
 Contingent Fund 10,903.36 
 
 Taxes refunded 3,424.17 
 
 New Code 3,505-55 
 
 Solicitor-General 3,330.oo 
 
 Supreme Court Reports 4,000.00 
 
 Miscellaneous 20,520.20 
 
 Total $3,423,488.20 
 
 Balance $120,000.57 
 
 As regards indebtedness the finances of the state are in 
 very good condition. The total bonded debt of the state is 
 $8,031,500, a decrease of $2,327,840 since 1890. The debt 
 was incurred mainly in the building of railroads and the 
 endorsement of bonds of railroad companies. Over against 
 this indebtedness the state owns the Western and Atlantic 
 Railroad, which brings in a rental of $420,012, the North- 
 eastern Railroad, and $30,700 worth of other stocks. The 
 total interest charge is $343,880. The state pays seven 
 per cent, on $282,500, four and a half per cent, on $5,- 
 
220 Studies in State Taxation [220 
 
 399,000, four per cent, on $230,000, and three and a half on 
 $2,120,000. The decline in the rate of interest shows that 
 the state's credit is good. 
 
 The debt of the state in detail is as follows : 
 
 7 % bonds, due 1931 $ 282,500.00 
 
 4^4% bonds, due $100,000 each year after 1898. . 1,800,000.00 
 
 4^% bonds, due 1912 207,000.00 
 
 4i4% bonds, due 191S 3,392,000.00 
 
 4 % bonds, due 1915 230,000.00 
 
 35^% bonds, due 191S 287,000.00 
 
 3^% bonds, due $100,000 each year Irom 1917. . 1,833,000.00 
 
 Total $8,031,500.00 
 
 Development of Taxation 
 
 Georgia was the last of the original thirteen colonies, and 
 in many respects the most unpromising. Especially was 
 this true in financial matters. The colony was settled 
 mainly by debtors, and indeed the prime object of its estab- 
 lishment was to provide a place of refuge for those who 
 had fallen under the severities of the English law in regard 
 to debt. Only the perseverance of General Oglethorpe 
 kept the colony from going to pieces, and that large hearted 
 man was compelled to draw upon his private resources, and 
 to pledge his individual credit for conducting the operations 
 necessary to establish the colony. After the surrender of 
 the charter to the Crown, public officers were paid mainly 
 by fees, and a quit rent of nine shillings sterling for every 
 hundred acres was exacted from the inhabitants. 
 
 Upon the separation of the colonies from the mother 
 country, the representatives of the people were slow in im- 
 posing taxes, and financial matters gave the governor and 
 council much concern. In July, 1783, the council sent an 
 address to the lower house remonstrating against the small- 
 ness of the sum proposed in the tax-bill as " inadequate to 
 the great and pressing exigencies of the State." The coun- 
 cil urged that a tax of at least one-half dollar should be 
 laid on every negro, mulatto, or other slave; and one-half 
 
231] Taxation in Georgia 231 
 
 dollar on every town lot. The house, however, passed a 
 bill imposing a tax of a quarter of a dollar on every hundred 
 acres of land, a quarter of a dollar on every negro, mulatto, 
 or slave; a quarter of a dollar on every town lot; one dollar 
 on every free negro; and two dollars on every male inhabi- 
 tant of the age of twenty-one, " who does not follow some 
 lawful profession or mechanical trade, or who does not cul- 
 tivate, or cause to be cultivated, five acres of land." 
 
 In 1796, when Oliver Wolcott made his report on the 
 finances of the states, the same methods were still in oper- 
 ation. It was the characteristic system of the property tax 
 reinforced by the poll tax which has continued to the pres- 
 ent day. Lands were divided into districts or classes, and 
 upon each of these a certain amount per acre was imposed 
 as the value for taxable purposes. On such values and on 
 all lots, wharves, and buildings a tax of forty cents per 
 hundred was imposed. Free white male persons and slaves 
 paid a poll tax of thirty-seven and a half cents ; free negroes 
 were taxed fifty cents ; professors of law and physic, and all 
 factors were taxed four dollars. Negroes brought by sea 
 into the state for sale were taxed ten dollars. Stocks of 
 shopkeepers were taxed twenty cents per hundred; foreign 
 wares sold by factors and brokers, eighteen and three- 
 quarter cents; and the. funded debt of the 'United States, 
 fifty cents per hundred. 
 
 In 1805 a tax was laid on banks, the first of its kind in 
 the United States. Banks were taxed two and a half per 
 cent, on their capital stock, and one-half per cent, on their 
 circulation. In 1817 bank stock was taxed thirty-one and 
 a quarter cents on the hundred. In 1820 the stock of the 
 Steamboat Company of Georgia was taxed thirty-one and 
 a quarter cents a hundred. In 1830 lottery-ticket brokers 
 and private bankers were taxed at the same rate. In 1840 
 bridges, ferries and turnpikes were taxed ten cents per 
 hundred dollars. In 1850 we find the first tax on railroads, 
 a special act being passed for the taxation of each road. 
 The Georgia Railroad was taxed one-half of one per cent. 
 
232 Studies in State Taxation [222 
 
 on the net income of the stock of the road, and any increase 
 of stock was taxed thirty-one and a quarter cents per hun- 
 dred. The Central Railroad was taxed one-half of one 
 per cent, on the income. The Macon and Western and 
 the Memphis Branch Railroad were each taxed thirty-one 
 and a quarter cents on every hundred dollars of the stock 
 actually paid in. In the same year the poll tax was reduced 
 to twenty-five cents, and the tax on free negroes was raised 
 to five dollars. Carriages were also taxed from fifty cents 
 to ten dollars according to size and number of horses re- 
 quired. 
 
 Present Tax System 
 
 The present tax system of Georgia is under the super- 
 vision and direction of the comptroller-general, who is 
 elected biennially on the first Wednesday of October. 
 Railroad, street railway, telegraph, telephone, sleeping-car 
 and express companies, make their tax returns direct to 
 the comptroller-general. All other property, whether 
 owned by individuals or corporations, is returned for taxa- 
 tion to the " tax-receivers " in each county. Those com- 
 panies which make their return direct to the comptroller- 
 general also make payment to that officer, while those that 
 make returns to the tax-receivers- pay their taxes to the 
 " tax-collectors " in the counties in which the returns are 
 made. The tax rate is fixed by the governor, Avho is au- 
 thorized by the legislature to fix a rate up to a certain limit, 
 two years in advance. The maximum rate is always im- 
 posed. 
 
 Tax-Receivers. The tax-receiver might be called the unit 
 official in the tax system of Georgia, as he is the official 
 in each county who has immediate charge of the assessment 
 of taxes and receives all returns of taxes within the time 
 and in the manner prescribed by law. The taxpayer makes 
 his return to the tax-receiver and the latter is required to 
 receive the returns at any time a taxpayer applies therefor. 
 To facilitate this process he is required to attend in each 
 
223] Taxation in Georgia 233 
 
 militia district in the county at least three times during the 
 time allowed to make returns, and he must give ten days' 
 notice in writing of the several times and places at which 
 he will be present for the purpose of receiving such returns. 
 He must also keep a standing advertisement specifying the 
 day or days when he will be at the county seat for such 
 purpose. After he has received a return he must make a 
 " digest " or detailed report of such return in triplicate, 
 and forward one to the comptroller-general, one to the 
 " ordinary," who performs the duties of a board of cotmty 
 commissioners,' and one to the tax collector. In this 
 digest he is required to make a list of all " defaulters," or 
 those persons who have not returned their property for 
 taxation, and to return such property for taxation at double 
 its true estimated value. This is known as the double tax. 
 Furthermore the tax-receiver is required to publish the 
 lists of all defaulters and the amount of their penalty or 
 double tax for thirty days. Upon the basis of the digest 
 deposited with the ordinary the tax-receiver assesses the 
 county taxes according to law and according to the rate 
 per cent, levied by such ordinary. The tax-receiver is 
 under the supervision of the comptroller-general and must 
 conform to such rules as are laid down by that official. 
 
 The tax-receivers are elected on the first Wednesday in 
 January. This popular election of tax-receivers suggests 
 an initial criticism of the tax system, as the receivers who 
 
 ' Briefly summarized, the " ordinary " is r\ormalIy the adminis- 
 trator-general for the county in decedent estates, with those eccles- 
 iastico-judicial functions which at common law pertained to the 
 bishop. In addition to these judicial functions, the ordinary 
 exercises a superintendence of all county business except in so far 
 as the same is vested in the sheriff, the clerk of court, the treasurer, 
 the county surveyor, the tax-receiver, and the tax-collector. Over 
 the four latter he has a large measure of superintendence and visita- 
 tion, though none of them are directly responsible to him, all being 
 elected by the people. The ordinary is the guardian and custodian 
 of county property, fixes the tax rate, and determines in general the 
 character and amount of county expenditures. [For the above in- 
 formation the writer is indebted to Mr. Hooper .Alexander, of the 
 Atlanta bar.] 
 
224 Studies in State Taxation [224 
 
 are thus locally elected are less likely to be free from an 
 inclination to make a low assessment of property than they 
 would be if appointed by the governor or other central 
 authority. The tax-receiver is paid a commission equal to 
 one-half that which the collector receives for collecting the 
 tax. He is required to give bond for one-half the amount 
 of state tax supposed to be due from the county for the 
 year in which he performs his duties.' 
 
 Tax-Collector. After being assessed by the tax-receiver, 
 the taxes are collected by the tax-collector. This officer is 
 elected in the same manner as the tax-receiver, is sworn 
 and is required to give bond for thirty-three and one-third 
 per cent, more than the state tax supposed to be due from 
 the county in the year for which he is required to give 
 bond. The tax-collector is supposed to supplement the 
 work of the tax-receiver by ascertaining as far as possible 
 all polls and professions, and all taxable property not 
 returned to the receiver or not found in his digest. Upon 
 all such property he collects and pays over the double tax 
 as required by law. The collector also issues executions 
 against all defaulters and insolvents, and places them with 
 the proper officer for collection. The collector is required 
 to give public notice of the time and place of his presence 
 to collect the taxes due, and also of the days on which he 
 will be at the courthouse. He is further required to publish 
 his list of insolvents at the door of the courthouse for thirty 
 days, and also to furnish the election supervisors of the 
 county with the list of all persons who have not paid their 
 taxes. In collecting the tax upon dealers in intoxicating 
 liquors the collector is required to report to the comptroller- 
 
 ' The oath of office of the tax-receiver is as follows: " I swear that 
 I will truly and faithfully perform the duties of receiver of returns 
 of taxable property, or of persons or things specially taxed in the 
 county to which I am appointed, as required of me by the laws, and 
 will not receive any return but on oath or affirmation, and will 
 before receiving returns carefully examine each, and will to the best 
 of my ability carry out all the requirements made upon me by the 
 tax law. So help me God." 
 
225] Taxation in Georgia 225 
 
 general the name of the person or firm paying such a tax, 
 the amount paid and the time of payment. The tax-collec- 
 tors are required to make monthly returns of all taxes 
 collected, and to pay the money collected into the state and 
 county treasuries, or into banks designated by the governor 
 as state depositories. 
 
 General Property Tax 
 
 Taxable Property. As in most other American common- 
 wealths the main source of public revenue in Georgia is the 
 general property tax. All real and personal property, 
 whether owned by individuals or corporations, resident or 
 non-resident, is liable to taxation unless specially exempt. 
 This includes all bonds, notes or other obligations for 
 money, of persons in other states, or bonds of other states, 
 or bonds of corporations in other states. All moneyed or 
 stock corporations, unless exempted or dififerently provided 
 for in their charters, are liable to taxation upon such capi- 
 tal stock as upon other property. All deeds of gift, mort- 
 gages or other assignments of property made to avoid the 
 payment of taxes are null and void. The property is always 
 liable for the taxes, and the taxes are a first lien before any 
 other debt or claim. The property enumerated above was 
 taxed in 1898 at the rate of 6.21 mills on the valuation, and 
 the yield was $1,909,233.84. 
 
 Exemption. By the act approved December 11, 1878, 
 the following forms of property are declared exempt from 
 taxation : " All public property, places of religious worship 
 and places of burial; all institutions of purely public charity; 
 all buildings erected for and used as a college, incorporated 
 academy or other seminary of learning; the real and per- 
 sonal estate of any public library, and that of any other 
 literary association, used by or connected with such library; 
 all books, philosophical apparatus, painting and statuary 
 of any company or association kept in a public hall, and 
 not held as merchandise or for other purposes of gain or 
 sale; provided, the above-described property so exempted 
 IS 
 
226 Studies in State Taxation [226 
 
 be not used for purposes of private or corporate profit or 
 income." 
 
 Assessment. A complete reassessment of property is 
 made each year, and all property held on the first day of 
 March must be returned for taxation at its market value. 
 The listing system is used in the return of property. This 
 consists simply in the distribution of printed blanks to the 
 taxpayers, who answer under oath the questions thereon. 
 These lists are furnished the tax-receivers by the comp- 
 troller-general, and are distributed to the taxpayers on the 
 first of April in each year. The justices of the peace are 
 required to furnish the tax-receiver with a list of all tax- 
 payers in their respective districts. The following are the 
 questions contained in the printed list; 
 
 Are you subject to poll tax? 
 
 Are you a lawyer? 
 
 Are you a doctor? 
 
 Are you a dentist? 
 
 Are you an agent or firm negotiating loans and charging therefor? 
 
 Are you the president of a railroad company? 
 
 Are you the superintendent or general agent of a railroad, ex- 
 press, telegraph, telephone, electric light or gas company doing 
 business in this state, the president of which does not reside in this 
 state? 
 
 Are you the president of an express, telephone, electric light or 
 gas company doing business in this state? 
 
 How many hands are employed by you between the age of 12 
 and 65 years? 
 
 How many acres of land, except wild lands, do you own, or of 
 how many are you the holder, either as parent, husband, trustee, 
 executor, administrator or agent? Where is the same located by 
 number, district and section? 
 
 What is the value thereof? 
 
 How many acres of wild land do you own or represent by num- 
 ber, district and section? 
 
 What is the value thereof? 
 
 What is the value of your improved city or town property, in- 
 cluding the improvements thereon? 
 
 What is the value of your unimproved city or town property? 
 
 How many shares in the bank of which you are president and 
 what is the value thereof? 
 
 How much capital have you in the bank of which you are presi- 
 dent as a sinking fund or surplus fund and undivided profits, and 
 real estate not represented in the value of your stock? 
 
237] Taxation in Georgia > 227 
 
 How much money or capital has the building association, or the 
 building and loan association of which you are the president, in 
 loans? 
 
 How much on hand? 
 
 How much property, real and personal, does the gas or electric 
 light company of which you are president or general manager own, 
 and what is the value thereof? 
 
 How much money on hand? 
 
 What is the gross value of your notes, accounts or other obliga- 
 tions for money and the market value thereof, whether solvent or 
 partially solvent; whether the same are within or without the state? 
 
 The value of your merchandise of all kinds, including fertilizers 
 for sale, on hand? 
 
 How many boats, vessels or watercraft of any description do you 
 own, and the value of each? 
 
 The amount of capital invested in stocks of companies, other than 
 such companies as are required to be returned by the president or 
 their agents to the comptroller-general? 
 
 How much capital invested in bonds, except bonds of the United 
 States and such bonds of this state as are exempt by law from 
 taxation ? 
 
 How much capital has the manufacturing company of which you 
 are president or agent invested in the manufacture of woolen or 
 cotton fabrics, including lands, and what is the value of your manu- 
 factured goods? 
 
 What is the value of raw material on hand March ist? 
 
 What is the value of manufactured goods or articles on hand 
 March ist? 
 
 What amount of money, bonds, notes, accounts, choses in action 
 of every kind did you own on March ist? Value? 
 
 What other property of every kind did you own on March ist? 
 What was the value thereof? 
 
 How much capital have you invested in iron-works, foundries, 
 and machine-shops, including machinery and lands? 
 
 How much capital have you invested in mining, including lands, 
 and what is your surplus fund? 
 
 What is the value of your household furniture, including your 
 tableware, or owned by wife? 
 
 What is the value of your kitchen furniture? 
 
 What is the value of your office furniture? 
 
 What is the value of your pianos, organs or other musical instru- 
 ments, or owned by wife? 
 
 The value of your library, pictures, paintings and statuary, or 
 owned by wife? 
 
 What is the value of your sewing-machines, or owned by wife? 
 
 The value of your gold watches, or owned by wife or minor 
 children? 
 
 The value of your silver watches, or owned by wife or minor 
 children? 
 
228 Studies in State Taxation f228 
 
 The value of your watches made from material other than gold 
 or silver? 
 
 The value of your gold and silverware? 
 
 The value of diamonds and jewelry worn by owner or wife and 
 minor children? 
 
 The number of horses, the value of each? 
 
 The number of mules and asses, the value of each? 
 
 The number of cattle, the value of each? 
 
 The number of sheep, the value of each? 
 
 The number of goats, the value of each? 
 
 The number of hogs, the value of each? 
 
 The value of carriages, wagons and buggies? 
 
 The value of agricultural tools, implements and machinery? 
 
 The value of cotton, corn and other farm products on hand and 
 for sale? 
 
 The value of portable saw mills, gins, engines and other machin- 
 ery, or of such other machinery, stationary or otherwise, and not 
 returned as part of realty? 
 
 What is the value of your turpentine stills and appurtenances? 
 
 What is the value of your leases or leased privileges or assets of 
 like character? 
 
 Value of guns, pistols, bowie knives and such articles? 
 
 The value of other property not herein mentioned? 
 
 The value of property owned by the wife and minor children of 
 the taxpayer and not returned for taxes by the owners thereof? 
 
 Whether solvent or partially solvent, give the value of your 
 bonds, stocks of non-resident companies or corporations in this 
 state whose capital stock is not returned by the president of such 
 companies or corporations; all notes, accounts, judgments, mort- 
 gages, liens and other choses in action of every kind, whether such 
 bonds, stocks, notes, etc., are held by the taxpayer in Georgia or 
 held by some other person for him, either in or out of this state. 
 There shall be no reduction from the value of property returned 
 for taxes on account of any indebtedness of such taxpayer. 
 
 The following oath is also required in order to insure 
 the correctness of the return: " I do solemnly swear that I 
 have carefully read (or have heard read) and have duly 
 considered the questions propounded in the foregoing tax- 
 list, and that the value placed by me on the property re- 
 turned, as shown by said list, is at the true market value 
 thereof; and I do further swear that I returned for the pur- 
 poses of being taxed thereon, every species of property that 
 I own in my own right or have control of, either as agent, 
 executor, administrator or otherwise; and that in making 
 said return I have not attempted, either by transferring my 
 
239] Taxation in Georgia 339 
 
 property to another or by any other means, sought to evade 
 the laws governing taxation in this state. I further swear 
 that in making said return I have done so by estimating 
 the true worth and value of every species of property con- 
 tained therein." All freeholders or agents are also re- 
 quired to make returns to the tax-receiver of all persons 
 liable for tax residing on their premises. 
 
 Answers to these questions, accompanied by the above 
 oath, must be returned to the tax-receiver of the county 
 wherein the person resides before July i. If a person fails 
 to make a return, or fails to affix a value to his property, the 
 receiver then makes the valuation and doubles the tax. The 
 ordinary, however, is authorized to relieve a defaulting tax- 
 payer if he can show from good cause that he did not have 
 an opportunity to make the return. If the receiver finds 
 that the return is below the full value of the property, it is 
 his duty to assess the true value within thirty days. The 
 taxpayer must be notified of any increase in his assessment, 
 and if he is not satisfied, the entire valuation is left to three 
 disinterested persons, of whom the taxpayer selects one, 
 the receiver another and these two select a third. The 
 valuation made by these three assessors is final. If any 
 taxpayer has reason to think that any property is returned 
 below its full value, he may lodge a complaint, and the 
 receiver gives notice to the person complained of, and a 
 new assessment is made as in the case of an appeal. If 
 there is any property which is not returned; and the tax- 
 receiver does not know the owner, it is his duty to tax it 
 double and then proceed against the property for the col- 
 lection of the tax. 
 
 Nominally the tax-receiver is required to submit his 
 digest of returns of taxable property in his county to the 
 grand jury of the superior court of that county, who are 
 supposed to review the assessments and to correct any un- 
 dervaluations they may find in the returns of the tax- 
 receiver. This provision, however, is practically a dead 
 letter. The returns in any one year are the guide of the 
 
230 Studies in State Taxation [230 
 
 tax-receiver in the next year, and if the taxpayer returns 
 his property at less than the year before, the valuation must 
 be submitted to arbitration as described above. If the 
 receiver makes a mistake in his digest it is the duty of the 
 comptroller-general to correct such mistake by making the 
 proper entries in the digest furnished the comptroller-gen- 
 eral, and he must notify the ordinary and tax-collector of 
 the county of such mistake and correction. 
 
 Defects. Such is the general property tax as it stands 
 on the statute books. The question naturally arises whether 
 such a formidable array of interrogations and the appended 
 oath really secure a just and equitable return of property, 
 or whether the experience of Georgia has been the same as 
 that of other states using the general property tax? It may 
 be stated in reply that the general property tax has worked 
 but little better in Georgia than in the other states where 
 it has been employed. In the first place the tax is inequit- 
 able as between individuals and is again inequitable as be- 
 tween the various counties of the state. Such can hardly 
 fail to be the case when the property is valued by the tax- 
 payer. Thus in 1878 cultivated lands under essentially 
 the same conditions were valued in Bibb county at an aver- 
 age of $19.61 per acre, in Richmond county at $13.90, in 
 Chatham county at $14.81, in Muscogee county at $9.18, 
 and in Fulton county at $45.55. Furthermore, in many cases 
 the number of acres returned is lower than the land in 
 possession of the taxpayer. Thus in 1896 eighty-three 
 counties of the state returned 722,205 acres of land less 
 than they did in 1895, and at a moderate estimate this land 
 would be worth two and a half million dollars. In 1897 
 the acreage of land returned for taxation was 1,177,518 
 acres less than the actual acreage of the state. In 1896 it 
 was 1,275,932 less. In 1898 the return of land was 158,542 
 less than in 1897. By taking the highest and lowest acre- 
 age returned by each county over a period of six years, there 
 would be shown for the state a difference of 4,885,298 acres. 
 
 The comptroller-general in his " Instructions " to the 
 
231] Taxation in Georgia 231 
 
 tax-receivers for the year 1898 called attention to this as 
 follows: " The law relative to the manner of returning lands 
 for taxation is one thing, and the value at which you receive 
 them is another; and while I have given you the law that 
 relates to the former, I especially call your attention to the 
 value at which they should be returned by the taxpayer, 
 and that is, ' at its true and market value.' ' Our lands are 
 wor^ a great deal more than they are being returned for 
 taxation, and you cannot be too careful in the discharge of 
 the duties imposed upon you in receiving their returns. . . . 
 I find in some of the digests for 1897 large discrepancies 
 between the number of acres returned for taxation and the 
 number known to be actually located in the counties. In 
 the aggregate these differences ran up several thousand 
 acres in the state, all of which, of course, escape both state 
 and county taxation, thereby contributing to increase the 
 rate of taxation on the property returned and illegally ex- 
 empting this unreturned property altogether." 
 
 There are again wide discrepancies between the valuation 
 of city and town property for municipal taxation and the 
 valuation for state taxation. The valuation of real property 
 in the three cities of Atlanta, Augusta, and Macon on the 
 city digest is $68,486,866, while the city and town real estate 
 on the three county digests aggregates only $51,780,853, 
 showing a difierence of $16,706,013. In the cities the val- 
 uations are made by assessors, and are much more thorough 
 and accurate. If city and town property were taxed on 
 the same valuation for both state and local purposes this 
 difficulty would be obviated. In regard to this we find the 
 comptroller-general making the same complaint in his 
 " Instructions for 1898," as was quoted by Prof. Ely in his 
 " Taxation in American States and Cities," from the In- 
 structions for 1886, indicating that the evil is one of long 
 standing: " There is a very just complaint against the cus- 
 tom or practice of taxpayers returning this class of prop- 
 erty to the receiver of tax returns, for the state and county, 
 at a very much lower valuation than the same property is 
 
232 Studies in State Taxation [832 
 
 returned to the corporate authorities for taxation. It must 
 be manifest to every one that property is worth as much 
 when returned for taxation to the state and county as when 
 returned to be taxed by the cities." 
 
 Personal property of all kinds escapes its just share of 
 taxation. All the watches, rings, diamonds, precious stones, 
 plate, etc., in Fulton county, containing the city of Atlanta 
 with a population of over sixty-five thousand, was valued 
 at $108,083 in 1898. As regards merchandise the returns 
 are far worse. In 1896 Tatnall county returned only $500 
 of merchandise, while Campbell county returned nothing 
 at all, and Worth county returned nothing in 1895. Fulton 
 county, containing the city of Atlanta, the largest distrib- 
 uting center between Baltimore and New Orleans, returned 
 merchandise to the amount of only $3,171,170 in 1898. In 
 Macon a single fire destroyed goods upon which insurance 
 was paid equal to almost a third of the entire amount the 
 city returned for taxation. The fluctuations in the value of 
 merchandise are also startling. Berrien county dropped 
 from $118,690 in 1896 to $415 in 1897, and rose to $125,093 
 in 1898. Campbell county rose from nothing in 1896 to 
 $40,136 in 1897, while Taliaferro county rose from $1,150 in 
 1896 to $14,250 in 1897. 
 
 As to intangible property such as stocks, bonds, notes, 
 mortgages, etc., the comptroller-general in his " Instruc- 
 tions " for 1898, says: "This class of property, except in 
 isolated cases, is seldom ever returned by the owners there- 
 of for taxation. It has become a very considerable item 
 of the wealth of the state, but has not been returned for 
 taxation." In regard to merchandise, the same officer adds : 
 " From a careful examination of the digests on file in this 
 office, it is evident that such property is not returned as it 
 should be, the aggregate value of such property for the 
 year 1897 being only about seventeen million dollars. This 
 is far below the market value of this property, and I invite 
 your special attention to the returns of this class of, prop- 
 erty when it is being given in to you this year. I know 
 
233] Taxation in Georgia 233 
 
 that large stocks of commercial fertilizers are being car- 
 ried in this state from year to year, and I am satisfied that 
 very little of it is ever returned for taxation." As to house- 
 hold property the complaint is as follows: " Perhaps no 
 class of property is so undervalued by the owners when 
 returning it for taxation as household furniture, from the 
 fact, no doubt, that it is regarded as unproductive and 
 therefore should not be valued at its full market value. 
 / am quite sure that a very large percentage of the watches, 
 jewelry, pianos, organs, etc., owned in our state are not returned 
 at anything like their market value, if returned at all." That 
 these are standing complaints is evidenced by the fact that 
 almost the same " Instructions " were issued in 1886. 
 
 Another criticism of the general property tax in Georgia 
 is the double taxation involved in taxing land at its full 
 value, without allowance for indebtedness, and then taxing 
 the evidence of such indebtedness. It is clear that if the 
 burden of taxation is to be apportioned according to abil- 
 ity, the man with a mortgage or other debt of half the value 
 of his property is not able to pay as much as where the land 
 is unencumbered. The comptroller-general, in his " In- 
 structions" for 1898, called especial attention to the fact that 
 such indebtedness should be taxed : " In purchasing lands 
 on a credit, it is the custom for the purchaser to give to the 
 party from whom purchased notes representing the amount 
 to be paid at the time or times agreed upon by the parties 
 selling and buying; the party selling and taking such notes 
 secures himself by retaining deeds to said lands, and giving 
 parties buying a bond, in which they agree to make titles 
 when purchase money is paid. Those holding such notes 
 must return them to you for taxation, and the party pur- 
 chasing must return the lands so purchased." The law 
 should be amended so as to make an allowance for indebt- 
 edness. 
 
 Now if the operation of the general property tax in 
 Georgia has been thus defective, what causes are respon- 
 sible? Most of the writers on taxation will declare that 
 
234 Studies in State Taxation [234 
 
 the general property tax is inherently bad. The two marked 
 defects of the tax are said to be (i) its lack of univer- 
 sality, that is, the escape of personal property from taxa- 
 tion, and (2) its incentive to dishonesty, in that people make 
 false returns in order to secure a low assessment. But 
 criticism should be positive as well as negative, and a sub- 
 stitute should be offered for that which is condemned. 
 The corporation tax, which is well adapted to the wealthy 
 commonwealths of the north, cannot be applied to the 
 commonwealths of the south where manufacturing is very 
 little developed, and where the country is largely agricul- 
 tural. The single tax on land can not be justified by 
 an appeal to ethics or to the science of finance. We have 
 left the income tax. Without going into the political and 
 social aspects of the income tax it is hard to see how it can 
 be any more successful than the general property tax. If 
 personal property escapes taxation with such a list of ques- 
 tions under oath as is required in Georgia, and if the num- 
 ber of acres of land is misrepresented, will the great mass of 
 intangible personal property be reached any better by an 
 income tax? As to the charge of being an incentive to 
 dishonesty, the same is true of the income tax and of any 
 other tax where returns are required under oath by the 
 taxpayer. The general property tax, as far as real property 
 is concerned, has the advantage of something tangible to 
 seize upon, and with a properly drawn corporation tax a 
 great deal of the personalty will be reached. 
 
 The unsatisfactory results of the general property tax in 
 Georgia are not due so much to inherent defects in the tax 
 as to lack of vigor and to defects in administration. In the 
 first place it is essentially wrong that the tax-receiver should 
 be an elective official, and elected for such a short term as 
 two years. The tax-receiver is naturally anxious for an- 
 other term of office, as he regards his position as a stepping- 
 stone to another one, and he naturally endeavors to concil- 
 iate his constituent by making the burden of taxation as 
 light as possible. It would be contrary to human nature 
 
235] Taxation in Georgia 335 
 
 to expect anything else. An official or a board appointed 
 by the governor or some central authority would be much 
 less open to such influence. Furthermore, an official so 
 appointed would be more attentive to the instructions of the 
 comptroller-general. As the matter stands now the assess- 
 ment of property by the receivers is a merely pro-forma 
 proceeding. The blanks are sent to the taxpayer to be 
 filled in, but the questions provided by the statute are an- 
 swered in a rambling manner, or they are disregarded alto- 
 gether and the taxpayer is allowed to lump his estimate 
 under one or two heads. 
 
 The omission to answer the questions and the failure of 
 the tax-receiver to require this are so common that they 
 excite no comment, and are taken as a matter of course. 
 Even when the list is filled out, the valuations given are 
 usually those of the year before, and the tax-receiver 
 accepts them without question and does not endeavor to 
 scrutinize them in any way. The taxpayers generally 
 sign the appended oath, but it is never administered as 
 is required by the statute. That the assessment is usu- 
 ally low is shown by the fact that the provision for arbitra- 
 tion in regard to assessment is seldom, if ever, resorted to, 
 and a well-informed correspondent writes me that he has 
 heard of but one instance where the valuation was referred 
 to arbitration. This in itself shows that the valuation is 
 so low that the taxpayer never feels justified in taking an 
 appeal. The provision for the correction of valuations by 
 the grand jury is also never carried out, but is practically a 
 dead letter. 
 
 In view of these facts it is not to be wondered at that the 
 law has not given satisfaction. The only matter of surprise 
 is that it has worked as well as it has. No law, no matter 
 how good, will give satisfaction unless it is properly admin- 
 istered. The present list of questions falls by its own 
 weight; it is too awkward and cumbersome. The tax- 
 receivers do not do their duty properly, and the comptroller- 
 general does not seem to be able to force them to it, al- 
 
336 Studies in State Taxation [336 
 
 though he has emphasized it from year to year in almost 
 the same words. The following is from his " Instructions " 
 for 1898: 
 
 " See to it, then, that every requirement of the law 
 is met in taking the returns of every class of property 
 and from every class of citizens. Many complaints are 
 made to this office by taxpayers of the loose and care- 
 less manner of tax-receivers in taking returns. In many 
 instances they charge that the receivers never propound 
 the questions to taxpayers required by law, nor re- 
 quire them to fill out the blank tax list and make oath to 
 the correctness of their return. This is a violation of law 
 that will not be permitted in future by this office." And fur- 
 ther: " In order to have a full and fair return of the taxable 
 property, it is absolutely necessary for you to ask each 
 party making the return the questions which I have ar- 
 ranged for you, to be found in these instructions and the 
 tax lists sent with the digests. Such questions I am com- 
 pelled by law to give you, and they are given for no idle 
 purpose, but are designed to bring out and exhibit the tax- 
 able property of the state in the possession of the owners 
 thereof." " 
 
 The tax-receivers should be appointed by the governor 
 or by an appointing board, which should also have the 
 power of removal. This would enable the comptroller- 
 general to exert greater pressure on the tax-receivers and 
 hold them to a stricter accountability. The assessment of 
 property should also be made by a board of, say three as- 
 sessors, who should value the property direct or make a 
 strict revision of the returns of the taxpayers, as it is 
 manifestly unfair to allow each person to make his own 
 valuation. Finally, taxation for state purposes in cities 
 
 ' By the act approved December 22, 1898, it is made a misde- 
 meanor for the tax-receiver to neglect to administer the oath, and 
 in addition to the penalty provided in the code for misdemeanors, 
 the oflfender is fined ten dollars, one-half to go to the informer. It 
 remains to be seen whether this will stimulate the administration of 
 the oath. 
 
337] Taxation in Georgia 337 
 
 and towns should be assessed upon the same valuation as 
 for local purposes. 
 
 Capitation Taxes 
 
 Poll Tax. Capitation taxes yield the second largest 
 amount derived from taxation. Every male inhabitant of 
 the state, between the ages of twenty-one and sixty years, is 
 subject to a poll tax of one dollar per annum. Blind per- 
 sons, cripples, and maimed and disabled Confederate sol- 
 diers are exempt from this tax. No city or county, or any 
 other corporate authority is allowed to assess or collect any 
 capitation tax whatever, except a street tax, and that after 
 an opportunity is given to work upon the streets. The pay- 
 ment of the poll tax is requisite for the exercise of the 
 suffrage, and this is a source of political demoralization. 
 The negro especially refrains from paying his poll tax, and 
 waits for the politician to pay it for him, which is ordinarily 
 done. There is no way of enforcing the collection of the 
 tax from persons who do not own property, except as a 
 qualification for voting and thus the tax always tends to 
 fall on those who already own property. Furthermore the 
 constitution of the state requires that a voter shall have 
 paid all taxes required of him since 1877. Thus payment for 
 the current year is not sufficient to qualify, but the voter 
 must pay all taxes in arrears. There is a large class of 
 citizens who sometimes pay and sometimes do not, and 
 when they do pay they do so merely for the purpose of 
 voting. But before they can do this they must register 
 and swear that they have paid all taxes since 1877, and 
 hence the tax is a constant incentive to perjury. The 
 pernicious effect of such a system hardly needs any com- 
 ment. About sixty per cent, of the tax is generally col- 
 lected. The census of 1890 showed a voting population of 
 398,122 and the yield in 1898 was $234,431.99. The pro- 
 ceeds are used " for educational purposes in instructing 
 children in the elementary branches of an English educa- 
 tion only." 
 
238 Shidies in State Taxation [238 
 
 Professional Tax.'' Every practitioner of law, medicine, 
 or dentistry, presidents of each of the banks of the state, 
 the president of each of the railroad, express, telegraph, 
 telephone, electric light and gas companies doing business 
 in the state, and every architect, and civil, mechanical and 
 electrical engineer is taxed ten dollars per annum. In 
 case the president of any of the companies named does not 
 reside in the state, the superintendent or general agent of 
 such company must pay the tax. No municipal corporation 
 is allowed to levy any additional tax on these professions, 
 but the payment of the tax is prerequisite to practice. This, 
 however, does not insure its payment, and probably not 
 over twenty-five per cent, is paid. The returns for this tax 
 are included in the general property tax. 
 
 CoRPOitATiON Taxes 
 
 There is no special law for the taxation of corporations, 
 except those corporations which enjoy specific franchise 
 privileges. Manufacturing and other incorporated com- 
 panies (except railroad, insurance, telegraph, telephone, 
 express, and sleeping- and palace-car companies) are taxed 
 in the same manner as individuals on the value of their real 
 and personal property, and must return their property for 
 taxation in the county in which the company is located, or 
 where the principal business is carried on. The return 
 must be made under oath by the president or agent of the 
 corporation. In addition to the questions given above the 
 president or agent is also required to answer the following: 
 
 What is the nominal value or cost of the real estate of the com- 
 pany you represent, including the huildings thereon? 
 
 Second. What is the fair market value thereof? 
 
 Third. What is the nominal value or cost of your machinery of 
 every kind? 
 
 Fourth. What is the fair market value thereof? 
 
 Fifth. What is the value of the real estate not used in the con- 
 duct of the business of your company? 
 
 ' A rigid classification would perhaps include this charge under 
 License Taxes rather than under Capitation Taxes. 
 
239] Taxation in Georgia 339 
 
 Sixth. What is the value of raw materi&l on hand on the day 
 fixed for the return of property for taxation? 
 
 Seventh. What is the value of the manufactured goods or 
 articles on hand on the day fixed for the return of property for 
 taxation, whether at your principal office or in the hands of agents, 
 commission merchants or others? 
 
 Eighth. How much money did your company have on hand on 
 the day fixed for the return of property for taxation, whether within 
 or without the state? How much deposited in bank? 
 
 Ninth. State separately the gross nominal value of the notes, 
 accounts, bonds and other obligations for money or property of 
 every kind on hand on the day fixed for the return of property for 
 taxation. State separately the fair market value of each of said 
 classes of property. 
 
 Tenth. What other property of every kind did your company 
 own on the day fixed for the return of property for taxation, and 
 what was the fair market value thereof? 
 
 The comptroller-general is also empowered to propound 
 any other questions which might secure a fuller return. 
 
 Banks and Building Associations. The capital stock of 
 banks is not taxed, but the shares of the stockholders are 
 taxed at their market value in the county where the bank is 
 located at the same rate as real and personal property. 
 The banks are also taxed on their real estate unless the 
 value of the same is represented in the market value of the 
 shares of stock. The undivided profits and surplus are also 
 taxed when these are not included in the value of the stock 
 and buildings. 
 
 The tax on general corporations works about as well as 
 does the general property tax on individuals, and in fact 
 corporations are taxed the same as individuals when they 
 should be taxed in an entirely different manner. The 
 sphere of a corporation is in most instances specifically 
 different from that of an individual. The business of a 
 corporation is likely to be scattered over the state and in 
 this fiscal system the entire proceeds of the tax go to the 
 county in which the main offices of the company are located. 
 To reform the tax on corporations and put it on a modern 
 basis the following changes are necessary: In the first 
 place the taxation of corporations should be separated from 
 
240 Studies in State Taxation [240 
 
 the taxation of individuals. Secondly, corporations, like 
 individuals, should be taxed for local purposes on their 
 real estate only, and the real estate should be taxed in the 
 county in which it is located. Under the present system a 
 corporation may have large holdings of property in one 
 county and another county may reap all the benefit. This 
 is obviously unfair and should be remedied. Thirdly, cor- 
 porations should be taxed for state purposes on their earn- 
 ings or on their capital and debt, and when this is done 
 only so much of the total earnings or capital should be 
 taxed as is actually received or employed within the state. 
 
 Building associations are also taxed upon the market 
 value of their shares of stock on which no advance has been 
 made, at the same rate as other property. This tax is in 
 lieu of all other taxes and license whether state, county or 
 municipal, except a business license by the town or city in 
 which the principal office of the association is located. The 
 returns for these taxes are all included in the returns of the 
 general property tax. 
 
 Railroads. Railroads, like other corporations, are taxed 
 on the value of their property at the same rate as other 
 property of the people of the state. The president of the 
 company is required to return to the comptroller-general, 
 under oath, the amount of the property of the railroad, 
 without deducting indebtedness, and the president of the 
 company is then required to pay the tax so assessed to the 
 comptroller-general. Railroad companies operating rail- 
 roads lying partly in the state and partly in other states, 
 are taxed as to the rolling stock and personal property ap- 
 purtenant thereto, and which is not permanently located in 
 any of the states through which the road passes, on so much 
 of the whole value of the rolling stock and personal prop- 
 erty as is proportional to the length of the railroad in the 
 state, without regard to the head office of the company. 
 If the comptroller-general is not satisfied with the return, 
 and he makes a new assessment not satisfactory to the 
 person making the return, two arbitrators are chosen, one 
 
341] Taxation in Georgia 341 
 
 by the comptroller-general and the other by the officer 
 objecting to the assessment. If these two fail to select an 
 umpire within thirty days, the governor appoints one, and 
 the award of these three arbitrators is final. Street rail- 
 roads are assessed in the same manner. The receipts from 
 railroads in 1898 were $215,921.76, and from street rail- 
 roads $8,279.37. 
 
 That no deduction should be allowed for indebtedness is 
 eminently proper, as the bonded debt of a railroad is often 
 really a part of its capital stock. But the general property 
 tax is even less applicable to the railroad than to the gen- 
 eral corporation. Here again the best form of taxation is 
 that on net earnings, i. e. the total annual revenue from all 
 sources minus all actual expenditures except interest and 
 taxes. As noted above, the interest on bonds should not 
 be deducted from the gross receipts as the funded debt 
 really represents earning capacity. 
 
 Insurance Companies. All foreign and home insurance 
 companies are taxed one per cent, on all premiums received 
 by them ; but mutual, co-operative or assessment fire insur- 
 ance companies, organized for mutual protection against 
 fire, and receiving no premium other than the assessment 
 of its own members, are not so taxed. If any insurance 
 company does a brokerage business it is taxed upon the 
 capital so employed the same as other moneyed capital is 
 taxed in the hands of private individuals. The returns of 
 insurance companies must be sworn to by the president of 
 the company and forwarded to the comptroller-general on 
 or before the first day of July in each year. The returns 
 embrace the period from May i to April 30. The name 
 and address of each agent must be given, the aggregate 
 amount of risks written during the year; the amount of 
 premiums received; and the losses paid and unpaid by 
 agencies. The returns must be itemized and the comp- 
 troller-general has power to correct them within sixty days. 
 If this be done the officer making the return has the priv- 
 ilege within twenty days of referring the question at issue 
 16 
 
242 Studies in State Taxation [243 
 
 to two arbitrators, who choose an umpire in case of dis- 
 agreement, and their award is final. In case the company 
 fails to make a proper return, the comptroller-general 
 makes the assessment from the best information he can 
 secure. All home and foreign fidelity and guarantee com- 
 panies, and other companies furnishing bonds are taxed 
 at the same rate and in the same manner as insurance com- 
 panies. The returns are included in those of insurance 
 companies. In 1898 the revenue from this source was 
 $56,006.07. 
 
 Express and Telegraph Companies. All persons or com- 
 panies, including railroad companies, doing an express and 
 telegraph business and charging the public, are taxed two 
 and one-half per cent, on their gross receipts. The super- 
 intendent or general agent of each telegraph or express 
 company, or the president of each railroad company doing 
 such a business in the state is required to make a quarterly 
 return, under oath, to the comptroller-general on the last 
 day of March, June, September, and December in each year, 
 showing the full amount of gross receipts during the quar- 
 ter ending on that date. The tax is also to be paid at the 
 same time as making the returns. If any officer, whose 
 duty it is to make such returns, fails to do so within thirty 
 days of the required time, such person may be indicted for 
 a misdemeanor, and punished by fine and imprisonment 
 in the discretion of the court. In 1898 the tax received 
 from express companies was $3646.63, and that received 
 from telegraph companies was $3558.20. 
 
 Telephone Companies. Every telephone company or in- 
 dividual operating telephones is required to pay a tax of 
 one dollar a year for each telephone station or box, rented 
 or used by subscribers. The superintendent or general 
 manager is required to make returns under oath, and to 
 make payments to the comptroller-general on the same 
 dates as the officers of express and telegraph companies. 
 In 1898 the revenue from this source was $6073.32. 
 
 Sleeping-Car Companies. Sleeping-car companies are 
 
243] Taxation in Georgia 343 
 
 taxed at the regular tax rate imposed upon other property 
 in the state of Georgia in the same proportion to the entire 
 value of such sleeping cars that the length of lines in the 
 state bears to the length of lines of all railroads over which 
 the sleeping cars are run. The returns are made to the 
 comptroller-general by the president or person in control 
 of the sleeping cars in the state. The comptroller-general 
 may frame such questions as will elicit the information 
 sought, and the answers to these questions must be made 
 under oath. If the officers fail or refuse to answer the 
 questions addressed to them, the comptroller-general ob- 
 tains the information from such sources as he may, and he 
 then assesses a double tax on such sleeping cars. If the 
 taxes are not paid the comptroller-general issues execution 
 against the owners of such cars, which execution may be 
 levied by the sheriff of any county of the state upon the 
 sleeping cars of the owner who has failed to pay the re- 
 quired taxes. In 1898 the yield from this source was 
 $748.24. 
 
 License Taxes 
 
 Georgia, like most other southern states, imposes a H- 
 cense tax on a number of occupations. These are generally 
 specific in amount, and are laid both for revenue purposes 
 and as an aid to police regulation. License taxes have 
 been imposed in the state ever since its earliest day and 
 will probably long continue as an auxiliary to more impor- 
 tant taxes. 
 
 Liquor License. All dealers in spirituous or malt liquors, 
 intoxicating bitters or brandy fruits or domestic wines, are 
 taxed two hundred dollars for each place of business in 
 the county where the same are sold. The tax does not 
 relieve the dealers from any local or prohibitory law, and 
 it does not apply to domestic wines manufactured from 
 grapes or berries purchased by or grown on lands owned, 
 leased or rented by the dealer. All liquor dealers must 
 register their names before the ordinary of the county in 
 
244 Studies in State Taxation [244 
 
 which they propose to sell spirituous or malt liquors. The 
 ordinary then notifies the comptroller-general and the col- 
 lector of taxes for the county. When the person or firm 
 registers it is required to pay the tax imposed by the Gen- 
 eral Assembly for that year. To fail to register is a mis- 
 demeanor punishable by fine or imprisonment. The pro- 
 ceeds of the tax are used for educational purposes, and in 
 1898, when the tax was one hundred and fifty dollars, they 
 amounted to $109,408.39. 
 
 Insurance Agents. Every local insurance agent or broker 
 doing business in the state is taxed ten dollars for each 
 county in which he may solicit business. Every traveling 
 or special or general agent of life, fire, accident, or other 
 insurance company doing business in the state, is taxed 
 fifty dollars, and the tax must be paid before the agents are 
 allowed to act for their respective companies. This tax is 
 not required of the agents of assessment life insurance com- 
 panies or mutual aid societies, nor of railroad ticket agents 
 selling accident insurance policies, nor of agents of indus- 
 trial life insurance companies writing industrial life insur- 
 ance, the premiums of which are payable in weekly instal- 
 ments not exceeding $1.05 per week. For such agents as 
 are required to pay the tax, the receipt of the comptroller- 
 general, together with his certificate, constitutes their li- 
 cense to transact business for their companies. In 1898 
 this tax yielded $7570. 
 
 Show Tax. Circus companies, in or near cities of twenty 
 thousand inhabitants or more, pay a license tax of one 
 thousand dollars ; in or near cities or towns of five thousand 
 inhabitants and under twenty thousand, four hundred dol- 
 lars; in cities or towns of four thousand inhabitants and 
 under five thousand, three hundred dollars; and in cities or 
 towns of less than four thousand inhabitants, two hundred 
 dollars for each day they exhibit. All dog or horse shows 
 and shows of like character, beneath a tent, canvas or enclo- 
 sure, charging an admission fee of more than twenty-five 
 cents, pay a tax of thirty dollars for each day they exhibit, 
 
245] Taxation in Georgia 345 
 
 and those charging less than twenty-five cents pay a tax of 
 ten dollars for each day they exhibit. All shows and exhibi- 
 tions (except such as are histrionic, musical, operatic, and 
 elocutionary) including the side shows accompanying cir- 
 cuses, pay fifty dollars in every city or town of five thousand 
 inhabitants ; forty dollars in cities or towns of four thousand 
 inhabitants and less than five thousand; and thirty dollars 
 in towns of less than four thousand inhabitants. The re- 
 ceipts go for educational purposes, and in 1898, when the 
 tax was somewhat lower, amounted to $6176.64. 
 
 Tax on Games. Every person or firm who keeps or holds 
 for hire or sale any billiard, pool, or other table of like 
 character, is taxed one hundred dollars for each county in 
 the state in which such person or firm does business. Every 
 keeper of a pool, billiard or bagatelle table kept for public 
 use is taxed twenty-five dollars for each table. Every 
 keeper of any other place for the performance of any game 
 or play, and the keeper of any flying-horses is taxed twenty- 
 five dollars in each county. Every keeper of a ten-pin 
 alley or shooting gallery, kept for public pay, is taxed 
 twenty-five dollars for each place of business. In 1898 the 
 receipts froin these taxes were $6143.50. 
 
 Pistol Tax. A tax of twenty-five dollars is imposed on 
 all dealers in pistols, toy pistols, shooting cartridges, pistol 
 or rifle cartridges, dirks, bowie-knives, or metal knucks, 
 for each place of business in the county where the same 
 are sold. In 1898 this tax yielded $5269.40. 
 
 Tax on Futures. Every individual, firm, or agent en- 
 gaged in the business of buying and selling farm products, 
 etc., not intended for bona fide sale and delivery, but for 
 future delivery (commonly called futures) is taxed one 
 thousand dollars per annum in each county in which said 
 business is carried on. In 1898 this tax yielded $4950. 
 ' Packing-houses and Brewing Companies. Packing-houses 
 are taxed one hundred dollars in each county where the 
 business is carried on. In 1898 this tax yielded $1260. 
 Brewing companies are taxed three hundred dollars, and 
 
246 Studies in State Taxation [246 
 
 all others who are engaged in the sale of beer, and do not 
 pay the tax as liquor dealer described above are taxed three 
 hundred dollars for each place of business in each county 
 in which they carry on business. In 1898 this tax yielded 
 $1260. 
 
 Bicycle and Sewing-Machine Companies. Every sewing- 
 machine company, and all wholesale and retail dealers in 
 sewing machines selling machines manufactured by com- 
 panies that do not pay this tax, are required to pay two hun- 
 dred dollars for the fiscal year or fraction thereof. Whole- 
 sale and retail dealers are required to pay the tax for each 
 brand of sewing machines sold by them, unless the manu- 
 facturer of such a machine has paid the tax. Furthermore, 
 sewing-machine companies are also taxed twenty-five dol- 
 lars a year for each agent in every county in which he may 
 do business. Bicycle manufacturers, and all wholesale and 
 retail dealers selling bicycles manufactured by companies 
 that have not paid this tax, are required to pay a tax of 
 one hundred dollars for the fiscal year or fractional part 
 thereof. Before beginning business both sewing-machine 
 and bicycle manufacturers are required to register their 
 names with the ordinary of the county in which they do 
 business and exhibit their license from the comptroller- 
 general. A failure to comply with these provisions is a 
 misdemeanor punishable by fine or imprisonment. In 1898 
 the tax on sewing-machine companies yielded $1600, and 
 that on the agents of the companies $1010. The tax on 
 bicycle manufacturers is imposed for the first time in 1899. 
 
 Miscellaneous License Taxes. Every daguerran, ambro- 
 type, photographic or similar artist is taxed ten dollars, 
 and the tax is required of them in only one county. Every 
 person carrying on the business of auctioneer is taxed 
 twenty-five dollars for each county in which he carries 
 on business. Pawnbrokers are taxed fifty dollars for each 
 place of business. All itinerant doctors, dentists, opticians, 
 or specialists doing business in the state are taxed ten 
 dollars for each county in which they may do business. 
 
247] Taxation in Georgia 347 
 
 Itinerant lightning rod agents are taxed fifty dollars for 
 each county in which they may do business, but this tax 
 is not required of any indigent or disabled Confederate 
 soldier. Dealers in cigarettes are taxed five dollars for 
 each place of business. Every proprietor or owner of 
 any park where baseball or any similar game is played and 
 where admission fees are charged is taxed fifty dollars for 
 each place, but in places of less than ten thousand inhabi- 
 tants twenty-five dollars is paid. Emigrant agents, or the 
 employer or employee of such agents, are taxed five hun- 
 dred dollars for each county in which the business is car- 
 ried on. This is a prohibitory tax, as there is no return for 
 it in the report of the comptroller-general. Every agent of 
 a matrimonial, natal, or nuptial company is taxed one hun- 
 dred dollars for each county in which he may do business. 
 Railroad-ticket brokers are taxed fifty dollars for each place 
 of business. All mercantile and collection agencies, and 
 commercial agencies are taxed fifty dollars in each county 
 where they have established an office. Firms and agents 
 negotiating loans and charging therefor are taxed ten dol- 
 lars for each county in which they carry on business. Each 
 person or firm engaged in making abstracts in cities or 
 towns of twenty thousand inhabitants or over is taxed 
 twenty-five dollars ; in cities or towns of ten thousand inhab- 
 itants and less than twenty thousand the tax is ten dollars; 
 and in cities and towns of less than ten thousand inhab- 
 itants the tax is five dollars. But this tax is not required 
 of lawyers who have paid the professional tax required of 
 them. Detective agencies are taxed fifty dollars for each 
 place where they have an office. Pedlers of agricultural 
 implements who have not a fixed place of business are taxed 
 twenty-five dollars for each county. Clock pedlers are 
 taxed one hundred dollars in each county in which they 
 do business. Traveling vendors using boats for the 
 purpose of selling goods on the waters of the state are 
 taxed fifty dollars for each county in which they sell their 
 wares. This tax is a lien on the boat and its contents with- 
 
248 Studies in State Taxation [248 
 
 out regard to ownership. Every vendor of patent or pro- 
 prietary medicines, special nostrums, jewelry, paper, soap 
 or other medicines is taxed fifty dollars in each county in 
 which he offers such articles for sale. Pedlers of stoves 
 or ranges are taxed two hundred dollars for each county in 
 which they do business. Traveling vendors of patent 
 churns and patent fences, and the patent rights of the same 
 are taxed ten dollars in each county in which they offer 
 such articles for sale. Each company of traders or fortune 
 tellers, usually known as " gypsies," are taxed twenty-five 
 dollars in each county in which they carry on business. In 
 1898 the receipts from the most important of these taxes 
 were as follows: artists, $1197; auctioneers, $315; pawn- 
 brokers, $1440; speciaUsts, $118.80; agents $747; pedlers, 
 $2499.40. 
 
 Conclusion 
 
 The general property tax must continue for many years 
 to be the main resource in the tax system of the state of 
 Georgia. The reforms necessary to the better operation 
 of that tax have been indicated above, but it might be better 
 to summarize all such suggestions in this place: The official 
 assessing taxes should not be elected, but should be ap- 
 pointed by the governor or other central authority; the 
 listing system should be carried out in the spirit of the law 
 or it should be abolished altogether; the administration 
 should be centralized, and the personnel of the staff should 
 be rigidly examined. Where officials do not carry out the 
 orders of their superiors it is impossible to make any system 
 work properly. In regard to the tax on corporations the 
 following reforms are recommended: The taxation of cor- 
 porations should be separate and distinct from that of 
 individuals ; corporations should be taxed for local purposes 
 on their real estate only, and for state purposes on their 
 earnings or on their capital stock and debt. If it is finan- 
 cially possible the poll tax should be abolished, as it is anti- 
 quated and acts as an incentive to fraud and perjury. In 
 
349] Taxation in Georgia 249 
 
 regard to new taxes the most desirable that can be recom- 
 mended is that of a tax on inheritances, and also a tax on 
 the commissions of executors and administrators. The 
 simplicity of these taxes and the utter impossibility of eva- 
 sion makes them the most desirable of taxes. A bonus on 
 charters and franchises might also add an appreciable sum 
 to the year's receipts. 
 
 It was confidently expected that the last legislature (1898) 
 would make material changes in the revenue laws, but with 
 the exception of imposing a few additional license taxes and 
 increasing the amount of others, the legislature did nothing. 
 A proposition to tax all dogs over six months old at one 
 dollar a head caused a hot debate in the House of Dele- 
 gates. It was claimed that this tax would put $250,000 
 in the state treasury, but one of the speakers predicted 
 that if the bill passed, " the next gale that sweeps the 
 deck of the grand old ship of the state of Georgia will waft 
 to our ears the wail of the statesmen out of a job." In the 
 face of such a dire prophecy the bill failed for want of a 
 constitutional majority. 
 
 The tax rate in the state of Georgia has risen steadily 
 from 2}4 mills in 1883 to 6.21 mills in 1898, and at present 
 the state is confronted by the prospect of a deficit. During 
 the period mentioned above the taxable basis has increased 
 from $306,921,355 to $411,813,911 or about one-third, while 
 the tax rate has almost tripled. When the tax rate increases 
 in inverse proportion to the taxable basis there is a certainty 
 that a reform of the fiscal machinery is necessary. A pri- 
 mary difficulty is the lavish attitude of the legislature with 
 respect to appropriations. An exceptionally well-informed 
 observer makes the following statement concerning the 
 pending financial difficulties : " Shallow and flippant talkers 
 ascribe this to the unascertained class of people known as 
 tax-dodgers. I am satisfied that if all the tax-dodgers were 
 made to pay up their full share there would be no deficit, 
 but I do not think the tax-dodger is the cause of the diffi- 
 culty so much as the fact that the legislators . . . have 
 
250 Studies in State Taxation [250 
 
 appropriated money without the wherewithal to pay. The 
 state seems at present to be divided into two factions. One 
 thinks that the remedy is to cut down appropriations, the 
 other thinks that the remedy is to catch the dodger. The 
 truth is that the dodging has gone on all the time as much 
 as now. It has no reference to the present trouble. The 
 present trouble will have to be secured by economy in 
 expenditures. The catching of the tax-dodger and equaliz- 
 ing of tax burden is something that it likewise needs." 
 
 With a careful limitation of expenditures, and the re- 
 forms indicated above, and a strict enforcement of the 
 laws that are provided, the state ought to obtain sufficient 
 revenue to meet all its expenses without a crushing burden 
 of taxation. Nothing is more demoralizing and pernicious 
 than the non-enforcement of the laws that stand on the 
 statute books. 
 
 [Bibliographical Note. — i. Cobb, Georgia Digest, Athens, 
 1851. 2. Georgia Code, Atlanta, 1895. 3. Stevens, History of Geor- 
 gia, New York and Philadelphia, 1847, 1859. 4. Jones, History of 
 Georgia, Boston, 1883. 5. Comptroller-General's Report, Atlanta, 
 1898. 6. Instructions of the Comptroller-General to the tax-re- 
 ceivers of Georgia, Atlanta, 1898. 7. Public Acts of the General 
 Assembly of the State of Georgia for 1896, 1897, 1898, Atlanta, 1899. 
 8. Wolcott, Report on Finance, American State Papers, Vol. V, 
 Washington, 1832. 9. R. T. Nesbitt, Georgia a Fair Field for 
 Home-seekers and Investors, Atlanta, 1895.] 
 
INDEX 
 
 Adair, F., acknowledgments to, 
 
 217. 
 Adams, F. G., acknowledgments 
 
 to, IIS- 
 Administrators and executors, 
 taxation of commissions in 
 Maryland, 62-63. 
 Alexander, H., acknowledg- 
 ments to, 217. 
 Assessment of taxes, in Georgia, 
 226-230. 
 in Kansas, 143-148. 
 in Maryland, 34-37. 
 in Mississippi, 198-199. 
 in North Carolina, 88-90. 
 Ayer, H. W., acknowledgments 
 to, 77. 
 
 Barksdale, , cited on recon- 
 struction in Mississippi, 192. 
 
 Bassett, J. S., acknowledgments 
 to, 77- 
 
 Bell, Helen D., acknowledg- 
 ments to, 177. 
 
 Brown, J. E., acknowledg- 
 ments to, 217. 
 
 Clement, H., acknowledgments 
 
 to, n. 
 Collection of -taxes m North 
 Carolina, 89-90. 
 in Mississippi, 200-201. 
 in Kansas, 148-149. 
 in Georgia, 224-225. 
 Commissions, tax on officials, in 
 
 Maryland, 64. 
 Corporation taxes in Georgia, 
 238-243. 
 in Kansas, 161-163. 
 in Maryland, 51-61. 
 in North Carolina, 97-101. 
 
 Debt of Georgia, 219-220. 
 of Kansas, 120-121. 
 
 Debt of Maryland, 22-26. 
 of Mississippi, 183. 
 of North Carolina, 82n. 
 
 Economic characteristics of 
 Georgia, 217-218. 
 of Kansas, 115-118. 
 of Maryland, 13-16. 
 of Mississippi, 177-179. 
 of North Carolina, 77-79. 
 Ely, R. T., cited on use of term 
 " transitional period," 188. 
 quoted on general property 
 tax in Georgia, 231. 
 Executors and administrators, 
 taxation of commission, in 
 Maryland, 62-63. 
 Express companies, taxation of, 
 in Georgia, 242. 
 
 Fees, excess of, in Maryland, 
 
 63- 
 Finances of Georgia, 218-220. 
 
 of Kansas, 118-122. 
 
 of Maryland, 16-26. 
 
 of Mississippi, 179-183. 
 
 of North Carolina, 79-82. 
 Fund system in Kansas, 141-142. 
 
 in Maryland, 16-17. 
 
 General property tax in Geor- 
 gia, 225-237. 
 
 in Kansas, 140-160. 
 
 in Maryland, 30-45. 
 
 in Mississippi, 196-206. 
 
 in North Carolina, 86-92. 
 Georgia, corporation taxes in, 
 238-243. 
 
 economic characteristics of, 
 217-218. 
 
 finances of, 218-220. 
 
 general property tax in, 225- 
 
 237- 
 history of taxation in, 220- 
 222. 
 
252 
 
 Index 
 
 [252 
 
 Georgia, license taxes in, 243- 
 248. 
 poll tax in, 237-238. 
 reforms suggested in, 248-250. 
 Graham, R. P., acknowledg- 
 ments to, 13. 
 
 History of taxation, in Georgia, 
 220-222. 
 in Kansas, 123-139. 
 in Maryland, 26-30. 
 in Mississippi, I&4.-I95. 
 in North Carolina, 82-86. 
 HoUoway, J. N., cited immi- 
 gration into Kansas, 123. 
 
 Income tax in North Carolina, 
 
 105-108. 
 Inheritance tax in Maryland, 61- 
 62. 
 in North Carolina, 108-111. 
 Insurance companies, taxation 
 of, in Georgia, 241-242. 
 in Kansas, 162. 
 in Maryland, 57. 
 
 Kansas, corporation tax in, 161- 
 
 163. 
 economic characteristics of, 
 
 11S-118. 
 finances of, 1 18-122. 
 general property tax in, 140- 
 
 160. 
 history of taxation in, 123- 
 
 . ^39- 
 
 license taxes in, 163-165. 
 poll tax in, 165-166. 
 reforms suggested in, 166-174. 
 road tax in, 166. 
 school taxation in, 174-176. 
 King, J. L., acknowledgments 
 to, 115. 
 
 License taxes in Georgia, 243- 
 248. 
 in Kansas, 163-165. 
 in Maryland, 45-51. 
 in Mississippi, 206-212. 
 in North Carolina, 92-97. 
 Little, J. D., acknowledgments 
 
 to, 217. 
 Local and state taxation in 
 Kansas, relations of, 139- 
 140. 
 
 Lowry and McCardle, cited on 
 territorial taxation in Miss- 
 issippi, 184, 
 cited on reconstruction in 
 Mississippi, 192. 
 
 Maryland, corporation taxes in, 
 51-61. 
 economic characteristics of, 
 
 13-16. 
 finances of, 16-26. 
 general property tax in, 30-45. 
 history of taxation in, 26-30. 
 inheritance tax in, 61-62. 
 license taxes in, 45-51. 
 miscellaneous taxes in, 62-65. 
 reform suggested in tax sys- 
 tem of, 65-75. 
 May, A. Q., acknowledgments 
 
 to, 177. 
 McCardle and Lowry, cited on 
 reconstruction in Mississip- 
 pi, 192. 
 cited on territorial taxation in 
 Mississippi, 184. 
 McPherson, J. D., acknowledg- 
 ments to, 217. 
 Medcalf, J. A. J., acknowledg- 
 ments to, 13. 
 Mississippi, economic character- 
 istics of, 177-179. 
 finances of, 179-183. 
 general property tax in, 196- 
 
 206. 
 history of taxation in, 184- 
 
 license taxes in, 206-212. 
 poll tax in, 212-213. 
 reforms suggested in, 213-215. 
 Mortgage tax in Maryland, 64- 
 65. 
 
 Noble, cited on inheritance tax 
 
 in Iowa, 172. 
 North Carolina, corporation 
 
 taxes in, 97-101. 
 economic characteristics of, 
 
 77-79- 
 finances of, 79-82. 
 income tax in, 105-108. 
 inheritance tax in, 108-111. 
 general property tax in, 86-92. 
 history of taxation in, 82-86. 
 license taxes in, 92-97. 
 
S53] 
 
 Index 
 
 253 
 
 North Carolina, poll tax in, loi- 
 105. 
 reforms suggested in, 111-114. 
 
 Poll tax in Georgia, 237-238. 
 
 in Kansas, 165-166. 
 
 in Mississippi,, 212-213. 
 
 in North Carolina, 101-105. 
 Power, J. L., acknowledgments 
 to, 177. 
 
 Railroads, taxation of, in Geor- 
 gia, 240-241. 
 assessment of, in Kansas, 146- 
 
 147- 
 taxation of, in Maryland, 52- 
 
 57- 
 taxation of, in Mississippi, 
 
 200. 
 
 Reforms suggested in Georgia, 
 248-250. 
 in Kansas, 166-174. 
 in Maryland, 65-75. 
 
 Reforms suggested in Missis- 
 sippi, 213-215. 
 in North Carolina, 111-114. 
 Road tax in Kansas, 166. 
 
 School taxation in Kansas, 174- 
 176. 
 
 Seligman, E. R. A., cited on in- 
 heritance tax in Missouri, 
 172. 
 
 State and local taxation in Kan- 
 sas, relations of, 139-140. 
 
 Telegraph companies, assess- 
 ment of, in Kansas, 147-148. 
 
 Telephone companies, assess- 
 ment of, in Kansas, 147-148. 
 
 West, M., quoted on inheritance 
 tax, iio-iii. 
 
 Worth, W. H., acknowledg- 
 ments to, 77. 
 
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