CORNELL UNIVERSITY LIBRARY FROM The ^st^'te of chfi.s .F.Full Date Due ^UHr 1948 fl iAR2 2 951 -^K^ ^i?8>} 1-951 ^4Sg4i __J^^SS lWAR_liJaS6-&-J^ ^7. Jbt^ Ij^^S^ISSII]!!! JLis: - I9e,q ]} ^ Cornell University Library The original of tliis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030265072 -* WiicifRvts €, lElg's SlEorfts. THE LABOR MOVEMENT IN AMERICA. Price, $1.50. TAXATION IN AMERICAN STATES AND CITIES- Price, $1.75. PROBLEMS OF TODAY. Price, $1.50. SOCIAL ASPECTS OF CHRISTIANITY. Price, $.90. THOMAS Y. CROWELL & CO., Publishers. *- AN INTRODUCTION TO POLITICAL ECONOMY. Price, $1.00. PUBLISHED BY HUNT & EATON, New York. FRENCH AND GERMAN SOCIALISM IN MODERN TIMES. Price, 75 cents. I'UBUSUED BT HARPER & BROS., New York. TAXATION IN /VMERICAN STATES AND CITIES. BY RICHARD T. ELY, Ph.D., LL.D. PROFESSOR OF POLITICAL ECONOMY AND DIRECTOR OF THE SCHOOL OP ECONOMICS, POLITICAL SCIENCE AND HISTORY, IN THE UNIVERSITY OF WISCONSIM- ASSISTED BY JOHN H. FINLEY, A.B. NEW YORK: THOMAS Y. CROWELL & CO., POI; Wf-J-i- 'MvilVPIvnirY I I,' l;/-,r;Y Copyright by Thomas Y. Crowell & Co- i888. l.l'.iHiUK) PREFACE. ■ I ■'HE present volume is not intended primarily for specialists, but for American citizens generally who are intelligent enough to appreciate the vast importance of the topic with which it deals. It is meant to be a popular work, but, it is hoped, in the better sense of the word. I have endeavored to keep the essential facts in mind, and to avoid all technical details which are not essential to an understanding of the main issues. The work is larger than I thought it would be as it is ; and had I written an exhaustive treatise, such as I would have tried to write had my book been designed primarily for lawyers or political economists, it would have been necessary to publish four or five volumes instead of one. The specialist will then understand why much has been omitted which he would gladly have seen inserted. Perhaps the general reader will obtain an idea of the largeness of the subject of taxation in states and cities, when told that the bill itself presented by the Maryland Tax Commis- sion to the legislature covered one hundred and twenty-one printed octavo pages. An adequate explanation of all parts of the bill would have required at least as many additional pages. A study of taxation is calculated to give one a rather pessi- mistic view of American laws, American institutions, and American character. As soon as one begins to examine the facts respect- ing taxes and tax-payers in our cities, one discovers that many an advocate of governmental reforms, loud in his professions, is viii PREFACE. as unscrupulous a tax'dodger as any unregenerate politician of the " spoils " school ; that many a man who plumes himself on the soundness of his Christianity, is but too ready to browbeat the tax-assessor and shift his just burden to the shoulders of the weak and defenceless ; that many a one who figures in the lists of donors to charitable and philanthropic institutions, gives, after all, only a part of what he has withheld from the public treasury. On the other hand, it is encouraging to find rare instances of men of wealth who do not avail themselves of the means at their command to evade taxes, and who bear heavy burdens placed upon them by an antiquated and iniquitous sys- tem of taxation. It would also be difficult for me to take too sombre a view of human nature, for in the preparation of this work I have been the recipient of so many kindnesses from so many people in every part of the United States, that I find myself embarrassed to know how to express my gratitude. Should I print simply a list of names of those who have aided me in one way and another, it would require two or three pages. I must thank the different officials of states and cities who have often, at no inconsiderable inconvenience to themselves, supplied me with public documents and written information on numerous points of the various sys- tems of taxation with which they are concerned. It seems ungrateful not to mention them by name, but there are so many of them that it is impossible to do this. Professor J. B. Clark, of Smith College, Northampton, Mass. ; Professor E. R. A. Seligman, of Columbia College, N.Y. ; Professor Arthiu- Yager, of Georgetown, Ky. ; Professor Edward W. Bemis, of Vanderbilt University; Hon. P. Bliss, of Missouri ; Hon. Seymour Dexter, of Elmira, N.Y. ; Hon. James Alfred Pearce, of Kent County, Md. ; Mr. J. R. PREFACE. IX Lamar, of Augusta, Ga. ; Mr. Stuart Wood, of Philadelphia ; Mr. Francis T. King, of Baltimore; Hon. T. M. Cooley, of The Interstate Commerce Commission; my father, Mr. E. S. Ely, of Fredonia, N.Y. ; Mr. W. B. Hill, of Macon, Ga. ; Hon. Lewis Hopkins, of Baltimore ; Professor George W. Knight, of the State University of Ohio ; Professor Henry C. Adams, of the University of Michigan; and Colonel William P. Craighill, of Baltimore, have written me valuable and suggestive letters on some aspects of state or local finance. It is scarcely necessary to say that not one of these gentlemen is to be regarded as in any way responsible for the views I have expressed in this work. I am indebted to Mr. Joseph A. Hill, graduate student of Har- vard University, for the loan of a manuscript essay on " Taxation in States and Cities " ; to Professor Arthur Yager for the loan of a manuscript essay on " Taxation in Kentucky"; to Mr. Henry B. Gardner, graduate student of the Johns Hopkins University, for the loan of his manuscript essay on "Taxation in Rhode Island " ; and to my colleague, Professor George H. Emmott, for reading parts of this work, and discussing with me some of the legal aspects of taxation. A considerable part of one chapter in this book appeared as an article in the Baltimore Sun, in my series, entitled, " Problems of To-Day." I must also make acknowledgment to the Sun for a few other extracts from the same series. Finally, I desire to acknowledge the aid I have received in various ways from Mr. John P. Poe and Mr. Charles M. Arm"- strong, with whom I was associated both on the Baltimore City Tax Commission and the Maryland State Tax Commission ; to Mr. Summerfield Baldwin, of the City Commission; and to Mr. James Alfred Pearce, of the State Commission. I have omitted the names of many to whom I am indebted for X PREFACE. kindnesses which I sincerely appreciate. I must mention the very special aid I have received from Mr. John H. Finley, graduate student of the Johns Hopkins University, who for many weeks has devoted his entire time to this book, and has assisted me with extraordinary diligence and a display of unusual ability. Whatever merits this book may possess are due to no small extent to Mr. Finley, and it has seemed to me only proper to place his name on the title page. It is extremely diiBcult to obtain the material needed for ade- quate presentation of the finances of all our states and cities. I hope in a future edition, should one be called for, to give a more nearly perfect account of the facts respecting the revenues of American states and cities, past and present, and I ask that all readers who have it in their power to assist me to complete my collection of official documents, will have the kindness to do so. I want reports of auditors and treasurers of states and cities, reports of tax commissions, governors' and mayors' messages ; and, in short, all financial documents which I can secure. There are many such reports stored away in old garrets and out-of-the- way places, of no possible value to their present owners, which would be of use to me. The older reports are more difficult to obtain, and are on that account more valuable ; but my collection of even recent documents is imperfect. I trust that I shall re- ceive fiirther assistance from members of legislatures and officials of states and cities. Instruction in sewing and cooking has been introduced in some of our schools, and the results have been most satis- factory. I venture to express the hope that at least a few schools and colleges will use this work as a text-book on taxa- tion, for the subject is of vital importance to all American citizens. The difference between a good system of taxation and PREFACE. xi a poor one is to many of our fellow-citizens precisely the differ- ence between having cloth to make into garments and going naked; the difference between having food to cook and going hungry. RICHARD T. ELY. Johns Hopkins Univeksitv, Baltimore, Md., April 14, x888. TABLE OF CONTENTS. Part I. INTRODUCTION. PAGE Chapter I. — Taxes Defined 3 Chapter II. — General Propositions respecting Taxes. Taxes are not payments in exchange 13 Taxes are not debts 18 The power to impose taxes is legislative 19 Taxes are regular and orderly contributions .... 22 What is called a tax in one place is not always called a tax in another .......... 23 The power of taxation cannot be delegated .... 23 Chapter III. — The Origin and Growth of Modern Taxa- tion. Taxation as we understand it a new thing 25 The revenues of the state in the Middle Ages .... 30 Taxes long hold a subordinate position in budgets of states . 35 Taxes first paid only by the weak and defenceless ... 42 The early American views of taxation C 44 Other sources of revenue at the present time. — Comparative statement 47 Chapter IV. — A Few General Remarks on the Workings of Taxation. Taxes often yield larger returns than ordinary expenditures . 55 The tendencies of taxation are various . . . . . 57 Taxation and liberty ......... 58 Taxation and social reform . 62 TABLE OF CONTENTS. Chapter V.— The Different Kinds of Taxes. Classification of taxes has become important The classification of the Physiocrats Other classifications Administrative classification of taxes Other modes of classification .... Chapter VI. — Direct and Indirect Taxation Compared. Indirect taxes are chiefly taxes on commodities Indirect taxes violate the principle of equality Indirect taxation and pauperism Indirect taxes obstruct trade Indirect taxes and monopoly Indirect taxes congenial to despotism and aristocracy . Direct taxes promote good citizenship .... A judicious combination of direct and indirect taxes desirable Comparison of the cost of raising revenues by direct and indirect taxation ...,,..,. 63 63 64 76 77 79 80 82 83 83 85 87 90 Chapter VII. — The Literature of Taxation. Paucity of the literature of taxation ...... 94 Reports of tax commissions 94 Treatises on political economy and finance .... 95 Special treatises 98 Other sources of information loi Part II. TAXATION AS IT IS. Chapter I. — Colonial Taxation. Introductory remark The colonies insist upon the right to vote the taxes Rhode Island 105 'v 106 V 107 V TABLE OF CONTENTS. xv Voluntary contributions early replaced by taxes . . . 109 ▼ Taxes on property and polls 109 ■/' Quit-rents 112 V Fees j,2 ,/ Other taxes 113 V Lotteries 113 •'' Duties 114 "^ Chapter II. — Taxation in jy<)b 116 <^ The objects and principles of taxation in 1796 . . . . 117 "^ Taxes on land . , . 119 '^ Other peculiarities in the various tax systems . . . . 120 . Apportionment and collection of taxes 123'' Assessment of taxes . 1 24 -^ Collection of taxes . . . . . . . . . 1 28 '^ Compensation of assessors and collectors ..... 130 Chapter III. — The Transition Period. leral remi Connecticut General remarks ......... 131 •- 133 Ohio 134 Other states . . . . . . . . . . 137 . Reason for the taxation of all property at one uniform rate . 139 Dissatisfaction early manifested' ....... 141 The nature of the difficulty 143 The testimony of experience 145 Chapter IV. — Experience of Ohio. Constitutional provisions 146 Real estate 148 The taxation of personal property in Ohio . . . . 152 Chapter V. — Experience of Georgia . . . . 160 City and town property . . . . . . . . 1 64 Notes, accounts, bonds, merchandise . . . . . 164 XVI TABLE OF CONTENTS. Chapter VI. — Experience of Wisconsin and West Vir- ginia. Wisconsin 170 -Taxation of railroads 1 70 The general property tax 172 West Virginia 173 Those evading taxes are generally best able to pay them . 1 73 Chapter VII. — Experience of New York . . . 176 Who pays taxes on personal 177 Boards of equalization in New York State . . . . 1 84 Chapter VIII. — Experience of Other States. New Hampshire 188 Connecticut 188 Maryland 189 Illinois 192 Dr. Patten's Essay 192 The Report of the Revenue Commission of 1886 . . 197 Chapter IX. — Other Features of Existing Financial Sys- tems. Introductory 202 — Ordinary business licenses and occupation taxes . . . 203 _ Poll taxes 209 . Special assessments 212 __ Other sources of revenue 213 Chapter X. — The Testimony of Reason. States not independent in matters of taxation . . . . 217 Returns on property of a high degree of mobility dependent on general conditions 218 Interference of the federal government in matters concerning ,, local taxation 22el/'^ Our existing methods of taxation needlessly demoralizing . . 229 TABLE OF CONTENTS. xvii Part III. TAXATION AS IT SHOULD BE. PAGE Chapter I. — The Principles on which a New System of Taxation should be Based ...... 237 Chapter II. — Taxation on Real Estate .... 246 Chapter 111.— r Exemption of Real Estate from State Taxation. Administrative reasons for this exemption . . . . . 25 1 A further reason for separating the sources of state revenue from the sources of local revenue 253 Chapter IV. — A Plan whereby a Part of the Increasing Value of Real Estate in States and Cities may be Se- cured to the Public ....... 264 Chapter V. — Natural Monopolies. Natural monopolies defined and characterized .... 269 Profitableness of natural monopolies 270 Recommendations 271 Chapter VI. — Taxation of the Manufacture and Sale of Intoxicating Liquors. Modified prohibition ......... 280 High licenses 283 Chapter VII. — Taxation of Incomes. The position of an income tax in a system of taxes . . . 287 An income tax will promote good government . . . 289 Current opinion against an income tax ..... 290 Income tax and personal property tax contrasted . . . 294 An income tax must be a state tax 296 Assessment of an income tax ....... 297 xvill TABLE OF CONTENTS. PAGE Sufficiency of a low income tax 300 The income taxes in American states 302 Pennsylvania levies an income tax on special kinds of income . 302 All incomes above a moderate exemption should be taxed . 303 Progressive versus proportional taxation 305 Chapter VIII. — Taxation of Inheritances and Bequests . 312 Chapter IX. — Business Tax 321 Chapter X. — Taxation of Railroads Operated by Steam and Other Corporations. Railroads 324 Corporations 328 Chapter XI. — Miscellaneous Kinds of Personal Property. Taxation of household goods 334 Exemption of certain kinds of personal property . . . 335 Diffusion of the benefits of exemption 338 Chapter XII. — Taxation of Savings Banks, Churches, and Educational and Benevolent Institutions. Savings Banks 340 Church buildings ........ 344 Educational and benevolent institutions . . . ■ . 345 Chapter XIII. — Technical Details and Administrative Machinery ........ 350 Oaths 352 Money to be raised for the coming year * 353 Discounts for the prompt payment of taxes 354 Counties 360 City assessors 365 Valuation of real and leasehold property in Baltimore City . 367 Appeals 369 Conclusion 371 /" TABLE .OF CONTENTS, XJX Part IV. CONSTITUTIONAL PROVISIONS, STATISTICAL INFORMATION, AND MISCELLANEOUS MATTER. PAGE I. Constitutional Provisions. 1. General remarks 375 2. Tabular statement opp. 396 3. Additional provisions 397 II. Revenues and Expenditures of the States. 1. Comments , . 407 2. Revenues and expenditures of each state . . . 408 r 3. Statistical table of revenues and expenditures , . opp. 452 '"^ 4. Table showing receipts, . expenditures,, etc., of the territories 454 5. Taxation in Ohio 455 6. Taxation in New York 457 7. Revenues of North Carolina 458 8. Royalty from phosphate rock in South Carolina, by C. Meriwether, A. B 459 9. Onondaga Salt Springs of New York .... 466 III. Revenues and Expenditures of Cities. 1. Budgets of Baltimore, Boston, Chicago, New York, Philadelphia, and Atlanta 469 2. Comparative table of receipts and expenditures of the cities named 478 3. Statistical tables of valuation of property, taxation, etc., f in Baltimore, Boston, Chicago, Cincinnati, New York, f Philadelphia, and Providence .... 480 IV. Rates of Taxation. I. Table showing rates of taxation in the states . . 496 ' 2. Table showing rates of taxation in New York from 1816- 1887 497 V. Valuations of Real and Personal Property. 1. Table from census report of 1880 .... 498 2. Table from census report of 1880 .... 499 XX TABLE OF CONTENTS. PAGE 3. Valuations in the states in 1887 compared with 1880 . 500 4. Connecticut grand list 503 5. Valuation of property in Charleston .... 507 VI. Public Debts of States and Cities. 1. Constitutional provisions 5"^ 2. Additional constitutional provisions . . . . 510 3. Statistical table 513 VII. Inheritance and Bequests. 1. Comments on proposal to change statutes of descent and wills in Illinois 515 2. Bill introduced in the Illinois legislature to reform statutes of descent and wills . . . . . 519 3. New York laws in regard to collateral inheritances and bequests 523 PART I. INTRODUCTION. PART I. INTR OD UCTION. CHAPTER I. TAXES DEFINED. THE preparation of a book on taxation at once suggests the question: What are taxes? While most men have a sufficiently clear conception of a tax to, recognize one in the concrete, it will be found by those who try, a most difficult thing to frame such a definition of taxes as to include everything which may properly be called a tax, and exclude everything which cannot properly be called a tax. Many definitions have been given to the public by dif- ferent writers on finance, but no one of them, it seems to me, is accurate in every particular. I will quote a few of the most noteworthy definitions of taxes, and after criticising them briefly, will present one of my own.^ , Professor Knim of the University of Heidelberg defines taxes in these words : '^ Taxes are the legally determined and legally collected contributions of individuals for meeting the necessary and general expenses of the state." This 1 Other words are used to denote taxes or a particular kind of taxes, as for example, imposts, customs duties, and excise duties, which are usually called internal revenue taxes in the United States. The French use the word impbts for taxes, and the Germans, Steuern. 4 INTRODUCTION. definition may be said to tell us what taxes ought to be, rather than what taxes are. As a matter of fact we find taxes frequently levied not for the necessary expenses of government, but to provide the means for extravagant and useless or worse than useless expenditures, while they are too often laid upon the people not for the sake of the gen- eral welfare, but to subserve some private end. When we examine the institutions and the public life of countries like Turkey and Russia, we at once discover a wide divergence between the actual practice with respect to taxation and the requirements of the definition given by Knies.* Judge Cooley, in his work on "Taxation," defines taxes " as being the enforced proportional contribution of persons and property levied by the authority of the state for the support of government and for all public needs." On the one hand, this definition fails to include with desirable precision some ideas which may properly be embraced in a definition of taxes, and on the other, it does not appear to be quite accurate. Taxes are not always levied even pro- fessedly for pubKc needs, unless we go so far as to claim that every contribution from the public treasury is for a pub- lic purpose, simply because it has been sanctioned by public authority. ' Constitutions at times even make provision for expenditures in order to meet some private need. Section 9 of Article I. of the constitution of New York provides that "the assent of two-thirds of the members elected to each branch of the legislature shall be requisite to every bill appropriating the public moneys or property for local or pri- vate purposes." The constitution of Rhode Island, in sec- tion 14 of Article IV., contains the same provision. 1 It is proper to say that this definition is taken from the notes on the lectures by Professor Knies which I made while a student in Heidel- berg. TAXES DEFINED. 5 A remarkable instance of a tax imposed for private pur- poses is afforded by the history of Maryland. Luther Martin, " the Federal Bull-Dog," was much esteemed by the bar of Maryland, and when he was rendered dependent upon his friends in 1820 by a stroke of paralysis, a great deal of sym- pathy was aroused for him. This led in 1822 to the passage of an act by the legislature, requiring every lawyer in the state to pay an annual license fee of five dollars to trustees for the use of Luther Martin.^ Paul Leroy-Beaulieu, in his " Trait6 de la Science des Finances," in one place defines taxes in these words : "Taxes are simply contributions demanded of citizens as their share of the expenses of government,"^ and on the following page he gives this somewhat more amplified defini- tion : " Every contribution regularly demanded of the citizens by the constituted authorities of the land for meeting the expenses of government, is a tax." The objections to these definitions by Leroy-Beaulieu are similar to those given above, and it may be said that they positively exclude some purposes for which taxes are levied which might possibly be included under Judge Cooley's definition. Taxes are levied for other purposes than the support of government. They are laid to encourage people to do certain things, and also to dissuade them from doing certain things.' Taxes on imports are, for example, often designed to encourage people to manufacture 1 See " Luther Martin, the Federal Bull-Dog," by Henry P. God- dard, page 28, "Maryland Historical Society Papers," Baltimore, 1887. 2 Volume I., page 104, of second edition. ' The Maryland constitution expressly grants to the legislature the power to levy taxes for the promotion of the general welfare. A part of Article XV. of the Declaration of Rights contains these words: " Fines, duties or taxes may properly and justly be imposed or laid with a political view, for the good government and benefit of the community." 6 INTRODtrCTION: commodities, while the revenue is regarded as something merely incidental.' The high licenses, which in Illinois, Pennsylvania; Minne- sota, and elsewhere are exacted of dealers in intoxicating liquors, profess to have in view the discouragement of the liquor traffic. These licenses may yield large revenues, but the advocates of this sort of taxation claim that the benefits which accrue to the public treasury are something rherely incidental, while the main object is to diminish the number of drinking-saloons, and thus to lefesen the curse of intemper- ance. A tax of ten per cent, is laid by federal law on all bank notes issued by any other banking associations than those organized under federal law and known as national banks. As this tax more than equals any benefit which could accrue to any one from the issue of bank notes, it has com- pletely suppressed the issues of state banks, and was designed to accomplish this. It has been decided by our courts that the right of taxation includes the right to destroy value. Chief Justice Marshall says " the power to tax involves the power to destroy," and " if the right to tax exists, it is a right which in its nature acknowledges no limits." " The following definition, upon which I have spent consid- erable thought, appears to me to contain an accurate descrip- tion of taxes : — Taxes are simply one-sided transfers of economic goods 1 Clay favored in 1816 "a thorough and decided protection to home mariufactures by ample duties," and' Mv. Ingham, in supporting him, said : " The revenue was only an incidental consideration and ought not to have any influence in the decision upon the proposition before the committee." See "Taxation in the United States, 1789-1816," by Henry Carter Adams, Ph.D., page 35, Johns Hopkins University Studies in Historical and Political Science, Volume II., Nos. V.-VI. 2 See Cooley's "Taxation," foot-note 2, pages 10 and n. TAXES DEFINED. 7 or services demanded ^f the citizens, and occasionally of those not citizens, but who, nevertheless, are within the reach of the taxing power, by the constituted authorities of the land, for meeting the expenses of government, or for some other purpose, with the intention that a common burden shall be maintained by common contributions or sacrifices. Several points in this definition require comment. Taxes are described as one-sided transfers. The element of reci- procity is excludedi Taxes are not an exchange, nor are they a payment. The sovereign power demands contribu- tions from citizens regardless of the value of any services which it may perform for the citizen. This is a clear aban- donment of the old legal fiction that taxes are paid for pro- tection/ — so palpable an absurdity that it is strange that it could ever have gained the currency which it even now enjoys. It is probable that the ancient fiction is maintained because our jurists have so generally failed to give proper attention to economics, and have never grasped the funda- mental principles of taxation. Something must be said, and knowing nothing better, it is still repeated, " taxes are pay- ment for protection," although the law itself refuses to- recog- nize in taxation any of the principles which apply to purchase and sale, and contracts and debts resulting therefrom. More will-be said hereafter about the reason why taxes are paid.^ Taxes are transfers of economic goods or things which 1 This idea is implied in Montesquieu's definition of taxes : " The public revenues are a portion which each subject gives of his property in order to secure and enjoy the remainder." " Esprit des Lois," XIII. 7. 2 No one is admitted to the bar in France and Prussia -fiVo has not studied political economy. Our best law schools are beginning to in- troduce courses in political, social, and economic science; and the ancient fiction in question will, it is to be hoped, ere long be laid to rest with the contract theory of the origin of the state. 8 INTRODUCTION. have value. Taxes are generally paid in money, but not necessarily. Formerly it was common in the American colonies to receive commodities in payment of taxes. When taxes were paid "in kind," much was said about the lean kine used for this purpose in New England. Rhode Island prescribed certain rates at which various commodities should be received by the public treasury for taxes ; and it is probable that careful research would discover similar legis- lation in every one of the original thirteen colonies.' Taxes for certain purposes are still paid in labor in many of our states. These are chiefly taxes for construction, maintenance, and improvement of roads in country districts. These taxes are "worked out," as the phrase is. They are like the old French corvees, which were one of the abuses of the ancien regime, and are a partial explanation of the abominable roads at the present time in most parts of the United States. "Road duty" in cities is usually replaced by a general tax, but in the city of Atlanta, Ga., those who fail or refuse to pay this and other taxes in money are obliged to work on the streets at the rate of thirty-five cents a day until their taxes are thus paid.^ Taxes are demanded of citizens usually, but foreign resi- dents are after a period generally treated like citizens with respect to most taxes. Non-resident foreigners are taxed when they own property in the country laying the tax. This is always the case with real estate, and sometimes with per- sonal property. The tax on real estate is a tax on things. It is like a first charge on its revenues, and is raised regard- 1 The treasurer of New Haven, for example, was authorized to receive Indian corn at 2s. s,d. per bushel in payment of town taxes or rates. See Levermore's " Republic of New Haven," Baltimore, 1886, page 74! 2, The tax in Atlanta is ^3.50, and all males between the ages of sixteen and fifty are subject to this tax; truly a "grievous and op. pressive" burden. TAXES DEFINED. 9 less of ownership. It often practically amounts to partial public ownership in the property. The English income tax on shares in corporations, stocks and bonds, is collected from corporations and from banks paying interest or divi- dends,^ and takes no account of the fact that the owner of the stocks and bonds may be a non-resident foreigner. It is expressly provided in most of our states in which a poll tax exists that aliens are subject to it, and the comp- troller-general of Georgia in his book of " Instructions " spe- cially calls the attention of tax-receivers to the fact that aliens are liable for the poll tax. Taxes on foreigners are justified on the ground that they must derive some benefit from the existence of the govern- ment taxing them, and in so far such taxes may be regarded as a payment for protection, for it cannot be held that the duties of citizenship devolve upon foreigners. It may also be urged that if foreigners are taxed by our government, our citizens will probably be taxed by foreign governments, and that the sum which we collect from foreigners will approxi- mately equal the sum that foreign governments collect from our citizens. A rough kind of justice, about as accurate as can be attained in matters of taxation, is thus effected. The element of might also undoubtedly enters into taxa- tion, and the mere fact that a foreigner is so situated that he can be forced to contribute to the expenses of government is at times held to be suflScient reason for placing a tax upon him.' 1 Coupons are generally made payable at some bank, and when any English bank pays them, it must deduct the income tax and pay it to the government. 2 It may be further urged that a man owes certain duties to humanity, and if he fails to discharge the offices of citizenship at home, it is ethically allowable for a foreign government, which can lay its hands on him, to force him to do his part towards the support of government. 10 riKTHODUCTION. A burden is sustained by common sacrifices, and by com- mon is meant according to some fixed rule, applicable to a class of persons or a class of property, but not necessarily to all persons, still less to all property. Certain persons may not individually and without the application of any common rule be selected for the maintenance of government, or to bear a public burden. This would be confiscation and not taxation, and in the United States would be prohibited by that provis- ion of our federal constitution which provides that private property must not be taken for public use without adequate compensation. The constitution of Illinois provides in Art- icle IX., section i, that the general assembly shall have power to tax pedlers, auctioneers, brokers, hawkers, merchants, commission-merchants, and other persons enumerated, as well as toll-bridges, ferries, insurance, telegraph and express interests, and persons or corporations owning or using fran- chises and privileges, in such manner as it shall direct by general law, but the tax must be "uniform as to the class upon which it operates." ^ State constitutions often prescribe what kind of taxes shall be levied, or how they shall be levied. Thus Article XV. of the Declaration of Rights of Maryland provides that every person in the state, or holding property therein, "ought to contribute his proportion of pub- lic taxes for the support of government, according to his actual worth in real or personal property." It is held that this would prevent ani exemption of certain classes of per- sonal property from taxation, although the principles of taxation would sanction such an exemption. 1 InSti Mary's Comity, in Maryland, a tax was once laid upon all lawyers within the county for the repair of the court-house. This is a curious instance of a tax' laid upon all members of class. It was evi- dently supposed that lawyers derived, a peculiar advantage from the existence of court-houses, and accordingly jthought fair that they, should make- a special contiibation for their maintenance. TAXES DEFTlSrED. l\ Judge Cooley, in his work on "Taxation,"' gives a decision of the Court of Appeals of Kentucky, which held a law un- constitutional because it required a portion of one street in a city to be improved in an exceptionally expensive manner, at the cost of abutting property owners, and that without their consent, whereas the law required a petition from property owners in other portions of the city, before street improve- ments could be ordered. The following is an extract from the opinion of the court : " A. law imposing taxation on the general public, the evident intent . and legitimate results of which are to equalize the burden so far as practicable, will not be held as violative of the fundamental law merely be- cause that desirable end may not be attained. But when, as in this case, the most probable, if not the necessary, conse- quence of the law is to produce the most oppressive inequal- ity, and to compel a small minority of tax-payers to provide at their sole expense, an improvement of general utility and public interest, the construction of which costs more i than double as much as the character of such improvements in general use, and from which, when constructed, the general public derives almost as much advantage as themselves, it assumes the character of an attempted exercise of arbitrary power over the property of this minority; it becomes, in a constitutional sense, a taking and appropriation of their pri- vate property to the public use without compensation." This decision harmonizes with the conception of the defi- nition. When common burdens are placed upon the citi- zens, these may be called taxes ; but when a portion only of the community are, without good and sufficient reason but by arbitrary exercise of power, separated from their fel- low-citizens and commanded to bear public burdens, it can be regarded only as confiscation. Good and sufficient reason 1 Page 489. 12 INTRODUCTION. for taxing all property of a class, and not all classes of prop- erty, may be found in the principles of taxation. Real estate owners cannot claim that their property is confiscated because they are taxed while owners of such personal property as mortgages and promissory notes are not taxed on their prop- erty, for the reason that the ground of exemption is public policy. It is held that the benefits of this exemption are diffused. Similarly, dealers in the commodity, sugar, could not enter a plea that a tax laid on sugar and not on all com- modities was confiscation, since the manifest intention of a legislature in laying such a tax law must be to provide for a common burden by common sacrifices, for it holds that the tax will be shifted by dealers, and thus diffused through- out the community. Where a small income, like ;?6oo, is ex- empted from a general income tax, those who pay an income tax have no ground for complaint, because indirect taxes, which probably comprise the major portion of taxes in all civilized countries, bear more heavily on the poorer classes than on the rich and well-to-do, and because there are fur- ther technical reasons for this exemption found in the ad- ministrative machinery of government, since the expense of collecting an income tax from those whoSe incomes are small is excessive, taking far more from the pockets of the tax- payers than ever reaches the public treasury. More may be said on this point, and the foregoing is simply by way of illustration. Taxes must appeal to the conscience of the community as fair and equitable,' for the moral sense of the community has always had, and doubtless always will have, great weight in judicial decisions touching taxation as well as other matters. 1 The constitution of Massachusetts provides that assessments, rates, and taxes shall be " proportional and reasonable." Constitution, Part II., Chapter I. § i, Article IV. CHAPTER II. GENERAL PROPOSITIONS RESPECTING TAXES. TAXES ARE NOT PAYMENTS IN EXCHANGE. IT is well to specify some things which taxes are not, in order to bring out more clearly what they really are, and first of all, I will elaborate further the idea of which men- tion has already been made, that taxes are not one part of an exchange of services. This has been implied in the definition. They are one-sided transfers of goods or services, and are not mu- tual. The citizen pays because he is a citizen, and it is his duty as a citizen to do so. It is one of the conse- quences which flow from the fact that he is a member of or- ganized society. Man, as a human being, owes services to his fellows, and one of the first of these is to support govern- ment, which makes civilization possible. Only an anarchist can take any other view. To the ordinary man it appears right that he should be called upon to give not only his property for the promotion of common interests, but even his life, if need be. He asks only that it shall be by some common rule. While the citizen and all human beings de- rive benefits from the existence of government, these bene- fits come to them as citizens and as human beings. A failure to pay taxes never works a forfeiture of the common rights of citizens, and the pauper who receives from the community instead of paying to it, has inalienable rights as well as the millionnaire, and under certain circumstances all 14 INTRODUCTION. the expensive machinery of government will be placed at his disposal. Nor can I even urge that I have not received protection, as a plea for non-payment of taxes. The police and the fire department may both have failed to protect my person and my property as they should have done, but that fact will not be regarded as a justification for a deduction from the annual tax on my house.^ Nor yet can; I go before the courts and urge that as I require no protection from the state, I should be relieved from taxation. I am not allowed to undertake to protect my own person in lieu of the pay- ment of taxes.^ Judge Cooley, after making a concession to the old fiction of reciprocity in taxation, adds as a justification of taxation, " the exclusive sovereignty and jurisdiction of the state over the persons and property within its territory," ^ evidently feeling the insufficiency of such justification as is " found in the reciprocal duties of protection, and support." As I ^ A recent writer well says that the laws of insurance and contract do not apply to taxes. When my house burns down or a thief robs me, I am not indemnified out of the public treasury. ^ The correct doctrine of taxationis ably stated in the " Report of the Massachusetts Commissioners relating to Taxation " made in 1 875. "A man is taxed," says this Report, " not to pay the state for its expense in protecting him, and not in any respect as a recompense to the state for any service in his behalf, but because his original relations to society require it. All the enjoyments which a man can receive from his property come from his connection with society. Cut off from all social relations a man's wealth would be useless to him. In fact, there could be no such thing as wealth without society. Wealth is what may be exchanged, and requires for its very existence a community of persons with reciprocal wants. ... It is wise and right, therefore, for an individual to contribute of his wealth what the true interests of society require, and this he does, not as a payment for the gifts which society has conferred." (Page 10.) * "Taxation," page 2. OENERAL PROPOSITIONS RESPECTING TAXES, li take it, from a purely legal view, the fact of sovereignty may be regarded as sufficient justification, and the attempt to add to that leads to confusion of thought. The ethical view has a larger scope. The duties to one's fellows, frequently imposed by law, are perhaps alone suffi- cient ethical justification. More may, however, be said. The general public through the agencies of organized gov- ernment is a partner in production, and is in this capacity entitled to a share of all that is produced.' If any one doubts that, let him put to himself the question. How great would be the production of wealth, did no government exist? Now if government is an indispensable condition of produc- tion, it is as truly a factor of production as any natural agent or as labor, and is as truly entitled to a share of wealth. What this share shall be, however, is determined by its own sover- eignty, and not by principles of private exchange. Still further, society, of which one manifestation is government, is present in all production. No such thing as strictly indi- vidual production of wealth exists in any modern community. How much can be produced on a strictly individual basis can be ascertained by one who will isolate himself in the heart of Africa, or on the plains of South America, or even in our own fertile West, and have no dealings whatever with others. All modern production is truly social, and the de- pendence of the individual is felt in a thousand and one ways. Where a division of labor obtains, and we produce for others, we are dependent upon these others. If they fail to produce, we receive nothing in exchange. The activity of our competitors in production is also of vital importance, as is the competition of those who desire to obtain the things 1 A recent pamphlet on taxation, by Mr. C. M. Armstrong, of Balti- more, bears the title of- "The Guaranteed Partner of the Tax- Payer,'' meaning thereby the state and city. 16 INTRODUCTION. which we wish in exchange for our commodities. The fact that an individual Hves in modern society and enjoys its blessings, gives that society an ethical claim upon the indi- vidual.^ This, it seems to me, is also a valid reply to Henry George's views on the nature of taxes. Curiously enough he is in this respect what some might call an ultra-conserva- tive, for he does not believe in taxes at all, but holds them to be robbery. The annual rental value of land in itself, apart from improvements, is due to the exertions of the community at large, according to the theory of rent as gen- erally accepted. Now Mr. George says, let society take its own, namely, rent, and defray all social expenses there- from ; but what I have produced individually by my own ■exertions is mine by natural right against all the world, and if the public takes a part of it, I am robbed. These are not (his own words, but this is a succinct statement of one of his ^ " ' Why should I be robbed of my property to pay for teaching another man's children?' is an individualist question which is not unfre- •quently put as if it settled the whole business. Perhaps it does, but I 'find difficulties in seeing why it should. The parish in which I live makes me pay my share for the paving and lighting of a great many •streets that I never pass through; and I might plead that I am robbed ito smooth the way and lighten the darkness of other people. But I am •afraid the parochial authorities would not let me off on this plea; and I must confess that I do not see why they should. I cannot speak of ray own knowledge, but I have every reason to believe that I came into this world a small, reddish person, certainly without a gold spoon in my mouth, and in fact with no discernible abstract or concrete ' rights ' or property of any description. If a foot was not at once set upon me as a squalling nuisance, it was either the natural affection of those about me, which I certainly had done nothing to deserve, or the fear of the law which, ages before my birth, was painfully built up by the society into which I intruded, that prevented that catastrophe. If I was nour- ished, cared for, taught, saved from the vagabondage of a wastrel, I GENERAL PROPOSITIONS RESPECTING TAXES. 17 cardinal positions. The truth is, there is in modern society no such individual production as Mr. George assumes. What have I produced alone and unaided ? Nothing. What more than has been said is needed as a justification of taxation ? And does not this avoid the confusion of thought which inevitably results in every legal and economic treatise in which it is attempted to apply the principles of barter or exchange ? It is perhaps hazardous to criticise so eminent a jurist as Judge Cooley, whose learning and capacity entitle him to the universal esteem in which he is held ; but is not the fol- lowing quotation an illustration of the natural results of an attempt to reconcile things which are essentially irreconcila- ble? " It is no objection to a tax that the party required to i pay it derives no benefit from the particular burden, e.g. a tax for school purposes levied upon a manufacturing corpo- ration. But in truth benefits always flow from the appropri- ; ation of public money to such purposes, which corporations, ' certainly am not aware that I did anything to deserve those advantages. And, if I possess anything r\Qnt, it strikes me that, though I may have fairly earned my day's wages for my day's work, and may justly call them my property, yet, without that organization of society, created out of the toil and blood of long generations before my time, I should prob- ably have had nothing but a flint axe and an indifferent hut to call my own; and even those would be mine only so long as no stronger savage came my way. So that if society having — quite gratuitously — done all these things for me, asks me in turn to do something towards its preservation, — even if that something is to contribute to the teaching of other men's children, — I really, in spite of all my individualist leanings, feel rather ashamed to say no. And if I were not ashamed, I cannot say that I think that society would be dealing unjustly with me in con- verting the moral obligation into a legal one. There is a manifest unfairness in letting all the burden be borne by the willing horse." — Professor Huxley, in his article " The Struggle for Existence," pub- lished in the "Nineteenth Century" Magazine for February, 1888. 18 INTRODUCTION. in common with natural persons, receive in the additional security to their property and profits." ' But this security, which it is said results from education, is called in question, and there are those who would have us think that widely diffused education renders property less safe. Sup- pose the tax-payer convinces himself that his taxes diminish the security of his property, and even convinces judge and jury, what then? The reader should also consult in this connection the statements on pages i6 and 17 of Cooley on " Taxation." It is stated that as taxation and protection are reciprocal, — which is only another way of saying that taxes are payment for services rendered, an exchange, — " the taxes levied by any government ought to be apportioned among the people according to the benefits which each re- ceives from the protection the government affords him," and straightway the learned judge adds, but " this is manifestly impossible. The value of hfe and liberty, and of the social and family rights and privileges, cannot be measured by any pecuniary standard." Mr. Thorold Rogers is also quoted with approval, to the effect " that if taxation were deter- mined by the comparative protection accorded to individuals, women and children should pay a higher rate than strong and healthy adults, since they have more need of assistance ; and, if the law be effectual, get more." How then can he add in the same paragraph, that the assumption which pre- scribes taxation in proportion to benefits received, " is suffi- ciently near the truth for the practical operations of govern- ment?" TAXES ARE NOT DEBTS. Second, Taxes are not debts. They are not based on contracts, either express or im- 1 " Taxation," page 3, foot-note. GENERAL PROPOSITIONS RESPECTING TAXES. 19 plied ; they are the contributions demanded by sovereignty, in which the taxing power is inherent and with which it is co-extensive. Laws which apply to debt do not apply to taxes; and the abolition of imprisonment for debt would not carry with it abolition of imprisonment for failure to pay taxes, did the law at the time provide such a remedy for non-payment of taxes.' THE POWER TO IMPOSE TAXES IS LEGISLATIVE. This is another way of saying that taxation and represen- tation go together. This phrase, " taxation and representa- tion go together," never signified in law that every tax-payer should have the right of suffrage. It simply means that the legislature, composed of representatives of the people, se- lected, now in this way, now in that, must vote the taxes, and as such, the maxim has become one of the established principles of constitutional government. There have been always and everywhere those excluded from the right of suf- frage, and, as is so well said in Cooley on "Taxation," "so long as all persons cannot participate in government, the limits of exclusion and admission must always be determined by considerations of general public policy."^ It is stated in our constitutions that the power to provide revenues by levying taxes pertains to the legislature. Two t)'pical quotations from American constitutions are the fol- lowing I " The general assembly shall provide such revenue 1 Cooley, I.e. page 13. 2 Page 45. The explanation given in the same place of the mean- ing of the rallying cry of American revolutionists, no taxation without representation, seems to me most satisfactory. It was maintained that taxation for the colonies was the right of the local legislature, and that the Enghsh Parliament which laid taxes was a body in which they had no representation. 20 INTRODUCTION. as may be needful," ^ and "that no aid, charge, tax, burden, or fee ought to be rated or levied under any pretence with- out the consent of the legislature." ^ A still further restriction of the power to levy taxes is found in constitutional monarchies, for in these it is regarded as important to confine the right to the lower house. The form of the Queen's speech to Parliament on its opening points this out clearly, and is a beautiful illustration of an historical evolution, wrapped up in a few words. The "Speech from the Throne" read on Feb. 9, 1887, will serve as an example. It begins, "My Lords and Gentle- men,'' and proceeds at once to discuss the relations existing between England and other powers. It is mentioned that " cordial assurances of friendly sentiments as well as of an earnest desire to maintain the peace of the world" are received. The speech next touches upon the Afghanistan boundary, and after referring to Abyssinia, Canada, Amer- ica, and other countries, proceeds, "Gentlemen of the House of Commons : The estimates for services for 1888, which have been laid before you, have been framed with a due regard to economy." When the subject of finan- ces is left, the style of the address immediately changes again, and the speech proceeds with, " My Lords and Gen- tlemen : The measure which at great labor you passed last session for the benefit of Ireland," etc. Thus is the finan- cial control of the House of Commons recognized in the forms employed in the speech from the throne in England. It was doubtless a feeling acquired in England which led our forefathers to provide in the federal constitution that reve- nue bills should originate in the House of Representatives. The provision appears to amount to very little at present, for ^ Constitution of Illinois, Article IX., section i . 2 Constitution of Maryland, Declaration of Rights, Article XIV. GENERAL PROPOSITIONS RESPECTING TAXES. 21 the Senate through its power of amending bills seems to have as much control of the finances as the lower house. Should a fierce and protracted struggle between the House and Sen- ate ever break out, like struggles in England between the House of Lords and the House of Commons, it is not im- probable that the Representatives would seek to curtail the power of the Senate. Both branches of our state legislatures are elected, and it is considered that it makes very little difference in which house revenue bills are originated. It is indeed often expressly provided in our state constitutions that such bills may originate in either house, as for example in the consti- tutions of Illinois,^ Maryland,^ New York,^ and Florida.* The restriction to the lower house, of the right to originate bills for raising revenue appears to be regarded as of less impor- tance than it once was, for the constitution of Mississippi of 1832 contained such a provision, whereas it was dropped from the constitution of 1868.' Representation does not always go with taxation ; for the District of Columbia is governed by Congress, and the peo- ple of the District are disfranchised. The territories are represented in Congress only by delegates ; but the people ■'Article IV., section 12. 2 Article III., section 27. 2 Article III., section 13. ^Article V., section 12. ^The constitution of many of the states still retain the old provision, that bills for raising revenue must originate in the lower house. These are, N. H., Mass., Me., Vt., N. J., Pa., Ind., Minn., Neb., Del., Ky., Tex., Ore., Col., S. C, Ga., Ala., La. In most of these constitutions it is provided that the senate may propose amendments, as in the case of other bills, while four provide that no new matter not relating to the revenue may be introduced. These are Me., Vt., Del., Ky. See Stim- son's " American Statute Law," Volume I., page 79. 22 INTRODUCTION. living in them are subject to the indirect federal taxes. It cannot in fact be said that the power to tax always belongs to the legislature power, for there are countries like Russia, which have no true legislation ; but it can be laid down as a general principle with respect to modem constitutional countries. TAXES ARE REGULAR AND ORBERLY CONTRIBUTIONS. The word taxes comes from ra^is (ordo), and indicates something regularly recurring ; and taxes differ thus from sub- sidies granted by Parliament to the king in time of urgent necessities. These subsidies were also at times called aids. Forced loans and contributions are likewise different from taxes in this respect, for they are irregular and tyrannical exac- tions. Benevolences of early days were sometimes gifts, as the word signifies, and at other tinjes irregular exactions ; and in either case they were not taxes, for taxes are not volun- tary offerings, although they are often paid willingly.' It is ' The benevolences of early times were more in the nature of loans than taxes, although the word appears to have been used as equivalent to taxes; naturally, it would often be a matter of indifference whether a benevolence — really a forced contribution — were regarded as a tax or a loan. It appears, according to Dowell, that the rich bore a rela- tively small part of the public burdens, and that these benevolences, which they could well afford to pay, equalized matters somewhat. An amusing account is told of a benevolence which the handsome Edward IV. exacted of a rich widow. Expecting scarce ^lo, he received ;^ 20, which the widow paid him with the words, "By my troth, for thy lovely countenance thou shalt have even £2.0"; whereupon the king did " lovinglie " kiss her, and received for this royal favor another £'2a, either, as an arisient writer said, " because she esteemed the kiss of a king so precious a pearle " or " because the flavour of his breath did so comfort her stomach.'' Benevolences were condemned, and as such abolished, by a statute of Richard III. See " History of Taxation and Taxes in England," by Dowell, Volume I., pages 156-9, GENERAL PROPOSITIONS RESPECTING TAXES. 23 to be noticed, whether, that the words, aids and subsidies, have also been used for true taxes. The word has been retained after its meaning has been changed. More will be said of this in the following chapter. Tribute has some- times been used as equivalent to taxation, but it is more properly restricted to its usual meaning of forced contribu- tions levied by a victorious foreign power. WHAT IS CALLED A TAX HST ONE PLACE IS NOT ALWAYS CALLED A TAX IN ANOTHER. The law is more or less arbitrary in declaring what shall be regarded as a tax ; and the action of the courts in inter- preting the laws is far from uniform. It was held in Illinois, for example, that a highway assessment payable in labor was not a tax, whereas in Nevada an assessment of four dol- lars or two days' labor on each male inhabitant between the ages of twenty-one and sixty years, was held to be a poll tax, a tax which was in that state unconstitutional.^ This is an illustration of the extent to which definitions are arbitrary both in law and political economy. Nature has not separated by sharp lines from all other objects any one object to which we give the name tax, as she has separated a horse or a tree from other natural objects. The word is an arbitrary sign for a somewhat varying and shifting idea. The best that can be done in such cases is to con- form with what appears to be the best usage, and to work for harmony, simplicity, and unity in expression. THE POWER OF TAXATION CANNOT BE DELEGATED. This is a general provision applicable in modern con- stitutional governments. The power to tax is delegated to 1 Cooley, page 12, note 4. 24 INTRODUCTION. the legislature ; but the general rule holds that a delega- ted power cannot be delegated by its recipient to others. Judge Cooley speaks of the power of local political units as " one clearly defined exception " to the rule which has existed from time immemorial, and one which as a tradi- tional right has been tacitly or expressly incorporated in state constitutions. The power is frequently Hmited and regulated both by constitutions and laws. But even with respect to the local political units, it holds that the dele- gated power cannot be transferred. Some cities existed prior to the sovereign states of which they are now part, and retain such sovereign rights as have not expressly been taken from them. This is very often the case in Europe, and is a principle of the law of the cities in Ger- many. CHAPTER III. THE ORIGIN AND GROWTH OF MODERN TAXATION. TAXATION AS WE NOW UNDERSTAND IT, A NEW THING. WHILE something in the nature of taxes may be found even in the most ancient history, it is safe to say that taxation as we now understand the term is something new in the world's history. We now consider taxes as a regularly re- curring burden faUing upon all inhabitants of a country, and we expect taxes to defray the greater portion of the heavy and increasing expenses of our various governments. It is not consistent with the plan of the present work to dis- cuss the revenues and expenditures of ancient states. It may be remarked, however, that the budget of any state that ever existed before the nineteenth century would be almost in- significant when compared with the budgets of England, France, Germany, and the United States to-day. Grote estimates the annual expenditures of Athens in the brilliant age of Pericles at one thousand talents, say one million two hundred thousand dollars.^ War was then made self-support- ing by plunder and tribute, and victorious nations derived a revenue from it. Foreigners were looked to for revenue as an habitual thing ^ and personal services were exacted from 1 In his "Public Economy of Athens," London, 1828, Boston, 1857, Boeckh says that the revenues of that city never exceeded two thousand talents. 2 The protection-money of the resident aliens was an important item in the budget of classical Athens. 26 INTRODUCTION. citizens which were often quite burdensome. Officials were also remunerated, as in more recent times, by fees, and offices were often a source of net revenue rather than of expense, as is usual in modern times. What we would call indirect taxation, existed in both Greece and Rome, but it was evidently regarded as payment for privileges. Imported and exported commodities were taxed ; but this tax was doubtless held to be a proper pay- ment for the privilege of bringing goods into the country, and was put in the same category as harbor fees for the use of the harbor, or market charges for the use of the public market. These import and export duties were purely for revenue ; for they were the same on exported as on imported commodi- ties, and appear to have been what we would call ridiculously low. We hear much of a charge of a fiftieth, and ten or twelve per cent, on imports and exports was regarded as exorbitant ; whereas we in the United States are not startled by taxes of fifty and one hundred per cent, on imports. Boeckh divides the revenues of Athens into regular, ordinary revenues, and irregular and extraordinary revenues. The regular reve- nues are by him divided into four classes, namely : " Duties {■riXt]) arising partly from public domains, including the mines, partly from customs and excise, and some taxes upon industry and persons, which only extended to the aliens and slaves ; fines (TL/jLyjimra) together with justice fees and the proceeds of confiscated property; tributes of the allied or subject states {6poi) ; and regular Liturgies {XeiTovpytai cyKu/cXioi).'" None of these revenues imply modern notions of taxation. It is to be observed in studying the revenues of ancient and mediaeval states that what appears to be taxation is often only 1 Book III., I. ORIGIN AND GROWTH OF MODERN TAXATION. 27 payment for service or for the use of property. Ancient tithes are an example. Where these were levied in Greece, they were as a rule payment for the public property, for the public domain, and ought to be called rent rather than taxes. The land of subjugated peoples became the property of the conquerors, and the payments exacted for its use were like- wise rent, rather than taxes. A poll tax was also exacted of subjugated foreigners, which was a mark of subjugation and inferiority. " As the land has less value if it is subject to an impost, so are men more degraded if they pay a poll tax, for it is a token of captivity." These words are from TertuUian,^ and express a view also held during the reign of the Carlovingian dynasty ; in fact, even up to the present century traces of the view that taxes were unworthy of free- men can be found. Direct taxes on land held in fee-simple were regarded as less degrading than taxes on persons, but these were borne with impatience, and Boeckh asserts that no such tax was laid before the Peloponnesian war.^ It is certain that before that time other revenues, especially those from the state-owned mines, were so superabundant that sur- plus revenue was distributed among the citizens of Athens. There are those, however, who hold that taxes were laid in early times both in Greece and Rome, and who even go so far as to claim that the right of taxation in time of need was fully acknowledged. This seems a rather strong expression, but there appears to be reason for the view that both Greece and Rome passed from an early period of taxation to one of freedom from taxation, a time of great prosperity, and then back again to a period of heavy and increasing taxa- 1 TertuU., Apolog. 13, quoted from Boeckh, III., i. 2 He says that the first regular property-tax was occasioned by the siege of Mitylene in 406 B.C., and he quotes the testimony of Thucydides. 28 INTRODUCTION. tion in the time of their decline and fall.^ How light the extraordinary taxes on property were is amply demonstrated by Boeckh by numerous examples.^ It appears that the average annual tax paid on the property of Demosthenes by his guardians amounted to only one-fifth of one per cent, on its valuation, or about one-eleventh of the rate in New York City in 1887. The Athenians regarded a tax of one and two-thirds per cent, as something so exorbitant as not to be seriously contemplated. The liturgies were somewhat like unpaid offices. They were regarded as a mark of distinction and involved large expenditures for the entertainment of the citizens or the defence of the country. The acceptance of these offices was compulsory, but as a rule more was performed by the recipients of the offices than was required, and they appear to have been held to be an oppressive burden only in a time of declining wealth and waning patriotisna. Liturgies were also known in Rome and became a source of corruption and plutocratic rule. The sediles were ex- pected to contribute to the expenses for the amusement of the people, and the office of aedile was a stepping-stone to the remunerative offices in the provinces which were thus rendered accessible only to the wealthy. The office of " Rex " in the carnival of New Orleans resembles an ancient liturgy save that its acceptance is not obligatory. It is, however, held to be an honor to receive it, as it was, in the best days of Ath- ens, to perform a liturgy. It is said to cost ;^ 10,000, and is to that extent a contribution of a rich man to a public amuse- 1 Compare, in addition to Boeckh, " Die Steuer nach der Steuer fahigkeit," von Fr. J. Neumann, Jena, 1880 (Separat-Abdruck aus den Jahrbuchern fur Nationaloekonomie und Statistik), also Roscher's " Finanzwissenschaft," Book III., Chapter IV. 2 Boeckh, IV., 7. ORIGIN AND GROWTH OF MODERN TAXATION. 29 ment. The office of police justice in New York City has, at times, certain features which remind one of the sediles. Po- lice justices give picnics and entertainments to those resid- ing in their election districts, which cost large sums. It is interesting to notice from a recent essay on " Taxation in Japan," that in the old feudal period of that country's his- tory the rich were singled out for special taxation as for a compulsory public subscription, " that is to say, the govern- ment forced the rich citizens of a city or town to make such subscriptions for the public treasury as the government asked for. This corresponds to the English ' benevolences ' under the Tudor-Stuarts."^ This essay shows, further, that for generations the principal public burdens were met by a labor tax and by payment of a sort of rental for the land, which appears to have belonged to the sovereign, in theory at least. It was in the nature of a tithe. Japanese taxation can be traced back to 87 B.C., and look its origin in a labor tax, expressed in days' work, for every inhabitant of middle age, regardless of sex. Such a tax would naturally bear more heavily on the poorer classes, and the special forced contributions from the rich may have been an attempt to compel them to bear more nearly their fair share of the pub- lic burdens. These two features of taxation in Japan, the labor tax and the land tax, or more properly rental, appear to have been prominent in all Asiatic countries with which we are familiar. The ideas of Rome in the age of Cicero are well illus- trated by a passage in his work " De Officiis." Cicero says : " Care should also be taken lest, as was often the case among our ancestors, on account of the poverty of the 1 "Taxation in Japan," by Shiro Shiba. Wharton School Annals of Political Science, Volume I., page 94 30 INTRODUCTION. treasury and the continuity of wars, it may be necessary to impose taxes, and it will be needful to provide long before that this should not happen. But if any necessity for such a burden should befall any state (for I would rather speak thus than speak ominously of our own ; nor am I dis- cussing about our own state only, but about all states in general) , care should be taken that all may understand that they must submit to the necessity if they wish to be safe." What could better illustrate the difference between ancient and modern ideas of finance ? Cicero spoke of a possibil- ity of taxation with hesitation, and was careful to point out that his remarks were purely general, as if to predict tax- ation in Rome were something terrible and unpatriotic, be- traying a lack of confidence in the future of his own state. Much as if one should now predict the overthrow of our existing social order in the near future by socialism ! Yet it is probable that Cicero did have Rome in mind, his protestations to the contrary notwithstanding ; for, if Plutarch may be relied upon, a tax was levied in 43 B.C., the year after Cicero wrote the " De Ofificiis,'' although for over one hundred and twenty years the Roman people had been relieved of taxes by successful wars. • THE REVENUES OF THE STATE IN THE MTODLE AGES. The patrimonial idea of the state obtained in the early Middle Ages when the sovereign regarded the state as his own, and at times claimed the right to dispose of it by will, or even to sell it, as if it were a piece of private property. Brandenburg, which has become Prussia, serves as an illus- tration. Otho the Lazy became involved in debt in the fourteenth century, and sold his right as margrave for 200,000 florins, and thereafter Brandenburg was mort- ORIGIN AND GROWTH OF MODERN TAXATION. 31 gaged, divided, sold, and transferred like a private estate until it came into the possession of the Hohenzollems in 1415- When such ideas obtained, it was natural to expect the monarch to defray all expenses of government, for no distinction was made between his public and private ex- penses ; they were all his own, just as all employes under the sovereign were servants of the prince, whether employed in his household or in public business. They were all called filrstliche Diener, servants of the prince, and it was only at a later period that the term Staatsdiener — state-servants — was employed, and then these were separated from the Hof diener — servants of the court.' Large domains were set apart for the support of the sov- ereign, both in his public and private capacity, here indis- tinguishably blended ; and revenues which would have been private for any one else, were public as well as private. It was a favorite theory of law and practice that all private property of a prince became public the moment he as- cended the throne, and it was so declared in France by law in 1607. It has thus in modern times become extremely difficult to separate public from private property, and this has led to complications. This also explains confiscations which were often regarded as a mere resumption by the public of property which had always belonged to the public, but which had been set apart for a time for certain special purposes. Land was held on feudal tenure, which means that the nominal owners were only tenants, from whom a return to the crown was due. Various fees and duties, and 1 Staatsdiener and Siaatsdienst are employed in the Prussian code of Frederick the Great- — das preussische allgemeine Landrecht. On this whole subject, see that excellent little work, " Der Staatsdienst in Preussen," by Clemens Theador Perthes, Hamburg, 1838. 32 INTRODUCTION. other special rights of the crown, called " regalia," furnished revenues. The Jews, particularly in England, were made to contribute heavily to the support of the crown, from which they were supposed to derive special protection. The very interesting monograph on " The Exchequer of the Jews of England in the Middle Ages," by Charles Gross, Ph.D.,' gives valuable information on this point. It appears that the cities on the Continent derived revenue from the Jews more frequently than did the sovereign. " In Germany the crown became weaker and weaker, parting with most of its prerogatives, among which was the control of the Jews, to- gether with the right to tax them. What the German towns- men . . . really sought from the king, and often secured, was permission to have Jews among them, from whose ple- thoric purses they could borrow money, and, above all, squeeze heavy taxes. In England, on the other hand, the crown clung tenaciously to this, as well as to its other re- galia." ^ The revenues derived from the Jews may be divided into four classes : namely, reliefs, escheats, fines, and tallages. Relief was an inheritance tax, which generally amounted to one-third of the estate ; while escheats were forfeitures for crimes and offences, real or imaginary, — for slaughtering Christian children, coin-cUpping, counterfeiting, and the like, and it is said that it was found convenient to bring false accusations against the Jews when the treasury of the king needed replenishing. Fines were used in a broad sense, and included what we might term fees. They were paid for permission to marry or even not to marry, and for the priv- ilege of changing one's residence. Tallages were simply 1 London. Office of the Jewish Chronicle, 2 Finsbury Square, 1887. 2 Gross, page 4. ORIGIN AND GROWTH OF MODERN TAXATION. 33 taxes, sometimes poll taxes or capitation taxes, but generally taxes assessed in proportion to one's means. Dr. Gross estimates that the average annual tallage did not greatly ex- ceed ;^5ooo in the reign of Edward I. ; but at that time the entire revenue of the crown was only about £fi<^,ooo. It is evident that the Jews then paid altogether considerably over one-tenth of these revenues.^ An interesting account of a forced loan levied in Frank- fort-on-the-Main, during the Thirty Years' War, not only illustrates the treatment of the Jews, but is a further indica- tion of the character of financial operations in the Middle Ages. The essay from which this account is taken was based on a study of original documents, and appeared in the Wochenblatt der Frankfurter Zeitung for Jan. i, 1888. Frederick V. of the Palatinate, and the chosen king of Bohe- mia, when defeated by the emperor, took refuge in Holland, and later proceeded against his enemies, with his general, Ernst von Mansfeld. When near Frankfort he sent word to the Jews that, as their protector, he was entitled to a yearly payment ; that this had not been received for some years ; and that he now wanted all that was due, in addition to 6000 thaler. The Jews were astonished, for they had never heard of this protectorship before. They did not refuse, but delayed payment on various pretexts. Christian of Brunswick, in the meanwhile, approached Frankfort from another side, and demanded 10,000 gulden from Frankfort, promising to leave the Jews unmolested, on condition that he received the sum. He justified the demand on the ground that the Jews were lawful prize in time of war. Fi- nally, when these two were defeated, the Emperor Ferdinand II. pretended that the Jews had paid to the city treasury > Gross, pages 25-29. 34 INTRODUCTION. 10,000 thaler for his enemies, and on this account he feigned great anger, and demanded the 10,000 thaler himself, and received that sum. The view gradually gained- ground that the office of sov- ereign was simply a public trust, and that the king ruled by right divine, and not as the owner of a piece of property. It then became natural to exact from the people assistance for the support of a government in which they could claim a real interest. Yet even Jean Bodin, in the latter half of the sixteenth century, in his work " De la Rdpublique," prefers revenues from public domain to all others for the support of govern- ment, and speaks jf taxes in a manner which reminds one of Cicero." ^He says a Christian prince will resort to them as rarely as possible. Montesquieu expresses similar opin- ions about the desirability of revenues from domains in his "Esprit des Lois." Braunschweig-Wolfenbiittel declared in the old German Reichstag, in 1653, that taxes were contrary to the nature of the state because one entered into civil society to protect one's property and not to have it taken away. The words used for taxes are significant, for they show how taxes were regarded. What were really taxes were called aids and subsidies' and benevolences (sub- sidium, adjutorium, petitio. Bede) . They were something irregular and unusual, something supplementary to other revenues, and were granted by the estates of the realm as a favor.^ 1 A tax for the benefit of the Lord Proprietor of Maryland, laid by the assembly of 1641 and 1642 was called "An act for granting a sub- sedye." See " Sketch of Tax Legislation in Maryland," in " Report of the Maryland Tax Commission " in 1888, page cxii. 2 When in this century Karl Ludwig von Haller, in his " Restaura- tion der Staatswissenschaft " (six volumes, 1816-26), denied the right of ORIGIN AND GROWTH OF MODERN TAXATION. 35 TAXES LONG HOLD A SUBORDINATE POSITION IN BUDGETS OF STATES. Taxes were long held to be something merely secondary and subordinate, and it was necessary to show first the in- sufficiency of other revenues. Taxes may still be considered as something subordinate in a modern budget, as the state- ment of receipts and expenditures is called. First, an esti- mate is made of expenditures, then of revenue from fixed sources of income, in particular from productive property of the state or municipality, or other local political units, and finally direct taxes are levied to meet the deficiency. This deficiency is now larger than the revenues from other sources in most states ; and when to direct taxes we add indirect, perhaps the only modem states which derive a major por- tion of their revenues from domains and public works, are four of the German states. What was once merely sup- plementary, and is now in budgets often treated as sub- ordinate, yields the greater portion of all revenues.' The old forms often continue, however. As late as 1809 an edict of Nassau, countersigned by Marschall, recognized the principle that taxes should be raised only to cover deficien- cies after the revenues from the public domains and from the regalia had been exhausted. Article 109 of the consti- tution of Wurtemberg, treats first of the needs of the state ; second, of the revenues from the crown land ; and third, of taxation and claimed that it was more fitting for the master (the sover- eign) to support his servants (the subjects) than to reverse the process, it sounds indeed Hke a voice from the tombs. See Roscher, I.e. 1 See my Introduction to Worthington's " Historical Sketch of the Finances of Pennsylvania," Volume II., No. 2, Publications of the American Economic Association, Baltimore, 1887. 36 INTRODUCTION. the deficiency still required to provide for the expenditures of the state. The German authority, von Seckendorff, says the revenues of the domains are destined, first, for the sup- port of the royal family ; second, for payment of the civil service employes ; third, for embassies ; fourth, for castles, fortresses, streets, etc. ; fifth, for churches and schools ; sixth, for amusements and entertainments.^ As the modern state developed by means of consolidation and concentration of scattered powers, as standing armies took the place of plundering baronial troops, and as payment in money, and exchanges through the medium of money; took the place of barter and truck, and as paid services took the place of compulsory services like the corvees of France, the needs of the state continually increased, and the insufficiency of old sources of revenue became year by year more manifest. The wasted resources of the princes must be added to the causes which increased the fre- quency of taxes. Weak princes squandered their public and private property, much as the people of the United States are doing at the present time. Strong princes in parliamentary states found it easier to raise revenues by sale of public property than by taxation. Feudal conditions were revoked, and tenants became fee-simple proprietors, and thus the many were robbed for the few. Theft and usurpation by nobles still further diminished public land, just as English and Scotch nobles, and others, are robbing us of our vast treasures, while a careless and indifferent and corrupt Congress wastes its time in petty wrangles and sense- less partisan controversies, refusing to pass laws for the pro- tection of the public domain which have met with the all but unanimous approval of upright and thinking citizens. 1 See Roscher's " Finanzwissenschaft," Book I., Chapter I. § 9. ORIGIN AND GROWTH OF MODERN TAXATION. 37 Thus it happened that taxes increased in frequency, until they became regularly recurring burdens, and contributions which were once of a more or less voluntary character be- came compulsory. There is an old proverb to the effect that he who gives three times establishes a claim against himself. This has been true in finance. New Haven offers a curious illustration. " In the autumn of 1644, the town began its annual contributions for the support of poor scholars at Harvard College. The offering consisted of a peck of wheat, or the value of the same, from every one ' whose hart is willing.' The largess lost its voluntary character and was regarded as a tax. The collectors of college corn were regu- larly elected town officers until the end of the colonial ex- istence."^ In this same year an interesting note in the Records of the Colony of Massachusetts Bay in New England shows that a similar request was made in that colony. The Records of the General Court read : " It is ordered yt y° deputies shall comend it to y° sev'all towns (& y' eld's are to be desired to give their furth'ance hereto) w* declaration of ■f co'se w* was ppounded by y° said comissioners, & hath bene put in practice already by some of y° other colonies, viz. : of ev^ family alow^ one peck of come, or 12'^ in mony or oth'' comodity, to be sent in to y= Treasurer for the col- ledge at Cambridge, or where else hee shall appoint, in Boston or Charlstowne." ^ The implied voluntary character of the offering is noteworthy. It may be doubted whether in reality it ever had any voluntary element at all. Our Puritan ancestors, with their stern ideas of duty and their readiness to apply a vigorous boycott to obnoxious individu- 1 Levermore, " The Republic of New Haven," page 77. 2 Volume II., page 86. 38 INTR OD UC TION. als, would probably have made things most uncomfortable for any one who should have objected to his share of the contribution. A curious act of the Assembly of the Province of Mary- land, dated 1650, is worthy of notice in this connection. It is entitled "An Order for the Relief of the Poor," and it directs that an " equal assessment " be levied on such inhab- itants of St. Mary's County as will not make a willing contri- bution for the maimed, lame, and blind.^ The proprietary government of Maryland was succeeded by the convention of June, 1774, and this formed a tempo- rary government in the following year on the basis of " Arti- cles for Association." This endured for two years longer, or until 1777, and during that time the government was supported by contributions which were called voluntary, but the following quotation from the "Sketch of Tax Legisla- tion in Maryland " throws a vivid light on the development of finance : " In every county, contribution or subscription lists were presented to the inhabitants. If any person de- clined to contribute, his name and his refusal were noted, and then consequences followed which, in those times, were more serious than a tax sale. In one county^ the names of those refusing were directed to be recorded in perpetual memory of their principles ; in others they were publicly declared by county resolutions enemies to America, and as such published in the Maryland Gazette reported to committees of observation, etc. As the unfortunates who were so injudicious as to allow themselves to be returned delinquent became the objects of distrust and aversion, and 1 " Report of Maryland Tax Commission to the General Assembly," January, 1888. Part entitled " Sketch of Tax Legislation in Maryland,'' page cxxvii. 2 Charles County. ORIGIN AND GROWTH OF MODERN TAXATION. 39 subjected themselves to the suspicion of Toryism, with its grave consequences of arrest, banishment, and confiscation, it will be readily beheved that these means were capable of being very nearly as effective as compulsory taxation." ^ It was undoubtedly a more general practice in earlier times to give money to defray the regular ordinary expenses of government than now, while at the present time it is doubtless true that more is given for specific purposes, many of them purely public, than formerly. The citizens of Baltimore and Indianapolis will point the stranger with pride to fine public buildings constructed for less than the appro- priations made for them. Other instances of large results with public expenditures can readily be found, and it will frequently be discovered that unpaid services of citizens, who desired to see the most made of the appropriations, contributed to the success of these undertakings. A gratify- ing example of large results with small expenditure is afforded by the Baltimore Manual Training School. Citizens of Rhode Island made voluntary contributions toward her support in early days.^ Benjamin Franklin left a fund of ;^iooo, which was to be lent to young married couples in sums not to exceed £,(iO. He thought that this would at the end of a century amount to ;^i 31,000, when _;£3 1,000 was to be devoted to general municipal improvements. He directed that ;£ioo,- 000 should be retained for loans to young married couples until the expiration of the second century, when he thought the principal would be equal to over four millions of pounds. 1 " Report of Maryland Tax Commission," 1888, page cxxxi. 2 From an excellent paper on Taxation in Rhode Island, by H. B. Gardner, graduate student and late fellow of the Johns Hopkins Uni- versity, as yet an unpublished manuscript. It will probably appear in the following year as a contribution to the Johns Hopkins University Studies in History and Political Science. 40 INTRODUCTION. It was then to be divided between state and city. The fund now amounts to ^73,321.00. A similar fund left to Boston amounts to over ^315,000.00. One of the pur- poses for which Stephen Girard left his immense estate to Philadelphia was to improve the city " and diminish tax- ation." ' Examples of this sort continue even up to the present. The legacy of John L. Lewis of New Jersey, for the diminu- tion of the debt of the United States, figures in the finance report for the year ending June 30, 1883, for ^950,000. The Duke of Brunswick left a large sum of money a few years ago to the city of Geneva, Switzerland, which was used to pay the city debt, to erect a monument to the Duke, and to build a fine opera house. These instances are simply by way of illustration, for it would not be possible, without a vast amount of research, to tell the exact significance of gifts, and their amount in proportion to all expenditures. The use of lands was given in payment for services in the Middle Ages. We may say that the offices were endowed, and frequently the land was retained, when the duties of the office were abolished or transferred to some one else. Thus the public domain was diminished. The endowment of the English churches (glebe lands) continues to the present. Offices were sold for revenue in the Middle Ages. This often practically amounted to a sale of an annuity, for the offices were in many instances mere sinecures. Richelieu abolished 100,000 offices which had been for the most part, it appears, established in order to be sold. The civil service became so poor under this system in France that it was 2 See "Philadelphia 1681-1887, A History of Municipal Develop- ment," by Allinson and Penrose, Baltimore, 1887, Chapter III. ORIGIN AND GROWTH OF MODERN TAXATION. 41 necessary to reconstruct a new civil service, and thus the country had to support two sets of officials, — the sinecur- ists and those who did the work. Among the other devices for raising revenues may be mentioned the sale of titles. This was actively carried on by James I. of England, when the title of baron brought _;£io,ooo, and that of an earl ;^i 2,000. The feudal dues paid to James amounted to ;^i 80,000, out of a total budget of ^4SO;000.^ The crown lands rented for ;^3 2,000 at this time, and the rent subsequently rose to ^80,000. Lotteries were formerly often relied upon to defray a portion of the state and local expenditures in this country, and are still used for that purpose in two of our states. The Louisiana lottery^ is the best known in this country. Prussia and other European states still support lotteries, and one reason why in some places all private lotteries were suppressed was to give the state a monoply. It is surprising at how late a date taxation, as we now un- derstand it, came to be relied upon as the regular ordinary source for the major portion of vast public expenditures. Indirect taxes, which in England can be traced to the twelfth century, were made important by Charles II., as will be seen in a subsequent chapter of this work, and modern public debts were first established in the reign of William and Mary, and it may, perhaps, be said, roughly speaking, that modern financiering in England was established about 1 700 1 Walker's " Political Economy," Part VI., Chapters XV. and XVI., and Wilson's " National Budget," etc.. Chapter I. 2 Louisiana derived $40,000 from the Louisiana Lottery Company in 1882. Kentucky receives $4000 a year from a tax on lotteries. Nevada derives a revenue from " gaming licenses." 42 INTRODUCTION. TAXES FIRST PAID ONLY BY THE WEAK AND DEFENCELESS. Adam Smith says that, in the period of feudalism, only those were taxed who were too weak to resist, and on ac- count of their weakness the poorer classes have always, even up to the present time, been obliged to pay an undue share of taxes, as we shall see hereafter. It is now, however, a recognized principle that taxes should be laid in proportion to abilities, and, while this principle receives many different interpretations, the heavier burdens of the poor at the pres- ent time are due to poor systems of taxation and faulty ad- ministration of the laws, and not to openly expressed principle. Adam Smith probably had France particularly in mind, and there the principle was widely accepted that the clergy pro- tected the country by their prayers, the nobles by their arms, and the commons by the taxes they paid. These ancient regulations were swept away by the French Revolution, and in this century the universality of the duty to pay taxes has become an accepted principle of political science and of actual practice. The statement of Adam Smith is confirmed by the kinds of taxes which were employed to raise the revenues. Poll taxes, or capitation taxes, were frequent, and as these often demanded an equal sum from every one, they were specially oppressive. The insurrection of Wat Tyler in the reign of Richard II. was occasioned by a poll tax.' These taxes have been generally abolished in Europe and America. The constitutions of Maryland and Ohio especially prohibit poll 1 This was preceded by an attempt to tax all in proportion to ability, but the vesistfince of the powerful was so obstinate that it was aban- doned. See Wilson's " National Budget," etc., Chapter I. ORIGIN AND GROWTH OF MODERN TAXATION. 43 taxes, but they still linger in some of our states as a relic of barbarism.^ The hearth and window taxes were especially oppressive. The window taxes increased with the number of windows, and thus people were induced to deprive themselves of the light. The workings of this tax are well illustrated by a passage in Fielding's " Tom Jones." A landlady is represented as saying to an officer of the army : "To be sure it is natural for us to wish our enemies dead, that the wars may be at an end and our taxes lower ; for it is a dreadful thing to pay as we do. Why, now there is above forty shillings for window lights, and yet we have stopped up all we could ; we have almost blinded the house, I am sure."^ A curious illustration of Adam Smith's assertion that those paid taxes who were too weak to resist, is found in Mr. James Russell Lowell's "Address on Democracy." The author is speaking of the Provinces of Lower Austria in 1546, in which there were five sorts of persons, — clergy, barons, nobles, burghers, and peasants, — and he quotes from Ber- nardo Navagero, to the effect that no account was made of the peasants because they "had no voice in the diet." "Be- low the peasants," continues Mr. Lowell, "it should be remembered, was still another even more helpless class — the servile farm laborers. The same witness informs us that of the extraordinary imposts, the peasants paid nearly twice as much in proportion to their estimated property as the barons, 1 "That the levying of taxes by the poll is grievous and oppressive, and ought to be prohibited; that paupers ought not be assessed for the support of the government." — Constitution of Maryland, Declaration of Rights, Article XV. This provision in regard to poll taxes has been incorporated into the Ohio constitution. 2 "Tom Jones " appeared in 1750. It was not until 1851 that this tax was abolished. 44 INTRODUCTION. nobles, and burghers together. Moreover, the upper classes were assessed at their own valuation, while they arbitrarily fixed that of the peasants, who had no voice." ^ THE EARLY AMERICAN VIEWS OF TAXATION. The right of taxation has not always been recognized even in America, new as is our history. In the report of Mr. VVolcott, Secretary of the Treasury, made to Congress in 1796, on the systems of taxation in the various states, it was stated that no direct tax had been levied in New York since 1788, and that no objects of taxation were defined by the laws nor any principles of valuation prescribed. The credit and funds of the state were ample, and their product sufficient to supersede the necessity of taxation except for county and local purposes. The tax of 1788 amounted to ^60,000. The annual civil expenses of the state were ^75,900 in 1796, in addition to which there were grants to universities, col- leges, schools, hospitals, and some " contingent " expenses.^ In Rhode Island there was an attempt to conduct the government by all sorts of makeshifts, without regular taxa- tion, for some time after the foundation of the colony.' Phil- adelphia was greatly embarrassed on account of the absence of the power to lay taxes, even in the eighteenth century ; and it was resolved in 1710 "to make application to the assembly for the passage of an act empowering the corpora- tion to make ordinances and by-laws for the better support, rule, and government of this city." It appears that no ^ " Democracy, and Other Addresses," by James Russell Lowell, Bos- ton, 1887, page 12. 2 American State Papers, Finance, Volume I. ^ Authority is Mr. H. B. Gardner's paper, to which reference has al- ready been made. ORIGIN AND GROWTH OF MODERN TAXATION. 45 power of taxation whatever existed under the charter of 1 701 ; and "by the common law the power of taxation of the borough, if it can be said to have existed at all, was of the most restricted character ; nor could the king or proprietor grant such a power. . . . The main sources of revenue were from fines, fees, freedoms, city property, and lotteries." ^ Fines were heavy and oppressive on account of the necessities of the city, while wharves, market-stalls, and other city property yielded an income increasing with the growth of the city. The' control of taxation by the people was established by an act of 171 2. The state of Pennsylvania levied the first direct state tax in 1785. It was an annual tax of ;^76,945, and was levied until 1789, when it was discontinued. How poorly it was collected may be seen in the fact that the arrearages in 1795 amounted to ^14,560. The annual expenditure of the state government was given as ^130,000 in the re- port of Mr. Wolcott on the various systems of state taxa- tion.^ The revenue of the state then exceeded this amount, and it was stated as probable that the state would con- tinue to be exempt from the necessity of taxation except for county purposes. Pennsylvania hoped to abolish tax- ation in the present century, during the early part of which a comparatively small proportion of the revenues was raised by taxation. "In 1810 the revenues of the state amounted to ^353,965.08. Of this sum the interest on state invest- ments returned ^134,887.95; lands, ^93,644.42; taxes, ^83,658.25. The expenditure per capita was seventy- three cents, and taxes per capita were thirteen cents. . . . 1 See Philadelphia, by AUinson and Penrose, Baltimore and Phila- delphia, 1887, pages 22-29. 2 American State Papers, Finance, Volume I. The date of the report is 1796. 46 INTRODUCTION. Before the year 1825, with the exception of the tax on bank dividends, there was, with one minor exception, no state taxation whatever except in the way of Ucense. In 1827 the House Committee of Ways and Means reported that there had been a steady increase in the various permanent sources of revenue ; that they would suffice for the general expenses of government, and that the surplus in a few years would redeem the public debt." ■" The financial history of Pennsylvania illustrates the ex- treme difficulty with which taxes can be established among people who have either never been used to them, or who have grown unaccustomed to them. The people refused to submit to any taxation whatever, and the burdens resting on the public works increased constantly, while no appeals could move them to raise any money for the support and mainte- nance of their own property; as foolish a proceeding as for the stockliolders of a railway corporation to refuse to levy an assessment on stock for any purpose. The unwill- ingness to submit to taxation led to the sale of the public works of Pennsylvania, canals included, and thus the state suffered loss. The financial history of Maryland illustrates the same fact. There were few instances of state taxes before 1841, during the present century, and by that time people had learned to look upon taxes with great aversion. The state had reck- lessly lent its credit to aid in the construction of works of internal improvement, and it became embarrassed by their failure to meet expectations. So obstinate was the resist- ance to any taxation whatever, that repudiation was openly advocated as preferable to taxation. Better advice pre- 1 Worthington, " Historical Sketch of the Finances of Pennsylvania." American Economic Association monograph, May, 1887. ORIGIN AND GROWTH OF MODERN TAXATION. 47 vailed, and the present methods of taxation in Maryland were instituted in 1841. It is important for us to remember, especially at the present time, how difficult it is to re-establish taxation when the right to tax has been allowed to fall into disuse. OTHER SOURCES OF REVENUE AT THE PRESENT TIME. — COM- PARATIVE STATEMENTS. While taxes have increased enormously during the present century,^ a large proportion of the revenues of modern states is still derived from other sources than taxation. The pub- lished budgets of states and cities are so imperfect, even in Europe, that it is difiScult to give full and complete informa- tion on the point ; and in America the information which can be gathered is still more fragmentary.^ It is to be noticed in this connection that the more modern budgets show a tendency to assume the character of the older budgets in some respects. Taxes occupy a place of relatively decreas- ing importance in the budgets of many states and cities. This is due to the acquisition of public works, like railroads, telephones, and telegraphs, to the extension of forest-cul- ture by the states, and to the extension of municipal func- tions by the purchase or construction, of street-car lines in a few instances, of water-works, gas-works, and electric-light- ing works more frequently. This explains the more cheer- ful tone which may be observed of late in the English municipalities. The rapid increase in local debts in Eng- land excited a good deal of alarm for a time, but it is now 1 Facts in regard to this will be found in another part of the present work. ''■ With the resources of the United States at his command, a cen- sus official might gather enough facts to make some estimates, but these would be more or less uncertain. 48 INTRODUCTION. found that many of these cities have valuable assets to show for expenditures. It is possible to see only the beginnings of such a movement in the United States. New York state . has entered upon forest- culture, and it is now proposed that the United States should do the same.' Water-works are generally owned by our municipalities, and gas-works rarely. Wheeling, West Virginia, acquired private gas-works by purchase in 187 1, and the controversy about the Philadelphia gas-works in 1886 has been decided in favor of municipal ownership, in spite of powerful pressure by a syndicate of prominent men. It may safely be said that the sentiment in favor of municipal enterprises in the matter of gas-supply is a growing one, and it seems probable that popular pressure for federal ownership and control of the telegraph is becoming more intense. The only public street-car line in the United States is that which runs over the New York and Brooklyn Bridge, but American municipalities exhibit an increasing inclination to derive a revenue from street-cars. A considerable percent- age of the revenues of Baltimore is derived from the special tax of nine per cent, on the gross revenues of all street-car lines, and the regular taxes which they pay in addition, like all other corporations. A recent New York state law com- pels all cities in that commonwealth to sell franchises for street-cars at public auction for a percentage of gross reve- nues. The present mayor of New York City, Hon. A. S. Hewitt, advocates the construction and ownership of a rapid 1 A bill has been introduced into the Congress of the United States, entitled "A Bill for the Protection and Administration of Forests on the Public Domain." It is indorsed by the American Forestry Congress, and may be said to meet with popular approval. The only question is whether the land and lumber thieves will be powerful enough to defeat it ORIGIN AND GROWTH OF MODERN TAXATION. 49 transit system in that city by the municipahty, and a bill has been introduced into the New York legislature to authorize a municipal rapid transit system in cities having over 800,000 inhabitants. American states draw an increasingly large proportion of their revenues, in similar manner, from rail- roads operated by steam, several states defraying all or nearly all of their expenses from these revenues. A determination to draw more than formerly from the revenues of telegraph, telephone, express and street-car companies is already mani- fest. It may be said that we can discern a tendency in taxes to occupy a place of relatively decreasing importance even in American budgets. The following table gives the net revenues of certain European states from domains and forests, during the fiscal year 1 880-8 1 : — 1880-81.1 REVENUES FROM DOMAINS AND FORESTS. Prussia 45,612,000 marks^ Bavaria 19,625,000 " Kingdom of Saxony 7,007,000 " Wurtemberg 5,339,000 " Baden 3.537.0°° " Austria 1,740,000 " Hungary 11,497,000 " France 25,912,000 " Italy 1,247.°°° " Great Britain 6,700,000 " The following table gives, in columns one and two, per- centages of revenues derived by certain states from profits 1 This table is taken from Roscher's " Finanzwissenschaft," 2d edition, page 34. 2 A mark equals 23.8 cents. For rough calculations four marks are usually considered as equal to one dollar. 50 INTROD UCTION. on domains and forests in 1873 and 1880 respectively, and in columns three and four gives the percentages of revenues derived from profits on all gainful pursuits of the states, or the " entire private acquisition," ^ as it is called, in the years 1873 and 1884-85 respectively. The profits are calculated by subtracting all expenses from gross receipts. The per- centages for the year 1884-85 are given for only a few Ger- man states. DOMAINS AND FORESTS. ALL GAINFUL pyRSUITS.* 1873 1879 1873 18 84-5 Saxony 9-7 8.9 54-7 ^2.70 Wurtemberg 132 9-9 .42.9 ; }7-92 Bavaria . . '7-3 159 37-0 ! 6.71 Baden . . 71 3-9 36.6 ; 8.49 Prussia . . 8.4 7-5 31-9 f 6.29 Denmarli . 2.9 4.6 26.0 , , Switzerland 4.1 24.4 Belgium . I.O 0.9 18.6 Netherlands 1-9 1-3 17.0 Norway . . 1.2 0.7 13-05 Greece . . 3-6 34 12.7 Russia . . 3-4 0.4 12.S Italy . . . 30 2.0 10.2 , , Chili. . . 1-7 2.3 8-3 , . Servia . . 1.8 6.6 , ^ Austria . . . °-5 0.2 4-9 , , Portugal . 0.6 0.2 4-7 , , France . . 1.4 1-9 3-9 Great Britain 0.6 . . . 2-5 German Empire 7.65 Alsace-Lorraine . ... I S.ii 1 Der ganze Privaterwerb. 2 Columns one and three are taken from Wagner's " Finanzwissen- schaft," Part I., 2d edition, page 356. Column two is taken from ORIGIN AND GROWTH OF MODERN TAXATION. 51 It is worthy of notice that the net profits on German state railways more than pay the interest on all the debt of the German state. The following table is given by von Scheel.' The money is in marks. PRUSSIA. BAVARIA. SAXONV. wurtemb'rg BADEN. Interest on debt . . 135,358,000 47,642,000 22,622,000 17,503,000 13,606,000 Net revenues of state rail- roads . . 164,685,000 37,317,000 27,158,000 12,848,000 12,181,000 It is worth while to record the opinion of von Scheel in regard to state-owned and state-operated railroads, as indic- ative of the drift of opinion in Germany. It was a matter of grave doubt in 1877 whether Prussia was doing well to acquire private railroads. Professor von Scheel says in his monograph, published in 1885, that all opportunity for serious controversy as to the desirability of state-owned and state-operated railroads has now been removed by the test of actual experience which has decided in favor of the state in European countries.^ Municipal statistics, even in Europe, are so imperfect that it is possible to give only isolated facts about the revenues which cities derive from property and productive enterprises. It can be safely said that these are increasing, for nearly all the facts which can be gathered show a movement towards the Hofkalender for 1880, published by Justus Perthes. The per- centages are probably derived in most cases from budgets of 1879. Column four is derived from the monograph on " Erwerbseinkunfte des Staats," by von Scheel in the 2d edition of Schdnberg's " Handbuch der Politischen Oekonomie," Volume III., page 68. ' I.C., page 97. ^ l-c, page 83. 52 INTRODUCTION. increased receipts in the modem city from other sources than taxation. Paris derives considerably over twenty per cent, of its reve- nues from productive property. Some of this is managed directly, but the larger proportion by companies with limited charters granted under condition that all the property should revert to the city without compensation on the expiration of the charter period. In the meanwhile, these companies divide profits with the city of Paris. Leroy-Beaulieu thinks that the revenues from public property and municipal enter- prises will defray the greater proportion of the expenses of Paris before 1950, and that thereafter only a small direct tax will be needed. The expenditures of the city of Paris were about 246 millions of fi"ancs in 1882, and of this, prop- erty and productive enterprise yielded about 5 2 millions of francs. The gas .company, whose charter expires in 1905, paid about 15 millions of this sum.' The payments by the company have increased, and in 1885 they amounted to I7.499>i56, francs.^ Rent of halls and markets yields over 7 millions of francs, and the abattoirs bring in an annual return of over 3^ mil- lions \ water- works about 1 1^ millions ; public conveyances over 5 millions.' The budget of Leipsic, Germany, in 1886, shows receipts from taxes amounting to 4,218,007 marks, while rents and profits on property yielded the following sums : — 1 "Traite de la Science des Finances," by Leroy-Beaulieu, 2d edition, Volume II., page 109. 2 The price of gas is high; $1.45 for the 1000 cubic feet, or a little over 27 centimes for the cubic metre. The gas company pays 200,(X)0 francs for the use of the public subways. ^ See the excellent statistical works, "Annuaire Statistique de la Ville de Paris." VI« Annee — 1885. Paris, 1887. ORIGIN AND GROWTH OF MODERN TAXATION. S3 Net profits on landed estates 156,581 marks. Forests 58,052 " Milk, etc 6,005 " Meadows, etc 35,668 " Chase and fisheries 3,127 " Stone quarry 11,949 " Rents 55,967 " Total 327.349 " to which must be added estimated profits from the gas- works, 1,027,443 marks, which, with some other receipts, brings the revenues from other sources than taxation up to over one quarter of all revenues. Nuremberg received, in 1883, from city property 151,740 marks, and from taxes 1,600,353 marks. In Berlin 73.39 per cent, of expenses is paid from tax receipts, while the gas-works yield about 15 per cent.' The increase of municipal revenues from other sources than taxation is seen in the statement that the gross re- ceipts from property and gainful pursuits in forty Prussian cities, with over 10,000 inhabitants each, rose from 340 pfennige to 1014 pfennige per capita between 1869 and 1876, and the net receipts during the same period from 34 to 434 pfennige per capita.^ In Prussia all the water- works have finally become public works, and the public gas- works produce over twice as much as the private gas-works, and. these are gradually passing into municipal ownership like the water-works. In England cities have recently begun to acquire gas- ' A later estimate which I have seen make's the receipts from gas- works cover 1 8 per cent, of all the expenses of Berlin. Gas is sold for less than |Si.oo a thousand. 2 A pfennig is about one-fourth of a cent. These statistics are taken from Roseher's " Finanzwissenschaft," § 1 58. S+ INTRODUCTION. works and street-car lines. In the financial year 1883-84 the amount of money received from water-works by munici- pal boroughs was ;^i, 928,5 85 ; by urban sanitary districts, ;£267,8io; by rural sanitary districts, ^19,166. From gas- works the municipal boroughs received ^3,056,559 ; the urban sanitary districts received _^307,489. From tram- ways the municipal boroughs received _;^8 1,980.^ Such data as can be obtained in regard to revenues de- rived by American states and cities from gainful pursuits will be given in a subsequent part of this work. 1 From Professor Frank J. Goodnow's paper on " Powers of Munici- palities Respecting Public Works." Monograph of American Economic Association, Volume II., No. 6. CHAPTER IV. A FEW GENERAL REMARKS ON THE WORKINGS OF TAXATION. TAXES OFTEN YIELD LARGER RETURNS THAN ORDINARY EXPEN- DITURES. TAXATION seems like a simple thing to one who has never reflected on its nature and consequences. When, however, one begins seriously to examine the finan- cial systems of different ages and of different countries, one must be profoundly impressed with the far-reaching impor- tance of taxation. Taxation may create monopolies or it may prevent them ; it may diffuse wealth or it may concen- trate it ; it may promote liberty and equality of rights, or it may tend to the establishment of tyranny and despotism ; it may be used to bring about reforms, or it may be so laid as to aggravate existing grievances and foster dissension and hatred between classes ; taxation may be so contrived by the skilful hand as to give free scope to every opportunity for the creation of wealth or for the advancement of all true interests of states and cities, or it may be so shaped by igno- ramuses as to place a dead weight on a community in the race for industrial supremacy.^ There are those who claim that when the state takes ten dollars from me, I am simply ten dollars poorer, and that 1 It is proper to say that some of these observations are quoted from one of my articles on " Problems of To-day " which appeared during the past winter in the Baltimore Sun. 56 INTRODUCTION. nothing further needs to be said on the subject. Nothing could be more erroneous. It makes a vast difference to me on what the tax is laid, when the tax is collected, and what is done with it. There are those who look upon taxation as so simple a thing that they feel warranted in laying down this general proposition : When money in taxes is taken from some of us to spend for other members of the com- munity, we who pay are impoverished, or, if the reader will, even robbed for the benefit of those who receive it. This is far from going to the bottom of things. Considerations adduced in a previous chapter show its fallacy. One illus- tration will show us further grounds for the view that taxa- tion requires careful study at this time from all citizens. I will give my experience in regard to taxes for educational purposes because it is merely a typical instance.' I was educated largely at public schools, and it is doubtful whether I should have been able to finish my school education had not the schools which I attended been supported by taxes ; for where schools are supported by fees, these fees must be high in order to defray expenses if the schools are of supe- rior quality.^ My educational advantages have been of pecuniary advan- tage to me, while the personal satisfaction which I derive from them is to me beyond price. I have become a tax- payer, and with no children of my own at public schools, I am helping to educate other men's children. If in the 1 The reader will, I am sure, pardon this personal allusion. It is given because concrete illustrations are more readily understood than abstract reasoning. 2 Few understand how expensive education is in modern times. The tuition fees of the Johns Hopkins University students have not covered one-tenth of the expenses. The tuition fee was at first $8o per annum, and is now ^loo. GENERAL REMARKS ON TAXATION. S7 course of my life I pay in taxes for schools twenty times what I have ever received from taxes levied for my educa- tion, I shall, nevertheless, think I have been well repaid, and shall always experience a feeling of profound gratitude for those who established the American public school system. While I individually gain, the community also gains, because it receives back more than it has paid out. This holds generally with regard to wise expenditures for educational purposes. The chief factor in production is man, and the better he is prepared for industrial pursuits by suitable train- ing of hand and head, the larger will be the quantity of economic goods produced, and the more rapid the accumu- lation of wealth. A present burden may lessen future rates of taxation by increasing the taxable basis of a state or city.* THE TENDENCIES OF TAXATION ARE VARIOUS. Taxation is apt to lead to interference in the business affairs of private individuals, and such interference tends to foster monopoly. Taxes laid for educational purposes tend to prevent monopoly, because education renders the ordi- 1 No tax should be levied unless the money raised thereby can be employed better by government than by individuals. This sets the true limit to taxes. This idea is well expressed in the constitution of Pennsylvania of the year 1776. "Sec. 41. No public tax, custom or contribution shall be imposed upon, or paid by, the people of this state, except by a lav? for that purpose : And before any law be made for raising it, the purpose for which any tax is to be raised ought to appear clearly to the legislature to be of more service to the community than the money would be, if not collected; which being well observed, taxes can never be burthens." The Vermont constitution of 1777 has this same provision, probably copied from the Pennsylvania constitution. 58 INTRODUCTION. nary man better able to protect his own interests; both as an individual and as a member of society. TAXATION AND LIBERTY. Is it a good thing to be taxed ? One replies, no, instinc- tively. Taxation in the popular mind is coupled with evil. It is said that only two things are certain, and those are " death and the taxes." Taxes no doubt are often a serious burden, and are frequently more disastrous in their indirect than in their direct effects. The preceding paragraph has shown that, considered from the standpoint of benefits conferred by the government, taxes are often beneficial. The benefits derived from taxes can also be seen in their connection with the liberty which we enjoy in mod- ern times. When free pohtical institutions would have come to the countries of Europe without taxes, is un- certain, but it is clear that they came largely through the avenue which the taxing power opened. Sovereigns found their ancient sources of revenue insufficient and were obliged to petition for subsidies which were granted under conditions. Again and again the sovereign found it neces- sary to petition for new revenues, and the estates of the realm continually increased their demands for concessions, until finally in England the lower House, through the con- trol over the purse strings of the nation, has become more powerful than the Queen and the Lords. This is one of the most important keys to the comprehension of modem his- tory. English constitutionalism has been built up on the taxing power from Magna Charta in 1 2 1 5 until the present day. King John was allowed to reserve for himself the three customary feudal "aids" : namely, contributions in case of king's captivity, on the knighthood of his eldest son, and on GENERAL REMARKS ON TAXATION. 59 the marriage of his eldest daughter; but, otherwise, the charter reads, " no scutage ^ or aid shall be imposed in our realm save by the common council of our realm." Green says justly in his " Short History of the English Peo- ple " that the English constitutional system rests on this pro- vision. The great Council of the Barons became the Parlia- ment of our day when the financial needs of the sovereign compelled him to give assent to the addendum to the Great Charter in 1294, called the statute de tallagio non conce- dendo, whereby it was agreed that no taxes should be levied by the king save with the consent of knights, burgesses, and citizens in Parliament assembled. Green says, " By a change . . . within the Parliament itself we shall soon see the bur- gess, originally summoned only to take part in matters of taxation, admitted to a full share in the deliberations and authority of the other order of the state. The admission of the burgesses and knights of the shire to the assembly of 1295 completed the fabric of our representative constitution." Parliamentary institutions were strengthened by the Petition of Right of 1628, and the Declaration of Rights of 1689. The House which drew up the Petition of Right was sum- moned by Charles I. when oj^erwhelmed "with debt and shame," and was under the co^rol of those who had suffered by resistance to arbitrary taxation. The Petition quoted the statutes against arbitrary taxation, loans, and benevo- lence, and in it the Commons prayed the king that "no man be compelled to make or yield any gift, loan, benevo- lence, tax, or such Hke charge without common assent by act of Parhament." The Declaration of Rights contained this statement : " Levying money for or to the use of the crown by pretence of prerogative, without grant of ParKa- 1 Land-tax; a commutation in money for personal services due under feudal tenure. 60 INTRODUCTION. ment, for longer time or in other manner than the same is or shall be granted, is illegal." The Declaration of Rights was followed up by annual grants of supplies — instead of life grants, as during the reigns of Charles II. and James II. — and annual renewals of the Mutiny Act, containing provis- ions for the discipline and pay of the army. An annual Parliament has since that time been a necessity, in order to provide supplies for the state, and to grant disciplinary powers for the maintenance of the army. Green speaks of this as " the greatest constitutional change which our history has witnessed." ' It is the control of the commons over the revenues of the realm which now enables the lower House of Parliament to bring the upper House to terms, and even to threaten the abolition of the Lords. Space is too short to enable me to enter upon historical accounts of the connection between finance and liberty else- where, and it would take the reader too far from the imme- diate purpose of the present work. Any careful perusal of modern history will disclose the main facts with sufficient clearness. What has already been said will show that no political tendency is either wholly good or wholly bad. Strong kings sacrificed the pubUc domains, and unscrupulous ones parted with public rights, rather than petition the peo- ple for aids and subsidies. To-day the careful observer of contemporary politics must feel that, were taxes on the continent of Europe no longer necessary, the painfully acquired liberties of the people would be in serious peril. There appears to be, however, no ground for apprehension in the recent increase in rev- enues derived from other sources than taxation, for taxes 1 See Green's " Short History of the English People," Chapters IV. and IX.; Roscher's " Finanzwissenschaft," Book II., Chapter III., § 53; Wilson's "National Budget," etc., Chapter I. GENERAL REMARKS ON TAXATION. 61 must still yield — and so far as we can see will continue to yield in the future — an immense sum, and the inevitable burden will be as much of a check to usurpation of power by the sovereign as can well be provided through taxation, — quite as much of a check as a heavier burden, — while the necessity of resorting to taxes for all revenues might engender a dangerous revolutionary sentiment. If stability of government and peaceful evolution are desired, the in- creasing revenues from public works are a reassuring sign of the times. The United States government, on the other hand, illus- trates the disadvantages and dangers which threaten a peo- ple whose government derives sufficient revenues without recourse to taxes which are felt to be a burden. The fed- eral government derives larger revenues than it needs from indirect taxes, which many people wish to see retained for other than revenue purposes. Were the revenues of the federal government derived from direct taxes of which payers were conscious, the whole course of Congress would at once be changed. It might even be questioned whether past experience would warrant us in expecting revenues large enough for the legitimate needs of government. It is not improbable that the situation of the federal government is more disadvantageous in some respects than that of a government which should derive its whole revenue from property or productive pursuits. It was an attempt of an English king to tax the American colonies, it may be mentioned in this connection, which led to the final outbreak between this country and Great Britain, and thus to the establishment of our liberties. It is worthy of note, also, that a free people will submit to a heavier taxation for purposes of which they approve, than 62 INTROD UCTION. people living under a despotism. The history of the United States again serves as an illustration. TAXATION AND SOCIAL REFORM. John Stuart Mill laid down the general principle that gov- ernments should do what they could to redress the wrongs and injustices of nature, and Professor Adolf Wagner of Berlin has developed the idea that the taxing power should be used as a lever for bringing about a more desirable distribution of wealth. Progressive taxation is one of the favorite devices which have been urged for this purpose. Limitation of the right of inheritance and bequest and abolition of collateral inheritances ab intestato have been urged with this in view. High hcenses for the right to sell intoxicating liquors are advocated as a means of social reform. The land- tax scheme of Henry George has been described as simply reform in taxation, and it may be so considered, although, as already explained, he does not grant the existence of a general right of taxation. Thucydides said he was a dan- gerous citizen who gave no attention to politics. When one considers the tremendous importance of taxation, one feels inclined to call him a dangerous citizen who gives no atten- tion to the principles of taxation. CHAPTER V. THE DIFFERENT KINDS OF TAXES. CLASSIFICATION OF TAXES HAS BECOME IMPORTANT. WHAT has been said in previous chapters shows the small importance which could be attached in early ages to a classification of taxes. It was then sufficient to mention the few taxes which existed, and to describe them. Possibly it is only in this century that nations, states, and cities have had what may fairly be termed classes of taxes. There are now, however, taxes of so many sorts that .one will find it impossible to understand taxation unless the different kinds are arranged in subdivisions and these char- acterized by their main features. The richness and fulness of modern industrial life render it like the natural world in complexity, and the student is forced to resort to similar methods in his investigations. THE CLASSIFICATION OF THE PHYSIOCRATS. Jean Bodin speaks of direct and indirect taxes in his work, "Six Livres de la R^publique"; but this distinction appears to have been made familiar by the teachings of the French economists, the Physiocrats' of the last century. The Physiocrats taught that land was the only source of new wealth ; and agriculture, consequently, the only truly produc- 1 The three most prominent Physiocrats were Quesnay, Gournay, and Turgot. 64 INTRODUCTION. tive pursuit. Agriculture yielded, so they taught, not only returns on labor and capital, but a surplus or rent. This rent they called the prodicit net — net product. Now as this produit net, or rent, was the only source whence additions to existing wealth could come, they endeavored to show that all taxes must of necessity be paid out of rent. If they were laid on persons, pursuits, or commodities, they would be simply shifted to the landowner. They advocated, therefore, a single tax on the rent of land, and this tax they called direct, because it was at once paid by the tax-bearer. All other taxes were called indirect, because they were shifted, and were ultimately paid by a person who did not in the first instance pay them — or, more properly speaking, advance them. The distinction which the Physiocrats made has become the generally accepted principle for clas- sifidation both in the practical administration of public affairs, and in science. Taxes, it is generally stated, are direct which are borne ultimately, by the one upon whom they are in the first instance laid, while taxes are called indirect when they are paid by one person and by him shifted to another. Those taxes which the Physiocrats considered indirect have since their time been held to be partly direct and partly in- direct ; for subsequent writers have entertained different views about the incidence of taxes — the technical phrase which refers to the real as opposed to the nominal payment of taxes.' OTHER CLASSIFICATIONS. No economic writer now beUeves that a tax on rent is the only one not shifted. The incidence of taxation has, 1 Fawcett's definition. The real or ultimate payment of taxes is also discussed under the technical terms, the shifting of taxes, or the reper- cussion of taxes. DIFFERENT KINDS OF TAXES. 65 however, long been a subject of controversy, and the distri- bution of taxes between the two classes must vary with the ideas of different writers on this topic, provided the old principle of classification is retained. This distribution must also change with every new theory respecting the incidence of taxation. The observation of the uncertain character of this classification has recently led to search for new principles for classification. Some scholars have adopted new terms for the main kinds of taxes, while others have retained the old terms, but have defined them differently. It may be well to consider one or two classifications. Professor Rau of Heidelberg divided all taxes into as- sessed taxes and expenditure taxes. Assessed taxes were defined as taxes levied on the basis of an assessment or valuation. The object taxed is assessed or valued. Ex- penditure taxes were defined as taxes levied on articles of consumption, such as food, clothing, and the like ; or liter- ally, " taxes levied on account of a transaction in which an individual manifests an intention of undertaking a consump- tion." It may be objected to this classification that it is not sufficiently inclusive, and also that it does not direct atten- tion to the main features of the two taxes. Many stamp duties^ could not be well included under either class, and taxes on commodities are after all frequently based on an assessment of the object taxed. Senator Sherman, in a speech on the income tax in the United States Senate in 1871,^ incidentally divides taxes ' Stamps on checks and bills of exchange could not be included. It is also difficult to tell how many of our license taxes could be brought within either class. ^ January 25. See his " Speeches and Reports on Finance and Tax- ation." New York, 1879. 66 INTRODUCTION. into these two classes : taxes on possessions, and taxes on consumption. The same objections would hold against this classification, and in addition it may be said that a dis- tinction ought clearly to be made between property and income. The distinction between direct and indirect taxes ought to be retained, if possible, as it has been so universally introduced ; but each kind of taxes should be so defined as to separate it clearly from the other, and so as to make it correspond to well-known facts rather than more or less con- jectural theories. The recent efforts to define direct taxes and indirect taxes with more precision seem, therefore, to be a move in the right direction, and two of these defini- tions are worthy of note. Paul Leroy-Beaulieu in his " Traits de la Science des Finances," gives this definition : " Direct taxes are those which the legislator intends should be paid at once and immediately by him who bears their burden. They strike at once his fortune or his revenue, and every intermediary between him and the treasury is suppressed, and a rigorous proportionality is sought between the tax and his fortune or ability to pay taxes." * Indirect taxes, on the other hand, are defined by Leroy- Beaulieu as " those which the legislator does not intend should be paid at once and immediately by him who bears their burden, and he does not seek to proportion them to his revenues or fortune. The legislator seeks to lay them on the one who it is intended should bear their burden in a roundabout way. Intermediaries are put between him and the treasury.'' The income tax, land tax, and tax on personal property, on successions and gifts, and 013^ horses and equipages, are included under direct taxes, while taxes on commodities, DIFFERENT KINDS OF TAXES. 67 Stamp duties, and fees for registering or recording legal docu- ments are by this definition placed among the indirect taxes. It may again be objected that the intention of the legis- lator is too uncertain an element for the characterization of a scientific conception, while the facts in regard to the repercussion of taxation are often uncertain. Was the tax of two cents formerly laid on bottles of patent medicine which sold at retail for fifty cents, paid by the consumer or manufacturer? Which one did the legislator seek to relieve when he removed the tax? Professor Knies gives the following definition, which seems to me preferable : " Direct taxes are taxes which are based on an assessment of a person's property and business, or bear directly on the person of the tax-payer. Indirect taxes are taxes not based on such an assessment, but taxes which are levied when the existence of a taxable object, or source of taxes (productive property), is presumed from other evi- dence than that of direct assessment or valuation." ' This definition characterizes taxes according to the source whence the power to pay them is derived. Land is taxed because it yields an income and a tax can be paid out of this income. It is the source of the tax. A carriage horse kept for pleasure is not a source of income, but it is pre- sumed that the owner of the horse has an income out of which the tax may be paid. The existence of a source of taxes is inferred from an evident fact. This is similar to the principle on which the Physiocrats based their classification. The direct tax, according to both the Physiocrats and Knies is that laid on the source of the tax. The essential point, as I take it, is not whether the tax is paid directly or indirectly by the one who bears the burden, 1 Translated from my manuscript notes on Knies's lectures. 68 INTRODUCTION. important as that is in many ways, but the nature of the economic goods on which the tax is laid should be made decisive in separating taxes on things, and then other taxes may advantageously be grouped about these. Taxes on real property and on incomes are by general consent direct taxes. Property and income are assessed and taxes are imposed according to some rule of propor- tion, but income and property are not necessarily taxed in the same proportion.' Indirect taxes are taxes on articles of food, drink, and clothing, or articles of consumption, or, as is most frequently said in America, on commodities. An accessory circum- stance is, that they are, as a rule, paid by a dealer who adds the tax paid with a profit to the price of the article. This does not invariably happen, for sometimes the dealer is so situated that he must bear the tax, although it is obviously the intention of the legislator in most cases that he should shift the burden. When I import my own books, however, the tax I pay on their value is as truly indirect as when I purchase the books of a foreign dealer ; but I usually save by doing so, because I am not then obliged to pay a profit on the duty. When a Parisian brings food into the city oJ Paris, it is taxed by the municipal authorities, and the tax is an indirect one whether the food is designed for his own use or for sale. This definition includes customs duties and in- ternal revenue taxes, which are mainly thought of by the economist when he uses the term indirect taxation. The indirect system of taxation arose when Parhament, in the reign of Charles II., " divested the landed gentry of all feudal obhgations to the crown, without touching their privi- leges," and replaced these obligations by taxes on beer, 1 Zurich and Basel have different rates, for example. DIFFERENT KINDS OF TAXES. 69 wine, tobacco, and spirits.^ These were all taxes on articles of consumption. The definition of direct taxes may now be completed by- adding other taxes which it has generally been agreed to call direct, and which will be found to have certain charac- teristics in common, as, for example, that they imply a list of taxable persons, natural and artificial, and that they are proportioned more nearly to the ability of the tax-payer than can well be the case with indirect taxes. Sometimes direct taxes carry with them the assessment of all a man's fortune, more often of his total income, and perhaps still more fre- quently, the valuation of all of certain species of property ; whereas indirect taxes are specific, a fixed charge for an ob- ject without assessment, as so much a pound for sugar ; or the single object alone is valued and taxed without reference to the value of other property which the tax-payer or tax- bearer may or may not have. I would then give this as a definition of direct taxes. Direct taxes are taxes on trades (including any branch of business), on pursuits, on property consisting of other eco- nomic goods than articles of consumption, and on income. This definition includes taxes on articles of luxury, such as dogs, horses, carriages, and also on successions and gifts. Indirect taxes, on the other hand, are taxes on articles of consumption, or on commodities, as that term is now usually understood, and also taxes levied on occasion of certain transactions, as the payment of money by check,^ or the re- cording of deeds or mortgages. The following table will help the reader to understand this classification, and also the various subdivisions of these two classes : — 1 Wilson, " National Budget." 2 Formerly in the United States. 70 INTRODUCTION. H -QH W X- < s g . M U^ »0 ^ > B g Vermont X X X X New Hampshire X X X X X X Massachusetts . X X X X X X Rhode Island . X X X X Connecticut . . X X X X(0 xw X X New York . . . X X X New Jersey . . . X X X X X Pennsylvania . X X X X X Delaware . . . X(«) X(a) Maryland .... X X X X X Virginia .... X x(« X X X X X Kentucky . ; . . X X X X X X North Carolina X X xw X X X South Carolina X X X Georgia X X X X X X (a) Annual income from. (if) Except loans to the state or United States. C^) Horses only. (e) With few exemptions, (i:) That is, all property, with certain exemptions. From a glance at the above table it is plainly evident that the New England states followed one and the same copy, though with different degrees of accuracy. The Southern states too, it will be noticed, had several features in common TAXATION IN xfqb. 119 and peculiar to themselves; and the Middle states, while showing no striking resemblance to one another, were still less like either of the other groups. But while a general likeness obtained between the members of these three groups of states, there was naturally a considerable diversity in minor points. The people of one state were further removed from those of a neighboring state than they are to-day, and though both may have started as colonies with the same system of taxation, it is not strange that they should have grown apart. TAXES ON LAND. Before looking at other peculiarities, it will be interesting to note the varieties of the land tax, which tax it will be seen by reference to the table was common to all the states with one exception. In Vermont all lands which had been improved two years and were within enclosure, and in North Carolina all lands, excepting town lots, which were assessed according to valuation, were taxed uniformly according to quantity. In Rhode Island and New York lands, together with all other property, real and personal, were taxed ac- cording to estimated valuation. They were assessed in Mas- sachusetts and New Hampshire according to their products or supposed annual rents. A peculiarity of this tax in the latter state was the arbitrary and variable size of the acre. It was not a certain number of square rods, but was a sufiS- cient quantity of orchard land to produce ten barrels of cider, or of arable land to produce twenty-five bushels of Indian corn, or of mowing land to produce a ton of hay. A quan- tity of land sufficient to support a cow one year was re- garded as four acres. In Connecticut no regard was had for the value of lands in their assessment, but all were assessed uniformly, according to the mode of cultivation or 120 TAXATION AS IT IS. condition, each kind being put in the list at a fixed rate ; as for example, meadow lands at ^2.50 per acre. Taxes were levied on land in Pennsylvania^ according to a triennial valuation, in Virginia according to a permanent valuation. The average or relative value of lands in different counties or districts was fixed by law in Maryland and New Jersey, and this average value multiplied by the number of acres therein became the basis of taxation. Within the counties or districts, lands contributed to the total sums assessed to them in proportion to their value. Lands in Kentucky, except town lots, were divided into three classes,^ according to quality, and in South Carolina and Georgia were taxed uniformly by districts or classes, whether cultivated or not.^ Delaware had no direct tax on land, but a tax was levied on the income from land in the general income tax.* OTHER PECULIARITIES IN THE VARIOUS TAX SYSTEMS. In Vermont all taxes were imposed in proportion to a general list of ratable objects with fixed valuations. A tax on lawyers, traders, and owners of mills, proportioned to their profits, might be added at the discretion of the assess- ors ; the planting of orchards was encouraged by an exemp- tion from taxation for ten years. 1 Lands granted to any officer or soldier of the line were free from tax during occupancy. ^ The first was taxed at half a dollar per hundred acres; the second, at one-fourth of a dollar; and the third, at one-eighth of a dollar per hundred acres. ° For example, in South Carolina all tide-swamps not generally af- fected by the salts or freshes, of the first quality, were rated at six pounds per acre; in Georgia at ^10.39 per acre. '' Provision was made in this same year for a change in the system of taxation, and land was thereafter to be taxed according to valuation. TAXA TION IN 17^6. 121 • New Hampshire's list was somewhat longer, and was required to be revised at least once in iive years. All stock and property of men employed in trades, as well as the stock of merchants and traders, were taxed. Mills, wharves, and ferries were rated at a twelfth of their net income. On the long and detailed list of Massachusetts, in addition to objects named above, were shops, mills, industrial works, buildings of all kinds of five pounds and upwards, the ton- nage of vessels, government securities, stock in bank, and plate. All property, real and personal, was subject to taxation in Rhode Island, New York, and Maryland, though under differ- ent regulations and with different exemptions. In Rhode Island household furniture, farming utensils, and one-fourth of property taken at sea were exempted.' In New York, as has already been noted, no taxes for state purposes had been levied for some years, since 1788, and no objects or principles of taxation were prescribed ; but all assessments, whether state, county, or township, were determined by the " discretionary estimates of the collective and relative wealth of corporations and individuals." Maryland exempted such property as belonged to the state or the United States, houses for public worship, burying-grounds, such property as belonged to county, college, or county school ; the produce of land in the hands of the producer, provisions for the year, plantation utensils, working tools of mechanics and manufac- turers, wearing apparel, imported goods, home-made manu- factures in the hands of the manufacturer, stills, and ready money. In this state certain specific taxes were also col- lected, viz. : of every attorney for admission to the bar, and ^ Providence, by a vote of its inhabitants, had abolished the poll tax in respect to that town, estates only being taxable. 122 TAXATION AS IT IS. an annual sum thereafter during practice ; on licenses to sell liquor, to keep tavern, and to get married. The profits of any and all lucrative professions, trades, and occupations, except compensation to public office and the profits of husbandry and common labor for hire, might be taxed in Connecticut. Such a tax on trades and professions might, at the discretion of the ass^sor, be assessed in Penn- sylvania, exemptioas being granted- in favor of ministers, mechaiiics, manufacturers, and schoolfnasters ; and also in South Carolina, those exempted beings the same as in Pennsylvania, excepting manufacturers, j Pennsylvania and New Jersey were alike in having certain personal taxes : the former levied a tax dn all freemen over twenty-one years of age ; the latter, on shop-keepers, single men who kept horses, and single men Who did not keep horses. Taxes on furnaces, mills, ferries, and industrial works of various kinds were also common: to the two. Delaware alone had a general income tax, and this was levied on income from all sources, uncultivated land, persons under twenty-one ye|rs^,,i^age and apprentices excepted. This ^st©TB>»eBenKto have"oJ;casioned inconvenience and inequality, and a new plan was adopted in 1 796 ; but mer- chants, traders, mechanics, and manufacturers were still to be assessed according to their gains. ! A special tax was placed on ordinaries and houses for retailing liquors in North Carolina; in South Carolina, on sales at auction, and a double tax on the property of per- sons who resided out of the state, except of persons in the employ of the state or of the United States and of young men sent abroad for education, until the age of twenty-three. Georgia placed a tax on foreign wares, liquors, and mer- chandise, sold, bargained, or trafficked for ; on the funded debt of the United States ; on all negroes brought into the TAXATION IN i-jqb. 123 State by sea for settlement or sale, except such as are brought in from any part of the United States ; on all pro- fessors of law and physic ; and on all factors and brokers. Exemptions from poll tax were generally granted in favor of ministers of the Christian religion, presidents, professors, and students of colleges, and of the infirm and indigent. Maryland, in 1776, declared that the levying of taxes by the poll was "grievous and oppressive," and ought to be abohshed ; and that paupers ought not to be assessed for the support of government, but that every other person ought to contribute according to his actual worth in real and per- sonal property. The property of seminaries of learning, houses of public worship, and all lands employed for schools and other public pious and charitable purposes, were also gen- erally exempted from taxation in the various states. The general characteristics of taxation in the states in 1796, it will be noticed, were, first, that specific objects were usually selected for taxation, rather than all property ; second, that visible property bore all, or nearly all, the burden; and third, that taxes were usually laid according to some fixed and arbitrary rule of valuation, rather than according to the selling value of the objects taxed. APPORTIONMENT AND COLLECTION OF TAXES. The various methods and means of apportionment and collection of taxes are next to be noticed. South of Dela- ware, all state taxes were laid directly on persons or the property of individuals by the state, while in states north of Delaware they were assessed to corporations or districts, as counties or townships.^ In the former, the assessing and ' Taxes in the Northern states are still apportioned among the local political units. Taxes in the Southern states are still percentage taxes. 124 TAXATION AS IT IS. collecting officers were appointed by the state executive, by the state legislature, by the courts, or by officials receiving their commissions from the state ; in the latter, they were chosen by the people, who were held responsible for their conduct. In the state of Delaware the mean between the two was observed ; the taxes were apportioned to the peo- ple of the counties, but the counties were not held responsible for their collection. The following table indicates the vari- ous methods of appointment. Marks made in the upper spaces opposite the names of the states refer to assessors ; in the lower, to collectors. ASSESSMENT OF TAXES. In the New England states, New York, and New Jersey, listers or assessors were chosen in the annual town meetings. The selectmen were the assessors in New Hampshire, and in Massachusetts acted as such when assessors were not elected. To these officers the inhabitants of the various towns were required to return annually, under oath, always under pen- alty of increased assessment or fine for omission or conceal- ment, a list of the ratable property in their possession. The duties of the assessors in Vermont, Connecticut, and New York ended when the aggregate lists had been returned to the proper state or county authorities. In Vermont the selectmen, and in New York the supervisors, then made the apportionment, while in Connecticut the collectors were directed to collect certain sums, a poundage rate on the lists returned by the assessors. But in the other states belong- ing to this group, the assessors were further required to They are laid by the state, and whatever they yield, move or less, accrues to the state treasury. County and local officials are in the South usually intrusted with the collection of taxes. TAXATION m 7796. 125 i s > i u \ >■ a < 1 tfl g u t > P3 3 u z >. w X X New Hampshire X X MASSACHUSE'rrs X X Rhode Island X X Connecticut X X New York X X • New Jersey X X Pennsylvania X X Delaware X X Maryland X X Virginia X X Kentucky X X North Carolina X X South Carolina X X X X 126 TAXATION AS IT IS. apportion the quotas of state and county tax, together with the township tax, among the inhabitants of their respective towns according to prescribed rules of assessment. Rhode Island was peculiar in having a state committee of assess- ors, somewhat like the modern board of equalization, which went about from town to town, summoning the local assessors of each to appear before it with their lists, and was empowered to fix, on the best information to be obtained, the quota for each. Provision was generally made in these states for hearing the grievances of individuals who felt un- justly assessed, and power was given the body constituted for that purpose to reduce or entirely abate taxes, in cases where such a course seemed equitable. A general assessment was made in Pennsylvania triennially, and served as a basis for valuation. The officers of assess- ment were county commissioners, chosen by the people, and holding, office for three years. The lists of the assessors were subject to the alteration and revision of the commis- sioners, though the relative value in the townships might not be changed. The commissioners also sat as a court of appeal in tax cases. The counties of Delaware were divided into hundreds, and in each hundred an assessor was annually chosen. Lists of all taxable persons were furnished the assessors by the constables of the hundreds, and opposite the name of each inhabitant the assessors, in a general meeting of the county, placed his supposed income. These hsts thus completed were published in the various hundreds, and notice also given of the holding of the levy court and court of appeals for the county, before which complaints of excessive and unjust assessment might be made. , The legislature of Maryland appointed for each county and Baltimore town, five commissioners of the tax. These TAXATION IiV ijgb. 127 commissioners divided their respective counties into con- venient districts and appointed in eacli an assessor who must be worth ;^200. The assessors were to inform them- selves by all lawful means of the property in their districts, and to make returns to the commissioners, who sat $& a court of appeal. The annual assessment was made in Virginia by commis- sioners of revenue, appointed by county and corporation courts, sheriffs and collectors who had not settled their accounts being ineligible. They received from the com- missioners of the previous year the books, with the perma- nent valuation of lands, in which were noted all alterations, alienations, divisions, and additions. Lists of ratable per- sonal property were to be returned at a certain time to these commissioners, who made an abstract of all property, real and personal, and returned the same to the collector or sheriff. The permanent valuation was made in 1781 by three commissioners from each county, appointed by the justices. But as these commissioners were independent of one another, there were many inequalities in the valuations of the several counties. For this reason the counties were arranged in four districts, reference being had to soil and situation. To effect this equalization, two commissioners were appointed in 1782, and the valuation thus equalized became the basis for future assessments. The county courts divided the counties of Kentucky into districts, and appointed a commissioner for each. By the commissioners the class to which land belonged was deter- mined, lists of ratable objects collected, and returns made to their respective county courts, which had power to cor- rect mistakes and relieve grievances. In North CaroHna the justices of the peace were appointed by the county courts to receive returns of taxables in each 128 TAXATION AS IT IS. district. They were usually aided by the captains of militia, who advertised musters, to which the people came with writ- ten lists of their property. These returns were exhibited by the justices to the county court, together with the names of those who had failed to comply. The valuation of town property was made by three freeholders, appointed annually in each town by the county court. The assessors and collectors were the same persons in South Carolina, and were appointed by the legislature. They determined the class to which lands belonged, re- ceived lists of ratable personal property, and made assess- ment on business and income. The lists, when completed, were exposed in the parish in a public place for ten days, during which period the taxes must be paid. A receiver of tax returns was appointed in Georgia for ■every county by the legislature. The receivers were required to give notice to each captain's district of the times and places at which they would receive tax returns. They were to be furnished by the commanding officer of each company with lists of persons liable to taxes, and were to attend at least three days in each district. COLLECTION OF TAXES. The collectors, like the assessors, in New England, New York, and New Jersey, were elected annually in the town meeting by the people.^ In Pennsylvania they were appointed by commissioners elected by the people ; in Maryland, by commissioners appointed by the legislature ; in Delaware, by the state treasurer ; in Virginia, by the governor ; in Kentucky, by the people ; in North Caro- lina, by the county courts ; and in South Carolina and 1 In New Hampshire they were either thus elected, or appointed by the selectmen. TAXATION IN ngb. 129 Georgia, by the legislature. The office of collector was, in many cases, attached to some other office. In Ver- mont, for example, the first constables were ex officio col- lectors ; in Maryland and Kentucky the sheriffs were gen- erally collectors ; ^ and in North Carolina and Virginia the sheriffs were such ex officio, being appointed, in the latter state, from a list of justices recommended by each county. Though the collectors in Vermont and Massachusetts were chosen but for one year, their powers continued until a final settlement was made, and in case of death after the term for which elected their responsibilities and obliga- tions descended to their administrators and executors. In Connecticut their powers continued but three years. Simi- lar customs were probably in force in other states. As has already been noticed, in states north of Delaware the towns were the collection districts, and hence were re- sponsible for deficiencies on the part of their collectors. In some instances, the treasurer of the county or state was per- mitted, in event of delinquency or insolvency of the collector, to collect the amount of deficiency from the selectmen or from individuals of the town, if need be by distraining goods and chattels. The latter were of course permitted to in- demnify themselves by laying a new tax upon the town. In other states, the counties, though frequently divided for convenience, were the collection districts, and the collectors were as a rule responsible to state authorities. The collectors in the first group of states were generally permitted to distrain and sell goods and chattels — certain things, such as implements of trade, work-horses, etc., being excepted — of those delinquent in paying their taxes. If these, however, were insufficient, the delinquents might be im- prisoned ; or if they had escaped, their lands might be seized. 1 The sheriffs are still the collectors in Kentucky. 130 TAXATION AS IT IS. In other states the collectors merely returned the names of delinquents, and summary measures were taken by other authorities. In Maryland unpaid taxes became, in absence of goods, a charge on the land ; in New York and New Jer- sey, they were added to the next year's list. The land of non-residents became, in South Carolina, the property of the state if taxes remained unpaid after certain notice. Bonds and sureties were generally required of collectors. COMPENSATION OF ASSESSORS AND COLLECTORS. As to the compensation of assessors and collectors, the following have been noted : in Vermont the assessors re- ceived one-half of the taxes from double assessments, per- haps in addition to certain other remuneration ; in Massachu- setts, 4 shillings per day ; in Rhode Island and New Jersey if per cent, of amount of taxes assessed ; in New York, their fees were determined by the supervisors ; in Pennsylvania, they received ^i.oo per day; in Maryland, not over ;£2<^ per year ; in Georgia, 2^ per cent, of tax assessed, plus 6^ cents on every poll without property. The collectors received in New Hampshire usually 4 or 5 per cent, of collections ; in Massachusetts, from 3 to 5 per cent. ; in Rhode Island, regularly 5 per cent. ;^ in Connecti- cut, 2\ per cent, and travelling fees ; in New York, 5 per cent. ; in New Jersey, previous to 1 794, if per cent., after 1 794, 4 cents per poll ; in Pennsylvania, 5 per cent. ; in Dela- ware, 7^ per cent. ; in Maryland, 4 per cent., and such sums as seem uncollectible ; in Kentucky, 5 per cent. ; in North Carolina, 6 per cent., with certain additional fees ; in South Carolina, 5 per cent. ; and in Georgia, 5 per cent., with certain fees. 1 Though, in consequence of competition for the office, encouraged by the state, the sum received had been reduced to 3f per cent., and in some cases to 2\ per cent CHAPTER III. THE TRANSITION PERIOD. GENERAL REMARKS. WE may, for lack of a better designation, call the period from 1796 to the beginning of our Civil War, a transition period. It witnessed the complete estab- lishment of the American system of state and local taxation. The distinguishing feature of the system may be described in a single sentence. It is the taxation of all property, mov- able and immovable, visible and invisible, or real and per- sonal, as we say in America, at one uniform rate. This is the only direct tax known in most of our commonwealths, and it is only recently that certain special forms of taxation have assumed greater importance in some of our state budgets than this. The fundamental idea of our tax systems is a democratic one. It is, that all should contribute to the support of gov- ernment in proportion to their capacity or " respective abili- ties," as Adam Smith expresses it. It is, however, assumed that one's ability to contribute to the support of government is measured by the actual selling value of all one's property, real and personal ; then it is further assumed that it is pos- sible in each case to discover the actual selling value of all the property of citizens and other residents. The last chapter shows that in 1 796 specific kinds of prop- erty were taxed, and in some cases the collective mass of 132 TAXATION AS IT IS. property. The general practice appears to have been, how- ever, to tax only a few main species of property, and rough kinds of devices were used for valuation. Horses and cattle were valued at a definite sum each, and- agTicultural lands were often classified and valued at so much for each acre of each class. Persons were taxed by the poll uniformly, and were also estimated according to their earning capacity, and taxed accordingly. President Francis A. Walker in his "Political Economy"^ reaches the conclusion that faculty, the power of production, constitutes the only theoretically just basis of contribution ; tHat men are bound to serve the state in the degree in which they have the ability to serve themselves. Taxation according to faculty is, however, rejected as imprac- ticable, but in earlier and simpler times it was practised in the American Colonies. The reasons why these earliest methods were abandoned are sufficiently evident. They were adapted only to a primi- tive condition of society. When the classes of wealth be- came more numerous, and when the differences in value between articles of the same class became more important, when one acre of land was often worth ten or twenty times, or even fifty times, as much as another situated in the same commonwealth, there could not fail to arise a demand for a system of taxation which would adjust the burdens of the government more accurately and make them bear upon each individual more nearly in proportion to his ability. It seems that our present system of taxation arose with this in view, and in our older American commonwealths, very gen- erally, during the first half of the present century ; while the newer states simply copied the institutions of the older. The details of the changes in the various states are difficult to discover, owing to the inaccessibility of many public docu- 1 New unabridged edition, § 595. THE TRANSITION PERIOD. 133 ments, but it has been possible to gather together the main facts about several states, which, there is every reason to believe from what can be discovered, were merely typical. A few words will be devoted to Connecticut and Ohio, and some facts will then be presented regarding other states. CONNECTICUT. The old colonial system of taxation continued in Con- necticut until the adoption of the constitution of 1819. It was the practice to follow the plan still in vogue everywhere in Europe, and also in the city of Quebec, Canada, of basing taxation, not on the selling value of property, but upon its probable net revenue. We tax property now in our American commonwealths on the selling value of property ; but the European system and the old Connecticut system was to estimate income itself, directly. It was also the practice in Connecticut to estimate the annual income of those pur- suing any trade or occupation, and to tax them accordingly. The plan is described in the following words in the " Report of the Special Tax Commission of Connecticut," made in January, 1887 :' — " Those pursuing any trade or profession were assessed on an estimate of their annual gains. Real estate was rated, not according to its value, but in proportion to the annual income, which, on the average, it was deemed likely to pro- duce. Lands as distinguished from buildings were put in the list at a fixed rate for each kind, prescribed by statute. The best meadow-land went in at ^2.50 an acre ; plough- land, at ^1.67; pasture, at ^1.34; wood-lots, at 34 cents, etc. ; not because those sums were deemed to be the value of the lands, but because they were thought to represent the ^ Pages 9 and 10. 134 TAXATION AS IT IS. average income they would produce. Houses and other buildings were likewise listed at fixed sums, determined by their size, materials, number of fireplaces, etc., but all described by the statute itself, and beyond the control of the assessors. Under such a system there was little oppor- tunity for evading taxation. The acreage of each farm, the general character of each lot, and the dimensions, use, etc., of each building, were readily ascertained, and the law then fixed the rate of assessment." Property was taxed according to its selling value, and not according to its probable income, after 1819 ; but only cer- tain classes of property were taxed, and there were different rates for real estate and personal property, the former being assessed at only half the rate at which the latter was assessed. Before 1850 real estate was listed at only three per cent, of its value, while personalty was listed at six per cent, of its value; but in 1850 all property was made ratable at three per cent, of its true value. It was provided in i860 that all property should be assessed at its true value. The present financial system of Connecticut may be said to date from the years 1850 and 1851, when it was provided that all property not specially exempted should be taxed, and when personal taxation was restricted to its most injurious form, the capitation tax. OHIO. Land was divided into three classes, according to "quality," and there were three rates of taxation per hundred acres ; one for land of the first quality, another for land of the second quality, and still another for land of the third quality. This method of taxation continued until 1825, inclusive. These rates in 1800 were J0.85, $0.60, and $0.25 per hun- dred acres, according to quality. The rates in 1825 were THE TRANSITION PERIOD. 13S ^1.50, ^1.12^, and ^0.75, respectively. During this period the highest rates are found in the year 1816, when they were $3.75, ^3-00, and 2 2.00, respectively. Until 1826, in Ohio, it was found necessary to tax only real estate for state purposes. Funds for county purposes were derived from a poll tax, and a tax upon horses, mules, and cattle, to which was added by legislative appropriation, a percentage from one-fifth to one-half, varying with the several years, from the taxes levied upon real estate. The tax laws passed in 1825 and 1831 show how much more diversified property was becoming. These acts enu- merate for taxation, lands and town lots, including buildings, horses, cattle, pleasure carriages over ^100 in value, mer- chants' and brokers' capital, money at interest, all grist and saw mills, all manufactures of iron, glass, paper, clocks, and nails, all distilleries, breweries, tanneries, all iron, brass, and copper foundries. One feature of the early Ohio system is specially note- worthy. February 3, 1825, an act was passed entitled "An Act establishing an equitable mode of levying the taxes of this state." ^ The only animals subject to taxation were " all horses, mules, asses, and all neat cattle three years old and upward." Section 15 provided that land should be valued " without taking into consideration the value of the actual improvements made thereon." ^ Dwelling-houses over the value of ^200 were valued at their true value in money, " but few of our country houses were at that time rated above that sum." All horses, mules, and asses were assessed at ^40, and all neat cattle at ^8 per head. These provisions were not changed in the revision 1 25 Ohio Laws, page 58. ^ Land was taxed in Kentucky at the beginning of the century with- out regard to improvements. 136 TAXATION AS IT IS. of 1 83 1, but continued in force until 1846, when the present system of taxation was introduced. The essential point is the exemption of improvements. A man was not made to pay what seems to many like a penalty for adding to the wealth of the country. I have received a letter on the subject of early Ohio taxation from a gentleman, then a resident of the state, since a judge on, the Supreme Bench of another state, and now the head of a law school, from which I make these quotations : ^ " The result of rating farm lands unimproved was beneficent, and large bodies of land were held in Northern Ohio, where I lived, by non-residents ; and they generally held on to their land until pioneers, by improving neighboring farms, ren- dered this land valuable. In respect to the naked value of the land, they received equal benefit from the labor of these pioneers, and should not complain if their land was taxed equally. The effect^ was to induce them to sell to those who would use the land, improve it, and obtain a profit from it by way of production, and not simply by rise in value. It thus contributed to the more rapid settlement of the state. It also tended to discourage farmers from buying more land than they could use. Another feature of the general tax act had a good effect. I refer to the fact that all horses were Hsted at one price, and so of horned catde. The farmers were thus encouraged to raise good stock only. Taxation upon actual value depresses industry, especially efforts to excel. Bams, fences, fine fields,^ good ploughs, harness, etc., were not taxed at all ; and if the 1 I must also acknowledge my indebtedness to my good friend Professor George W. Knight, of the University of the State of Ohio, who has sent me copies of the old tax laws. 2 That is, of the new tax law. 8 Evidently meaning fields rendered fine by improvements. THE TRANSITION PERIOD. 137 farmer should raise a team worth from ^300 to ^600, as any one can do, he paid no more tax than for a crowbait pair of horses worth ^50, which he should never be per- mitted to raise or keep. In raising neat cattle, also, the uniform assessment of ^8 encouraged him to have the best.'' OTHER STATES. Maryland introduced the present system of taxation in 1 84 1, when, after an interval of years, it was again necessary to have recourse to general taxation for state purposes. The present direct tax on the value of all property seems to have obtained for local purposes since the framing of the consti- tution of 1776. It may be remarked incidentally that reg- ular taxation in Europe appears generally have been first introduced in cities, as might naturally be expected from their more advanced industrial situation and the earlier ne- cessity for them to abandon old methods of personal service and payment in kind, and on account of their larger public needs. So in this country there appears to have been little serious thought of ever abolishing local taxation, even in those states which were able for a time to live without gen- eral taxation. Virginia, including what is now West Virginia, adopted the main features of its present method of taxation in 1852, when a new constitution went into effect. Before that time the only tax on invisible property was a small one on divi- dends and interest.' New Hampshire taxed visible objects, and included in- comes in 1772; but no other changes, except in detail, 1 See " West Virginia Tax Commission Minority Report," by Joseph Bell, 1884, page 21. 138 TAXATION AS IT IS. were introduced before the Civil War, when all property was made taxable.^ All real estate not especially exempted, all personal estate, shares of stock in incorporated companies and banks, incomes from professions, trades, and occupations (except farmers), and bank stock, were made subject to taxation, both for state and county purposes, in Pennsyl- vania in the year 1841.^ I have been unable to find the date of the change in Massachusetts, probably because it was not sufficiently marked to attract the attention of those who have re- viewed taxation in that state. The list of ratable prop- erty, which was in 1796 so long as to include almost everything, might be made general without making many changes in the laws of taxation. In the Louisiana constitution of 1845 it was provided that after 1848 property should be taxed according to value. The constitutions of all the Southern states, adopted after the close of our late war, provided for the taxation of all property according to its selling value. It is, then, safe to say that, at the close of our late Civil War, our property tax was in force everywhere, and the transition period fully terminated. While I have not found all the facts which I could desire, I have found none which would not harmonize with this statement. 1 See report of Hon. George T. Sawyer on " Taxation,'' made to the legislature of New Hampshire in 1876. 2 See Worthington's " Sketch of the Finances of Pennsylvania," page 58. THE TRANSITION PERIOD. 139 REASONS FOR THE TAXATION OF ALL PROPERTY AT ONE UNIFORM RATE. One reason why our present system of taxation was uni- versally introduced may be found in the progress of demo- cratic thought. It was desired that all should contribute in proportion to their abilities. It was observed that the forms of property had increased rapidly in number, and that the old specifications of property to be taxed failed to reach large masses of wealth ; and this produced dissatis- faction and irritation. The sentiment to-day, all over -the Union, in favor of the taxation of all property is very strong. The constitution of Ohio, adopted in 185 1, best gives ex- pression to prevaihng sentiment when it expressly provides that even state and local bonds shall never be exempted from taxation. It is of no avail to talk about abolishing taxes on personal property, as some do, unless something is substituted for the personal property tax, so unalterable has become the determination to tax every one in proportion to his ability. This is one of the first facts to attract the atten- tion of the student of American finance. The new classes of property which modem inventions and discoveries and the industrial revolutions accompanying them have produced are one of the striking facts in our finan- cial situation, and it can never be safely left out of view by the practical legislator. Early in this century, it should be remembered, there were comparatively few banks ; ' there was not a single railroad company, and of course none of that mass of easily concealed property based on railways, such as stocks and bonds ; there was not a telegraph or telephone com- pany, nor were there any traces of that property which con- 1 When Hamilton wrote his report on the proposed United States Bank, in 1790, there were but three in the United States. 140 TAXATION AS IT IS. sists of their evidences of indebtedness ; there was not one gas company ; there was not one street-car Hne ; and the manufacturing corporations of our day had scarcely begun to exist. Some way must be contrived to make owners of these new kinds of property, who include most of our wealthiest citi- zens, pay their due share of taxes. It was possible to go on with old methods when the rates of taxation were low, as before the war, because public burdens were so light that it scarcely seemed worth while to trouble one's self about them. The town population was small, and most people paid only state and county taxes, and township taxes suffi- cient to meet the needs of rural districts. Rates of taxation of one, two, and three per cent, are not now unusual, as will be seen later; but in Virginia, in 1796, a tax of one-fourth of one per cent, on the assessed value of land, which was fixed once for all, and must have been below its true value, was sufficient. Some states had no state tax ; and others taxed land at a small sum per acre or per hundred acres, as for example, Ohio and Connecticut, for which the rates have been mentioned, and Kentucky, where the best land was taxed only a half of a dollar for a hundred acres. A committee was appointed by the General Assembly of Connecticut in 1844, to inquire into the subject of taxation; and it reported in favor of the abolition of the State Board of Equalization, because it was a clumsy contrivance, and the state tax was so inconsiderable that it made little dif- ference whether property in different parts of the state was assessed at the same proportion of its actual value or not. Now the state tax is ten times as great as it was in 1844.^ The municipal tax rate in the city of Baltimore in the same year was "jo^ cents on the ^100, and the amount 1 " Report of the Special Tax Committee of Connecticut," 1878, THE TRANSITION PERIOD. 141 " collected within the year upon the levy for that year " was ^254,394.87; whereas in 1884 the rate was ^1.60, and the amount collected within the year on the levy for the year was $2,774,073.84, over ten times as much.^ Part IV. will give additional data about expenses of states and local political units at present and in past times. DISSATISFACTION EARLY MANIFESTED. The existing method of assessing and taxing property was better adapted to the first half of the nineteenth century than to the second half, because taxation was less important, and also because property could more readily be found. This follows from the difference in the kinds of property which existed in earlier times and at present, and also from the fact that people were less migratory and cities smaller, for in cities property can more readily be concealed than in villages and in the country. Formerly people were required to tell what their neighbors were worth, and the proportion between the property of their neighbors and their own — which could not well be done at the present time. A curious illustration of older methods is furnished by Rhode Island. The first real tax law was passed in 1673, and in this it was provided that " if the Assembly judge any have undervalued their estates, each shall be required to give in to the treas- urer a true form of an inventory of all their estate and strength in particular, and give in writing what proportion of estate and strength in particular he guesseth ten of his neighbours, nameing them in particular, hath in estate and strength to his estate and strength." ^ No sooner, however, were existing methods introduced, 1 See " Report of the Baltimore Tax Commission," 1886, Appendix. 2 Mr. H. B. Gardner's monograph. 142 TAXATION AS IT IS. than wide-spread dissatisfaction became manifest on account of inequalities in the adjustment of the burdens of taxation, and attempts were made to remedy this. This dissatisfaction has increased without interruption up to the present tiine, and every year renders our existing methods of assessing property, and of taxing it, more intoler- able. The endeavors to improve upon actual methods have been frequent and are daily increasing in frequency ; but they usually prove fruitless or render a bad matter worse, because those who make them have failed to go to the root of the evil, which is the system itself. The truth is, the existing system is so radically bad, that the more you improve it, the worse it becomes. This lies in the nature of things, and nothing any legislature can do can alter this condition of things. Experience and reason alike teach this, and in my opinion place it beyond controversy for all those who have eyes to see what is passing about them every day of their lives. There was comparatively little personal property in existence one hundred years ago. Only in the present century has that species of property, at first gradually, then very rapidly, assumed the enormous proportions to which we are now accustomed. This growth has accompanied the development of cities, which are the home of invisible per- sonal property. Where the population is chiefly rural, there can be comparatively little personal property, and a large part of what does exist is visible and easily found. When our first census was taken in 1790, about one in thirty of our population was a resident of a city, but since then the urban population has steadily gained on the rural population, until now one-fourth of the population is urban. The following table, taken from the last census report on THE TRANSITIOX PERIOD. l-(3 population, shows the movement of population towards the cities from 1790 to 1880 : — Inhabitants of the cities Date. in each loo of the total population. 1790 3-3 1800 3.3 1810 4.9 1820 4.9 1830 6.7 1840 8.5 1850 12.5 i860 16. 1 1870 20.9 1880 22.5 There is every reason to expect a continued concentration of population in cities, and a rational scheme of taxation will keep this movement in view. Personal property has increased relatively more rapidly than real property, until now it is regarded as its equal in value in most of our American commonwealths. This would seem, however, to be a low estimate, if we may regard the estimate of an English writer^ on finance, in regard to England, as at all trustworthy; for as early as 1869 he es- timated the value of personal property in England at double that of real property. THE NATURE OF THE DIFFICULTY. The reason why our present system of taxation does not operate satisfactorily can be stated in a word : although it is on the face of it fair and simple, it is found in practice to be an impracticable theory, for a large portion of property 1 Dudley Baxter. 144 TAXATION AS IT IS. escapes taxation, and that, the property of those best able to bear the burdens of government, namely, the wealthy residents of cities. On the one hand, it is impossible to find this- property, and to force men to make returns under oath, results invariably in perjury and demoralization, with- out discovery of property ; on the other hand, federal laws over which our states and municipalities have no control, enable many to escape taxation by investments, often tem- porary, in federal bonds, exempt from taxation. Personal property is sometimes discovered in its entirety, but it is then nearly always the property of the compara- tively helpless, namely, widows and orphans, whose posses- sions are a matter of public record. Less often a burden is imposed upon the conscientious. Thus, I happen to know of one wealthy town of a few thousand inhabitants, where three men of conscientious convictions with regard to a citi- zen's duty to the commonwealth, pay taxes on their person- alty, although they have as good an opportunity to escape as others. This state of things naturally produces dissatis- faction on the part of farmers and other hard-working people, who feel that personalty ought to bear a share of the burden of taxation. On this account they suggest various things, like taxation of mortgages and a more vigorous search for hidden property. Their aim, as I have said, is commendable, but to attempt to reach the desired goal by direct means, under existing laws, or any laws which do not imply a change of the system of taxation, is as Utopian as the dream of the most radical socialist. If we desire to accomplish a purpose we must use means adequate to the end in view. As there is a general misapprehension of the facts of the case, and as it is desirable to abandon at once all fruitless efforts to realize a Utopia, it is well to interrogate past expe- rience and reason. THE TRANSITION PERIOD. 145 THE TESTIMONY OF EXPERIENCE. I have first to remark that the one uniform tax on all property as an exclusive source of revenue, or the chief source — the main feature in direct taxation — never has worked well in any modern community or state in the entire civihzed world, though it has been tried thousands of times, and although all the mental resources of able men have been employed to make it work well. I have read diligently the literature of finance to find one example, but in vain, and lest this should not be sufficiently trustworthy, I have made it my business, in my capacity as tax commissioner, to visit typical states and cities and to make inquiries in person, of citizens as well as of officials intrusted with the adminis- tration of the laws. I have visited Charleston, South Caro- lina ; Savannah, Atlanta, and Augusta, Georgia ; Columbus, Ohio ; Madison, Wisconsin ; Toronto, Montreal, and Que- bec, Canada; and the result has been abundantly to con- firm all that I have said about the impracticability of the one uniform tax on real and personal property. The expe- rience of two or three states with the single direct tax on all property will be told in the following chapters. CHAPTER IV. EXPERIENCE OF OHIO. PROBABLY the most vigorous effort to apply present methods may be found in Ohio, and to the experi- ence of Ohio I will accordingly devote some considerable space.' The Ohio system is the Maryland idea perfected, though perfected seems the wrong word to use ; for, as already re- marked, it is characteristic of this system that the more you perfect it, the worse you make it. However, it is a vigorous attempt to carry the Maryland idea into practice. CONSnrUTIONAL PROVISIONS. It may be remarked in general of the Ohio constitution, that it imposes excessive limitations upon the legislative power. It prescribes too many things, for it was drawn up at a time when becoming alarmed at abuses of power, people were more inclined to abolish or restrict power than to learn how to use it properly ; as sensible a proceeding as that of the mother who wished her boy to learn to swim, without 1 It may be proper to state first that on my arrival in Columbus I was taken to the office of the Governor, Hon. Joseph B. Foraker, by my friend, Rev. Washington Gladden; that I was courteously received by the Governor, and by him introduced to other gentlemen whom it seemed desirable that I should meet, and every facility given me for the prosecution of my inquiries. Special mention should be made of the courtesy of Hon, Emil Kiesewetter, Auditor of State, who explained at length every point in the system of taxation which is under his control. EXPERIENCE OF OHIO. 147 incurring the danger of drowning in the water. The result is, that having shorn themselves of control over finance, the sinews of war, the people have often engaged in an unequal contest with vast corporations not subject to like limitations. This remark appKes to the state of Maryland, where we find the state not able to borrow money for the maintenance of the Chesapeake and Ohio Canal, while no restrictions are imposed upon the borrowing powers of railway corporations, which may be rival enterprises. Unless the people dare to trust themselves in financial matters, they must always expect to be worsted in contests of this kind. Liberty is illusory for those who fear to trust themselves. The most general provision of the constitution of Ohio, on the subject of taxation, is found in sections 2 and 3, Article XII., which reads as follows : — "Sec. 2. Laws shall be passed taxing (i) by a uniform rule, all moneys, credits, (2) investments in bonds,' stocks, (3) joint stock companies or otherwise ; and also all (4) real and personal property, (5) according to its true value in money; (6) but burying-grounds, public school-houses, houses used exclusively for public worship, institutions of purely public charity, public property used exclusively for any public purpose, (7) personal property to an amount not exceeding in value $200 for each individual, may, by general laws, be exempted from taxation ; but all such laws shall be subject to alteration or repeal, and the value of all property so exempted, shall, from time to time, be ascertained and published as may be directed by law. " Sec. 3. The General Assembly shall provide by law for taxing the notes and bills discounted or purchased, moneys loaned, and all other property, (i) effects or dues, of every description (without distinction), (2) of all banks, now exist- ing, or hereafter created, and of all bankers, (3) so that all 148 TAXATION AS IT IS. property employed in banking shall always bear a burden of taxation equal to that imposed on the property of indi- viduals." It is also provided that the state may create a debt to supply casual deficits or failure of revenue, to the amount of ^750,000, but for no larger amount, and that no debt shall be contracted for any internal improvement. This renders it necessary that private corporations should carry out all future internal improvements, or that such work should be done by the local political units of the state, though it will happen at times that an internal improvement is not suitable for a local government, while it is not desirable to intrust it to a private corporation. Special municipal legislation is further forbidden by the constitution ; but as it is so necessary under the Ohio system, which provides for minute particulars of local finance, to pass different laws for different cities, according to their size, character, and peculiar needs, cities have been divided into classes, and these again into grades ; and as only one city may be found in a given grade of a given class, in legislating for that grade, the legislature is, after all, making laws for a particular city. The practical necessity which compelled recourse to this subterfuge shows the absurdity of these minute and injurious constitutional restrictions. The methods of assessing real and personal property must now be outlined. REAL ESTATE. Real estate is assessed once in ten years,^ and in the fol- lowing manner. The county commissioners divide the county into assessor's districts, and one assessor is elected for each district. 1 The last assessment took place in 1880. EXPERIENCE OF OHIO. 149 The county auditor, who is at the head of the county system of taxation, as the state auditor is at the head of the state system, furnishes to the assessor of each district a description of each tract and lot of property in the dis- trict, the name of its owner, the number of acres it con- tains, etc. If necessary, the county commissioners may ad- vertise for bids for the construction of suitable maps for this purpose. Each district assessor must value real estate after careful examination ; and in case the owner cannot or will not give all necessary data, he may cause a survey of the land to be made at the owner's expense. The assessor must note in his plat-book the value of all houses, mills, and other buildings, which exceed ^loo in value, the number of acres of arable or plough land, the number of acres of meadow and pasture land, also of wood and uncul- tivated land in each tract. Each tract is to be valued sepa- rately "at its true value in money, excluding the value of crops growing thereon ; but the price for which such real property would sell at auction or at forced sale, shall not be taken as the criterion of the true value." The county auditor must correct returns from time to time on account of new buildings or destruction of buildings. As the assessment in each county is under the control of one man, the valuation is generally uniform as between the various parcels of real estate within a county. The county auditor of Franklin County, in which Columbus is situated, at the time of last assessment, which took place in 1880, re- quired all assessors to meet in his office once in two weeks to compare notes and to secure the adoption of uniform methods. A comparatively uniform assessment of property was thus secured in Franklin County. The valuation as between the various counties is not uni- ISO TAXATION AS IT IS. form, but real property is valued all the way from seventy-five per cent, of its true value down to twenty-five per cent. A state board of equalization is elected, whose duty it is to see that property in all parts of the state is equally assessed ; and right here we encounter a difficulty. Each member of the board is elected from a senatorial district, and he feels that he represents his constituents and not the state of Ohio, as the law contemplates ; consequently each tries to reduce the assessed valuation of the part of the state which he repre- sents, all oaths to the contrary notwithstanding. AVe have here two clearly marked defects which should be avoided. The constitution of boards concerned with taxation should not be of such a nature that each must naturally feel that he represents a particular locality ; second, appointed tax offi- cials are on the whole preferable, for elected officials always fear influential persons and do not assess them for so much as they know they should. I was told in Columbus about one conscientious official who tried to carry out the law, and place all property upon the tax duplicate. The only com- ment made was this : " He was never re-elected ! " ^ Another somewhat similar case came to my notice in New York. Faithful local assessors were diligent and successful in finding property for some time ; whereupon some of the moneyed men of the place drew up a petition for the aboli- tion of the local board of assessors and canvassed for signa- tures, with the demagogical plea that the local board involved a needless waste, and that property could just as well be 1 The Connecticut special tax commissioners narrate the experience of an assessor in that state, who, by diligent search, succeeded in finding |S200,ooo of intangible personal property, such as railroad stocks and bonds, and money at interest, and added it to the grand list, and he writes to the commissioners, " that may have had something to do with my defeat when election came around." Report,- 1881, page 23. EXPERIENCE OF OHIO. 151 taxed on the general assessment for state and county pur- poses. Many signatures were received before people seemed to realize the character of the undertaking. ' The petition was taken to Albany, and the board abolished by the legis- lature. Another defect of the Ohio system is noteworthy, espe- cially for us in Maryland. The assessment of property once in ten years is not often enough, and owing to changes in value it leads to injustice as between citizens. The gov- ernor used these words on this subject in his annual mes- sage, dated Jan. 4, 1887: "The last decennial appraise- ment of real estate was had at a period of great prosperity ; it was a time of general high values ; since then there has been a heavy decline ; farm property is from twenty-five to fifty per cent, cheaper to-day than it was then. The con- sequence is, that farming lands of the state, where they have not been affected by the growth of cities or other develop- ment, are now taxed on the average more nearly at their full value than any other class of property. In fact, the farm lands of some of the counties are taxed at even more than they could be sold for. But while this is true of the farm lands, the reverse is true of the real estate of many of the cities of the state where there has been growth and development, as in some portions of Cincinnati and in Cleveland, Toledo, Columbus, and many other cities that might be named. The valuations placed upon the real estate of these cities in 1880 are in the aggregate fifty per cent, of their present true value in money, and in some cases they will not exceed twenty-five per cent. "The consciousness of this lack of uniformity, and the consequent injustice that must result to all who are fairly taxed, has had much to do in producing the unsatisfactory results that are experienced." 152 TAXATION AS IT IS. This passage from the message of the governor of Ohio shows the desirability of more frequent assessments. An assessment once in ten years is not often enough in any American state, because our values fluctuate so rapidly. When assessments are made only at rare intervals, a por- tion of the burdens of the state and local government is taken from those who have been specially prospered, — that is to say, those whose property has risen in value and who might with propriety be called upon to contribute a larger share to the public treasury than others, — and an additional burden is placed upon those who have suffered the mis- fortune to witness a depreciation of their property, and who might with reason ask for special consideration at the hands of the tax-assessor and tax-gatherer. John Stuart Mill says it is the function of government to do what it can to redress the inequalities and injustices of nature ; but in this case we see government aggravating these inequalities and injustices. THE TAXATION OF PERSONAL PROPERTY IN OHIO. We must now turn our attention to the assessment and taxation of personal property in the state of Ohio. We find in this state in actual practice most of the devices which have been recommended by those elsewhere, who are pur- suing that will-o'-the-wisp, the fair and equitable taxation of all citizens by means of the one uniform direct tax on all property. Blanks are made out containing lists of every conceivable kind of personal property. These blanks are sent to every person of the age of twenty-one and over, who must answer every question relating to the various sorts of property which he owns, or which are in his keeping, and he must do this under oath and under pain of heav\' penalties. These lists are everything that could be desired, and in EXPERIENCE OF OHIO. 153 inquisitorial nature, go far ahead of anything of the kind we have ever seen in the assessment of an income tax. I would call attention to the Revised Statutes of the state of Ohio, sections 2734 to 2746, inclusive, and in particular to sections 2736 and 2737, which read as follows — I will quote them to show that they go as far as law well can go in respect to inquisitorial examination into private' affairs : — "Sec. 2736. Each person required to list property, shall, annually, upon receiving a blank for that purpose from the assessor, or within ten days thereafter, make out and deliver to the assessor a statement, verified by his oath, of all the personal property, moneys, credits, investments in bonds, stocks, joint stock companies, annuities or otherwise, in his possession or under his control on the day preceding the sec- ond Monday of April of that year, which he is required to list for taxation, either as owner or holder thereof, or as par- ent, husband, guardian, trustee, executor, administrator, re- ceiver, accounting officer, partner, agent, factor, or otherwise. " Sec. 2737. Such statement shall truly and distinctly set forth, first, the number of horses, and the value thereof; second, the number of neat cattle, and the value thereof; third, the number of mules and asses, and the value thereof; fourth, the number of sheep, and the value thereof; fifth, the number of hogs, and the value thereof; sixth, the number of pleasure carriages (of whatever kind), and the value there- of; seventh, the total value of all articles of personal prop- erty, not included in the preceding or succeeding classes ; eighth, the number of watches, and the value thereof; ninth, the number of piano-fortes, and the value thereof; tenth, the average value of the goods and merchandise which such a person is required to list as a merchant; eleventh, the value of the property which such a person is required to list as a banker, broker, or stock-jobber; twelfth, the average 154 TAXATION AS IT IS. value of the materials and manufactured articles which such person is required to hst as a manufacturer; thirteenth, moneys on hand, or on deposit subject to order; fourteenth, the amount of credits as hereinbefore defined ; fifteenth, the amount of all moneys invested in bonds, stocks, joint stock companies, annuities or otherwise ; sixteenth, the monthly average amount or value, for the time he held or controlled the same, within the preceding year, of all moneys, credits, or other effects, within that time, invested in, or converted into bonds or other securities, of the United States, or of his state, not taxed, to the extent he may hold or control such bonds or securities on said day preceding the second Mon- day of April ; and any indebtedness created in the purchase of such bonds or securities shall not be deducted from the credits under the fourteenth item of this section ; but the person making such statement, may exhibit to the assessor the property covered by the first nine items of this section, and allow the assessor to fix the value thereof; and in such case, the oath of the person making the statement shall be in that regard only that he has fully exhibited the property covered in said nine items." It is also provided that any person required to list prop- erty, who shall claim that there is no taxable property within his control, which he owns or which he has on account of others, shall be required to make oath to that effect. It must also be added that these laws are actually en- forced. The blanks are, as a matter of fact, distributed, they are filled out, and they are returned. It is specially required that the personal property shall be assessed at its usual selhng price. The law affords every facility to the officers intrusted with the administration of the tax laws for the ascertainment of property. Indeed, it is hard to see how law could go fur- EXPERIENCE OF OHIO. 155 ther. I refer to the Revised Statutes, sections 2781 to 2797, inclusive. Parties may be summoned, questioned under oatli ; and if any person fails to appear, or appearing, refuses to testify, "he shall be subject to Kke proceeding and penal- ties for contempt as witnesses in actions pending in the Pro- bate Court." The costs and expenses must be paid by the person whose property is under examination, if he has made a false statement to escape the payment of taxes in whole or in part ; but if the statement of the person is correct, and no intention to evade the payment of taxes shall be evident, the costs and expenses must be paid by the county. If a person refuse to hst or swear his property to the assessor, the auditor shall add fifty per cent, to the amount returned or ascertained, and the amount thus increased shall be the basis of taxation. The powers granted by the laws are ample, as a matter of fact ; but the officers intrusted with their administration are afraid to be over-diligent in the discharge of duty, knowing that in such a case they would not be re-elected. Now, what is the result of all this ? I will quote the state- ment of the governor in his " Special Message," dated April 6, 1887, premising only that all inquiries made on the ground lead me to suppose that the description of the actual situa- tion does not err on the side of pessimism : — " Personal property is valued all the way from full value down to nothing ; in fact, the great majority of the personal property of the state is not returned, but entirely and fraudu- lently withheld from taxation. So far as Personal Property is concerned, the fault is chiefly with the people who list their property for taxation. The idea seems largely to pre- vail that there is injustice and inequality in taxation, and that 156 TAXA TION AS IT IS. there is no harm in cheating the state, although, to do so, a false return must be made, and perjury committed. "This offence against the state and good morals is too frequently committed by men of wealth and reputed high character, and of corresponding position in society. " In connection with the recent refunding of our state debt, maturing next December, it was disclosed that some of the most prominent and highly respected men of our state held large amounts of these bonds, without having ever paid a dollar of tax on the same, or having in any manner reported them for taxation. The only excuse that has been suggested for this is, that bonds were supposed to be non-taxable ; but it is difficult to be patient with such a claim when it is advanced by men of intelligence, familiar with our constitution and its requirement, — that all bonds, etc., shall be taxed. " While such men thus disregard and violate the- law, it must be expected that our tax duplicate will continue to decline, instead of increase, with our growth and develop- ment. The harm they do is not measured by the amount of money of which they deprive the state ; their example is bad, and fraught with evil to the whole community." In another part of the same message, the governor refers to the existing tax laws, and the constitutional requirements respecting taxation, in these words : — Our Tax Laws. " Our tax laws are, in the main, perhaps as wise as they can be made under the present constitution. If it were not for its positive injunctions, much might be said in favor of exempting from taxation the bonds of our state and munici- pal governments, to the end that we might not tax our credit and drive our securities away, but keep them at home and EXPERIENCE OF OHIO. 157 pay the interest upon them to our own people. But that is impracticable, and unnecessary to be discussed. " The requirement of the constitution is that all bonds, stocks, investments, etc., as well as real property, shall be taxed at their true value in money. Our laws have been framed with a view to securing this result, but it is manifest to all acquainted with our resources that they have lament- ably failed ; for all such know that instead of a grand du- plicate of §1,670,079,868, we ought to have one of at least three thousand millions, and four thousand millions would more nearly represent the taxable wealth of the state." The following extract shows a decreased valuation of per- sonalty during a period of increasing wealth : " In 1883 the value for taxation of the personal property of the state, as shown by the grand duplicate, was §542,207,121. In 1884 it shrunk to §528,298,871, and for 1885 dwindled again to §509,913,986. This loss has been made up largely by the steady growth of the valuation of real esfate, on account of new structures, etc., but the loss was greater than the in- .;rease last year, and the result is shown in the fact that the grand aggregate of all property of the state, both real and personal, amounted in 1885 to but §1,670,079,868, against §1,673,774,081 for 1884, or a loss of §3,694,213. This indicates that our wants and our ability to meet them, are travelling in opposite directions, and that unless the tax rate or the valuation of property is increased, the casual defi- ciencies will continue and grow larger without power to pro- vide for them, because of the extreme limitation allowed by the constitution having been reached under the bill above referred to, providing for the issue and sale of the bonds of the state to the amount of §750,000, to meet the emer- gency now upon us." 158 TAXATION AS IT IS. These statistics show that the chief trouble is in getting at the personal property. I conversed with many reliable citizens, who were frank with me in their expression of opinion. There was, natu- rally, a wide divergence between their various estimates ; but nobody claimed that more than a comparatively small frac- tional part of the personal property was reached in the larger cities, while it was generally, if not unanimously, held that the larger the city the smaller the proportion of personalty reached — as, indeed, always happens. One successful busi- ness gentleman, well acquainted with different parts of the state, estimated the personal property taxed in Columbus at from ten to twenty per cent, of the whole, and the amount reached in Cincinnati at a considerably smaller percentage. On the other hand, I was informed that in Cambridge, Ohio, a city of a few thousand inhabitants only, a far larger proportion of the personalty was reached. I conversed with a gentleman in Columbus, who, from practical experience, probably knows as much about taxa- tion as any one in the state of Ohio, and was told that existing laws signally failed to reach large masses of prop- erty ; that the burdens of government rested on the poorer and middle classes of society, and that the wealthy escaped. A lawyer of standing in Columbus, who holds estates in trust for several parties, says that whenever he goes to the tax office, to pay taxes, he feels capable of committing rob- bery, arson, and murder ; because he is obliged to pay taxes on the full value of estates of two, three, and four thousand dollars, belonging to little orphan children, whereas he sees wealthy clients paying on ten or fifteen per cent, of what he knows they are worth. After a lengthy conversation with a gentleman who was once an official, and had served long in one of the tax de- EXPERIENCE OF OHIO. 159 partments of Ohio, I said, " It seems to me, from what you say, there is not a wealthy man in the state of Ohio who is not a perjurer." He replied, " It is true." I do not wish to make any assertion of the kind ; I simply quote what I heard, as an evidence of widespread demoralization. CHAPTER V. EXPERIENCE OF GEORGIA. SO much attention has been given to Ohio because the principles embodied in our system of taxation seem to be as thoroughly and vigorously carried out there as else- where. It is well, however, to examine the experience of other states where similar systems of taxation obtain, in order that we may the better be able to determine whether the failure of the system in Ohio and Maryland is due, on the one hand, to certain local peculiarities or to imperfections in the details of the law, or in the administration of the law ; or whether, on the other hand, the failure of the system is due to the nature of the system itself. I accordingly decided to visit Georgia, a typical and progressive Southern state, and to examine the practical workings of our system in that commonwealth. The main feature of the tax system in Georgia is the one uniform tax on all property, real and personal, and th," reve- nue from this tax defrays a greater part of all state and local expenses than all other sources of revenue put together. There are stringent provisions for the enforcement of the law which need not be described at length. All property is assessed yearly by tax-payers, and the returns are given to the tax-receivers of the various counties. These tax-receivers must examine the returns, and receive them only when appar- ently satisfactory ; all returns are made by filling out blanks containing minute specifications designed, on the one hand, to aid the tax-payer in making a full return of all his prop- EXPERIENCE OF GEORGIA. 161 erty; (jn the other, to make concealment difficult. The statute provides the questions which must be asked in the blank, and there are thirty-six distinct questions, many of them containing several sub-questions, if the expression may be used. The following, for example, is regarded as one question : " How many acres of land, except wild lands, do you own, or of how many are you the holder, either as par- ent, husband, trustee, executor, administrator, or agent; where is the same located by number, district, and section ; what is the value thereof? " The following are a few other questions which are asked : — " How many shares in the bank of which you are presi- dent, and what is the value thereof? " " How much capital have you 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 president, as a sinking fund, or surplus fund, and not represented in the value of the shares?" " How much property, real and personal, does the bank of which you are president, own, not used in the banking business, and what is the value thereof? " "The value of merchandise of all kinds on hand? " " How much capital invested in bonds, except bonds of the United States, and such bonds of this state as are by law exempt from taxation? " " What is the value of your kitchen furniture ? " "The value of your gold watches?" " The value of your silver watches ? " Finally, after many more questions, which would seem to include everything, this question is asked : — " The value of all other personal property not herein men- tioned?" The statute also describes personal property, and these 162 TAXATION AS IT IS. are the words used : " Be it further enacted, That personal property shall be construed, for purposes of taxation, to in- clude all goods, chattels, moneys, credits and effects, what- soever they may be ; all ships, boats, and vessels belonging to the inhabitants of this state, whether at home or abroad, and all capital invested therein ; all money within or without the state, due the person to be taxed ; all stocks and secu- rities, whether in corporations within this state, or in other states, owned by citizens of this state, unless exempt by the laws of the United States, or of this state." The oath which is attached to the lists to be filled out by the tax-payers is prescribed, and is as follows : " I do sol- emnly 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 returned, as shown by said list, is at the true market value thereof; and I further swear that I returned, for the purpose 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 for the purpose of being taxed thereon, I have not attempted, either by transferring my property, or by any other means sought to evade the laws governing tax- ation in this state. I do further swear that in making said return, I have done so by estimating the true worth and value of every species of property contained therein." This oath must be subscribed by the persons making the return, and the administration and taking of the oath must be attested by the receiver of tax returns. An act was passed in 1874, entitled an act to provide for the correct assessment of taxable property in this state, which is worthy of notice, and in its aim to secure the co- operation of representative citizens with tax officials, it is EXPERIENCE OF GEORGIA. 163 undoubtedly a move in the right direction, whether or not this may be precisely the right method of obtaining the desired end. It is provided in this act that the tax-receiver in each county must, at the fall term of the Superior Court in his county, lay his returns for that year before the grand jury, whose duty it is then to examine the same, and to assess at its true value all property which they may find undervalued. This corrected digest is the tax-receiver's guide for the succeeding year, and whenever any person returns his property at a valuation lower than that of the digest, its true value is ascertained by arbitration in this wise : The tax-payer appoints an arbitrator, the tax-receiver likewise appoints an arbitrator, and these two elect an um- pire ; to these the question of valuation is referred, and the decision of these three is final. The system of taxation for the state of Georgia is placed under the supervision of the Comptroller-General, who is- sues " Instructions " to the tax-receivers, those officials con- cerned with assessment, and also to the tax-collectors of the state, informing them of the nature of their duties, describ- ing the precise method of procedure on their part, in the fulfilment of their several duties, and pointing out to them pitfalls for the unwary or inexperienced. I have read these "Instructions" issued for the year 1886, by Hon. W. C. Wright, Comptroller-General, and can testify that they give evidence of the fact that they were prepared by an alert, experienced, and capable public officer, conscientious to the state in the discharge of the functions of his office. It would seem that the plan pursued in Georgia of placing the entire system of state and county taxation under the general supervision of one man, and making him responsible for the administration, has in it much that is worthy of commenda- tion. 164 TAXATION AS IT IS. But does Georgia succeed better than Ohio in reaching all property? I doubt it. The Comptroller-General, in his " Instructions " for the year of 1886, repeatedly has occasion to point out the fact that a large portion of property either entirely escapes tax- ation or is not assessed at its true value. I will quote a few sentences taken from different parts of these " Instructions " : " Our lands are worth a great deal more than the same are being returned for taxation, and you cannot be too careful in the discharge of the duties imposed upon you in receiv- ing their returns." "city and town property. "There is very just complaint against the custom or practice of tax-payers returning this class of property to the receiver of tax returns, for the state and county, at a very much lower valuation than the same property is re- turned to the corporate authorities for taxation. It must be manifest to every one that property is worth as much when returned for taxation by the state or county as \yhen returned to be taxed by the cities. Look closely to the returns of this species of property, and endeavor to correct the evil complained of." "notes, accounts, bonds, merchandise. " From a careful examination of the digest of file, in this office, it is evident to me that such property is not returned as it should be, and, as an officer whose duty it is to see that all property is returned, I ask of you to give this your care- ful attention." " All notes, accounts, and other evidences of debt are taxable, and, like other property, at their market value. It is sometimes the case that persons owning this class of property deed or convey it to citizens of other EXPERIENCE OF GEORGIA. 165 States or remove same, in order to avoid paying taxes due on it. Sucli deeds and conveyances are illegal and void (see Code, section 813 . . .), and the property so deeded or conveyed must be returned for taxation." " A great many merchants and other citizens of this state have borrowed money on bonds, notes, and other evidences of debt owned by them, and have deposited such bonds, notes, etc., as collateral security with the persons from whom they have made such a loan, and think that said notes, bonds, etc., being out of their, hands on April ist, such prop- erty should not be returned by them ; this is not true." " I desire to invite your attention especially to the returns of merchandise. An examination of the returns of this item of property in the state discloses the fact that at least fifty per cent, of this class of property is not returned for taxation ai all. I 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." The Comptroller-General, in conclusion, again takes oc- casion to remind the receivers of tax returns, that it is contrary to " law to allow any one to make a return of his property, without administering the oath and propounding the questions instructed from this office." I visited Savannah, Atlanta, and Augusta, and conversed with public officers as well as with many citizens of charac- ter and standing in their respective communities, and the unanimous testimony of all who had given this subject any careful attention, more than confirmed the quotations from the Comptroller-General in regard to the inadequate nature of the returns of tax-payers. I conversed with a gentleman in Savannah, who is prob- ably as well acquainted with the actual workings of the tax laws there in force as any resident of the city, and he told 166 TAXATION AS IT IS. me that they could not reach the personal property ; that millions of dollars escaped. " A person has bonds and does not return them ; but what are you going to do about it ? " asked this gentleman. " If he does not return them, must he not take a false oath and perjure himself? " I replied. "Yes," answered he ; " and it is unfortunately a thing which is done every day." I was told that people with elegantly furnished houses frequently valued their furniture at ^500 or ^600, although if the furniture were put up at auction, that in each room would bring as much. But I was again asked : " What are you going to do about it ? We cannot well go into people's houses and examine their furniture. A gentleman has been appointed by the City Council who puts up the valuation of personal property, if there seems to be a reason for it, and ^1,000,000 has this year been added to the assessed valua- tion of personalty ; but after all, the burden of proof rests on the city. We cannot raise the valuation without a reason therefor." Another gentleman, with almost equal facilities for care- ful observation, told me that no one paid any attention to the personal property tax. "There is, for example," said he, " a tax on watches, but there are not ten men in Savan- nah who own watches." This last was naturally said laugh- ingly.i The valuation of property in Savannah is acknowledged to be low because the valuation for municipal purposes is taken as a basis for state and county taxation, and the resi- dents say that if the assessed valuation is raised, they will 1 Through the kindness of Robert P. Dechert, Esq., City Comptrol- ler of Philadelphia, I am enabled to give striking illustration of the futility of the attempt to tax everything. There is a state tax of one dollar on each gold Vfatch, of seventy-five cents on each silver watch, EXPERIENCE OF GEORGIA. 167 bear more than their fair share of the burdens of county and state, because property elsewhere is not assessed at its full value. Savannah is situated in Chatham County, and one of the gentlemen connected with the administration of the tax laws for that county and for the state, told me that about 1873 the assessed valuation of property in Savannah was some twenty-six millions of dollars, and that the rate of taxation in the city was one per cent., but that to escape paying so much to the county and to the state, they reduced their assessed valuation to the neighborhood of twelve millions and raised their local rate to three per cent. One feature of taxation in Savannah is unique for an American city, and deserves notice. It has long been the practice in Savannah to tax personal property and real estate at two different rates. The tax ordinance for 1887 fixes the rate of taxation on real estate at two and one- eighth per cent, of value, and on personal property at one- half' of one per cent. Shares in banks and banking associa- tions alone are excepted. The rate of taxation on shares in banks doing business in Savannah is fixed by state law at three-tenths of one per cent., whether the owner of such shares resides in the city or elsewhere. I was told by the and fifty cents on every other watch carried in Philadelphia. The fol- lowing table shows the number of watches of each description taxed in that city of nearly a million of inhabitants, in the years 1883, 1884, i88c: — Gold watches . Silver watches Other watches 1883 1884 14,515 375 19 18,509 675 74 18,39° 545 55 168 TAXATION AS IT IS. head of the tax department. Major Hardee, that in his opinion the lower rate of taxation produced as large a revenue as a higher rate would. It is not claimed, how- ever, that the results are entirely satisfactory, for, as has already been mentioned, large amounts of personal prop- erty escape. The assessed valuation for 1886 as it appears on the city treasurer's books was as follows : — MUNICIPAL TAX RATE. , AMOUNT OF TAX. PERCENTAGE. Real estate . . . S13.343.632 2i ^283,552 18 Stock in trade . . 2,341,046 i 11,705 23 Personal .... 3.521,525 i 17,607 63 Banking capital . . 1,898,891 A 5.696 67 Shipping .... 1.346.350 i 6.731 75 Total 822,451,444 S325.293 46 It is simply impossible to tell what ought to be the exact proportion between real and personal property ; but as it is a fact beyond controversy that large amounts of personal property escape taxation, it is manifest that it ought to be different from what it actually is in Savannah. No one, so far as I know, who has ever looked into the matter, claims that the amount of personal property in a modem city is less in value than the real estate ; and if we assume that they are equal in Savannah we can see how far the Savannah system fails of reaching all personal property. All the time I was in Georgia I saw no one who claimed that property in any part of the state was assessed at its EXPERIENCE OF GEORGIA. 169 true value, though I understand that the assessments on some property in Atlanta were high ; yet every one takes an oath to return property at its true value ! Again I remark that nothing is further from my thoughts than to make an attack on the people of any state, for I simply wish to show the natural consequences of our existing methods of assessing and taxing property. It is not necessary to add further testimony from Atlanta and Augusta, as it would be scarcely more than a repetition of what has already been said. CHAPTER VI. EXPERIENCE OF WISCONSIN AND WEST VIRGINIA. I. WISCONSIN. Taxation of Railroads. I WENT to Wisconsin to ascertain the experience of a new and progressive state in the Northwest, in respect to taxation. A great part of the revenue of this state is derived from a license tax on steam railroads, and it was proposed to raise aU the revenues for state purposes from this tax in the near future. This method of taxing railroads yielded large returns, and seemed to give very general satisfaction. My attention was frequently called to it, and it was especially commended. The license fees in Wisconsin are as follows : — " I. Four per centum of the gross earnings of all rail- roads except those operated on pile and pontoon, or pon- toon bridges, whose gross earnings equal or exceed three thousand dollars per mile per annum of operated railroad. " 2. Five dollars per mile of operated railroad of all railroads whose gross earnings exceed one thousand five hundred dollars per mile per annum, and are less than three thousand dollars per mile per annum of operated road, and in addition two per centum of their gross earnings in excess of fifteen hundred dollars per mile per annum. " 3. Five dollars per mile of operated road by all com- panies whose gross earnings are less than fifteen hundred dollars per mile per annum. EXPERIENCE OF WISCONSIN. 171 " 4. Two per centum of the gross earnings of all railroads which are operated upon pile or pontoon bridges, which gross earnings shall be returned as to such parts thereof as are within the state. " One-half of such license fee shall be paid at the time the license so issues, and one-half on or before the tenth day of August in each year." The railroads resisted the tax at first, as corporations al- ways do new taxes, until they perceived that it was impossi- ble to escape its payment, and since that time they have given little trouble. The license fee is regarded as a payment for a privilege, and perhaps may more properly be so regarded than as a real tax, for a regular tax would not necessarily be excluded hereby. In Baltimore, Maryland, for example, license fees are paid, and regular taxes in addition, by street- car lines. The advantages of deriving a large revenue in this way are obvious. Railroad corporations are too power- ful for local political units to handle, and for these to attempt to tax them leads to friction and corruption. States are really not powerful enough, but they are more nearly equal to the great railroad corporations in strength, and it is in every way desirable to turn all vast corporations, whose operations extend throughout the state, over to the state exclusively for taxation. Insurance companies and telegraph companies, are also, in Wisconsin, taxed by the state ; but inadequate revenue is derived from telegraphs and tele- phones, and attention has been called to the propriety of bringing sleeping-car companies, operating in Wisconsin, under the general rule, and placing a license tax on them. Since 1883 these special sources have been so productive that there has been no state tax for general purposes. A tax of one mill on the dollar, or ten cents on the hundred 172 TAXATION AS IT IS. dollars, is levied for school purposes, and a tax of one cent on the hundred dollars for the state university. The railroad companies' license fees for 1885 and 1886 yielded ^1,481,066.56 out of total receipts for the state of ;?2,963,S38.88, or about fifty per cent, of all revenues. The General Property Tax. The oldest source of revenue, and until the present time an important one for the state, and still the chief one for all local purposes, is the one uniform tax on all property, real and personal. There is nothing especially noteworthy to be said about the experience of Wisconsin with this tax, as it is similar to that of Ohio and Georgia, although the adminis- tration of the laws does not appear to be nearly so strict, and the blanks with minute specifications are not required to be filled in by each tax-payer under oath. Personal property, it was generally said — indeed, I remem- ber no contradiction of the statement — was not reached; especially not in large places, and still more especially not in the case of men of large means. I was told that in a small city like Ripon, most of the personal property was reached, in Madison less, and in Milwaukee still less. This is in keep- ing with what I found everywhere. The great cities escape the personal property tax to a more considerable extent than the smaller cities and villages, and still more than the rural districts. A gentleman of prominence, in a city in Wisconsin, which I will not name, and an office-holder under the present fed- eral administration, said to me : " You see in me a monu- ment of the iniquity of our present system of taxation. When I was a poor and struggling young man, with five or six hundred dollars' worth of personalty, I paid on all that I had j but now that I really have something, I keep still and EXPERIENCE OF WEST VIRGINIA. 173 pay taxes only on part of my property. Indeed, when I think about taxation in our states and cities, I feel like turn- ing anarchist and blowing things up with dynamite." II. WEST VIRGINIA. I will quote a few passages from the " Preliminary Re- port of the West Virginia Tax Commission," made in 1884, which have a bearing on the points under discussion, and which confirm the results of my own observations. Those Evading Taxes are Generally Best Able to Pay them. " For the purpose of suggestion, and by way of illustration, tax-payers may be divided into two classes. One class con- stantly schemes to shift off on a neighbor some burden which they themselves ought to carry ; the other class, unskilled in the practices of evasion, submit to whatever is measured out to them by the recognized authorities, and pay whatever is demanded. The one class is shrewd, enterprising, and adroit ; the other is content to accumulate property slowly, honestly, and by hard labor. It is the very first duty of a government so to shape its tax laws that this second class will be fairly dealt with; it is largely composed of those helpless and unobtrusive persons, who, treading the humbler walks of life, make but little noise in the world, and are seldom able to assert or defend their personal rights. Again, the first class, by reason of their activity and shrewdness, have more abil- ity than the other class to carry their full proportion of a common burden. ... It is a primary principle that the subjects of a state ought to contribute towards the support of the government, as nearly as possible in proportion to their respective abilities; but it will be seen before these reports are concluded, that in West Virginia almost the re- 174 TAXATION AS IT IS. verse is the case, and that a man of small means pays, as a rule, more in proportion than a man of large means. " The statistics bearing on this point will scarcely be cred- ited by persons who have not investigated the subject, and they exhibit a condition of things that ought not to be tol- erated. It will be found, for instance, that a house and lot worth ^800 is valued at ^700, while a house and lot worth ^000 is valued at I4000 — in the one case at seven-eighths, and in the other at one-half; that is to say, the owner of the small property has ^100 untaxed, and the owner of the large property has forty times that amount untaxed. Again, when a person dies, his entire personal estate is listed and valued by the appraisers, whose appraisement is recorded by the county clerk. By comparing a number of these appraise- ments with the tax assessments made next prior to the death of such person, we find that a man with a personal estate valued immediately after his death at ^200, was rated imme- diately before his death at ^178 ; while a man whose estate is appraised at ^5000 was rated at only ;?i5oo; that is to say, if the man of small means was rated in the same pro- portion as the man of larger means, he would pay taxes on only ^60, whereas he now pays on ^178. " At present all the taxes from invisible property come from a few conspicuously conscientious citizens, from widows, executors, and from guardians of the insane and infants ; in fact, it is a comparatively rare thing to find a shrewd trader who ' gives in ' any considerable amount of notes, stocks, or money ; the truth is, things have come to such a condition in West Virginia that, as regards paying taxes on this class of property, it is almost as voluntary and is considered pretty much in the same light as donations to the neighborhood church or Sunday-school. "A merchant's stock of goods was worth ^15,000; he EXPERIENCE OF WEST VIRGINIA. 175 'gave it in' to the assessor at ^2500, and this conversation occurred : — " Assessor. ' I can't take this valuation ; the law requires me to swear you.' " Merchant. ' If you swear me, I'll vote against vou next time.' " Mr. A. paid §800 for his piano, and listed it as worth 5ioo. Mrs. S. paid ^250, and listed hers at ^250. " It is useless to continue these examples ; they are only too familiar to every citizen. It is idle to expect a man to meet the assessor in a proper spirit, when he feels that he is subjected to the alternative of either telling a falsehood or being swindled. If I am compelled to pay a tax which be- longs to my neighbor, I am swindled, and I feel the injustice as much as if robbed on the public highway. " Under the present system (probably) four-fifths of the invisible property is not listed, and of the visible property that is on the assessor's books (probably) one-half is as- sessed at forty per cent, lower than the other half. "We frequently hear the remark : ' If a man is ten times richer than I, he ought to pay ten times as much tax ; whereas, the richer a man is, the less is his tax in propor- tion to his property.' " CHAPTER VII. EXPERIENCE OF NEW YORK. IET us turn to New York state, where full returns are _^ easily accessible. For many years attention has been called, by commissions and administrative officers, to the defective assessment of personal property in that common- wealth ; but what have been the results of their admonitions ? While no one doubts that personal property in that state has been increasing steadily, and with great rapidity, there has been a constant decline in the proportion of public burdens borne by personalty. " In 1869 real estate contributed seventy-eight per cent, of the public revenue, and personal property paid twenty- two per cent. ; while in 1879 real estate was made to pay eighty-seven and eight-tenths per cent., and personal property only twelve and two-tenths per cent, of the whole tax. It would be difficult to show that the value of personal property has not increased to a larger extent in the past ten years than real estate." ' This decrease in the assessed valuation of personalty has continued from 1878 to 1880 ; the decrease in round num- bers was thirty millions of dollars ; from i88o to 1881, there was an increase of twenty-nine millions, which was, however, more than counterbalanced by a decreased valuation of nearly thirty-six millions in 1882. The New York assessors say in their report for 1881, that 1 Governor's Message, 1881. EXPERIENCE OF NEW YORK. 177 " banking capital ' is assessed fully eighty-five per cent, of its nominal value, while it is quite evident that other personal property is assessed at an average of less than ten per cent.'' And in another place they use these words : " As it is an acknowledged fact that the assessable personal property in the state equals, if it does not exceed, the real value of the real estate, demanding a large share of the attention of the legislature and courts for its protection, and yielding quite as much profit to the owner as real estate, it should be made to bear more of the burdens of taxation. "who pays taxes on personal? " The answer to this question is to be found in the assess- ment rolls of the cities and towns, and is disgraceful to the commonwealth. Women, heirs, executors, administrators, guardians, and trustees of persons of unsound mind are assessed beyond all measure of justice. " A man dies, leaving in personal property an amount, the interest of which is barely sufficient with rigid economy to support the widow. The records of the surrogate or the publication of loss by a life insurance company, reveals the fact, and the assessor, bound by his oath to be ' diligent ' in his inquiry for personal property, enters the full amount on his roll ; and if in a city, the tax of from two to four per cent, must be paid from the amount already too small to pro- vide the necessities of life. "This same assessor, however, if not forgetting his oath when inquiring of the wealthy neighbor as to his personal, very Hkely accepts the negative answer as truthful, though 1 They must refer only to incorporated banks. One of the worst features of taxation in New York is the evasion of taxation by private bankers. 178 TAXATION AS IT IS. it is well known to the community that he possesses large means. " The one has not yet learned how to cover the personal property by an assumed indebtedness, while the other is well versed in the many devices by which he may escape even the ' diligent ' assessor. "This is no fancy picture. Many cases of hardship in assessing personal property have come to our notice. Here is one : A man in comfortable circumstances, with a business giving him a good support, becomes insane. His business is placed in the charge of a trustee, who converts his effects into money. Awaiting a better opportunity for investment, the amount is deposited in a savings bank at four per cent. interest, the only means of support for the wife and family. "The assessors placed the full amount thus deposited on the assessment roll, and yet they could truthfully say that they had not violated the law in so doing. " The common practice of many is to create an indebted- ness to bridge over the ist of July, after which the assessor cannot reach the party for personal assessment. " It must, however, be patent to every one that has given any attention to this matter of the assessment of personal property, that the present practice is a farce, and should no longer be tolerated." Governor Hill refers as follows to the subject of taxation, in his annual message for 1886 : — " It is believed that the tax laws of the state need a thorough revision. The present system of taxation has ex- isted for years with few changes, and comparatively little improvement. Every radical modification seems to have been stoutly resisted irrespective of its merits and propriety. " It is evident that the personal property of the state does not pay its just proportion of taxes, and the disparity in the EXPERIENCE OF NEW YORK. 179 assessed valuation of personal and real property verifies the statement that the statutes governing the appraisement and assessment of personal property are to a great extent defect- ive and do not reach the great bulk of personalty for the purposes of taxation. "For years the state assessors have directed public attention to the fact that the personalty of the tax-payers was escaping assessment, yet there has been a shrinkage from 1871 to 1884 (not inclusive) of ^107,184,371. " The loss has been upon the assessment rolls alone, for the personal property of the citizens of the state has greatly augmented during the same period. The wealth of the state has increased with its population and re- sources, and if the personal property does not show an increase upon the assessment rolls, it may be accounted foj in part by a lax administration of existing laws, but it mainly may be attributed to the defects in the laws ■ them- selves. " That such laws are inoperative to reach personal estate is evident by the mere statement of the fact that while — according to the last report of the state assessors — the assessed valuation of the real estate of the state is ^2,669,- 173,011, the valuation of the personal estate is only $345,418,361, or about one-eighth of the realty. " It is reasonable to believe that if our present tax laws were reformed and placed upon some true and consistent theory, the assessment of the personalty would nearly equal the assessment of the realty, and thereby the present unjust burdens upon real estate would be greatly alleviated." The state assessors in their report for 1886 substantiate the foregoing with these remarks : — " The condition of the present assessment of the real and personal property of the state is correctly indicated by the 180 TAXA TION AS IT IS. comparison we have instituted with former years. The comparison points to the remarkable fact that there has been an average yearly increase in the aggregate valuation of the realty for the purpose of taxation, and, with an occasional exception, a yearly decrease in the aggregate of the personal. "The assessed valuation of real estate in 187s was . $1,960,352,703 The assessed valuation in 1885 was 2,762,348,218 Increase in ten years 1^801,995,515 The assessed valuation of personal property in 1875 was $407,427,339 Assessed valuation in 1885 was 332,383,239 Decrease in ten years $75,044,160 The assessed valuation of real estate in 1884 was . $2,669,173,011 Assessed value in 1885 was 2,762,348,218 • — Increase in 1885 $92,175,207 The assessed valuation of personal property in 1884 was $345,418,361 Assessed value in 1885 was 332,383,239 Decrease in 1885 $13,035,122 Aggregate increase of real and personal in 1885 . $79,140,085 "Aggregate Tax paid by the Real and Personal, respectively, in 187J and iSSj, and the Rate Per Cent, paid by the Real and Personal in Said Years. "The amount of state tax levied for all purposes in 1875 was §14,206,680.11. " The rate of state tax for the above year was six mills on each dollar of valuation. " The aggregate sum of said tax paid by the realty in said year was Ji 1,762,1 16. EXPERIENCE OF NEW YORK. 181 " Paid by the personal, ^2,444,564.61. "The amount of state tax levied for all purposes in 1884 was 27,762,572.78. " The rate of state tax on each dollar of valuation was 2^1 mills. " The aggregate sum of said tax paid by the realty in said year was ^6,873, 120.50. " Paid by the personal, ^889,45 2.28. "Rate per cent, paid by real estate in 1875 was 82^'^. " Rate per cent, paid in 1885 was 883^. " Rate per cent, paid by the personal in 1875 was i7i^. " Rate per cent, paid in 1884 was iii%-. " If the above statement had included the year 1871, when the assessed valuation of the personal aggregated ^452,- 607,732 (the largest amount that has been spread upon our assessment rolls), it would appear that the personal paid over twenty per cent, of the total state tax in said year. Now it is generally conceded that the personal property has proportionately increased with the real, and that it is not sustaining its just proportion of taxation. We therefore suggest remedial legislation. " Estimated Aggregates of the Personal Property owned in the State Liable to Assessmetit and Taxation. Capital surplus and undivided profits of the National banks Ji 16,458,000 Capital surplus and undivided profits of state bonds . 34,443,289 Capital invested in manufacturing, 1880, as per census, 514,246,575 Value of live stock and farming implements (census of 1880) 160,461,024 Capital in mercantile interests, estimated 750,000,000 Capital invested in bonds and mortgages, estimated . . 500,000,000 Capital invested in jewelry, paintings, statuary, house- hold furniture, etc., not exempt 10,000,000 ^2,085,680,888 182 TAXATION AS IT IS. "It is a reasonable assumption that the above amount represents a fractional part of the personal of our tax- payers, and that the total sum liable to assessment and taxation fully equals the aggregate assessment of the real estate of 1884. At all events, the above estimates substan- tially indicate that the personal sustains but a small per- centage of the burdens of government, and that the laws relating to the assessment thereof are loosely executed or defective. " Statement of the Assessed Valuation of Personal Property in Other States. " In 1 880 the assessed valuation of personal property in the state of Massachusetts was ^473,596,730, aggregating ^151,128,018 more than the valuation of the personal in the state of New York in that year. " In the above-named year, the assessment of said prop- erty in the state of Ohio was ^440,682,803, aggregating ^118,214,091 more than the assessment of the personal in New York in said year. " In Ohio, the personal paid about 42 per cent, of the state tax. In Massachusetts, it paid about 42^-^-^ per cent. In Indiana, with a personal valuation of ^189,131,892, it paid about 35 per cent. In Illinois, with a personal valua- tion of $211,175,341, it paid about 37 per cent, while the Empire State, embracing the city of New York, wherein is concentrated and owned a large share of the wealth of the nation, the personal paid in the aforesaid year of 1880, about 14 per cent, of the state tax, and in the year 1884, only 1 1/^ of said tax. " Bearing on the question of personal taxation, the New York Times of July 7, 1885, says: 'There is scarcely a doubt that the wealth held in this city in the forms classed EXPERIENCE OF NEW YORK. 183 as personal property greatly exceeds that held in real es- tate . . . There is no doubt that twenty-five men in this city could be named, whose wealth in personal property alone exceeds the entire valuation of that class of property as shown on the assessment rolls.' " Now, if the above statement is correct, viz., that the personal property held in New York City greatly exceeds that held in real estate, the following statement of the as- sessed valuation of the real and personal in that city, in 1884, suggests that a mere trifle of the personal property of its citizens is spread upon its assessment rolls, for the pur- pose of state or local taxation. Assessed valuation of the real estate in New York City in 1884, was ^1,119,761,597. Assessed valuation of personal property in 1884, was $181,- 504,533. The New York Tribune of July 18, 1885, says: ' . . . The wealth of New York City is exceeded by the valuations of only four states in the Union — New York, Massachusetts, Ohio, and Pennsylvania.' "Statement showing the Amount of State Taxes paid by the Real and Personal of the Several Counties in 1884, that embrace the Principal Cities of the State. "The county and city of New York paid state tax as aforesaid, as follows : — On its assessed valuation of real, ;J3,072,I04.54. On its assessed valuation of personal, ^508,681.22. The real estate paid of said tax, 83^%% per cent. The personal paid, i6^^% per cent. "The county of Kings, including the city of Brooklyn, paid state tax as follows : — On real estate, ^731,031.45. On personal property, ^34,392.69. 184 TAXATION AS IT IS. The personal paid of said tax, 4xVtr P^' cent. The real paid, gs^s's per cent. " The county of Monroe, including the city of Rochester, paid said tax as follows : — The real estate paid, ^8165,232.95. The personal paid, ;f8,79l.35. The real paid of said tax, 94-nn^ per cent. The personal paid, 5y^j per cent. " The county of Albany, including the city of Albany, paid state tax as follows : — On its assessed realty, jS 1 83,529. 64. On its assessed personal, jii9,463.45. The real paid of said tax, 89^^% per cent. • The personal paid, lOj^^j per cent. " Erie County, including the city of Buffalo, paid state tax' as follows : — On assessed realty, ^(228,750.43. On assessed personal, ^27,521.78. The real paid of said tax, 87^'^ per cent. The personal paid, I2j-|^ per cent." It is not then surprising that the Hon. Alfred C. Chapin, late Comptroller of New York State and present Mayor of Brooklyn, advocates a new system of taxation, and speaks of the present system as " the antiquated system now prevail- ing." BOARDS OF EQUALIZATION IN NEW YORK STATE. One of the strange products of our astonishing financial methods is the board of equahzation, which has reached its highest development in New York, and illustrates the para- doxical remark already made, that the more you improve our present system of taxation, the worse it becomes. EXPERIENCE OF NEW YORK. 18S The tendeticy to undervaluation is an inherent part of present methods. Preceding chapters have made this suf- ficiently obvious. Real estate must be assessed by men of local knowledge, but men of local knowledge are interested in their own locality and are elected to represent its interests. The largest assessment district which is practicable is the county, and it is possible to assess property uniformly within a county. In New York state, however, assessment is made by township assessors, and the lower the assessment, the lower the tax. Each township board tries to outdo the others in under-assessing property, although sworn to return it all at its true selling value. To correct this, the county board of supervisors, consisting of one supervisor from each town, constitutes a county board of equalization with power to raise or lower the assessed valuation of real estate only, in any township, provided it does not alter the grand total. What is taken from one town must, then, be added to another. This is an arbitrary proceeding and can at best be based on guess-work. It is said, however, that this power is used for political purposes; that a board of supervisors of one party has been known to punish a town for giving a majority for the opposite party, by adding a round sum to the assessed valuation of its real estate, which would natu- rally be taken from towns in favor with the dominant party. After the county board of equaKzation has arranged the rela tive valuations of the different townships satisfactorily, a state board of equalization equalizes the county valuations of real estate in a similar manner, taking something off from the valuations of some of the counties and adding it to the valu- ations of other counties, but leaving the aggregate valuation throughout the state unchanged. The opportunities for a misuse of power are equally great, and the proceedings must be of quite as arbitrary a character. Complaints are perpet- 186 TAXATION AS IT IS. ually heard on account of the equalizations of the state board, and a good deal of antagonism between various parts of the state, especially between New York City and the rest of the state, is produced. It is said that the political influence of the farmers induces the board of equalization to raise the valuation of New York City unduly ; but, on the other hand, the farmers know that a large proportion of the vast wealth of New York City escapes taxation, and they feel that the city does not bear an adequate proportion of the public bur- dens. The state taxes are apportioned among the counties, and the county taxes, including the apportioned amount of state taxes, are apportioned among the towns. The town authorities add state and county taxes to the appropriations for town expenses, and raise the whole on the basis of an assessment of the town assessors. The individual assess- ments are not changed by the county and state boards, but the tax rate for county and state purposes must depend on the apportionment. Town authorities send the amount due to the county authorities, and the county authorities forward to state authorities the amounts assigned to their respective counties. The state board of equalization, organized in 1859, consists of the lieutenant-governor, the secretary of state, the attor- ney-general, the state treasurer, the state engineer and sur- veyor, the speaker of the Assembly, and three traveling state assessors. The traveling assessors must visit every county in the state at least once in two years and " prepare a written digest of such facts as they may deem most important for aiding the board of equalization in the discharge of its duties." The state assessors do all the work, and really constitute the board of equalization. The other members are a useless appendage, and the assessors have recommended EXPERIENCE OF NEW YORK. 187 that the board of equalization be reconstructed by the addi- tion of two assessors and by the removal of the other state officers from the board.^ 1 See various annual reports of state assessors, especially that for 1886. See also "Tax Laws of New York," by W. W. Saxton, New York, 1880, Chapter I. CHAPTER VIII. EXPERIENCE OF OTHER STATES. I. NEW HAMPSHIRE. HON. GEO. T. SAWYER, as chairman of a special tax commission, made a report to the legislature of New- Hampshire in 1876, in which he estimates that from one-half to one-third of the personal property in that state subject by law to taxation escapes, and he recommends radical changes in the tax laws. n. CONNECTICUT. The following remarks are quoted from the " Report of the Special Tax Commission," made in 1887 : "A comparison of the grand lists of the state from 1864 to 1885, as given in the table appended to this report, will show that the proportion of those intangible securities to other taxable property has steadily declined from year to year. In 1855 it was nearly ten per cent, of the whole ; in 1865 about seven and one- half per cent. ; in 1875 a little over five per cent. ; and in 1885 about three and three-fourths per cent. Yet, during the generation covered by these statistics, the amount of state, railroad, and municipal bonds, and of Western mort- gage loans, has very greatly increased, and our citizens have invested large sums in them in almost or quite every town in the state. Why, then, do so few put them into the tax list ? The terms of the law are plain, and the penalties for EXPERIENCE OF OTHER STATES. 189 its infringement are probably as stringent as the people will bear. Many attempts have been made from early times to create more effectual ones, but with little success. . . . The truth is, that no system of tax laws can ever reach directly the great mass of intangible property. It is not to be seen, and its possession, if not voluntarily disclosed, can, in most cases, be only the subject of conjecture. . . . Such consid- erations as these, coupled with the results of an investigation of now nearly three years into the practical working of our tax system, have brought us to the conclusion that all the items of intangible property ought to be struck out of the list. As the law stands it may be a burden upon the con- science of many, but it is a burden on the property of the few ; not because there are few who ought to pay, but be- cause there are few who can be made to pay. Bonds and notes belonging to estates of deceased persons or infants are generally traced through the Probate Records, and brought into the tax list ; but those held by an individual are, for the most part, concealed from the knowledge of the assessors ; nor do they, in most towns, make much effort to ascertain their existence. The result is that a few towns, a few estates, and a few persons of a high sense of honesty, bear the entire weight of the tax. Such has been the uni- versal result of similar laws elsewhere." ' III. MARYIAND. The defective assessment of personal property in Mary- land is a matter familiar to all citizens of that state, and it needs no lengthy treatment here. The Appeal Tax Court of Baltimore estimated in 1881, 1 " Report of the Special Committee of Connecticut on the Subject of Taxation," January session, 1887. Pages 23, 26, 27. 190 TAXATION AS IT IS. that fifty millions of dollars were in this city invested in United States bonds or other government securities, in addi- tion to those used in banking. Now, these bonds can be openly manipulated in such manner as to render a large share of the personal property of Baltimore untaxable. They can pass from hand to hand, and debts can be created on them. It is customary for corporations and wealthy individuals to invest in bonds temporarily, to avoid taxation. One of the questions propounded to the Appeal Tax Court of Baltimore, by the tax commission of 1881, was this : " To what extent do you succeed in reaching invest- ments made by residents of this state, in private securities of any kind ? " The answer was : " We utterly fail in reaching private securities of every description. Here and there only have they been returned by some conscientious holder." The city collector was asked this question by the same commission : " Does your experience enable you to suggest any effective way of collecting taxes on personal property? " He repUed : "The collection of taxes on per- sonal property is. attended with so many and such insur- mountable difficulties that I am at a loss what suggestion to make looking to a more effective collection." It may be further remarked that the same tendency to reduce the relative assessment as the wealth of the tax-payer increases, is found in Maryland as well as in other states. It is seen even in the case of real estate, although the evil is, I think, not so marked with us as it is elsewhere. Neverthe- less, a house worth two, three, four, or five thousand will, in Baltimore, at any rate, be assessed for nearly its true selling value, and sometimes for more, while a house worth from thirty to eighty thousand or more will probably not be as- sessed for over two-thirds of its value, the owner arguing, and with some plausibility, that it could not be sold for what it EXPERIENCE OF OTHER STATES. 191 cost. It may be doubted, however, whether the legislature intended those whose means enables them to build houses so expensive that there is no market for them, to bear a smaller relative burden than others. It is interesting to notice that the necessities of the case have led to a practice in Baltimore, with reference to the taxation of personal property, somewhat similar to that of Savannah. There are not two different rates for real and personal property, but personal property is assessed in pro- portion to the income it produces. Personal property is so assessed that it yields ten per cent, on the assessed valua- tion. A thousand dollar bond bearing three per cent, inter- est, for example, would be assessed for only ^300. It is found that a higher tax will drive personal property from, Baltimore. Even this arrangement makes taxation high. The state and city .tax rate for Baltimore in 1888 is ^2.07f. Every ten dollars in income from personal property must. pay, then, ^2.07!, or nearly twenty-one per cent. This is- not a legal arrangement like the Savannah system. It is, in fact, illegal, but it is the best thing which can be done under our antiquated tax laws. There is a similar arrangement authorized by law for the assessment for state taxation of the public debt of Maryland liable to taxation, whether owned by residents or non-residents. Debt bearing 6 per cent, interest is assessed at par ; debt bearing 5 per cent, interest at ^85 in the hundred ; debt bearing 4^ per cent. interest at ^80 in the hundred ; debt bearing 3 per cent, in- terest at ^64 in the hundred. The state treasurer simply retains the tax, and thus the difficulty encountered in Ohio is obviated. Mortgages in Maryland are exempted from taxation by law.' 1 Parts of Maryland retain features of the financial methods of the last century. The antiquated arrangement of farming out the collection 192 TAXATION AS IT IS. IV. ILLINOIS. Dr. Patten's Essay. Dr. Simon N. Patten wrote a work called " Das Finanz- wesen der Staaten und Stadte der Nordamerikanischen Union " (Finances of the States and Cities of the United States), published in Jena, Germany, 1878, which deals chiefly with taxation in Illinois, and which reveals a state of things in that commonwealth precisely like that described in other states. The assessed valuation of property in Illinois in 1875 was as follows : — Millions of Dollars. Cattle 80 Railroads 60 Real estate 780 All other property 165 Total 1085 Real estate and railroads paid seventy-eight per cent, of the taxes, cattle seven per cent., leaving only fifteen per cent. of the revenues still exists in Maryland. As already mentioned, the collection of taxes in Harford County is sold at auction to the lowest bidder. In Kent County landed property is divided into three classes, and horses and cattle are uniformly assessed. The details in regard to ithe assessment of property in Kent County are given in the following 3etter Vfhich I received from Hon. James Alfred Pearce : — " It appears from the assessment books that practically all farming lands were divided into three grades — at ;J35, $25; and $it, per acre. There is no tract so far as I have been able to find, assessed at over ^35, and there are very few tracts of farming land assessed at less than "^ome small parcels of from one to ten acres, and improved with good dwellings, are assessed higher, but these are not classed as farm- ing lands. " Again in some cases, more numerous than I had supposed, persons EXPERIENCE OF OTHER STATES. 193 for all other property, which is, of course, absurd. Dr. Pat- ten calls attention to the fact that assessors and collectors of taxes are elected for one year only, and as a system of rota- tion seems to meet with favor on the part of voters, they are devoid of that experience which is an indispensable condi- tion of a faithful performance of duty. The fact that one has enjoyed office for a year is regarded as a good reason why some one else should have a chance. Voters good- naturedly consider a special misfortune which has befallen one of their number, or any special need, as a reason why he should be elected, and from motives of pity, weak and inefficient men are elected. This appears, as far as my ob- servation has extended, to be common everywhere in the United States. appealed to the Board of Control and Review, and these reduced valua- tions in some cases to ^30, in some to ^28, $20, and $ii, and also re- duced marsh, hillside, and other waste portions of large tracts to |Sio per acre or ^5 per acre, so that there is ^n apparent want of uniform- ity, and lack of classification. Still, I think it is safe to say that after examination I find three-fourths of the farming land in the county embraced in the three grades of ^^35, ^25, and ^15. There is an abso- lutely uniform assessment of farm cattle as follows : — Horses and mules, each JS50 Cattle zo Hogs 5 Sheep 4 "The exceptions to this classification are so few as to be insignifi- cant. A few stallions kept for breeding purposes and a very few fine driving horses are assessed higher, but probably not twenty in the county are so assessed. There have been a good many changes made in the assessments since 1876 by the County Commissioners under their general authority to correct assessments, but in spite of all these, I still think that three-fourths of the land is within the three classes men- tioned. Of the lands assessed at ^35, some would probably bring ^75, some J65, some ^50, some $^o.'" 194 TAXATION AS IT IS. Dr. Patten draws the justifiable conclusion that the failure of the system of taxation in Illinois is accounted for by the nature of the system itself, and that that must be changed to produce any considerable improvement. The practice of confining one's self to the one direct tax on the assessed value of property must, he thinks, be abandoned. Dr. Patten examines the allegation that the cause of high taxation is to be found in universal manhood suffrage, and disproves it satisfactorily. He finds it rather" in the control of real estate speculators, who have taxed the people for the improvements of their property. Taxation has increased more rapidly in small cities than in large cities, and in sev- eral counties in Illinois where the property owners were clearly in the majority, he found that the tax rate was higher than in Cook County, in which Chicago is situated.' The following tables are instructive : — 1 When Mr. Enoch Pratt offered to give over ;?i,ooo,ooo to Balti- more on condition that the city should appropriate $50,000 a year for a free library, I think there vi'as no serious opposition on the part of the rich, but one of the poorer wards actually voted against an acceptance of this magnanimous offer ! Workingmen in Buffalo recently pro- tested against improvements which are being carried forward in the interest of real estate owners. T\\s Real Estate Record and Builder^ Guide, of New York, for March 31, 1888, says: "Towns like Eliza- beth, N.J., have been bankrupted by the owners of realty, who insisted upon improvements which were fifty years ahead of any possibility of their being needed." There is reason to believe that large real estate owners in New York City work bills through the legislature of New York for local improvements, to be paid for by special assessments on the property improved, which bills, however, are purposely drawn with legal flaws in them, and that after the improvements are made, the law is declared by the court of no effect, which throws the cost of the improvements on the tax-payers. It would be possible to mention names. The reader will do well to consult Mayor Hewitt's messages of 1888, in which he complains of the burdens by this means thrown on the city. EXPERIENCE OF OTHER STATES. 195 B H B ET O. ^ i^ o g a CI u< o c B b' <-t o c B CL B s O^ -vj p y. ^j tJ* a CT* ff* V m rr rr w ^ P 31 3 rV D K- CT' K- CJ* 3- B" o S-* ^ D o u> 2. « H O > a PERCENTAGE OF TAX ON PROPERTY. INCREASE IN TAXES, FROM 1866-76, IN PERCENTAGE. 196 TAXATION AS IT IS. COUNTIES. TOTAL TAXES. TOTAL TAXABLE PROPERTY. PERCENTAGE OF TAX ON PROPERTY. Dollars. Dollars. Alexander . . . . 166,389 2,408,000 6.9 Pike . . . 432.888 11,488,000 3-7 Pulaski . . 109,77s 898,000 12.2 Gallatin . . 92,403 1,869,000 4-9 Saline . . 77,760 1,615,000 4.8 Williamson 86,449 2,336,000 3-7 Cook . . 9.597.041 229,927,000 4.1 Effingham . 143.713 3,942,000 3-6 Hamilton . 68,014 1,697,000 4.0 Hardin . . 26,378 683,000 3-8 Johnson . 61,536 1,365,000 4-S Randolph . 201,809 5,392,000 3-7 The State . 29,007,461 1,085,540,000 2.6 It is true that two parties, tax-payers and non-tax-payers, have never been opposed to each other, as it is true that men of means control all our legislatures and municipal He does not, however, appear to have ever heard that this was wilfully brought about. The following quotation is an extract from a report of the Pennsylvania Commission on cities, made in 1878: "The undue accumulation of debt in most of the cities of the state of Pennsylvania has been the result of a desire for speculation on the part of owners of property themselves. . . . Large tracts of land outside the built-up por- tions of cities have been purchased, combinations made by men of wealth, and councils besieged until they have been driven into making appropriations to open and improve streets and avenues largely in ad- vance of the real necessities of the city." Professor Henry C. Adams says he is fully prepared to accept this testimony. See his "Public Debts," page 354. The plan which I recommend in Part III., whereby cities may secure a portion of the increasing value of real estate, would do much to prevent attacks of speculators on the public treasury. EXPERIENCE OF OTHER STATES. 197 councils. Speculators, property-owners in Western cities, have spent public money lavishly for the sake of helping for- ward a " boom," and then when the crash has come, they have cried out, " We are ruined by universal suffrage ! " The Report of the Revenue Commission of 1886. This report indicates no improvement in the financial sys- tem of Illinois since Dr. Patten's essay was published. The following extracts from this report reveal some of the de- fects of present methods of taxation in Illinois : — "The gross inequality in the assessments of different pieces of property of the same kind, owned by diiferent individuals in the same community, and of different kinds of property, regardless of ownership ; as, for instance, real estate and personalty — a large proportion of the personalty escaping all taxes. " The arbitrary and unjust operation upon individual as- sessments of the system of equalization between counties by the state board. "The inadequacy of existing methods to discover and estimate valuable interests .which have grown out of the inventions and refinements of modern commerce. " The want of a central and efficient supervision of the administration of the revenue laws throughout the state. " The realty of one man is assessed at one-third, one-half, two-thirds, or even the full measure of its actual value ; while that of his neighbor-is assessed at one-sixth, one-tenth, one-twentieth, or, as was shown in one instance of consider- able magnitude, one twenty-fifth of its actual value. The owner of the one pays, as his annual tax, five or six per cen- tum of the whole capital invested, while the owner of the other pays one-fourth or one-fifth of one per cent. Such distinctions are too invidious to be meekly borne. 198 TAXATION AS IT IS. " The discriminations in favor of personal property, and against realty, are glaring and unjust, amounting, in some species of the former class, to an almost total escape from taxation. "For instance, for the year 1884, in Cook County, contain- ing the great and wealthy city of Chicago, the total valua- tion of Credits of bank, banker, broker, etc., was . . . $98,615 Credits of other than bank, banker, etc 209,463 Bonds and stocks 7S.830 Shares of capital stock of corporations not of this state 100 "The second objection to the operation of the present law is a very grave one, and was uttered and reiterated by nearly every one who appeared before us. " For the same year, the valuation of credits, other than those of bank, banker, etc., in the following counties, stood thus, to wit : — Cook . ;(S209,446 De Kalb 377.223 Kane 348,913 McHenry 400,881 Winnebago 725,218 Ogle 432,866 Stephenson 239,758 Henry 236,987 La Salle . 632,681 Knox 793,819 Pike 344,083 Morgan 461,730 McLean 591,586 Coles 250,209 " In this important element of wealth, always disproportion- ately augmented in large cities, as compared by population, EXPERIENCE OF OTHER STATES. 199 small rural counties surpass metropolitan Cook, and some of them three or four fold. " Equalization would seem plainly necessary. But how does it work under the present system ? The state board deals with the aggregate assessment of lands, lots, and per- sonal property — three classes — and adds to, or subtracts from, each class a fixed and arbitrary percentage ; thus raising or lowering all property in each class in equal pro- portion. Thus upon pieces. of property already assessed at a large fraction of their value, frequently an increase of valuation is made, which carries them above their market value. " By way of illustration, we cite one instance in Cook County, as follows : — "A block of real estate worth ^100,000 was assessed at ;^90,ooo. The Board of Equahzation added sixty-seven per cent., making the equalized assessment of that property 1^150,300. If a scrupulous owner of credits in Cook County should return them at their value, he would be ruined by an equalization that would bring the county to its full equalized value. In this particular, with other counties, similar instan- ces, more or less extreme, occur every year." It is to be observed that the Illinois system of equaliza- tion is different from that of New York. In Illinois the assessments of individuals for all purposes are increased. The rate of taxation is not changed, but the basis for the individual is changed. This makes the equalization apply to local taxes, which is not the case in New York state, and it can be very oppressive if one has made an honest return. The equalization of Illinois applies to personal property as well as real property, whereas it applies only to the latter in New York state. A further difference is that the Illinois authorities in equalization are not obliged to keep the 200 TAXA TION AS IT IS. original aggregate valuation of all property. It is provided that in the county equalization the result must be kept as near the total assessed valuation as possible. A further difference between the New York and Illinois systems is this : The New York state authorities demand of the counties fixed sums, and each county demands of its towns fixed sums, and rates must be laid to meet these demands. Illinois demands a certain percentage of the assessed value of all property, and whatever that yields, more or less, flows into the state treasury. When Dr. Patten wrote his essay, — and probably it is still the case, — the collections were poorly made, and showed radical defects in the entire system. It is necessary in Illinois to raise the rate sufficiently to cover the loss on account of failure to collect, and cost of collection. The estimated loss on account of both items — failure to collect, and the expenses attending the raising of the revenues — was as follows from 1865-1875 : — 1865-1871 (inclusive) 10 per cent. 1872 II " 1873 18 •■ 1874 17 " 1875 13 " It is remarked by Dr. Patten that the increased loss after 1872 was due to severer laws passed in that year which led to the assessment of property from which no taxes could be collected. Testimony of this sort might be extended indefinitely, and from all parts of the country. I might quote the testimony of a tax-payer of Charleston, South Carohna, one of the largest tax-payers in the state, who told me that only a fractional part of personalty was reached, and that it was impossible to EXPERIENCE OF OTHER STATES. 201 carry out the law with regard to that kind of property, as the tax would absorb so large a proportion of the income. This gentleman stated that he paid only on part of his per- sonalty, but that the tax department was only too glad to get what he was willing to pay. I might refer to the pubhshed lists of tax-payers in Brooklyn and New York City, and call attention to the ridiculous assessment of personalty standing against names known far and wide for large wealth. I might call attention to a single estate whose representatives acknowledged a taxable personalty of thirty-three millions, but refused to pay on more than eight millions, under threats of withdrawing their property from the reach of the tax-gatherer in the city. But this is entirely needless. The actual experience of our various American states and cities affords ample illustration. CHAPTER IX. OTHER FEATURES OF EXISTING FINANCIAL SYS- TEMS OF AMERICAN STATES AND CITIES. INTRODUCTORY REMARKS. WERE this a book intended primarily for specialists, it would require two or three volumes to describe ade- quately the financial systems of American states and cities. It must, however, be distinctly understood that this is pri- marily a practical work for practical people. Its purpose is to draw attention to the main features of American state and local finance, and not to enter into all the complicated details of administration and all the complexities of legislation and judicial decisions. This book aims to present an outline sketch of what exists, and to indicate the lines along which financial reform must move. Readers will be able to fill in the sketch here given by personal inquiry and research. Teachers who may use this book in the class-room will dis- cover many points which should be further explained to their classes, and will find it advantageous to assign topics to their students for further elucidation. Local tax authorities will be able to give the needed information about local taxation, and state laws will be found useful in a study of state taxation, while intelligent legislators and state officials will be glad to explain to classes the practical operations in which they are engaged. AMERICAN FINANCIAL SYSTEMS. 203 ORDINARY BUSINESS LICENSES AND OCCUPATION TAXES. All cities and many states have licenses for a few occupa- tions, and these are generally specific. Fixed sums are paid for the privilege of engaging in a few specified gainful pur- suits. The privilege of retailing liquors is probably taxed in every American city, while state and county often add a license tax to the local license tax. In a Georgia city liquor- dealers pay ioMX license taxes ; namely, one to the city, one to the county, one to the state, and one to the federal government.' Boston has license taxes for pedlers, keepers of biUiard tables, pawn-brokers, carriages, second-hand dealers, horse- car drivers, junk-dealers, owners of dogs. Owners of hacks for hire are often taxed by the license system. Keepers of bowling-alleys and dealers in fireworks often pay a license for this privilege. Keepers of intelligence offices are among those who appear to be frequently required to pay an annual license tax. Pedlers are frequently required to take out a license. Virginia, for example, passed a law approved Janu- ary 27, 1888, taxing each pedler ^300 when he travels on foot and ^500 provided he "peddles otherwise than on foot." Newsboys and bootblacks pay a license tax of twenty-five cents each in Cleveland, Ohio. The object of this license fee is probably to bring about a registration of newsboys and bootblacks. Although these charges for the licenses are generally spe- * A dealer in intoxicating liquors in Savannah pays as follows : — 1. Federal government license, $25. 2. State license, $(,0. 3. County license, ;Jloo. (Chatham County.) 4. City license, $200. 204 TAXATION AS IT IS. cific, the amount collected from each licensed person is not always the same. Keepers of horses for hire are sometimes charged so much for each horse or each carriage. Street- car hnes are often charged so much for each car. Keepers of billiard tables are frequently charged a certain sum for the first billiard table and a less sum for each additional table. Northern states and cities require licenses for a few speci- fied pursuits only, and leave every one perfectly free to enter all other occupations according to opportunity and inclina- tion. The system of freedom obtains. Southern states and cities pursue a different policy ; namely, that of restriction. A special tax is exacted from every one who within their limits attempts to gain a livelihood, and the purpose of the license system is twofold : first, revenue ; second, local protection by exclusion of competition. It would require too much space to give all the regulations concerning licenses in Southern states ; indeed, this entire book would not be sufficiently voluminous for that purpose. It may be said, however, that the license system is universal south of Mason and Dixon's line. A few examples will be given which a perusal of state laws and municipal ordinances will show any one to be merely typical. In Charleston, South Carolina, there are fifty-six classes of business to which licenses are issued, besides a few special licenses. One gas company paid a license of ^500 ; seven building and loan associations, a license tax of §50 each ; two railroad companies, ^500 each ; two real estate agencies, ^50 each; one telephone company, ^500; two telegraph agencies, ^500 each ; eight auctioneers and real estate bro- kers, ^75 each; twenty-three billiard tables, $2^ each; twelve boarding-houses and hotels, from ^10 to ^100, ac- cording to the number of rooms ; barbers, for each chair. AMERICAN FINANCIAL SYSTEMS. 205 $3 ; one circus, $500 ; builders, master mechanics, and work- men of all trades and employments, not specially named elsewhere, sixty-six employing no hands, $12 each, and thirty employing not over ten hands, ^30 each ; four dentists, whose gross business does not exceed ^1000 each, ^15, and four whose gross business does not exceed ^3000 each, ^25 ; three dealers in sewing-machines pay from ^20 to t\o each, according to sales ; commercial brokers, ^100 each ; five ste- vedores, ^50 each ; eight merchant tailors, ^50 each ; dealers in merchandise not specially named elsewhere pay from tio to ^500, according to sales. The total receipts of Charleston for the year ending December 31, 1886, from licenses, amounted to ^128,459, out of a total revenue of "^538,336.52-' A thoroughly " protected " town is Charlotte, North Caro- lina. Every bar-keeper must pay |liooo for the privilege of selling spirituous, vinous, and malt liquors ; every express company, ^250 ; every gas or electric-lighting company, ^100 ; on every fruit or vegetable stand, |io must be paid ; every bootblack must pay I3 ; surgeons, dentists, physicians, lawyers, civil engineers, etc., ^15 each. The " Schedule of Licenses " in the tax ordinance of the city of Atlanta, for the year 1886, occupies six pages of the printed ordinance. Persons who barter or sell goods within the state of Mary- land must first procure a hcense, called a " trader's license," for which the following charges are made : — If the applicant's stock does or will not exceed )Ji,ooo, a license of S12. If over $1,000 and less than $1,500, a license of $15. " 1,500 " " 2,500, " " 18. " 2,500 " " 4,000, " " 22. " 4,000 " " 6,000, " " 30. 1 See "Year-Book of the City of Charleston," 1886. 206 TAXATION AS IT IS. If over ;J6,ooo and less than 8,000, a license of ; 8,000 (( ( 10,000, ' ' " 5°- " 10,000 tt ( 15,000, ' " 65. " 15,000 it 1 20,000, ' ' " 80. " 20,000 " ' 30,000, ' ' " 100. " 30,000 " ' 40,000, ' ' " 125. i 40,000 or over, ' " 150- A female engaged in vending millinery, whose stock does not at any time exceed ^500, is entitled to a license for ^6. The receipts from this source of revenue for the year end- ing September 30, 1887, were ^187,187.29. Many- other persons pay licenses in Maryland, as, for example, brokers, bankers, pedlers, liquor-dealers, and express companies. The total receipts from licenses, for the year ending September 30, 1887, amounted to ^521,311.14 out of total receipts of ^2,440,363.53 ; but part of the total receipts was expended in the redemption of state stock, and a considerable portion was used in purchasing stock for the sinking fund. The ordinary expenses of the state government amounted to only ^1,699,- 063.44. It will be seen that a large proportion of state ex- penses is provided for by the Maryland system of licenses. The property tax of i8f cents on the ^100 for this period yielded ^910,949.50. Among the license fees of Maryland which has yielded a considerable income up to the present year was the marriage license of I4.50, of which fifty cents was for the clerk of the court. The marriage license fees for 1886 yielded the state ;?24,226.98 net. This fee was reduced to one dollar in 1886, because it was considered unjust, oppressive, and a restraint upon marriage. Maryland taxed bachelors in the last century, to encourage matrimony, and it was undoubtedly a departure from ancient policy to tax marriage. The system of licenses on persons engaged m ordinary AMERICAN FINANCIAL SYSTEMS. 207 pursuits is a most vicious one from every point of view. It tends to promote pauperism, because it makes it difficult to enter any pursuit which one may desire to follow. TTie license fees are considerable, and are a great burden to per- sons beginning business, as every one who has lived in a Southern city knows. When a man has failed in one pursuit, the license fee for entering another is often an insurmountable obstacle. Li- censes prevent freedom of movement. It is desirable that every one should be at liberty to move about from place to place, and to change his pursuit from time to time until he can find the right place and the right occupation, and then be enabled to gain a livehhood. A considerable proportion of the improvements in modern times, as compared with previous centuries, is due to increased freedom of movement. The license system may be fairly called mediaeval in its character. The tendency of modern times is supposed to be in favor of giving a man every opportunity to make the most of his talents, and particularly to place no obstacle in the way of his becoming independent and self-supporting. The license system pushes the comparatively weaker ele- ments and the industrially unfortunate down, and then helps to keep them down. The license system imposes regressive taxation upon those who live under it. The rate of taxation increases as one's means decrease. It violates the fundamental principle of equality of taxation. The license system drives men away from the states and cities in which it exists. It comes repeatedly to the notice of the careful observer that one who is more or less doubt- ful about starting business in a Southern city is finally decided not to do so by the license tax. Those who have left such a city would, in some cases, undoubtedly have developed a 208 TAXA TION AS IT IS. business which would have been beneficial to the city and state, had they not been deterred by the license taxes. Taxes on property are generally high in cities which have licenses. Licenses like many of ours remind me of taxation in the time of feudalism, when only those were taxed who were too weak to resist. Those who are prosperous find specific licenses a small burden, and those who are just entering a business career are too weak to resist successfully. Licenses thus encourage monopoly and are undemocratic. Of course the case of licenses for natural monopolies and corporations is essentially different, and in case of liquor licenses restric- tion is the very thing aimed at, and is the justification of high license.^ It is strange that our Southern states, which have prided themselves on their liberal views in regard to international trade, should maintain the most oppressive system of local protection known to the civilized world. Licenses on corporations of a quasi public nature, or those engaged in pursuits which are natural monopolies, ought to be in proportion to gross revenues, and not specific. South- ern cities usually, however, tax street-car lines, gas companies, express companies, telegraph and telephone companies, and electric-lighting companies at a ridiculously low figure be- cause they include licenses for them under the general license system. Baltimore pursues a more rational policy with ref- erence to street-car companies, in imposing a license fee on them of nine per cent, of gross revenues, in addition to a license charge of ^5 for each car, and in addition to the regular tax which they pay to state and city on the value of ' On the same principle the license tax in Savannah of ^^500 on "every owner, proprietor, or Iceeper of a 'bucliet' shop, or a place where ' futures ' are sold," might be commended. Perhaps it ought to be four times as high. AMERICAN FINANCIAL SYSTEMS. 209 real and personal property. In 1887 the city of Baltimore received from licenses for street-car companies $132,167.26. POLL TAXES. Poll taxes exist in most of the Southern and New England states and in some of the other states. Poll taxes are un- worthy of a civilized nation in the nineteenth century. They are to be rejected, also, from purely economic grounds. In order not to be impossible of collection without great hard- ship, they must be so low as to yield little to the pubUc treasury. Poll taxes are both state and local. In some states only state poll taxes are known, but in others both state and local poll taxes exist. This is the case in North Carolina. Charlotte, for example, levies a poll tax of $2.10 on each male between the ages of twenty-one and fifty years, and the state collects a poll tax on males between the same ages, which may not, however, exceed the state tax on $300. Other facts about poll taxes will be found in Part IV. The right of suffrage is often made conditional on the pay- ment of a poll tax, but this condition only gives rise to cor- ruption. It is well known that in New England, before election, the political parties pay the poll taxes of dehn- quents, in order to secure their votes.^ The road tax is often of the nature of a poll tax. This is the case in Atlanta, Georgia, where, as already mentioned, it amounts to $3.50. Atlanta is the only place, so far as I know, where anything like a poll tax is strictly collected, and here it is done by compelling those who can not or will not pay the road duty in cash, to work for ten days on the high- 1 The Pennsylvania legislature of 1887 passed an amendment to the constitution abolishing the payment of a poll tax as a prerequisite for voting. This amendment now goes to the next legislature. 210 TAXATION AS IT IS. ways. The undemocratic character of a high capitation tax hke that, having no reference to the abiHties of the tax- payers, is sufficiently obvious. Georgia has a state poll tax of ^i.oo, but it is not rigidly collected. A competent and well-informed lawyer of Macon, Georgia, writes me as follows about the poll tax in his state : — " There is no poll tax in Macon, other than the poll tax of ^i.oo imposed by the state on all its citizens. It is not rigidly collected by the state tax officials in this county. If a man has no money, the tax cannot be collected, unless he earns wages. In the latter event (inasmuch as the state's lien for taxes is paramount to all exemptions) the daily, weekly, and monthly wages of the delinquent may be reached by process of garnishment served upon his employer. I have heard of but one county in the state where the poll taxes are thoroughly collected. It was done there by the method I have just mentioned. All the farmers and others who em- ployed hands were garnished, and in that way the wages were reached. " The only years in which a general collection is made of poll taxes are those in which elections are held under the local option laws. In these elections the liquor men who are able to draw upon the inexhaustible resources of the whiskey ring pay all the poll taxes of the negroes and pauper whites who will vote the ' wet ' ticket. Payment of taxes is a condition precedent to voting. These elections have, there- fore, brought into the treasury, in this way, large amounts of money which would otherwise never have been col- lected. "There is, in addition to the state poll tax of |i.oo, a street tax of ^3.00, imposed by the municipality. This is per capita, and without reference to the individual's prop- erty. The poor people do not work it out. If a person has AMERICAN FINANCIAL SYSTEMS. 2U no property he does not pay the tax, unless he does so with the object of retaining his municipal suffrage, which he would forfeit if he was in arrears for taxes. " It frequently happens in municipal elections that the respective candidates furnish the money to such of their supporters as are tax delinquents, for the purpose of en- abling them to vote." A friend from Georgetown, Kentucky, equally compe- tent to speak on taxation, writes me as follows about poll taxes in Kentucky : — " The poll tax in many counties is quite heavy, but there is no way of enforcing payment, and there is always a very large list of citizens from whom it is never collected. The sheriff is, at the end of the year, credited by the county court with the number of polls in the 'delinquent list,' and that is the end of the matter. This list of delinquents is quite large, though it is impossible to say exactly how large in all the counties. In our county (Scott County) it has, for the last few years, included from something over one- third to considerably over one-half of the legal voters in the county. Scott County is very far above the average county in the state in point of wealth, etc., and I therefore have no hesitation in saying that, taking the state as a whole, the number of those who fail every year to pay their poll tax is much more than one-half the voters. " There has been some talk in the legislature of making failure to pay poll tax a misdemeanor, but as yet there is no way of compelling payment by those who have no visible property. They are not made to work on the highways. The latter are maintained in most of the counties in the old-fashioned way — a supervisor calls out all the men in his district and makes them work the road at intervals in the year. A few counties have a road tax and apply the pro- 212 TAXATION AS IT IS. ceeds to road purposes in the more modern way, but the bulk of the state is under the old system." A prominent state official of Wisconsin writes me as fol- lows regarding the poll tax in this commonwealth : — " Yes, we have a poll tax, d it. I think if it were or could be collected, I would favor a poll tax, but only those who pay other taxes are now compelled to pay on their polls. You see how that is : when I go to pay my other tax, they add on the ?i.oo for my poll ; but all who have no personal property or real estate tax escape poll taxes, as they do not, as a matter of course, go to the tax-gatherer's office, and the collector never goes after or makes a list of them. Now the poll tax was intended to reach the very class it never touches, in order to reduce the burdens of those owning property ; but in reality it doesn't gain a dollar from the un- taxed, while it adds more burdens to those who already pay their full share, and for whom the tax was designed to be a relief." SPECIAL ASSESSMENTS. Special assessments on property benefited by local im- provements are common in American cities. New streets are sometimes paid for entirely by those through whose property they pass, and sometimes the expense is divided. In Baltimore, pavements are paid for by the property- owners and the city. The city pays one-third and the abutting property-owners on either side pay each one-third. Occasionally streets are paid for entirely by general taxes. This does not seem right. Although taxes are not payment for services rendered, it seems perfectly proper that those who receive a marked and special advantage should pay more than others for the improvements. Improvements of the nature of parks and avenues are often paid for, in part AMERICAN FINANCIAL SYSTEMS. 213 at least, by those who derive a special pecuniary advantage from their proximity. This has recently happened in Balti- more in connection with the Mt. Royal Avenue extension. It is proposed that those who derive a special advantage from the contemplated small parks in New York City shall pay a special tax.^ OTHER SOURCES OF REVENUE. " Conscience money " is a heading frequently seen in state and local financial reports, but generally for small sums. As probably nearly all readers understand, it is money sent without the name of the sender to the public treasury by some one who has defrauded the government by withholding money due, or otherwise, and who has been pricked by his conscience. Our federal government receives conscience money frequently, and occasionally sums of some importance. It is said that Wiirtemberg and England are the only other countries in which conscience money is a frequent item in the budgets. It has been remarked, how- ever, that the legislation of other countries may not be of such a character as to lead so frequently to fraud.^ Public property and public works yield more considerable revenues in American states and cities than is ordinarily imagined. The reader will find in Part IV. as complete information on this point as I could gather. Here only a few illustrative facts will be presented. South Carolina owns phosphate beds below the river bot- toms, and from a royalty on the phosphates obtained from them she is able to defray over twenty per cent, of all her 1 On this subject see Chapter XV., on " Taxation by Special Assess- ments," in Cooley's " Taxation." 2 See Helferich, in Schonherg's "Handbuch der Politischen Oeko- nomie, 2d edition, Volume III., page 169. 214 TAXATION AS IT IS. expenses. A plan has even been proposed for working these beds by the state and defraying all expenses from the pro- ceeds. New York state has derived over ^5,000,000 revenue from the state-owned salt-works of the Onondaga reserva- tion. Georgia derives ;?l300,ooo from the rental of the Atlanta & West Point Railroad. The total receipts for the year ending September 30, 1886, were ^4,220,130.30. This sum includes ^2,508,850 received from the sale of bonds, and applied to payment of state debt. The rental of a single railroad de- frayed about seventeen per cent, of all the ordinary expenses of the state. During the same year the state received from the Bank of Rome, ^18,197.61, and from dividends from stocks, ^2,410. The state of Illinois receives seven per cent, of the gross revenues of the Illinois Central Railroad as a special charter tax. This ought, however, to be regarded as a payment for a privilege, like the percentage of street-car receipts claimed by Baltimore, and not as a tax. It is, indeed, inadequate payment for what the road has received from the public. For the two years ending October i, 1886, the receipts of the public treasury of Illinois amounted to $4,666,443.85, of which the Illinois Central Railroad paid $725,207.93, or over fifteen per cent. Massachusetts has redeemed over one hundred acres of land now in the " Back Bay " district of Boston, which was formerly under water. The total net proceeds in cash value amounted to $4,275,644.73. This was the amount which accrued to the state after paying all expenses and making donations of land to Boston, to Trinity Church, to the Mas- sachusetts Institute of Technology, to the Boston Society of AMERICAN FINANCIAL SYSTEMS. 215 Natural History, and to the State Board of Education for the Normal Art School.^ Many of our states have money invested in bonds, on which they receive interest. Several of them own all their own bonds ; others own their own state bonds, local bonds, federal bonds, railroad bonds, and the like. States and cities have sinking funds, and moneys devoted to this fund are used for the purchase of bonds and other property to pay off debts at the expiration of a period, usu- ally prescribed. States and cities also hold trust funds, the income of which is used for the purposes determined by the nature of the trust itself. In January, 1887, Massachusetts had property in the sinking fund valued at ^18,964,412, and in trust funds, chiefly for educational purposes, bonds and notes valued at ^3,307,910.27. A part of the trust funds consists of money deposited by the United States with Mas- sachusetts in 1837, when the federal surplus was distributed among the states. Several of the states still hold the amount then received in trust for educational purposes. New York state holds trust funds invested chiefly in bonds of various descriptions. The funds of New York state amounted to ^8,706,488.52 on September 30, 1887, which sum yielded nearly ^550,000 revenue. The revenues of the funds are used mainly for educational purposes. West Virginia has an educational fund which, like that of New York, cannot be abolished without a change in the state constitution. One of the municipal public documents of Philadelphia is the annual report on trusts. The principal one is the Girard trust, now worth a good deal over ten miflions of dollars. Philadelphia owns gas-works which figure in the budget of 1887 for receipts of nearly three millions of 1 Auditor's Report, 1886, pages 365-6. 216 TAXATION AS IT IS. dollars. Richmond, Virginia, defrays a considerable portion of her expenditures from the profits on gas-works. New York City, like Baltimore, now receives an income from a portion of gross revenues of street-car lines, and, had not the people been plundered in a most shameful manner. New York might probably now defray three-fourths of hei expenses from public property. CHAPTER X. THE TESTIMONY OF REASON. STATES NOT INDEPENDENT IN MATTERS OF TAXATION. WE must now turn from actual experience and ask whether there are any reasons in the nature of things which make experience what it is. It is not enough to show that a thing never has been done, to induce a rational man to desist from efforts to accomplish it, for we all know that brilliant success has often waited on him who refused to be convinced by a thousand failures. It is necessary to show that a thing cannot in all probability be done. It should first be remembered in any treatment of the subject of taxation, that any single American commonwealth like Maryland is not an industrial unit, but simply a part of a larger whole — the United States. Even the United States in its economic affairs is not by any means entirely inde- pendent, but it must often have regard to proceedings of other governments if it would act wisely. Still, the United States, taken together as one country, may fairly be regarded as an industrial unit, and in matters of direct taxation it need not inquire very minutely into the industrial situation in foreign lands. A single state is in an essentially different position, and may be well-nigh ruined by a failure to take into consideration interstate relations. 218 TAXATION AS IT IS. RETURNS ON PROPERTY OF A HIGH DEGREE OF MOBILTTY DEPENDENT ON GENERAL CONDITIONS. There is a species of property wiiich floats about from place to place with ease. We may say that property of this sort is endowed with a high degree of mobility. This is the case, for example, with money for investment in mortgages or other securities. Now, the remuneration for property of this sort is to a large extent independent of the laws of a single state like Maryland. If in our state it is op- pressed, it will leave us for other regions, where it is more favorably treated. We may like this or not, but as men of sense we cannot wisely shut our eyes to the fact. It has ever been laid down as a maxim of taxation that only those things should be taxed which cannot leave us ; and those who advocate this rule of action do not have in view the special interests of holders of such property, but the general welfare. I would not wish to be understood as advocating this maxim without any qualification, but it appears to me clear that the legislature should always keep in mind the distinction between property which can and property which cannot leave us.' From the time of Turgot and Adam Smith to the present, political economists have not ceased to warn people to be careful not to drive capital abroad by taxing it, and they have often in their timidity, gone too far in this direction and at times indeed appear to have given too much heed to what amounted to little more than blustering threats on the 1 "Never tax anything that would be of value to your state, that could and would run away, or that could and would come to you." Quoted from a pamphlet entitled "The Tax Question," by Enoch Ensley, of Memphis, Tennessee, 1873. THE TESTIMONY OF REASON. 219 part of tax-dodgers. Nevertheless, no practical man can fail to move carefully in this matter. When those who do not like American institutions talk about taking their capital away from the United States, an amused smile of incredulity may be a sufficient reply. Where will they go ? Where else will their capital be so well protected, and at the same time yield so large a net return after defraying the burden of taxation ? When we are, concerned, however, with a single state like Maryland, the case is essentially different. Capital of any high degree of mobility does, as a matter of fact, readily flow from state to state, and this interstate move- ment of floating capital was never so easy as it is to-day. Special companies have been formed to encourage this movement, and it is to-day often practically as easy through their assistance to invest money in a mortgage a thousand miles from one's home as in a mortgage on land in one's own country. The normal returns on floating capital are then deter- mined by general conditions in the United States, and over these we have comparatively little control. If our tax laws operate to depress the returns on floating capital far below what we may regard as their normal level, a portion, and a considerable portion, of our capital will leave us to our own detriment. The result will be that the farmer will find a poorer home market for his produce, on account of dimin- ished wealth in the state, while his lands will fall in value, and the workingman will likewise suffer from fewer oppor- tunities for profitable employment of his services. The money-lender will take his transportable commodity away from us, and instead of placing upon him a fair share of the public burdens, we will simply injure those who would borrow. It is important to consider this well. A. is a young man 220 TAXATION AS IT IS. who wishes to acquire a home by savings from a not too generous income. Is he benefited by laws which make it difficult for him to borrow money with which to build a house or purchase a bit of land ? If the money-lender were walled up within the boundaries of Maryland, it might be that this young man could regard with indifference projects for taxing the desired loan ; but as he is only one of many possible borrowers throughout the length and breadth of the land, I do not see how he can escape loss by any ab- normal burden placed upon the lender of capital. Mort- gages are exempt from taxation in the state of Maryland. Does any one think that money could be had on mortgages in the city of Baltimore, for five per cent., if they were taxed as other property is taxed, namely, ^1.78! on ;?ioo?' Turning this matter over in my mind, and looking at it from every possible standpoint, I fail to see how this ex- emption of mortgages is a special favor conferred on money- lenders. It is an exemption which makes the flow of capital to us easier, and the benefits are thus diffused throughout the community. I am aware that this is a point which has been much dis- cussed among the farmers of Maryland, and that many of them have criticised the exemption with a good deal of severity. I protest that no one has a friendlier ■ feeling for the farmers of Maryland than I ; nor do I need to be told anything about the burdens which rest upon the farmer, and the hardships which he must undergo. No one has a more active sympathy with the trials of the farmer, for I know all about them by personal experience, having lived the first eighteen years of my life on a farm, and having had for a time its exclusive management. Nevertheless, I cannot see how the farmer is to gain anything by special taxes on mort- 1 The rate for 1888 is ;?2.07|. THE TESTIMONY OF REASON. 221 gages or floating capital. His desire to see the burdens of government distributed among the people in proportion to their ability to bear them, is just, but he must obtain his end by other means. Money invested in mortgages, as well as other capital of a high degree of mobility, is taxable by law in most states of the American Union, but as a matter of fact it nearly every- where escapes taxation. Now the returns on this kind of capital, especially in the form of interest, are adjusted to this practical exemption. This is seen in the fact that it has actually happened that the tax rate has in places exceeded the current rate of interest,' which could not happen if a man expected to be taxed. Otherwise, he would be plan- ning to pay for the privilege of lending some one money. Nearly everywhere the rate of interest on good securities in 1 A striking case of oppression narrated in the second " Report of the New York Tax Commission " in these words serves as an illustration of this fact : " The following curious instance of hardship in taxing mort- gages actually occurred in one of the counties of central New York within the last six years. A worthy farmer and his wife finding them- selves becoming incapacitated through age from taking personal care of their little farm, sold it for JS5000, and allowed the purchase money to remain in the form of a mortgage, with the expectation of living on the interest paid annually by the purchaser from the profits of the farm. The town being very small, the fact of the sale and the consideration be- came known to every one, and assessors were compelled, in opposition to their usual practice, to tax the old man to the full amount of the mortgage, as personal property. But the year in which this was done happened to be a year in which the town, anxious to avoid a draft of men for the army, to which the old man was not liable, put up the rate of taxation to more than the legal rate of interest, in order to provide sufficient money to purchase recruits. The result was that the poor old man and his wife found that not only was their income from the mort- gage swept away by the tax-collector, hut they were even obliged to go out for day's work, in order to pay a balance of taxation and provide 222 TAXATION AS IT IS. American cities is so low and the tax rate so high that if a man paid the taxes legally due from him, his income would be far lower in proportion to his means than those who make other investments. This fact in itself discloses the actual practice with sufificient plainness.^ A man turns over various kinds of investments in his mind and balances them against one another in this fash- ion : " Real estate yields so much gross ; taxes, repairs, and insurance deducted, I have so much net. Money placed out on interest will yield, let us say, five per cent., but it is practically exempt from taxation. I will, therefore, lend the money to A. which he desires." Is it not sufficiently evident that the rate of interest on such investments would necessarily rise if they were taxed ? The vital practical point in the discussion is this : the means of support, and this, too, while the identical farm for which the mortgage was given was taxed at one-fifth its true value, and other in- vestments of other citizens of an invisible and intangible character un- doubtedly escaped taxation altogether. And this we call equality in taxation 1 " The report from which this is taken appeared in 1872. The event to which reference is made evidently occurred about 1865. 1 The rate of taxation in the city of Nashville, Tenn., for all pur- poses, state and local, was about three per cent, on the value of prop- erty fifteen years ago, and it was at that time about four and one-half per cent, in Memphis, as I learn from the pamphlet on "The Tax Question," by Mr. Enoch Ensley, to which reference has already been made. The rate of taxation in New York City was ^2.16 on the Jfioo of valuation in 1887. Mayor Hewitt expressed the belief in a recent message that it would be $2.18 in 1888. The rate of taxation for state and local purposes in Baltimore will be JS2.07J on the ^100 of valuation in 1888. How could money be borrowed for five per cent, were loans taxed in these cities? Or even for six per cent.? It is to be further noticed that the rate of interest in great cities does not fluctuate with the rate of taxation, which it would show some tendency to do, were loans actually taxed. THE TESTIMONY OF REASON. 223 benefits of a practical exemption of any sort of floating capi- tal are fully diffused among the people only when it is legal. A lender in Baltimore is content with good five per cent, mortgages, because he knows that they cannot be taxed. If they were legally taxable as in other states, he would want six where he now takes five. He would say : " Probably the mortgage will not be taxed, but it is uncertain, and I must have something for the risk I run." Often, indeed, the risk is transferred to the borrower by making him agree to pay any taxes. The case with other floating, invisible capital, difficult of discovery, is similar. So long as it is taxable by law, no special inducement is offered to it to come to Mary- land, and we nevertheless get little from the tax. If, how- ever, we proclaim to the world that certain sorts of floating capital are in Maryland not taxable, but that their exemption is a part of our tax system, we derive the greatest possible amount of gain from an exemption of that which is for the most part after all beyond our control, and the benefits of the exemption are thus most widely diffused. We remove all premium on risk and tell all owners of capital, of the specified kinds, that without perjury or dishonesty of any kind, they may make investments in the state of Mary- land. The competition among lenders must thereby be in- creased, and the rate of interest must fall correspondingly. We are benefited thereby because we need this species of property.^ The experience of a village in another state, which came within my knowledge, illustrates the extent to which the rate ^ I discuss a concrete case, but what is said will be found to be gen- erally applicable to American states and cities. Foreign countries like England and France are obviously differently situated. Property is more readily transferred from state to state of the American Union than from one country to another. It has been found in Austria that a 224 TAXA TION AS IT IS. of interest on mortgages is beyond the control -of any local authorities. The rate of interest was regulated by law, and the rate was high enough for money lent on good security, provided it was not taxed, and as a rule in the state, it was not. It so happened, however, that honest and intelligent assessors succeeded in finding personalty in this village, but the result was that it became difficult to borrow money, and the comparatively poor who wanted loans were more injured than the comparatively rich who had money to lend. Our experience in Baltimore is instructive. Our present diligent tax-collector, on entering office, very properly felt that his oath amounted to something, and that he must en- force the laws as he found them. He consequently began a vigorous search for personal property, to the apparent con- sternation of many worthy citizens. It was discovered, however, that the returns on capital of that sort, which I have described as capital of a high degree of mobility, had been adjusted to its practical immunity from taxation, and that they were so small that the tax rate was felt as an exces- sive load for tax-payers to carry. Dissatisfaction with what WEis regarded as practical injustice was so pronounced that it became necessary to announce to tax-payers that those who made honest and voluntary returns of personal property of this description, would be dealt with fairly ; in other words, they would be taxed only on part of their property, the law to the contrary notwithstanding. This was the best a practical man could do under our tax laws. Some money put out at interest or invested in taxable small tax on loans has not affected the rate of interest although it was collected. Roscher tells of similar experience of other countries. The federal government could more advantageously tax money at interest and capital of a high degree of mobility than the states, because capital will not readily leave the United States in great quantities. THE TESTIMONY OF REASON. 225 bonds, yielded four per cent., or less, which made the tax rate of ^i.ySf nearly equal to an income tax of forty-five per cent. — truly exorbitant ! In the " Majority Report of the Maryland Tax Commis- sion," one of its members relates the experience of a consci- entious client who wished the valuation of his personalty increased from ^5000 to ^20,000. When told that his book accounts were also taxable, he declared that he could not stand that, owing to the severity of competition with those not thus taxed; and he did not go before the Appeal Tax Court until he received assurance that inquiry would not be made into his book accounts, in consideration of his con- scientious and voluntary discharge of his duty as a citizen. Every one will feel instinctively that it was only fair and proper for the Appeal Tax Court to act as it did in this manner ; that any other course would have been mean as well as disadvantageous to the city, in refusing to take what they could get. Yet it was not law. This is the point. Do we want laws which we cannot enforce, and which, by the necessities of the case, educate men to regard an oath, calling upon the Almighty to witness its sanctity, as some- thing light and trivial ? ESTTERFERENCE OF THE FEDERAt GOVERNMENT IN MATTERS CONCERNING LOCAL TAXATION. In the second place, we are not independent in matters of taxation in Maryland, because we are subject to federal laws, over which we, as a state, have no control. Federal evi- dences of indebtedness are not taxable by our states, and under our existing system it is impossible to avoid their use for purposes of evading taxation ; and the faciUty with which they can be used for these purposes is an important element in determining their market value. It is difficult to see how 226 TAXATION AS IT IS. the federal government can tolerate local taxation of its evi- dences of indebtedness ; for if it does so, a hostile state might destroy their value by taxation, and thus by indirect methods successfully dispute its sovereignty. At any rate, we have in this matter a fact not likely to be changed, and any rational system of taxation for an American commonwealth will be framed with due reference to federal laws and institutions ; and its nature will be such that the exemption of federal property from taxation will not enable the cunning and un- scrupulous to escape their fair share of state taxation.^ Federal interference is, however, not confined to exemp- tion from taxation of federal bonds and federal property, like post-offices, custom houses, and court houses. Im- ported commodities cannot be taxed, and this, with the federal internal revenue taxes, makes taxes on commodities a practical impossibility in our states. The constitutional provisions that the state must not interfere with interstate commerce, and that contracts are inviolable, and the decision that charters of private corporations are contracts, have been made an excuse for an invasion of state sovereignty in matters of taxation, which the most ardent federalist of the last century could have hardly desired, or, at any rate, contemplated as a possibility. Drummers or agents of commercial houses located outside of a state in which they solicit trade, cannot be taxed, because, by a recent decision of the Supreme Court, that is interfering with interstate commerce. It may 1 In this country an interstate tax commission has been suggested, in order to bring about harmonious tax laws in all our states, and to pre- vent both double taxation and escape from taxation. Elsewhere inter- national tax legislation has been proposed for the same purpose. The prospect of co-operation between states and countries in matters of tax- ation is remote, for their interests are too diverse. It is better to adjust our schemes of taxation to the facts which exist at present. THE TESTIMONY OF REASON. 227 thus happen that residents of a state will be placed at a dis- advantage as compared with outsiders. Care is necessary in this respect. Prudence must be exercised in taxation of railroads, or it will be found that laws taxing them will be nullified by a federal court, on the ground that it involves interference with interstate commerce. It is well for a state in this matter to follow, as nearly as may be, the laws of a state like Wisconsin, which has had experience in the taxing of railroads, and which has finally framed its laws in such a manner that they cannot be successfully attacked in the courts by " tax-fighters." Corporate charter exemptions from taxation are held by the Supreme Court to be of the nature of an inviolable con- tract, and, consequently, forever irrevocable. Thus one legislature can forever part with a sovereign power, and cor- porations are granted favors which cannot be shown to natural persons, both because a natural person dies and a privilege would not pass to his heirs, and because a natural person is not called into being by a legislative act. The interference of federal courts in matters of state and local taxation, added to the interference of state courts on account of the endless minutise introduced into our written state constitutions, produces a confusion and uncertainty most damaging, and leads to ceaseless and wasteful litigation. It is only in the United States that " tax fighting" has become a regular branch of the legal profession. When one studies state and local taxation, it is difficult not to become a strict constructionist of the federal constitution, just as when one studies other subjects, like banking, bank- ruptcy, divorce, and marriage, one sees the importance of increased federal powers. The truth is, modem industrial developments have produced new conditions with which our written constitutions do not correspond, and with which 228 TAXATION AS IT IS. they are likely to harmonize less and less every year. Yet it is said that it is now practically impossible ever to change our federal constitution.^ A federal decision which interferes with the otherwise tol- erably satisfactory workings of our Maryland system of taxing stocks and bonds of corporations, and which leads to a practical and unjustifiable immunity of large amounts of wealth from taxation, is given in this quotation from the "Majority Report of the Maryland Tax Committee " : — " We appreciate the force of all that has been said about the difficulty of enforcing a tax upon certain classes of per- sonal property. We believe that the situation would be very much improved in that respect if all the states would adopt the Maryland system of collecting taxes on stocks and bonds through the corporations which issue them, and would not 1 So Alexander Johnston in the Old Princeton Review in an article on a proposal to call a Federal Constitutional Convention. This was not at all the intention of our forefathers who established this govern- ment. The " Report of the Proceedings and Debates of the Virginia State Convention of 1829-30," with the constitution of Virginia, which was -drawn up by that body, lies before me. It was said to have been a remarkable convention. Chief Justice Marshall and two ex-Presidents, Madison and Monroe, were members. The motto on the tide page is this sentence from the Virginia Bill of Rights : " No free government or the blessing of liberty can be preserved to any people but by a firm adherence to justice, moderation, temperance, frugality, and virtue, and by frequent rectirrence to fundamental principles." The italics are in the motto on the title page, and this motto was retained as an article in the new constitution. All early writers contemplate a frequent recur- rence to fundamental principles for the United States, but the constitu- tion has been so drawn that a small minority of the people can keep the constitution as it is, and thereby rule a large majority. It is curious to notice the growing aversion of monopolists, and those who under existing constitutions have received special favors, to any recurrence to fundamental principles. THE TESTIMONY OF REASON. 229 attempt to tax such property in the hands of the individual holder, and especially if the states would abandon the effort to tax such securities in non-resident corporations. Unfor- tunately the Supreme Court of the United States has held that the state in which a corporation is located cannot col- lect from it, out of the interest due to a non-resident holder of its bonds, a tax upon such bonds, because the situs of such property follows the person of its owner." ^ But however this may be, the fact of federal interference in state and local affairs must not be overlooked in making laws for state and local taxation. OUR EXISTING METHODS OF TAXATION NEEDLESSLY DE- MORALIZING. We must next remark that our system of taxation carries with it, as an essential part of its very nature, temptations which, to the ordinary man, are irresistible, and thus need- lessly demoraKzing. A wise people will always endeavor to frame institutions so in accord with the facts of human na- ture that the temptation to lawlessness may be reduced to its lowest terms. " Lead us not into temptation " is as wise a prayer for a state or a nation as for an individual. Expe- * rience shows that the ordinary man wants to do what is right in the main, and to discharge his duties to the common- wealth, but the ordinary man is not a moral hero. He will resist temptation to a certain point, but when the pressure becomes too strong he yields. To deny this is to assert that environment has no influence on character, and to claim that it makes no difference where a child is brought up, among thieves and prostitutes in the slums of a city, or among wholesome surroundings in an upright and Christian ^ See R. R. v. Pennsylvania, 15 Wall. 323; Kirttand v. Hotchkiss, 100 U. S. 491. 230 TAXATION AS IT IS. ! family ! an absurdity which needs no refutation. Now, practical men, in framing laws and poUticayinstitutions, will act with due reference to the facts of human nature. There is a tendency on the part of the pnthinking to draw the conclusion, from the imperfections of human nature, that it makes no difference what laws aid institutions we have until men are improved. This is a -mistake. The imperfec- tions of man set a limit, beyond v X X X 1 X X X X X X X ! X --- — - --- -- -— ~— 1 X X X d X X d X X X X X X X X X /J X fie X X X f X X X X X X X ij X 1 i 1 X X X X X d. X d X X d X X X X X X X X X X X X 1 i^ A i k' i d X X X X r — j X — ■- X X X X X X X X X X X X — 1 X ,21.1^4 - A X A, X X X X X X »Joo $-t X X X X k ^~ 1 X - 1 1 I 1 1 X — X i X X X X I— > X A, X X X X X X X X 1 i X X X X X X X 5 X X X X 1 X X X X $2 X X t t i d X X X — r " I X X X > X 1 : x d X X X X X X X X X X X ) --:■- X X 1 X : X : X : X 1 X d X X X X X X X , X u ^2 X X , 1 1 -— - X X X i -— - X X X •■ \ - - X U- ^ X 4 X '1 d X I X d X X X X A, X X 42 '' ^ X St X ^ X X X X X — - X — X X X X X d d \ d. X I X , X X X X ft X X \ 1 i X i d X d X X X X i $1 X X X X d ' X d 1 d X \ X ~ -.mr X : X X X X $1 X X X d d. X X X X X tl t ■io p X X X X X d X X 1 1 ; 1 1 1 X X "" i X X X X X ii X X X X X 1 -I ^_ i i X ft X X d- X ,r X X (1 X i' d X .V X X 1 X X X X .4 X X X X X X X X X X d X X .9 X X X X X X X X $1 X X ! X ^ ) r — — _ 1 i ! X X X X X r 1 T ' 1 ! ■ X held for pereoual or corporate profit. d higher, than another spocfba of the name value. ». Counties and towns may also levy poll tax to same amount. j. Counties and towns may also levy poll tax to amomit of 50 cents. *. Of the part of poll tax imposed by the state. I, As to grants of land only. m. May be allowed by two-thirds vote of legislature. m. For educational purposes, not over one-fourth to poor. 0. On incomes over $600. p. But not on incomes derived from property already taxed. q. Except in case of public calamity. r. Except grants of aid to orphan or indigidnt acQrlums according to uniform rule s. Except to asylums for soldiers' widows or orphans. f. Except for reli^^dous and charitable purposes. | FAXES. .. 'ISAS€il^> APPROPRIATIONS, Etc. MUNICIPAL. WARRANTS. STATE ACTS. PRIVATE APPROPRIATIONS, CLAIMS, ETC. INT. IMPROVE. LOANS OF CREDIT. wylums according to uniform rule. )rphanB. ». Except when incurred in war for benefit of the state. «. Specially, in any bank. w. To any railroad corporation. X. Except for purpose of getting water supply. y. Except stock be x>aid for at the time of liuDscription. z. Except stock of railroad companies. ALABAMA. ARKA^NSAS.^ CALIFORNIA. COLORADO. CONNECTICUT. DELAWARE. FLORIDA. GEORGIA. ILLINOISr INDIANA^] iOWA. KANSAS. KENTUCKY. LOUISIANA. MAINE. MARYLAND. MASSACHUS'TS. MICHIGAN. Mlj^NESOTA. MISSISSIPPL MISSOUF?l. NEBRASKA. NEVADA. N. HAMPSHIRE. NEW JERSEY, NEW YORK. N. CAROLINA. _ OH 10^ O^EGON^ PENN'A. RHODE ISLaM S. CAROL IN A._^ TEN N ESJEE.^ _^ TEXAS^^ J J VERMONT. VIRGINIA. w. virgin! A. wiscoNsiN. CONSTITUTIONAL PROVISIONS. 397 3. ADDITIONAL CONSTITUTIONAL PROVISIONS. State Finance and Taxation. The provisions here added could not well be tabulated, and are presented best in this form. It must be constantly borne in mind that the following notes must be read with the taljle, as they present simply additional provisions, and in a few cases, exceptions to the provisions given in the table. And it must further be remembered that these are simply constitutional provisions ; the statutory can not well be collected. General Principles. A provision of the Vermont constitution has already been quoted to the effect that the purpose for which the tax is levied ought to appear of more importance to the commu- nity than the money would be if not collected, before any law for a tax be enacted. This provision, introduced in 1777, is still in force. The "state's ancient right of eminent domain and taxation is expressly and fully conceded" in the constitution of Arkansas ; and in that of Georgia, taxa- tion is declared to be an absolutely inalienable sovereign right of the state. The specification of objects and subjects of taxation shall not, according to the lUinois constitution, deprive the Gen- eral Assembly of the power to tax other objects or subjects. Taxable Property. Taxes shall, in Michigan and Wisconsin, be " levied upon such property as is described by law." Personal property of a resident of Maryland shall be taxed where he resides for the greater part of the year, except where goods and chattels are "permanently located"; in 398 CONSTITUTIONAL PROVISIONS. Texas and California all property, except rolling stock, etc., of railroads, is assessed where situated. In California land and improvements thereon are sepa- rately assessed, all mortgages except mortgages by railroads, etc., are taxed to the owner, and the property less the value of the mortgage to the mortgagor, all contracts to the contrary being void. It is provided in the Texas constitu- tion that all property of railroads shall be taxed, and such as is in towns shall bear its share of municipal taxation. The legislature in Mar}'land are to provide for taxation of foreign corporations doing business in the state. Exemptions. Lots in towns, within one mile of limits to the extent of one acre, and lots one mile or more distant to five acres in extent, with buildings thereon, used exclusively for religious, school, or charitable purposes, are, in Alabama, and may be in Missouri, exempt ; in California all property exempt by, or belonging to, the United States ; in Colorado the increase in the value of land caused by the planting of hedges, orchards, and forests may for a time be exempted. The personal property of every individual is exempt in Minne- sota, and may be in Ohio, to the value of ^200 ; in Tennes- see to the value of ^100; in Kansas the property of every family to the value of ^200 ; and household property in Louisiana to the value of J500 ; in Texas, ^250. Growing crops are exempt in California ; the direct prod- ucts of the soil in the hands of the producer, in Texas and Tennessee ; and in the latter state such products in the possession of the immediate vendee, and also articles manu- factured of the produce of the state, except for expense of inspection. Supplies for home and farm use are exempt in Texas. CONSTITUTIONAL PROVISIONS. 399 North Carolina provides that the following may be exempt : wearing apparel, arms for muster, all household furniture, mechanical instruments of mechanics, agricultural imple- ments of farmers, libraries, and scienlific instruments, the total exemptions, however, not to exceed in value ^300. Valuation and Assessment. It is provided in the Louisiana constitution that the assess- ment of property shall never exceed its cash value ; that tax-payers may test the correctness of assessments in court ; and that valuation for purpose of state taxation shall be taken as valuation for local taxation. Cultivated and uncultivated land of the same quality and similarly situated are to be assessed at the same value in California. Purposes of Taxation. In Texas, taxes can be levied for costs of collecting the revenue, to protect the frontier, for the erection and repair of public buildings, and for the enforcement of quarantine regulations ; in New Hampshire and Massachusetts, for the necessary defence of the government ; in Louisiana, for the erection of levees ; in Georgia and Louisiana, to supply Confederate soldiers with wooden arms and legs ; in Ne- braska, to provide such revenue as may be needful ; and in Missouri and Texas, for public purposes only. In Florida, a tax may not be levied to pay interest on bonds of any chartered company. In Arkansas, taxes for other purposes may be enacted by a two-thirds vote of both houses. In Missouri it is provided that all revenue shall go directly into the treasury, and appropriations shall be made there- from in the following order of priority : first, to pay interest on the public -debt; second, certain sum for sinking fund; third, free pubUc school purposes ; fourth, cost of assessing 400 CONSTITUTIONAL PROVISIONS. and collecting ; fifth, payment of the civil list ; sixth, the support of charitable institutions of the state ; and seventh, for the pay of the General Assembly and such other pur- poses not prohibited by the constitution, as may seem necessary.^ Amount of State Tax. The limits of the amount of state taxation for any one year, placed by state constitutions, are as follows : in Ala- bama, 0.75 per cent. ; in Colorado, 0.60 per cent., or 0.40 per cent, when the valuation reaches ^100,000,000; in Louisiana, 0.60 per cent. ; in Texas, exclusive of tax to pay state debt, 0.35 per cent. ; in Arkansas, i per cent. ; in Missouri, 0.20 per cent., or 0.15 per cent, when the valua- tion exceeds ^900,000,000. Poll Tax. By the constitutions of Ohio and Maryland poll taxes are declared oppressive, and are prohibited. The following exemptions are made by the constitutions of the following states : paupers, in North Carolina and California ; idiots and insane persons, in California ; the aged or infirm, in West Virginia, North Carolina, Tennessee ; Indians not taxed or uncivilized, in California and Nevada. In South Carolina no additional poll tax can be levied by any municipal corporation or by the state. Income and License Taxes. Such taxes must be uniform upon each class in Nebraska. They cannot be imposed on mechanical or agricultural pur- suits, in Texas ; nor upon licenses, in Florida ; but may be imposed on all persons in Louisiana, except clerks, laborers, clergymen, school teachers, those engaged in mechanical, 1 Hitchcock "American State Constitutions," page 38. CONSTITUTIONAL PROVISIONS. 401 agricultural, horticultural, and mining pursuits, and manufac- turers of anything except liquor, tobacco, etc., and cotton- seed oil. In North Carolina incomes from property already taxed, cannot be taxed. Private Appropriations, Claims, and Debts. No appropriation of money out of the treasury shall be made in any private law, according to the constitution of Illinois ; and in Texas no appropriation for private or indi- vidual purposes. It is also provided in the Illinois consti- tution that the Illinois and Michigan Canal can never be sold or leased, except by vote of the people, and also that no lien, etc., in the original charter of the Illinois Central Railroad shall be released or impaired. New York may not sell or lease or otherwise dispose of her canals, and in Mary- land, canals in which the state is interested cannot be sold unless the sale is ratified by the ensuing legislature. The constitution of Louisiana gives the legislature the right to grant to a railroad or canal the right of way through pubhc land. In Maryland the legislature can appropriate no money in payment of a private claim of over $300, unless proved before the comptroller and reported on by him. In Illinois and West Virginia the legislature may appropriate for expenses incurred by private persons in suppressing in- surrection or repelling invasion. In New York no claim shall be allowed against the state which would be barred by lapse of time if made against a private person. Internal Improvement. The Tennessee constitution provides that a well-regulated system of internal improvement shall be encouraged by the legislature ; and in Mississippi a board of pubhc works shall be estabUshed for that purpose. 402 CONSTITUTIONAL PROVISIONS. Miscellaneous Restrictions. No appropriation for a bureau of, or to assist or encour- age immigration, shall, according to the constitution of Texas, be made. Loans of Credit. In Alabama the state may not be interested in any private or corporate enterprise ; in Tennessee the state may not issue bonds to a railroad which is in default of payment of interest on bonds previously issued, or which has sold them below par. Upon vote of the people. North Caroliaa may loan its credit. Money. The constitution of Texas provides that the state shall have no power to issue treasury notes or warrants intended to circulate as money. Payment of Taxes a Qualification for Voting. In Georgia all taxes except for the year of election must be paid before one can vote; in Massachusetts, Pennsyl- vania, and Delaware, payment of a state, county, or city tax within two years preceding the election is required of a voter; in Rhode Island he must have paid all poll taxes assessed upon him for a period of two years preceding ; in North Carolina, all poll taxes for a period prescribed by the legislature ; in New Hampshire no person can vote who is excused from paying taxes at his own request ; in Massa- chusetts, however, a person exempt from taxation by law may vote ; in Rhode Island he must have paid a tax to the amount of one dollar, unless possessed of real estate. In municipal elections in Texas, to determine the expen- diture of money or the assumption of debt, no person can Vote who does not pay a property tax in such municipality. CONSTITUTIONAL PROVISIONS. 403 In the Virginia constitution of 1870 payment of taxes was made a prerequisite for voting ; but this provision was abol- ished in 1882 ; and in South Carolina an amendment was carried in the same year which accomplished practically the same purpose. In several states the payment of poll taxes is made a pre- requisite for voting by statutory provision. Municipal Finance and Taxation, General Principles. Municipal taxes in North Carolina and Tennessee must be levied according to the value of property ; in Missouri they may be levied on all property subject to state taxation, and the valuation may not be greater; in Louisiana the valuation must be the same. Amount of Municipal Tax. The rates of county taxation for one year are limited as follows : — Arkansas, \ per cent. Alabama, \ " " Illinois, f " " W. Virginia, 95 cents per JlOO. Louisiana, I per cent. Nebraska, ij " " New York, 2 " " Texas, J " " or one-half of rate of state tax. N. Carolina, twice state tax (except for special purpose and with special approval of the legisla- ture) . Missouri, | per cent, in aggregate where valuation is not over $6,000,000 , 1 1- • f 6,000,000 " ^ per cent, in aggregate where valuation is 1 ^^ ^ between [ 10,000,000 404 CONSTITUTIONAL PROVISIONS. ),000 Missouri, \ per cent, in aggregate where valuation i between j^ 30,000,00b " ^(5 P^"^ cent, in aggregate where valuation is over 30,000,000 tionisj'"'^" i 30,000,0 The following taxes, however, are not included in amounts limited above : in Alabama, " special taxes authorized by law" ; in West Virginia and Arkansas, taxes for free schools ; in Illinois, Nebraska, West Virginia, Arkansas, and Texas, taxes for debts already incurred ; and in Texas, taxes for the erection of public buildings, and taxes for roads and bridges, — the former being limited to one-half per cent, in one year, the latter to ^f^ per cent. Municipal corporations may levy a greater rate than the above in a few states. The rate may be raised in Loui- siana by a vote of the property tax-payers — the tax in this state to be for public works ; in Illinois and Nebraska, by a vote of the electors of the county ; and in West Virginia, by a three-fifths vote of such electors. In the following states the rate of taxation in towns and cities is limited for any one year as follows : — Arkansas, | per cent. Alabama, \ " Texas, (for town not having special charter) \ per cent. Texas, in cities of over 10,000, 2\ per cent. Missouri, in cities of over 30,000, i " " " in cities of between 10,000 and 30,000, ^^ per cent. « « " " 1,000 " 10,000, \ " " " " " less than 1,000, \ " " " in school districts, for school purposes, -^ " " These rates, however, in Missouri, for school purposes, may be increased by a vote of the tax-paying voters, and for the purpose of erecting public buildings by a two-thirds vote of all voters. CONSTITUTIONAL PROVISIONS, 405 Taxes for paying existing or hereafter renewed indebtedness are not included in the above Hmited amounts in Missouri, Arkansas, and Alabama. Purposes Prescribed. Every town and city in Wisconsin, according to its con- stitution, shall by tax annually raise a sum for the support of common schools not less than half the sum received from the state school fund ; in North Carolina no tax shall be levied by counties, towns, etc., except for necessary ex- penses, without a special vote of the electors ; in Arkansas the legislature may authorize school districts to levy a tax for school purposes not exceeding one-fifth per cent. ; in Georgia, counties may levy taxes for schools under special authority of legislature and a two-thirds vote of the county ; in Texas counties may raise a special tax for common schools not exceeding one-fifth per cent. Counties, towns, etc., may levy taxes in Texas for current annual expenses, and for interest and sinking fund of debts ; in Georgia, for edu- cational purposes ; and in Georgia and Mississippi, for the building and repair of court-houses, jails, bridges, and neces- sary conveniences for the people. Special Taxes. Betterment taxes must, in Arkansas, be consented to by a majority of the property-holders in the locality affected, and must be ad valorem and uniform ; and in California, must be collected before the work is commenced. A specified tax may, in Louisiana, be levied for public improvements or railroads by vote of the tax-payers. Loans of Credit. In Maryland no county can loan its credit to any associa- tion or corporation except by act of the legislature, ap- 406 CONSTITUTIONAL PROVISIONS. proved by the next legislature after publication in the local- ity interested. The Maryland constitution contains this special provision regarding the city of Baltimore, viz. : that it may not incur debt or loan its credit in aid of any individ- ual, corporation, etc., or in the construction of works of internal improvement, unless such debt or credit be author- ized by an act of the General Assembly and by an ordinance of the city, submitted to the legal voters of the city of Balti- more and approved by a majority of the votes cast. In Iowa no municipality can become stockholder in a bank ; nor in Minnesota and Nebraska, issue bonds or become in- debted in aid of railroads for more than ten per cent, of its valuation ; in the latter state five per cent, extra, on a two- thirds vote of the people. The following limitations are, however, noted : in Nebraska counties, towns, etc., may, by vote of the electors, under the authority of law, loan credit, etc. ; in Mississippi, on vote of two-thirds of electors and with authority of legislature ; in Tennessee, on three-fourths vote of electors. Statutory provisions, regarding the above points, are much more numerous, but are not given. 11. REVENUES AND EXPENDITURES OF THE STATES. I. COMMENTS. IN a comparative study of the tax systems of the various states, it is necessary to examine not only the provisions regarding taxation as found in the state constitutions or statutes, but also the results of those laws in operation, to be found in the reports of the financial officers of the states. An examination of the laws will make plain who should pay the taxes and, perhaps, what each should pay, but an exami- nation of the budgets of the states will show who really pay the taxes, and how much they pay. In this present work, however, it will not be possible to make an analysis suffi- ciently detailed or extended to show, save in a general way, how great the burden of taxation is, upon whom it rests, and for what the revenues derived from taxes are expended. It is undertaken to give in brief the essential points to be gathered from the yearly financial reports. This task of analysis — or synthesis, as it has been in some cases — has not been an easy one. In the first place, there is no approach to uniformity in the methods of keeping or publishing the accounts in the various states, nor in the classification of receipts and expenditures. In one state, for example, all receipts are grouped according to their source in one grand list, and so of the expenditures; in another, the receipts and disbursements are grouped accord- ing to the funds into or from which they are paid, each fund 408 STATISTICAL INFORMATION. having a separate account ; and in a third, the general plan being as in the last, a portion of the receipts pass through one fund into another, and are thus mentioned twice in the column of receipts, and twice in the column of disburse- ments. These differences arise from the different methods of financial legislation, and are mentioned to show the diffi- culty of analysis and classification. There is, it may be incidentally remarked, abundant room for reform in the methods of keeping state and municipal accounts of reve- nues and expenditures. There have been many other things to render the work a perplexing one, but the greatest care has been taken to avoid errors, and it is believed that the facts set forth are trustworthy. Because of the difficulty of classification, just mentioned, a brief summary of the finances of each state is first given, and afterward, such matter as could be conveniently grouped, is given in tabular form. In collection of these statistics not only have the auditors', comptrollers', and treasurers' reports been of assistance, but also the "American Almanac," edited by Mr. A. R. Spofford, the librarian of Congress. 2. REVENUES AND EXPENDITURES OF EACH STATE. Alabama} For the fiscal year ending September 30, 1886, the total receipts, exclusive of the amount collected and paid out for the public schools in the counties, were ^888,724 ; tlie disbursements, ^818,366. Of the total sum received, the revenue accruing from a general tax on property formed ' Throughout these statements the cents have not been given. If however, they were in the reports, etc., fifty or more, ^i. 00 was added; if less, no account was taken of them. REVENUES AND EXPENDITURES. 409 the greater part ; that from hcenses being next in amount. The following were the principal receipts : — General taxes )?655,I02 Miscellaneous licenses 99,471 Railroad licenses 12,500 Insurance company licenses 4>377 Fees 568 Purchase and redemption of lands 9i777 There was also received ^12,099 from the Department of Agriculture, being a part of the fertilizer tax, and ^31,939 from the university land fund, derived probably from the sale of university lands. The hire of convicts was the only other considerable item, and was more than balanced by the expenditure for the same. There was a school fund tax, amounting to ^325,000, and a poll tax of ^1.50 per poll, amounting to ^150,000, collected and paid out in the counties. The total assessed valuation in 1885 was ^172, 528,933 : that of real estate, ^102,037,631; of railroad property, ^22,296,870 ; the rate was 60 cents per $100, but was reduced in 1887 to 55 cents.' , ^ It is interesting to notice that the assessed value of dirks, guns, pistols, canes, etc., in Alabama greatly exceeds that of farming imple- ments, the value of the former being returned as ^429,493, while that of the latter is returned as only ^87,567. A paper on " Taxation in Ala- bama," by Mr. W. T. Sanders, of that state, read before the class in political economy in Vanderbilt University, lies before me. In this essay it is claimed that the reason for this large apparent excess of value of warlike implements is the fact that farming implements to the value of ^25 are exempt from taxation, and the home-made tools, generally used, are not regarded as of much value, while every one knows exactly what he paid for his dirk or gun, and this can also be ascertained from merchants. All firearms are taxable, and in the " black belt," where there are six or seven blacks to one white, it often happens that firearms are the only property owned by a negro which the state can reach. 410 STATISTICAL INFORMATION. The cost of assessment and collection of taxes was about 5 per cent, of sums collected. The principal expenditures were : for civil list, ^98,837; for payment of interest on bonded debt, ^323,097 ; for charitable and educational purposes, ^230,780. The sixteenth section fund, belonging to the several counties of the state, amounted in September, 1886, to Ji, 820,686. The interest on this amount accrues to the benefit of the educational fund. The state, besides the interest on this fund, had at this date a bonded debt to the amount of ^9, 193,900, bearing interest at 4, 5, and 6 per cent. Arkansas. In the latest financial report of Arkansas to be had, 1878, the total receipts into the general revenue were given as about J 750,000, more than half of which consisted of loans. $128,050 was collected by a property tax; J1622 from insurance -companies; $11,228 from fees; 112,064 fron* commission sales. The revenues of the school fund were chiefly from taxes ; of the permanent school fund, from sale of lands, fines, and estrays ; and of the sinking fund, from liquor licenses and interest. The following statistics are taken from the "American Almanac" for 1888: — For the year ending October, 1884, the receipts were $1,445, I20, ^iid ^'^ expenditure, $515,605. In 1883 the receipts were $830,000; the expenditures $590,000. The amount of taxable property in 1886 was as assessed : real, $78,444,227; personal, $48,382,167; railroad, $13,- 704,639 ; total, $140,531,033. The rate of state tax was 40 cents on the $100. A poll tax of $1 was levied for school purposes. REVENUES AND EXPENDITURES. 411 The amount of the state debt, October, 1885, was ;?2,32i,ioo priacipal; past-due interest, 12,786,943; total, ^5,108,043 ; mostly bearing interest at 6 per cent. There is an additional debt to the amount of ^11,000,000, consisting of Levee and Railroad Aid bonds and others, the former of which have been declared by the Supreme Court of the state as unconstitutional and invalid ; the latter have been declared illegally issued. California. There was received into the state treasury for the fiscal year ending June 30, 1886, the sum of ^6,476,230. The principal items were as follows : — Property tax ^4,222,198 Poll tax (Ji>2 per poll) 296,919 State school lands 169,586 Fees 54,367 Rent of wharves and collection of tolls .... 247,256 Rents and privileges (Yosemite Valley) . . . 10,890 Railway taxes 851,413 Licenses incorporated banks 12,700 Sales of jute products , . . . 51,680 Estates of deceased persons 13,210 Redemption of bonds 288,500 Interest 228,277 The disbursements for the same year amounted to tSil^Tr 612. Of this ^1,894,487 was for the support of schools; ^218,812 for educational institutions ; ^1,162,045 for chari- table and penal institutions; ;?294,578 for harbor improve- ments; ^634,615 in purchase of bonds; ^179,380 for payment of interest on bonds; and ^411,654 as payment of county portion of railroad taxes ; and over ^800,000 for payment of salaries of public officers, etc. The total valuation of property for 1886 was ^816,446,700, 412 STATISTICAL INFORMATION. of which the personal was 1151,937,132, being 24.64 pel cent of the real. The state rate of taxation was 56 cents on the ^100. Among the principal items in the list of assessed valua- tions were : merchandise, ^32,449,166 ; moneys, ^10,874,- 971; solvent credit, 115,428,987 ; mortgages, $98,833,614; furniture, $12,426,022; horses, $11,883,980; cattle, $13,- 541,662 ; sheep, $5,683,083. The cost of assessing, auditing, collecting, and pa}ring in the taxes was $259,563, or about 5 per cent, of taxes col- lected. The state school fund had in its possession state and county bonds to the amount of $2,549,500. This fund is maintained by interest on these bonds ; by poll taxes ; by interest on sales of certain lands, the 500,000-acre 'land grant, and sixteenth and thirty-sixth sections land grant ; by sale of geological survey reports, and by a percentage of the state and railway taxes — chiefly the former. The state rate in 1885 was 547*5- cents on the $100, of which 17^5- cents was for school purposes. The university fund held bonds, bearing 6 and 7 per cent, interest to the amount of ^i,363>50o- The funded debt of the state was in 1886, $2,953,500, $2,614,000 of which was held by the state school and uni- versity funds, leaving bonds to the amount of $339,500 only, in private hands. The state funded debt bonds, which constitute the greater part of the debt, fall due in 1893. Thus it will be seen the state is practically out of debt. The funded debt of the counties amounted in 1885 to $7,717,741,^ the floating debt to $667,445. 1 No account was found of sinking funds, but it is probable that such exist. It is very generally true of minor civil divisions as well as of REVENUES AND EXPENDITURES. 413 Colorado. This state has over thirty funds among which are distrib- uted the receipts according to some prescribed rule. The total receipts for the two years ending November 30, 1886, were ^1,837,395; the disbursements, ^1,515,951. For the general revenue a tax of four mills on the dollar was laid, and for other specified funds, of i-^ mills, and in addition to these, a military poll tax of ^i per capita. The amount charged the counties on account of these taxes was, for the two years, ^1,403,214, but the amount collected for 1885 was but 93.30 per cent, of the amount assessed, and for 1886 but 92.81 per cent. There was received from fees ^43,440, and from insurance taxes and fees, ^37,246. A considerable amount is received from sale of land and interest. The assessed valuation of all property for 1886 was ^124,269,710. The expenditures were chiefly in payment of salaries, for the building of the capitol, for the state peni- tentiary, and for charitable and school purposes. The amounts invested for the various funds were as follows : — Public school fund ^171, 567 Public school land lease 89,784 State university fund 40,660 Internal improvement fund 29,894 Penitentiaiy land fund 4>o85 Public building land fund 16,626 The state debt consisted of outstanding warrants bearing 6 per cent, interest ; certificates of indebtedness, bearing 6 states that the real debt is less than the nominal. The net or real debt is found by subtracting the amount in the sinking fund from the nomi- nal debt. The bonds of a Maryland debt were recently wholly in the sinking fund. 414 STATISTICAL INFORMATION. per cent, interest ; and loco weed certificates unredeemed ; in all ^666,874. But there was sufficient revenue in the treasury to meet all the debt save ^110,379. The state constitution prohibits the legislature from creating a debt in advance of appropriations, beyond the amount provided for by taxation, and consequently the state has no bonded debt. Connecticut. The receipts from revenue for the fiscal year ending June 30, 1886, were ;^i,8i3,702, the principal items being the following : — State tax from towns $i,yi^'j2 Military commutation tax 102,472 Tax on railroads 626,199 " " insurance companies 225,484 " " savings banks 200,590 " " express companies 8.675 " " telegraph and telephone companies . . . 6,926 " " non-resident stock 7i>549 " " insurance agents of other states .... 22,585 The expenditures for the same period amounted to $3,249,597, over one-half being in payment of interest and in purchase of bonds. The amount of property, personal and real, as assessed for 1886, was ^349,977,339. The rate was \2\ cents on the III 00. A tax of one per cent, is levied on railroad com- panies on the market value of all stock, plus the market , value of funded and floating debt, less amount of cash on hand.i 1 This percentage was derived by a calculation based on published returns. The Connecticut system is thus described in the " Report of the Special Tax Commission," made January, 1887: — " The present system assumes, with certain minor modifications, that REVENUES AND EXPENDITURES. 415 The treasurer holds in custody for the Town Deposit fund, ;? 1 8,824, on which the interest received is paid to the several towns. There is an Agricultural College fund invested in bonds and mortgages, amounting, in 1886, to ^135,000. There is also a large school fund, the interest thereon for the same year amounting to ^172,100. The amount of the funded state debt, July i, 1886, was ;?4,27i,20o; $1,030,000 five per cent, bonds, ;^i,5oo,ooo of three and one-half per cents., and 1 1,740,000 three per cents. Delaware. There is no state valuation of property, and all state revenues are derived from other sources. The following were the principal receipts of the general revenue for 1 886 : — Railroads ^41,528 Licenses (less amount to school fund) 45.423 Interest 24,000 Dividends from banks 4>S45 Fees 1,120 Inheritance tax 913 The total receipts into this fund were $121,190; the dis- bursements, $1 20,028. The chief items of expenditure were, interest on bonds, $37,000 ; salary of officers, $33,000 ; and for free schools, $30,000. The school fund investments in bank stocks, bonds, etc., amounted to $495,749. This fund receives also a part of the license fees; its share in 1886 was $12,500. The state the market value of the stock and bonds and floating debt of a railroad company represents the taxable value of the property itself, and that a tax of one per cent, upon that property is practically the average rate that it would pay, if assessed, bit by bit, in each town that the line passes through." 416 STATISTICAL INFORMATION. had ^73,050 invested in bank stock, and had ^600,000 on loan. The state indebtedness January i, 1887, was ;?824,750, as follows : outstanding bonds bearing interest at 4 per cent., 1585,000; school bonds at 6 per cent., ^156,750; amount on which interest at 6 per cent, is paid Delaware College, ;^83,ooo. But the state is practically out of debt, as it holds interest-bearing securities to the amount of ^1,168,799. Florida. The state treasurer's report for the year ending December 31, 1886, shows the total receipts on account of general revenue to be ^383,843, and chiefly from the following sources : — License tax . $130,420 General tax 246,890 Auction tax 538 Commission taxes 4>'75 The expenditures on the general revenue account amounted to ^534,466. Of this amount ^27,734 was paid for the collection of revenue ; for salaries of execu- tive, judicial, and legislative departments, ;^ 130,000; for jurors and witnesses, ^149,470; for educational institutions, .^18,000 ; and for interest on the bonded debt, ^79,954. For the support of public schools a tax of one mill is levied and paid out to the treasurers of the different coun- ties, amounting, in 1887, to 1172,361. There are several educational funds, fed chiefly by sale of lands and interest on bonds. The amount of bonds in the various funds December 31, 1887, was as follows : — In the Agricultural College fund {(155,800 " Common school fund 532,284 REVENUES AND EXPENDITURES. 417 In the Seminary fund ,892,300 " Sinking fund (Bonds of 1871) 77,90o 1873 150,300 Total 11,008,584 The bonded indebtedness of the state is represented by ;?3So,ooo bonds of 1871, bearing 7 per cent, interest, and ^925,000 bonds of 1873, bearing 6 per cent, interest; in all, ^1,275,000. But all save ^411,300 is held by the funds named above, so that the outstanding indebtedness is not large. The "American Almanac" gives the amount of taxable property assessed for the year 1887, ^76,611,409, and the rate for the year ending December 31, 1884, 40 cents on every ^100. As above stated, one mill on the dollar or 10 cents on every ,^100 goes to the benefit of public schools. Georgia. For the fiscal year ending September 30, 1886, this state has an unusually large budget. The receipts for 1885 were ?i, 533, 320, and for 1886, ^4,220,130; the expenditure for 1885, $1,441,338, and for 1886, ^4,453,393. This in- crease is due to a refunding process, the state selling bonds to the amount of $2,508,850, and paying upon the pubhc debt $3,103,392. The chief items of revenue are : — General tax ^871,130 Railroad tax 95>S2I Capital tax ... , 150,223 Insurance tax 21,362 Privilege taxes 176,417 Telegraph, telephone, and express companies . . 5,ii8 Liquor licenses 67,881 Fees 78,405 Rent of West Point and Atlanta R.R 300,000 Bank of Rome 18,749 418 STATISTICAL INFORMATION, The chief expenditures are on account of public debt, civil establishment, new capitol building, schools, and asy- lums. The assessed value of all property was ;?329,489,505 ; lands, and city and town property, ^182,366,292 ; railroad property, ^22,981,927 ; personal property, ^124,141,286. The rate of the state tax for 1886 was 35 cents on the ^100. The bonded debt of the state outstanding October i, 1 886, was ^9,052,620, the larger issues bearing interest at 4^, 6, and 7 per cent. Illinois. The revenues of this state are derived chiefly from taxes and a percentage (7 per cent.) of the gross earnings of the Illi- nois Central Railroad. Of the total amount — ^4,666,444 — received into the general revenue fund, for the two years ending September 30, 1886, 13,774,363 was derived from taxes, ^725, 208 from the gross earnings of the Illinois Cen- tral Railroad, and ^150,887 from fees. There was also received from the tax on property, for the use of the school fund, ;?2, 164,739, of which amount there was disbursed ?2, 132,084. The total expenditure for the same period from the gen- eral revenue fund was ^5,122,800. Of this amount ^618,861 was paid as salaries of oflficials ; ^309,242 to the members of the general assembly; ^353,652 for the completion of the state house; ^2,353,106 for charitable institutions; and ^244,120 for educational institutions. The total equalized value of all property, personal and real, for 1886 was ^726,178,132; of railroad property and capital stock of other corporations, ^66,728,678. The ag- gregate equalized value was ^793,563,498, 79.77 percent of this being real, and 20.23 P^"^ ctxit. personal. REVENUES AND EXPENDITURES. 419 The rate of taxation for the same year was, for state pur- poses, 21 cents on every ^loo, and for state school pur- poses, 14 cents, making a total rate of 35 cents on every 5 1 00. The state pays an annual interest to the school fund, amounting to ^139,848 in the two years named, and to the local bond interest fund, ^2,779,038, in the same years. The state tax is small compared with the total taxes col- lected for all purposes. In 1885 the state tax was ^3,485,- 083, the county tax $5,024,407, the city tax $7,383,462, the town and district and local taxes were $12,017,757, the registered bond tax $1,535,220, a total of $29,445,931. The state has really no bonded debt. All bonds have been called in and cease to draw interest, but the principal out- standing amounted, October i, 1886, to $23,600. The state, however, as has been noted, pays a large sum armually to the counties, etc., as interest. The local indebtedness is given as follows : — • Counties J!i2,S79,98s Townships 7,252,048 Cities, villages, and incorporated towns . . . 19,621,675 School districte 2,047,137 Total ^41,500,843 Indiana. In this state there are numerous funds, chiefly unproduc- tive, among which the receipts are distributed. For the fiscal year, ending October 31, 1887, the receipts into the general fund were $2,373,043^ into the school fund $2,127,- 946 ; into the new state house fund $168,159 ; into other funds $69,047; a total of $4,738,198. Of this amount there was received from the state tax $2,709,635, or more than one-half. There was also an additional sum of $32,- 566 for the support of inmates of asylums, etc. 420 STATISTICAL INFORMATION. Among other sources of revenue were the following : — Fees (insurance) ^23,547 Fees (court and other sources) I5>386 Insurance tax 61,985 Express company tax • 366 The total may be somewhat misleading, as in it are in- cluded some transfers from one fund to another. Thus the sum ^351,430, a payment of interest on bonds, figijres in the expenditure column of the general fund, and in the receipt column of the school fund. It has not been found convenient to re-group the receipts and expenditures, and they are therefore given as found. The expenditures for all purposes were |!4,774,226. From the general revenue fund the chief disbursements were: for pay of public officers, clerks, etc., ;?36 1,802; for benevolent and penal institutions, ^965, 155 ; and for educational institutions, ^58,360. The amount of taxable property as assessed for 1885 — as given by the "American Almanac " — was : real, ^566,521,- 981; personal, ^227,004,098; total, ;?793, 526,079. The rate of state tax, 12 cents on each $100. There is a capi- tation tax of 50 cents per poll for state purposes. The domestic bonded debt of the state was, October 31, 1887, ^4,388,783; the foreign debt, ;?2,04i,826; total, ;?6,430,6o8. The domestic debt consists of non-negotiable bonds held by the school fund, Purdue University, and Indiana University. Iowa. The total receipts for the two years ending July i, 1887, were ^3,327,981 ; the expenditures for the same period, ;^3,Sii,5oo. The state tax of two and one-half mills on the dollar was the chief source ; the amount received for the REVENUES AND EXPENDITURES. 421 two years named being 12,359,883. Among other revenues the following are the more important : — Insane dues from counties ^41 1,840 Other dues for charitable institutions 80,461 Pedlers' licenses 2,195 Insurance taxes I40j355 Fees (insurance) $1)248 Other fees i6,iS4 Telegrapl; and telephone taxes 22,552 Railroad commission tax 40,302 The chief items of expenditure are, beside the civil list, schools, - penitentiaries, charitable institutions, the militia, and the capitol building, that for charitable institutions be- ing nearly one-third of the total expenditure. The total equalized value of all property for 1887 is given as ^501,369, 744 : of real, ^349,213,676; of personalty, ;?ioi, 665,098; of railroad property, ^38,722,761. The rate as already stated was two and one-half mills on the dollar. The taxes assessed for all purposes in the state, for 1885, were ^14,430,547, the state tax being but ^1,201,791. The state has a permanent school fund amounting, June 30, 1887, to ^4,187,893. Of this, the several counties held ?3, 940,487 ; the amount in 8 per cent, state bonds was ^245,435 ; the remainder consisted of contracts for real estate sold, and cash. There are two or three other funds to which the proceeds of the sale of certain lands accrue. The state has no debt except the one of ^245,435 to the school fund. This is a permanent debt, and the state is responsible only for the annual interest of 8 per cent. Kansas. For the fiscal year ending June 30, 1886, the amount re- ceived into the state treasury on all accounts was ;?2, 566,624. 422 STATISTICAL INFORMATION. Of this amount, ;?i,o82,476 was derived from taxes ; ^i 18,815 from the penitentiary ; and $50,863 from the insurance de- partment as hcense fees. The greater part of the remainder was received from the sale of lands and as interest. The disbursements for the same period were $2,727,701, and were principally as follows : — General revenue warrants paid $1,190,140 Sinking fund warrants paid 45j776 State bonds paid 83,000 School warrants paid 1,026,492 Educational institution warrants paid 130,292 State house fund warrants paid 128,242 The total assessed valuation of all property for 1886 was $277,110,683: of real, $189,635,722; of personal, ^5S.49i>779; of railroad property, $32,453,776. The rate of taxation was i,-^-^ mills on the dollar. In 1885 the amount of state taxes was $1,044,939; o^ county taxes, $2,863,258 ; of city taxes, $950,047 ; of town- ship taxes, $981,841 ; of school district taxes, $3,049,936 ; in all, $8,890,024. The several state funds are possessed of bonds as fol- lows : — Permanent school fund j(S3,6oo,323 Normal school fund 6'>595 State Univer>ity fund 9iii53 State Agricultural College fund 384,189 State Agricultural College note fund 71,726 Sinking fund 2i,ooo The state has a bonded indebtedness to the amount of $847,500 ; but of this amount, in June, 1886, only $273,000 was held by individuals or corporations, the remainder be- ing held by the funds above mentioned. The municipal in- debtedness of the state for 1886 is given aj $17,779,299. REVENUES AND EXPENDITURES. 423 Kentucky. In the state auditor's report for the year ending June 30, 1887, the total receipts on account of general revenue are found to be ^3,038,638 (this sum, however, includes a trans- fer from other funds of ^150,000). Nearly two-thirds was received from the general tax. The chief receipts are the folUowing : — Sheriffs' revenue or general tax ;?l,845,46i Railroads 148,082 Insurance companies 79ilt8 Insurance bureau 26,629 Telegraph companies 3,ooi Banks, state and national . • 100,887 Distilled spirits i7i95S Lotteries 4,000 Turnpike dividends 26,686 Licenses (chiefly liquor licenses) 276,704 There was received also from a fund termed the " trustee jury fund," ^164,174, collected as fines, fees, etc. For the same period the expenditures from the general fund are given as ^3,058,578. There was paid in salaries, ;?i54,949 ; to the school fund, ^919,111; to the sinking fund, ^181,250; for criminal prosecutions, ^190,869; and to assessors, ^128,036. A considerable sum was paid out for penitentiaries, which was partially balanced by receipts from them. There was received into the school fund (white) beside above transfer, a slight tax on billiards, cards, dogs, and the banks, and interest on bonds, amounting to ^176,248; and into the school fund (colored), ^12,545, from sheriffs' reve- nue, fees, etc. The assessed value of real property for 1887 was ^351,- 424 STATISTICAL INFORMATION. 157.053; of personal, ^132,334,637; of railroad property, ^33,722,621; total, 1517,214,311. The rate for 1887 was 47^ cents on every ^100 ; for 1886 the tax levy was 5 1 cents. The state has a bonded indebtedness amounting to ^694,000; but the Agricultural College fund holds g 165, 000 of it, and the outstanding indebtedness is but ^509,000. There are, beside these, state and county bonds amounting to 2 1, 705, 946, drawing six per cent, interest; but they are irredeemable, and constitute an inviolable fund. To meet the interest on the above indebtedness, the state has stocks, etc., in the sinking fund to the amount of ^710,744. The state, therefore, has practically no debt. Louisiana. This state does not seem to have very efficient machinery for a prompt collection of taxes, as on the treasurer's books for 1883 appear returns from taxes laid in 1867. The re- ceipts for the fiscal year ending December 31, 1883, were ^1,907,152. From taxes proper was collected ^1,108,755 ; from poll taxes (back), ^1,073 ; from license taxes, $273,918 ; from levee taxes, $148,061; from lotteries, $40,000; from sale swamp lands, etc., $167,594; from fees, $18,919; and from interest on taxes, $42,759. There was expended for the same period, on account of all funds, $1,349,964. The commissions of collectors, etc., amounted to $69,894, or about 4 per cent, of collections. The following statistics are taken from the " American Almanac " : — Amount raised by taxation during the year ending Janu- ary 1, 1888, $1,565,119 ; from licenses, $265,000 ; from auc- tion sales, $2285; from poll tax, $7959; from property tax, $1,215,000. REVENUES AND EXPENDITURES. 42S Amount of taxable property as assessed for 1886 : real, $149,145,874; personal, $63,579,590; total, $212,725,464. The rate of state tax for 1886, was six mills on the dollar. A poll tax of $1 is levied for school purposes. The state debt, May i, 1887, was $11,982,621 funded, drawing interest at 4 per cent. Maine. For the year ending December 31, 1887, the total re- ceipts were $1,161,980; the total expenditures, $1,168,544. Nearly two-thirds of the total revenue was derived from taxes. The following items are taken from the treasurer's report for 1887 : — State tax )J743,II3 County taxes (for state purposes, probably) . . . 9,964 Railroad tax 89,797 Savings bank tax 256,430 Insurance company tax 17,294 Telegraph and telephone company tax 7i700 License fees 11,482 Shore rents 3,914 Duties on commissions 2,733 Maine Benefit Association 3>ii8 The expenditures of the state have not been classified, but are found to be confined to the ordinary purposes, viz. : civil establishment, schools, and charitable and penal insti- tutions. The assessed valuation of property for 1886 is given : real estate, $148,489,142; personal, $60,220,239; total, ;?2o8, 709,38 1. The rate of taxation for 1886 was 3f mills on the dollar, for 1887 but 2| mills, one mill of which was returned to the various towns of the state for school pur- poses. 426 STATISTICAL INFORMATION. The total liabilities of the state, January i, 1888, were ^5,355,077; of this, the bonded debt was 183,959,000. The state holds in trust certain funds amounting to nearly 1750,000, upon which interest is paid. Interest-bearing loans constitute the remainder of the indebtedness. There was in the sinking fund, December 31, 1887, bonds of the United States, Massachusetts, and New Hampshire, amounting to ^947,800, and ^1860 cash. During the year 1887 the treasurer cancelled all Maine bonds held in the sinking fund, to the amount of ^1,162,000, and beside, pur- chased and cancelled others amounting to ;?36,ooo, leaving the bonded debt of the state as above given. Maryland. There was received into the treasury of this state during the year ending September 30, 1887, ^2,440,363 ; and there was paid out ^2,374,916. The chief receipts were from — Taxes from collectors ^864,763 ^ Taxes from incorporated institutions 70,586 Taxes from state and state stocks 44,439 Licenses 521,310 Taxes on commission of executors, etc 50,855 Taxes on collateral inheritances 45,597 Taxes on gross receipts of railroad companies . . 52,433 Fees ",949 Fines l4,Sll Dividends from banks, etc 118,934 Interest (from certain railways) 94,200 Debenture scrip of P. & R. R.R 45,ooo There was expended for salaries of civil officers, ^27,295 ; for various colleges, academies, etc., ^43,565 ; for payment ^ Taxes from collectors mean the receipts from the general state tax of i8| cents on the ;Jioo of all property. REVENUES AND EXPENDITURES. 427 of interest on the public debt, ;?55 1,836 ; on account of free schools and state normal school, ^509,959 ; for the judiciary, 1^96,540 ; and for charitable institutions a very considerable sum. The assessed valuation of all property, real and personal, for 1887 was ;?485,839,772 ; corporation property, ^61,311,- 375. The state rate of taxation for 1887 was i8f cents on every $100. The amount of stocks and bonds held for the use of the school fund, September 30, 1887, was {83 10,986, and in the sinking fund there were stocks amounting to ^2,144,216. The funded debt of the state on the date named, was ;?io,96o,53S, bearing, 5, 6, and 3.65 per cent, interest. Sub- tracting the productive stocks held by the state and sinking fund, the net debt is ^5,661,234. The state holds, as an offset, unproductive stocks amounting to ^28,268,781, and ^1,876,025 due from accounting officers and incorporated institutions. Massachusetts. The receipts on account of revenue for the year ending December 31, 1886, amounting to ^8,748,652, were derived chiefly from the following sources : — State tax $1,499,805 Corporation tax 2,227,579 Bank tax (savings and national) 2,398,267 Insurance company tax 3^6,336 Licenses (insurance) 22,923 (liqior) 303.798 " (hawkers and pedlers) 18,029 " (coal and mining, companies) .... 4)777 Fees (court, clerks, etc.) 3°!949 Income from Hoosac Tunnel Z^Ztl^'i Foreign railway company tax 22,919 Interest on deposits 40,614 428 STATISTICAL INFORMATION. The payments on account of revenue for the year amounted to ?9,3i 7,609. Of this, over ^2,000,000, received as corporation tax, was paid out to towns or counties ; ^1,250,000 was used in payment of a loan; ^597,864 was paid to the various departments, executive, judicial, and legislative ; J5 12,01 7 to the charitable departments ; ^87,948 for educational expenses; ^461,771 to reformatory and correctional institutions; ^376,339 for public buildings; J 7 5, 000 for certain improvements, etc. The receipts on account of funds for the year were $4,316,704; the expenditures on account of same were ^S>S-28,247. There was in the school fund, January i, 1887, ;?2,7i5,- 944 ; and in others, exclusive of the sinking fund, $632,056, consisting of state securities, county and town securities, United States and railroad bonds, cash, etc. There was in the sinking fund $18,964,412, the greater part of it being invested in state and county, city and town securities. The total assessed valuation of property, January i, 1887, was $1,847,531,422: of real, $1,340,493,673; of personal, $507,037,749. The rate for 1886 was 86y\ cents on $1000. The total taxes raised in the state for state, coirnty, city, and town purposes, for the year ending May i, 1888, amounted to $26,701,437, or about $r3.75 per capita. No less than 9 1 per cent, of this was levied for municipal pur- poses. The state debt, January i, 1886, was $31,429,680 funded, all of which, with the exception of a small sum, bears in- terest at 5 per cent. The entire debt matures by the year 1900. REVENUES AND EXPENDITURES. 429 Michigan. This state has a general revenue fund, numerous educa- tional funds, and other funds, and the numerous transfers from one to the other of these funds make the analysis of the budget a somewhat difficult one. For the year ending September 30, 1886, the total receipts were, according to the treasurer's report, ^3,046,999, of which ^2,179,711 was received into the general revenue fund. The chief items of receipt were : from taxes, ^1,669,686 ; from fees, ^17,313; from interest, ^32,784; from sale of state lands, ^31,522; from delinquent taxes, redemptions, etc., ^192,592 ; and from miscellaneous sources, ^95 79. There is also included in this sum transfers to the amount of ^219,344. The ex- penditures from this fund for the same time were ^2,018,143, and principally for the following purposes : for the expenses of state government, ^141,947 ; for the judiciary, $5093 ; for salaries, ^256,705 ; for colleges and schools, $203,711 ; for institutions, etc., ;|!36 1,604 > ^^d on account of appropria- tions, ;?468,40o. To the specific tax fund were paid the taxes on corpora- tions, amounting to ^812,711. Of this amount railroad com- panies paid $619,399; fire insurance companies, $91,364; life insurance companies, $33,392 ; and mining companies, $47,565. These receipts were transferred to other funds. The remaining funds are fed chiefly by the sale of lands and interest. The total amount of taxable property as assessed in 1887 is given as $849,921,063 ; the rate of taxation 12.72 cents on each $100. The outstanding bonded debt of the state, September 30, 1886, was $243,149, of which $12,149 was past due, and not bearing interest, and $231,000 due in 1890, bearing interest at 7 per cent. 430 STA TISTICAL. INFORMA TION. There is beside a trust fund debt of ^4,511,934, upon which the state pays interest for educational purposes. To meet indebtedness, there was in the sinking fund at the above date ;? 2 3 1,000 invested in United States 4^ per cent, bonds. Minnesota. The receipts into the treasury of this state for the year ending July 31, 1887, were ^2,476, 530, and were as follows : from the counties, ^1,201,223 (^the tax for state purposes amounted to but ^642,883, the remainder was for school and internal improvement purposes) ; from railroad compa- nies, ^675,745 ; from insurance companies, ^98,365 ; from telegraph and telephone companies, 110,540 ; from stump- age, ^38,403 ; from school text-books, ^36,328 ; and from miscellaneous sources, ^415,926 (under "miscellaneous" are included chiefly fees from inspection, etc., interest, and penitentiary receipts) . The expenditures for the same period were J2, 759, 815. The amount of taxable property assessed for 1887 was : real, ^382,337,464; personal, ^87,494,258 ; total, ^469,83 1,- 722 ; the rate of state tax, 13 cents on the ^100. The taxes for all purposes, state, county, and town, as given by the "American Almanac," have averaged 17.3 mills on the $1, or ^1.73 on the ^100. The state loans, represented by bonds, consisted, July 3r, 1887, of ^3,964,000 railroad adjustment bonds, of which the permanent school fund held ;?i,98i,ooo, and the permanent university fund, ^280,000, the balance being held by outside parties. The permanent school fund, the university fund, and the internal improvement fund, together hold bonds amounting to ^4,727,783, there being, as just stated, ^2,261,- 000 invested in state bonds. It is thus seen that the bonds held by these funds more than equal the state debt. REVENUES AND EXPENDITURES. 431 Mississippi. For the fiscal year ending December 31, 1887, the total receipts into the state treasury were ^1,069,568, as fol- lows : — State tax *4i4.77S Privilege tax 142,649 Insolvencies C63 License to retail liquors 109,450 Swamps and overflowed land fund 6,379 Internal improvement fund 2,820 General state fund 10,904 Chickasaw school fund i,439 Special insurance tax 309 Railroad privilege 140,316 Sale of bonds 211,300 Sale of lands 7,004 Miscellaneous 450 Expenditures were principally for the following purposes : judiciary, ^82,2 1 6 ; executive, ^34,387 ; common school fund, ^232,624; interest Chickasaw school fund, 1(64,154; for educational institutions, ^118,497 > insane asylums, ^94,673 ;. railroad tax distributed, ^93,446 ; commission for assessing all taxes, ^31,996 ; principal on loan, ^175,000. The amount of property assessed, 1887, was: of realty, ^90,270,135; of personalty, ^39,617,119; total, 129,887,- 254. The state tax on property was 3^ mills on the dollar. The number of polls liable to taxation were 193,445. The total state debt, January i, 1888, was ^3,752,904. From this amount it is necessary to subtract the amounts due the Chickasaw school, the seminary, and common school funds, because the debt to these is permanent and invio- lable, and also the amount of the agricultural land script fund which must be permanently refunded or invested. This makes the real debt only ;?i,34s,z46. +32 STATISTICAL INFORMATION. Missouri. There was received from all sources during the year end- ing December 31, 1886, §3,425, 562, the receipts on account of the state revenue and state interest funds, §3,202,007, constituting the greater part of this sum. The receipts into the treasury on account of these funds just named are grouped under three heads : — From counties ^3,035,820 " railroad, bridge, and telegraph companies 78,370 miscellaneous sources 87,817 Under the latter head are included taxes on incorpora- tions, of §43,345 ; on insurance companies, of §22,619 ; and fees amounting to §5213. State licenses paid by dramshop keepers amounted to §151,477, but it does not appear from the treasurer's state- ment that they were paid into the treasury. The taxes levied for r886 for the state were : on real estate and personal property, §2,820,271 ; on railroad, tele- graph, and bridge companies, §198,398 ; on merchants and manufacturers, §186,357; in all, §3,205,026. There does not seem to be close correspondence between the sums lev- ied and the sums collected from the various sources. No explanation has been discovered and the facts are given as found. The principal expenditures for the year from the revenue fund were : for pay of civil ofificers, §199,883 ; for assessing and collecting the revenue, §145,345 ; for costs in criminal cases, §149,262 ; for support, etc., of penitentiary, §100,000 (more than covered by receipts on account of) ; for educa- tional institutions, §79,000 ; and for asylums, §244,901. The total assessed value of real estate for 1886 was REVENUES AND EXPENDITURES. 433 ;?5 18,803,118; of personal property, ^181,133,128; total taxable wealth, exclusive of railroad and telegraph property, 11699,936,246. The assessed value of the property of rail- road, telegraph, and bridge companies was ^42,847,264. The rate of taxation for state purposes was 40 cents on the Jioo. The county revenue tax was ^4,287,396 ; the county interest and sinking fund taxes, ^2,459,156 ; the school taxes, ^3,555,191 ; road, bridge, and drainage taxes ;?36i,6i8 ; and township taxes, ^389,725 ; in all, ^14,258,113. The cost of assessing and collecting the state taxes was a little over four per cent. The state school fund amounted, December 31, 1886, to J3, 1 34,440, and the state seminary fund to ^5 19,095; all but S440 of the former and ^95 of the latter being invested in state bonds, bearing 5 and 6 per cent, interest. The amount of the state bonded debt at the above-named time was ^10,527,000, bonds amounting to ^1,276,000 hav- ing been redeemed and cancelled during the two years. Nebraska. The revenue of this state is derived from taxes, fees col- lected by state officers, and from insurance companies, sale of lands, and interest. The following statistics for the two years ending December I, 1887, are taken from the " American Almanac " : — Total receipts $3,323,844 Total expenditures 2,822,308 The amount raised by taxation for the year ending De- cember I, 1887, was ;?i,305,66o. The amount of taxable property assessed, 1887, was ; real, $96,358,889 ; personal, $40,546,015 ; railroad, $23,601,362 ; total, $160,506,266. The rate of the state tax was 81.25 cents on the $100. 434 STATISTICAL INFORMATION. The amount of the state debt, November i, 1887, was ^449,267, drawing interest at 8 per cent. There was in the sinking fund ^128,761. Nevada. The statistics given are for the year ending December 31, 1887. From the property tax there was received into the treasury, ^236, 855 ; from tax on proceeds of mines, ^13,723 ; from escheats, J5 1 ; from possessory claims, $60 j from court fines, ^3254; from gaming hcenses, ;?7546 ; and from a poll tax of $2 per poll, $16,667 '> total receipts from counties, $278,572. There was received into the several funds beside the above, $188,683, principally from land sales, the other receipts being on account of fees, Hcenses, interest on bonds, etc. The actual disbursements were (subtracting transfers from fund to fund) $392,433. The assessed valuation of real estate was $15,649,537 ; of personal property, $10,790,670; net proceeds of mines, $1,557,133; total assessment, $27,997,340. The value of railroad property was $9,212,451. The state rate was 90 cents on the $100. The cost of collection of taxes is about 9 per cent. This large rate is due to the small amount of collections. The cost of collecting revenues from taxes tends to diminish rapidly as population and wealth increases. The state bonded debt, December 31, 1887, was $541,000 ; but of this amount $380,000 is an irredeemable debt, held by the school fund, while the remainder is also held by state funds. There is cash enough in the treasury to pay all indebtedness, exclusive of the $380,000. The state holds in trust, for the state educational funds, about $1,140,000 in bonds and cash. Some of the bonds are state bonds, the remainder United States four per cent, bonds. REVENUES AND EXPENDITURES, 435 New Hampshire. The state received into its treasury during the year end- ing May 31, 1886, ^500,197, as follows : — State tax $ipo,39i Fees (notaries) 29,998 Fines 3.144 Interest on deposits 35.31° Public knds 51,382 Non-resident taxes 129,268 Insurance department (fees) 132,268 Electric subway commissions '3.2^9 The total payments on accounts of these funds were $9,529,886, on account of the general fund, 18,599,886. Of this sum, $2,148,928, the proceeds of a tax of 6.8 cents on the $100, was transferred to the canal fund. It is not pos- sible to enumerate even the principal objects of expenditure. 438 STATISTICAL INFORMATION. The above sums given as totals of receipts and expendi- tures are exclusive of receipts and expenditures for canals and free schools. A part of the receipts into the canal fund, however, is included in the account of the general fund as has been noted, and so receives double mention, and is counted in tjvice. This increases the seeming revenue over ?2, 000,000. The necessity for such a system of book- keeping is not apparent, and it is suggested that a better method might be invented or found. Adding in the receipts into the two funds named above, the aggregates become — including transfers: receipts, $iT,82g,46'j ; expenditures, ^i6,77Ij449- The resources of the several productive funds are given as follows : — Common school fund $3,930,157 Literature fund 284,201 United States deposit fund 4,014,522 College land scrip fund 473,403 Military record fund 39>I2I The assessed valuation of real estate for 1887 was ^3,114,029,214; of personal estate, ^346,099,669; total, ^3,461,139,614. The rate of taxation for schools was I.I mills on the dollar; for general purposes, 1.6 mills. The town taxes were $13,975,005 ; county taxes, ^34,- 281,141 ; state and school, $9,075,046; the aggregate taxa- tion, $57,331,191. The total funded debt, September 30, 1887, was $7,444,- 310 bearing 6 per cent, interest, nearly all being canal debt. The amount in the sinking fund was $4,061,189. The net debt is given as $3,505,816, and the amount in the treasury on the same date was $3,714,907. This leaves a net surplus of $209,091. The state is therefore practically out of debt, and has in addition the above funds, amounting to over $8,000,000. REVENUES AND EXPENDITURES. 4» North Carolina. This state has two funds, the "public fund" and the "educational fund." Into the former there was received for the year ending November 30, 1887, ^847,864. This sum was derived chiefly from the following sources : — Public taxes ^505,612 Taxes to pay interest 26,386 Licenses (drummers') 3S>27S Licenses (fertilizer) 36,500 I^ees 6,53S Tax on telegraph and telephone compatiies ... 1,621 " express companies 385 '' bank stock 8,922 " insurance companies 19,026 Dividends of North Carolina R.R 154,674 Tax on gross receipts of same 4,419 Railroad property and franchise tax '6,391 The detailed list of expenditures covers one hundred and thirty pages, and it has not been found possible to arrange and classify them ; the total disbursement on account of this fund, however, were ^886,334. There was received into the educational fund ^6920, from entries on vacant land, from an incorporation tax, on railroads, and from interest on state bonds. There were levied in the counties the following taxes for school purposes ■. on licensed retailers of liquor ; on white and colored polls ; on bank stock, and on dogs ; 1 2\ cents on ?ioo of real and personal property; amounting in all to $605,203. The total valuation of property for 1886 was ^202,444,- 733; of real, ?i 26,883,382; of personal, $75,561,351. The valuation of railroad property, franchise, etc., was $7,075,- 252 ; this sum, however, is included in the above total. The rale of the state tax was 3I mills on the $\. «0 STATISTICAL INFORMATION. Ohio. There was received into the state treasury, on account of general revenue for the year ending November 15, 1886, the sum of ^2,755,734, principally as follows : — From taxes, etc. (county treasurers) .... ^2,323,254 public works, rents, tolls, etc 127,352 fees (insurance companies) 38,560 fees (other sources) 16,993 suspended war claims 12,590 notes and interest 19,614 penitentiary (convict labor) 215,257 There was received from sale of bonds ^500,887, which is not included in the above aggregate. The disbursements for the same period, on account of general revenue, were ^3,031,965 ; and were chiefly on account of the expenses of civil government, educational and charitable institutions, and the penitentiary. The sinking fund is su^pi*;.d by a general tax and sale of lands, the former amounting, in t886, to ^829, 962. The common scl» '61 fund also receives a portion of the general tax, and pedlers' licenses, the former amounting in 1886 to $1,660,742, the latter to $1779. It will be seen that the general taxes are the principal source of revenue, ^4,813,958, out of a total of ^5,775,904, being received from them in 1886. The assessed valuation for. 1886 was: of realty, ^1,173,- 106,705; of personalty, ;?s 15,569,463 ; total, $1,688,676,- 168. The rate of the state tax was 2.9 mills on the $\. Beside the state tax there were county taxes laid amount- ing to $8,372,519; city taxes, $7,606,025; school taxes, $7,682,120 ; township taxes, $1,099,963 ; total taxes, includ- ing certain miscellaneous taxes in addition to the above, laid for all purposes, $33,585,306. REVENUES AND EXPENDITURES. 441 The following items have been taken from an ab- stract of personal property as .returned by the assessors : horses, ^48,371,124; cattle, ^29,490,399 ; mules, ^1,562,1 74 ; sheep, ^8,888,430 ; hogs, ;?s, 137,982 ; carriages, ^8,231,763 ; watches, ^2,359,368; pianos and organs, ^5,124,032 ; mer- chants' stock, ^44,661, 562 ; bankers, brokers, etc., ^848,465 ; manufacturers' stock, ^16,023,899; moneys, ^34,346,612; credits after deducting debts, ;? 108,0 19,000; property of banks and other corporations, $105,01 8,5 72 ; other person- alty, $43,216,488. The number of dogs, assessed at one dollar per head, was 206,748. The total funded debt of the state, November 15, 1886, was $3,845,229, $2,025,139 bearing 6 per cent, interest, the remainder 4, j,\, and 3 per cent. In addition to the above there is an irreducible state debt, consisting of trust funds of over 4^^ millions. The amount in the state sinking fund was $96,237. Debts of cities of the first and second classes are given as about 42|- millions, and of counties 6^ millions. Oregon. The receipts into the treasury of this state are distributed among so many funds, that the revenues from a given source cannot without great difficulty be collected. From an exam- ination of the treasurer's report, the principal items in the detailed list of receipts are found to be taxes, income from penitentiaries, sale of land, and interest. The expenditures are also unclassified except by funds. The total receipts for the year ending January 9, 1887, were $1,870,264; the total disbursements, $1,487,780. For 1885', the taxable property, real and personal, as assessed, was $77,188,694; the rate of the state tax, 31 cents on the $100. 442 STATISTICAL INFORMATION. The notes, etc., held by common school, agricultural col- lege, escheat, and university .funds, amounted to $(iS7i " net earnings or income 81,597 Licenses (tavern) 565,164 " (eating houses) 90,989 " (wholesale liquor) 39,821 " (brewers and bottlers) 24,587 " (retailers) 405,105 " (other than above) 76,833 Bonus on charters 148,625 Notaries' commissions '5>S7S Commutation tonnage tax 460,000 United States government 172,000 Allegheny Valley Railroad 212,500 Fees 61,952 The total receipts into the treasury were ^7,646,147. The payments from the treasury were chiefly as follows : expenses of government, ^1,938,619; loans' redeemed, $1,418,511; interest on loans, $720,277; penitentiaries, $138,974; charitable institutions, $780,219; reformatories, REVENUES AND EXPENDITURES. 443 $230,040; and common schools, $1,171,812. The total expenditures were $7,366,763. The valuation of personal property in the several counties and taxable for state purposes, in 1887, was $401,079,562, the tax rate thereon being 3 mills on the $1. This is exclu- sive of property of corporations. The funded debt of the state, December i, 1887, was $15,692,600; the unfunded and non-interest-bearing debt, $147,871; a total debt of $15,840,471. Of the funded debt, $500,000 drew interest at 6 per cent., $5,233,500 at 5 per cent., $7,844,200 at 4 per cent., and $2,114,900 at 3^ per cent. The state has a considerable sum in stocks of incorporated companies and in the sinking fund ; the exact amount for 1887 has not been found ; for 1885 the amounts in these together amounted to $8,600,000. Rhode Island. In the state treasurer's report for the year ending Decem- ber 31, 1887, the receipts are given as $737,751, the ex- penditures for the same period, $852,704. The principal receipts were the following : — State tax ^394.237 Savings institutions '45>'35 Insurance companies 46>°27 Foreign insurance agents 33i049 Courts 28,755 Jailers 4.887 Pedlers' licenses 2,855 Auctioneers 2,154 Charters 5.75° State institutions in Cranston 39.74' Dividends on school fund 12,909 Tax on telephone companies '.559 " telegraph companies 597 " express companies '.233 444 STATISTICAL INFORMATION. The principal expenditures were : on account of special appropriations, ^59,820 ; for interest on state debt, ^80,760 j to commissioners of sinking fund, ^100,000; for public schools, ^119,989 ; for support of state institutions at Cran- ston, ^162,015; for salaries, ^86,349 ; for expenses of the general assembly, §21,560; and for the courts, §58,931. The amount of taxable property was as assessed for the state tax, 1886 : real, §243,658,190; personal, §84,872,369; total, §328,530,559. The rate of the state tax was 12 cents on each §100. The funded debt of the state, January i, 1888, was §1,341,000 bearing 6 per cent, interest. There was at the same date in the sinking fund §701,504. South Carolina. The total net revenue of the state for the fiscal year end- ing October 31, 1887, was §977,363, nearly all of which sum was received from taxes and on account of phosphate royal- ties, the former amounting to §707,929 (net), and the latter to §208,786. Other items given in the. list of receipts are : insurance fees, §4075 ; returns from the agricultural depart- ment (probably fertilizer fees) amounting to §24,178, and from the sinking fund commission, §13,853. The expenditures for the year were §969,787 : §60,845 on old accounts; §253,710 for current expenses ; §355,262 for payment of interest on public debt; §128,781 for penal and charitable institutions ; and for miscellaneous purposes, §171,198. The assessed value of property for the year 1887 was : real estate, §82,943,380; personal property, §41,867,145; railroad property, §16,263,822 ; total, §141,074,347. The rate of the state tax was 4^ mills on the dollar. The county REVENUES AND EXPENDITURES. 445 taxes laid for the same year were ;?668,788 ; the school taxes, $300,064. The following items appear in the aggregate list of per- sonal property for the year; horses, ^3,321,101; cattle, ^1,808,844; mules and asses, ^3,864,212 ; sheep and goats, $88,576; hogs, $368,365; watches and plate, $506,127; piano-fortes, melodeons, or organs, $407,315 ; pleasure car- riages, $1,969,593 ; dogs, $336,452 ; property of merchants, $6,578,459; of manufacturers, $1,084,587; manufactured articles on hand, engines, etc., $4,440,100 ; moneys, $2,157,- 806 ; all credits, $3,703,793 ; stocks of any company ex- cept national banks, $1,559,606 ; bonds not exempt, $1,738,625 ; all other property, $7,385,158. The total funded debt, October 31, 1887, was $6,122,928 ; the unfunded, $276,814 ; a total debt of $6,399,743. County and township debts were $2,253,688; city and town debts, The sinking fund held sums to the amount of $20,000. Tennessee. From December 20, 1884, to December 19, 1886, the receipts of the state were $2,581,553, and the total disburse- ments, $3,291,301. The receipts were principally from the following sources : — • Trustees (i.e. general tax) ^1,231,437 County clerks (privilege taxes) 664,022 Other clerks (fees, fines, etc.) 66,700 Insurance companies 69,012 Banks 13.126 Railroads 172.945 Express companies 9,080 Telegrapli companies 754 Insurance fees 14.328 Escheats 5.^77 446 STATISTICAL INFORMATION. Redemption of lands %^%,(yi)\ Turnpike company 26,585 Certain railroads 12,860 The principal items of disbursement were : interest on state debt, etc., ?i, 327, 953; judicial salaries, ^190,044; executive salaries, ^22,828; legislative expenses, ^84,000; and hospitals, etc., ^388,000. The assessed valuation of property for 1886 was : lands, !5i40,994,7ii ; town lots, ^59,123,554; personal property, 1^24,790.914; railroad property, ^31,547,582; total, ^256,- 456,761. The rate of taxation was 30 cents on every tioo. The debt of the state funded under an act of March, 1883, was, December 20, 1886, ;?ii,4i 2,900 ; 6 per cents. ;g725,20o; 5 per cents., ;?3S 7,100; 3 per cents., ;?io,330,- 600. The unfunded debt amounted to ^7,548,995. Texas. As there are in this state no less than thirty different funds or accounts, the collection of revenues from one source and another into a single sum is a difficult task, but as to most of the minor funds there accrued little else than pro- ceeds from land sales and interest, attention will be given to the two more important funds, the " state revenue " and " available school " funds. Into the former fund there was received for the year end- ing August 3r, 1887, ;?2,353,025, chiefly from the following sources : — General taxes ?2, 126,060 Special occupation tax 77,224 General land office (fees, etc.) 60,656 Fees (office, indigent, etc.) 48,564 Railroad companies i\,'j\2 REVENUES AND EXPENDITURES. 447 Into the available school fund was received ^2,109,695 : from taxes, ^1,069,738; from state land board, ^125,000; lease of school lands, ^24,774; from interest, ^817,511. The disbursements of the first fund were on account of current expenses, of the latter for school purposes. The total receipts for the year on account of all funds were ^5,499,043 ; the total disbursements, ;?4,972,386. The classes and value of property returned for taxation, for 1887, were as follows: land, ;?282,599,397 ; town lots, ^105,226,386 ; railroads, ;?48,2 74,237 ; telegraph lines, ^576,- 36'2 ; land certificates, ^206,830 ; steamboats, etc., ^348,040 ; carriages, wagons, etc., ^6,69 7, 934; manufacturers' tools, etc., $7,251,608 ; materials and manufactured articles, ^818,- 403; horses and mules, $33,166,338 ; cattle, $51,008,550; jacks and jennets, $415,471; sheep, $5,016,674; goats, $493,605 ; hogs, $1,141,655 ; goods, wares, and merchan- dise, $28,393,104 ; money on hand, $11,827,284 ; miscella- neous, $33,376,809; total (adding approximate value of lands in unorganized counties owned by non-residents) $650,412,401. The state ad valorem tax was 25 cents on the $100 ; the school tax, 12^ cents; the state revenue poll tax, 50 cents per capita; and the school poll, $1. The taxes levied for 1887 were as follows : — State aaT z/a/or^OT tax (25 cents on the $100) . . $1,626,103 School tax (12J cents on the $loo) 813,119 State revenue poll (50 cents per capita) . . . I73>96i School poll (^i per capita) 348,006 $2,961,189 It will be readily understood that taxes levied and taxes collected in any one year differ by very considerable sums. There was collected in the several counties an occupation 448 STATISTICAL INFORMATION. . tax, no fewer than forty occupations being subject thereto. In the above account of receipts into the general revenue, men- tion is made of a " special occupation tax," which is made payable to the comptroller of the state. The general occu- pation taxes, however, do not seem to be paid into the state treasury, as no account of them is found in the table of receipts. These occupation taxes collected in counties amounted, in 1887, to $648,555, the greater part of which was collected from liquor-dealers, viz. : — From retail liquor-dealers ^395,100 " sale by quart . 62,400 " wholesale liquor-dealers .... . . 10,200 " beer dealers 4S>9SO " all other occupations 134,905 These occupation taxes are evidently the same thing as the license- taxes of other Southern states, a payment for the privilege of gaining a livehhood in the occupations subject thereto. Although a tax is required for engaging in many occupations, the revenues from all save liquor-dealers are small. The state had, August 31, 1887, a bonded indebtedness amounting to $4,237,730; but of these bonds the greater part was Jield by funds of the state, the amount in the hands of individuals being but $ 1 , 245 ,830. The newspapers report that the governor of Texas has called a special session of the legislature to determine what shall be done with a sur- plus of $3,000,000 which has accumulated. Vermont. During the year ending July 31, 1886, there was received into the state treasury, $518,461, and paid out, $380,646. The principal receipts were as follows : \ — REVENUES AND EXPENDITURES. 449 State tax ;^i7i,oii Corporation tax 200,686 Fees (probate judges) 12,321 County clerks 29,565 Licenses, foreign insurance, and fertilizer companies • 3,844 The expenditure on account of interest was ;?i8,963 ; in payment of auditor's orders, i.e. for current expenses, J31 1,632 ; and in payment of loans, ^36,000. The amount of taxable property as assessed, 1886, was: real, ;?io7,264,665 ; personal, ;?49,92 7,597 ; total, $187,192,- 262. The rate of the state tax on property was 10 cents on each $100. The state holds in trust several funds, educational and otherwise, amounting to over J5 00,000. The state has practically no debt. The total bonded debt, represented by 6 per cent, bonds held in the Agricul- tural College fund, is more than covered by resources in the treasury. Virginia, The principal receipts into the treasury of this state were, for the year ending September 30, 1887 : — Real estate tax ^755>92I Personal property tax 238,142 Capitation tax 160,542 Bank tax 29.961 Railroad tax 308,428 Licenses (liquor) 244,413 Licenses (other) 374.6o8 Income tax 20,755 Insurance company tax and license 3i>859 Telegraph and telephone tax and license . . . 4.356 Oystertax '3.329 Clerks (court fees) 77.°48 Fines H.S50 450 STATISTICAL INFORMATION. The total receipts were 112,569,339 ; the disbursements, ^2,626,713. Of the latter, ^743,483 was paid out on ac- count of public schools ; nearly ^400,000 for lunatic asy- lums, etc. ; nearly ^500,000 as interest ; ^107,732 to officers of the government; and ^237,978 for criminal charges. The assessed valuation of real estate for 1887 was $257,468,760; of personal property, ;?8i, 873,963 ; of rail- road property, §35, 700,515 ; total, 8375,043,238. The rate of the state tax was 40 cents on each $100 of valuation. The amount of the state debt, October i, 1887, funded, under act of February 14, 1882, was ^129,095, 967, $10,000,- 000 drawing 3 per cent, interest, the remainder 6 per cent. The state has a sinking fund, but the exact amount of it has not been found. West Virginia. The state has four funds, the total receipts into which for the fiscal year ending September 30, 1886, were $1,167,514. There was received into the state fund, principally from t^t following sources, $669,668 : — State tax $342,858 /jcense tax 7Si78i ■license tax (on corporations) 6,800 ''.ailroad tax (state) 25,035 i'.ailroad tax (county and district) 129,901 Railroad tax (municipalities) . . 8,830 Loan 35.009 C. & O. R.R 25,795 The expenditures from this fund were chiefly for current expenses, and amounted to $672,110. There was received into the general school fund, from general taxes, $330,789 ; from fines, $11,449 j i^ova railroad tax, $12,517 ; from the C. & O. R.R., $11,707 ; and consid- REVENUES AND EXPENDITURES. 451 erable sums from interest and dividends on stocks. And there was received into the public building fund from gen- eral tax, ?6i,939 ; from the railroad tax, $()Oi\. The total amount received from the general tax thus was $735,586, or about two-thirds of the total receipts, and from the railroad tax j! 1 83,000, or about one-sixth. The amount of this tax collected for counties and municipaUties was distributed to them. The total assessed value of property for 1886 was : real, $116,746,529; personal, $42,768,223; railroad property, $14,488,758; total, $174,003,510. A capitation tax of $1 was also laid for school purposes. The rate for all purposes was 35 cents on each $100, — 20 cents for state purposes, 10 cents for school purposes, and 5 cents for public building purposes. The school fund had invested in bonds, October i, 1886, ^S70)473) $i37!Sii of which was represented by state bonds. The constitution provides that the school fund must be maintained, and certain revenues are set apart for its increase. The income from the fund may be expended, but any unexpended balance must be added to the capital of the fund. The state has no debt, the constitution forbidding the creation of any debt, except in an emergency like invasion. Virginia claims that West Virginia should share the ante hel- ium debt, but no adjustment has yet been made. Wisconsin. Wisconsin has, like several other states, numerous funds ; but as most of these are fed by land sales and interest, it will be necessary to examine only the general fund and, per- haps, the school fund. The receipts of the general fund for the year ending Sep- 452 ^STATISTICAL INFORMATION. tember 30, 1886, were Ji, 770,265. Of this sum there was re- ceived from counties, principally as interest, ^893,304 ; from corporations, as licenses, $831,459 ; and from sundry sources, 145,502. There was no general tax for state purposes; but a tax of about i^ mills on the dollar was laid for schools and charitable institutions. Of the total sum received as licenses from corporations, $ 747,8 70 was paid by railroads. The expenditures from this fund were $1,722,464, as fol- lows : for salaries, $881,390; for legislative expenses (the legislature not sitting this year), $2038; for charitable and penal institutions, $309,099 ; for clerk hire, $42,285 ; for labor about capitol, $37,700 ; for sundry purposes, $489,952. Beside income from sale of lands, and interest, the school fund received certain fines and forfeitures. The valuation of property, as assessed for 1886, was : real, $398,372,090; personal, $104,713,1,64; total, $503,- 085,254. The school fund had invested, September 30, 1886, in bonds, etc., sums to the amount of $2,978,118; the univer- sity fund, $190,998 ; the agricultural college fund, $258,597 ; and the Normal School fund, $1,398,740. The state has practically no debt, although it has nomi- nally a funded debt of $2,252,000. There was outstanding, September 30, i886, but $1000, the remainder being con- verted into certificates of indebtedness, and held by the several funds above mentioned. 3. TABLE SHOWING RECEIPTS AND EXPENDITURES OF STATES. In the appended table are grouped the principal receipts common to the budgets of several states, and there are also given the total receipts and expenditures of the various states. It will not be necessary to add many explanatory TABLE SHOWING PRINCIPAL RECEIPTS, AND TOTAL RECEIPTS AND EXPENDITURES OF THE STATES. STATEMENT FOR THE GENERAL RAILROAD GENERAL GENERAL LIQUOR INSURANCE ,. ^ INHEHI- OTHER TOTAL TOTAL STATES. FISCAL YEAR ENDING ST.ATE TAX. TAX. CORPORATION TAX. LICENSE TAX. LICENSE TAX. BANK TAX. TAX. FEES. TANXE TAX. SOURCES. RECEIPTS. EXPENDITURE. Alabama .... Sept. 30, 86 ^655,102 $12,500 M,47i H377 $568 $116,706 $888,724 $818,366 Arkansas .... Oct. I, 84 . 1,445,120 515,605 California .... June 30, 86 4,5'9,ii7 851,413 $12,700 1,093,000 6,476,230 5,787,612 Colorado .... Nov. 30,. 86 534,258 18,623 21,720 344,096 918,6971 707,9761 Connecticut . . . June 30, 86 539,944 626,199 200,590 248,069 198,900 1,813,702 3,249,597 Delaware .... Dec. 31, 86 None 41,528 45,423 1,120 $913 32,206 121,1902 120,0282 Florida Dec. 31, 86 246,890 130,420 6,533 383,8432 534,4662 Georgia .... Sept. 30, 86 871,130 95,521 176,417 167,881 21,362 78,405 2,909,414 4,220,130 4,453,393 Illinois Sept. 30, 86 2,969,551 ^ 75,443 1 371,834 3,416,8281 3,631,5521 Indiana .... Oct. 31, 87 2,709,635 85,532 15,386 1,927,645 4,738,198 4,774,226 Iowa July I, 87 1,179,942 1 1,098 1 95,802 1 8,0771 379,072 1,663,991 1 1,755,7501 Kansas June 30, 86 1,082,476 50,863 1,433,285 2,566,624 2,727,701 Kentucky .... June 30, 87 1,845,461 148,082 276,704 100,887 105,747 561,757 3,038,6382 3,058,5782 Louisiana .... Dec. 31, 83 ',108,755 273,918 18,919 595,560 1,907,152 1,349,964 Maine Dec. 31, 87 753,077 89,797 11,482 256,430 17,294 33,900 1,161,980 1,168,544 Maryland .... Sept. 30, 87 864,763 52,433 $70,586 521,310 11,949 45,597 873,785 2,440,363 2,374,916 Massachusetts . . Dec. 31, 86 1,499,805 2,227,579 45,729 303,798 2,398,267 326,336 30,949 1,916,189 8,748,652 9,317,609 Michigan .... Sept. 30, 86 1,669,686 812,712 124,756 17,313 377,956 3,002,4232 2,830,8542 Minnesota . . . July 31, 87 1,201,223 675,745 98,365 501,197 2,476,530 2,759,815 Mississippi . . . Dec. 31, 87 414,775 140,316 142,649 5 109,450 262,378 1,069,568 1,029,638 Missouri .... Dec. 31, 86 3,035,820 78,370 151,4775 22,619 5,213 132,063 3,425,562 3,337,131 Nebraska .... Dec. I, 86 1,661,9221 1,411,1541 Nevada .... Dec. 31, 87 253,522 7,546 206,187 467,255 392,423 New Hampshire . May 31, 86 400,000 87,080 1,390 4,832 2,025 4,870 500,197 474,990 New Jersey . . . Oct. 31, 86 1,465,268 778,290 147,415 31,408 952,946 3,375,327 3,341,404 New York . . . Sept. 30, 87 9,513,785 1,441,528 132,268 61,389 561,716 6,118,781 17,829,467 16,771,449 North Carolina . Nov. 30, 87 505,612 16,391 71,775 8,922 19,026 6,535 218,603 847,8642 886,3342 Ohio Nov. 15, 86 4,813,958 38,560 1 6,993 906,393 5,775,904 5,573,721 Oregon Jan. 9, 87 1,870,264 1,487,780 Pennsylvania . . Nov. 30, 87 864,355 ' 2,478,445 167,822 1,034,677 431,628 377,571 179,088 763,871 1,348,690 7,646,147 7,366,763 Rhode Island . . Dec. 31, 87 394,237 5,009 145,135 79,076 114,294 737,75> 852,704 South Carolina Oct. I, 87 707,929 28,253 241,181 977,363 969,787 Tennessee . . . Dec. 20, 86 615,218 86,473 332,0116 '6,563 41,670 33,350 175,494 1,290,7761 1,645,651 1 Aug. 31, 87 3,195,798 11,712 77,2246 109,220 2,105,091 5,499,043 4,972,386 Vermont .... July 31, 86 171,011 200,686 3,844 41,886 101,034 518,461 380,646 V^irginia .... Sept. 30, 87 1,153,605 308,428 374,608 244,413 29,961 458,323 2,569,338 2,626,713 West Virginia . . Sept. 20, 86 735,586 1 83,000 82,581 266,347 1,167,514 979,694 Wisconsin . . . Sept. 30, '86 446,652 * 415,725 22,755 885,1321 861,2321 ' The receipts and expenditures for the two years ending as above were found. The sums have been divided by 2 to determine approximately the receipts and expenditures for one year. 2 On account of general revenue. ^ Personal property alone. * See notes on Wisconsin. 5 Privilege taxes. REVENUES AND EXPENDITURES. 453 notes, as the reader will find detailed information regarding the finances of the states in the preceding pages. The table must be more or less unsatisfactory in its nature, for the reason that, as above stated, there is so little uniformity among the states in the manner of keeping their accounts. The "general tax," for instance, is not the same in all states. In one state it is a mere tax on property, excluding corporations ; in another, the property of corporations is included in the general assessment ; while in a third a poll tax is inseparably connected with the prop- erty tax. The tax on railroads is sometimes included under the head of the general corporation tax, sometimes given separately. The hquor hcense tax, too, is sometimes in- cluded in the general license tax and cannot be separated. But the table has, perhaps, in spite of inexactness, the merit of showing in a more graphic and condensed form than can otherwise be given, the chief sources of state revenues. The total receipts of all the states as given below are $109,543,870; the total expenditures, $107,299,152 ; of the territories (exclusive of Alaska) , the receipts were $1,608,712, the expenditures $1,317,020 ; making thus the total receipts of states and territories, $111,152,582; the total expendi- tures, $108,616,172. It must, however, be remembered, that these figures are merely approximate. In some cases it has been necessary to divide by two the receipts and ex- penditures, which were found for two years. In some cases funds are necessarily excluded which are in other cases included. 454 STATISTICAL INFORMATION. W P H U M ■■a e H c » ■ ^•* w t « •« trl H ^^ < vC 1^ 5 -> 13 .:5 s <<8" E H S 2 p u , o 5 0- "^ (/5 SgSg fe = i 3 D u O l^ 5 <<% o o o o I- in lA i^ O Q CO M^ «M vo vo r^ "% O ? O (^ . ^ C» 00 gg w ?9 oo oo CO oo Bu M ^ u Q S IS ^ P lA o REVENUES AND EXPENDITURES. 455' S5 t>.0\ON^ •'i- lOOO ON O t>* C7» -"^ t>. ^00 ON CO 00 f^ « "^00 cou^O iri O h-. 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N « £ s ■ • • o ■ N ONOO "^0^0^'-' i^OnO QvO t^ I>.vO t-o rovo i-t r^ O ;zi tc t^t^t^O OnOnN i-" O -« ►"• O H- h- M roTl-rOTt-<^ro 1^ HHI-Hh^Mh-11-HhHHHhHH-J-.WHH.-ll-. ¥ •^ CO roOO 0^ O r^ O OO r^OO OO M fO'O on m vo oo s O oo N OnO ^ONMi-OaNf^N fO■<:^ Tj-^O a^ . .^^ . 00 tJ- rj- roco On uo ro Lo r^ rOO ro co tJ- n u~i r-^ 5 i K . . . >•* o lA -^oo Ln '-O00 00 00 "^ 1-1 ON M \no li-j ro p J ^■t. u . . . -^ . . . .voHHtN^ONONONi-nONt^ ro^O LO O 00 >-• !>• t^ ■< VO Q O ro U-) 1^ lo lo >-o Lo L.-. VO >-tij~)0 t-nr^ooo t^o ovo ooo -^i-i onO^^ i§ M ro N Lo ^ -o lO'O a. ^-C^iM r^ror^N rof^i>- W •-^OO On --^^ ro t^ ON C'^O ror^-NvO OnOn-^N « . . .VO . '. '. ! o i-H*" rCvo" Looo" chvo' ■ o" t^ 4- -^ '^ ^ o" c> N ci . . . M . , . .00 i>. r^ u-ico Lo— loo « r-^u-iO rnt->LOM r^ l>o"vo"vo' iri \i ON CO lO hH u-)iOvO ON '-I (M -d-00 N -^ tJ- MOO ON ■^ CO l>^vO t>- M T^ ON tJ- fOOO >-< 00 LO ON O |3 K ; ; . t^ ; \ \ 1 O 00 r^ CO r^vo cooo r-T^rO'-' O OnOvOOO On i ! I hT I . . . ^■^S^'^y^OsO^r^-^ LOvo" i^ « vo -^ m'oO S° . I^vO OM'J-lTt-NCOMI^ H.-.^MMW.HMMwMi-HClClMWM'-i OS O w N ro -^ uivO 1-^00 ON O ■-< N f^ "^ lovjD r^OO On O — M (^ -^ t'N O O O O O 00000-'-'-i-'w-h-hi--i-hhMOMNNM OOOOOOOOOOOOOOCOOOOOOOOOOOOOOOOOOOOOOOOOOOOOCOOOOOOO 456 STATISTICAL INFORMATION. TOTAL VALUE VEAR. VALUE OF VALUE OF OF TAXABLE STATE TAX. TOTAL. REALTY. PERSONALTY. PROPERTY. 1826 $15,946,840 $11,035,820 $57,982,640 $105,816 00 $392,783 00 1827 47,206,386 12.375.336 59,591.722 188,830 00 472,094 00 1828 50,116,513 12,168,841 62,285,054 187,906 00 498,481 00 1829 49.511.733 16,788,170 66,299,903 174,412 00 441,191 00 1830 50,086,250 14.589,335 64.675.578 232,472 00 598,595 00 1831 50,627,110 15.793.666 66,420,776 240,991 00 615,651 00 1832 55,013.41= 19,229,620 74.243,03= 264,954 00 685,909 00 1833 58,280,851 19,738,67s 78,019.526 247,079 00 730,010 00 1834 57,399.577 23,500,073 81,100,660 172,434 00 703,104 00 1835 75,760,797 21,188,408 96,949,205 147,854 00 805,050 00 1836 72,223,906 27,029,444 99.253.356 211,932 00 1,007,216 CO 1837 75,782,176 25,890,566 101,672,742 337,264 00 1,205,362 00 1838 80,923,608 26,553,182 107.476,790 434,061 00 1,505,210 00 1839 83,080,406 28,143,791 111,224,197 553,475 00 1,770,161 00 1840 85,287,291 27,038,895 112,326,156 564,435 00 1.755.539 00 i84t 100,851,837 27,501,820 128,353,657 642,153 °o 1,890,405 00 1842 104,322,013 28,021,822 132,343,835 660,759 00 2,026,857 00 1843 105,496,382 28,167,312 133,663,794 934,899 00 2,361,842 00 1844 107,142,152 29,000,514 136,142,666 948,996 00 2,340,663 00 1845 108,185,744 35,974,7=5 144,160,469 1,006,001 00 2,409,171 00 1846 109,940,636 40.352,496 150,293,132 1,214,897 00 2,580,073 00 1847 306,798,730 83,964,430 410,763,100 1,131,398 00 2,847,673 00 1848 33°.995,273 90,072,818 421,067,991 1,265,769 00 3,241,95s 00 1849 335,839.3" 95.000,074 430.839,385 11=96,547 00 3,631,878 00 1850 341.389.838 98,487,502 439.876,340 1,413,830 00 4,227,708 00 1851 346,341,233 115,807.387 462,148,620 1,687,392 00 4,957,013 00 1852 354,937.147 15=1644.763 508,581,911 1.776.537 00 5.674,335 00 1853 363,490,901 229,905,947 593,396,848 3,026,324 00 8,823,805 00 i8S4 569,868,410 297,061,572 866,929,982 3,077,601 00 9.092,339 00 1855 577,858.538 283,018,815 860,877,354 2,754,807 00 8,954,512 00 .856 580,634,487 240,026,550 820,661,037 2,626,132 00 8,009,514 00 1857 585,620,682 263,793.897 849,4x4,579 2.609,395 00 8,673,298 00 1858 590,285,947 240,514,084 840,800,031 2,978,122 00 9,756,650 00 1859 594,114,004 =51.795.947 845,909,051 2,997,918 00 10,083,608 00 i860 639.894.311 248,408,290 888,302,601 3,503,713 00 10,817,676 00 1861 634,883,55= 248,966,532 892,850,084 4,056,379 00 11,656,814 00 1862 645,670,080 243.615.31= 889,285,292 4,1=9.473 °o 10,135,284 00 1863 649,500,022 286,871,222 936,371,244 4,722,608 00 11,859.574 00 1864 655,498,100 351,198,016 1,006,696,116 5,329.963 00 16,595,639 00 i86s 660,557,979 409,047,876 1,069,505,855 5,663,367 00 20,870,828 00 1866 663,647,542 44=.56i.379 1,106,208,921 3,867,167 00 18,868,437 00 1867 673.993.757 464,762,022 1.138,754,779 3,981,099 00 20,253,615 00 1868 683,452.487 460,008,899 1,143,461,386 3,997,47= 00 20,489,148 00 1869 697,018,203 459,762,252 1,157,180,455 4,045,476 00 22,232,877 00 1870 707,846,636 459,684,861 1,167,731,697 4,666,242 00 23,463,631 00 1871 1,025,619,034 476,510,937 1,502,129,971 4,350,728 00 22,955,388 00 1872 1,030,163,528 494.159.59° 1,524,323,118 4,414,557 00 23,248,979 00 1873 t.041.763.931 525,510,708 1.567,274,639 5,477,859 00 26,131,353 00 1874 1,052,257.736 528,121,588 1,580,379,324, 5,030,367 00 26,837,196 00 187s 1,062,915,044 535,660,818 1,598,575.862 4,948,995 00 27.952.971 00 1876 1,076,788,367 520,681,599 1,597,469.966 4,626,629 00 28,521,256 00 1877 1.084,455,378 490,190,387 I.S74.645.765 4.560,379 00 27,514,650 00 1878 1,091,116,952 461,460,552 1.552.577,504 4,496,376 00 26,324,445 00 1879 1,093,768,904 442,979,885 1.536.748,789 4,450,341 00 25,756,665 00 1880 1,102,049,931 456,166,134 1.558,215,965 4.513,240 00 29,092,048 00 1881 1,101,457,383 485.750.196 1.587,207.579 4,598,057 00 27,606,380 00 1882 1,116,681,655 518,229,079 1,634,910,734 4.735.748 00 30,618,785 00 1883 1,131,058,750 542,207,121 1,673,265,871 4,847,639 00 31,387,041 00 3884 I.I45.47S.2IO 528,298,871 1,673,774,081 4,681,339 62 32.787,417 00 1885 1,160,165,882 509,913,986 1,670,079,868 4,840,727 97 33.737,435 44 1886 1,173,106,705 515,569,463 1,688,676,168 4.894,593 98 33.378,558 16 There were re-valuations of the real property of the state for the years 1826, 1835, 1841, 1847, 1854, 1861, 1871, and 1881. REVENUES AND EXPENDITURES. 457 6. TAXATION IN NEW YORK- SCHEDULE Showing the aggregate valuation of real and personal property, the state and local taxes in New York state, and the rate per cent, for each year, from 184.6 to iSSy, inclusive. AGGREGATE STATE TAXES, TOWN, S3g YEAR. VALUATION. EXCLUSIVE OF COUNTY, AND TOTAL TAXES. SCHOOL TAX. SCHOOL TAX. fcl < W h =* u S»5 1846 . . $616,824,953 $370,557 44 $4,276,904 44 $4,647,461 88 0.753 1847 : < 632,699,993 302,579 27 4.541.046 33 4,843.625 «o 0.765 .848 651,619,595 325,638 72 4,969,819 51 s.295,458 23 0.812 1849 665,850,737 334,555 96 5.214.425 32 5,548,981 28 0.833 1850 727,494,583 364,003 75 5,948,783 58 6,312,787 33 0.867 1851 1.077,831,630 578,546 88 6,180,891 38 6,759,638 26 0.627 1852 1.168,335,237 292,641 69 6,715,046 39 7,007,688 08 0.600 1853 1,266,666,190 1,285,125 88 8,063,097 03 9.345,221 91 0.737 1854 1.364.154,625 1,020,926 49 8,615,164 36 9,636,090 85 0.706 '?5| 1,402,849,304 1.751,717 78 9.924.454 52 11,676,172 30 0.832 1856 1.430.334,696 1,430,000 02 11,312,845 04 12,742,845 06 0.890 1857 I.433.309.713 3,221,775 42 11.941,363 94 15,163,138 36 1.057 1858 1,404,907.679 2.457.533 80 12,968,004 78 15.425,538 58 1.098 1859 1.404,913.679 2,458,599 10 13,894,687 46 16,353,286 56 1.164 i860 1,4191=97.520 4.376,167 35 14.579.857 15 18,956,024 50 1-335 1861 1,444,767,430 4.505,523 19 15,896.753 29 20,402,276 48 1.415 1862 1,449,303,948 5.797.215 79 13.659.072 61 19,456,288 40 1.342 '?f3 1.454,454.817 6,181,432 97 16.865.367 69 23,046,800 66 1.584 1864 1,500,999,877 6,754,499 45 33,119.446 11 39,873.942 56 2.656 i86s 1.550,879,685 6,067,816 77 39,893,623 85 45,961,440 62 2.963 1866 1.531,229,636 7.369.042 63 33,199,202 06 40.568,244 69 2.649 1867 1,664,107,725 10,567,084 06 35,951,837 56 46,518,921 62 2.795 1868 1,766,089,140 8,035.705 59 36,262,130 31 44,298,435 90 2.508 1869 1,860,120,770 8,138,028 37 38.033.503 13 46,161,531 50 2.482 1870 1,967,001,185 11,827,225 07 33,501,459 14 50,328,684 21 2-555 1S71 2,052,537.898 9,048,271 24 36,626,215 68 45,674.486 92 2.222 1872 2,088,627,445 16,970,097 99 46.541.838 13 63.511.936 12 3-041 1873 2,129,626,386 12,138,870 40 39.305,665 87 51,444,536 27 2.416 1874 2,168,307,873 13,015.847 24 44,795,534 68 57,811,381 92 2.664 187s 2,367,780,102 11,246,955 48 45.679.515 21 56,926,470 69 2.404 1876 2,466,267,273 5,446,340 23 46,702,028 14 52,148,368 37 2.114 ^^Jl 2,755.740.318 5,626,303 15 44,610,860 91 50,237,164 06 1.823 1878 2,738,378,600 5,013,971 22 43,033,270 75 48,047,241 97 1-7S4 1879 2,686,139,133 4,773,269 24 42,375,205 80 47.148.47s 04 1-755 1880 - . 2,637,869,238 6,370.454 21 42,747,327 97 49,117,782 18 1.862 1881 , . 2,681,257,606 2,976,195 94 46,310,576 61 49.286,772 55 1.838 1882 2,783,682,567 3,757.971 47 43,815,848 60 47,573.820 07 1-709 1883 . . 2,872,257,325 6,235,670 66 44,701,118 30 50.936.788 95 1-773 1884 3,014,591,372 4,582,178 88 47.790,528 12 52,372,707 00 1-737 1885 3.197.163.785 6,065,673 65 51,196,976 37 57,262,650 02 1-850 1886 3,224,682,343 5,804,428 22 52,305,650 74 58,110,078 96 1.802 1887 . . 3,361,128,177 5.377.805 09 51,953,386 49 57.331.191 58 1. 70s «8 ST A TIS TICAL INFORM A TION. 7. REVENUES OF NORTH CAROLINA. TABLE Showing the amount of Receipts and Disbursements of the State of North Carolina for each Fiscal Year from 1868 to i88y inclusive. PUBLIC FUND. EDUCATIONAL FUND. TOTAL RECEIPTS. TOTAL DIS- i Receipts. Disburse- ments. Receipts. Disburse- ments. BURSEMENTS. 1868 $1,925,564 98 $2,019,909 41 $31,564 64 $35,866 01 $1,947,129 62 $2,055,755 42 1869' ■8,550,877 62 8,687,428 97 169,870 42 167,158 18 8,720,748 04 8,854,587 15 1870 3,557,867 48 3.454.214 1° 333.973 76 203,411 01 3,891,841 24 3.657,62s 11 1871 558,147 38 645.579 79 229,990 79 177,494 94 788,138 17 823,077 91 1872 654,476 21 628,532 70 46,000 81 173.27s 92 700,477 02 801,808 62 1873 481,224 91 524,168 47 41,705 01 83,007 18 522,999 92 607,175 65 1874 667,114 49 448,839 68 44,384 21 56,260 94 711,498 70 504,869 62 1875 508,317 67 551,816 78 43,677 08 37.959 97 551.994 75 589,776 75 1876 524,039 17 528,05s 22 42,235 59 54,7°2 93 566,274 76 582,758 IS 1877 533,63s 55 613,264 59 33.783 57 24.433 10 567,419 12 637,697 69 1878 533,322 04 534,187 07 12,592 39 4,915 03 545,914 43 539,102 10 1879 553,339 96 577,658 41 5,269 6s 4,074 90 558,609 60 581,733 31 1880 546,796 04 492,720 33 6.233 47 4,000 00 553,029 51 496,720 33 1881 645,743 05 625,616 59 114,501 31 50,651 25 760,244 36 676,067 84 1882 755,881 44 629,112 37 12,712 05 66,125 00 '768,593 49 695,337 37 1883 965,107 08 944,343 76 29,879 30 135 00 994,986 38 944,478 76 1884 1.436,775 66 785,641 78 35.200 33 76,228 65 1.471.975 99 861,870 43 1885 378,957 62 795,486 26 7,176 54 5,195 14 386,134 16 800,681 40 1886 835,421 03 1,112,652 31 7,626 25 7,365 85 843,047 28 1,180,017 16 1887 847,864 36 886,334 02 6,920 48 S.524 21 854.784 84 891,858 23 1 Much the larger proportion of the receipts and disbursements for i86g are on account of subscriptions to railroad companies, etc., where no money actually passed. ROYALTY FROM PHOSPHATE ROCK. 4S9 8- ROYALTY FROM PHOSPHATE ROCK IN SOUTH CAROLINA. Bv C. Meriwether, A.B., Graduate Student of the Johns Hopkins University. On the rice plantations along certain parts of the South Carolina coast, the planters noticed smooth, dark-colored nodules of rock scattered over the fields. They could see no good in them, and grumbled at being compelled to pile them out of the way of the plough. Among these rice planters on the Ashley River, a few miles above Charleston, was a young geologist, — Francis S. Holmes, — whose atten- tion was directed to these nodules in 1837 by the "beauti- ftilly preserved forms of shells, teeth, and bones, mingled with the rocks filled with the casts of shells, corals, and corallines." For several years he collected and preserved many of these specimens. The use of marl as a fertilizer for the South was very widely discussed, and in 1843 the Agricultural Society of South Carolina recommended the farmers to search for marl beds. In common with many other planters, Mr. Holmes sank a pit for this purpose on his land, and came across a stratum of the same nodules a few inches below the surface, and the situation of the phos- phatic deposits was established. On finding stone arrow- heads and hatchets in this layer, he thought he had made a discovery that would aid in fixing the age of the deposit ; but an older geologist derided the conclusions drawn from this fact, and stated that these specimens might have got in the stratum by accident through a hole from an upturned tree or the burrowing of an animal. Afterwards he came across human bones, but carelessly threw them away, think- ing that they found their way there by accident, just as the older geologist had explained the position of the stone 460 STATISTICAL INFOKMATWir. . implements. These discoveries really fixed the palaeontolo- gical age of the post-Pleiocene beds, as the prehistoric age of man ; but Professor Holmes never felt safe in drawing this conclusion until he read the work of an English geolo- gist, — Prqfessor Ansted, — on the same deposits in England. It is interesting to note that the age, of this formation was established in South Carolina in 1^44, while the discoveries for the determination of the age of the same formation in Europe were not made until 1854. Although the situation of the beds was thus established, no one suspected them as being of any commercial value ; but the knowledge would have been blundered into had it not been for the wise reasoning of the scientist. An old planter in 1843 resolved to see if these piles of nodules on his land could not be made serviceable. At a considerable expense he pounded up and ground into powder a large quantity of them, and was going to scatter it on his land, when the scientist, Mr. Ruffin, again stepped forward, and prevented a discovery that was not made till thirty years later. He advised him to throw the powder away, since it could possess no fertilizing properties. After these two checks by the scientists, nothing more was done till the close of the Civil War. In 1867 Dr. N. A. Pratt, a distinguished chemist from Georgia, analyzed a specimen of the rock, and found that it contained a large percentage of phosphate of lime. Other specimens gathered from the fields showed as high as sixty per cent., and he knew that he had made an important commercial discovery. At this time fertilizers were being very widely introduced into the South, and phosphate of lime was a valuable ele- ment in its manufacture. Doctor Pratt and Professor Holmes tried unavailingly for six weeks to induce the capi- talists of Charleston to undertake the development of the JR O YAL TY FR OM PHOSPHA TE RO CK. 461 industry. They then did as enterprising Southerners without capital have so often done since the war : they went North and showed the advantage of it to Northern men of means, and two gentlemen in Philadelphia were the first to invest. Of course, theories have been advanced to explain these deposits. It was supposed that they were the remains of animals drifted there during the glacial periods, but the advocates of this view overlook the fact that the nodules are geological rock, and not ftie fossihzed remains of ani- mals. The theory the most generally accepted is that advanced by Professor Holmes. The Eocene marl, in this theory, is the foundation of the whole seacoast land of South Carolina, and in the ages past extended out under the ocean. The mollusca and other animals bored into it, and honey- combed it to the depth of several feet. The pieces werd broken off and rolled shoreward by the water, and finally left in basins hollowed out in the sand. This action of the water accounts for their smooth, nodular appearance. When the land was raised, these , basins became inland lakes, and as evaporation took place, a layer of salt remained at the bottom, covering the stratum of nodules. But the large percentage (sixty) of carbonate of lime in the original Eocene marl has been nearly all converted into phosphate of lime in the nodules. Two theories have been advanced to explain this change of structure. One attributes it to the action of phosphoric acid which was generated from the fasces and remains of animals, vast herds of which were attracted to these salt-beds as to salt-licks. But this was rejected since nodules the poorest in phosphate of lime were found in the midst of the most of bones. The other theory assumes that certain mollusks largely wrought this change by their power of secretion before the nodule es- caped from the action of the sea-water. This was assisted 462 STATISTICAL INFORMATION. by chemical agents after the removal of the deposits beyond the action of the tides. This is a general cause, not a local one like that connected with the supposition of salt-licks, and harmonizes with the wide distribution of the formation. The occurrence of these deposits is confined to the tide- water country, reaching from North Carolina to Florida and extending sixty miles inland in some cases, but none are found at an elevation above that of mean high tide supplemented by the action of storms. No careful survey, unfortunately, has ever been made by the state, but Professor Shepard, of Charleston, in 1880 approximately placed their extent at two hundred and forty thousand acres, of which he consid- ered only ten thousand accessible. Estimates of the quan- tity, in consequence, vary from five million to five hundred fnillion tons. The first is Professor Shepard's estimate, and now that amount has already been mined without any hint of failure of supply. The average yield per acre on land is eight hundred tons. The formation is known as land or river rock, according to the element in which it is found. The land rock occurs from two to ten feet below the sur- face, in a layer averaging about eight inches in thickness, and composed of nodules varying in size from a potato to several feet in diameter, and in weight from a few ounces to a ton. It is very simply mined by removing the overly- ing earth and securing the deposit. The river rock is gath- ered by hand picking in shallow water, by diving in a depth of ten or twelve feet, and by dredging in a depth beyond that to twenty feet. The industry has been a great boon to labor, as common workmen make $1.75 a day, while divers have earned as much as ?i8 per week, though working not more than six hours a day, owing to the tides. The rock is washed usually by expensive machinery, and dried often by hot-air process, and then is ready either for shipment or ROYALTY FROM PHOSVHATE ROCK. 463 manufacture. The average price per ton has been about six dollars, and the value of this product in 1887 was more than three times as great as that of the precious minerals mined in all the Southern states. The total value of the raw product has been at least ^30,000,000. When the industry first began to be developed, the atten- tion of capitalists was chiefly directed to the land rock, and even up to 1880 the yield from the river beds was only half of that from the land deposits, but in 1887 it was nearly equal to that from the other source. The bed of all navi- gable streams, and generally all salt marshes between high and low water mark, and some additional swamps, lands, and streams were claimed by the state, and the term river- rock is often applied to the state phosphate possessions. The state at the beginning placed a royalty of one dollar per ton on her deposits, but, even with this, it was found more profitable to mine the river beds and pay the royalty than to invest in the enterprise on land. The plan was adopted of leasing certain defined territory to a company, and of issuing licenses to private persons to gather from the state possessions. The leases have been given for various times, from six months to thirty years. The royalty is uni- form, and complaint has been made of the unfairness of requiring rich and poor deposits to pay the same burden. This could be obviated by selling the right to mine in any given limits at public auction, but nothing has so far been done. The state control of this interest has been, on the whole, successful. Up to 1879 the cost of collection was a little over five per cent., and since then the machinery of the Department of Agriculture has been utilized for the pur- pose, and the cost is practically reduced to almost nothing. The total amount of rock from both sources is nearly four and a half million tons, of which almost one and three- fourths million tons were from the river rock. 464 STATISTICAL INFORMATION. The following table shows the total amount of royalty to date : — Receipts of Phosphate Royalty from 1872 to 1879. Under Inspectors of Phosphates, 1872101877. (Both inclusive. See Report of Attorney-General, Reports and Resolutions, 1877-78) ;?307,042.3o 1878 93."5-98 1879 (partly back royalty) 127,507.47 $527,665.75 Receipts of Royalty from 1880 to 1885. Under Department of Agriculture. 1880 S65,337-92 1881 124,541.14 1882 138,254.14 '883 125,793.41 1884 153,797.62 •885 176,754.91 iJ784.479.14 1886 196,089.88 '887 208,842.61 $1,189,411.63 Grand total $1,717,077,381 1 The revenues of the state government for three years were as follows : — 1872-1879 (both inclusive) $10,232,88410 '^^ 547.134 72 '°°' 782,370 17 ^f^ 852,449 76 '8°3 920,839 36 '884 898,951 26 '885 866,026 6s '886 810,477 01 '''' 977,363 74 „ ... $6,655,632 67 Orand total $16,888,516 77 The state expenditures were abnormally high to 1877 on account of the extravagance of the party in power. ROYALTY FROM PHOSPHATE ROCK. 465 One company paid nearly five-sixths of the royalty for 1 88 1, though there were several others. This source of revenue has gradually increased from less than one per cent, to more than twenty per cent, of the gross revenues of the state in 1887. At first the returns were made on the dried rock, but in 1882 it was very properly provided that the basis should be the cri'de article. Although the state engages in no productive enterprise of importance, the temptation to assume direct control of this interest led Capt. J. C. Seegers, of the House of Representa- tives, to introduce a bill in the legislature in 1887, providing for the direct management of the industry by the state, to be worked with her convicts. The title of the bill reads : " To exempt from taxation all property, real and personal, within the state of South Carolina, and to utilize the re- sources of the state, especially her phosphate beds and con- vict labor,- in the stead thereof." He also intended the crude rock to be manufactured into fertilizers by the state. The plan seems plausible. There are over a thousand con- victs, nearly all of them able-bodied negroes accustomed to such rough work under a hot sun. They are more easily controlled than whites, and there is no danger of a general outburst, under a vigilant overseer. They have been worked in chain gangs in building railroads, and though there was a great outcry of inhuman treatment, yet this was probably due to lack of proper oversight by the penitentiary authori- ties, rather than inherent in the system itself. The average cost to the state of maintenance of the convicts is about twenty-five cents a day. The phosphate companies do not pay less than a dollar a day for their hands, and this allows a wide margin for alleged difference in efficiency of manage- ment between private and public control. Some of the companies pay the royalty and still make large profits, — 466 STATISTICAL INFORMATION. sometimes, it is stated, from thirty to fifty per cent., — and the state ought, with the advantages of cheaper labor, to make larger profits. The profits to the state from mining and manufacture might be one dollar per ton, besides the royalty. Then, if the yield should be increased to five hun- dred thousand tons, as Captain Seegers thought, the entire expenses of the state government would be met, and taxa- tion for state purposes be abolished. Nothing, though, so far has come of the bill except an almost unanimous defeat.' 9. ONONDAGA SALT SPRINGS. The Onondaga Salt Springs Reservation, a tract of land about ten miles square, including the city of Syracuse, one or two neighboring towns, and Onondaga lake, was ceded to the state of New York by the Indians in 1795, in consid- eration of a cash payment of ^1000, and annual royalties of ^700 and 150 bushels of salt. The state, by this treaty, is bound to hold and work the property forever. Under an act of 1797, this property was surveyed, divided into lots of ten acres each, and leased to " squatters " then in occu- pation. Each lessee was required to manufacture ten bushels of salt per annum. At the same time a tax of four cents per bushel was imposed, and a superintendent ap- pointed, by whom the salt was inspected and stored, the state receiving in addition to the above, one cent extra for storage. The brine was at this time raised by the individual, the state permitting one manufacturer to use, if needed, the surplus of water, when his neighbor had all he wished. In 1805 the duty was fixed at three cents. In 181 7 it was 1 Authorities : Handbook of South Carolina, issued by the state; The Phosphate Rocks of South Carolina, by F. S. Holmes; Report of Commission of Agriculture of South Carolina for 1880; Review of Operations of Department of Agriculture for 1885. ONONDAGA SALT SPRINGS. 467 raised to twelve and a half cents, in order to aid in the pay- ment for the Erie Canal. A sum of ^2,055,458.06 was thereafter contributed from this revenue for the construc- tion of canals. From 1817 to 1825 the Superintendent reported to the Commissioner of the canal, but after the latter date, to the legislature. In 1822 a bounty of three cents per bushel was placed on coarse salt delivered on the Hudson or the lakes, the laborers in the salt work being also exempt from jury and military service. The duty was reduced to six cents in 1834, and to one cent in 1846, and has since re- mained the. same. The state, in return for this duty, sinks wells, raises water, furnishes it to the manufacturer, and inspects and weighs the salt. In 1859, on account of frequent troubles among the manufacturers, leases were issued to them for thirty years. The salt springs were at one time true springs, but from the increased consumption of the brine, it has become nec- essary to sink wells. Of late the industry has been much depressed, owing to competition with foreign salt, and with the Michigan salt. NUMBER OF BUSHELS PRODUCED BETWEEN JUNE 20, 1 797, AND 1886, 326,421,643. In 1797 . . . 25,474 bush. In 1847 . . . 3.951.355 bush " 1807 . . . 175.448 " " 1858 . . . 7.033.391 " " 1817 . . . 408,655 " " 1862 (max.) . 9.053.874 " " 1827 . . . 983,410 " " 1872 . . . 7,930.925 " " 1837 • . . 2,167,287 " " 1886 . . 6,101,757 " Since 1862 there has been a decline, the average down to 1872 being about 8,000,000 bushels, and from 1872-1886, 7,200,000 bushels. 468 S TA TIS TJCAL INFORM A TION. NET REVENUE DERIVED FROM MANUFACTURE OF SALT, AND PAID INTO THE GENERAL FUND SINCE DUTIES WERE REDUCED TO ONE CENT PER BUSHEL. 1846 )!i7.7°S 48 1847 9,7J7 63 1848 21,491 46 1849 20,153 69 1850 151I04 87 1851 13.337 55 1852 19,284 61 1853 29,557 '9 1854 23,711 57 1855 10,867 46 1856 9,690 79 1857 (deficit, ;fS6,603 01). 1858 19,766 93 1859 27,306 38 i860 12,342 50 1861 26,761 28 1862 49.696 21 1863 38,064 94 1864 29,906 96 1865 18,620 59 1866 24,557 48 1867 $25,089 73 1868 37,244- 06 1869 41.211 09 1870 24,411 38 1871 34,507 08 1872 33,991 78 1873 1S.I30 42 1874 3,106 88 1875 ....... 5,903 66 1876 4,871 08 1877 7.422 99 1878 14,803 43 1879 23,221 62 1880 1,313 20 i88i 20,045 52 1882 21,204 3° 1883 4,056 03 1884 3,452 55 1885 5,349 59 i886 (deficit, ;y7,oii 79). The total net revenue derived from the manufacture from 1818 to 1886 (inclusive) = ^4,296,664.50.' ^ The facts presented concerning the salt springs of New York have been gathered from the reports of the Onondaga Salt Spring Com- missioners. III. REVENUES AND EXPENDITURES OF CITIES. I. BUDGETS OF BALTIMORE, BOSTON, CHICAGO, NEW YORK, PHILADELPHIA, AND ATLANTA. Baltimore. THE gross receipts into the treasury for the year ending December 31, 1887, were 1^8,446,439, and were chiefly from the following sources ; — Taxes ^4,210,112 Public schools, tuition fees, etc 6,766 Market houses, rent of stalls 58,287 Wharfage and rent of wharves 33.56l General licenses 44,609 Auction duties 7>43' Dividends on stock in B. ^& O. R. R 130,000 Water rents 745.446 Passenger railvi^ay companies 132,167 From the state for public schools I47>403 Temporary loan 1,510,000 Receipts to pay interest on loans 896,704 Sale of stock 243.285 The total disbursements were 18,403,930. Of this ?4,54i,3S7 was spent on account of expenses of city government, the following being the principal items of expense : — Interest on the public debt JSgi 5,987 Expenses of law courts 118,806 470 STATISTICAL INFORMATION. Expenses of jail magistrates, etc. ... . . $103,587 Public schools (less amount paid by state) . . . 594,089 Expenses of poor ... 210,739 Police department . . 702,882 Street cleaning department 263,934 Fire department' 214,226 Street lighting . . . 221,203 Parks, etc 52,080 Salaries 72,624 City council 52,925 For expenses other than those of city government there was paid out ^3, 862, 573; of which ^896,704 was in pay- ment of interest, ?i, 310,000 in payment of temporary loans, $283,647 for improvements, and $215,312 for the opening and paving of streets. The assessed valuation of real estate for 1887 was $200,775,614; of personal estate, $64,784,338: total, $265,559,952. The rate of the city levy was $1.60 on the $100. The funded debt of the city, December 31, 1887, was $35,377,176, the greater part of it drawing interest at 5 and 6 per cent. There was on the «,bove date a guaranteed debt, i.e. indorsement of railroad mortgages, amounting to $992,000, making a total debt of $36,369,176. For the payment of the annual interest on $19,645,784 of this amount provision has been made, viz. interest received on water, park, and railroad loans, etc., and there remains but $16,723,392 upon which interest is paid by taxation. The productive assets of the city, December 31, 1887, including the sinking fund of $6,039,241, amounted to $17,711,665, and the unproductive assets to $15,610,500. REVENUES AND EXPENDITURES. 471 Boston. The following statistics are for the fiscal year ending April 30, 1887. For this period the total receipts for the city of Boston were ^20,476,111, the expenditures ^18,562,518. The principal receipts were the following : — Taxes ^8,885,881 Bank taxes 187,069 I Bank taxes collected for state 600,004 I Corporation taxes, share from state 648,225 I Taxes on foreign ships, share from state .... 9,422 Water-works, rates, etc 1,274,498 1 Liquor licenses, fees, etc 977,247 From several departments, including income from ■ trust funds 699,490 Interest on balances, taxes, etc 116,894 Pedlers 775 Loans 3,833,800 Temporary loan 2,000,000 ' Sinking fund for payment of debt 615,109 The ordinary expenditures, including interest on the city debt, and exchange on the part of interest (^2,237,479), and street improvements charged to general appropriation, were ^10,565,983. Of the remainder the principal sums paid out were : to the sinking fund, ^625,005 ; state tax, ;?555,87o; sewerage, ^130,179; special street improve- ments, ^610,564 ; parks, ^243,745 ; additional water supply, ^455,916; ^2,000,000 in redemption of loan; ^600,753, state's proportion of bank tax ; and ^149,979, state's pro- portion of liquor license tax. The total assessed value of real property for r886 was ;Ji5 1 7,503,2 75 ; of personal estate, ;?i93, 1 18,060 : total valu- ation, ^710,621,335. The rate of taxation was ^12.70 per ^1000. 472 STATISTICAL INFORMATION. The total funded debt of the city, April 30, 1887, was ^5.966,963. There was at the same date in the sinking fund, ^19,946,81 1 for the redemption of the debt. Chicago. The total receipts of this city for the year ending Decem- ber 31, 1887, were ^13,863,300; the total expenditures, ;?i3, 220,220. The following are the principal receipts : — Taxes ;^5,i66,is6 Licenses 2,225,769 Special assessment, paving, etc 2,664,534 From water fund, rents, etc 1,642,682 From school fund, rents, dividends, tax .... 1,190,409 Rents 39,505 Fines, police courts r . . 79, 1 86 Fees 987 The principal objects of expenditure were : — Public works department ^1,304,845 Fire department 826,048 Health department 279,788 Police department 1,305,562 Schools, buildings, repairs, etc 2,703,315 Special assessments, paving, etc 2,567,096 Street lighting 542,047 Sewerage 346,422 Salaries 127,326 On account of water fund 1,804,204 The cost of collection of taxes was ^58,145, or a little over I per cent, of total taxes collected. The total equalized valuation of real estate for 1887 was ^123,169,455 ; the total assessed valuation of per- sonal property was ^38,034,980 ; total equalized valuation 5161,205,535. REVENUES^ AND EXPENDITURES. 473 The total bonded debt of the city, January i, 1888, was $12,588,500, the greater part drawing interest at 7 per cent. New York. The receipts from taxes during the year ending December 31, 1886, were $31,568,097. The receipts into the treasury on account of the general fund were $1,966,225, chiefly as follows : — Railroad franchises jSgS.Sgg Fees from county clerk 142,878 Interest on taxes 609,128 Licenses, marshal 43.13° School moneys from state 589,311 Department of public works S'>734 Department of parks 17,022 Department of public charities 3S.i85 The receipts on special and trust accounts were $ 2 , 1 2 8,03 7. The following were the most important items : — Excise licenses ;f665,6o5 Special assessment, local improvement fund . . . 453,911 Five per cent, net earnings of Greenwich St. Elevated Railway 20,526 Intestate estates IS>873 Theatrical licenses 22,300 Into the sinking fund for the redemption of the city debt there was $11,978,385. The principal items were the following : — Market rents and fees ^292,199 Bonds and mortgages 95'787 Licenses ^I'^l Dock and slip rent 1,231,826 Revenue from investments i,73i,"2 Interest on deposits 77,547 474 STATISTICAL INFORMATION. Sale of real estate $5>ioo Special assessments 628,366 Railroad franchises 9S>9ll N. Y. & Brooklyn bridge (surplus) 50,500 Surplus revenues of interest fund 3,550,00 Investments paid off 3>250>950 And into the sinking fund for the payment of interest on the city debt there was received ^2,976,648; the largest and principal item is water rent, 162,485,658; interest, fees, fines, etc., make up the remainder. The total amount received for account of the city treasury (including loans of 122,607,213, and a few more items in addition to those mentioned above) was I58, 354,851, and for account of sinking funds, ^14,955,033, making the total receipts ^73,309,884. The payments on account of the city treasury were 1^57,979,620 ; on account of the sinking funds, ;?i3,8oi,i23 ; total payments, ^71,780,743. The purpose of payments of the sinking funds is evident ; the principal expenses payable from taxation and the gen- eral funds were : for state taxes, ^4,199,606 ; interest on debt, ;?7,245,205 ; redemption of debt, ^857,218 ; department of public works, ^2,410,251; pubhc parks, ^925,672 ; public charities, etc., ^1,526,651 ; police department, ^[3,942,322; street cleaning, ^1,103,371; fire department, ^1,872,576; board of education, ^3,994,116; asylums, etc., ^1,148,834. On the special and trust accounts the largest payment was revenue bonds, ^16,070,600. The assessed valuation of real estate for 1886 was ^1,203,- 941,065 ; of personal estate, 1^217, 027, 221 ; total, ^1,420,- 968,286. The rate of taxation of real and personal property was 2.29 per cent. ; of corporations subject to local tax, 1.9945 per cent. REVENUES AND EXPENDITURES. 475 The total funded debt of the city, December 31, 1886, was $125,982,736, of which bonds to the amount of ;?32, 684,190 were held in the sinking fund. The amount in the sinking fund on the above date, in- cluding the above city bonds, was $41,205,470. Philadelphia. The total receipts for the year ending December 31, 1887, were $17,584,256 ; the total disbursements, $17,633,304. The chief sources of revenue were the following ; — Taxes (current) 4(10,607,754 Taxes (delinquent) 729.152 Poll tax 3°.°86 Public building tax 793 State tax (after settlement) 12,579 Highways 56,458 Water 1,993.643 Fines and penalties 59.4'° Licenses — pawnbrokers, etc 9.03° State appropriation for schools 189,156 City property 1024672 Register of wills 102,568 Bureau of gas 2,749,189 Bureau of gas (interest account) 220,500 City solicitor 167,651 The expenditures are classified as follows : — Interest on funded debt ^45^,81 1 Sinking funds 630,100 Warrants of previous years . . . . ^. . . • 46o,473 Erection of public buildings 5°5>435 Park fund 5.786 Mandamuses 356.525 Loan 254,825 Amount paid departments ii.96i.349 476 STATISTICAL INFORMATION. Property is divided into three classes, according as it pays full, suburban, or farm rate ; the rates being, for 1886, I1.85, ^1.23^, and ^0.92!^ respectively. The amount of property paying full rate was $569,587,035 ; suburban rate, $40,203,- 885 ; and farm rate, $1,888,392 : total, $628,679,312. Horses and cattle pay full rate ; furniture and pleasure carriages full rate, in addition to the state tax ; while carriages for hire, money at interest, and watches pay the state tax only. The funded debt of the city, January i, 1888, was $57,967,395, being $9,500,921 less than January i, 1883. The city's means of paying debt amount to $29,717,824; $1,125,000 consisting of stock in the Sunbury and Erie Rail- road, the remainder of sinking fund securities. The net debt was thus $28,249,571. Atlanta, Georgia. Atlanta is taken as a typical Southern city, though its budget is a comparatively small one. The following receipts are given for 1887 : — General tax $522,109 Liquor licenses 775 Business licenses 48,191 Dray and hack licenses Si927 Cemetery license 524 Paving and curbing 34,3 1 8 Water-works 38,257 Sale gas stock 95,643 Sale bonds 25,000 Recorders' court (fees) 151854 Commission sales, etc S,3o6 Miscellaneous sources S>S7' Total receipts S797>47S The tax collector's office shows the following assessments and collections : — REVENUES AND EXPENDITURES. 477 Real estate, returned .... ^(24,532,777 \\ ^367,992 Real estate, not returned . . 400,287 i^ 6,004 Personalty 7.304.703 'i '09,57' Street tax 12,001 Sanitary assessment 14,683 Total ^510,251 It will be noticed that the liquor license tax is small. The year preceding the receipts from this source were ^37,708. A high license has again been placed on the sale of liquor, and the city will receive a large revenue therefrom during the ensuing year. The expenditures of the city for the year amounted to ^785,152, the principal items being the following : — Salaries jS24,oi5 Public buildings 5.647 Sewers, etc 23,823 Paving and curbing 66,065 Streets (ordinary) 48,396 Public schools 72,129 Fire department 45.8^9 Paupers and relief 12,067 Street lighting I9.'77 Police department 52,865 Sanitary department 24,802 Interest '56,357 The bonded debt of Atlanta, January i, 1887, was ^2,220,000. 478 ■STA TISTICAL INFORMA TION. S -5 (tj a;; \ ■s .^ ^ ^ o 00 ro Tf N rh N f o lO ■J 3 JL C^ "^ N !>. ro t^ N o" o CO m O vO N oo CO 00 ■* ^ W I>. so r^ 00 CO CO t^ •« r^ a. Ml i" Tl- "^ tn m 00 iri t^ t rh (^ 00 M ■* VD vO fo 0\ tF t^ ■^^ I^ 'XS o 00 o\ ? Tf 00 rr) »o r^ 00 o" f^ fO tc «*9: N r^ « »0 ~fo" ■<^ ■qo~ M M 00 0\ t^ OS ■^ i! ■* t^ VO^ w r^ O 2^ ir^ oo" cf o" o- lO N o N vo t^ "1: IN M " ■S ro ■^ M ^ g T ro 8 « oo M o B o" ro t^ lO < ro o w 3 xr\ oo *o ll lO « ■Ms M INCOME FROM PRODUCTIVE PROPERTY, BENTS, DIVI- DENDS, ETC., 1 O 00_ l" 1" § "1 o" o" 6 in « lo o in <3\ ? ro 4 to o "oo~ "1^ "oo" "PT t>. 1 C^i 00 lO Tj- yj^ K (A ^ vO^ vO^ VD M W H iri ■^ cT to r^ 00 Tj- 1^ ■^ 00 0\ CO t~^ « v3 ■^ o\ =09^ ■^ M w •^ r^ »n « M ■+ r^ S ™ w t>. 3y • '• ij ■sa o\ ~^ w "o~ « •J (A < H % v^ ? s? §8 t ^ cS '^ W t^ "3 «" « M ■^o~ ~FT" »o ON 00 lO C\ 00 o 00 o r^ M S o lo ^ oo" s8 cT ^ 00 \o o « « 00 vn ro in ■^ 00 u^ It «St fo i-« ~rt~" Z . ^ 1 . E o e o I t ^ s rt s J s P? m u Iz; £ < REVENUES AND EXPENDITURES. 479 It may be well to repeat again in this place what I have several times said in regard to the caution with which tables like the following should be used. The statistical table in regard to taxation in Baltimore gives a glaring instance of the faultiness of our ordinary financial statistics. The valu- ation in Baltimore increased in 1836 from ^3,787,762 to ^42,93 1,960. Of course this is due to a new assessment, and the decreased valuation in 1837 cannot be taken as an indication of a real depreciation of property. It is probably due to complaints on account of over- valuation. The reader will also notice that the fall of the rate of taxation to 66| cents in 1836 from t^-Tj^ on the ;?ioo of assessed valuation was accompanied by a real increase in taxation, because the decrease in the tax rate was not so considerable as the in- crease in valuation. This is an unusual case of difference between the real and the nominal rate of taxation, but it is necessary always to be careful in the use of tables concern- ing taxation. If proper care is exercised, they are useful despite their imperfections. I repeat these cautions in so many places, because tables in books are frequently con- sulted by those who have perused neither what follows nor what goes before. 480 STATISTICAL INFORMATION. ^ 00 00 n M flH o\ « •^ 5 a p: Z ^ B J-t H n o W CO ro M CO HI O; !>. -"t |H 00 OS i^ in -^ On t^ m « W M • •^'OvOOO ONi-i^O i-OO iOOnOnN « '^J- • 00 r^vo coOM^u-i-i^iLrifOioo f^O in ; o" "-T i-* pf ocTvcT T? in'^ ro ^ o" f^ cT rC • O "^ rOTj-'^inN OS -^vO ^ r*^ ro t^ O O\00 in{s, o\"^ ■^ ON O M OnvO vD m\0 t>. w 'i- Oi « -^ ossO «-. r>^ONO00 rooco O in\0 I O ° M fc. ., tf) n u . rt a \, - o CO so ro 00 I->.00 OO--"""--, o <« rt < < la • *o tmn • « N (S N • N M t->.inO ^ O O NvCvomt^N^e^ , « o rt 5 . t-* m M m O f^'O vO t^oo CO m NN t^ o • ro r^ OS fO t^ r>>^ «o vO m t>-oo 00 t^ »>• REVENUES AND EXPENDITURES. 481 $^f^S2^2gg5^^^fr^KS- M S^'^ '^'%'^V^t.^ %^t^X;$ ro 3; ^ PO in ON r^ fo •I 00 ^ 0,00 fo i>.oo^oq^w t:: *^ 0^ r-> o\ t^^ ^ •"TrocTwvno'i^'^ Chotf T? k-T ■^ hh" -.f vO ro oo" ^ « in •o in i-(hhi-iNMmwww.-«M«NNM« M CO ^ ■^ ^^ *t?3:00 c|?roo^ N ONTf-a.O\M t^ 10 Iv„ o\ •■too inrocor^OMoiH o\.«^o Tf- -^t r^ ^ VO VO ^2't::'^ iO'^o ^^'-' <^ "^^ -^ u-i ^ "I 00 ro ■^CTji^O f^N "-»o i>-0 ■^ r^oo ys « d 0^ 1-^. 00^ 1^00" rf 0" ^ 0" 0" « 00" rC tF tFoo" cT ti o" iC rn rC ro 8 '2 -(+■ 10 M ro •-• CO i>. o\oo 00 ro t^ 10 CMn '^ ^ N N W tO-. t^ t^oo 0^ On • 0\ • • • * 8888888888 88888 "8 8 8 8 1 8 « M u-jwOO N T^'^t^U-l fO^O ro ro in Tf in t^ « t>. CMO --d- 11 00 On M u-)00 tH N n M l^vO MD d fO On (» hi r^l-( i-i\0 lnc^O^■^'^0^ (^»o TJOO t^ C \ 00^ t^ N COM n OSNOOO Tj-w tJ- ■^ I-T vo" d\ in \ n" tC 0" VD i ro M in'O 11 fO N 00 M " Oi C N rn On N4 ^ (S 11 00 a\ in N ^ Ttoo 00 -^ cj^ 0^ t^ "^ in in '^ fO ON , t^po 00 00 ON fo fn f ■) ro fo fO " " w " M '"' tr^^'^-s-^-i^. , - 5 5 3 , t 1 1 < ^. -= = = . = ^= . . . . ^ < ^ IT) »o m 10 in 10 u-> u-» imo ui 0000 in in 10 ciMncscscHNNtHiiHiii^^iiiiiih:^ M « ro ro r4* Wkl l-llNlH(Nr+J. n«N O\00 \p OmO^Tt-H. onO hi Ov^O M t^fOOO ■* rhvo H. in in 00 VO t^ m-o vD 00 VO 00 000 a> S ■ . • . onO onQ fOM mot^ rooo n Q u-» vO t^\0 O\00 voo\l>.OwO^O'-'0^0 o- « « 8 in m Ov o\ w « M M H M M ^ )-« HH ■^ •^ invo r-»oo On o "I M to ^ loO r-00 on o Th^^"th ^inminminminmin lovo cooooooooooooooooooooooooooocooo 482 STATISTICAL INFORMATION. \f\ t^ r^ ^ VO ^ •* M M M fO *i *^ ov O ON VO 00 lO CO d 00 M M ro fO 1^ M Tt lOw tN. 8 ■<1- VO O ro 00 oti 1^ t^ ■^ ON VO 00 W Ov »-l CO XO-* o Q ">0^ \o in ON 00 Ot Ov xnu-i =eS. ^ CO \ri 00 O o N miri Coll with year that t^ 00 tp VO fO o" rvT \r\ ■* O ^ li^ ^ CO « ^ VO 00 o hH =69: ^ " •^ •^ C4 « M M rtPH- i"3a m SShJS M .5 M 8 8 8 8 8 8 8 8 8 8 o irl 00 ■* O vn O irj VO CO o O \o 00 M ON 0\ CO 00 VO CT. ■o VO l.fi I^ ro in 11 VO Ov VO o ■+ r^ ■* o n o ►H N w n N N « N «% .fi .a » . 00 VO ^1 in VO M W S.2 00 ■s 00 00 00 00 00 00 M 00 00 1 REVENUES AND EXPENDITURES. 483 \0 M 00 2.^ s- VO O VO CIVO (T\ 0\ O ON N lO t>* 00 o\ t^ VO ■•J-tC t-« 00 00 ri-K »o J^vO $ ON« « 00 r^ ro ONOO 00 t^Os l>* 00 00 n r^ t^ n Tf- r^ (^ rC vn cT eTvo" 00 ON M »H cS vo" ^'^ VO ON »-4 N « « 00 t^-* roro t^ Tt- '^ OO " •^ •^ « o c* ■^ ON ro ONOO I^ r^ii 00 *» N 00 o\ C^ vooo ■* ^OVO ts O O ONO fO t^ H li^W r^ O^ 1-^ ■^t^ N ^4 O CO LO ■* n Tt M ^o ro w \o ^ c/) 00 I>.00 ^ *^ VO r-^vo ^ a\vo LTl ■^ ^ "^ Ml N •^ N •^ N ■■ .« fT\ i-i lo vn Tj-00 N Ti- on ONTh 00 ¥>a lo ON ro ro ro i-i CO w vO M o o ■* t^ « r^ LO 00 00 \n I-* 0\ o !>. CO vo r^ ro O too vn 00^ ■+ li-JM OO ON ro ro ON ro in"^ On ro « UT* c^ ON M NO "n 00 00 t^ OO O" o\ r^ Q ^ ION 1^ vo tI- 00 ^O ■* Tf 00 lO ^ IH w HI M CI w N H( H« PE^P^ PiP^ P ^ - o M i O t^ t^ 00 00 VO M 00 o o\ s 1* a u^a\ ■* ^ t^o 00 ected n the upon :vy fo year. PO o ro 0\" s- Coll withi year theLe that; CO O" ■^ ■M, a Pip4 a o •=i«'a -c o rt w . •ri-H 4d rat— 1 (u P3 .S _ ft 3 O 88 8 88 8 88 8 88 o o r^\0 a\ '^t^ „ ■^ w u-l '^OO N It woo o\ Ov*^ l:^ t^oo VO M CO in i-i lO vO^ 00 fO M ii-1 vO VO CO O; vO lO kH y^ VO fO o o lO-i!*- 0\ •s-l w CO U^ w 0\ fow -^ t^oo »n lO M ^X3 ■* ^ q\ r-»u^ « I-^t-^ lO s. •* .12 ^ wQO CT\ ■*Ch en tCod vd" 8^ lO ON "^ ■* 0\ •ri lO On "^ lO \o (S ft N N M M N pifi; p^p; p^fi; pip; J3 _-- u 3 > • vo ^■o t^ II 00 I'" < < < sg iTO- ~ wH. F3(-T< MfrJH 00 00 00 00 i: rt tH M cnp^ X Rate out Limits of rect Taxa- tion, per $ioo. a^*--_s ~ H op 2 E g B"ji 5 5 R «8 Tax in th its of Tax per ■«. - ■* lO vO r^ rt 00 oo 00 oo ^ 00 00 oo oo .§ = " i^'S bo 1-^ 1 n g-o ° " § g « J?- 5 1-3 -S .5 *) 5 >.S tS ^ gO u ■« O UQ « rt ■"- -^ s-Sa ►^ 5^S a s -a i3 CO ■sl=l- s w ta rt J 0) > o o ^ w "^ « U Jq «"§ t«°« — rt iS a ■*J^ K « « u 3 •>'P'-3-gS ^•i.i's« o o3 -^ - ^ o a REVENUES AND EXPENDITURES. 485 Boston} Population by census of i860, 177,840. Population by United States census of 1870, including municipalities an- nexed, 250,256. Population by state census of 1875, 341,919. United States census of 1880, 362,839. State census of 1885, 390,393. YEAR .2 REAL ESTATE. PERSONAL TOTAL EATE TAX ESTATE. VALUATION.! PER $1000. 1867 8 - ;j25o,587,7oo ^194,358,400 ^444,946,100 ^15.50 1868 . 287,635,800 205,937,900 493.573.700 12.30 1869* . 332,051,900 217,459,700 549,511,600 13-70 1870 . 365.593.100 218,496,300 584,089,400 15-30 I87I . 39S.214.950 217,448,600 612,663,550 13.10 1872 . 443,283,450 239.440.850 682,724,300 11.70 1873^. 470,086,200 223,745.200 693,831.400 12.80 1874 . 554,200,150 244,554.900 798,755.050 15.60 1875 • 558,941,000 235.020,895 793,961,895 13-70 1876 . 526,157,900 222,838,310 748,996,210 12.70 1877 . 481,407,200 205,433.386 686,840,586 13.10 1878 . 440,375,900 190,070,966 630,446,866 12.80 1879 ■ 428,777,000 184,545,692 613,322,692 12.50 1880 . 437,370,100 202,092,395 639,462,495 15.20 I881 . 455,388,600 210,165,997 665.554,597 13-90 18826 . 467,704,150 204,793.812 672,497,962 15.10 1883 . 478,318,900 204,113,771 682,432,671 14.50 1884 . 488,130,600 194,526,058 682,656,658 17.00 1885 . 495.973.400 189,605,672 685,579,072 12.80 1886 . 517,503,275 193,118,060 710,621,335 12.70 1 The following tables concerning Boston are taken from Auditor's Report for Boston, 1886-87, pp. 265-267 : — '^ Included in the total valuation of 1865, and all subsequent years, was an assessment upon corporations chartered by the Commonwealth of Massachusetts, for real estate and machinery. The last item is taxed 486 S TA TIS TICAL INFORM A TION. AMOUNT AND RATE OF TAXATION. RATE PER $1,000. YEAR. STATE TAX. COUNTY TAX. TOTAL TAX. STATE. CITY AND COUNTY. 1867 ji!i,694,i50 ^962,261 ^6,656,41 I 3-94 11.56 1868 723,140 5,161,689 5,884,829 1.51 10.79 1869 903.925 6,375.399 7.279.324 1.71 11.99 1870 933.775 7.703.087 8,636,862 1.65 13-65 I87I 933.775 6,856,669 7.790,444 1-57 11-53 1872 736,480 7.023.362 7,759.842 I. II 10-59 i«73 828,540 7.809,552 8,638,092 1.23 11.57 1874 802,120 11,243,782 12,045,902 1.04 14.56 i«75 802,120 9,721,016 10,523,136 1.04 12.66 1876 742,932 8,527,872 9,270,804 1.02 11.68 1877 619,110 8,135,104 8,754.214 0-93 12.70 1878 412,740 7,466,410 7,879,150 0.67 12.13 as personal, and is the only personal estate taxable by local assessors to a Massachusetts corporation. ^ City of Roxbury united with Boston, with valuation of real, j!l8,- 265,400; personal, $8,286,300 : total, ^26,551,700. * Town of Dorchester, with valuation of jf 12,826,200 real, and ^57,489,500 personal: total, ;S2O,3i5,70O. ^ City of Charlestown, and Towns of West Roxbury and Brighton : — Real. Personal. Total. Charlestown . . . $26,016,100 $9.273.58z $35,n89,682 W. Roxbury . . . 16,254,350 5,894,250 22,148,600 Brighton .... 11,964,450 2,584,081 14,548,531 ' In consequence of Act 1881, exempting money loaned on mort- gages of real estate, the personal valuation receded, notwithstanding large gains were made upon the other items of personal estate. REVENUES AND EXPENDITURES. 487 STATE COUNTY RATE PER $1 ,000. TAX. TAX. TOTAL TAX. STATE. COUNTY. CITY. 1879 JiS2o6,37o $369,200 $6,916,940 $7,492,510 $0.20 $0.46 $11.84 1880 619,110 260,000 8,587,786 9,466,896 0.86 0.27 14.07 I88I 619,110 260,000 8,173,282 9,052,392 0.81 0.25 12.84 1882 825,480 291,200 8,798,073 9.914.753 1. 12 0.29 13-69 1883 578.055 291,200 8.778.556 9,647,811 0.72 0.28 13-59 1884 770,740 301,600 10,216,029 11,288,369 1. 00 0.29 15-71 1885 578.055 301,600 7,814,092 8,693.747 0.71 0.27 11.82 1886 555.870 386,568 7,897,240 8,839,678 0.65 0.40 11.65 i88 STATISTICAL INFORMATION. I ii S3 'vO « ON*^N i^>J-)i-« u^ ONOO CO ! OMX) >j^oo rN.inc^a»-^t-r^roPO °. s q; "-I in ro co^^ t^^ O •-_ ro r^ sis o\ t^>KO cTvo' N*^ ds oS CO d^'o' ^ to, >HMM |-.l-IW«CO i lo^o U-) m 1^ r^ ON -"i-oo o "-" Tl- o\ 11 00 lOOO VO N 00 W lOOO o *n o bi m o\ ^ "H ^ NM t^vo *-- u^ ON i-i u^ .-1 O ■^o « 00 -^^ t^ N irjinTj- ONOO 'Ot-^O^^i-'OOO'-'OO < ^ u^00 -^ T|- O ONOO t^ i-i "100 N O «9, H, NNt-.hNI-.MfO .^^S^R? 1 q; r^vq^ ^ *1 *^ (-Tt-Tvd't^'-.vo' WOiONmt^ ^ tOfO ■^ CO -^ fO «9: ^ Is J 2 N-O rOt^t^M '^1-t M\0 O O -^ ^ o«ooMi^i-. t^OO 00 f^ "^ % MO rot^^t>.i-( mNN \n\o \o ^^ O J ThONO CON lOM ONt^MvDvO rO 00 OvOO ■^Ot^MO'-''*vD ON O\00 f s WM mmONOnMvOOjOjm ** « m" PO •«? ■^ lO o O ON O 00ONO\fOt-^ t>.. -r^. -00 -oovdioNtJ- H Nj^. .Th- •m-O'-'OOOO ■-:? • ' T? * ' t^ ■ m" ■^vd' O" PO a* £ M i-i i-i M M . l>-00 On O "I N fO ■<* irivo t^OO On POfOPO^-*-^Tj--^Tl--1-^- 00000000000000000000000000 REVBN.UES AND EXPENDITURES. 489 1 POPULA- TOTAL BONDED IN- YEAR. ' INCREASE. TOTAL TAX. TION. VALUATION. DEBTEDNESS, 1850 28,269 $7,220,249 ^543,365 iS25,27o 87 ;?93,39S 1851 8,562,717 1,342,468 63,385 87 1852 48,000 10,463,414 1,900,697 76,948 96 126,035 1853 60,652 16,841,831 6,378,417 135,662 68 189,670 1854 75,000 24,392,239 7,550,408 499,081 64 248,666 1855 80,000 29,992,893 2,600,654 206,209 03 328,000 1856 84,113 31,736,084 4,743,191 396,652 39 435,000 1857 36,335,281 4,599,197 572,046 00 535,000 1858 35,991,732 430,190 00 1859 36,553,380 561,648 543,614 00 1,855,000 i860 109,206 37,053,512 500,132 573,315 29 2,336,000 1861 36,352,380 550,968 00 2,362,000 1862 138,186 37,139,845 787,465 564,038 06 3,028,000 1863 42,667,324 5,527,479 853,346 00 3,422,500 1864 169,353 48,732,782 6,065,458 974,665 64 3,544,500 1865 178,492 64,709,177 15,976,395 1,294,183 50 3,701,000 1866 200,418 85.953,250 21,244,073 1,719,064 05 4,369,500 1867 . . • 195,026,844 109,073,594 2,518,472 00 4,757,500 1868 252,054 230,247,000 35,220,156 3,223,457 80 6,484,500 1869 266,024,880 35,777,880 3,990,373 20 7,882,500 1870 306,605 275,986,550 9,961,670 4,139,798 70 11,041,000 1871 289,746,470 13,759,920 2,897,464 70 14,103,000 1872 367,396 284,197,430 4,262,961 45 13,544,000 1873 312,072,995 27,875,565 5,617,313 91 13,478,000 1874 395,408 303,705,140 5,466,692 54 13,456,000 1875 *i73,764,246 5,108,981 40 13,457,000 1876 407,661 *i68,037,i78 4,046,805 80 13,436,000 1877 *I48,400,I48 4,013,410 44 13,364,000 1878 436,731 *i3i,98i,436 3,778,856 80 13.057,000 1879 *i 17,970,135 3,776,888 19 1 3,043,000 1880 503,298 *ii7,i33,643 3,899,126 98 12,752,000 1881 *ii9,i5i,95i 4,136,608 38 12,752,000 1882 560,693 *i25,358,537 4,227,402 98 12,752,000 1883 * 1 33, 230,504 4,540,506 13 12,751,500 -1884 629,985 *i37, 326,980 4,872,456 60 12,751,500 1885 ♦139,958,292 5,152,366 03 12,695,500 1886 693,861 * 1 58,496,1 32 5,368,409 76 12,588,500 1887 *i6i,204,535 5,602,712 56 12,588,500 * Equalized Valuations of State Board of Equalization. 490 STATISTICAL INFORMATION. Cincinnati} Population by census of i860, 161,044; by census of 1870, 218,900; by census of 1880, 255,208. YEAR. REAL ESTATE. PERSONAL ESTATE. TOTAL VALUATION. RATE OF TAX PER $X,0OO. 1867 . . $68,569,040 $68,412,285 $136,981,325 $27.40 1868 . . 69.799.604 61,583,925 131.383.529 28.00 1869 . . 72,243,844 58,471,666 130,715.510 31.90 1870 . . 78,736,482 57.370.754 136,107,236 31.60 I87I . . 123,427,888 59.934.044 180,361,932 22.20 1872 . . 119,621,856 55,462,410 175,084,266 20.10 1873 . . 121,479,280 64,166,460 185,645,740 23.06 1874 . . 123,231,790 58,718,284 181,950,074 2338 1875 . . 125,976,83s 58,521,730 184,498,565 24.82 1876 . . 127,143,900 56,809,066 183,952,966 27.04 1877 . . 128,820,270 50,609,872 179,430,142 29.10 1878 . . 129,043,880 43,830,188 172,874,068 28.54 1879 . . 128,473,130 40,832,505 169.305.635 28.98 1880 . . 129,956,980 37.578.376 167,535.356 31.00 I88I . . 120,045,230 41.359.162 161,404,393 22.20 1882 . . 121,897,090 45,089,015 166,986,105 23.82 1883 . . 122,874,790 47,050,496 169,925,286 20.50 1884 . . 124,625,370 44,908,822 169,534.192 25.56 188s . . 127,454,100 42^632,868 170,086,968 26.86 1886 . . 129,378.370 42,571,661 171,950,031 25.44 1 Tables concerning Cincinnati taken from Auditor's Report^ Boston, 1886-87. REVENUES AND EXPENDITURES. 491 tH M M M 00 OO 00 00 OOOOOOOOOOODOOOOOOOOOOOOOOOO 00 00 1 00 00 00 00 O0O0O0'*a'»J'*a«^**J'*a*^*»I-*a*»a 0\ On on \ 0\ta 4i. W MMOvOOO*v|ON<-n-(i.OJtOi-iOvO 00 ^4 =&* tH M M t-i WMlotOMtOtOW"H'-ti-..MMM 10 to n ■5' VO O O ON pO-^LnU>UJ4^ ►HvpNp pOUi ONUl-P" hH HH ^^"S 8 ^b *►-« io NO -f»" to »b M to I-" ^ 00 vb ^ bo ^ ON-f>>Ot0'-«OU>OO'-nOt-nUi0 ^ o OJ OJ M ^ MMMtOI0lOt0tAOi-it0t0OJ4^ to to o 4»> Oi <^ ON o -^ -^ o \b IhnO « tobMO^vb-t-. m4^ OnOj OvOnO OnW O ^ to OO"-" 0<-"tnO •^ bo c o o 1 td to bd to t0t0t0t0Nlt0bdO0UlU>t0t04^Oa w w en ^^ §■% ^^^^'§^^o8'S^'§8^ o o s % to to to 10 tOtdOJtOtOtOtOIOtOMtOtOOJOO tJ to 1-3 1^ ON t-" p W to M popOVp"^4»-OJOJ p M ^ M 00 *^ ? ^ bo <^ i^ too O00-f>> O ■^ tOOOONO o o o '%% s- 4^. On ON O =&* Oi OJ OJ ^bO Oj^M4i.4»>4^;f^^OJji^MWOJOJ M M "io oi i>. ^ "t-^'io'b'boj O^'^NO OnOnO to M CO 00 n \0 w N w ONO\tO-F>--^--> 11 004».OoLri(jT ON NO ? P ^ 00 OnOn-^vO 0^'-| OnM hh NUinO^ O :^ p •§■ "m Ui vb "bp to vo 00 O 0-f^ 00-^vooo O^OJ M<-n-' bO 104^. OOONOOf-n O ON-^J OnOn-^VO On w w n 00 ON Ui -^ (Ji 00 t *■ ? r •»a OOOiLnixiJJO^^^^^^J-'JT^JO d^ ^ d On ON ON C>J "to'oN'boCjui oowT^bu)-^ onoo-^ o Cj t>l -1 oj oo'-t oovot>j<-" O o ONWUJ "-1 ON-^r oo*o- «0 vO -^ NO OOONOOVO O »W^ 00-^ o to-^t^ lo "o "qo "o oj Oi ii ^ "m ^ ^ "b ^ ^ ^J\ "^ w x: CO OJ f*. M ^ "to ^ "^ NO ^O 00 4^ » PI CnUxVO 00t-a-»*jLn OOj OnOn-(^-^ On^Ui to O 4^ W c <^ to On t>J vow M Ol^'-rt'F^ OnO 0-*» ONO-P^ to <-n PI < 2 l_l M M M .. '^ a a Ln ^ ^ U) OOOvO OOOnOvWVDVO OnST"-" O^M -F^ w w w :i,xj C*J^ ONOOtO ONi^-^ 00vp:^J3M^O^^«ip 'bvb^Ooi>."»-"t>i'bNOOO iHVO to ONO^NO tO(-n Is M *^ to ono^w w-^ tow-^ojvo to o cp HH \0 M ST O -^ O OJ \OON00t0-fa. ON- to 04». nn4>.vovO *a 00 A 4^ :fk oj 4fcWUl4»^UttyiJ*WWW4^;^>4^ 1 4>. "on OJ Ui 'b"bNloNb''H<4i.'w on^ ovt^ S.^":; ^ ^ M « M to *^ ON I-" g>^vg=S S^Scrs-s^s-^s-s^s to 00 W ^ON ^ J. 4^ O ^ "O "to M w "on 00 *-J M ^ 00 "O _HH ^ "b "a> aa 2^^ -iS 00-^ N^kCOW OOMW OOLTiNO,'-' ^w2 to^ ^vo ONiotn^vo-aw Ln 00 ON a ■3 492 STATISTICAL INFORMATION. New York. The City's Taxes and Expenses, Past and Present.* The great advance in the assessed valuation of property in New York City since The Record and Guide first saw the light is a matter of local history. It is interesting, however, to glance at the figures for the past twenty years and to institute comparisons. The assessed valuation since 1868 shows an increase of ^699,825,134, equal to 77 per cent. The tax levy during the same period has increased about 34 per cent., and the city's running expenses over 32 per cent. It would seem, therefore, that these have not kept pace with the increase in population, but that they have decreased as the inhabitants became more numerous. The population in the summer of 1868 was about 875,000, and at the same time of the year in 1887 it may be estimated to have been about 1,575,000, showing an increase of 700,000, or 80 per cent. Had the expenditure increased in the same propor- tion, the city's expenses would have been ^48,000,000, instead of about ^34,000,000. Again, in 1868 the appro- priation for the administration of the city government was $29.59 per head, while in 1887 it was $22.71. The tax levy during the same period has increased 34 per cent., or 46 per cent, less than the advance in population. A curious matter of note is that although the population and real estate of the city have increased so largely during the two decades, the assessed valuation of property per capita in 1868 was $1037.53, while in 1887 it was but $957-23- This is due, of course, to the population increasing in a slightly greater ratio than the value of the property, though it will be observed that there is only a difference of $80 per 1 From The Record and Guide, of New York, March 24, 1888. REVENUES AND EXPENDITURES. 493 capita, showing that the value of property has advanced in about the same proportion as the increase in population. The following are the figures : — TOTAL APPROPRI- TAX TOTAL TAX YEARS. ATIONS. RATE. TOTAL VALUATION. LEVY. 1868 . . ^25,895,659 02 2.66 ^907,815,529 ;?24, 147,893 02 1869 23.689,536 34 2.27 965,326,614 21,912,914 00 1870 23,072,556 47 2.25 1,047,388,449 23,566,240 10 187I 23.362,527 62 2.17 1,076,253,633 23,362,527 62 1872 34,036,290 51 2.90 1,104,074,537 32,036,290 51 1873 30,154,187 77 2.50 1.129,139,623 28,228,490 57 1874 34,872,391 79 2.80 1,154,029,176 32,312,816 92 1875 36,171,472 23 2.94 1,100,943,699 32,367,744 75 1876 34,934,801 26 2.80 1,111,054,343 31,109,521 60 1877 30,984,269 48 2.65 1,101,092,093 29,178,940 46 1878 30,079,077 12 2-SS 1,098,387,775 28,008,888 26 1879 30,247,750 20 2.58 1,094,069,335 28,226,988 84 1880 29,667,991 98 2-53 1,143,765,727 28,937.272 90 188I 31.759,205 '4 2.62 1,185,948,099 31,071,840 19 1882 29,434,031 36 2.25 1,233,476,398 27,684,427 26 1883 30,676,785 79 2.29 1,276,677,164 29,167,029 81 1884 34,067,585 51 2.25 1,338,298,343 29,991,172 85 1885 34,678,405 41 2.40 1,371,117,003 32,853,528 84 1886 33,802,320 59 2.29 1,420,968,286 32,421,550 15 1887 34,343,022 55 2.16 1,507,640,663 32,370,696 78 494 STATISTICAL INFORMATION. Philadelphia} Population by census of i860, 565,529; by census of 1870, 674,022 ; by census of 1880, 846,980. RATE TAX YEAK. REAL ESTATE.^ PERSONAL ESTATE. TOTAL VALUATION- PER $1,000. 1868 $445,563,317 ;S!7.954.i69 Tenth ward annexed. IV. RATES OF TAXATION.i I. TABLE SHOWING RATE OF TAXATION IN CENTS PER ^lOO, IN THE VARIOUS STATES FOR 1887.2 Alabama 55 Arkansas 40 California 56 Colorado 55 Connecticut 12J Delaware' — Florida 40 Georgia ....... 35 Illinois 35 Indiana 12 Iowa 25 Kansas 41 Kentucky 47f Louisiana 60 Maine 27J Maryland I7f Massachusetts 8J Michigan I2| Minnesota 13 Mississippi 35 Missouri 40 Nebraska 81 J Nevada go New Hampshire .... 19 New Jersey ^S-ru New York 27 North Carolina .... 37J Ohio 29 Oregon • 3' Pennsylvania 30 Rhode Island 12 South Carolina . . . 42J Tennessee 30 Texas 37J Vermont 10 Virginia 40 West Virginia 35 Wisconsin 15! ' The reader should not attribute too much significance to these rates. A rate of 18 cents on the $ioo in one state may be really a higher rate of taxation than a rate of 25 cents in another state. It depends upon the way property is valued. 1 have no doubt that our Baltimore rate of taxation for state and city of $2.07^ is higher than $2.18 in New York City, because the Baltimore assessed valuation is so much nearer the true valuation. * The rate, as found in the latest report received, has been given, in most instances for 1887. If the above are not consistent with the preceding detailed statements, it is because later reports have been found regarding this point* * There is no state tax on property. RATES OF TAXATION. 497 2. SCHEDULE SHOWING THE RATE OF STATE TAX ON EACH DOLLAR OF THE AGGREGATE VALUATIONS OF PROPERTY FROM l8l5 TO 1887, INCLUSIVE, IN THE STATE OF NEW YORK.l 1816 1817 1818 1819 1820 182I 1822 1823 1824 1825 1826 1842 1843 1844 1845 1846 1847 1848 1849 MILLS 2 2 3 I I I I I I k \ I I ItV T% 4 \ \ 1850 1851 1852 1853 1854 1855 • 1856 1857 1858 1859 i860 1861 1862 1863 1864 1865 1866 1867 1 868 MILLS \ \ i I 4 li If 3 2i 3* 3l 4l 5 4M 5^ 7f 54 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 5f 7toT StW 91 6tW 7i 6 l\\ 3i 2A 2t't^ l\ 2i ^^ 3i 2^V 2A 1 From Comptroller's Report for 1887. VALUATIONS OF REAL AND PERSONAL PROPERTY. I. TABLE Showing the proportions which real and personal property bear to the total assessed valuation in the United States and in each oj the geographical sections.'^ REAL ESTATE. PERSONAL PROPERTY. AGGREGATE. United States . . 7713 22.87 100 New England States 71.50 28.50 100 Middle States . . 86.60 13.40 100 Southern States . . 70.77 29.23 100 Western States . . 74.09 25.91 100 Territories . . . 46.81 5319 100 * Census Report for 1880. Volume VII., page 17. VALUATION OF PROPERTY. 499 2. TABLE Showing assessed valuation of real estate and personal property in the years jS6o, 1870, 1S80, together with percentage of increase and decrease} t "S u z g ASSESSED VALUA- ASSESSED VALUA- ^§ ^2, ii iE£S YEAR. £h gfcK K H [!;;,>■ REAL ESTATE. PERSONAL PROP- z 2 . z o: u K Z , z£e SgS " f " ?iSS OKU ■< < w h > per cent. per cent. per cent. i860 «6,973.oo6,049 fel ".553.956 1870 9,914.780,825 4,264,205,907 42 16 1880 13,036,766,925 3,866,226,618 31 9 87 24 1 Takea from the Census Report for 1880. Volume VII., page 9. soo STA TISTICAL INFORMA TION. (^•* O On O\00 00 On Th « O ■<*■ « N w m 01 t}-no ti- ■o a» o M ro O r-. On r-^ r-^ u-i on^ oo :^ 01 NO 01 U-) -^ o t O f^t^tr^tn ^ u-1 ro O J>;' "-tNO '^rOi>.'!l-0 r^N N On < ^OO 0\ r^ —N hT tC m" no" 00 rC «" lA cf; On hh" h" rCo" ■# ^ n N tJ-vO r^w «oo\WNOMO\wo ro rn 01 f^oo rn o 10 N 00 rt M ON NO Lo LT) u-ioo H- tj- r-~ r^oo i. 01 h^ S £ "t -I.^- « O r-NO LTi (N t^ N "-i. "n. °« IB tF cT tC • ! 1 '-' ; "^ ^^- '^ ON o r-^ ; tF rCf^NO t^ OOO ro . . Tj- , O "^0^ ro r^ M CO ; ON n ro Tt- » i-H ro O; I-. o NO -^ (^ ^n« o t^NO h li^ 00 oo" "" T? rC hT L^ N r^ o tc, r^ON nT d" -^ -^li^ N N O LT) rONO NO o 00 niOO -ej- =6.9= "I IX N 11 M iri w r-*oo W NH vO N ro -^ M on -"t u-iOO On rr> M ^ On 00 t-^ 1>. to r^ TJ- i^ NO 00 HH 00 \Ci M lO N On NO r^ O 00 11 NO Tf «_^ M^OO ^ t^ •J^ -^00 On in t^ O "^ CO N 00 ro u Sg o. ^% ro u-i N NO 1 1 Tf ^ J m"oo -^ N NO ON On n O^00 01 O 00 NO < o i>.^o 00 NO Tt-OO u-1 Tj- -^ 00 ON 1 ON bl hH vo HH u^ro 1 ro I n en lO K *g= -*" CO Th-O ro>J~ifOONO>Thi-i HH o^l-. Ch-O VOOI ON r^ On M 01 01 -O r^ CTiOO ■* o ON ON fO moo r^ ro I I^O LOCO 01 O OO U 0) t^ O NO rONO rOLorON- c^y^ c^,;(. r^M3 00 rONO n 00 l>- 5 rC cf\oo i-T r^ KH^oo n"nO lA 1*" h" ro N 00 f^NO NO 00 CO u-i LT) d •o o t^t^.r^Lorot^'-' "-I r^ 0\^€) NO r^ O lONO n 01 ONOO Ul 00 ■* u-t-^ OnOn^nOOOnOOO uo-f On<^ I^nO O nO l>. lo < cTno" -^ tF r^ on O OnnO t^oo O "-1 1>- ■* t-^00 O N o M 00 00 t^-• NO 00 ■■too OO-NOiOfON-^N LONO On On r^ (N) r^ LT) ON O '-0 LTi rt ON o -^no t}- r-*NO ro r-^ O ONOO O •i > N ON ^ Th On n NO rooo onno O i -t r^ r^ "^ On m^O ^ i 1- r^od ■^ i-^^o 00 moo m -^ NO o-oo o n tNO xt "00 N Z u. d On tJ- O NO 00 -d- u->oo t^ ro NH in r^ o n nD On CO u-i- n ° £ Tt-O roOO rONO O -^ "-i i-> -^ '^ -^00 -H oo inoo u-i « 00 u~i Pi 9 Lod"oo"oo 00 On n" On 1* On ii' m" lo r-^ oToo ro "^ Tt ii O ^'l 14 ctl T^ CO ■-< c^ On n ON 1 00 O LTiOO rONO 0) i>.00 m ro m ro ^ « N HH « ^ 0000 ^J^r^r^O^'-' m roONM onoo t^ « fo « ■ri- 11 O N <0 O 00 00 ON NO r^u->rJ-LnrOTj-'■ O r. 00 -^ Th On On O 00 00 -d-OO u-1 (-003 nD ui r-.moo Os -^NO N Tt- o f^oo ^ (d tC \r\\0 LOCO 00 On u-)00 r^OO U-) M r^OO oT fn (^ M lo < rv.LnNO ro n \j-)'-< f^t^^nONQNO 01 t^NO m o t^oo \rt OS ^ ** c* h-u^u-iNnOliiM f- "-*_ TJ-C4 CO u Ills 3 CJ 0) >. rt • 13 ^ t) S rt.S . « . 2 " " „ fe 6 1 3 £?-3 S ^ « = 7 g rt rt .r- .— .— -— aj ssssssz VALUATION OF PROPERTY. 501 t-. t^ ^ r|- p^co ■^ LOONinON M M m N tI- O tnO i-< r^vo ONM vnM t->.0'0 « vnin ev| IT) tnvo t^ HH vD a^ »J^ >o H-. ■^ M t^ t^ M O (S ^ 0^ -to OO^O O a\iNNN tJ-lti $2 li-i fO Tf t^OO w -rn HH O "-• 0\ "t w OO N -t. "t"^ ►I O looo ON Th I-I to in O ysoo" ro i-T oTod t^ >-"" 00 -"j^ tF d" t^crs en rn « « I>.vO O 00 I>.NO N W (S un lY^ CO m o « u-j-^ N vO^ hH^rONN N»0 11 f^i-i in ro i-r PO O - ON ►H m N On in Th t^to rn -^ l^hH \0 "TO VO O '>*■ 1-. ONNO « NO •sO t^ O r^ ^t !>. fO H- 0\ m ON N I-I O fO • o\ "-T d^ • Tt N t^O ■ t->. POOO ro ON C* ' OnO O • M |>.MD ON • W i>.ND I-I r^oo O "^ in ' OO QO 00 t^ Onoo i>.i^ o" i^ vO "-ju-i m Tj- « Tt Om-i N Tl- ^00 -^ r^^ NO 00 -t w Tt-00 ^o fO m 2: t-^^O Tt- « lO m o o m ino ON o en -* 1100 O in onoo no NO NO W ON u-jOO W ro t^ ^ ■^ i:^t<\ NO >- in O onoo" • 0\ rnO" ' N 00 POOO ; rfOO NO W ^o\ M 00 O ' O in '^ 1 O NO -^ r^ \o « ■ o «1 ^^ M O on "I • M Tl- t^fO i^o" T? o" rn l>»m M O t^ r^NO oo W CO « w r^ 0\ Tt-00 o in !-< ON NO^ N « •-< « M ro ro ►-T ■^ o\ I-I w VD M OO rj-o m inoo u-jin in in HH lOOO ^OOOOOO-ir^roro «-i I^ ro O in •^ -:. m M "J^ O OnD i-i inini>-i-i r^r^ i-T voco o o o N OnnO O 00 TJ-NO in N I-I On "1 h-< Tt- n vs M m mo i-^i O O m M t^ CI c^LncJ\ti rom^LOLot^ moo tI-^o on cf; T? N i-Tvo" tF ci fn N ro I-T o NO oo OnOO N -^ r^ u^ lo CO u^oo to fD i-t 01 00 O to ro LDVO n >J^ nO^ « i-i M rn (o n Ti- cT i-r ^" ON t^ fO r^'O roco On ■^ >-noo w «vO OnO w m CM Tt- r^ O I-. u-ihHvo fnONincnoNfn "to t^vO^CO oo_^ i-.^ 0_ «^ -sJ; m in i-i^ in rn q^ o N inr^o M i>."-csoor}-ino roMm m M 00 in OnoO romi-i ONrnmr^mNoo CO O 00 NO cnvO ON ■^ ro o "-i oq_ fooo o_ y~i I-T m" d\ w" -^ O On rn '^nO nO -^ in -tf -^ -^ HH -^N Nin*:i-i ■.roON HH CO ■^ M M O ■^00 OnnO inO !--. O O Q ^ to ONNO I-I CON coinM oo inmr^O t^ ^ OnO n O i-iO roror^ONON t1-0 N ^^„ "^ ^ ^ i-h" CO N N ON rC ^f rC ^f I-T -^oo^no -^ Q oo tJ- ro cooo o r^oo O NO -rO rOQ ooo ON i>.0 M t^O m O N Tho in ThO O r^ rC n" m" ON "^ (O cT o"oo" rC \f) in ►-T ro in »:*■ " " ~ On to 'tJ-oo r^ on O i>- to O -^ « -"t N O ON w -^ co« O u-i f W M ro N Pi u 1> >-h^ o (U o Fi ;1 Si C! [ft 1=; X o OJ QJ c S _, . U 0.13 w C a 3 o « rt U -a -iJ >i P.-C « o M «: -O 3 O 13 c - « m ■* " H S £ *J*^ C d « S u D.^. 13 C .. -SSi -= ui « V _c o — n g 3 fl, D.-S oj u o » s i III Mil! ^-s s Sj S c "l-S** tJ 1- u y jj -oCs P. I- o 33 o V - 3 rt 3 &.T3 t3 ■ - ^ ^ v3 S'O ^4, 2 o p-c Si 6 o i S B-2 ">• g S~JJ o £.9 ^ w !n ^^^ ^"S S ^ w rt ^2 « K ■so * 502 STATISTICAL INFORMATION. In some states the valuation of railroad property is given separately, and is not included in the above aggregate valua- tion for 1887. In 1880 the railroad property seems to be included. The separate valuations of railroad property are given as toUows — Alabama . . . ;j22,296,87o Nebraska . . ^23,601,362 Arkansas . . . 13.704,639 New Hampshire 13.536,711 Georgia . . . 22,981,927 Nevada . . . 9,212,451 Illinois . . . 62,972,101 North Carolina 7.075.252 Iowa .... 38,722,761 South Carolina. 16,263,822 Kansas . . . 32,453,776 Tennessee . . 31,547,582 Kentucky . . . 33,722,621 Virginia . . . 35,700,515 Missouri . . . 42,847,264 West Virginia . 14,488,758 In order to determine the full valuation the above sums must be added to the totals of real and personal property as given in the table. In states where railroad property is not given separately it is included in the totals of real and per- sonal property. VALUATION OF PROPERTY. 503 00 t^ d li-iOO O '^ O^OO O O O 00 ^vD »rj ^ O 00 0M>. 0\ rOfOOM N N'OOON "%\0 MOO ONTt-u^u-i- ^^miOO N CJjOO "TO 0\vO t^ 0\ r*TO ro (^ tJ- 0^ COO !>. fO N O "^ lo cm:©" tCoo" ^^c^^o"(^c^N''^'-^ro^oc^a^o^■*fc^p^(^ O "T-O O "-• O O\Q0 O ^ "^i- fOsO "^ M O N ro w u-)00 t^ *0 '^ **1 'l! '^'^ i/^"Hco^mii^Tf'-' o O i-i !-< O 0\ r^vo 'O t-T 0\ ro C'TocT'O" r^rnTfrCr^.^ o"'*"rorC|^'^ioioroON OOO O'-' •-' f^N '-QOCOr^ t^-OO 00 O O On 0\ r-O \0 ^O M O^ 0\ t--. "^ ■^ ■^ O ON I-" 'O rn I-. m ro O fO »J^ U-) ■^ -^ '^^'^'^OO r^r^N ro«oo i>.c-^0 •-> i^ ro m" '-J' oico'^o" o" cf ro i-T rC hT ro f^oo" r^od w ooo" ■^ « O to t^ O On "^O N O -^ O "^ r^OO ro O M NO OnoO rorO(OfOrO'J^'^Tt-«^^rocoPOrorOPOCOforOfOro 0\ roO vO QnO rrjiOLOONON OnOO n O 00 u-iOO W t--. •" »*> ■^ >-i OnOO -^ON"-" li-i>-( coo On>-' U1I-. N Tf r^oo 00 o^ •- ro t^OO ON M 1-1 -^ I-, ro Tt-oo fOO t-^ ro r-^ M « t^^D O "^ O r^ -^ ■^ >-o O N LoO O 00 tr^ >jn O 00 i-i t^o r^ i-i on ro onOo ONfor^oo row csoo ooooo r^-^ u-»oo t^'^ ^ i-T cf o" ^o ^f lo" t^ w'oo' fo ^o" o" o> i^ Lo ^T inotT r^ On fO 0000 NOOVO w M ^O^J^T^rO^-' r^r^>-ivoo iOt-»«0 ON ^ HH^ !^oo ■^'^O Q.Nt^r.i^^CN'-;.'^'^ i^oo iri ■^oo oo, i-H^ro""" 0\ (ONO fO r- I-I N W (O fOvO Th ON to 0\ M CO N t^O t-^ On hhOO coo r^i-i "-"NO ONOO O O OnOO « i>-oo vo no oo m oo u-»LOi- Th ■■d- LO i-i 00 tJ-OO NO ^00 O I-I •- I-I CO LO to 00 t^NO tC tC r^ tC t^oo NO td>^ I>.NO" tCoo oo" ON Ol CR On d" oi ooo fow T^ON^^ ooo tJ-ononn u-j ■-< LO COOO M On t^ r^ ^-. l>-0 lO On I-* o_^ to ■^NO -^ O*" I-T rT lONo" tC rC o" o^ o" cfoo ■o'" ■# cT <-r .-T o" o" o" on on nO 'O NO NO NO NO NO t^ND r^O OOOnOOOnDOO lou-) O 00 N NO o t^O O i-< fOoo r^ w^ lo CO r^ O ' ON IT) lOOO 00 ro On O ON I>.0 i-i O "-i "^ O "^ "■ i^HHwM c^ roO"^W ^O ONi-'iocofOiO'' - H- h- CO u-1 •NO M O N - ON N NO OO t-^o o "^ loo o no Lo d NO r-o tFo o roco on i-i r^ o\ i-< CI -^ O O t^O ONO TJ-CSNO fON ONr^HH OnCO )-i CO co U-) u-i ionO OnO ij-ji^iO^iO^"~)L0>-n':}*>J^Th^iOu^^ N N N cT cT cT pT pT N M m" W cT N cT N cT w" oT N M*" cT ONThM M O Oni-iO i-« voM COtI-On COOO CO N tJ-O nO u-. On !-< o 00 COOO o NO lo (s to "^o 00 i-ioooooo row couo O W N O iO O lOOO *-< O coco »J-i COOO r^ LO On M r-*00 "-I o o tC Tpoo fo >-"" w" "oo" n" ►-To n i-T fo unNo" i-T o" «" "^ O t^ OnOO O ■^ "^ O no "^O fOO t>. W tJ- O >-• i-" f^O i- O r>. CO rOvS CO I-I ^ M_ ^^„ ^ ^» ^ 9.^^ '^ "-l ^ ^ ^^ "« i^no" cf •-Tno' cf od" r^tor^cs" cfi-Too^ioi^r^c^t-rioONi-i l>- 1>»00 ONONOO I-I NN cotOtOWW tMW WcocOfO'^ tJ-« O i-i OnOnM rOt-^ONW lOWOO \r\y-t r-*0 lOU-iiOM NO fO 5 LOLOI-^O On O O '-' r-^CO O LO N tJ-OO 00 ON i-< CO C^nTiOtCrCi-ri-rLn irivo"o" ol w'no' CO ■^ in r^ iCnO ". r^ t>»00 00000000000000 O OnOnOnONOnONOnQ Tf i^O t^OO On O ■-■ N t^ "^ >nO r-^OO On O "-i N co ^ u-> oooooo r^o.t-^t-^t-^t^'t'^r^t^ r^co co oo oo oo oo oooooooooooooooooooooooooooooooooooooocoQOoo 504 STATISTICAL INFORMATION. Ov « •-• fO O C\QO tJ- iriOO tJ-00 lO O "O lO On^O N O O '-' Tj- u-> ro o m lo ^Ti'^ r^vo -^ N HH c^ lo N fO -^oo M o^ tj- ON r-^00 f^-o r^ r^ rn O O O O O 0\ ONOO 00 OO OO 00 00 00 00 00 On O r^ w -^ C^ -^00 l>. (^ ro r^ c\ o^ lO onoo Tt M ro 11 t-.00 N t-^ u^ i/T^ u-i HN >0 1-. -^O O u^t'-ON'-'OO'O ^o^^ i4" ^h" ci N N CT N « M N cT N i-T ro N" N cT PO rf CO f^ f^ iri « O lO ti 00 ■^O vO O f^ '■ T;t- hH I-. N \0 OnO i>. On t^ CO ►- LOW XOM N OnO t-^-'^O m»- vo" C^ nT ro CO cJ ^od"^ cood" On Ln CO ■^ ON r^vD '0\b\0' t On ON lovO O N CO ro LO -"^ "-) X-^vO t-i 00 J^-vO I^uMJ-icoi- uTO r^ r^OO OOOOOOOOOOOO'OvO'O iololou-jloiou^io . . . , - H VOOO ON OO O ■^>-' t^i*^ONt^i-i iV-lONt-'^tS C^OO O « <-< ON^O O w^ O O •-< ONOO O ^M^O N co^t^iJ-nivO eo\0 HH ONCOr-^ONt^I>.>-< t^w W PO co^ t-« ■^NH'sO'O COON1J-) Ov'tJ-O w-iO COONCOLnu-li-f >-( OnM I>.N 11 CO COOO lOOO coio'f'^-^copfN"cf\«'"rocK^ crlocT t^ rC tCio" i^ lo lo 11 On lovo Ttoo OncOhONNOOOO t^vO 00 r- n Tj-v£) ■>;fw 1 LDuncoO r^'-'oo Ooooo n on co'O N t^ COOO O LnONNvO'O t1-0 OnOO O N CO lOvO vO OO 00 •inCIWCOCOCOcococOfOMNdNMiiiiN^.i.id ONw o ^O ioi>-tJ- COOO r^i>r^roo O O M Ooooo : O "^Noo mi-N.li ooo t-^ COOO o N oncooncoooo o ' ■^ M^ CO «^ O; Q_0 n^ q^ 0_ ^^ '-'_^'0 r-. ^^ -^^o O^ n^ ro r^ tJ- O" On i" i-T vo' o^ ^ o\ -^ onoo" ro rC co co lO coOO hT i-T i-T lo O N M tJ-O coroco^i 'stONW'O ONi m M l>.O0 W M O •1 M Tf u-i u-i^O O I>-00 00 00 00 r--sD ^OvD'O'O^O r^t-^t^ M On n t1- c^ r^ ■^\0 -^ O >-0 O ■^ >i COOO vD ^O Oi O lo O M COO-POC^ n Q OnO M cOON-^N coOncoOOO O "^00 r^ q\ 1^ O 0_ N^ 0_ f^ ^ "t!^ "^^ T '^'^ r-^ t^ >- ►- -^ -"t '^ co-^u^Loinu^ioi^i^tC cF^od" Lnod' criod" rC co o" cT ^od* HK^H-ll1HHhHI1l1l1l1Hh-.11h-lHHW»-.r}(VlNWl1 rf- a\^o Lo co-o -o r-ci moo n roT^o^fo^^^-o^^ looo t^ 00 ON LO ■^ O I^ OnvO On r^\0 vOrJ-OCSOOMr^ON OnOO ONr^LoON— ^cr\^0,crj»jnii coi onmoo ooooo m co c^ -^ Lo o^od" On '^od'od" c5^'o' n" i^^d" cf n" d^oo" n" cT t^ o O M >J^"^t»*co«i ■^'^ u-jvO t^LO'^coco-^cot^N n n ■^u^■+cop^wc^^-ll-lM(l1l1l1Hl1l1l1MhHl1l1l1 ■^N cocOi >-0 W^O cot^N -"^hOOnO r^':*-© OnO t^ LOVO 00 ThC^ TfcOONt-^W N^O t^OO "iO'-OOnMWh'O O ro w O OnO iocoi>-ononcom lon n uor^ -^oo t-^oo tJ- 10*0 >-00 On O '-' N fO -^ i-n>o t^oo On O *-" w co tJ- iO vo^onO'O^o t-^t^r^r^r^t^r^r-^r^ r^oo oo oo oo oo oo OOOOOOOOOOQOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO VAL UA TION OF PR OPER T Y. SOS ESTMENTS IN ECHANICAL ND MANFG. PERATIONS. i^^in £? "^ "^ " imj->f^ior>.0 "-too « -^u-i u~)vO 00 i °'i "^ ^ "^ O., "^ '^ '^'^'^ ^ " "^^ 0000 r-.i>.(nt-^t^iN 5^ 9 " P ip cR x*^ oTmd m"oo*'oo"md cfi ^t -^ "-^ j>^ f^ 1^ tC^" I *^ ^ ^ ^ '^„^„ Tj-'^Mo-. o ooo ^ 4^ osa^^ O t^ rC "5^ 9 f, ^'^'^f^f^^^^O"NHro"Nro^tf,-^ro > E<0 ^"-.oiNNNWNPlMNNNMMNNNCINNO z u M^ 5^^*^ f^'^ r^^D rOi-t tN nOOOOO O r^ rn ^ lO M ^ 2^ S^, ^ "^ "^ '"^'^ -^OvOvO N TOO O 0\roa\0 N "^ "-"^ i>^ N cs HH^ q> -^ t^ 1-1 r^\o Pir^>HNLnoO'NO cr^oo b 5 Z (i) 2 v 3 j^-o N hh" ^ rC'o' lo r^vo" O"^ f^ d; cT '^ "-no" rC Tt ^ lo "rt i>.(NiOi-iO'->J~>>-i LOX) 00 r-^ u-1 Ln ("OOO Ch OiOO t-^ O^'^ > "^ Lo IN 00 t^ in ro ONVO vO w rj- ro O t^ 'd-vO ONOO u-> « vO 9u" • O u^OO CTi « OnX) 0\ m ro^O OO O O "X) C7^ tJ- lt) r^MD O ^O m J n iJ^O O"-" « Ou-)0 -yDLooOOH- roO On - M O a^ 0^ > ■^ f^*^ ""i^ ^„ ^^ '^ "-^ r^O^OO H- O OO m O 1^00 t>D >-« I>. u-i ^■^■^u^inw^ioio»0'^rovOTfroro*^rf" t1- hh ro n ltjvO r^ O 'O r^vj-jN o N^D r^LTiChroo Tj-rd-M i^m 0"0 n on^o lo si lOOO \D^GO^ w^OO Tt- ir^ N^ Ln ro -^OO 00O- -^ i>.i-iOM-iO'-'a\NON t^oo o\oo o o '5t-u-it-,(vt t-,roun si ■^ On "^ HH On C* t^oo no t^N£) On-i N OnO lou^O On^D O ^o 00 00 rnoo -^oocc rC rCtn cf\ i/i rf looo" w" o" ^ O"^ !>. O M ■^ Lo vonO \0 OnOO r^sO CSfO—ONOOMrO'-'O > CO On >- Pj^ r-*oo O r^ t~-~ -^oo -huiOOwomon '^•O •- Z 00 ON fo cs" ►-*' N ^^' hT o;od" crl "-h" ^ i-T o' o" --" -^^ w" cs~ d" d" M W rorornrorOfON (N N cororOrororofOCOfriroro y rn O '-' rOOO OO N uim-H Q u-XNnO -^OO r-CO -+^0^0 ON si ■^ Lo r-- in r^ in '^'J3 9;; ^ '^ '-L '^^ "^ ^ "^^ '^. '^ "1. ^_C*0 00 3 DGE, STOC NO in 11 cT c^ in cs" o^no" cf cf \jd" cR inoo" in rC rT fo r^ Tpoo" >-i ON'^NO NNOi-iNOr^crNO Tt*ON m h roONOm'^ Ni-iNCirONMNc-OMi-(Mi-«>-itH»-ii-(wi-.•-' r^iit^-d-OM o-o w« NO'-'ONu-ir^in as o\ t1- HH h- ONOO m-^MNO 1- -^ONini-i ONin'^ONt^NNO oo'it-^NrofOOwroin ONOO Td- u-i in -fd-NO ■*■ -^ O n cj igy _3 f^ o m ro r-~ rn rooo 00 onO on^oo noo Tf-o i>.i-. m O 00 invO 'OOl Tj-t-^i-i Q \0 -ri- t^\0 -^ N O CDOO (T) tJ-OO On t^oo o ^ CO m TfNO vo 'd-^rO'd-'d-'d-roinincofoM < a a D 2 "rt > ctE ^ Sg t-^oo 00 w t-^ t--.oo ONO "-I O CNinf^O O t~^0 »nONt^ON mM OnMvo rooNONroM romr^M ino lOO >-i rooo 6 2a . ■ r^vO ro w fo 1-1 t^ t^ r^oo "^'-C?^9,'^^ O ThON-^Ooo Sty 3 ■tFoo" i-T rn On o" o'oo" -d^ 1>. >-" rn t^ -"oO vo" r^ O t>- -^nO O t^O.'-' I '=d-'-' "n tJ-vO On OnOO OnO '"OM ro- CO -Tt-oo 00000'-'^Oq\coPJ^>-H^«0000000 O D i_r h7 i^" M ci CT ci cT N Ci N "-T i-T hh" hh" 1-" Kt" hh" i-h" kT w" -T K fa =e«9= K Tt LONO t-^OO ON O '-' M CO -^ m>0 t^OO On O i- C-l ro ■+ irj < vOnO'^dnoOnO r^r-~i^r-*i>.t-^r^r^i>. r-^oo oo co oo oo oo Id > oooooooocooooooooooooooooooooooooooooocxjoooo 506 STATISTICAL INFORMATION. "T-i ■^ tj-\o t^ Tf j>. ^ ^ ovoo o -^00 o looo ro m ) ■«f r^ ■^ rovo" «* »o d\ i-T Lo^o" pT o\ pT o" "^ m" -^ tC tC r^ tf r-- vo moo lo o^ onoo oooooco r>.i-< ^hr^r-^r^ q\ i>* in »ri ^ r^co^ O -^ ^* ^ '^'^ "^ '^.. ^ " t^ on ^' " Ch ■^ cT N 00 O^CO ^00 t-T ^ »^ '^ rC N 00 N CO d\ CK \0 O "-I N W ro'^mmii-i'^fOM M c<0POH-Tf'^'«f ^8 ^8 LTTO OO ^ o^oo^ "t "^ a\ T? vo'od' ^ o o\ u-» t^vO •^'O 00 00 »-i ro t-^ O lOOO w^ O 00 O P^ "^ ■* '^^'^"1. "It "1;^- ^ ■*? tC^" i^oo" ^ r^'sCT pT *o M lo »-« 00 r«* m r^co lo VO 00 ^ 'O u-1 u-j -^ l>.00 ■. fo ON i>j -^ ^ 0)00 O ^00 Q_ 1^00 PO \r\ o^ i-T lonO" pTcSpTd'^p^'^rCrC On OnOO OOOoooo c~>.i-i 'i^t^r^r-* p, ^ ^ "^ ^°*i "^ "^^ "^ ^ *^ "^ *■ '^od "-T T? lo ■■ "-H OnO -^NPI P^ i-i Plu-iiiu-iONr^ -^nO vO PTinO 00 P) ON IT) ,-1 ON '-' PO On t-OO PO ON PO PI iri tJ- Lnoo ^^ ^^O OcTvo" lOPOPOprprpf ^PO^fPOPOPOPOPOPOPOcfprpTpi » S 5 o o ■< ON u^ imo -ej-NO O PI On t-* O O OnOO 00 O pO C^ pO "TO C M t^OO On r^OO -tJ-ONONONOOO ^"^ u-iOO On tJ-vD O On ', ►1 PI r-.p|vo tj-p)no ^t^i-i t^>-ivO\ONO "^ '^''^ ^ ^ 9; tF On^'^OOO^vo" pT -^ pT i-T iPiOO in ©"nO" pT "^ 0\ lAoO ■^ PO NO vnroo PflNONO OnN OnN Onp) pOPI ^po r^NO O O '*' r^ONQ'-'O'-ONO t^OO O^O OnOnh- rofOkH >-" >- ' z h « o -^ w N I-I r^ ON »-< PO'O pOnO r^ i-i tJ- N On ThvO iri ON ^noo PO PO 00P<00i>'PlP>'-- ThPOi-i 1-0000 mt^mO\ tooo oo m o pi po r^P^OO ONiOi-i -^l-POPO u-iO ONP^POOxO O N0«3^0_0^On pO'^popOPOPOpTpTpT'-ri-rdN Onoo" rCoo"od"oo" t^ tC tCvo" •-I w l^PO'^POO PI r^POON»nONO "-■ u^POlOTl-mO po On PI O POvO »-i O PI ^ O '-' O "^00 NONDPlPlONOONr^ ■^O^O POPOPOrOPl M in 0\C0 PO ONOO^NO 0,00 O^ P*^ P^ PO On O NO PO On o" i-Ono" "-^ocT i-Tad" i-T lONO^ lo hh" rC tC On lo "^ H-i HH OO -^\o 00 00 t-* PI Tt u-ioo 1-1 ooo ■^'-' Tt-Ttr^ONO 00 O ^ t^oo t^NO Lo P) 00 ^ 1-1 mNO hH ta^ M P) Lnso no <-< pf PO PO PO PO PO PO PO PO PO fO f*" n" cT pf pf m" cf pT pT pT pf T^h u-ivO r^OO On O >-( PJ PO Th utinO P^OO On O >-< M ro '^ lO nononovOnOno i>.r^r--.r^r-^i^r^r^r^ t-^oo oo oo oo oo oo oooooooooooooooooooooooooooooooooooooooooooo VALUATION OF PROPERTY. 507 S- VALUATION OF PROPERTY IN CHARLESTON.^ The assessed valuation of real estate for 1886 was ^16,933,- 565; of personal property, ^7,809,212; total of real and personal, ^24,742,777. The following personal property was returned for taxa- tion : — 1543 horses and mules $128,885 322 neat cattle 8,270 1 127 gold and silver watches and plate 84,482 554 piano-fortes, melodeons, and cabinet organs . 48,950 443 carriages, buggies, etc 40,190 1^36 wagons, drays, carts, etc 43i792 774 dogs 7,740 Merchandise, moneys, credits pertaining to business of merchants 2,182,237 Materials, machinery, engines, tools, and fixtures of manufacturers 907,086 Moneys, bank bills, and circulating notes on hand or deposit, and all credits 451,516 Stocks and bonds of companies, corporations, and persons (exclusive of United States, state, and city), and receipts of insurance agencies . . .3,252,656 Vessels, boats, and other floating property . . . 201,618 All other property, including househ Md furniture . 451,790 Total $7,809,212 ' From Charleston Year Book, 1886. 508 MISCELLANEOUS MATTER. •SUOlJ'BIOdlOD ]Bdioin -nui JO siqsp siEJodjoo jo )U9ui -Aed joj p[os puE uas^Bj sq oj aiq -Eij aq lou HEL{S jtjAadojd sieauj; : XX •punj 3uiJ[uis JO XEi Xq juauiAed si] joj uois -lAOld 3}{BUI 9IIIII 9UIES 4E ]Snul jqsp E SuijeaiD' ^iiEdiDiuniu y ;XX :xx : OSp [EI39d5 E :iE SJ910A JO JU3S5E inomiAi" (^iBJoduisi jdaDxa) iqsp pEiiiioD jCeui Aii[edi3iunui o^ xx : : X • 'UOI]en[BAJO 'S1U3D jsd 3uiMO[ -|OJ Sqi Suip333X3 lUnOUIE UE 0} siqsp 1DEJJU03 JO paiqapui aq '3Je3 -3j33e sqi ui 'uED XjuBdiDiunui o^ ■U0UD3I3 (EJ3U33 E IE a^dosd Xq psyiiEJ sq isnui (3UO uuinjOD ui se jdsoxa) jqap 31E1S E SuizuoqinE ide uy x : XXX •punj Sui)(uis V JOJ apcm si noisiAOjj : :x ■pTEd SI iqsp sqi [ijun pajEadsi aq jbu Xeui uiun "loo 3uip303Jd UI OJ pgjjsjai M.-e'j : :xx :x :xx g f-JUSUlitEd JOJ SUOTSlAOjd 3}[EUI 9UJI1 3UJE5 9qi IE JlEqs qDiqjft ave[ e Xq pazuoqinE ss3jun paiDEJjuoD aq ued iqap o^ X ; XXX •juaiuXEd JOJ apEui uoisiAOJd puE 'a^doad Aq psij -UEj" *([iq UI payiDsds Apouu -sip uaqAi sasodjnd jsqio jo^ : XX : •jqap aiEjs Xed oj. XX ■uoijiaqaj sssjddns jo uoiseaui pdai oj;. X :xx : :x :xxx :X :x : :X : xxxxxx — 'sjqap qons jaqjo IJE ipiM *3uip3aDX3 JOU UEOf XjEJ -oduia'i azijoqinE Abui 3Jiub[si33'j O 0«^0 Q Q lO »J^ Q _ « M N O lO w rt rt rt DEBTS OF STATES AND CITIES. 509 :XX :X XX : X : : XX :xx : X :xx :x : :x :x :x :xxx X ::::.:: :xxx :xx ::::x::::x:x:x:::x:xx XXX :xx : :xx :xxxxxxx : :x :xxx A i-slgifr- ou C >, d; 3 t:, -C ' O ^ V o So S ^ "^ S t^ . CuO G is 5 , ,1 i i § a >-3 ■?» «=> c^!f? Jn o.S . fi a^ o >» o.oj o « « K « 3 u t o J^t^ ►H CwtaC J. " « .-a S?? >i c o •,;: § w-* o fi -'5 C.2 8'" • " rt 0)=;'*' o-i=: «- 4, 6-«- ^ <; 5,s > " " g 4J >» D W O PI is iS "S " o, fl ft"- i,"w raw o , u tJ - o "C ^ CO S^ S.2 °- 6 « p. n 8 ? ^-SO u 1 o ■"s E - ""5 Ph _ a> 1 2 §:| o- ,5 rt i3»-u 510 MISCELLANEOUS MATTER. 2. ADDITIONAL CONSTITUTIONAL PROVISIONS REGARDING STATE AND MUNICIPAL DEBTS. Temporary Loans. In Alabama no new loan can be negotiated until the old one is paid. A law authorizing a temporary loan must provide annual taxes sufficient to pay principal and interest : in Wisconsin in five years ; in Minnesota in ten years ; in Kansas when due ; in Missouri in two years. In Nebraska sufficient taxes must be laid to pay the interest. Such provisions, except in Missouri, are declared irrepealable. Other debts. In addition to those mentioned in the table, debts may in Colorado and Florida be contracted (but not to exceed $50,000 in Colorado) for the erection of public buildings ; and also in the latter state for the support of state institu- tions or the completion of public works ; in Kansas debts may be contracted for public improvements, but not to exceed 1 1,000,000. In Maine the constitution authorizes a special war debt of 583,500,000. In Virginia, Arkansas, and South Carolina there are constitutional provisions forbidding the issuing of in- terest-bearing treasury warrants or scrip, — except in Vir- ginia, for redemption of bonds previously issued, and in South Carolina and Virginia, for such debts as are expressly authorized by the constitution. Payment of debts. As indicated above, provision must be made in most of the states for payment of debts when the debt is contracted. DEBTS OF STATES AND CITIES. 511 It is further obligatory that provision shall be made for the payment of the debt, principal and interest : when due, in Iowa, Minnesota, Kansas, Nebraska; or within thirteen years, in Maine, Minnesota and Missouri; within fifteen years, in Maryland, Missouri, and Colorado ; within eighteen years, in New York ; within twenty years, in Iowa, California, and Nevada ; within thirty years, in Kentucky ; and within thirty-five years, in N^w Jersey. In Illinois and North Carolina and South Carolina it is required that the payment of interest when due shall be made. Limitation of state's power to contract debts ; Rebellion debts. By the constitutions of Virginia, North Carolina, Georgia, and Mississippi, the state shall never assume, pay, etc., any debt incurred in aid of rebellion against the United States, nor shall any tax in Virginia or North Carolina be levied for the purpose of aiding rebellion against the state or the United States ; and in Florida all debts contracted by the state or its municipalities during the war, except for school pur- poses, are void, nor shall any such debt ever be paid in South Carolina ; and it is further required in the latter state that all debts must be by state bonds not under ^50 each, payable in twenty years. Repudiation. The constitutions of North Carolina, Missouri, Mississippi, and Arkansas provide for the repudiation of certain debts. MUNICIPAL DEBTS. Purposes. The constitutions of several states make the following restrictions upon municipaUties, etc., in respect to the con- 512 MISCELLANEOUS MATTER. traction of debts : No country, city, or village shall in New York contract debts except for county, city, and village purposes ; in Colorado, except for making and repairing public roads and bridges, and for erecting public buildings. In Indiana no county can borrow money for the purchase of stock in any private corporation. No county, city, or other municipality can issue interest-bearing evidences of indebtedness, except in payment of jjebts previously (1874) existing in Kansas ; in Texas, counties or cities bordering on the Gulf may levy taxes and issue loans for the erection of sea-walls, breakwaters and for sanitary purposes. In Col- orado, school districts may contract a loan upon majority vote of the tax-payers therein. A constitutional provision concerning counties in Maryland has already been noticed under " Loans of Credit." Amount. No county in Oregon shall create debts to exceed ^5000. Debts in excess of above limitations may be contracted under certain circumstances : in Oregon, to repel inva- sion or ' suppress insurrection ; or in Indiana, to provide for the protection of the people in time of war or great public calamity, on the petition of a majority of the property- owners ; or in Missouri, to erect a court house or jail ; or in New York and Colorado, to supply water to the city or tcrwn. But in Colorado counties may incur debt to a greater amount than as above limited by a majority vote of the tax-payers in such county, but only to double such amount. Payment. A municipality creating a debt, must at the same time make provision for the payment of the same, principal and DEBTS OF STATES AND CITIES. 513 interest, either by a tax or sinking fund, within twenty years in Illinois, Wisconsin, Missouri, California ; within fifteen years in Colorado ; within thirty years in Pennsylvania, New York, and Georgia; and within thirty-four years in West Virginia. In Texas the sinking fund must be of two per cent, annually. 3. BONDED DEBTS OF STATES AND CITIES.' BONDED DEBTS BONDED DEBTS STATES. STATE BONDED DEBT. STATE BONDED DEBT. OF CITIES AND TOWNS, ETC., HAVING 7,500 OR MORE INHABITANTS. OF CITIES, TOWNS, ETC., HAVING LESS THAN 7,500 INHABITANTS. 1887.2 i88o.» 1880. 1880. Alabama . . . ;»9. 1 93.900 jJ9,oo8,ooo «3,492,500 )f425,7oo Arkansas . 5,108,043 2,813,500 178,694 361,733 California . 2,698,000 3,403,000 7.o55,"5 398,250 Colorado . none 16,000 342,15° Connecticut 4,270,000 4,967,600 12,848,054 2,582,200 Delaware . 465,000 880,750 1.372,450 44,100 Florida 1,275,000 1,280,500 266,497 760,786 Georgia . 8.733.5°° 9,951,5°° 8,927,800 668,725 Illinois none 18,590,680 ,2,452,752 Indiana . 6,430,608 4,998,178 6,958,700 1,871,429 Iowa . . 245.435 370,435 3,091,959 584.3°3 Kansas 815,000 1,181,975 1,839,813 955>7°9 Kentucky . 694,000 1,858,008 10,321,500 783.316 Louisiana 11,982,621 22,430,800 15-655.499 96,000 Maine . . 3,959,000 5,848,900 12,402,450 3.650.353 Maryland . 10,960,535 11,277,111 21,158,375 43.575 Massachusett 5 31,429,680 33,020,464 73,696,019 3,092,465 Michigan . 241,993 905.15° 5,546.045 837.356 Minnesota 3,964,000 2,565,000 2,991,911 686,387 Mississippi 3,752,904 379.485 373.2 '8 94,246 Missouri . 10,527,000 16,259,000 25,666,449 1,280,059 Nebraska . 449.267 499.267 428,535 213.465 Nevada . 541,000 56,400 112,000 20,000 514 MISCELLANEOUS MATTER. DEBTS OF STATES AND CITIES. — Continued. BONDED DEBTS BONDED DEBTS STATES. STATE BONDED DEBT. STATE BONDED DEBT. OF CITIES AND TOWNS, ETC., HAVING 7,500 OR MORE INHABITANTS. OF CITIES, TOWNS, ETC., HAVING LESS THAN 7,500 INHABITANTS. 1887. 1880. 1880. 1880. New Hampshire ;iS2,9i 2,600 »3,Soi,ioo ;?2,952,400 31,663,759 New Jersey . . 1,496,300 1,896,300 38,648,850 2,795,654 New York . . 7.444,310 8,988,360 208,536,882 2,184,102 North Carolina . 13.179,045 5,006,616 697,900 248,656 Ohio .... 3,845,229 6,476,805 40,683,526 1,926,285 Oregon . . . 110,000 356,508 76,500 10,000 Pennsylvania . 15,692,600 21,561,990 95,445,234 2,804,012 Rhode Island . 1,341,000 2,534,500 11,424,750 116,000 South Carolina . 6,122,928 6,639,171 5,380,301 124,255 Tennessee . . 11,412,900 20,991,700 4,433,400 353,834 Texas .... 4,237.730 5,566,928 3,141,662 261,731 Vermont . . . none 4,000 607,900 2,606,963 Virginia . . . 29,095,967 29,345.226 10,707,177 866,666 West Virginia . none 506,500 394,100 Wisconsin . . 2,252,000 11,000 3.683,651 3.343,583 Total of States 216,879,095 246,835,027 681,616,460 41,945,259 * It must be remembered that the debts of both states and cities are really smaller than they appear to be. I suppose all of the property belonging to states and cities would far more than equal the debt, and the productive property owned by states and cities is in the aggregate worth a large sum. Sinking funds are becommg uni- versal, and these often hold a large part of the nominal debt, and sometimes all of it. Other funds, educational trust funds and the like, own state and city bonds. Iowa, Wisconsin, and California practically owe nothing, although they stand in the reports among states with debts. The smking fund of Kentucky exceeds the amount of the debt. The newspapers recently reported that Texas has a surplus of three millions of dollars. The debts of all the states may be regarded as comparatively ▼ery small. Many cities are getting out of debt. I suppose the productive prop- erty of Baltimore City, if waterworks are included, is worth a great deal more than the debt. The city owns 32,500 shares of Baltimore and Ohio stock, which for Tears paid ten per cent, dividends. It is said that the city practically owns the Western Maryland Railroad. On this subject the statistics about revenues and ex- penditures already given should be consulted. ^ In column one are given the state debts as found in the latest reports, for the most part on or about January i, 1887. The figures may not exactly agree with those in the detailed statements above, for the reason that returns for a later date than those of statistics there given have been received. Columns two, three, and four have been taken from the Census Report of 1880, Volume VII., page 755. 3 The bonded debt of the counties in 1880 amounted to $105,314,884; that of town- ships to $29,881,548. The floating debts of slate, county, city, and township are not (vnsiderable in amount, and are not here taken into account. VII. INHERITANCE AND BEQUESTS. I. COMMENTS ON PROPOSED CHANGE IN THE STATUTES OF DESCENT AND WILLS IN ILLINOIS, SO AS TO INSURE A MORE GENERAL DIVISION OF PROPERTY AMONG THE PEOPLE. AT the meeting of the Illinois State Bar Association Jan- uary, 1886, the committee on law reform recommended, among other things, a most important change in the statutes of descent and wills, which we think ought to receive pro- found consideration. The recommendation is as follows : — " That the statutes of descent of property and of wills be so changed as to limit the amount that any one may take by descent from the same person or by bequest or devise, ex- cept for educational and other charitable purposes." The committee proceed to say that they would not recom- mend such a limitation as would carry the estate away from the kin of the decedent, or that would change the law as to the great majority of estates, but they would apply the limi- tation to those " abnormally large fortunes " which by being kept together as they may be as the law now stands " menace the political power of the state." The exact way in which such estates should be divided — that is, among whom as heirs and in what proportions is not set forth. The committee seem to have thought it better to leave the details to the wisdom of the legislature. They do, 516 MISCELLANEOUS MATTER. however, by way of example, tell us where the limitation might begin, and how it could be applied. They say that the amount a child might inherit might be limited to $500,000 ; those standing in the next degree of kinship ;$ 1 00,000 j if there is more than enough to satisfy those in that degree the overplus to go to the next, with a like limitation, and so on until the estate is exhausted. Suppose the estate to amount to ;? 1,000,000 and that the decedent left one child, and brothers and sisters and other kinsmen ; the child would take $500,000, and the remaining $500,000 would go, first to the brothers and sisters, not ex- ceeding $100,000 to each, and if there remained a balance, that would go to those standing in the next degree of kin- ship to the decedent, with a like limitation, and so on until the whole estate is exhausted. If there are no heirs, or after paying off all who are entitled to share in the estate there still remains a balance, this may go to the state, or under the law as it now stands, in case there are no heirs capable of taking the estate of an intestate. The committee disavow any intention of a departure from the settled policy of the law of this country upon the subject in hand ; on the contrary, they insist that their " recommen- dation is in harmony with the spirit of our institutions, and in the same direction as the present laws against perpetuities, entailments, and of descent." That they are not agrarian or communistic in their sym- pathies is shown by the liberality of their limitation. Those estates which fall short of the limitation would not be affected. Half a million dollars ought to be a reasonably satisfactory fortune for a young man or young woman to begin with, and the other poor kinsmen would find life not unreasonably burdensome to whose store a hundred thou- sand dollars should be added by way of windfall. It is not INHERITANCES AND BEQUESTS. 517 unlikely that the most serious apprehension which will be excited by the proposed reform will be, that if the legisla- ture once enters upon the policy of Umiting the amount one may take by descent or will, that it will run to extremes. In our estimation, however, this fear is substantially ground- less. The conservative force of property itself will be amply sufficient to meet this danger. The greater danger is that the influence of property interest is so great as to render any reform in the direction suggested out of the question, except through the means of revolution. The report does not enter into an extended argument in support of the recommendation, but one of the points made is, that while the laws as they now stand were sufficient, in the days of slow accumulations, to counteract the tendency to mass the wealth of the country in few hands, that times have changed, and they no more have that effect. The report adds : — " There never was a time in the history of the world when the power of money in skilful hands was so great as the present ; or when the use of that power was made so con- spicuous. The new forces at its command are augmenting it with wonderful rapidity. Already the sceptre has passed from the sword to the counting-house. The fact that one individual may monopolize hundreds of millions of the wealth of the nation and pass it at last by will to another, with all its possibilities, is a growing source of uneasiness among all classes of society. " It cannot be denied that in the proportion that the very rich are increased, so is the number of the very poor also increased, and the number of those comfortably off de- creased." After some discussion by members of the Bar Association present at the meeting, the subject was referred back to 518 MISCELLANEOUS MATTER. Messrs. H. B. Hurd and James A. Connolly, members of the committee making the recommendation, with request that they report at the annual meeting of the association to be held at Springfield, January, 1887, giving more fully their reasons in support of the measure, and if they think proper, presenting a draft of a bill in accordance with the recom- mendation. We shall look with interest for this report and the treat- ment it will receive at the hands of the members of the association. Lawyers are proverbially conservative, and it is not a little encouraging that so advanced a measure has been brought forward by them.' At a meeting of the Bar Association of the 'State of Illinois, in January, 1887, Messrs. Harvey B. Hurd and James A. Connolly made a report on the laws governing in- heritance and bequests. From the abstract, as given in Jacobson's " Higher Ground," the following quotation is taken : — "As to whether the disposition of property upon the death of the owner was within the control of the legislative power of the state, it should be said that there never was a time in the history of the law when such disposition was not regulated by the state. No state, as far as known, had seen fit to impose any constitutional restriction upon the exercise of this power. Both in England and in this coun- try the power to dispose of property by will was the creature of the statute. The statutes of wills of the different states were almost as variant as the statutes of descent. There was no constitutional restriction upon the right of the legislature to make and change such laws to suit the wishes of the people, nor was there any vested right standing in the way." ^ Reprint from Chicago Law Times INHERITANCES AND BEQUESTS. 519 2. BILL INTRODUCED INTO THE ILLINOIS LEGISLATURE TO REFORM STATUTES OF DESCENT AND WILLS. In the legislature of Illinois, session of 1887, the follow- ing, among other proceedings, were had : — HOUSE BILL, NO. 233. 35th Assembly, Illinois. — January, 1887. Introduced by Mr. Collins's special committee, January 28, 1887. First reading January 28, 1887, ordered printed and re- ferred to Committee on Judiciary. The Special Committee, to whom was referred the prepa- ration of a bill to restrict the amount any person or corpo- ration may take by descent or will from the same decedent, respectfully report the following bill : — W. H. Collins, Chairmcut. A Bill for an Act to restrict the Amount any Person or Corporation may take by Descent or Will from the same Decedent. Section i . Be it enacted by the People of the State of Illinois represented by the General Assembly, No person shall, by will or testament, devise or bequeath, either in trust or other- wise, more in value or amount, to the same person, than as follows, to wit : To his or her surviving wife or husband, not more than the sum or value of five hundred thousand dol- lars, or if the estate of decedent is in whole or in part in land, not more than fifteen hundred acres of land; to a child of the testator, or of his or her wife or husband, or a legally adopted child, not more than the sum of five hun- 520 MISCELLANEOUS MATTER. dred thousand dollars, or if the estate or decedent is in whole or in part in land, not more than fifteen hundred acres of land ; to the descendants of a child, in case of the death of the child, not more than by this section might be given to the child if she or he were living ; to any other person or corporation, not more than the sum or value of one hundred thousand dollars ; and any devise or bequest shall be vahd to such amount or value, and no more. This section shall not apply to devises or bequests for educational or benevolent purposes. Sect. 2. No person shall be capable of taking by descent or distribution either of the real or personal estate of any person who shall die after the taking effect of this act, more in value and amount, as follows, to wit : A surviving hus- band, or wife, or child, or a descendant of a child when he can take directly and not by representation, not to exceed five hundred thousand dollars, or if estate of decedent is in whole or in part land, not more than fifteen hundred acres of land. The descendants of a child taking by representa- tion may take the same as the person he or she represents might have taken if he or she were living. No other- person entitled to take by descent or distribution shall be capable of taking from the same decedent more than one hundred thousand dollars. When the estate is more than sufficient to give to the persons first entitled to take the full amount to which they are limited by this act, the balance, or so much thereof as may be sufficient to give to each of them the amount they may take under the limitations contained in this act, shall go to the kin of the deceased standing next in kinship after those first entitled to take under the laws of descent in their degree and their representatives. If there is more than sufficient to give to each of those standing in that degree of kinship and entitled to take the INHERITANCES AND BEQUESTS. 521 amount he or she may take under this act, the balance, or so much thereof as may be sufficient to give to each of" those the amount he or she may take under the limitations of this act, shall go to those standing in the next succeed- ing degree of kinship to the deceased and their represen- tatives. The like rule shall be applied to any surplus, so long as there shall be any, until the whole estate is divided among the kindred of the deceased, preferring those stand- ing nearest to the deceased, to the extent he or she may take under the limitations of this act. When there is not sufficient to give each of the persons standing in a certain degree of kinship and entitled to share the full amount he or she might take, such part of the estate shall be divided among them and those entitled to take by repre- sentation in equal shares, according to the rules of descent heretofore existing. If any balance remains after every person capable of taking the same shall have taken the amount or value he or she is entitled to take, the same shall escheat to the state, as in cases where there is no person capable of inheriting the estate. If in any case a person shall be entitled to take both by descent and by will from the same decedent, the aggregate in value or amount he or she may take shall not exceed the amount he or she is capable of taking by one of these ways. Sect. 3. The inventory required by law to be made by an executor or administrator, in addition to the matters now required to be stated therein, shall also state the value of each piece or parcel of real estate of which the deceased died possessed of or was in any way entitled, and the total value of the whole estate, real and personal ; which state- ment of the total value of said estate shall be conclusive upon all persons who shall claim any interest in such estate by descent or under the will of the deceased, by virtue of 522 MISCELLANEOUS MATTER. this act, unless the same is changed as hereinafter provided. Upon a sworn petition of one or more persons interested in the estate as heirs or distributors, showing that such total value is too low or too high, the court shall appoint three disinterested persons to revalue the estate, who, being first sworn to make a just and true valuation thereof, shall re- value the same and make return of their valuation, which, unless set aside for fraud or mistake, shall be conclusive as to the rights of aU persons claiming or to claim any interest in said estate by descent or under the will of the deceased. In all cases where a specific article or piece of real or personal property is given or devised by will, the value thereof may be inquired into in such way as the Pro- bate Court shall direct. Sect. 4. In the proof of heirship it shall not be necessary to show other than the heirs who will be entitled to share in the estate, taking into account the limitations contained in this act. Only such heirs or distributees as shall appear to be entitled to share in the estate need be notified of the final settlement by the executor or administrator. Sect. 5. Before the final settlement of the estate, or with a view to making such settlement, the court shall find the total value of the estate, and who are the heirs or persons interested therein as heirs, legatees, devisees, or distributees, and the nature and amount of their respective interests, and may order the whole or any part of the real or personal estate, or both, to be sold, and the proceeds brought into court for distribution according to the rights of the parties, or may declare the rights and interests of the respective parties in the respective pieces and parcels of real estate, and may make any and all orders that may be necessary to carry into effect the provisions of this act. Sect. 6. Every gift, conveyance, transfer, or disposition INHERITANCES AND BEQUESTS. S23 of any real or personal estate made with intention to defeat the operation of this act shall be void. Sect. 7. All acts or parts of acts inconsistent with the provisions of this act are hereby repealed.^ 3. NEW YORK LAWS REGARDING COLLATERAL INHERITANCES AND BEQUESTS. An Act to amend chapter four hundred and eighty-three of the laws of eighteen hundred and eighty-five, entitled " An act to tax gifts, legacies and collateral inheritances in certain cases." Passed June 23, 1887 ; three-fifths being present. The people of the State of New York represented in Senate and Assembly, do enact as follows : — Section i . Chapter four hundred and eighty-three of the laws of eighteen hundred and eighty-five, entitled "An act to tax gifts, legacies and collateral inheritances in certain cases," is hereby amended so as to read as follows : — § I. After the passage of this act all property which shall pass by will or by the intestate laws of this state, from any per- son who may die seized or possessed of the same while a resident of this state, or if such decedent was not a resident of this state at the time of death, which property, or any part thereof, shall be within this state, or any interest therein, or income therefrom which shall be transferred by deed, grant, sale or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainor, to any person or persons, or to any body politic or corporate, in trust or otherwise, or by reason whereof any person or body politic or corporate shall become beneficially entitled in possession or expectancy, to any property or to the income thereof, other than to or for the use of his 01 1 This is also quoted from Jacobson's " Higher Ground." 524 MISCELLANEOUS MATTER. her father, mother, husband, wife, child, brother, sister, the wife or widow of a son, or the husband of a daughter, or any child or children adopted as such in conformity with the law^ of the state of New York, or any person to whom the deceased for not less than ten years prior to his or her death stood in the mutually acknowledged relation of a parent, and any lineal descendant of such decedent born in lawful wedlock, or the societies, corpora- tions and institutions now exempted by law fi-om taxation by reason whereof any such person or corporation shall become beneficially entitled, in possession or expectancy, to any such property or to the income thereof, shall be and is subject to a tax of five dollars on every hundred dollars of the clear market value of such property, and at and after the same rate for any less amount, to be paid to the treasurer of the proper county, and in the city and county of New York to the comptroller thereof, for the use of the state, and all administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed, provided that an estate which may be valued at a less sum than five hundred dol- lars shall not be subject to such duty or tax. § 2. When any grant, gift, legacy or succession upon which a tax is imposed by section first of this act, shall be an estate, in- come or interest for a term of years or for life, or determinable upon any future or contingent event, or shall be a remainder, reversion or other expectancy, real or personal, the entire prop- erty or fund by which such estate, income or interest is sup- ported, or of which it is a part, shall be appraised immediately after the death of the decedent, at what was the fair and clear market value thereof at the time of the death of the decedent, in the manner hereinafter provided, and the surrogate shall there- upon assess and determine the value of the estate, income or interest subject to said tax, in the manner recorded in section thirteen of this act, and the tax prescribed by this act shall be immediately due and payable to the treasurer of the proper county, and in the city or county of New York to the comptrol- ler thereof, and, together with the interest thereon, shall be and remain a lien on said property until the same is paid ; provided INHERITANCES AND BEQUESTS. S2S that the person or persons, or body politic or corporate bene- ficially interested in the property chargeable with said tax, may elect not to pay the same until they shall come into the actual possession or enjoyment of such property, and in that case such person or persons or body politic or corporate, shall give a bond, to the people of the state of New York, in a penalty of three times the amount of the tax arising upon personal estate, with such sureties as the surrogate of the proper county may approve conditioned for the payment of said tax and interest thereon at such time or period as they or their representatives may come into the actual possession or enjoyment of such property, which bond shall be filed in the office of the surrogate of the proper county; provided further, that such person shall make a full verified return of such property to said surrogate, and file the same in his office within one year from the death of the decedent, and within that period enter into such security and renew the same every five years. § 3. Whenever a decedent appoints or names one or more executors or trustees and makes a bequest or devise of property to them .in lieu of their commissions or allowances, which other- wise would be liable to said tax, or appoints them his residuary legatees, and said bequest, devises or residuary legacies exceed what would be a reasonable compensation for their services, such excess shall be liable to said tax, and the surrogate's court hav- ing jurisdiction in the case shall fix such compensation. § 4. All taxes imposed by this act unless otherwise herein provided for, shall be due and payable at the death of the dece- dent, and if the same are paid within eighteen months, no interest shall be charged and collected thereon, but if not so paid, interest at the rate of ten per cent, per annum shall be charged and col- lected from the time said tax accrued ; provided, that if said tax is paid within six months firom the accruing thereof, a discount of five per cent, shall be allowed and deducted from said tax, and in all cases where the executors, administrators or trustees do not pay such tax within eighteen months from the death of the decedent, they shall be required to give a bond in the form and 526 MISCELLANEOUS MATTER. to the effect prescribed in section two of this act for the payment of said tax, together with interest. § 5. The penalty often per cent, per annum imposed by sec- tion four hereof, for the non-payment of said tax, shall not be charged where in cases by reason of claims made upon the estate, necessary litigation or other unavoidable cause of delay, the estate of any decedent, or a part thereof, cannot be settled at the end of eighteen months from the death of the decedent, and in such cases only six per cent, per annum shall be charged upon the said tax, from the expiration of said eighteen months until the cause of such delay is removed. § 6. Any administrator, executor or trustee having in charge, or trust, any legacy or property for distribution, subject to the said tax, shall deduct the tax therefrom, or if the legacy or prop- erty be not money, he shall collect the tax thereon upon the appraised value thereof from the legatee or person entitled to such property, and he shall not deliver, or be compelled to de- liver, any specific legacy or property subject to tax to any person until he shall have collected the tax thereon ; and whenever any such legacy shall be charged upon or payable out of real estate, the heir or devisee before paying the same, shall deduct said tax therefrom, and pay the same to the executor, administrator or trustee, and the same shall remain a charge on such real estate until paid, and the payment thereof shall be enforced by the executor, administrator or trustee in the same manner that the payment of such legacy might be enforced; if, however, such legacy be given in money to any person for a limited period, he shall retain the tax upon the whole amount, but if it be not in money, he shall make appUcation to the court having jurisdiction of his accounts, to make an apportionment, if the case require it, of the sum to be paid into his hands by such legatees, and for such further order relative thereto as the case may require. § 7. All executors, administrators, and trustees shall have full power to sell so much of the property of the decedent as will enable them to pay said tax, in the same manner as they may be enabled by law to do for the payment of debts of their testators INHERITANCES AND BEQUESTS. 527 and intestates, and the amount of said tax shall be paid as here- inafter directed. § 8. Every sum of money retained by an executor, administra' tor or trustee, or paid into his hands, for any tax on any property, shall be paid by him within thirty days thereafter, to the treasurer of the proper county, or in the city and county of New York, to the comptroller thereof, and the said treasurer or comptroller shall give, and every executor, administrator, or trustee shall take duplicate receipts from him of such pajTnent, one of which receipts he shall immediately send to the comptroller of the state, whose duty it shall be to charge the treasurer or comp- troller so receiving the , tax, with the amount thereof, and shall seal said receipt with the seal of his office, and countersign the same and return it to the executor, administrator or trustee, whereupon it shall be a proper voucher in the settlement of his accounts, but an executor, administrator or trustee shall not be entitled to credits in his accounts, nor be discharged from lia- bility for such tax, unless he shall produce a receipt so sealed and countersigned by the comptroller, or a copy thereof certified by him. § 9. Whenever any of the real estate of which any decedent may die seized shall pass to any body politic or corporate, or tO' any person or persons other than his or her father, mother, hus- band, wife, lawfiil issue, brother, sister, wife or widow of a son, or husband of a daughter, or child or children adopted by such decedent according to law, or any person to whom the deceased for not less than ten years prior to his or her death, stood in the mutually acknowledged relation of a parent, or in trust for them, or some of them, it shall be the duty of the executors, adminis- trators or trustees of such decedent, to give information thereof in writing to the treasurer or comptroller of the county where such real estate is situate, within six months after they undertake the execution of their respective duties, or if the feet be not known to them within that period, then within one month after the same shall have come to their knowledge. § 10. Whenever any debts shall be proven against the estate of a decede;it, after the payment of legacies or distribution of 528 MISCELLANEOUS MATTER. property from which the said tax has been deducted, or upon which it has been paid, and a refund is made by the legatee, devisee, heir or next of kin, a proportion of the tax so paid shall be repaid to him by the executor, administrator or trustee, if the said tax has not been paid to the county treasurer, comptroller, or to the state treasurer, or by them if it has been so paid. §11. Whenever any foreign executor or administrator shall assign or transfer any stocks or loans in this state, standing in the name of a decedent, or in trust for a decedent, which shall be liable to the said tax, such tax shall be paid to the treasurer or comptroller of the proper county on the transfer thereof, other- wise the corporation permitting such transfer shall become liable to pay such tax, provided that such corporation had knowledge before such transfer that said stocks or loans are liable to said tax. § 12. When any amount of said tax shall have been paid erro- neously to the state treasurer, it shall be lawful for him, on satis- factory proof rendered to the comptroller by said county treasiu-er or comptroller, of such erroneous pajTnent, to refund and pay to the executor, administrator, person or persons who have paid any such tax in error, the amount of such tax so paid, provided that all such applications for the payment of such tax shall be made within five years from the date of such payment. § 13. In order to fix the value of property of persons whose estates shall be subject to the payment of said tax, the surrogate, on the application of any interested party, or upon his own motion, shall appoint some competent person as appraiser as often as, and whenever occasion may require, whose duty it shall be forthwith to give such notice by mail to all persons known to have or claim an interest in such property, and to such persons as the surrogate may by order direct, of the time and place he will appraise such property ; and, at such time and place, to appraise the same at its fair market value, and make a report thereof in writing to said surrogate, together with such other facts in relation thereto as said surrogate may by order require, to be filed in the office of such surrogate ; and from this report the said surrogate shall forthwith assess and fix the then.cash value of all estates, annui- INHERITANCES AND BEQUESTS. 529 ties, and life estates or terms of years growing out of said estate, and the tax to wiiicli the same is liable, and shall immediately give notice thereof by mail to all parties known to be interested therein, and the value of every future or contingent or limited estate, income or interest shall, for the purposes of this act, be determined by the rule, method and standards of mortality and of value, which are employed by the superintendent of the insurance department in ascertaining the value of policies of life insurance and annuities, for the determination of the liabilities of life insur- ance companies, save that the rate of interest to be assessed in computing the present value of all future interests and contingen- cies shall be five per cent, per annum ; and the superintendent of the insurance department shall, on the application of any surro- gate, determine the value of such future or contingent or limited estate, income or interest, upon the facts contained in such report, and certify the same to the surrogate, and his certificate shall be conclusive evidence that the method of computations adopted therein is correct. Any person or persons dissatisfied with appraisement or assessment may appeal therefrom to the surrogate of the proper county within sixty days after the making and filing of such assessment, on paying or giving security ap- proved by the surrogate to pay all costs, together with whatever tax shall be fixed by said court. The said appraiser shall be paid by the county treasurer or comptroller out of any funds he may have in his hands on account of said tax, on the certificate of the surrogate, at the rate of three dollars per day for every day actually and necessarily employed in said appraisement, together with his actual and necessary travelling expenses. § 14. Any appraiser appointed by virtue of this act who shall take any fee or reward from any executor, administrator, trustee, legatee, next of kin or heir of any decedent, or from any other person liable to pay said tax, or any portion thereof, shall be guilty of a misdemeanor, and upon conviction in any court hav- ing jurisdiction of misdemeanors, he shall be fined not less than two hundred and fifty dollars nor more than five hundred dollars, and imprisoned not exceeding ninty days, and in addition thereto the surrogate shall dismiss him from such service. 530 MISCELLANEOUS MATTER. § 15. The surrogate's court in the county in which the real property is situate of a decedent who was not a resident of the state, or in the county of which the decedent was a resident at the time of his death, shall have jurisdiction to hear and de- termine all questions in relation to the tax arising under the provisions of this act, and the surrogate first acquiring jurisdic- tion hereunder shall retain the same to the exclusion of every other. § 16. If it shall appear to the surrogate's court that any tax accruing under this act has not been paid according to law, it shall issue a citation, citing the persons interested in the prop- erty liable to the tax to appear before the court on a day certain, not more than three months after the date of such citation, and show cause why said tax should not be paid. The service of such citation and the time, manner and proof thereof, and fees therefor, and the hearing and determination thereon, and the enforcement of the determination or decree shall conform to the provisions of the Code of Civil Procedure, for the service of cita- tions now issuing out of surrogates' courts, and the hearing and determination thereon and its enforcement. And the surrogate, or clerk of the surrogate's court, shall, upon the request of the district-attorney, treasurer of the county, or comptroller of the county of New York, furnish, without fee, one or more tran- scripts of such decree as provided in section twenty-five hundred and fifty-three of the Code of Civil Procedure, and the same shall be docketed and filed by the county clerk of any county in the state without fee, in the same manner, and with the same eifect as provided by said section for filing and docketing tran- scripts of decrees of such courts. § 17. Whenever the treasurer or comptroller of any county shall have reason to believe that any tax is due and unpaid under this act, after the refusal or neglect of the persons interested in the property liable to said tax,' to pay the same, he shall notify the district attorney of the proper county, in writing, of such failure to pay such tax, and the district attorney so notified, if he have probable cause to believe a tax is due and unpaid, shall prosecute the proceeding in the surrogate's court in the proper INHERITANCES AND BEQUESTS. S31 county, as provided in section sixteen of this act far.the enforce- ment and collection of such tax. All costs awarded by such decree, that may be collected after the collection and payment of the tax, to the treasurer or comptroller of the proper county, may be retained by the district attorney, hereafter elected or ap^ pointed, for his own use. § 1 8. The surrogate and county clerk of each county shall, every three months, make a., statement in writing to the county treasurer or comptroller of his county of the property from which, or the party from which, he has reason to believe a tax under this act is due and unpaid. § 19. Whenever the surrogate of any county shall certify that there was probable cause for issuing a citation and taking the proceedings specified in section seventeen of this act, the state treasurer shall pay or allow to the treasurer or comptroller of any county all expenses incurred for services of citation and his other lawful disbursements that have not otherwise been paid. § 20. The comptroller of the state shall furnish to each surro- gate a book in which he shall enter the returns made by ap- praisers, the cash value of annuities, life estates and terms of years and other property fixed by him, and the tax assessed thereon, and the amounts of any receipts for payments thereon filed with him, which books shall be kept in the office of the surrogate as a public record. § 21. The treasurer of each county and the comptroller of the county of New York shall collect and pay the state treasurer all taxes that may be due and payable under this act, who shall give him a receipt therefor, of which collection and payment he shall make a report under oath to the comptroller on the first Monday in March and September of each year, stating for what estate paid, and in such form and containing such particulars as the comptroller may prescribe ; and for all such taxes collected by him and not paid to the state treasurer by the first day of Octo- ber and April of each year he shall pay interest at the rate of ten per cent, per annum. § 22. The treasurer of each county and the comptroller of the 532 MISCELLANEOUS MATTER. city and county of New York, shall be allowed to retain, on all taxes paid and accounted for by him each year, under this act, in addition to his salary or fees now allowed by law, five per cent, on the first fifty thousand dollars so paid and accounted for by him, three per cent, on the next fifty thousand dollars so paid and accounted for by him, and one per cent, on all additional sums so paid and accounted for by him. § 23. Any person or body politic or corporate shall, upon payment of the sum of fifty cents, be entitled to a receipt from the county treasurer of any county or comptroller of the county of New York, or a copy of the receipt, at his option, that may have been given by said treasurer or comptroller for the payment of any tax under this act, to be sealed with the seal of his oiEce, which receipt shall designate on what real property, if any, of which any decedent may have died seized, said tax has been paid, and by whom paid, and whether or not it is in fiill of said tax, and said receipt may be recorded in the clerk's ofiice of the county in which said property is situate, in a book to be kept by said clerk for such purpose, which shall be labelled "collateral tax." § 24. All taxes levied and collected under this act, shall be paid into the treasury of the state, for the uses of the state, and shall be applicable to the payment of the general expenses of the state government, and to such other purposes as the legislature may by law direct. § 25. All acts or parts of acts inconsistent with the provisions of this act are hereby repealed. § 26. This act shall take effect immediately. INDEX. INDEX. A. Adams, Prof. Henry C, cited, 6, 91, 196, 263. Administrative classification of taxes, 76. Administrative machinery for the as- sessment and collection of taxes, 350. Alabama, statistics of, 408. See also tables of revenues and expenditures, valuation of property, rates of taxa- tion, and debts. Aliens, taxes on, 9. Allinson and Penrose, cited, 40, 45. Appeals, 369. Apportioned taxes, defined, 78. Arkansas, statistics of, 410. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. Armstrong, C. M., cited, 15, note. Assessment of taxes, in 1796, 124: ma- chineryfor, in counties,36o; in cities, 365- Athens, taxation in, 23, 26, 27. Atlanta, license taxes in, 205 ; statistics of, 476, See also comparative table, 478. B. Back Bay lands of Massachusetts, 267. Baltimore, cost of collection of taxes in, 91 ; increase in rate of taxation in, 140; taxation in, 191; ground-rent system of, 266 ; statistics of, 469 ; table showing valuation of property, taxa- tion, etc., in, 480. See also comparar tive table, 478. Baltimore Tax Commission Report, cited, 141 ; quoted on discount for payment of taxes, 354. Banks, taxation of, in Maryland, 331 ; taxation of, in Ohio, 332. Belgium, cost of collection of taxes in, 90. Bemis, Dr. E. W., cited, iii. Benevolences, 22, note. Benevolent and educational institutions, taxation of, 345. Bequests, see Inheritances. Berlin, receipts of, 53. Board of equalization in Connecticut, 140; in New York, 184; in Illinois, 199- Bodin, Jean, cited, 34, 63. Boeckh, quoted on taxation in Athens, 26 ; cited on same, 27, 28. Bonds and stocks, taxation of, in Mary- land, 332. Boston, license taxes in, 203 ; statistics of, 471 ; table showing valuation of property, taxation, etc., of, 485. See also comparative table, 478. Braunschweig-Wolfenbiittel, cited, 34. Business licenses, 203. Business taxes, 71, 321 ; classes of, 72; recommendations concerning, 323. C. California, statistics of, 411. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. S36 INDEX. Canard, quoted on taxes, 246. [205. Charlotte (N. C), business licenses in, Charleston (S. C), business licenses in, 204 ; valuation of property in, 507. Chesapeake and Ohio Canal, recom- mendations concerning, 385. Chestertown (Md.), plan of rental of college lands at, 265. Chicago Law Times quoted, 518. Chicago, statistics of, 472 ; table show- ing valuation of property, taxation, etc., in, 488. See also comparative table, 478. Church buildings, taxation of, 344, Cicero, quoted on taxation, 29. Cincinnati, table showing valuation of property, taxes, etc., of, 490. Cities, increase of population in, com- pared with country, 142. City assessors, 142. Collateral inheritances, taxation of, in Maryland, 316; in New York and Pennsylvania, 317 ; law concerning taxation of, in New York, 523. Collection of taxes, 1796, 128; cost of, 130. See also statistics of states. Colonial taxation, 105. Colorado, statistics of, 413. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. Columbia College, plan of, in rental of lands, 265. Connecticut, taxation in, in 1796, 119, 122, 124, 128, 129, 130; during the transition period, 133; taxation of personal property in, 188 ; statistics of, 414. See also tables of revenues and expenditures, valuations of prop- erty, rates of taxation, and debts, and grand list of 1864-1885, 503. Connecticut Special Tax Commission Report, quoted, 133, 140, 188. Conscience money, 213. Constitutional provisions, remarks on, 375; table of, opposite 396; addi- tional, 397; regarding state finance and taxation, 397 ; regarding munici- pal finance and taxation, 403. Cook County (111.), valuation of prop- erty in, 198. Cooley, Judge T. M., definition of taxes by, 4; quoted, 11, 14, 17, 19, 23.24- Corporations, recommendations of Maryland Tax Commission conceru- ing taxation of, 328. County assessors, 360. Custom duties, 74. D. Debts, state and municipal, constitu- tional provisions concerning, 510; statistical table showing, 513. Delaware, taxation in, in 1796, ii2, 126, 128, 130 ; statistics of, at present, 415. See also tables of revenues and expenditures, valuations of property, rates of taxation, and debts. Digressive taxes, ']']. Direct taxes, as defined by the Physio- crats, 64 ; by Leroy Beaulieu, 66, 76 ; by Prof. Knies, 67; by the author, 69 ; sub-classes of, 71 : compared with indirect, 79: promote good citizenship, 87 ; combination of, with indirect favored, 88; cost of collec- tion, 90, Discounts for early payment of taxes, 354- Domains and forests, revenue derived from, in European countries, 49, 50. Duties, in colonial days, 114. E. Educational and benevolent institu- tions, taxation of, 345. Egleston, Melville, cited, 112. England, gas-works, water-works, and street car lines in, 53; relation be- tween taxation and liberty in, 58; cost of collection of taxes in, 90. INDEX. 537 Ensley, Mr. Enoch, quoted, 218, note; cited, 222, note. Equalization, boards of, in New York, 184 ; metliods of, 185 ; of whom com- posed, 186 ; in Illinois, 199 ; method of, compared with that of New York, 200. Executors and administrators, tax on, in Maryland, 317. Expenditures of state compared with federal and local expenditures, 253. Expenditures and receipts of cities, 469. Expenditures and receipts of states, 407. Expenditures and receipts of terfitories, 454. Fawcett, 64 ; cited on income tax, 295. Federal income tax, returns of, 300. Federal interference in local taxation, 225. Federal, state, and local bodies to be considered together, 244, Federal, state, and local expenditures compared, 253. Fees, defined, 74, 112. Floating capital, taxation of, 218 ; ben- efit of exemption of, from taxation, 223. Florida, statistics of, 416. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. Foraker, Governor, quoted on taxation of personalty in Ohio, 155 ; on tax laws in Ohio, 156; on internal im- provements in Ohio, 387. Forest culture in the United States, 48. Forests and public domain, revenues from, 49, 50. France, cost of collection of taxes in, 90. Franchise tax, defined, 73. Franklin, Benjamin, bequest of, 39. Fundamental principles of taxation, 237- Gainful pursuits, revenues from, in European states, 50. Gardner, Mr. Henry B., cited, 39, 44, 141. Gas-works, in Paris, 52 ; in Berlin, 53 ; in Prussia, 53 ; in England, 53 ; profits from, 215 ; profitableness of, 270. George, Henry, views of, on taxation stated, 16, 62. Georgia, taxation of, in 1796, 120, 122, 128, 129, 130; experience of, 160; present tax system of, 160; assess- ment of property in, 161 ; city and town property in, 164; taxation of notes, bonds, etc., in, 164 ; productive property of, 214; statistics of, 417. See also tables of revenues and ex- penditures, valuations of property, and debts. Goodnow, Prof. Frank J., 54. Govan, Hon. Geo. M., on taxation of railroads in Mississippi, 327. Greece, taxation in, 26. Green, J. R., quoted, 59, 60. Gross, Charles, Ph.D., quoted on taxa- tion of the Jews, 32. Ground-rent in Baltimore, 266. H. Haller, Karl Ludwig von, cited, 34, note. Hearth and window taxes, 43. Hewitt, Hon. A. S., message of, quoted, 321. High licenses, 283. Hill, Governor, quoted on taxation in New York, 176, 178. Hills, Mr. Thos., quoted on discounts, 355- ^ ^ Hitchcock, Prof. Henry, quoted, 376, 377- Household goods, taxes on, 334. Huxley, Professor, quoted on taxation, 16. 538 INDEX. Illinois, constitution of, cited, lo ; taxa- tion in, 192 ; cause of high taxes in, 194; statistics of taxation and valua- tion in cities of, 195 ; in counties of, 196; realty and personalty in, com- pared, 198 ; board of equalization in, 199; productive property of, 214; liquor license in, 283; statistics of, 418. See also tables of revenues and expenditures, valuations of property, rates of taxation, and debts. Illinois Bar Association, report of com- mittee of, quoted, 319, 515. Illinois Revenue Commission Report, quoted, 197; on equalization, 253, note; on assessment of property, 351 ; on oaths, 352. Income taxes, 71, 287 ; position of, in a system of taxes, 287; equality of taxation impossible without, 287; &imess of, 2B8; objection to, 290; promote good government, 289 ; com- pared with taxation of personal prop- erty, 294 ; introduction into England, 294 ; why federal income tax unsuc- cessful, 296 ; must be state, not mu- nicipal, 296; cost of collection of, 296, note ; assessment of, .297 ; suffi- ciency of low, 300; in American states, 302 ; all income above certain moderate exemption subject to, 303 ; benefits of, to property owners, 304 ; progressive versus proportional, 305 ; favorable feeling regarding, 307; letters quoted concerning, 308, 309. Indiana, statistics of, 419, See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. Indirect taxes, as defined by the Physi- ocrats, 64; by Leroy-Beaulieu, 66, 76; by Prof. Knies, 67; by the au- thor, 69 ; origin of, 68 ; classes of, 70, 73 ; compared with direct, 79 ; are chiefly taxes on commodities, 79 ; violate principle of equality, 80 ; in- duce pauperism, 83 ; obstruct trade, 83; conduce to monopoly, 83; are congenial to despotism and aris- tocracy, 85; combination of, with direct favored, 88 ; cost of collection of, 90. Industry, taxes on, 243. Inheritances and bequests, taxation of, 312; exemption of certain amount, 318; literature on, 320, note ; com- ments of Chicago Law Times on, 518 ; bill introduced into Illinois legisla- ture^oncerning, 519 ; New York law regarding, 523. Internal improvements, recommenda- tion to repeal constitutional provision concerning, 384. See also under Constitutional Provisions. Internal revenue taxes, 73. See also Indirect Taxes. " Instructions " of Georgia comptroller- general, quoted, 164, 165. Iowa, statistics of, 420. See also tables of revenues and expenditures, valua- tions of property, rates of taxation, and debts. Jacobson, quoted, 523. Japan, taxation in, 29. Jefferson, quoted on education, 346; on University of Virginia, 347. Jews, taxation of, in the Middle Ages, 32. 33- Johns Hopkins University, reasons for not taxing, 347. Johnston, Alexander, cited, 228. K. Kansas, statistics of, 421. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. INDEX. 539 Kent County (Md.), assessment of property in, 191, note. Kentucky, taxation in, in 1796, 120, 127, 128, 129, 130; letter concerning poll tax in, 211; statistics of, 423. See also tables of revenues and expenditures of states, valuations of property, rates of taxation, and debts. King, Mr. Francis T., quoted on sav- ings banks in Baltimore, 342, 343. Knies, Professor, definition of taxes by, 3; classification of taxes by, 67; quoted on fees, 74, note. L. Lamar, J. R., quoted on Georgia sys- tem of examining tax returns, 299. Land, taxes on, in 1796, 119. Leipzig, budget of, 52. Leroy-Beaulieu, Paul, definition of taxes by, 5; classification of taxes by, 66 : definition of direct taxes by, 76; cited, 52. Levermore, cited, 8 ; quoted, 37, Lewis, John L., legacy of, 40. License taxes, 203; evil influence of, 206; on natural monopolies urged, 208; on manufacture and sale of liquor, 280. Liquor, taxation of manufacture and sale of, 280. Literature of taxation, 94. Liturgies, 28. Local self-government, 380. Local expenditure, increase in, faster than that of state, 253. Local taxation, interference of federal government in matters concerning, 225. Lotteries, 41, 113. Louisiana, taxation in, 138; statistics of, 424. See also tables of revenues and expenditures of states, valua- tions of property, rates of taxation, and debts. Lowell, James Russell, quoted on taxes in Austria, 43 ; quoted, 377. M. McComas, amendment to constitution proposed by, 392. McMaster, quoted, 114. Macon, poll tax in,, 210. Maine, statistics of, 425. See also tables of receipts and expenditures, valuations of property, rates of taxa- tion, and debts. Maine, Sir Henry, quoted, 376, 377. Marshall, Chief Justice, quoted, 6. Martin, Luther, tax levied for use of, 5. Maryland, declaration , of rights of, quoted, 10; early finances of, 46; taxation in, in 1796, 120, 121, 126, 128, 129, 130; taxation during the transition period, 137 ; taxation of real and personal in, 189; license taxes in, 205 ; collateral inheritance tax in, 316; executors' and adminis- trators' tax in, 317: recommenda- tions concerning taxation of rail- roads in, 325 ; concerning taxation of corporations in, 328 ; concerning taxation of stocks and bonds in, 332; proposed amendments to constitu- tion of, by author, 394 ; statistics of, 426. See also tables of revenues and expenditures of states, valuations of property, rates of taxation, and debts. Maryland Tax Commission Report, quoted, 38, 228 ; on taxation of stocks and bonds, 332 ; on taxation of church buildings, 344; on system of admin- istrative machinery for assessment of taxes, 360. Massachusetts, constitution of, cited, 12, note; taxation in, in 1796, 119, 121, 124, 128, 129, 130; taxation in the transition period, 138 , productive property in, 214 ; income taxes in, 302, 303 ; statistics of, 427. See also tables of revenues and expenditure 540 INDEX. of states, valuations of property, rates of taxation, and debts, Massachusetts Bay Colony Records, quoted, 37. Massachusetts Tax Commission Re- port, quoted, 14, note ; quoted on dis- counts, 355, note. Meriwether, C, on royalty from phos- phate rock in South Carolina, 459, Michigan, liquor licenses in, 283 ; sta- tistics of, 429. See also tables of revenues and expenditures, valua- tions of property, rates of taxation, and debts. Middle Ages, revenues of the state in, 30, 40, 88. Mill, John Stuart, quoted on taxation, 237 ; on income tax, 295 ; on inheri- tances and bequests, 312. \ Minneapolis, liquor license in, 284. Minnesota, high license in, 284; sta- tistics of, 430. See also tables of revenues and expenditures, valua- tions of property, rates of taxation, and debts. Mississippi, tax of railroads in, 327 ; statistics of, 431. See also tables of revenues and expenditures, valua- tions of property, rates of taxation, and debts. Missouri, high license in, 283 ; statistics of, 432. See also tables of revenues and expenditures, valuations of prop- erty, rates of taxation, and debts. Modified prohibition, 280. Montesquieu, quoted, 7, note^ 34, 305. Montreal, business tax in, 323. Mortgages, etc., exemption of, fi^om tax- ation, 335; benefits of exemption, 338. N. Nashville (Tenn.) , taxation in, 222. Natural monopolies, 269 ; defined, 269 ; profitableness of, 290 ; recommenda- tions concerning, 271. Nebraska, high license in, 284 ; statis- tics of, 433. See also tables of reve- nues and expenditures of states, valu- ations of property, rates of taxation, and debts. Nevada, statistics of, 434. See also revenues and expenditures of states, valuations of property, rates of taxa- tion, and debts. Newcomb, Prof. Simon, cited, 387. New Hampshire, taxation in, in 1796, 119, 121, 124, 128, 130; during the transition period, 137; taxation of personal property in, 188; statistics of, 435. See also tables of receipts and expenditures of states, valuations of property, rates of taxation, and debts. New Jersey, taxation of land in, in 1796, 120, 122, 124, 128, 130; statistics of, 436. See also tables of revenues and expenditures of states, valuations of property, rates of taxation, and debts. New York, early taxation in, 44 ; taxa- tion in, in 1796, 119, 121, 124, 128, 130 ; comparison of taxation of realty and personalty in, 170; statistics of same, 180 ; comparison with other states, 182; board of equalization of, 184 ; productive property of, 214 ; trust funds of, 215 ; increase in state and local taxes of, 260 ; collateral in* heritance tax in, 317 ; statistics of, 437; table showing rate of taxation, 1816-1887,497; table showing valua- tion of property and taxes from 1846- 1887, 457 ; salt works of, 466 ; laws re- garding collateral inheritance tax in, 523. See also general tables of reve- nues and expenditures, valuations of property, rates of taxation, and debts. New York and Brooklyn Bridge Street- Car Line, 48. New York City, cost of collection of taxes in, 92 ; statistics of, 473 ; table showing valuation of property and INDEX. S41 taxation of, 493. See also compara- tive table, 478. New York Tax Commission Report, quoted, 221. Vorth Carolina, taxation in, in 1796, 119, 122, 127, 128, 129, 130; taxation of incomes in, 303 ; statistics of, 439 ; table showing receipts, etc., of 1868- 1887^,4^8. See also tables of revenues and expenditures, valuations of prop- erty, rates of taxation, and debts. Oaths, 162, 232. Occupation taxes, 203. Ohio, taxation in, in the transition pe- riod, 134; experience of, 146; con- stitutional provisions of, 147; real estate in, 148; taxation of personal estate in, 152 ; provisions for assess- ment of, 153 ; tax laws of, 156 ; sta- tistics of, 157 ; increase in state and local taxes of, 259; experience of, with public works, 387 ; general sta- tistics of, 440; grand duplicate of 1800-1886, 455. See also tables of revenues and expenditures, valua- tions of property, rates of taxation, and debts. Onondaga Salt Springs Reservation, 466. Oregon, statistics of, 441. See also tables of revenues and expenditures, valuations of property, rates of taxa- tion, and debts. P. Paris, revenues of, from productive property, 52. Patten, Dr. Samuel N., essay of, quoted on taxation, in Illinois, 192. Payment of taxes in instalments, 358 ; result of, in Georgia, 358 ; in Quebec, 3S9- Pearce, James Alfred, letter of, on as- sessment of property in Kent County (Md.) , 191, note. Pennsylvania, early taxation in, 45 ; constitution of, quoted, 57 ; taxation in, in 1796, 120, 122, 126, 128, 129, 130 ; during the transition period, 138; high Ucense in, 283; income tax in, 302; collateral inheritance tax in, 317; tax on corporations in, 328; constitution of, quoted, 393; statis- tics of, 442. See also general tables showing revenues and expenditures, valuations of property, rates of taxa- tion, and debts. Pennsylvania Tax Commission Report, quoted, 196, note. Penrose. See AUinson. Percentage taxes, defined, 78. Perry, Mr. A. J., quoted on taxation in Illinois, 92, note. Personal property, growth of, compared with real, 142 ; difficulty of discovery, 144 ; taxation of, in Ohio, 152 ; pro- vision for assessment of, in Ohio, 153; taxation of, in Georgia, 160; taxation of, in Wisconsin, 172; in West Virginia, 174; in New York, 176: in New Hampshire, 188; in Connecticut, 188 ; in Maryland, 190 ; certain kinds of, to be exempt from taxation, 335. Personal taxes, 71. Perthes, cited, 31. Philadelphia, taxes in, 44; gas-works of, 48; high hcense in, 284; compar- ative table of receipts and expendi- tures, 475 ; table showing valuation of property and taxation, 1887, 494. See also comparative table, 478. Phosphate beds of South Carolina, 213, 459- Physiocrats, classification of taxes by, 63- Poll taxes in ancient Greece, 27; in England, 42 ; defined, 71 ; in colo- nial days, III ; in United States at S42 INDEX. present, ,209; in Georgia, 210 j in Kentucky, 211. Productive property, revenues from, in South Carolina, 213 ; in New York, 214 ; in Georgia, 214 ; in Illinois, 214 ; in Massachusetts, 214. See also do- mains, forests, gas-works, water- works, etc. ; also statistics concern- ing states and cities. Progressive taxes, 77,- See also under Income, 303. Property taxes, 71 ; classes of, 72 ; in colonial days, 72 ; reason for equality in, 139. See also Personal and Real. Proportional taxes, 77. See also under Income, 305. Providence, valuation of property, tax- ation, etc., of, 495. Prussia, water-works and gas-works of, 53 ; cost of collection of taxes in, 90 ; decentralization of administration in, 2SS, note. Q- Quebec, quarterly payments of taxes in, 359- Quit-rents, 112. Railroads, taxation of, in Germany, 51; in Wisconsin, 170; remarks on taxation of, 324 ; gross, not net, reve- nues to be taxes, 324 ; recommenda- tions of Maryland Tax Commission concerning taxation of, 325 ; taxa- tion of, in Vermont, 326 ; in Missis- sippi, 327 ; valuation of property of, SOS- Rates of taxation in transition period, 140; at present, 496. See also sta- tistics of states. Rau, Professor, classification of taxes by, 65. Record and Guide quoted, 492. Real estate, in New York, 176 ; taxation of, in Ohio, 24S; reasons for taxa- tion of, , 246 ;- exemption of, from state taxation favored, 251 ; failure in equalization of state taxes on real estate, 251 ; plan for securing part of income from taxation of, to state and cities, 264 ; valuation of, in states, 500 ; in cities, 480. See also Land, Property, and Personal Property, and statistics of states and cities. Real taxes, 71. Receipts, see Revenues ; also Expendi- tures. Referendum, 353. Regalia, 32. Regressive taxes, "jy. Reitzenstein, Baron von, quoted, 231. Rents, tax on, 310. Revenues of the state in the Middle Ages, 30, 40 ; sources of, at present, other than taxation, 47; from do- mains and forests, 49, 50; from gainful pursuits, 50; iirom produc- tive property, 213, 214. Revenues and expenditures, of states, 407 ; tabular statement of, opp. 452 ; of territories, 454 ; of cities, 469; tab- ular statement of, 478. Rhode Island, early taxation in, 44, 107, 141; in 1796, 119, 121, 125, 128, 130; general statistics of, 443. See also tables of revenues and expenditures, valuations of property, rates of tax- ation, and debts. Road tax, 209. Rogers, Thorold, quoted on taxation, 18. Rome, taxation in, 28, 29. Roscher, 36, 49, 53, 60, 85, 88, 90. S. Salt springs of New York, 466. Savannah, taxation of real and per- sonal in, 166-168 ; liquor licenses in, 203 ; plan of disposing of real estate in, 264. Savings banks, taxation of, 340. INDEX. 543 Sawyer, Hon. Geo. T., cited, 138, 188. Scheel, Prof, von, on ownership of railroads by state, 51. Schonberg, cited, 77. Seckendorff, von, cited, 36. Seymour, Hon. Horatio, quoted on Erie Canal, 388. Sherman, Senator, classification of taxes by, 65. Smith, Adam, on taxes, 42; four canons of taxation, 240. South CaroUna, taxation in, in 1796, 120, 122, 128, 130; phosphate beds of, 213, 459; general statistics of, 444. See also tables of revenues and expendi- tures of states, valuations of property, rates of taxation, and debts. Special assessments, 212. State expenditures, compared with federal and local, 254-260 ; remarks upon, 261 ; table showing, 452. See also statistics of states. Stocks and bonds, taxation of, in Mary- land, 332. Street-car lines, revenue from, 48, 216; recommendations concerning man- agement of, 271 ; New York and New Orleans plan of management of, 272 ; Baltimore plan of management of, 273. Sumner, Prof. W. G., cited, 306. T. Taxation, origin and growth of modern, 25 ; in Greece and Rome, 26 ; in Japan, 29 ; in the Middle Ages, 30 ; early American views of, 44 ; rev- enues from other sources than, 47 ; importance of, SS i tendencies of, 57 ; and liberty, 58; and social reform, 62 ; literature of, 94 ; colonial, 105 ; in 1796, 117; during the transition period, 131 ; rates of, during transi- tion period compared with present, 140; dissatisfaction with old system early manifest, 141 ; of real estate, in Ohio, 148; of personal, in Ohio, 152 ; in Georgia, 160 ; in Wisconsin, 172 ; in West Virginia, 173 ; in New York, 176; of real and personal, compared, 179 ; in New Hampshire, 189; in Ilhnois, 192; states not in- dependent in matters of, 217 ; of floating property, 218 ; benefits of exemption ,of, from, 223; interfer- ence of federal in local, 225 ; present methods of, needlessly demoralizing, 229 ; principles for a new system of, 237; four canons of, 240-242; of real estate, 246; exemption of real estate from state taxation, 251 ; of natural monopolies, 271 ; of man- ufacture and sale of intoxicating liquor, 280 ; of incomes, 287 ; of in- heritances and bequests, 312 ; of railroads, 324; of corporations, 328; of household goods, 334 ; of savings banks, 340 ; of churches, 344 ; of ed- ucational and benevolent institutions, 345 ; constitutional provisions con- cerning, 375. Taxes, various definitions of, 3-6 ; au- thor's definition of, 6 ; inwhat paid, 8 ; one-sided transfer, 13 ; not debts, 18 ; power to impose legislative, 19: re- striction of power to impose, to pop- ular body, 20; representation not always accompany, 21 ; regular and voluntary contributions, 22; arbi- trary nature of definition of, 23; power to levy not be delegated, 24 ; in Greece and Rome, 26 ; in Japan, 29 ; in Middle Ages, 30 ; subordinate in early budgets, 35 ; voluntary na- ture of, in earlier days, 37 ; paid at first by weak and defenceless, 42; in early history of America, 44 ; re- turns of, 55 ; classification of, 63 ; administrative classification of,' 76; other modes of, 77 ; in the colonies, 105 ; voluntary contributions early gave way to, 109; in 1796, 118; on land, 119; on other objects, 120; 544 INDEX. apportionment and collection of taxes in 1796, 123 ; taxes on real and per- sonal in force in the states, 140-192 ; on occupations, 203 ; on polls, 209 ; special, 212 ; levied by state, county and school district, 260; on man- ufacture and sale of intoxicating liquor, 280 ; on income, 287 ; on in- heritances and bequests, 312; on business, 324; on railroads, 324; on corporations, 328 ; on household goods, 334 ; on savings banks, 340 ; on churches, 344; on educational and benevolent institutions, 345. Ten Eyck, Henry James, cited, 306. Tennessee, taxation in, in 1796, 117, note; statistics of, 445. See also tables of revenues and expenditures of states, valuations of property, rates of taxation, and debts. Texas, statistics of, 446. See also tables of revenues and expenditures of states, valuations of property, rates of taxation, and debts. Thomas, J^dge E. A., cited, 319, note. Thucydides, 62. Titles, sale of, 41. Toronto, rental of land in, 265, 268. Transition period, 131. Trust funds, 215. U. United States, forest culture in, 48 ; tax- ation and liberty in, 61 ; cost of collec- tion of taxes in, 90 ; increase of federal state and local expenditure in, com- pared, 256. See also various states of the Union. Valuations of real and personal prop- erty in the various states, tabular statement of, 500. See also statistics of several states. Vermont, taxes in, in 1796, 119, 120, 124, 128, 129, 130; taxation of rail- roads in, 326 ; taxation of corpora- tions in, 329, note ; statistics of, 448. See also tables showing revenues and expenditures of states, valua- tion of property, rates of taxation, and debts. Virginia, taxation in, in 1796, 120, 127, 128, 129, 130; during the transition period, 137; income taxes in, 302; statistics of, 449. See also tables of revenues and expenditures of states, valuation of property, rates of taxa- tion, and debts. W. Wagner, Prof, Adolf, 50, 62, 74, note. Walker, Gen. Francis A., cited, 41, 78, 132, 3°3- Washington, quoted on education, 346. Watches, returns on, in Philadelphia, 167, note. Water-Vk'orks, ownership of, 48; in England, 54. Wells, David A., quoted on oaths in tax assessments, 232. West Virginia, taxation in, 173 ; statis- tics of, 450. See also tables showing revenues and expenditures of states, valuations of property, rates of taxa- tion, and debts. West Virginia Tax Commission Report, cited, r37; quoted, 173, 233. Wilson, C. J., cited, 41, 42, 60, 69. Wisconsin, taxation of railroads in, 170; property tax in, 172-, statistics of, 451. See also tables showing revenues and expenditures of states, valuations of property, rates of taxa- tion, and debts. Wolcott, Hon. Oliver, report of, cited, 116 sgg. Worthington, Mr. T. K., quoted, 45; cited, 138, 303. Wright, Hon. Wm. A., quoted on work of grand juries in Georgia, 300, note.