SECOND REPORT 
 
 OF THE 
 
 COMMISSIONERS TO REVISE THE LAWS 
 
 FOR THE 
 
 and Collection of fapjs 
 
 t j * t j 
 
 IN THE 
 
 STATE OF NEW YORK, 
 
 With a (flock of gfeutf lelatiM to g^e.ssmfnt and taxation. 
 
 DAVID A. WELLS, ) 
 
 EDWIN DODGE, > Commissioners. 
 
 GEORGE W. CUYLER, ) 
 
 “ In order that the greater part of the members of any society should contribute to the public 
 revenue, in proportion to their respective expense, it does not seem necessary that every single 
 article of that expense should be taxed.” — Adam Smith. 
 
 ALBANY: 
 
 THE ARGUS COMPANY, PRINTERS. 
 
 1872. 
 

STATE OF NEW YORK 
 
 No. 26. 
 
 IN SENATE, 
 
 February 7, 1872. 
 
 REPOET 
 
 op THE 
 
 COMMISSIONERS TO REVISE THE STATUTES RELATIVE 
 TO TAXATION. 
 
 STATE OF NEW YORK: 
 
 Executive Chamber, ) 
 Albany, February Sth, 1872. 1 
 
 To the Legislature: 
 
 I transmit, herewith, the draft of a code of laws relating to the 
 assessment of taxes in the State of New York, prepared by the 
 “Commissioners on Taxation,” under an act of the Legislature, 
 passed May, 1871, together with their report relating to the same. 
 
 Having in my annual message urged upon you an earl} 7 and con¬ 
 siderate examination of the system of taxation presented by the com¬ 
 missioners, it is unnecessary for me to do more now than renew that 
 recommendation ; and at the same time to express my satisfaction 
 with the labor and care which has manifestly been expended by the 
 commissioners in their conscientious effort to arrive at a uniform, 
 equitable and productive system of tax legislation. 
 
 JOHN T. HOFFMAN. 
 

 . 
 
REPORT. 
 
 Albany, February , 1872. 
 
 Sir. — In pursuance of an act of the Legislature of the State of 
 New York, passed April 20th, 1870, the undersigned were appointed 
 by the Governor, commissioners “ to revise the laws for the assess¬ 
 ment and collection of taxes,” and in discharge of their duties, they 
 submitted in February, 1871, a report, embodying a review of the 
 existing system of State or local taxation; an outline of a new system ; 
 and reasons in detail, which seemed to the commissioners sufficient 
 to warrant them in recommending such new system to the Legislature 
 and the people of New York for adoption. 
 
 As the proposed new system of local taxation involved a radical 
 change in existing laws, the commissioners did not ask or expect any 
 immediate action ; but preferred, and with the concurrence of the 
 Executive, recommended that the whole subject should be laid over 
 for at least a year, in order to afford time to the people of the State 
 to consider the nature and the bearing of the facts submitted; and to 
 decide whether they preferred to retain the present system—annually 
 becoming more ineffective, unjust and unequal—or adopt the system 
 of the commissioners, as likely to prove remedial for defects in exist¬ 
 ing laws, which have now become a matter of almost general acknow¬ 
 ledgment. 
 
 In this view the Legislature of 1871 so far concurred, that no official 
 action was taken, further than to order the printing of the report for 
 distribution to the people of the State of New York, and to the Legis¬ 
 latures of other States, from whom application for copies were made,* 
 and to authorize the commissioners to prepare and submit to the 
 Legislature of 1872, a code, framed in accordance with their recom¬ 
 mendation. This authorization, passed May, 1871, reads as follows: 
 “And the said commission are directed to report , for the considera- 
 
 * Besides the edition of the report of the commissioners ordered by the Legislature, two other 
 editions have been printed and issued by private parties ; one by Messrs. Harper & Bros., of New 
 York, with notes additional to the official report; and another in England, the last with a preface, 
 under the direction of the Cobden Club, of London, for circulation or gratuitous distribution among 
 the people of Great Britain. 
 
6 
 
 Report of the Commissioners to 
 
 tion of the Legislature , at its next session , a draft of a tax code or 
 law , m’tfA estimates of expenses and collection thereunder 
 
 In accordance, therefore, with the instructions given in the act as 
 above quoted, the commissioners have now the honor to submit the 
 draft of a code of laws for the assessment of taxes in the State of New 
 York; meaning thereby State, county, city and town taxes, and 
 would respectfully recommend the same to the Legislature and people 
 of the State of New York for examination and adoption. 
 
 But, as prefatory to so doing, they desire again to submit in brief 
 the reasons of their recommendations / an easily understood analysis 
 of the principles upon which the code prepared by them has been 
 founded ; and a prospective exhibit of its method of working • and 
 this more especially, because, notwithstanding the extensive circula¬ 
 tion by the Legislature of the former report, it seems certain that 
 a very large portion of the community has, as yet, no clear and 
 definite comprehension of the nature of the reforms proposed by the 
 commissioners, and of the intimate relation which a system of taxation 
 sustains to the growth and development of a State, and to the mutual 
 interests, comfort and happiness of each individual of its population. 
 
 p 
 
 The Problem Involved. 
 
 The problem involved in any system of taxation is the raising of 
 money from the people or property of a State or community, for 
 defraying the expenditures incident to the maintenance of govern¬ 
 ment, and tor the general organization and well-being of society. 
 The command of revenue being furthermore absolutely essential to 
 the existence of government, the power of every complete sovereignty 
 to compel contributions, or as we term it ,/ ( to taxf* ,i& generally held 
 to be unlimited, and only restricted against abuse by the fundamental 
 structure of the government itself.f 
 
 Limitations of the Taxing Process of the States. 
 
 The separate States of the Federal union not being, however, abso¬ 
 lutely sovereign, are limited in their exercise of the taxing power by 
 certain conditions, expressed or implied in the constitution of the 
 
 * A tax is a contribution imposed by government on individuals for the service of the State. It is 
 distinguished from a subsidy as being certain and orderly, which is shown in its derivation from the 
 Greek taxis, orclo. order or arrangement. (Jacob. Law Die., Bouvier Law Die.) 
 
 t “ The power to tax rests upon necessity, and is inherent in every sovereignty. No constitutional 
 government can exist without it; and no arbitrary government, without regular and steady taxation, 
 could be anything but an oppressive and vexatious despotism, since the only alternative to taxation 
 would be a forced extortion for the needs of government from such persons or objects as the ones in 
 power might select as victims.” ( Cooley's Constitutional Limitations.) 
 
Revise the Statutes relative to Taxation. 
 
 greater sovereignty, namely, that of the United States; as, for exam¬ 
 ple, in respect to agencies or instrumentalities of tl?e Federal govern¬ 
 ment; imported goods in original packages in the hands of the 
 merchant importer; exports to foreign countries; inter-State instru¬ 
 ments; goods in transitu, and the like; while, on the other hand, the 
 exercise of the taxing power by the Federal government in respect to 
 distinctively State agencies has been declared by the Federal courts to 
 be inconsistent with the principles upon which the federation of the 
 States has been established. 
 
 But above all constitutional or other artificial restrictions, each 
 State or community is virtually under the obligations of a higher law 
 to establish and maintain a tax system within the range of its powers, 
 which will insure justice or equality, certainty, efficiency and economy; 
 for the reason that it is contrary to the material interests of each such 
 State or community, and contrary to the morality of its people, to do 
 otherwise. 
 
 (The discussion of the province and scope of taxation in general; 
 of the limitations of the taxing powers of the Federal and State Gov¬ 
 ernments • of the effect of the Fourteenth Amendment to the Consti¬ 
 tution of the United States in abridging the control of the States over 
 the property of their citizens ; and of certain recent legal decisions ; 
 being a separate department of the subject under consideration, a/nd 
 one not more pertinent to New York than to all the ctther States, has 
 been transferred to a supplement to this report, to which attention is 
 requested ’.) 
 
 System of Local Taxation in New York Compared with the Tax 
 Systems of other States. 
 
 With this brief review of the nature, necessity, and limitation of 
 the powers of taxation as exercised by the States, let ns next inquire 
 as to the actual condition of affairs in respect to taxation in the State 
 of New York, and in the other States, so far as the latter furnish 
 experience pertinent and illustrative of the special subject of our 
 inquiry. 
 
 And first, we'find that the system of taxation existing in New 
 York, in common with most of the other States, has been based and 
 built up on the theory, that the raising of revenue to meet public 
 expenditures, according to the three recognized fundamental condi¬ 
 tions of taxation — certainly, justice or equality, and economy— can 
 be best accomplished by subjecting all property, real and personal, 
 within the jurisdiction of the State, to ascertainment, valuation, and 
 
8 
 
 Report of the Commissioners to 
 
 assessment. New York, however, by her Legislature and her courts, 
 has held in accordance with what has seemed to these authorities to 
 be the dictates of justice and common sense, that the visible, tangible 
 property of her citizens, situated beyond her territory, is beyond her 
 jurisdiction, and is, therefore, not liable to State assessment and taxa¬ 
 tion ; and recognizing further the principle, that an individual should 
 be taxed on what he owns , and not on what he owes, has allowed 
 indebtedness in part to offset or diminish the valuation of assets. 
 
 Systems of Local Taxation in Other States. 
 
 Massachusetts, on the other hand, basing her tax code and practice 
 upon the same assumption as New York, namely, the desirability of 
 taxing all property of her citizens, endeavors to carry its application 
 to a much greater extreme ; inasmuch as this State claims the right, 
 and practically exercises the power to assess her citizens for not only so 
 much of their personal property as is specifically within her limits and 
 control, but also for so much as is undeniably beyond her territory, 
 and, therefore, inferentially beyond her sovereignty and jurisdiction. 
 The tax laws of Massachusetts furthermore, do not allow indebted¬ 
 ness to offset or diminish tangible property, consigned goods only 
 excepted. 
 
 In Pennsylvania, the system of local taxation is entirely different 
 from that of either New York or Massachusetts, and far more liberal 
 than the system of any of the other States; inasmuch as in that State, 
 personal property is either wholly exempt from taxation, or is taxed 
 to so small an extent, in comparison with New York and Massachu¬ 
 setts, as to practically amount to exemption. We have, therefore, in 
 the three States of New York, Massachusetts, and Pennsylvania, the 
 types, or representatives of the various systems of local taxation as 
 they exist in the United States. 
 
 Results of Experience. 
 
 The results of the experience of these three systems may be fairly 
 stated as follows : In Massachusetts, under her existing system, the 
 revenue collected by taxation is larger in proportion to her popula¬ 
 tion than in any other State, and larger, probably than in any other 
 country; amounting in 1870 to $1L35 per capita , as compared witli 
 $11.50 per capita in New York. The system under which this result 
 is effected is characterized by nearly all the citizens, of that State 
 with whom the commissioners have come in contact, as in the highest 
 degree arbitrary, unequal, unjust, and in respect to personal property, 
 
Revise the Statutes relative to Taxation. 
 
 9 
 
 notoriously ineffective. In the city ot Boston, where,- through the 
 high character ot officials and the permanent tenure of office, the 
 Jaws are executed more efficiently than elsewhere, thirty per cent or 
 more of this latter class ot property is acknowledged to escape assess¬ 
 ment, while in the remainder ot the State the proportion is known 
 to he much greater. 
 
 In Pennsylvania, under her existing system of local taxation, less 
 dissatisfaction is probably expressed, and less trouble reported by 
 officials, than in any other State. Real estate is not regarded as unduly 
 burdened ; rents in her large cities are comparatively low; while, under 
 the inducements offered by liberal legislation, population and wealth 
 are very rapidly increasingthe gain in population from 1860 to 1870 
 having been, 21.18 per cent, as compared with 12.91 per cent for New 
 York. 
 
 t In the case of New York, no one, either officials or citizens, is sat¬ 
 isfied with the existing system or its administration ; and so apparent, 
 moreover, are its defects, that the necessity of reform is almost uni¬ 
 versally acknowledged. But the commissioners, who have made the 
 system a matter of special study and inquiry, go further, and unquali¬ 
 fiedly assert that, as it exists to-dav, it is more imperfect in theory 
 and defective in administration than almost any system that has ever 
 existed, and that its longer recognition and continuance is alike pre¬ 
 judicial to the material interest of the State and the morality of its 
 people.* 
 
 I In their previous report the commissioners collected and presented 
 a large amount of evidence illustrative of the actual condition of 
 affairs ; but now, with another year’s experience, and for the purpose 
 of fully demonstrating the truth of their assertions, they would again 
 briefly ask attention to the subject. 
 
 Actual Condition of the New York System. 
 
 The property of New York, made subject to taxation, divides itself 
 into two classes; real and personal. 
 
 Real Property, embracing, according to the usual acceptation 
 of the term, lands and buildings, being visible and tangible, presents 
 no inherent difficulty in the way of ascertainment, valuation and 
 assessment. The New York system of taxation in respect to these 
 
 * If this judgment may seem harsh, reference to the records of the constitutional convention of 
 1867-8 is only necessary to show that more severe language is made use of in the debates in respect 
 to the system than any now employed by the commissioners; that of one of its leading members, 
 for example, beiug as follows: “1 insist that a people cannot prosper whose ofllcers either work or 
 tell lies. There is not an assessment roll now made out in this State that does not both work and 
 tell lies." 
 
10 
 
 Report of the Commissioners to 
 
 objects might, therefore, be reasonably supposed to work with 
 some degree of uniformity and equality; but so far from this being 
 the case, it would be difficult, nay, probably impossible, to find any 
 two contiguous towns, cities or counties in the State, in which the 
 valuation of such property approximates in any degree to uniformity. 
 So far as the commissioners can ascertain, the average aggregate 
 valuation varies from twenty per cent of actual value as a mini¬ 
 mum, to fifty per cent, as a maximum; with a probable total 
 average for the whole State of a rate not in excess of forty per 
 cent. The lowest valuations, furthermore, do not, as might be sup¬ 
 posed, occur in the poorest and most sparsely settled counties of the 
 State, but rather in the richest and most densely populated; and it 
 is also curious to note, that comparing the real estate valuations of 
 the several counties of the State in the years 1860 and 1870, with 
 the census returns of their population at the same periods, it will 
 be found that some counties which have increased their population 
 and railroad facilities, have decreased their valuations, while other 
 counties which have actually diminished in population, have increased 
 their valuations. 
 
 The increase in the assessed valuation of the real property of the 
 entire State for the ten years, from 1861 to 1870 inclusive, was forty- 
 seven and a half per cent; but deducting the valuations of New York 
 and Kings counties, the increase was only eight and a half per cent, 
 although the increase in the population of these two sections, during 
 the same period, was not very unequal; the increase in New York 
 and Kings counties having been 269,722; and for the remainder 
 of the State 232,302. Now as the law of the State is clear and 
 explicit, that the valuations shall be uniform, it is evident that the 
 law in this respect has become a dead letter and wholly inoperative. 
 
 Personal Property. 
 
 But it such be the inequality and illegality of the methods of taxing 
 real property at present followed in the State of New York, the 
 results which have attended the attempts to tax personal property 
 under the same system are infinitely more farcical and disgraceful. 
 The evidence of this failure is most conclusive, and the reasons why, 
 under the existing system, nothing but failure in respect to the taxing 
 of this description of property can be anticipated, are of a character 
 that admit of being readily understood and verified. Thus the total 
 equalized valuation of all the property of the State of New York 
 for the year 1871-72 is $2,076,454,000, of which but little more than 
 
Revise the Statutes relative to Taxation 
 
 one-fifth (21.48 per cent), or §445 qi q n A n 
 head of personal property ? ’ Wa& returne d under the 
 
 -. 
 
 They furthermore presented a aoWni. 7 ei ^ cl °sely approximated. 
 
 umal within the State, founded on exalt I ," ° l ' ert - V ot the class per- 
 wh,,e aggregate a,nou,/t " 7 “ 
 
 all the property of the State, real and net- . t ** entlre ‘mount of 
 during the year 1870-71 T|,, P ,, ’ returne fi ®>r taxation 
 
 authoritatively expressed in the Z 7 , , “'f re0a11 the opinion 
 that thirty citizens of the State eo^VUTam^'XTiSfe 
 
 But without again ° f 8 ‘*«- 
 
 u- 7 u.v, that another year-s%xp:ietrit d 7h7rr„'°tr ""'"I 
 
 coneluston, that the authorities of the State under a law n“f "7 
 executed) requiring the assessment nf , (professedly 
 
 value, do not in faft sleed ,771seli, P ®" 0 "* 1 P"*"* “ its f “» 
 
 per cent of the recognised *»*IJ£«%^^*J** 
 than Jifteen per cent of the real and true vahm r • li i ’ 11016 
 
 immediately located within the Statp ml * * suc h property 
 
 authority So , r l aS 8Uch 8 ub J ect to ««> State 
 
 "II " 1 n r\ nt 0f e ' ''donce of the failure of the 
 
 7 s 7' e , Ish 7 t0 ,ocaI taxat,0 “ t0 do what they were designed 
 I 7 ln P "i P r t ‘° d °-, So ,nnch also *u evidence that the existing system 
 | of local taxation, by its own gravitation and surrounding hifhimiees 
 has with the exception of incorporated capital, practicall/come down 
 I to a tax upon real estate. 
 
 Conditions of Failure Inseparable from the Existing System 
 
 The reasons why nothing but failure in respect to the valuation and 
 
 — Pere “ ,al PW under the existing system can he 
 anticipated, are in the main as follows : 
 
 Ill the first place, much of the property termed “personal,” and 
 
 othm Ce!\ Sy T U Kr Perati ' e in NewTork > ai| d most of the 
 
 i. . St ’ d ,K made obligatory on the assessors to value and assess 
 
 ”^incorporeal and invisible, easy of transfer and concealment, not 
 m ing o valuation by comparison with any common standard 
 and the situs or locality of which for purposes of assessment and 
 taxation involves some of the oldest, most controverted, and vet 
 unsettled questions of law. Of such a character are all negotiable 
 
12 
 
 Report of the Commissioners to 
 
 instruments, i. e., national, state, municipal, and corporate bonds; 
 written obligations of indebtedness on the part of individuals; book 
 accounts, annuities, money at interest, cash on hand, and the like, the 
 whole constituting by far the largest proportion of the so-called per¬ 
 sonal property of the country. 
 
 It is obvious, therefore, that the law contemplates the doing of an 
 act, namely, the valuing and assessing of that which is invisible and 
 incorporeal, which cannot be done without the fullest cooperation, 
 through communication of information, ot the tax-payer himself; and 
 yet for the imparting of which, the two most powerful influences 
 that can control human action, namely, love of gain, and the desire to 
 avoid publicity in respect to one’s private affairs, cooperate to oppose. 
 
 And in the case also, of much of the so-called “ personal property” 
 that is visible and tangible, as furniture, books, works of art, jewelry, 
 musical instruments, and the like, it is clear that its valuation with 
 any approximation to fairness, must be not only the work of time, 
 but must require an amount of experience rarely in the possession ot 
 any one individual. 
 
 Wherever, therefore, a system contemplating the taxation of per¬ 
 sonal property, generally, has been projected, its authors have been ( 
 led as it were by instinct, to the conclusion, that its execution with 
 any degree of effectiveness, must depend upon the employment ot 
 extraordinary and arbitrary measures. Thus, the old Romans, who 
 first established the taxation of personal property at the period of 
 the decadence of the empire, and who were not troubled with any 
 restrictions of a constitutional character, or any very nice notions 
 about personal liberty or general morality, clearly perceived this, and 
 accordingly invested their tax officials with the power of administer¬ 
 ing torture as a means of compelling information and enforcing 
 payment. 
 
 The board of officials of Illinois, who last year, under authority, 
 prepared a new tax code for their State, and based their work on the 
 hypothesis, that the only way to make a better system was to enlarge 
 and make more effective the old, also, perceived this; and accordingly 
 prepared a code, which one of the highest authorities in that State 
 characterized in the following language : 
 
 “ Without exception, it is the most objectionable law that was ever 
 proposed, and we can imagine no act which will become so justly 
 odious and detestable. It provides for the establishment of a distinct 
 branch of the government, which may properly be styled, the grand 
 inquisitorial and confiscatory office, clothed with powers and func- 
 
13 
 
 Revise the Statutes relative to Taxation. 
 
 tious, which, it enforced, would produced a revolution in Austria or 
 Turkey.” —Chicago Tribune. 
 
 The officials ot the State ot Massachusetts, also, in attempting to 
 carry out a system which provides for the valuation of that which is 
 intangible, and the assessment ot what is invisible, acknowledge 
 the necessity of the employment of extraordinary measures, and 
 accordingly resort to a method of procedure, which has no parallel 
 except in the records of the middle ages and of the inquisition, anti 
 constitutes, in itselt, a satire upon any claim to the enjoyment of a 
 wholly free and enlightened government. For failing to obtain 
 Isatisfactory information about the private affairs of any individual; 
 the chief assessors and their subordinates to the number of some 
 fifty, meet in secret session, in a large upper chamber set aside for the 
 purpose and appropriately termed the “dooming chamber,” when 
 the citizen in question, without being present either by counsel or 
 in person, is arbitrarily doomed to the'payment of any sum which a 
 majority of those present may think proper; and from which “doom¬ 
 ing” there can be no appeal. 
 
 I Now the old Pagans, the officials of Illinois, and the Boston asses¬ 
 sors, have undoubtedly been consistent in following the only line of 
 action calculated to render their ideas of raising revenue by taxing 
 all descriptions of property, in any degree effective; and the people 
 of the State of New York ought clearly to understand that the same 
 course is the only one open to them, which can, by any possibility, 
 make their existing system anything different from the farce which 
 every intelligent person must acknowledge that it now is. 
 
 \ But supposing the people of the State of New York were willing 
 to inaugurate and put in practice such inquisitorial, arbitrary and 
 pagan measures, of which indeed all the evidence is to the contrary,* 
 there are three questions which it is important to first take into con¬ 
 sideration : 
 
 \ 1st. Is an arbitrary , inquisitorial , illogical system of taxation in 
 itself desirable f 
 
 | 2d. Is such a system anywhere effective , or can it be made so ? 
 
 % 3d. Is there any way of collecting the revenue of the State with 
 certainty , equality and economy , without resorting to arbitran'y and 
 inquisitorial measures ? 
 
 * The constitutional convention of New York in 1868 adopted the following provision and sub¬ 
 mitted it to a separate vote of the people: “ Real and personal property shall be subject to an uni¬ 
 form rate of assessment and taxation.” The result was that the proposition was signally disapproved, 
 the majority against its ratification and adoption having been in excess of 44,000 in a total vote of 
 
 457,000. 
 
14 
 
 Report of the Commissioners to 
 
 Consideration of the First Question. 
 
 1. In response to the first question, “ is an arbitrary , inquisitorial 
 and illogical system of taxation desirable f” the advocates of the theory 
 of the existing system may make, and in fact have made this answer 
 That each individual owes the State annually a certain sum of money 
 in the way of taxes proportioned to his entire property. If } Je 
 voluntarily pays, he escapes arbitrary measures. If he declines to 
 pay or tries to avoid payment, he has no just cause to complain if 
 he is regarded in the light of a criminal, “ or if the same arbitrary 
 measures are used to collect his tax, as if it were a debt owing by one 
 citizen to another.” 
 
 But let us examine this averment. If the defaulting tax-payer is 
 to be regarded as a criminal, and as such placed in the worse possible 
 light, he certainly ought not to be deprived of the privileges of a 
 criminal; which are a right to a public investigation according to the 
 rules ot evidence adopted by free and enlightened communities; a 
 right to be heard before condemnation; and the right to be presumed ’ 
 innocent of having property subject to taxation until the fact is ascer¬ 
 tained otherwise by legal proof. But under the existing tax laws, we 
 do not accord to the tax-payer the privileges of a criminal; for no tax 
 can be assessed on a large proportion of the personal property of the 
 State, according to any rules of legal evidence that any common 
 law court would adopt. No assessor, under the laws of New York, 
 m assessing personal property can act judicially. The law gives him 
 no power to obtain legal testimony of a character that is admissible 
 m a court; he must act the part of an arbitrary despot against an 
 men pated tax payei, 01 not act at all, and his conclusions for acting 
 must leached at best by the testimony ot those who have no means 
 o nowing anything, in a legal sense, about the subject-matter under 
 investigation. It seems clear, therefore, that any attempt to tax 
 without legal evidence, is an act of usurpation or despotism, wholly 
 antagonistic to the principles of a free government, and that it is a 
 mockery to characterize such acts as, in any sense, judicial proceedings. 
 
 Regulation of Assessments by Oaths an Absukdity. 
 
 Nor does the right to reduce or regulate the assessment by the oath 
 dlnntie t : Pay T ^ W “ “7 degree of its unequal and 
 the United T 7 individual hiding public office in 
 to official * ° S “? WS ’ t iat oaths 88 a grantee of truth in respect 
 official statements have ceased to be of any value. The assessments 
 
15 
 
 Revise the Statutes relative to Taxation. 
 
 made according to the oaths of parties, furthermore, are not made 
 f according to legal evidence, upon examination and proofs; but 
 t according to the will and secret caprice of each tax-payer, instigated 
 [ by his selfishness, and the natural depravity of human nature. Each 
 I tax-payer, under the present rule, becomes therefore the interpre¬ 
 ter, not only of the law, but of the fact, and makes a secret inter¬ 
 pretation of both, and we have as many interpreters of the law, as 
 [ there are numbers of tax-payers; and also an indefinite multiplicity 
 K of assessors; for each person who unfairly reduces his own assess- 
 | ment, arbitrarily assesses thereby some other of the community for 
 I the difference. 
 
 1 .ik I -Resent System a V iolation of the Principles of Constitu¬ 
 tional Government. 
 
 Now the commissioners, in the discharge of their duty, ask the 
 I people of New 1 ork, it all this procedure does not bearinpon its face 
 [ the most unmistakable marks of dishonesty ; if it is not in the highest 
 [ degree heathenish and disgraceful; and if the fullness of time has not 
 I come, when it should be at once and forever done away with? Could 
 
 ■ or would any people apply the same rules tor the collection of debts? 
 Is there any one who has so much confidence in human nature that 
 lie will propose a law, that a person who is sued, shall be discharged 
 
 I from all claims of indebtedness if lie will make oath, interpreting both 
 I the law and the fact himself, that he owes the claimant nothing? Is 
 I it believed, that under tariff laws, the government could got sufficienl 
 I revenue to pay for its collections, if the importer was permitted to offset 
 I debts against the value of his goods; or if the law was peremptory 
 I that his oath alone should be given, and that there should be no legal 
 I examination, inspection or proof of the value or character of the 
 I importations ? 
 
 In whatever aspect we view the present system, therefore, it is 
 l arbitrary and in violation of the principles of constitutional govern- 
 | ment. If the assessor acts, he acts solely by his despotic will, and 
 I without, any reference to legal proof or evidence, such as is enforced 
 
 ■ in recovering private debts; and if the tax-payer, by his oath, becomes 
 I the arbiter, his will is supreme, and not subject to investigation or 
 ♦ control. It is a system, in short, that violates all the laws of evi- 
 
 ■ dence, the growth of centuries in civilized countries; that makes 
 I secret that which should have publicity, and proceeds upon a basis 
 
 that could not be recognized for one moment in .the collection of debts, 
 or in the trial of persons accused of the most henious of offenses. 
 
16 
 
 Report of the Commissioners to 
 
 Inconsistencies of the Existing System. 
 
 But pursuing .this inquiry still further, let us next consider what 
 claim can be preferred for the existing system in respect to consistency 
 and uniformity in its methods of administration or procedure. 
 
 It would seem as if the one principle to be recognized above all 
 others, in any system of taxation, as fundamental and admitting of no 
 exceptions, should be that whatever rule of assessment is once decided 
 upon and adopted, the same should be made uniform in its applications • 
 and that officials should not be permitted to put upon it entirely 
 opposite intepretations, according as it may subserve their interests 
 to do so. And it would seem, further, as if any State, calling itself 
 civilized and enlightened, would be ashamed to permit an inconsist¬ 
 ency of this kind to find a .place upon its statutes, or a recognition in its 
 administration. And yet this inconsistency, which, stated in the abstract, 
 no one would be willing to justify, forms the rule and not the excep¬ 
 tion of almost every State system of local taxation in the country. 
 Thus, real estate is universally held to be taxable at the place where 
 it is situated; but personal property, of an equally tangible and visible 
 character as real property, is held, for the purposes of taxation, to follow 
 the owner; and solely by reason of a fiction of law u mobilia personam 
 sequuntur ,” which the Supreme Court of Vermont (Catlin v. ITall, 21 
 Vt., 152), has declared, was “ adopted from considerations of general 
 convenience and policy, and for the benefit of commerce; ” and which, 
 according to every principle of common sense and equity, was never 
 intended to have any other meaning, than that for the purpose of the 
 sale, distribution, and other disposition of property 7 , any act, agreement 
 or authority r , which is sufficient in law where the owner resides, shall 
 pass the property in the place where the property is."* As a principle 
 applied to taxation, it has undoubtedly one argument in its favor, naiiie- 
 ly, that of old custom; but it is interesting to note, that when first made 
 
 In the case of Catlin v. Hall (21 Vt., 152), the question at issue being, whether certain personal 
 property in^spntaWy located in Vermont, could be legally taxed because the owner was domiciled 
 out the State and personal property having no fixed Mm followed the owner, the court after 
 referring to the fiction insisted upon, observed: “ But this rule (i. that personal property follows 
 foLv ! ga] fiCUOn ’ ad ° Pted fl ° m “-^'lations of general convenience and 
 
 aSeea’b v t to owners to dispose of property at their decease 
 
 laws omhl on t W n 8 ’ Wl t Ug embarrassed their ™nt of knowledge in relation to the 
 ^ 18 6itU!ltud " Aud in tbe ^se of Green v. Van Buskirk (7 
 
 :t;rrT ?t ° f the unit ° d states ’ by Mr -*«■*» ***, ^ „ 
 
 d °T * the ° Wner draws to il Phonal estate wherever it may happen to 
 ined “ This fictir *? iP ° 8eB of justice that the actual situs of the property shall be exain- 
 
 ned. This fiction,” he continues, “has yielded in New York on the power of the State to tax 
 
 for attectdng^hTestate^° f dt5zens situated in a sister State, and always yields to laws 
 
 1L enSeW dfstiu Tf “° n ‘ reBldents ’ beca " 8e s ™ b laws necessarily assume that property has a 
 
 situs entirely distinct from the owner’s domicil.” 
 
Revise the Statutes relative to Taxation. 17 
 
 applicable in England, equity and consistency were so far regarded, 
 that real estate was placed upon exactly the same footing as other 
 visible, tangible property, and in common with the latter was held to 
 follow the owner, and be taxable only at the place where the owner 
 resided, But so earl) did liberal and simple views, in reference to 
 the nature and scope of taxation, come to prevail in England, that the 
 first English colonists and lawmakers who came to America do not 
 appear to have brought with them any of the narrow and illogical 
 views which have characterized their descendants. Thus, for exam¬ 
 ple, one of the earliest laws of the Massachusetts colony reads as 
 follow s. j\' o man shall be rated leave (Massachusetts) for any estate 
 
 or revenue he hath in .England, or in any forreine partes, till it be 
 transported thither. (fMlass. Historical Society Collections , vols. 7 
 and 8, page 213*.) And in the first provincial codes of Pennsyl¬ 
 vania, especial care was taken to confine taxation to land, and a very 
 few articles of personal property of a visible character, as slaves, 
 horses and cattle, and to exempt from taxation, debts, accounts, mer¬ 
 chandise, and ships;f But in later days, when laws came to be made 
 by legislators who could not conceive that anything more was involved 
 in taxation, than the raising of a given amount of money, the dis¬ 
 criminating rule in respect to the situs of real and personal propertv 
 was generally adopted, and has resulted in the following absurdities: 
 
 If a citizen, resident of Massachusetts, owns a farm, with cattle, 
 
 * When, therefore, the claim is set up as it has been during the past year, that the existing system 
 of taxation in Massachusetts is founded upon, and is ^justified by the wisdom of the fathers of the 
 Massachusetts colony,” the claim is preferred without any very exact knowledge of what the wisdom 
 of the fathers actually was. 
 
 t In a report of the law committee of the common council of the city of Philadelphia, submitted 
 February l(5th, 1871, we find the following historical review of the tax laws of Philadelphia, under 
 the government of William Penn and his successors in the colonial government: 
 
 These laws “ were framed to avoid repeating errors which had been proven by long experience in 
 Great Britain and the continental countries. Anxious to foster trade, commerce and industry, and 
 make the province the home of a free people, the founder of Pennsylvania came with a plau of 
 government. The earliest enactments of d ! rect tax laws show that lie and those who followed him 
 were as careful, in this regard, in profiting by the most enlightened views of his time as they were 
 in planning the city with broad and regular streets for “a great town.” Anterior to this period, 
 although personal estate hud not attained the magnitude and importance in Great Britain that it lias 
 at this time, yet tax laws had been enacted to rate it and make it pay part of the public burdens. 
 These laws were-found to be inquisitorial in their nature, and by concealment, evasion, and perjury, 
 were not only demoralizing to the people, but the enlarged basis was fouud to be more unequal 
 than the retention of a few subjects for the levy. Added to this, the higher rate of interest paid in 
 France and other continental countries drew from the kingdom capital which should have been 
 retained to improve their own country and give employment to the people. The English govern¬ 
 ment, therefore, wisely abandoned this system, and it was in the light of these facts that our first 
 enactments were made. We find the Provincial Council (1683) first determining that “ a publick tax 
 on land ought to be raised to defray the publick charge," and the enactment of 1700, fixing county 
 rates and levies (which law was not enrolled), is believed to have been not larger in the subjects of 
 county rates than in the act of 1724, which were real estate, horses, cattle, sheep, negroes and a 
 poll-tax. It will lie noticed, that the personal estate here enumerated was visible property not smv 
 
18 
 
 Report of the Commissioners to 
 
 sheep, or horses, grazing upon it, in New York, the tax officials of 
 Massachusetts hold, that while the situs of the land is in New York, 
 the $itus of the stock equally tangible and visible (by virtue of the 
 rule that personal property follows the owner), is in Massachusetts; 
 and they tax the 'owner there for the same accordingly. If, however, 
 a citzen resident of New York owns stock situated upon a farm in 
 Massachusetts, the latter State ignoring her former rule of procedure, 
 taxes this property by reason of its being within her territory and 
 jurisdiction, and without any reference to the domicil of its owner. 
 New York, rightfully adopting this latter rule, the citizen of Massa¬ 
 chusetts, in the first instance, is inevitably subjected to double taxa¬ 
 tion on one and the same property; and the citizen of New \ ork 
 would be subjected to the same treatment, were it not that the courts 
 of New York, some years since, decided that the power of the State 
 of New York to tax visible, tangible property, was strictly limited to 
 property actually within the territory of the State. 
 
 In other respects, however, the courts of New York have, left the 
 law of New York governing the situs of personal property the same 
 as in Massachusetts, and therefore it is that most of the personal pro¬ 
 perty of the cities of the State, enjoying the advantages of cleaned 
 and lighted streets, the protection of the police, and of other acts of 
 municipal administration, must be taxed, if taxed at all, where the 
 owner resides; which may be, and frequently is, in an agricultural 
 town, where there are few expenditures and a low rate of taxation. 
 But when we come to mortgages held by foreigners, and negotiable 
 bonds deposited with the comptroller of the State by foreign insurance 
 
 ceptible of concealment, ancl that debts, accounts, merchandise and ships, are nowhere mentioned. 
 In the several enactments that followed in 1795, 1799, and 1834, the subjects of county 1 evy were 
 substantially the same, sheep and slaves being omitted in the last act, and officers added to the two 
 , last, and it was not until 1844, a period when the State, by large expenditures, had become embar¬ 
 rassed, that, by the act of 29th day of April, 1844, mortgages, money owing by solvent debtors, 
 6tocks, household furniture, public loans, watches, etc., were made taxable for county purposes. 
 The attempted enforcement of this act was so injurious to the people, by driving capital and indus¬ 
 trial establishments from the State, and so evaded in returns, that by common consent the law 
 remained on the statute book a dead letter until the consolidation of the city.” 
 
 “ At that time (1854) the question was again discussed, and although the councils of the city had 
 the power to impose the tax rate upon all the subjects of taxation, in the thirty-second section of 
 the act of 1844 we find, by the first ordinances, they limited the levy to real estate, furniture, horses 
 cattle and pleasure carnages, and so continued until 1864, when an act was passed empowering the 
 city to levy taxes on all the subjects of taxation contained in that section of the act of 1844, a power 
 which they possessed before, but had not exercised.” 
 
 11 Since that time the authority of the city to lev}' a tax on mortgages, stocks of Pennsylvania 
 corporations and occupations, has been repealed. In considering the enlargement of the subjects 
 of levy in this city, the fact must not be lost sight of, that the State does not impose any tax on real 
 estate for State purposes, but derives all its revenue from corporation stocks and loans, merchantUe 
 license, tavern licenses, collateral inheritance, etc., and it is estimated that of the gross receipts for 
 1870 ($6,336,603.00), more than two-fifths of the amount ($2,600,000) was derived from the property 
 and business interests of the citizens of this city.” 
 
Revise the Statutes relative to Taxation. ]<j 
 
 ; companies, then Xew York, equally inconsistent with Massachusetts, 
 reverses the ordinary rule of assessment, namely, that “personal pro¬ 
 perty follows the owner, and in its place taxes such mortgages and 
 1 bonds, without the slightest regard to the domicil of their owners! 
 
 Again, can there be anything more absurdly illogical than the law 
 ot Massachusetts, which provides that personal property belonging to 
 persons under guardianship shall be assessed to the guardian in the 
 place where the ward resides , in case the ward is an inhabitant of the 
 I State ; but if the ward is a citizen and resident of another State , the 
 I irroperty in trust shall be taxed to the guardian in the place where he 
 I is an inhabitant. If, therefore, it should so happen that the guardian 
 I resides in Massachusetts, the ward in Connecticut, and the property 
 in trust be personal property in the city of Xew York, the same pro- 
 I perty would be certain to be taxed twice, and possibly three times.* 
 
 That such anomalies and absurdities should be retained in the local 
 [ tax codes of the United States after every other nation has discarded 
 l them, is surprising; but that in this latter half of the nineteenth cen¬ 
 tury, when the effort is being constantly made to lift society to a 
 I higher plane, by making the law of abstract right and justice para- 
 I mount to all considerations of self-interest and expediency, it is infi- 
 \ nitely more surprising that intelligent law makers .and administrators 
 [ should be found willing to defend such anomalies, and even advocate 
 t their continuance. 
 
 By the laws of Xew York, indebtedness in valuation for taxation is 
 [ allowed to offset assets in the case of personal property, on the general 
 I ground that it is unjust to tax a man on property for which he is 
 I indebted, and practically tliat the enforcement of a contrary rule would 
 | seriously interfere with the vast commercial transactions of which Xew 
 York city is the center; but no man can assign any good reason why 
 | indebtedness should be allowed to offset assets in the shape of cattle, 
 i merchandise, money or machinery, and not offset assets in the form of 
 land and buildings,' except that it would be doubtful whether the State 
 ; under the latter rule could collect an adequate revenue. Massacliu- 
 [ setts meets this difficulty by refusing to allow indebtedness to offset 
 I or diminish the valuation of any tangible property; but. her citizens, 
 when consulted privately, speak of the enforcement of the law as an 
 i absurdity and a failure. Isew York, on the other hand, as before 
 
 * That the commissioners are not indulging in any mere fanciful hypothesis on the subject of 
 [ double taxation under the laws of Massachusetts, they would state that assessments invoMng the 
 L conditions stated are now (January, 1872) pending and in dispute,—the ward in one instance resid¬ 
 ing in Boston, the trustees in Connecticut, while the property assessed to the ward (through the 
 trustees, directly or on its income), is in great part bank stock and real estate in Xew York city. 
 
20 
 
 Refort of tee Commissioners to 
 
 intimated, allows indebtedness to offset one species of property; but 
 in disregard of every principle of equity, refuses to make the applica¬ 
 tion of the rule to real estate. 
 
 From these and other illustrations, which might be multiplied to 
 almost any extent, it seems clear that any claim which the advocates 
 of the existing system may set up in its behalf, that it is uniform, 
 theoretically equitable, and fails only through lack of efficient adminis¬ 
 tration, has no foundation in truth; while experience shows that it is 
 only necessary to carry out the principles of the. present system of 
 local assessment to their logical conclusions to demonstrate and render 
 palpable their inequalities, fallacies and absurdities. 
 
 So much, then, in answer to the first question, “ is an arbitrary , 
 inquisitorial and illogical system of taxation in itself desirable f n 
 
 Second Question. 
 
 In answer to the second question, “ is such a system anywhere 
 effective , or can such a system be made so f” the commissioners would 
 return an unqualified negative, and in support of their position submit 
 the following evidence: 
 
 1st. In Massachusetts,where the inquisitorial, arbitrary system is car¬ 
 ried out as fully as it ever can be in a country having a constitutional 
 form of government, and any decent respect for personal freedom and 
 equal rights, there is no intelligent person who will claim for it any 
 more than a partial success. Here double, triple, and even greater 
 taxation of personal property is not uncommon, and there has been 
 one case brought to the attention of the commissioners where a man 
 was taxed seven times in one and the same year for the same capital. 
 The laws of the State also require that real estate, merchandise, stock 
 in trade, and corporate stocks, shall all be assessed without any deduc¬ 
 tion of debts, and that all residents of the State shall be taxed for per¬ 
 sonal property situated in other and foreign States and territories, no 
 matter whether such personal property consists of visible, tangible 
 objects, like cattle grazing on the plains of Illinois or Texas, stocks of 
 goods, or machinery in California, ships registered in the port of New 
 1 ork, bullion in the Bank of England, or intangible, invisible rights 
 to property, like evidences of indebtedness and negotiable instru¬ 
 ments. In some towns in Massachusetts, moreover, they have a way 
 of publishing and distributing a list of each man’s personal property 
 that can be got hold of, even down to the family cow and pig, the 
 halt dozen hens, and the sleigh bells and horse blankets, and yet not¬ 
 withstanding this repeated taxation, this minute inquisition, this reach- 
 
Revise the Statutes relative to Taxation. 21 
 
 ing out all over the world to find property, and notwithstanding the 
 investment of her officials with almost unlimited power, the amount 
 of personal property assessed in the whole State of Massachusetts to 
 individuals has never been but little more than half the valuation of 
 the reality, and in some of her prosperous towns and cities is not equal 
 to one-third, while there can be but little doubt that if the law was fully 
 executed in respect to so much only of personal property as is exclu¬ 
 sively within the territory of the State, that the amount claimed 
 would fully equal, and probably far exceed, the aggregate value of all 
 the real property returned for assessment. 
 
 As a further illustration that the system of Massachusetts is a fail¬ 
 ure, even at the point — Boston — where it is acknowledged to be car¬ 
 ried out with the greatest degree of effectiveness, it is only necessary 
 to examine the records of the Boston Stock Exchange and notice the 
 prices which prevail for securities bearing a comparatively low rate 
 of interest. Thus in May, 1871, Boston six per cent currency bonds 
 sold for lOlf; Massachusetts, Maine, Connecticut and Xew York Gs, 
 100 to 106; Beading B. B. 6s, 108; Cambridge City do., 99£. Bow 
 will any sane man believe, that citizens of Boston, or Massachusetts, 
 or other Xew England States, where the same system of taxatiou 
 prevails, buy these securities at the prices quoted, and pay a rate of 
 taxation of from one and a half to two per cent on their market 
 value — thus reducing their annual interest to four and a half or 
 four per cent — when bonds of the United States paying five per cent 
 interest and free from all taxation, or first mortgage railroad bonds 
 paying seven or eight per cent interest could be bought for about the 
 same money? 
 
 The most intelligent *of the Massachusetts tax officials frankly 
 admit that they have no expectation of any result under their system 
 much better than what is already attained to; and if this is so, we 
 have then an admission, or rather demonstration, that this same sys-* 
 tern, which is advocated mainly on the ground that it works uniformly 
 and equally, can have no legitimate claim to either characteristicj 
 inasmuch as to tax one man for one species of property, because through 
 his honest} T , ignorance, or inability to escape, he can be laid hold of, 
 and fail to tax another man for precisely the same description of pro¬ 
 perty, because he is cunning and unscrupulous, and so cannot be laid 
 hold of, is not taxation, but arbitrary confiscation. Xay more, this 
 same system punishes a man for being honest or ignorant, by making 
 him pay not only his legitimate proportion!of taxes, but also an addi- 
 
Report of the Commissioners to 
 
 22 
 
 tional amount to make up for the deficiency occasioned by those who 
 by reason of cunning and dishonesty do not pay. 
 
 Principle of Brigandage Applied to Taxation. 
 
 It should also not escape attention, that the practice of taxing 
 property outside of the territory and jurisdiction ol a State, and which, 
 therefore, the laws of the State can in no ways protect, merely 
 because the owner is a citizen or resident ot the State, rests upon 
 identically the same principle as that which constitutes the basis of 
 brigandage, namely, that the control of the person ot the victim, con¬ 
 fers the right to a revenue consisting of a percentage of the value of 
 all the victim’s property of every description and wherever situated. 
 (For further discussion of this point, see supplement.) 
 
 But if it be said, as it actually is, that in this species of levying, it 
 is not the property outside of the State that is actually taxed, but 
 that the property is simply taken as the measure of the ability of the 
 owner to pay, who, being a resident within the State, is unquestiona¬ 
 bly subject to its jurisdiction and authority; the answer is, that if 
 this is the intent, the laws nowhere express it, for they particularly 
 specify property, and not persons; and that if it were otherwise, the 
 change would simply be one of form, and not of substance. Or to 
 put the matter even more practicably, does any one suppose that any 
 State could get round the exemption of United States bonds from 
 taxation, by providing that the amount of such property should he 
 taken as the measure for the assessment of a poll or personal tax on 
 any individual holding such property? 
 
 When, therefore, a State in the exercise of its authority, virtually 
 proclaims that it is bound to consult its own interest irrespective of 
 justice, and that the possession of might confers right, it is not to be 
 wondered if a portion of its citizens turn round, and by their frauds, 
 evasions and concealments, practically answer;— 
 
 “The villainy you teach me\ 1 will execute; and it shall go hard , 
 hut I will letter the instructions .” 
 
 And that they have made this answer, the condition of local 
 taxation in nearly every State in the Union, the open disregard 
 of oaths, and the contempt in which the law everywhere has fallen, 
 are sufficient witnesses. 
 
 The Present Tax System of New York Incapable of Execution. 
 
 2d. The present law of New York, requires the assessors charged 
 with its execution, “ to ascertain ” (“to make certain’’—Webster), 
 
Revise the Statutes relative to Taxation. 28 
 
 “ ^ l0 ta - Na kle personal property ” of all taxable inhabitants of-the town 
 or ward, and the assessment must include all the taxable personal 
 property owned by the persons assessed within the State; and further, 
 a valuation of taxable property is only to be reached by deducting 
 debts due, from the personal property that is subject to taxation. 
 Now 7 , it is a fair question, whether this law as it stands to-day upon 
 the statute book, is not in itselt a nullity, for the reason that it requires 
 an act to be done which from the very nature of the case it is impossi¬ 
 ble to do, and it is understood that some assessors in the State, take 
 this view of the case. 
 
 I hey allege that even it they have the power and capacity to find 
 out, and examine, and appraise or estimate all visible tangible per¬ 
 sonal property subject to taxation, that the tax-payer alone can know 
 the amount ot his debts, and therefore that no assessment can be 
 made on an individual according to a fair construction of the lan¬ 
 guage of the statute, unless the tax-payer will voluntarily report the 
 amount of lus invisible and intangible property, and also the amount 
 of his debts. The law, however, does not compel or require the tax¬ 
 payer to make any such report, nor does it authorize the assessors 
 to guess about taxable property that may have no existence, and 
 about which they cannot have any certain knowledge or informa¬ 
 tion. It is, therefore, worthy of consideration whether the law of 
 New York, as it stands to-day, does not in great part defeat itself, and 
 whether the assessors are not fully justified in declining to act as guess- 
 ers and clairvoyants in such matters as they cannot by any possi¬ 
 bility know (ascertain), and in abandoning all attempts to value and 
 assess personal property of an invisible, intangible character.-' It is 
 
 * In this connection, the following letter, addressed during the past year, by one of the assessors 
 of the city of Syracuse, N. Y., to the mayor and common council of that city, resigning his office 
 of assessor, and giving reasons therefor, will be read with interest: 
 
 To the Mayor and Common Council qf the city of Syracuse: 
 
 Gentlemen.—-I have the honor herewith to tender my resignation as assessor, and ask that you 
 accept it, for the reasons involved in the following statement: 
 
 As would naturally be supposed, the duties, powers and obligations of assessors are defined, 
 regulated and enforced by the statute; and its provisions in this respect are so ample, and its 
 instructions so plain and specific, that every judicial act for which it provides, is entirely freed from 
 the restraint it would impose were its teachings less exact, or did its language admit of a doubtful 
 construction. It offers to assessors but one alternative, of assessing property in the manner and at 
 the rate it prescribes, or of violating their oath of office. For it persistently requires, that all the 
 pioperty liable to taxation, for State, county and municipal purposes, shall be assessed at its full and 
 true value; and then, as if to guard against the possibility of mistake, defines that value to be the 
 value, at which they would appraise the same in payment of a just debt due from a solvent debtor, 
 i Accepting this as the necessary and only authorized criterion by which the judgment is to bo 
 guided and governed in their estimates of value, it only remains for assessors to ascertain, in the 
 most reliable way possible, what that “ full and true value ” is, and then to assess accordingly: and 
 from the responsibility of so doing I know of no avenue of escape, even though the pretexts by 
 which it is sought be never so plausible or urgent. Admitting there is none, how can assessors con- 
 
24 Report of the Commissioners to 
 
 not moreover, to be wondered that in some towns of this State 
 there is no personal assessment levied; and that in some counties 
 the entire valuation of personal property is not by any means equal 
 to the personal property known to be in the possession of certain 
 corporations. Other States, which adopt the system of taxing per¬ 
 sonal property of every description, attempt to overcome this by 
 requiring the tax-payer to present and swear to a list of all ot his 
 property ; and in default thereof, fine and arbitrarily doom or fix an 
 assessment; but New York lias thus far refused to subject her citizens 
 to the exercise of any such proceedings; and the experience of other 
 States, as already pointed out, shows that the results, attained to 
 thereby, have no claim to be regarded in the light ot a success. 
 
 sent to assess property at only one-third the value required by law ? And what shall excuse or justify 
 them, if they do ? 
 
 But I may be asked, what difference does it make with tax-payers, whether their property is 
 assessed at a high or low figure, if, relatively , it is all estimated by the same rule of valuation? I 
 answer none whatever, practically; nor would it, if assessed as the statute requires, provided, that 
 all through the State, the same inflexible rule was applied in determining values. But the truth is, no 
 uniform standard of valuation is employed by assessors, even at the low rate at which property has 
 everywhere been assessed ; for an examination and comparison of the returns made by them, will 
 show that the scale used by them is so very flexible in its character, and is graduated between 
 extremes so remote as to allow real estate to be assessed anywhere from tivenfy to .fifty, and personal 
 from thirty to one hundred per cent of its full and true value," as determined by current marker 
 prices. In the language of another, this free and easy way of adjusting values under the law, “is 
 not only grossly unjust, but it is demoralizing to the last degree.” Another, in his attempts to 
 make the practice odious, brands it as a “gigantic fraud.” 
 
 So much then for the requirement of the statute as to valuation, and the practice under it. Per¬ 
 mit me now to say, in view of it, could I be persuaded, for reasons not yet apparent, that it was.my 
 duty to go into the field and, “to the best of my ability” help to do the preliminary work which is , 
 required to be done, prior to July 1st, doing it under the rule of valuation applied by assessors 
 hitherto, and which it is proposed to reapply the current, year also, I could not, when the assessment 
 rolls should have been fully completed, consent to subscribe to an oath thereon, that in estimating 
 the value of the real and personal property assessed therein I had complied with the requirements of 
 the law when, in fact, I had knowingly and pmposely violated it at every step, save, perhaps, in 
 assessing the shares of bank stock. 
 
 Were I so to swear, I should deem myself guilty of and justly amenable to the penalties for willful 
 and corrupt perjury, a crime which would find neither excuse nor justification in the acknowledged 
 fact that, all through the State property is everywhere assessed in this same irresponsible and 
 arbitrary manner. 
 
 What defenses arc set up for this constant violation of the law from year to year, or by what 
 ingenious processes of reasoning it is made both possible and easy to take the oath referred to, 1 
 know not. But this I do know; had I been in possession of the above facts at the time it was pro¬ 
 posed to use my name, in connection with the nominations to be made for the office to which I have 
 been elected, I certainly should have refused it. 
 
 If I have succeeded in making myself understood in this review, I have accomplised three things: 
 
 1st. I have made it appear that it would be inconsistent, unreasonable and unjust to increase the 
 valuation of property in this city, unless there was a corresponding increase throughout the county 
 and State. 
 
 2d. That the oath without which the completed assessment rolls would possess no legal force, is 
 neither self-adjusting, nor is it a mere matter of form. If taken at all, it must be without change or 
 modification. If not taken, payment of the taxes assessed is a voluntary matter, entirely. 
 
 3d. That my resignation is based upon scruples of conscience under the oaths required of me; 
 and these I cannot sacrifice. Very respectfully, 
 
 A. G. SALISBURY. 
 
Revise the Statutes relative to Taxation ,, 55 
 
 Personal Property Free From Taxation? 
 
 But whether the existing tax system of Kew York defeats itself in 
 the manner indicated or not, other influences, arrising from causes 
 over which the assessors can have no control, have very effectually 
 combined to render it practically inoperative. 
 
 rnitcd States Instrumentalities.—Thm, of the personal property 
 of the whole country, an amount equal to probably one-fifth— suppos¬ 
 es the same to be all owned in the country—is represented by United 
 States notes and securities, which are by law placed beyond the reach 
 of State authorities for assessment and taxation. Under this head 
 would be also included, so much of personal property as is represented 
 by “cash,” in actual possession, or on deposit, the same being like the 
 bonds, a national instrumentality.* 
 
 Imported goods, wares and merchandise, in original packages, in 
 possession of the merchant importer, also stand in the same category.f 
 State bonds .—The fact that the supreme court of the United States 
 has decided that no State can tax any instrumentality of the federal 
 government—the power to tax involving the power to destroy—is 
 now universally recognized, and its legality acknowledged; but it is 
 not so generally known that it has also been decided, that the federal 
 government cannot tax a State instrumentality, as for example, in 
 the special case decided, the income arising from the salary of a State 
 office; and that Congress some years since, acting under the advice of 
 the supreme court, repealed so much of the internal revenue law, 
 as required the affixing of stamps to State processes, warrants, com¬ 
 missions, etc. But it would seem clear that what has been decided 
 to be unlawful for the federal government, to do in respect to the 
 States, is equally and unquestionably unlawful for the States to do in 
 respect to each other; as for example, the taxing of the instrumental¬ 
 ity or the borrowing power of one State by another State. And 
 hence the commissioners hold, in contormitv with the opinions of 
 some ot the best legal authorities in the country, with whom they 
 have conferred, that the bond of a State, issued for the purpose of 
 raising money, or as an acknowledgment of its indebtedness, is not 
 taxable by any authority other than the State which issues it.J 
 Personal grroperty exempted by Stale legislation.—In addition to 
 
 •Some States, as Connecticut for example, require their citizens to return in the list of personal 
 property, “ cash on hand,” and then tax the same for State purposes. This requirement and pro- 
 cecduro is, however, clearly beyond the power of any State to do. as there can be no cash in tin; 
 sense of current money, which is not a national instrumentality of precisely the same character as 
 a bond of the United States bearing interest. 
 
 tSee supplement. 
 
 +For legal decisions beating on this subject, see supplement to this report. 
 
Report of the Commissioners to 
 
 26 
 
 securities of tlie above named character, whose exemption from taxa¬ 
 tion is universal, there is also a very large class of property whofee 
 exemption is more limited, but sufficiently broad to influence the situs 
 and determination of capital, and so give exemption from local taxation 
 to the very classes and forms of capital for the taxing of which the reten¬ 
 tion of the present New York system is constantly advocated. Thus, 
 for example, the States of Pennsylvania and New Jersey, for some 
 ^ears, have united in exempting bonds and mortgages on real estate 
 from taxation, in those counties where investments of this character 
 by non-residents and citizens are most likely to be made. Dining 
 the past year also, the legislature of Maryland has swept from her 
 statute book, all acts imposing taxes on mortgages in the city and 
 county of Baltimore; while the legislature of the territory of the Dis¬ 
 trict of Columbia, has gone even still further in this same direction, 
 and has exempted from direct local taxation all evidences of indebted¬ 
 ness ; namely, railroad, corporate and municipal bonds, bonds and 
 mortgages, money at interest, book accounts, etc. 
 
 The laws of the State of New York also exempt from taxation the 
 deposits and surplus of savings banks, involving personal property to 
 the extent of nearly three hundred millions of dollars ;* all personal 
 property of a visible, tangible character — stocks of goods, and chattels 
 of every description — belonging to her citizens situated without the 
 territory of the State; and all property in transitu , which by a decision 
 of the court of appeals has been held to exempt from taxation all 
 firms and corporations established in other States, but selling their 
 own goods exclusively in New York through permanently located 
 agents and warehouses. 
 
 And, finally, another door for the exemption of personal property 
 from taxation in New York, one wide enough to admit all owners ot 
 such property to pass through, and one practically beyond the power 
 of the State officials to close, will be found to have been opened dur¬ 
 ing the past year by a decision of the State courts, that not only is 
 property invested in national securities exempted from all State cog¬ 
 nizance and taxation, but that indebtedness created by the purchase 
 or hypothecation of such securities, whether incurred in legitimate 
 
 * Before the year 1867 the surplus of savings hanks, which are practically “ nobody’s property, 
 were liable for taxation, but during that year the following ingenious law was enacted: “ The privi¬ 
 leges and franchises granted by the legislature of this State to savings banks or institutions for sav¬ 
 ings are hereby declared to be personal property and liable to taxation as such in the town or ward 
 where they are located to an amount not exeeding the gross sum of their surplus earned (after 
 deducting the amount, of such surplus invested in United States securities).” It seems unnecessary 
 to add that after this the amount derived from the taxation of the surplus of savings banks was very 
 inconsiderable. 
 
Revise the Statutes relative to Taxation. 27 
 
 transactions or avowedly for the purpose of evading taxation, may be 
 used to offset a similar amount of other personal property, and thus 
 withdraw the same from any control whatever by the State authorities 
 for valuation and assessment.* 
 
 The person loaning the money on such collateral, it may be 
 remarked, will also undoubtedly regard his loan as an investment in 
 United States securities; and as he is permitted to make a secret 
 interpretation ot the facts and ot the law, his conscience will proba¬ 
 bly allow him to swear that so much of his property as is thus repre¬ 
 sented is likewise exempt from taxation. 
 
 When the former report of the commissioners was published, a 
 criticism was* preferred against it, that the exposures which it pre¬ 
 sented of the defects of the existing system and the means reported 
 to for the purpose of evading taxation, were likely to prove exceed¬ 
 ingly damaging to what were left of the “ honest tax-payers,” and that 
 the value ot the report would have been enhanced if much of this 
 information had been omitted from its pages. But the commission¬ 
 ers take a different view of the subject, and hold that if there are 
 ways and means of evading taxation, this information should not be 
 restricted to a few , but that all should be placed upon an equal foot¬ 
 ing. And then again, they would ask, what sort of public policy 
 can that be which does not invite the utmost scrutiny and exposure 
 of details; or, what can be thought of a system of taxation whose 
 efficiency is supposed to be in proportion to the ignorance of the com¬ 
 munity in respect to its defects and irregularities? 
 
 * Supreme Court of New York, Jan, 3, 1871—(Before presiding Justice Ingraham and Judges 
 Barnard and Cardozo)— Assessment of Personal Property— The People ex rcl. Benjamin T. Babbitt v 
 The Commissioners of Taxes and Assessments for the City of Nets York, Bes/xmdents.— The relator in 
 this case was, in April last, assessed by the commissioners ot taxes of this city, on his personal pro 
 perty on $250,000. He claims that, on the 1st of January, 1870, his personal property and assets, 
 other than certain bonds of the United States government, amounted in the aggregate to $845,895.97. 
 and that his debts on that day were $350,084.49; that between January 1 and April 1,1870. the lia¬ 
 bilities and debts of the petitioner increased, and that at the end of April the excess of debts over 
 his assets was greater than on January 1. On the 29th of April, 1870, he addressed to the respondents 
 a written notice, duly verified, to the effect that he was not liable to taxation in any amount for 
 personal estate, and requested them to strike his name from the assessment rolls. From this state¬ 
 ment it appeared the relator was the owner of $250,000, commonly known as five-twenties, which 
 had been purchased by him in the years 1865,1866 and 1867, for permanent investment, which bonds 
 he claims are by law exempt from taxation. The petitioner, therefore, insisted that as his debts 
 exceeded the amount of his personal property, aside from the bonds mentioned, he was not liable to 
 be assessed or taxed in any amount for personal estate, and that those bonds could not be taken into 
 consideration for the purposes of taxation, either as a part of his capital, or for the reduction of his 
 debts and liabilities. The respondent declined to accede to this, but gave the relator notice that 
 they had reduced his assessment to $200,000. From such decision an appeal was taken to this court, 
 which, after hearing, gave judgment in favor of Mr. Babbitt.—Press Report. 
 
28 
 
 Report of the Commissioners to 
 
 Classification of Personal Property. 
 
 Under these circumstances, the difficult question presents itself: 
 How, in a system of taxation arranged to meet the necessities of the 
 State of New York for revenue, shall personal property he dealt 
 with ? And, as preliminary to attempting an answer, it is important 
 to consider, in the outset, how the personal property of the State, in 
 respect to taxation, classifies itself. 
 
 The facts already presented show : 
 
 First. That a very large portion of such property, through the laws 
 of the United States and the decisions of the federal courts, is abso¬ 
 lutely or inferentially beyond the control of the State authority for 
 taxation; such as United States securities, imported* goods in the 
 original package, money obligations of other States, and property 
 owned by citizens whose situs is unquestionably beyond the territory 
 of the State, and consequently beyond its jurisdiction, processes or 
 protection. The commissioners take it for granted that they would 
 not be justified in recommending the legislature to instruct their law 
 officers to reopen all these questions in the courts, with the expecta¬ 
 tion of obtaining a reversal of former decisions, as preliminary to 
 revising the existing system ; and that, pending such action, all efforts 
 for reform be suspended. And if not, then the personal property of 
 the State, included under the above heads, cannot be considered in 
 any new system of taxation. 
 
 Second. Another large proportion of the personal property of the 
 State is of the most intangible character, and in great part invisible 
 and incorporeal. As such it fluctuates in value in the hands of 
 any one individual continually; it is measured by indebtedness which 
 may never be the same one hour with another; it is easy of transfer, 
 and as essential to using is in fact continually transferred from one 
 locality to another, and from the jurisdiction of one State to the juris¬ 
 diction and laws of another and a different State. Now, how is per¬ 
 sonal property of such a character to be reached, valued and assessed 
 for taxation ? Every effort heretofore made in every country to tax 
 it has proved wonderfully uncertain and unequal, and therefore every 
 country that has ever attempted it, with the exception of Holland* 
 
 * Holland, by reason of her immense national debt, the largest comparatively of any country, 
 has been obliged to maintain a most rigorous and extensive system of taxation in order to raise 
 revenue sufficient to the wants and requirements of the Slate. But it has been prominently brought 
 out during the past year in the discussions which have taken place in France on the revision of the 
 French fiscal system, that the decadence of Holland dates almost from the hour when taxes were 
 imposed on manufactories, commerce, fishing industry, and moneyed capital. Business went else¬ 
 where, and with the decline of business the ability to pay taxes diminished, and the burden of taxa¬ 
 tion augmented. ( See Journal lies Economistes , November , 1871; also,' Principles of Political Economy- 
 J. R. McCulloch , pp. 470-71.) 
 
29 
 
 Revise the Statutes relative to Taxation. 
 
 I and the States of the Federal Union, have abandoned the project as 
 I something wholly impractical* Nevertheless the idea is enter¬ 
 tained, and during the past yfer lias been publicly expressed 
 I by men whose opinions are entitled to respect, that all such 
 [ property, or rights to property can be assessed as uniformly and 
 I Efficiently as real estate or rents of buildings; and that it is the 
 I business of the commissioners to devise a way for so doing, and not 
 Ito create difficulties, but to remove them. But to all such as enter¬ 
 tain these opinions the commissioners would propound the following 
 [questions: How can you devise a law to tax the incorporeal, invisible 
 i property ot non-residents? How will you tax the owners of mort^a- 
 ;ges on real estate in New York, who reside in Pennsylvania and 
 pertain counties in New Jersey ? IIow will you tax negotiable instru¬ 
 ments, it owned by residents or non-residents, secured by property in 
 New York, if the negotiable instruments are located out of the State, 
 since the court of appeals has decided that New York cannot tax 
 [property having a situs or location beyond its jurisdiction? How 
 can you tax the 81,000,000,000 of products and manufactures sent to 
 New York annually from other States in the hands of consignors and 
 ; agents, and now exempt from taxation ? How can personal property 
 be reached while debts are permitted to reduce the assessment? 
 What system can be introduced that will enable assessors to see things 
 which cannot be seen, or examine things that are intangible ? 
 
 [ And finally in respect to so much of the personal property of the 
 [State as is visible, tangible and clearly within the territory and juris¬ 
 diction of the State: How shall we deal with such of this property 
 as by the laws of contiguous and competing States is free from taxa¬ 
 tion ? Can we afford to put manufacturing industry, capital employed 
 in improving real estate and in building, shipping engaged in 
 commerce, bonds and mortgages and other evidences of debt, under 
 [disadvantages from which they can readily relieve themselves by 
 simply moving across our borders ? 
 
 [ * Within the past two years the local taxation of Great Britain has been made the subject of spe¬ 
 
 cial inquiry and investigation by a committee of Parliament; and in addition to several official 
 reports, two prize essays on the same subject have been published by the Statistical Society of Lon¬ 
 don : (i. “ On the Local Taxation of Great Britain and Ireland." First and second Tayler Prize 
 
 Essays , by R. H. Inglis Paly race, and John Scott, qf the Inner Temple.) During the past year, also, 
 the necessity of raising increased revenue in France has also drawn especial attention to the subject 
 of local taxation in that country; but it is particularly noticeable, that in neither England or France, 
 has any prominent speaker or writer advocated the direct taxation of personal property; or even 
 Blinded to the subject, except to scout the very idea of such a proposition. 
 
30 
 
 Report of the Commissioners to 
 
 Comparative Decrease of New York during the last Decade. 
 
 Is not tlie small increase of the population of New York during the 
 last decade, 12.94 per cent, as compared with Pennsylvania, 21 per. 
 cent and New Jersey 34 per cent, sufficiently significant to satisfy 
 that’the occasion for temporizing has gone past, and that of practical, 
 soun d action has come ? * 
 
 Effect of Injudicious Taxation on Business Development. 
 
 The following incident, taken from a recent report of the chair¬ 
 man of the hoard of tax revision for the city of Philadelphia 
 Hon. Thomas Cochran, affords a striking illustration ot the influ¬ 
 ence of injudicious local taxation upon business interests within 
 the sphere of its execution. Thus, during the first quarter ol 
 this century, the auction business of Philadelphia in respect to teas, 
 coffee, indigo, drugs, dry goods, etc., was the most important hi the 
 country, and attracted to that city merchants from widely different 
 localities In 1826 the legislature of Pennsylvania, looking for new 
 sources of revenue, increased the taxes on auction sales in Philadel¬ 
 phia to such an extent as to make them one per cent higher than in 
 New York on East Indian goods and three-quarters of one per cent 
 higher on most descriptions of other goods. The result was that 
 merchandise in a great measure ceased to be consigned to Philadel¬ 
 phia, and went to New York, and with the merchandise and sales 
 went also a very large proportion of the foreign shipping owned in 
 
 * Heretofore it has been considered a particularly happy idea by many tax officials in New York, 
 and especially in New England, to endeavor to throw as much as possible of the burden of local taxa¬ 
 tion upon the manufacturing enterprises included within their jurisdiction; and with this view the 
 valuation of the real and personal property pertaining to such industries-especially if the same are 
 incorporatedis placed for taxation at the very highest admissible figures, and above the average 
 of other property; old swamps and bogs, for example, originally having no appreciable tax valuation, 
 becoming in the eyes of the assessors first-class real estate the moment the same have been flowed 
 with water and made available for a mill privilege. In the State of Connecticut the legislators have 
 even made a point of going out of their way, to make sure by a special statute, that “ mills and build¬ 
 ings used for manufacturing purposes,” shall not enjoy the advantages of other property in being 
 rated at less than their real value; but shall be especially assessed at their full value ; and so in fact 
 discriminated against rather than in any way favored. Now what has been the result ? Why Ver¬ 
 mont and Maine having tried this practice for an indefinite period have at last come to a realizing 
 sense, that manufacturing capital has ceased to come or remain within their borders, and prefers to 
 go to Pennsylvania where it is more liberally dealt with; or seeks investment in invisible, intangible 
 securities, representing property in other States, and which, from the very necessity of the case, 
 cannot be discovered by the local tax officials. And having made the discovery, these States are now 
 endeavoring to entice back such capital by promising an exemption from all local taxation; while in 
 Connecticut, although no legislative remedies have been yet proposed, the people of many towns and 
 cities have become fully conscious that the value of their real estate, of their trade, and the aggregate 
 of their population would have been very much greater to-day than it actually is, had a policy of 
 local taxation, more liberal and intelligent than now exists, been heretofore adopted. “We can 
 point,” says one of the leading journals of this State in a recent article on this subject, “tomore 
 than one town in Connecticut where manufacturing enterprises have been actually abandoned on 
 account of the policy pursued by town authorities relative to taxation.” 
 
Revise the Statutes relative to Taxation. gj 
 
 .Philadelphia, and which formerly sailed from that port; After the 
 mischief was done and the business of Philadelphia seriously injured, 
 
 . the legislature of Pennsylvania modified the law, and during the past 
 year, with a wise regard for the State’s interest, swept all such taxes 
 ifrom her statute books.* 
 
 | The legislature of Pennsylvania, during the last year (1871), also 
 ; repealed all existing taxes on trades, professions and employments, 
 thus taking a still further step in the direction of concentrating taxa- 
 ! tion to the fewest and simplest elements. 
 
 I The commissioners would also call attention to the following reso¬ 
 lution, embodied during the past year, as part of the platform of one 
 | of the great political parties of Pennsylvania: 
 
 I “ Resolved K In the judgment of this convention the time has come 
 1 when the State tax on personal estate may be safely abolished I 
 
 How Philadelphia Regards tiie Direct Taxation of Personal 
 Property. 
 
 t During the past year, the subject of the direct taxation of personal 
 property being agitated in Philadelphia, the common council of that 
 ' city requested its law committee (consisting of nine members), to eon- 
 * sider the subject, and prepare a bill “for the taxation of all personal 
 property as now enforced in some of the States of the Union.” This 
 . committee, in February, 1871, submitted a report, declining, in fact, 
 to report any such bill, on the ground that, after careful examination, 
 ^ they were satisfied that it would “injure the business interests of the 
 
 K * The report of the poor law commissioners of Great Britain for 1843 also gives another interesting 
 |l illustration of the effect of injudicious taxation in causing the permanent diversion of a great branch 
 of industry from one section of England to another and less favorable section. It says: “ The prac- 
 . tice of rating stock in trade never prevailed in the greater part of England and Wales. It was with 
 » comparatively few exceptions confined to the old clothing district of the south and west of England. 
 It gained ground just as the stock of the wool staplers and clothiers increased, so as to make it an 
 Object with the farmers and other rate payers, who still constituted a majority in their parishes, to 
 bring in a considerable property within the rate. They succeeded by degrees, but when the practice’ 
 of rating stock in trade was fully established in this*district the ancient staple trade rapidly declined, 
 and withdrew itself still more rapidly into the northern clothing districts, where no such burden was 
 ever cast upon the trade. Whether this transfer of business was in any way aided by the imposition 
 of other taxes in the district and the exemption in the other, cannot now perhaps be distinctly 
 Sf proved? but it is undeniable that the operation must have been in effect a discriminating tax of a 
 very considerable amount against the trade of the one district, and therefore proportionably in favor 
 of the trade of the other. In both districts the trade was of ancient growth, but hitherto the southern 
 had the advantage, for the natural and acquired advantages of the two districts are in most respects 
 ' such as rather to have favored the southern district; i. e., in respect to density of population, posses¬ 
 sion of coal beds, proximity to London, and almost unlimited capital.” The same reportalso brought 
 out another very curious fact in respect to the experience of this English district, namely, that the 
 Krsuccess in raising money which attended the taxing of the w-oolen industries led to great improvi- 
 « dence and expenditure; and relief under the poor rates being increased and distributed injudiciously, 
 “ produced most conspicuous effects in deteriorating the habits and depreciating the wages of the agri¬ 
 cultural laborer.” 
 
 
32 
 
 Report of the Commissioners to 
 
 city, and stop or retard the growth of our industrial establishments.” 
 Discussing the effect of the proposed change on the real estate pro¬ 
 perty of the city, the committee say : 
 
 “ Will the owners of real estate be relieved of any of the weight of 
 local taxation, by imposing a part of the levy on the business of the 
 city % 
 
 “Capital, business and industrial establishments alone give value 
 to city real , estate. With it the real estate can be made to produce 
 revenue, maintain or increase in value ; without it comes deprecia¬ 
 tion in values and want of occupation for large classes of people. If, 
 therefore, a tax imposed on the business interests of the city would 
 have an unfavorable effect upon its growth and prosperity, the transfer 
 of a part of the tax levy to property in business would,.in effect, be 
 an injury to the owners of real estate. This, we think, would be the 
 result. Of the capital in business in this city, the largest interest is 
 in manufacturing. Through the prosperity of our industrial and 
 manufacturing establishments, we have grown and maintained our 
 position as the second city in the union in the last decade. Thou¬ 
 sands of families are maintained by that interest, and whilst we may 
 attribute our advance in this respect, in part, to our favorable location, 
 well-housed population, and the tine agricultural country surround¬ 
 ing ns, yet the ability of the manufacturer to compete in other mar¬ 
 kets with the manufacturer of Massachusetts and Connecticut, is more 
 largely owing to the fact that here the capital of the manufacturer is 
 untaxed, than has been generally supposed.” 
 
 u A careful examination of the facts show that, in Xew England, 
 private capital is taxed, and being at about the same rate as corporate 
 stocks, has probably induced the formation of manufacturing com¬ 
 panies, the corporate form having some seeming advantages in the 
 exemption in part of individual liability and facility to aggregate a 
 large capital at the start.” 
 
 “ I n the city ot Philadelphia, private capital in manufacturing 
 being untaxed, except for the value of the real estate occupied 
 (machinery not being estimated in the valuation), the business has 
 been encouraged in the hands of individuals and firms, many of 
 whom, with but limited capital at the start, have been enabled to 
 enlarge until they give employment to great numbers of our people.” 
 
 u The aggregate ot the establishments of these enterprising men 
 has made our city the largest center of manufactures in this country. 
 The business which they have concentrated here, gives employment 
 to and sustains an important part of our population, and materially 
 
Revise tiie Statutes relative to Taxation. 33 
 
 assists in maintaining the value of real property. We cannot afford 
 to try the experiment of imposing a tax on our manufacturing 
 
 interests 
 
 Difficulties in.the Way of Estimating Visible Personal 
 Property. 
 
 But irrespective of the influence of the legislation of other States. 
 ,hc commissioners assert, that no means can he devised of taking an 
 inventory, or estimate of even tangible personal property witlfanv 
 , degree of accuracy, which will not entail an expense about equal to 
 tlymiount collected at the present rate of taxation; for the com- 
 niKsioners assume, if the existing laws relative to taxation are 
 to be allowed to remain on the statute books, that sooner or later, the 
 attempt must be made to enforce them. If, therefore, we are to have 
 equality and efficiency, an official inspector must be upon every farm 
 the entire year to ascertain its annual products, or the average of per¬ 
 sonal property on the farm; and every house, store, shop, or piece of 
 occupied property, must be placed continually under the espionage of 
 an expert. Besides, it cannot certainly be claimed to be equaf and 
 just taxation, to admit the goods of all citizens of other States free 
 from taxation, to be sold at wholesale and retail in competi¬ 
 tion with similar property of citizens of New York, which is 
 subject to heavy taxation. At present, there are whole blocks of 
 stores in New York city, occupied by agents of New England, New 
 Jersey and Pennsylvania manufacturers, who consign and sell'their 
 goods free from taxation, while the .citizen of New York occupying 
 analogous stores, pays taxes (theoretically at least), on his entire stock 
 or capital. New York has a right to tax these goods, for the Supreme 
 Court of the United States has recently made a decision, that impor¬ 
 tations from sister States may be taxed at the same rate as the same 
 articles are taxed in the State into which the importations are made 
 but to do this in such a way as to insure equality of taxation in 
 every locality, would require not only a system of customs along the 
 State borders, but a system of octroi* about every city and town. But 
 
 *Tlie “ octroi ” system of taxation in Europe, is one by which taxes are levied in towns and lar«e 
 villages, on meat, vegetables, wine and other articles of living, brought into them for the use of the 
 inhabitants, and has for a long time in continental Europe been a favorite method of raising local 
 revenue. In Prussia, during the past year, the government, in deference to an almost universal 
 public sentiment has introduced a bill in parliament, providing for the entire abolition of the 
 " oclroi >'” ,)nt it is to be noted, that in place of substituting for it a tax on stocks on hand, evidences 
 of debt, money capital and the like items of personal property, the government proposes to. make it. 
 compulsory on all towns to establish a species of income tax—in which taxes are not levied upon tiie 
 lowest rate of income. In France, on the other hand, the octroi is yet in full operation. 
 
 3 
 
t , 4 Report of the Commissioners to 
 
 wliatj under sucli a system, would become of the present commercial 
 and financial supremacy of the State ? 
 
 Special Taxes on Non-resident Traders Unconstitutional. 
 The supreme court of the United States, in the case of WarcU 
 The State of Maryland, December, 1871, has decided, that special j 
 taxes imposed by States on.non-resident traders, are unconstitutional; 
 and that non-resident merchants, agents, commercial travelers and 
 the like, may “sell, or offer, or expose for sale” any goods in any ; 
 State, “without being subject to any higher tax or excise than ttyt 
 exacted by law of permanent residents.” Cut as the practice of tax- 
 inn- merchants and dealers for the mere privilege of doing business, 
 or making the procurement of a license the preliminary condition of 
 doing business, is generally repugnant to popular sentiment, and has* 
 as yet been put in practice in only a few localities', the decision above 
 referred to, is equivalent to allowing non-residents to do business on 
 a basis of advantage not allowed to merchants and dealers who are 
 resident, and as such are taxed upon their stocks of goods offered for.sale, 
 and upon all the capital and machinery employed in the production 
 of such stocks. The opportunity which is offered in large, border 
 cities, like New York, for the transaction of an immense business bj 
 sample by citizens of other States, constitutes, therefore, anoij 
 strong argument in support of the position of the commissioners, 
 that the local taxation of New York should be so adjusted that there 
 should not be a discriminating tax against resident merchant citizens 
 and manufacturers and in favor of non-residents. 
 
 The Proposed New System of Taxation. 
 
 Having thus demonstrated the absurdity of the theory of the sjs 
 tern of local taxation at present adopted by New York, the inequality 
 and irregularity of its administration, and the injury which is certain 
 to accrue to the material'interests of the State from its longer con¬ 
 tinuance, the commissioners come next to the consideration of the 
 third question: 
 
 “ Can any system of local taxation be devised , which will p® 
 effectual for revenue , be free from arbitrary and inquisitorial 
 ods of administration , and at the same time be made to work m 
 strict justice and uniformity f” 
 
 And, in answer to this question, the commissioners, as the res" 
 of a most careful investigation of the whole subject, and after haul 
 endeavored to thoroughly acquaint themselves with the experience! 
 
35 
 
 Revise the Statutes relative to Taxation. 
 
 other States or communities, present herewith a code of a new sys¬ 
 tem of local taxation ; in respect to which they feel entire confidence 
 that it will prove in every way remedial of the. most serious of the 
 evils experienced und’er the present system, allow of simple, effective 
 and economical administration; and in opposition to which no objec¬ 
 tion has as yet been presented which cannot be shown to have its 
 origin either in a misconception of the views of the commissioners, or 
 in a prejudice in favor of old ways and observances, simply because 
 they are old and customary, and not because they have been founded 
 on either justice or expediency. 
 
 The main features of the proposed new system may be stated as 
 follows: 
 
 First. Taxation of real estate , lands and buildings , at a full and 
 fair market valuation. 
 
 The existing laws require this; but it is perfectly well understood 
 that at present-so much of this law as relates to valuation is a per¬ 
 fectly dead letter, and that in place of “full and just valuation,” the 
 valuation, as before shown, runs down as low, in some instances, as 
 fifteen or twenty per cent; and on the average for the whole State is 
 not probably in excess of forty per cent; and furthermore, that every 
 assessor in the State in annually certifying under oath that he has 
 complied with the law, annually swears to that which he knows is 
 untrue, and can only exculpate himself of moral as well as technical 
 perjury, by the plea that his official acts deceive no one, and are 
 understood to be a mere form, without meaning or significance. 
 
 ISTow, it would seem clear, that the first step in the way of reform 
 of the existing tax system, is to provide for the execution of this law; 
 and the commissioners in advance charge, that no legislator, or citi¬ 
 zen can oppose or be indifferent to the adoption of measures calcu¬ 
 lated to bring about such a result without becoming thereby a party 
 to fraud and a promoter of social immorality. It is also important to 
 state, that the recent experience of the cities of Boston, Philadelphia 
 and Chicago shows, that there is no practical difficulty, as is often 
 supposed, in valuing and assessing real estate at its true or approxi¬ 
 mative cash value, inasmuch as this method lias been successfully 
 adopted in each of the above named cities as a substitute for the for¬ 
 mer “ guess-work ” plan of rating such property. 
 
 And although it is an almost self-evident proposition, it may, never¬ 
 theless, be not out of place to recall to mind, that it is the amount of 
 expenditure and not the valuation that governs and controls the 
 amount of taxation ; and that making the valuation of one and the 
 
86 
 
 Report of the Cojijijssioeeps to 
 
 eame description of property invariably conform to one and the same 
 standard, cannot increase the taxes of any citizen, unless be is now 
 unjustly taking advantage of the defects of. the existing law to ine¬ 
 quitably pay less than his fair proportion at the expense of some other 
 
 citizen. . 
 
 They also recommend that the administration of the whole tax 
 
 system of the State be placed under the charge of some supervising 
 officer, intrusted with full powers, whose business would be to see 
 that the laws, whatever they may be, are lived up to and enforced; 
 and that he shall be especially required to prosecute, or cause tote 
 prosecuted, every assessor of the State who deliberately makes oath 
 that he has complied with the provisions of the law, when the fact 
 can be made evident that he has not done so. . I 
 
 Second. To tax moneyed corporations of the State in conform.^ 
 with existing laws. 
 
 Third, A little reflection and an examination of the statistics of 
 taxation will show, that under the two heads above specified are inclu¬ 
 ded almost all the property of the State now returned for assessment; 
 and that what is not thus included is of a character very difficult, if 
 not impossible, to fairly value and assess; and that the continued 
 attempt, as now, to directly ascertain its value and assess it, will be 
 productive of very little revenue, and for reasons above presented 
 must prove disastrous to the future development and prosperity of the 
 State. The commissioners, therefore, propose, as a substitute for all 
 such defective taxation, and as an equivalent for the present tax on 
 individuals for personal property, to tax the occupier, be he owner or 
 tenant , of any and every building used as a dwelling , or for any 
 other purpose, on a valuation of three times the rental or rental value 
 of the premises occupied ; but not including under such assessment , 
 any land expept such as the building stands on, or is essential for 
 access thereto. 
 
 All property not embraced under one of these provisions, as above 
 stated, to be exempt from taxation. 
 
 Relation of Real Estate to Personal Property. 
 
 The general principles, irrespective of considerations of expediency 
 on which the commissioners base the essential feature of their system) 
 may be briefly presented as follows: 
 
 The market value of real estate is always proportional to, and 
 dependent on, the amount of personal property, or rather productive 
 capital, placed upon it, or in its immediate vicinity. Land in itself 
 
-37 
 
 He vise tiie Statutes relative to TaxatIox 
 
 bus originally no value, as it cost nothing to any man to produce it 
 If there is no personal property or productive capital connected with 
 it, or reflected on it, it will not sell in the market, or at only a non.- 
 inal value. If by chance any buildings should be connected with 
 mob land they will possess no rental value. Only as personal pro¬ 
 perty, or productive capital is brought in connection with real estate 
 does its value become appreciable and augment. 
 
 Applying, practically, to New 1 ork the proposed system for taxing 
 personal property through buildings or rentals as its representative” 
 we should find that the aggregate of taxation would be the lowest in 
 the most sparsely settled agricultural districts of the State. Property 
 here is mainly in land, and the value of the buildings is generally 
 much less than the value of this land with which they are connected 
 As we leave the sparsely settled agricultural districts, and rise through 
 the more densely populated portions of the State from the villages°to 
 the towns, from the towns to the cities, and from the cities to the 
 great metropolis of the continent, we shall find that the value of land 
 of buildings, and the aggregate of taxable valuation will increase as 
 the amount and accumulation of personal property increases, until 
 land and buildings attain their greatest market and tax valuation in 
 Wall street, Broadway and Fifth avenue, where the accumulation of 
 personal property is the greatest. It is also to be observed, that start¬ 
 ing at the bottom of the scale, with the value of land greatly in 
 excess of the value of the buildings connected with the land, that 
 this difference, as we progress upward through the more densely popu¬ 
 lated districts, gradually diminishes, until, as is the case very fre¬ 
 quently in the cities, the value of the building greatly exceeds the 
 mine of the land on which it is Situated. 
 
 And yet, while under the proposed system, the agricultural dis¬ 
 tricts would, as now, pay the smallest proportion of°the aggregate 
 taxes, and the villages and cities as now also the largest, therTwould 
 be no injustice, but on the contrary, one uniform, equitable rule of 
 valuation and assessment. 
 
 The Proposed System a Correct Standard of Measurement of 
 Personal Property lx Different Locations. 
 
 A little reflection will also satisfy, that the proposed system of tax¬ 
 ing “ building occupancy,” constitutes in itself a correct standard of 
 measurement of personal property, or of expenditure and consump¬ 
 tion, both for the city and country, and establishes also just and 
 equitable relations in respect to taxation between city and agricul- 
 
38 
 
 Repoet of the Commissioners to 
 
 tural property. Thus, to illustrate, let us suppose a piece of occupied 
 real estate worth $10,000 to be presented for taxation in the country, 
 and in the city respectively. In the country the assessment under 
 the proposed system woidd be as follows: 
 
 Farm and farm buildings, valued at .. $10? 000 00 
 
 Value of buildings and lot, $2,000.^ 
 
 Rental of buildings, at ten per cent, $200. 
 
 Three times rental as equivalent of personal property... oUU 00 
 
 Total valuation for assessment. $10? 600 00 
 
 On the other hand, in the city, the assessment would be as follows: 
 
 City store and lot, valued at., $10>000 00 
 
 Value of building and lot, $10,000. 
 
 Rental of building, at ten per cent, $1,000. 
 
 Three times rental as equivalent of personal property.. 3)000 00 
 
 Total valuation for assessment. $13) 000 60 
 
 Under the new system, therefore, the city store and lot would be 
 regarded as a measure of $2,400 more of personal property, expen¬ 
 diture, or consumption, than the country farm or property of the 
 same value, a measure which the commissioners hold, will prove to be 
 entirely correct and equitable, both in theory and practice. But if 
 the tax-payer in the country and the tax-payer in the city, hold other 
 personal property apart from their lands and buildings, as stocks in 
 banks, or other moneyed corporations, they will both be put on 
 exactly the same footing as regards taxation or expenditure, and that 
 too, without the possibility of either assessing the other by fraud or 
 evasions. 
 
 Economy of the Proposed System. 
 
 To devise a more economical method of assessing and collecting 
 taxes, is equivalent to the invention of a labor-saving machine; and 
 the commissioners claim, as one of the special merits of their proposed 
 system, that it will prove, by its simplicity and freedom from detail, 
 more economical than any other. Every man under the new’ system 
 might know before the day of assessment exactly what his assessment 
 and consequent taxation -was certain to be ; and few people, therefore, 
 would in any contingency be subject to the expense and annoyance of 
 examining the assessment rolls, or of carrying on vexatious contro* 
 
 '‘A fair average valuation for farm property in the country. 
 
Revise the Statutes relative to Taxatiox. 
 
 39 
 
 vcrsies with the assessors. jSTo discretion, moreover, being permitted 
 to the assessors, it will not be possible to use the machinery of taxa¬ 
 tion in the slightest degree as the instrument for personal favor or 
 malice, or for promoting the interests of any political organization. 
 And it is well worth the consideration of the people of New York, 
 especially at the present time, whether there can be permanent reform 
 instituted in respect to municipal government, so long as the prom¬ 
 inent and most influential citizens of any municipality are under the 
 influence of any arbitrary and irresponsible officials. 
 
 An examination of the code submitted will show, that it is proposed 
 that the tax on building occupancy shall be collected from the real 
 estate; and it is permitted to the owner to collect of the tenant, for the 
 reason that the larger proportion, probably three-fourths of the build 
 ings of the State are occupied by their owners, and because the owners 
 can more economically collect the tax than any official. In New York, 
 at present, the tax on real estate, for sake of economy, is very often 
 collected from the tenant; and the law permits the tenant to recover 
 from the landlord; and for a similar reason it is now proposed that 
 the building occupancy tax shall be collected from the land and 
 recovered from the tenant by the landlord. Such a plan involves 
 both reciprocity and economy, and is of mutual advantage to both 
 landlords and tenants; and still the tenants are at liberty to make 
 contracts that the landlords shall pay the building occupancy as well 
 as any other taxes. 
 
 The Proposed Sr stem xot ax Exclusive Tax ox Real Estate. 
 
 The question may be asked, as it was on the presentation of the 
 former report of the commissioners, “ Why not still further simplify 
 the system, and impose all the taxes on real estate ?” and to it the 
 commissioners would return this answer, that an additional assess¬ 
 ment upon the occupiers of buildings, equal to three times the rent of 
 the buildings, seems to them to be most equitable, as a measure of the 
 amount of the occupier’s personal property, for they hold that no person 
 can occupy buildings without possessing personal property to an 
 amount equal to the proposed assessment under this just and uniform 
 rule.* Then again, the proposed system taxes a man according to 
 
 * The commissioners assert unqualifiedly, and challenge refutation of their assertion, that no per¬ 
 son can pay rent in any amount, or own and occupy any building, who does not have necessarily 
 three times the value of such rent or rental value in personal property. Civilized life, in fact, cannot 
 be carried on with any less amount of such property. If the rent is $100 per annum three times that, 
 or $300, will not cover the value of the chairs, the tables, the bed, the stove, the clothing, the cook¬ 
 ing and eating utensils, the tools and other appurtenances by which life is maintained, and the rent 
 in question earned. If the rent is $40,000 per annum, there must be about $120,000 of personal 
 
40 
 
 Report of the Commissioners to 
 
 the sign which lie puts out of his personal property, or the amount 
 of his annual expenses or consumption. Adam Smith says: “ In 
 general there is not perhaps any article of expense or consumption by 
 which the liberality or meanness of a man’s whole expense can he 
 better judged of, than by his house rent.” “ The luxuries and vani¬ 
 ties of life occasion the principal expense of the rich ; and a magnifi¬ 
 cent house, embellishes and sets off to the best advantage, the other 
 luxuries and vanities they possess. A tax upon house rents, therefore, 
 would fall heaviest upon the rich, and in this sort of inequality there 
 would not, perhaps, be anything very unreasonable.”* A valuation of 
 real estate, furthermore, is not as positive a sign, or evidence of expense, 
 consumption, or of protection under the laws, as the rental value of 
 buildings occupied. • Real estate often produces no revenue; is in 
 some localities remotely protected, or not protected at all, and as culti¬ 
 vated land is rather a measure of production, than of expenses or con¬ 
 sumption. The indicia adopted by the commissioners, however, as the 
 measure of personal property, of protection, and of expense and con¬ 
 sumption, are the most uniform and equal means of assessment and 
 measurement that the best authors on taxation have ever recommended. 
 
 Let us contrast the indicia recommended with the indicia 
 adopted in the present law. Thus the index which now deter¬ 
 mines whether a person is subject to personal tax or not in a 
 given locality is thedact of domicil there; but such an arbitrary rale 
 of taxation disregards all questions of the amount of protection in the 
 locality, the amount of property there, or the amount of expense or 
 consumption of the tax-payer in the town, city or State.f It is a 
 
 property productively employed by the occupier, or the rent could not be paid, except at the expense 
 of capital. The question was indeed put to one of the commissioners, by one of the leading 
 merchants and capitalists of New York, “ Would you tax a merchant who rents a store for $40,000 
 per annum, on $120,000 personal property?” and the question was answered by asking another in 
 return, “ Would you as a real estate owner, rent a store to an individual for $40,000 per annum, unless 
 you felt satisfied that the lessee had in his possession or control, productive capital equal to or in 
 excess of $120,000 ?” 
 
 * Discussing the incidence of local taxation upon house rents, Mr. John Stuart Mill, in his Princi¬ 
 ples of Political Economy, observes: 
 
 No part of a person’s expenditure is a better criterion of his means, or bears on the whole more 
 nearly the same proportion to them. A house tax is a nearer approach to a fair income tax, than a 
 direct assessment on income can easily be; having the great advantage, that it makes spontaneously 
 all the allowances which it is so difficult to make, and so impracticable to make exactly, in assessing 
 an income tax; for, if what a person pays in house rent is a test of anything, it is a test not of what 
 he possesses, but of what he thinks he can afford to spend.” 
 
 t In France, the “ faille,” an inquisitorial, personal tax on profits, a species of income tax, was only 
 •levied upon villains, or upon those occupying lands under a base tenure. Adam Smith says: “ This 
 tax (the taille) is supposed to dishonor whoever is subject to it, and to degrade him below not only 
 the rank of a gentleman, but that of a burgher, and whoever rents the lands of another becomes sub¬ 
 ject to it. No gentleman, nor even any burgher who has stock, will submit to this degradation.” 
 It is a curious chapter in the history of serfdom and slavery to see that a tax intended for an enslaved 
 or degraded class, and in its arbitrary character only fitted for such # a class, shoulc} long survive the 
 
Revise .the Statutes relative to Taxatiox. 
 
 41 
 
 more arbitrary rule than the income tax of England, imposed in 1G91, 
 which provided that double rates should be paid by Catholics. Under 
 that rule the Protestants paid half rates, but under our law those who 
 do not live in the locality where the tax is imposed upon personal 
 property pay nothing. A more arbitrary or unreasonable index, 
 therefore, than the existing laws of New York now adopt, cannot be 
 conceived. A residence is made a crime, coupled with a penalty. 
 
 Now. whatever other objections may be raised against the plan of 
 the commissioners tor valuing and assessing personal property, it 
 would seem that all must admit that it is plain, economical, certain 
 and uniform, and that it admits of the most complete investigation 
 and publicity. Every block of buildings would be an assessment roll, 
 and “ he who runs may read.” Returns, schedules and oaths may be 
 false, but buildings never lie, and are a perpetual sermon of truth. 
 
 Comparative Valuation of the Aggregate Property of the 
 State under the Oli> and New Systems. 
 
 We come next to the consideration of the manner in which the 
 valuation of property, and the rate and apportionment of taxes, will 
 be affected under the proposed system, as compared with the condi¬ 
 tions of the existing system. And in respect to this question it may 
 be said: 
 
 First. That as the new system does not propose to change the 
 present method of directly assessing real estate, except to make the 
 assessment of the same equitable and uniform, the revenue from this 
 source cannot be impaired. If the valuation is uniformly increased, 
 the rate will be uniformly decreased; and, as a further result of 
 uniform valuation, it will follow that every man who pays on an 
 approximately honest valuation, will have his taxes diminished; while 
 every man who now pays on a dishonest valuation, will not be longer 
 allowed to arbitrarily assess his neighbor. But herein the commis¬ 
 sioners are obliged to confess is to be found the real obstacle in the 
 
 institution that gave rise to it, and that after our entire population has become free, that we should 
 still wear the badges of former slavery, and not appreciate the degradation which they indicated. A 
 fngitive slave or serf, finding refuge in a burgh for one year, became a free man, and when in full pos¬ 
 session of his rights could not be arbitrarily taxed in England or France. But under the system of taxa¬ 
 tion generally adopted in the United States, the people do notnow enjoy the rights formerly accorded 
 to a fugitive slave or a freedman. Adam Smith said that at the time lie wrote, the capitation taxes in 
 France were assessed upon the highest orders of people, according to their rank, and upon the 
 “lower orders of the people, according to what is supposed to be their fortune, by an assessment 
 which varies from year to year.” “ The inferior ranks of people must in that country suffer patiently 
 the usage which their superiors think proper to give them.” In France the revolution of 1789 
 removed all slavery or serfdom and its natural adjunct arbitrary taxation, but herawe still cling to 
 some of the old cast-oft’ clothing of servitude, and secin to dislike to part with the old familiar 
 claims. 
 
42 
 
 Report of the Commissioners to 
 
 way of tax reform ; for as, the number of those who pay on an unfair 
 valuation is greater than those who pay fairly, the probabilities are, 
 that the former will consider it for their interest that no change shall 
 be made, and being in the majority will control public opinion accord¬ 
 ing to their own likeing.* 
 
 Second. It is certain that the average valuation of land and build¬ 
 ings—real estate—throughout the State, is not now in excess of fifty 
 per centum of their fair marketable value; while the probabilities are, 
 that the present assessed valuation is considerably less than this propor¬ 
 tion. The true value of the real property of the State is, therefore, 
 not less than twice its returned valuation, or $1,631,258,885x2 = 
 $3,262,517,770. 
 
 More than one-half of the population of the State is confined to 
 cities and villages ; and much more than one-half of the real estate 
 valuation of the State is found in these localities. But of this real 
 estate of cities and villages, almost the whole would be subject to the 
 “ building occupancy valuation; ” and we can, therefore, safely 
 assume that the property in the cities and villages of the State sub¬ 
 ject to such valuation would amount to more than $1,600,000,000; 
 and if we assume further, that the agricultural portions of the State, 
 representing $1,600,000,000, additional valuation of real estate, will 
 present twenty-five per cent of that valuation subject to building 
 occupancy valuation, we shall have an aggregate of property subject 
 to such valuation of full two thousand millions of dollars. A 
 rental on this valuation, taken at ten per cent, would be $200,- 
 000,000; three times this, for the valuation of personal property, 
 assumed as the equivalent for all other valuation of such pro¬ 
 perty in the hands of individuals, would be $600,000,000. If 
 we now add to this the personal property of the moneyed corpora¬ 
 tions of the State, less value of real estate owned by the same, esti¬ 
 mated at $200,000,000,f we have a total valuation representing per¬ 
 sonal property of $800,000,000; as compared with a present valua¬ 
 tion of $445,000,000 of such property. And, as already intimated, 
 
 * Some years since a commission for revising the tax code of one of the States was appointed, aiid 
 in due time presented the draft of many just amendments ; none of which, however, were adopted. 
 On asking the chairman of the commission, a man of great honesty and plainness of speech, how to 
 account for the result, he made answer as follows: “ That when the subject of reform came up, all 
 who thought that by being made to pay taxes fairly, would be thereby made to pay more, were 
 present and opposed the enactment of the new laws; while all those who felt that their taxes would 
 be decreased, through the adoption of an honest system, trusted in the power of trnth to do them 
 justice, and stayed away.” The result was as might have been anticipated. 
 
 + The capital, surplus and undivided profits of the national banks of the State in 1870, was $155,- 
 000,000; the capital of banks doing business under the laws of the State, Sept. 30th, 1870, $10,759,000; 
 and the assets of New York State fire and marine insurance companies, in excess of all liabilities, 
 except capital-and script, Jan. 1, 1870, $61,958,998; total, $235,717,000. 
 
Revise the Statutes relative to Taxation. 43 
 
 such a valuation would probably be very considerably under the 
 truth. 
 
 But that these estimates, indefinite and general as they must neces¬ 
 sarily be, are really much less than the valuation of personal pro¬ 
 perty likely to be attained to under the system of the commissioners, 
 will appear evident from the following considerations: 
 
 Thus, an estimate given to the commissioners by persons whose 
 judgment is to be relied on, is to the effect, that the present annual 
 rental of the buildings of the compactly built wards of Xew York 
 city, is considerable in excess of $100,000,000. Three times this 
 amount would be $300,000,000. If we add to this the capital, sur¬ 
 plus and undivided profits of the national banks and other moneyed 
 corporations of the city — less real estate— estimated at $150,000,000, 
 we shall have a valuation representing personal property of $450,- 
 000,000, as compared with a present personal property valuation of 
 $306,000,000. 
 
 The assesment roll of Xew York city would then substantially 
 stand as follows: 
 
 Beal estate, on the assumption that the present valuation is not in 
 
 excess of fifty per cent of true value. $1 ? 500? 000 ? 000 00 
 
 Shares of moneyed corporations. 150? 000? 000 00 
 
 Building occupancy valuation. 300? 000? 000 00 
 
 Total. $1,950,000,000 0<> 
 
 A tax of one and a half per cent on this valuation would produce 
 $28,250,000. If to this we add licenses for the sale of liquors at 
 retail, $2,250,000, the total income of the city at the above rate of 
 taxation, would be $31,500,000; or ten and a half millions more than 
 would be requisite to meet the interest on the existing debt, and 
 provide for all other reasonable expenditures. 
 
 But great as would be the gain in valuation here, the gain in other 
 parts of the State would undoubtedly be in much larger proportions. 
 Thus, taking Brooklyn for example, we find the value of the dwell¬ 
 ings in that city, according to the census of 1865, returned at $120,- 
 000,000 ; the annual rental of which, at ten per cent (a low rate to 
 cover insurance, repairs and taxes), would be $12,000,000; three 
 times which would be $36,000,000. If we add to this the amount on 
 which the corporations of the city of Brooklyn were assessed for 
 1870, $7,956,820, we have the total of $43,956,820, as compared with 
 a present valuation of personal property for the whole city of 
 $17,559,980, showing a gain of $25,396,840. And this result, it must be 
 
44 Report of the Commissioners to 
 
 remembered, is predicated on the rentals of dwellings alone, thus 
 making it evident that where the rentals of buildings, other than 
 dwelling are also included, the valuation will be still furthemncreased. 
 
 It seems evident, therefore, that by the proposed system, the valua¬ 
 tion of the property of the State of New York can be largely, as 
 well as equitably, increased, and made, without difficulty, to approxi¬ 
 mate to its fair and just basis; thus affording all the revenue that 
 may be needed at an average rate of taxation much less than the rate 
 now prevailing. 
 
 Limitation of the Rate of Tax Under the New System. 
 
 The commissioners, in this connection -would especially direct 
 attention to the fact, that by the twenty-third section of the fourth 
 article of the code presented, they have provided, “ that the board of 
 supervisors of no county shall levy a tax without special authority of 
 the legislature, on any town, to exceed one per cent, nor in any ward, 
 or city, to exceed two per cent on the total valuations of the assess¬ 
 ment roll thereof.”* 
 
 The reason of the introduction of this limitation, is in part to help 
 insure conformity to the law on the part of assessors in respect to 
 valuations, and more especially, because the commissioners are cer¬ 
 tain, that under the proposed system no higher rate of taxation can 
 be required, except as the result of indefensible extravagance, or 
 extraordinary contingencies, for which last, relief by the legislature 
 is provided. The commissioners further estimate, that under their 
 proposed system, the rate of State taxation (now about seven mills) 
 will fall below three mills; and that in the larger cities, the most 
 extravagant administration could not carry the aggregate of State, 
 county, and city taxation above one and a half per cent. The pro¬ 
 posed increase of valuation under the new system, coupled with the 
 tax for occupancy as a substitute for personal property, will, there¬ 
 fore, be more than compensated for by a reduction of rates. 
 
 General Advantages of the Proposed System. 
 
 The general advantages of the system proposed by the commissioners 
 o\ei the system now existing may be briefly summed up as follows: 
 By making the standard of valuation and assessment, that which is 
 
 * “ And no contract, obligation or liability, nor any number of contracts, obligations or liabilities, 
 shali be entered into, made, or incurred by any town, ward or city, or by the constituted authorities 
 thereof, which, in the aggregate, shall exceed, in any year, the amount that may be realized by taxes 
 at the hnntation of rate defined in this section, after deducting from said taxes the amount of the 
 liability of the town, ward or city, in each year, for maturii 
 indebtedness, and for the State and county tax.” 
 
 I interest or principal of bonded 
 
Revise the Statutes relative to Taxation. 45 
 
 certain , visible and tangible, and disregarding that which is invisible , 
 [ incorporeal and intangible , the incentive and opportunity for fraud, 
 [ evasion and perjury would all, or in a great degree, be removed ; the 
 tax gatherer brought in communication with the smallest number of 
 individuals; all personal inquisition, exposure of property, and neces- 
 I sity for oaths avoided ; production of every kind, agricultural, mining 
 | and manufacturing, placed upon the most favorable conditions; 
 t shipping fostered ; trade and commerce left untrammeled; while all 
 t the numberless vexatious and difficult questions, which are sure in 
 I the future to grow out of the conflict of laws and the sovereignty of 
 \ States respecting the situs of certain descriptions of personal pro- 
 | perty, would be transferred to such other communities as desire to 
 I enjoy them. The proposed plan, furthermore, will not permit the 
 I dishonest tax-payer (under oath) to arbitrarily assess other persons by 
 I* the under valuation of his own property, or, on the other hand, com- 
 I pel the honest tax-payer to either criminate or over-burden himself; 
 [ or permit assessors to assess in an arbitrary manner any one, inas- 
 r much as all the proceedings must be according to a uniform law and 
 F on the basis of such testimony as is admissible in any court of law 
 I in a country where property can only be taken by well known and 
 k established rules of evidence. 
 
 In the plan proposed by the commissioners there is nothing arbi- 
 I trary; the relations between the burdens upon city and country pro- 
 1 perty are equitably adjusted; no class of property, under its opera- 
 
 ■ tions, would be driven from the State, while residents and non-resi- 
 i dents would be placed on an equality, inasmuch as both would be 
 
 ■ assessed on one and the same indicia of personal property, namely, 
 I the rental value of the premises occupied; instead of as now taxing 
 y the former doing business in the State and exempting the latter, 
 
 under circumstances similar in every respect, with the single excep- 
 x tion of residence.* 
 
 * The commissioners in this report, as will be noticed, have often quoted and referred to Adam 
 • Smith in support of the views by them presented; but they think they are'even warranted in going 
 further, and in claiming that this acknowledged authority, throughout all civilized countries, is in 
 fact the real author of the proposed plan of taxing rentals, or rental values, as a substitute and 
 an equivalent for direct taxes on personal property. Thus, an examination of his chapter, “ taxes 
 on rents of houses,” will show, that he has not only fully set forth the views expressed by the coni- 
 missioners, but has also anticipated their reasoning, and combatted all the objections that have been 
 ; urged against their system. Recommending the tax upon the rent of houses, in addition to the tax 
 upon real estate, which he likewise favors and commends for its certainty and equality, he says: 
 * “ The quantity of the land any man possesses can never be a secret, and can always be ascertained 
 
 : with great exactness ; ” and in urging objections to a tax upon money at interest, he says, “bnt the 
 whole amount of the capital stock which he possesses is almost always a secret, and can scarce ever 
 be ascertained with tolerable exactness.” “An inquisition into every man’s private circumstances, 
 and an inquisition, which in order to accommodate the tax to them, watched over all W\q fluctuations 
 of his fortune, would be a source of such continued and endless vexation as no people could support.” 
 
46 
 
 Report of the Commissioners to 
 
 
 The changes proposed in the law in respect to personal property, 
 are, moreover, by no means radical or violent. There is little of 
 such property, apart from corporations, now subject to assessment; 
 and the new system is certain to be more productive of revenue. If 
 any little inequalities may arise from the change (and some must arise 
 from any modification of tax laws), they will be but trifling com¬ 
 pared to the inequalities that daily arise from the attempts to admin¬ 
 ister and carry out the existing system. 
 
 Again, under such a simple and liberal, though at the same time 
 just and inflexible system of taxation as the commission propose, New 
 York, instead of comparatively retrograding, as she has done within the 
 last ten years, would be more than ever the Empire State of the Union. 
 Could all foreign commerce be specially admitted into New York 
 free of every tax, duty and restriction, none could doubt that the 
 impetus which would be at once given to the growth and prosperity 
 of the State would be something marvelous. But to do this, is not 
 permitted under the Constitution of the United States to any State; 
 but it is permitted to New York to place herself, if she will, in exactly 
 similar relations to the domestic commerce, trade and manufacturing 
 industry of the country, which exceed in importance and value its 
 whole foreign commerce, in the ratio of at least fifteen to one. And 
 this position in view of the tax legislation of all the other States, with 
 the exception of Pennsylvania,* the commissioners claim New York 
 will assume upon the adoption of their proposed new system ; and they 
 do not think, furthermore, that they are guilty of any unwarrantable 
 extravagance in predicting, that if their views are recognized and 
 adopted, the resulting prosperity of the State during the next decade, 
 will be no ways inferior to that which attended the construction 
 and opening of the Erie canal. And with this prosperity would come 
 another result, which would be no less a matter of congratulation, 
 namely, that all the present vexations, inequalities, inquisitions, self- 
 exculpating oaths, and natural depravity supremacy of taxation would 
 vanish, and be hereafter known only as subjects of ridicule and disa¬ 
 greeable tradition, ranking in importance and similarity in history, 
 with the legislation and inquisition against witches. 
 
 * As to the policy of a tax on mercantile business in a city contending with rival cities for a fair 
 share of the trade of the country, we cannot see any benefits to be expected from it. If we can 
 make this city the great market of the nation, heavier taxes than those now imposed on real 
 estate could be borne with less discomfort than the present rate, and wise legislation can do much to 
 this end, but in the opinion of the committee, a city mercantile tax would be a step backward in 
 attaining so desirable a result.-2?e;;orf Law Committee , Common Council of Philadelphia , Feb. 1871. 
 
Revise the Statutes relative to Taxation. 
 
 47 
 
 Diffusion of Taxes, 
 
 One of the greatest obstacles which stands in the way of a reform in the 
 local taxation of the United States, and consequently of the adoption of 
 the views embodied by the commissioners in this report, has been the 
 o-eneral acceptance, of the theory that in order to tax equitably and 
 uniformly it is necessary to subject all property to assessment, and 
 more especially that the exemption of any form of what is termed 
 “money capital" 1 is to grant a favor to those who possess such pro¬ 
 perty and are best able to bear taxation at\the expense of the remain- 
 inq and poorer part of the community. 
 
 The commissioners, however, utterly discard this theory (and it is 
 properly termed a theory, for no country or community ever attempted 
 to full v execute it), and hold, in opposition, that equality of taxation con¬ 
 sists in a uniform assessment of the same articles or cl ass ofproperty that 
 is subject to taxation; and they further maintain that all taxes equate 
 and diffuse themselves, and that if levied with certainty and uniformity 
 upon tangible.property and fixed signs of property, they will, by a 
 diffusion and repercussion, reach and burden all visible, and also all 
 invisible and intangible, property, with unerring certainty and 
 equality* 
 
 Simplicity in Taxation.— The one principle in taxation which the 
 civilized world, after years of experimenting, has gradually come to 
 accept as fundamental, is to tax but a few things, and then to leave 
 those taxes to diffuse, adjust and apportion themselves by the inflexible 
 laws of trade and political economy. 
 
 Great Britain, commencing several hundred years ago with a sys¬ 
 tem which contemplated taxing everything, has gradually reduced 
 her tax list to some six or eight articles or sources under the customs, 
 and to an equally limited number under her excise and local systems; 
 and, with every degree of concentration, the relief experienced by the 
 
 * The method in which taxation diffuses itself has been thus illustrated by M. Thiers, in his work 
 .‘Rights to Property.” “ In the same manner,” he says, “ as our senses, deceived by appearances, 
 tell us that it is the sun which moves and not the earth; so a particular tax appears to fall upon one 
 c'a*« and another tax upon another class, when in reality it is not so. The tax really best suited to 
 the poorest member of society is that which is best suited to the general fortune of the State; a for¬ 
 tune which is much more for the possession and enjoyment of the poor man than it is for the rich ; 
 a fact of which we are never sufficiently convinced. But of the manner, nevertheless, in which taxes 
 are divided among the different classes of the State, the most certain thing we can say is: That they 
 are divided in proportion to what each man consumes, and for a reason not generally recognized or 
 understood, namely, that taxes are reflected, as it were, to infinity, and from reflection to reflection 
 become eventually an integral part of the prices of things. Hence the greatest purchasers and con¬ 
 sumers arc everywhere the greatest tax-payers. This is what I call ‘ diffusion of taxation ,’ to borrow 
 a term from physical science, which applies the expression ‘ diffusion of light ’ to those numberless 
 reflections, in consequence of which the light which has penetrated the slightest aperture spreads 
 itself around in every direction, and in such a manner as to reach all the objects which it render, 
 visible. So a tax which at first sight appears to be paid directly, in reality is only advanced by the 
 individual who is first called upon to pay it.” 
 
Report of the Commissioners to 
 
 48 
 
 whole population, and the impetus given to material development, has 
 been all but universally acknowledged. In France; also, where the 
 number of owners of real estate, in proportion to population, is greater 
 than in any other country, the essential features ot the concentrated 
 system recommended by the commissioners prevails, for local, and to 
 a limited extent, for general taxation. And in the case of the United 
 States, it is to be further noted, that the national government, except 
 under the exigencies of a great war, has always recognized in her tax 
 laws the desirability of simplicity and concentration; and that now, 
 although the present diffused system does not tax directly the one- 
 fiftieth part of the property of the country, all parties are agreed that 
 a further limitation of the sources of national revenue is most desirable. 
 
 But it is curious to note, that while no sensible person entertains the 
 idea that the taxes levied by the national government on spirits, fer¬ 
 mented liquors, or tobacco, or upon any imported articles, are paid by 
 the producer or importer, except so far as he is a consumer of the 
 same, the exactly opposite doctrine appears to prevail in the United 
 States in respect to the incidence of local taxation; and the principle 
 which has constituted the basis of most of the State legislation on 
 this subject seems to have been, “ that whatever is not taxed directly 
 is necessarily exempt.”* 
 
 What Constitutes an Exemption? 
 
 But an exemption is “ freedom from a burden or service to which 
 others are subject or liableand if there is no primary taxation on 
 
 * As a most honorable exception to this experience, and as affording some evidence of a gratifying 
 progress of enlightened views respecting the influence and distribution of taxes, we ask attention 
 to the following extract of the report of the law committee of the common council of Philadelphia, 
 presented February, 1871: 
 
 “ All taxes imposed upon property, real or personal, will, if possible, be reimposed by the tax-payer 
 upon the consumer of the article taxed, and, if practicable, a profit will be added to it. It is cheaper 
 for consumers to pay the tax upon one than upon six articles. In cities, every person, either as ten¬ 
 ant, owner or boarder, must contribute his or her portion in the taxation of real estate, and whilst 
 absolute equality can never be obtained, in rating it according to value, the occupant of .a dwelling 
 -valued at $60,000 pays sixty times the tax that is received from a $1,000 house, and business contri¬ 
 butes directly by the occupancy of stores, warehouses and factory buildings.” 
 
 “ Money withdrawn from active circulation in the business or improvement of a city, induced by 
 taxation or any other cause, is an injury to the inhabitants of all conditions in life, whether they be 
 employer or employed, not only depressing existing operations, but in causing a limitation of their 
 extension and advancement. 
 
 “ Those of our citizens who possess capital not invested in business enterprise, and do not seek 
 foreign investment, can easily escape taxation within your own boundaries, by the purchase of 
 United States bonds, Pennsylvania State loan and Philadelphia city loan (untaxable), or reimpose 
 the tax on real estate owners by investment in bonds and mortgages and ground rents, with agree¬ 
 ments and covenants that the borrower or covenantor shall pay all taxes levied and assessed upon 
 the principal, interest or rent.” 
 
 “ It is fair to presume that most of the capital at interest, held by citizens not engaged in active 
 business, will, 'under the pressure of taxation, seek compensation by flight or investment in the 
 securities above indicated, and that the weight of the levy would fall, in this city, on capital in 
 
Re vise the Statutes relative to Taxation 49 
 
 l P erew,,al P ro ^ ert .) j then there can be no exemption of it. W e do not 
 ■ consider that putting a given article into the free list, under the tariff 
 f is au exeinpt,on t0 an - v l >ai 'ticular individual; but if we make the rule 
 higher on one tax-payer or on one importer of the same article than 
 0,1 anot ier tax "l )aver or ““Porter, we grant an exemption. If all per¬ 
 sonal property ,> in State taxation upon the free list, it is nevertheless 
 taxed through the real estate it occupies, or other agencies. It is not 
 subject to primary taxation in England, and yet no one there doubts 
 that it pffys its proportionate burden in the form of reflected taxes or 
 by “ repercussion.” We use the word “exemption,” therefore 
 imperfectly, when we speak of “the exemption of all personal pro- 
 | perty : for it the removal of the burden operates uniformly on all 
 personal property, then there can be no primary exemption, but all 
 such property becomes subject to uniform secondary taxation. 
 
 Adam Smith may be considered to have established, beyond all 
 controversy, the principle that taxes, with a degree of infallibility, 
 diffuse themselves when they are levied uniformly on the same article, 
 and hence arises his deduction, that the average profits of one invest¬ 
 ment are always equal to the average prof 'ts of other investments, risk 
 <nul shill in management , in each , being taken into consideration * 
 This is the great principle which pervades his great work “Wealth 
 of Nations;” and he even goes so far as to admit, that a tax upon 
 labor if it could bo uniformly levied and collected would be diffused, 
 and that the laborer would be the mere conduit through which the 
 tax would pass to the public treasury. Thus, he says: “ While the 
 demand for labor and the price of provisions, therefore, remain the 
 same, a direct tax upon wages can have no other effect than to raise 
 them somewhat higher than the lax.” f 
 
 * As applied to the wages of labor, the truth of this principle is equally iucontestible.-'- The sew- 
 mg girl performing her toilsome work by the needle at one dollar a dav. the street sweeper working 
 the mud with his broom at a dollar and a half, the skilled laborer at two and three dollars the profes¬ 
 sor at five, the editor at five or ten. the artist and the songstress at ten or five hundred dollars a day 
 arc all members of the working classes, though working at different rates. And it is only the 
 difference in their effectiveness that causes the difference in their earnings. Bring them all to the 
 same point of efficiency, and their earnings also will be the same.'*—Ill Jungat, Cincinnati. 
 
 t John Locke, in his treatise *• on the standard of value,” treats of taxation, and shows conclusively 
 that if all lands were nominally free from taxation, that the owners of lands would proportion¬ 
 ally pay more taxes than now, because the same amount of money must continue to be collected in 
 some form, and the average profits of lands would only be equal to the average profits of other invest 
 tueuts; and further, that the expense and annoyance (another form of expense) would be increased 
 if the tax were exclusively levied in the first instance upon personal property; and hence the land 
 owner would be burdened with his proportion of the unnecessary expense and annoyance. He also 
 shows that you may change the form of a uniform tax. but that you cannot change the burden; and 
 that the change will increase the burden, if the new system is more expensive and annoying than 
 the old. Locke wrote nearly a century before Adam Smith published his “ Wealth of Nations-” 
 and it would seem probable that Smith acquired his ideas relative to the average profits of invest¬ 
 ments from Locke. 
 
 4 
 
Report of the Commissioners to 
 
 50 
 
 And, pursuing the subject further, he continues: “ No tax can ever 
 reduce, for any considerable time, the rate of profit in any particular 
 trade, which must always beep its level with other trades in the neigh¬ 
 borhood and in the following language he solves the very question 
 now at issue between the advocates of the existing system of local 
 taxation in New York and the advocates of the new system: “In 
 order that the greater part of the members of any society should con¬ 
 tribute to the public revenue in proportion to their respective expense, 
 it does not seem necessary that every single article qf that expense 
 should be taxedR 
 
 In the city of New York, with its population approximating a 
 million, it is believed that not four per cent of the inhabitants are 
 subject to primary taxation ; * but if the theory that taxes do not 
 diffuse themselves is the correct one, then certainly the non-taxpayer 
 can have no interest in an honest and economical administration of 
 the city government, or in the reduction of city taxes; but on the other 
 hand, we should be warranted in concluding, that he must be benefited 
 by exorbitant taxes on other person’s property; and in a distribution 
 of the money collected, even if stolen by corruptionists, but spent 
 with a lavish hand in giving him bread and employment. Taxation, 
 furthermore, under the non-diffusion theory, becomes in reality a con¬ 
 test between classes; one class of real estate against another; one 
 class of personal property against other classes ; the classes.possessed 
 of no property against those who do possess it. The doctrine of the 
 old philosopher Hobbes, “ that war or conflict is the natural state of 
 mankind,” becomes also, by this supposition, embodied in taxation; 
 the Greek brigand must be regarded as an equitable assessor; and 
 the whole system of raising revenue for the State is reduced to a 
 simple question of the exercise of arbitrary power. 
 
 The Rational Principle of Taxation. 
 
 A more cheerful view of human nature would, however, lead us 
 to believe that there is no natural antagonism of classes or interest 
 among mankind, that capital is accumulated labor, and joint tenant 
 
 < * As BOlne evidence of the ratio that prevails elsewhere than in New York between the number of 
 
 persons directly assessed for taxes on property and the aggregate of population, the following statis¬ 
 tics of the city of Boston are worthy of attention: By the laws of Massachusetts a poll tax (usually 
 two dollars) is assessed on every male inhabitant of the State, above the age of twenty, whether a 
 citizen or an alien; and the payment of this tax is made a prerequisite to the exercise of suffrage. 
 In 1869 the whole number of polls returned in the city of Boston was 54,242; of which number.43,587 
 were legal voters. But of the whole number of legal voters but. 15,177 were assessed for property or 
 for taxes, other than the poll or capitation tax. If we suppose that one-half the excess of polls over 
 legal voters were assessed for property (an excessive estimate), then the whole number of persons 
 who paid taxes in 1869 on property in the city of Boston would be 20,504 out of a total population in 
 1870 of 250,526, or 8.1 per cent. 
 
Revise the Statutes relative to Taxatiox. 51 
 
 with it, that whatever promotes the true interests of the. one, is 
 advantageous to the other, and that we are all jointly interested’ in 
 low assessments, economical administration, equal protection to 
 property and labor; and that whatever may be our position, high or 
 low. rich or poor, \\ e must by an irrevocable law, bear our part of the 
 public burdens. 
 
 ^ e nia\ establish laws that will act as a prohibition of certain 
 forms ot investment or occupations; we may give special bounties to 
 certain interest and occupations, and the effect of all our legislation, 
 for benefit or injury, will finally be diffused on the entire community, 
 if the systems engrafted into our laws are made permanent. The 
 convictions of Galileo did not prevent the world from revolving* and 
 so, no sophistry, no cunningly devised system of laws, no appeal to 
 prejudice or class interest, can prevent taxes, imposed under perma¬ 
 nent laws, from being diffused as the inevitable doom of man, or 
 abrogate that invariable law of political economy, that the average 
 profits of one class of investments must, in the long run, be the average 
 profits of all other investments, risk and skill in management, being 
 taken into consideration. These simple principles are a key to an 
 equitable, uniform and economical system of assessment. The base 
 of taxation must, however, be sufficiently broad to act as a tax, and 
 not as a prohibition; and the tax should be levied by means of evidence 
 admissible in courts that are instituted for the protection of life and 
 property. Individuals imbued with freedom and self-respect, flee 
 from everything that is arbitrary, and capital abhors it, and seeks 
 shelter in other lands. When the assessor or other administrators 
 are clothed with arbitrary and despotic power, the citizen tends to 
 become a sycophant, and will often submit to fraud, corruption and 
 plunder, rather than attempt an unequal contest with despotic 
 authority. 
 
 It is fortunate, furthermore, for the human race that the enlight¬ 
 ened governments of the world have not attempted as a rule, the pri¬ 
 mary taxation of every atom of personal property, or the atomic 
 system of taxation, for man has some other and better duties to per¬ 
 form in this sphere of labor and toil, besides attempting to artificially 
 tax everything. 
 
 Why not Confine Taxation to Money Capital? 
 
 The question may be asked, if all taxes imposed under uniform laws 
 diffuse themselves, why not tax only money at interest? The answer 
 to this, however, would be, Jirst, that such an assessment would pro- 
 
- y? Report of the Commissioners to 
 
 bably act as a prohibition, and would produce no revenue ; and second, 
 that such a tax could not be levied with sufficient accuracy to divest 
 it of the character of an arbitrary exaction, or of a species of partial 
 confiscation of one man’s property and the practical exemption of 
 another person, through non-residence, indebtedness, etc., on the 
 same class of investments. 
 
 Money Property. 
 
 But, after all, says some objector, “notwithstanding your many 
 and plausible arguments ; your statement that all the world 
 except the United States have done away with the old, atomic, 
 inquisitorial system of taxation, and your demonstration that Penn¬ 
 sylvania and Philadelphia by pursuing a more liberal fiscal policy are 
 advancing in wealth and population far more rapidly than New lork, 
 I do not like vour proposed reforms, and lor the reason mainly, that 
 they exempt ‘money property!’” It is most important, therefore, to 
 inquire what is “ money property,” and also its relations to local 
 taxation. 
 
 All capital or property is accumulated labor, labor being the source 
 of all property. Hence any attempt to excite prejudice against capi¬ 
 tal or property, or to attack either, is an attack upon labor itself. 
 
 “ Moneyed property ” is generally understood to mean evidences of 
 debt , which are not in a strict sense property ; but rights to property , 
 or assignments of property , according to the amount of interest of the 
 creditor. 
 
 What is a mortgage ? —Thus, a mortgage is a species of conveyance, 
 and is no more property than a deed ; and neither is property except to 
 the extent of the value of the paper and the labor of writing or print¬ 
 ing it, and still both are very valuable as conveying rights to property. 
 The property is the real estate conveyed, or mortgaged, and a tax on 
 the land, and another tax on the deed, or a tax on the land, and 
 another tax on the mortgage, which covers the land, will, in effect, be 
 a double tax on the land. This tax may be made a quadruple tax: 
 first on the land, then on the deed of the land, then on the mortgage, 
 which is on the land, and then on the lease which the landlord may 
 grant to the tenant. The present laws of New York impose a tax on 
 landlords who lease lands in fee, or for more than twenty-one years, 
 on a principal which at seven per cent, will produce the amount of 
 the stipulated rent. It is true, that landlords refuse to make long 
 leases, and thus evade the tax; but a law might be made to require 
 the payment of the tax on short leases, or on annual rentings. These 
 
Revise the Statutes relative to Taxation. 
 
 53 
 
 lesises, if taxed, however, like all evidences of indebtedness would, in 
 effect, impose double taxation upon the property which they repre¬ 
 sent * 
 
 To tax indebtedness, is to tax the borrower .—If any one doubts that, 
 a tax on indebtedness is a tax upon the borrower, or the property 
 which the indebtedness covers, that question can be easily solved by 
 an honest uniform tax on all State, county, town and city bonds here¬ 
 after issued, by making them all subject to an annual tax of one, two 
 or more per cent, and by providing that the tax shall be deducted at 
 the time of the payment of the interest. Is there any one who believes 
 that these bonds will sell in the market at the same high rate that 
 they would command, if by law, they were free from taxation? 
 
 We can also test the effect of an honest, uniform tax upon mort¬ 
 gages, by providing that mortgages hereafter made, shall operate to 
 reduce for assessment, the valuation of the land mortgaged to the 
 amount of the mortgage, and that the mortgagor shall pay the tax on 
 the mortgage, and deduct the tax from the principal or interest, when 
 paid to the mortgagee. But who believes, under such a law, with the 
 legal rate of interest at seven per cent, that any money would be loaned 
 on mortgages in this State ? 
 
 A somewhat curious piece of practical evidence in support of the 
 truth of the position taken by the commissioners in respect to the 
 taxation of mortgages, has been afforded by the recent experience of 
 New Jersey. This State, as before stated, exempted in IS09, all 
 mortgages from taxation in certain of her counties and cities which 
 lie contiguous to New York city: but this legislation, although 
 operating to draw capital away from New York and into New Jersey, 
 was not primarily effected for any such reason, but was brought about 
 in this wise. New Jersey, in the first instance, enacted an honest 
 uniform law of taxing mortgages, and one, moreover, which could 
 
 * Tho following curious instance of hardship in taxing mortgages actually occurred in one of the 
 counties of central New York within the last six years. A worthy farmer and his wife, finding 
 themselves becoming incapacitated through age from taking practical care of their little farm, sold 
 it for $5,000,and allowed the. purchase-money to remain in the form of a mortgage, with the expecta¬ 
 tion of living on the interest paid annually by the purchaser from tho profits of the farm. The 
 town being very small, the fact of the sale and the consideration paid became known to every one, 
 and the 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 io 
 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 all their income from the mortgage swept away by the tax collector, but they were 
 even obliged to go out for days' work, in order to pay a balance of taxation and provide means of 
 support; and this too, while the identical farm for which the mortgage was given was taxed at one- 
 flfUi its true value, and other investments of other citizens of an invisible and intangible character 
 undoubtedly escaped taxation altogether. And this we call equality in taxation. 
 
Report of the Commissioners to 
 
 54 
 
 with the utmost certainty be executed, and similar in principle to that 
 above suggested ; namely, that the person giving the mortgage should 
 pay the tax on it, and deduct the tax from the principal or interest, in 
 settling with the creditor. The result was, that all mortgages falling 
 due were immediately foreclosed, and as no new loans, moreover, 
 could be made, the inhabitants of the growing counties near the city 
 of New York, wishing to borrow money on land, or to sell land, 
 found themselves in an uncomfortable position; so much so, that 
 if the law taxing mortgages in this section of the State had 
 not been promptly repealed by the legislature, the issue would 
 soon have become a predominant one in the State elections; and 
 hence the explanation of one of the most curious statutes in 
 the history of American legislation, which makes one tax law 
 for. one part of a State, and another and a different one for 
 the remainder.* But the point of chief interest to be noted is, 
 that it did not take the citizens of New Jersey a great length of time 
 to find out that a borrower of money on a mortgage paid the tax, and 
 that the lender was the tax collector, and only paid his part of a dif¬ 
 fused tax, as all other persons living, consuming, buying or selling in 
 the State must pay ; and that if the borrower could not legally pay the 
 lender a rate equal to other net profits of investments, he could not 
 borrow. A little experimental legislation in New York will, there¬ 
 fore, effectually explode the vague theory that taxes uniformly levied 
 do not diffuse themselves; and although it is true that the persons 
 or property primarily taxed do not charge the entire tax over to 
 others, this very fact nevertheless shows that the tax is diffused with 
 absolute equality upon the persons who originally may pay the tax, 
 and upon, those who finally bear their portion of it. 
 
 Loans on mortgages prohibited in Rome. —Mommsen, in his “His¬ 
 tory of Rome,” states that at one period the lending of money in that 
 country on mortgages was prohibited, and it is apparent that a uni¬ 
 form taxation of mortgages in New York would amount to a prohibi¬ 
 tion as effectual as the prohibition which existed under the Roman 
 law. The Roman patricians, in their legislation, wished to prevent 
 the common people from becoming an independent yeomanry, and 
 owning and acquiring real estate through the facilities of borrowing 
 upon mortgages. No chimerical attempt had then ever been made to 
 
 * “ And all mortgages upon estates, chattels or personal property, taxable by law, within said 
 counties of Hudson, Union, Essex and the city of Brunswick, Middlesex county and the county of 
 Passaic, except the townships of West Milford, Pompton and Wayne, for State, county, township and 
 city purposes, shall be exempt from taxation, when in the hands of any inhabitant, corporation or 
 association, residing or located in said counties or cities.” Approved. April 2, 1869; Laws of Neff 
 Jersey, 1869, page 1225. 
 
Revise the Statutes relative to Taxation. 
 
 do 
 
 tax money at interest, and this purpose of having the soil cultivated 
 on shares or by dependent tenants could best be obtained by a prohi¬ 
 bition of all mortgages. 
 
 Now it needs no argument to show that a system of onerous taxa¬ 
 tion of mortgages must have a tendency to reenact the Roman policy, 
 and in time we may thus see our State cultivated by a dependent 
 tenantry and owned by a few capitalists; and it ought not to escape 
 attention that this very transformation has already occurred to a great 
 extent in <S T ew York city and other cities. Capitalists and institu¬ 
 tions, except life insurance companies and savings banks, which are 
 free from taxation, will not loan on mortgages, but will buy real estate 
 and lease it for a term of years, because this investment pays a higher 
 rate than money loaned on mortgage subject to the contingency or 
 reality of taxation. The effect of the present law, even partially or 
 loosely executed, has changed the form of investment,f hut has not 
 prevented capitalists from obtaining the average rate of profit of 
 investments. 
 
 It is undoubtedly the true interest of the State, on both political 
 and economical grounds, to encourage occupiers to become owners, 
 who always give better attention and protection to their own property 
 than to the property of landlords. 
 
 Purchasers of Uniterl States Bonds not practically exempt from 
 taxation .—The purchasers of United States bonds, which are nomin¬ 
 ally exempt from taxation, are in effect taxed, and uniformly taxed 
 
 t The experience of taxing mortgages in New York is exactly what might liavc been legitimately 
 expected. Capital which formerly found its way into real estate mortgages is now directed into other 
 channels, and to such an extent that were it not for the provisions of law which exempt the mort- 
 •rage investments of savings banks and life insurance companies from taxation, and compel these 
 institutions to invest a part of their capital in such securities, money could now hardly .be obtained 
 in New York for the improvement of real estate on pledge of the property. Again.-it was formerly 
 a very general custom to embody in wills a provision that property bequeathed or to be held in trust 
 should be invested in mortgages; but this custom, the commissioners are informed, is now almost 
 entirely done away with, while executors and trustees are continually importuned by legatees to 
 change the character of such investments on the ground that they no longer continue to afford a fair 
 interest. In one instance the commissioners were frankly informed by a board of assessors that their 
 feelings as men would not allow them to assess mortgages according to the strict provisions of the 
 law. when they knew that by so doing they would deprive widows and orphans of almost their entire 
 income. In another instance it was pleaded that the interests of a city would not allow its assessors 
 to tax its local mortgages, inasmuch as so doing would inevitably restrict, growth, and that a certain 
 annual growth or land improvement was absolutely essential in order to prevent the rate of taxation, 
 by reason of annually increasing expenditures, from becoming unbearable. 
 
 As an illustration of the manner in which such capital has been diverted, of late years, from 
 employment in connection with real estate in New York, the commissioners would call attention to 
 a report made to them, to the effect, that, while in 1850 the fire insurance companies of New York, 
 with assets of $26,323,384, loaned on bond and mortgage $19.801.004; in 1869, with assets amounting 
 to $53,722,655. they loaned on similar security, but $18,611,232. At. the same time, the directors of 
 the largest savings banks in the State, inform the commissioners that the applications made to them 
 to loan on the security of real estate of unquestioned value, for the purpose of its improvement, are 
 continually and largely in excess of the amount available for such investments.— Report by commu- 
 Hon*rs, 1870. 
 
Report of the Commissioners to 
 
 in the high price which they are obliged to pay for these securities 
 by reason of their exemption from taxation. It is not only a sound 
 principle of political economy, that a tax upon money at interest is 
 simply a tax upon the borrowing price of the borrower/ causing an 
 increased rate of interest, or a reduced price to be obtained for the 
 obligation given; but this principle has been adjudicated by the 
 highest court of the country, so far as a court of last resort can adju¬ 
 dicate a great principle in economic science. Thus, in the case ot 
 Weston v. The City of Charleston (2 Peters, 449), the Supreme 
 Court of the United States, through Chief Justice Marshall, held 
 that “ a tax on government stock is a tax on the powei to borrow 
 money on the credit of the United SeatesT It, therefore, we except 
 the borrower from taxation in the form of a decreased rate ot interest, 
 we grant him no special exemption or advantage, tor his propeity, 
 which is covered by the debt, has already in other forms been taxed, 
 and the exemption will diffuse itself in the form of lower rate ot 
 interest, which will be the means ot producing a higher price 
 of labor, land, and personal property, until the exemption is com¬ 
 pletely diffused. Who will then be injured by taking the tax from 
 money at interest? It is probable, that he who now adds the tax to 
 the rate of interest, and charges the borrower, and does not pay it to 
 the State, may lose*by the change. He will be obliged to enter the 
 open money market and pay the market rate, as the purchasers ot 
 government bonds now do, for evidences of debt that will be free 
 from taxation in the hands of all persons; and the laws ot trade will 
 regulate his investment as they daily regulate the price ot govern¬ 
 ment bonds, and will bring down his securities to a rate of interest 
 not much above the rate paid by the national government. The 
 exemption applied to United States bonds, which is of no practical 
 benefit to the present purchasers, in consequence of the increased 
 price of the bonds, would be of no benefit if applied to the holder of 
 other securities in an established and permanent system, except in 
 freedom from the uncertainties and irregularities attending the exer¬ 
 cise of arbitrary and irregular power. If the exemption is an 
 
 * A striking practical illustration of the truth of this proposition is to be found in the system 
 adopted by Connecticut for taxing the savings’ banks existing in that State. Thus, the State, in 
 the first instance, imposes a tax of three-fourths of one per cent on the whole amount of deposit* 
 and stock in such institutions; and then, in consideration of this and all other taxes (i. United 
 States internal revenue tax of one-fourth of one per cent on dividends), the banks are permitted to 
 add a compensatory amount to the legal rate of interest on all their loans, and to take the interest 
 in advance; the effect of which is to throw the whole amount of taxation, with possibly some addi¬ 
 tion for profit, off from the bank on to the borrower, who in most, and perhaps a majority of cases, 
 is a man of small means, who borrows for a purpose of local development; or, in other words, the 
 whole system is an ingenious plan for imposing a little more taxation on a class which the State can 
 least of all afford to tax, and that, too, not on their property, but upon their debts. 
 
Re vise the Statutes relative to Taxation. 57 
 
 exemption of e\erything of tlie same class, it is perfectly e<pial and 
 f fair, and its effect is diffused and equated ; and the tax on another 
 I' article, taxed in lieu of the exempted class of articles, is likewise 
 » equated and diffused, and it invisible and imponderable evidences of 
 | debt cannot be taxed equally no injustice will arise if they are all free 
 I from primary taxation, and it the taxes of a permanent system are 
 | imposed on other things subject to positive and fixed rules of assessment. 
 
 The daily price of T.nited States bonds, therefore, is a constant lesson, 
 f that an exemption of a security from taxation is an exemption of the bor- 
 | rower, ;wid the same law of political economy will rule in respect to 
 both private, and public debts. Each State has, therefore, the power 
 f to put its borrowers on an equal footing with the general government, 
 and without injustice or inequality toward the borrower or the lender. 
 
 The Old and New Ideas in Taxation. 
 
 The first attempt made to tax money at interest was instigated 
 I against money lenders because they were Jews; but the Jew was 
 L sufficiently shrewd to charge the full tax over to the Christian bor- 
 I rower, including a percentage for annoyance and risk; and now 
 I most Christian countries, as the result of early experience, compel or 
 I permit the Jew to enter the money market, and submit, without lot 
 | or hindrance, his transactions to the “ higher law ” of trade and politi- 
 . cal economy. But a class yet exist who would persecute a Jew if lie 
 I is a money lender, and they regret that the good old times of roasting 
 [ him has passed away. They take delight in applying against him, in 
 [ taxation, rules of evidence admissible in no court since witches have 
 | ceased to be tried and condemned. They sigh at the suggestion that 
 all inquisitions shall be abolished ; they consider oaths, the rack, the 
 | iron boot, and the thumbscrew as the visible manifestations of equality. 
 
 They would tax primarily everything to the lowest atom; first for 
 I national purposes, and then for State and local purposes, through separ¬ 
 ate boards of assessors. They would require every other man to be an 
 \ assessor or collector, and it is not probable that the work could then 
 be accomplished with accuracy. The average consumption of every 
 inhabitant of this State, annually, is at least $200, or in the aggregate, 
 
 [ $800,000,000; and this immense amount would fail to be taxed if 
 the assessment was made at the end of the year, and not daily, as fast 
 r as consumption followed production. All this complicated machinerv 
 ■ of infinitesimal taxation and mediaeval inquisition is to be brought into 
 [ requisition for the purpose of taxing “ money property,” which is 
 nothing but a myth. The money lender parts with his property to 
 
58 Report of the Commissioners relative to Taxation. 
 
 the borrower, who puts it in the form of new buildings, or other 
 improvements, upon which he pays a tax. Is not one assessment on 
 the same property sufficient ? But if you insist upon another assess- j 
 ment on the money lender, it requires no prophetic power to predict 
 that he will add the tax in his transactions with the borrower. If a 
 tax of ten per cent was levied and enforced on every bill of goods, or 
 note given for goods, the tax would be added to the price of goods, 
 and how would this form of tax be different from the tax on the 
 goods ? 
 
 « Money property ” except in coin is imaginary, and carniot exist. 
 There are rights to property of great value. The right to inherit pro-, 
 pertv is valuable ; and a mortgage on land is a certificate of right or 
 interest in the property, but it is hot the property. Land under 
 lease is as much “ money property ” as a mortgage on the same land; 
 both will yield an income of money. Labor will command money, 
 and is a valuable power to acquire property, but is not property. It 
 we could make property by making debts, it cannot be doubted that 
 a national debt would be a national blessing. Attacking the bug¬ 
 bear of “money property” is an assault on all property ; for “money 
 property” is the mere representative of property. If we tax the 
 representative, the tax must fall upon the thing represented. 
 
 A traveler in the Okefanokee swamp slaps the mosquitoes off his right | 
 cheek only to find that they immediately alight upon his left cheek; 
 and that when ho has driven them from thence, they return and alight 
 on his nose; and that all the time he loses blood as a genuine pri¬ 
 mary or secondary tax-payer. And so it is with taxation. If we live 
 in any country not wholly barbarous, we cannot escape it; and it is 
 the fate of man to bear his proportion of its burdens in proportion 
 to his expense, property and consumption. 'The main question of inter¬ 
 est and importance in connection with the subject, therefore, is, shall 
 we have an economical system (and hence a species of labor saving 
 machine), and a uniform and honest system ; or one that is expensive 
 and encourages dishonesty and is arbitrary and inquisitorial ? In either 
 case the tax collector will act the part of the mosquito, and will get 
 blood from all; but in an honest and economical system he will get 
 no unnecessary blood. 
 
 Referring to the supplement to this report for a discussion in detail 
 of some other point of importance, the commissioners would next ask 
 attention to the code of laws, prepared in conformity with the instruc¬ 
 tions of the Legislature, as before cited. 
 
SUPPLEMENT. 
 
 NATURE AND PROVINCE OF TAXATION, AND LIMITA¬ 
 TIONS UPON THE POWERS OF TIIE FEDERAL AND 
 STATE GOVERNMENTS IN RESPECT TO TAXATION. 
 
 The power of every complete sovereignty over the persons and pro¬ 
 perty of its subjects is unlimited, and in every such sovereignty, there¬ 
 fore, the power to compel contributions for the service of the State, 
 or as we may term it, “ to tax” must be unrestricted. In the United 
 States, however, the powers of the national government, and the 
 powers of the separate States are materially limited in many respects. 
 On the one hand, in virtue of an agreement of union accepted by all 
 the States, and known as the federal Constitution, and on the other, 
 in virtue of certain original powers retained by the States, and not 
 delegated by them in entering the federal Union, to any other or 
 higher sovereignty. It is proposed to inquire how far these limita¬ 
 tions of sovereignty affect the powers of the national and State gov¬ 
 ernments in respect to taxation? And first, of the limitations on the 
 taxing powers of the States recognized and maintained by the federal 
 government. 
 
 Taxation of United States Agencies. 
 
 The most important of these limitations upon the taxing power of 
 the separate States of the federal land, is that which excepts and 
 exempts all agencies of the national government, of every name and 
 nature. This limitation, the federal courts have held, exists by impli¬ 
 cation, not only in the Constitution of the United States, but in the 
 structure of the national government itself; “for otherwise the States 
 might impose taxation to an extent that might cripple, if not wholly 
 defeat the operations of the national authorities within their proper 
 sphere of action.”* 
 
 ♦In tlic celebrated case of McCulloch r. Maryland. 4 Wheaton, 481, where the question involved 
 was the right of the State of Maryland to impose taxes npon the operations, within its limits, of the 
 Bank of the United States, created by the authority of Congress, Chief Justice Marshall uses the 
 following language: “If we apply the principle for which the State of Maryland contends to the Con- 
 
Supplement. 
 
 60 
 
 Can Congress authorize the States to tax national instrumentali¬ 
 ties ?—In the popular discussions which have occurred during the 
 last few years in reference to the taxing of United States securities, 
 the position has not been unfrequently taken, that it would have been 
 just and expedient on the part of Congress, at the time of the crea¬ 
 tion of the present national debt, to have allowed the separate States 
 to tax the evidences of such debt (i. e., the bonds) in the possession 
 of their citizens, subject to a limitation that the same should not he 
 taxed at any different rate than other “ moneyed capital.” A full 
 consideration of the whole subject will, however, suggest a doubt 
 whether Congress possesses the power to grant any such authoriza¬ 
 tion, inasmuch as to have done so would have been equivalent to 
 authorizing the States to do an act which in itself is unconstitutional, 
 a thing which it is self-evident that Congress cannot do. Thus, “ the 
 power to tax,” says Chief Justice Marshall, in giving the opinion of 
 the supreme court denying the right of Maryland to tax the Bank ot 
 the United States, “ involves the power to destroy and in the case 
 of Weston v. The City of Charleston, the same court, by the same 
 eminent authority, held further, “ that if the right to impose a tax 
 exists, it is a right which in its nature acknowledges no limits. It 
 may be carried to any extent within the jurisdiction of the State or 
 corporation which imposes it, which the will of such State or corpo¬ 
 ration may prescribed For Congress, therefore, to have authorized 
 the States to tax “national agencies,” would have been equivalent to 
 authorizing the exercise of a right to destroy; which right, the 
 supreme court have held, cannot, from its nature, when once existing, 
 be limited. 
 
 Imported Goods in Original Packages. 
 
 Another restriction upon the taxing powers of the States, imposed 
 by implication by the Constitution of the United States, and directly 
 by the decision and interpretation of the supreme court, has reference 
 to imported goods in original packages, in the possession of the mer¬ 
 chant importer. As this restriction upon the powers of the States 
 
 stitution generally, we shall find it capable of changing totally the character of that instrument. 
 We shall find it capable of arresting all the measures of the government, and of prostrating it at the 
 foot of the States. The American people have declared their Constitution and the laws made lit 
 pursuance thereof, to be supreme; but this principle would transfer the supremacy, in fact, to the 
 States. If the States may tax one instrument, employed by the government in the execution of It" 
 powers, they may tax any and every other instrument. They may tax the mail; they may tax patent 
 rights; they may tax the papers of the custom-house; they may tax judicial process; they ui*J 
 tax all the means employed by the government, to an excess which would defeat all the ends of gov¬ 
 ernment. This was uot intended by the American people. They did not design, to make tb* lr 
 government dependent on the States." 
 
SurrLEMKNT. 
 
 61 
 
 ha? been recently called in question by officials in Massachusetts,* 
 and practically denied by the actual assessment in that State of such 
 property, the commissioners ask attention to the following recent expo¬ 
 sition of this subject by a recognized authority. “ The Constitution of 
 the United States declares that “no State shall, without the consent 
 of Congress, lay any imposts or duties on imports or exports, except 
 what, mav be absolutely necessary for executing its inspection laws.” 
 I'nder this prohibition some difficulty has been experienced in indi¬ 
 cating with sufficient accuracy for practical purposes,.the point of 
 time at which articles brought into the country from abroad cease to 
 be regarded as imports in the sense of constitutional protection, and 
 become liable to State taxation; but it lias been said generally, that 
 where t,he importer lias so acted upon the thing imported, that it lias 
 become incorporated, and mixed up with the mass of property in the 
 country, it has, perhaps, lost its distinctive character as an import, 
 and has become subject to the taxing power of tlie State ; but while 
 remaining the property of the importer, in his warehouse, in the 
 original form or package in which it was imported, a tax upon it is 
 too plainly a duty upon imports to escape the prohibition in the Con¬ 
 stitution. And it was also declared in the same case (Brown v. 
 Maryland), that a State law, w hich for revenue purposes required a 
 merchant to take a license, and pay fifty dollars, before be should be 
 allowed to sell a package of imported goods, was equivalent to laying 
 a tax upon imports. And it has been held in another case, that a 
 stamp duty imposed by the legislature of California upon bills of 
 lading for gold and silver, transported from that State to any port or 
 place out of the State, was in effect a tax upon exports, and the 
 
 ♦ The case relied on by the commissioners in their former report, to sustain their position In 
 f respect to the right of a State to tax imported goods, was that of Brown v. The State 0/ Maryland 
 (1*2 Wheaton. 449); the question involved being the legality of a license tax imposed by the State as 
 r a prerequisite to the right to sell an imported article. The court (Chief Justice Marshall) held, that 
 this tax, though indirect inform (f. <*., a license on the person of the importer), was in fact equiva¬ 
 lent to a duty on imports, and therefore illegal; and that the right to import carried with it the 
 [ right to sell. 
 
 In reply to this, the chairman of the board of assessors of the city of Boston (see auditor's report 
 of tin* city of Boston, 1X71) makes the following statement: 
 
 ••There is certainly a broad distinction between the prohibition of the right to sell an imported 
 article, and the right, to to: the same as property. The decision of the United States court was to 
 the effect that the state could not enact a law that would prevent the sale of such property, and did 
 not touch the question of the right to tax. In a recent decision of the supreme judicial court of 
 ' Massachusetts {lumbar v. Boston, 101 Mass., 317), where the question was raised that the coimnon- 
 ; wealth could not tax a stock of liquors, the sale of which, by her laws, she had declared illegal, the 
 court sustained the lax. upon the ground that the case did not show that the goods could not he 
 legally sold. As the law stood at the time the decision was given, but one class of the plaintiff’s 
 stock of intoxicating liquors could legally be sold; and that was his importations in the original 
 packages.'' 
 
Supplement. 
 
 62 
 
 law was consequently void.”* ( Cooley’s Constitutional Limita¬ 
 tions.) 
 
 Limitations on the Taxing Power of the Federal Government in 
 Respect to the States. 
 
 But if the States cannot tax the agencies or instrumentalities by 
 which the federal government performs its functions, it would seem to 
 clearlv follow that for the same reasons the federal government can¬ 
 not tax State instrumentalities or agencies. And so the courts of the 
 United States have held, whenever this question has been brought 
 before them for adjudication. Thus, in a case of recent decision 
 {Day v. Buffington, U. 8. Circuit Court , Mass. District ), it was held 
 that the salary of a State official, in this particular instance a judge of 
 probate, could not be legally subjected to assessment for an income 
 tax, under the laws of the United States authorizing the assessment and 
 collection of internal revenue; and Congress, some years since, acting 
 under the advice of the United States Supreme Court, repealed so 
 much of the internal revenue act as previously required the affixing 
 of stamps to State processes, warrants, commissions, etc. In the case 
 of Warren v. Paul , 22 Ind., 279, the court used the following lan¬ 
 guage : “ The federal government may tax the governor of a State or 
 the clerk of a State court and his transactions as an individual, but 
 not as a State officer. This must be so, or the State may be anni¬ 
 hilated at the pleasure of the federal government. The federal gov¬ 
 ernment may, perhaps, take by taxation most of the proper y in a 
 State if exigencies require, but it has not a right by direct or indirect 
 means to annihilate the functions of the State government.” 
 
 * This case {Almy v. California , 24 Howard U. S. Reports, p. 169), arose under a statute of Califor¬ 
 nia, which imposed a stamp tax on hills of lading for the transportation of gold and silver from any 
 point within the State to any point without the State. The question, as presented to the Supreme 
 Court of the United States under this statute, was stated to be as follows: Is this stamp act, so 
 required to be paid by State authority, an impost, or an exjjost, within the meaning of the consti¬ 
 tutional prohibition upon the States ? It was held by an unanimous bench that the tax fell within 
 the terms of the prohibition, or was in conflict with the clause of the Constitution giving Congress 
 the right to regulate commerce with foreign nations. In a subsequent review of this case, 1868, Mr. 
 Justice Miller stated that the case was well decided, but on a different ground, viz. : “ That such a 
 tax was a regulation of commerce; a tax imposed on the transportation of goods from one State to 
 another , over the high seas, in conflict with that freedom of transit of goods and- persons between 
 one State and another, which is within the rule laid down in Crandall v. Nevada (6 Wallace U. S. 
 Reports, 382), and with the authority of Congress to regulate commerce among the States.” It, 
 therefore, follows that bills of lading given for goods transported from one State to another arc 
 interstate instrument*, and as such cannot be subjected to State taxation; and it would further 
 seem that bills, drafts, bonds, etc., made in one State and payable in another, are similar iuter-State 
 instruments, and as such cannot be taxed by State authority any more than bills of lading, the taxa¬ 
 tion of which by States, as above shown, has been decided to be unconstitutional. 
 
Supplement. 
 
 6 $ 
 
 Taxation of the Instrumentalities or Agencies ok one State of 
 the Federal Union by Another State Unconstit tional. 
 
 It would seem, from the above referred to decisions and precedents, 
 to follow that what is unconstitutional and unlawful for the federal 
 government to do in respect to the States, is equally unconstitutional 
 and unlawful for one State to do in respect to another and sister State ; 
 as, for example, the taxing of such an instrumentality of one State as 
 its “borrowing power” by another State. And hence the commis¬ 
 sioners hold, in conformity with the opinion of some of the best legal 
 authorities in the country with whom they have conferred, that the 
 bond of a State of the federal Union, issued for the purpose of raising 
 money, or as the acknowledgment of indebtedness, is not taxable by 
 any authority other than the State which issued it. And, in support 
 of this assumption, the commissioners would ask attention to the fol¬ 
 lowing citations from a recognized authority : 
 
 In the case of Weston v. The City of Charleston (2 Peters, 449), 
 the Supreme Court of the United States, by Chief Justice Mar¬ 
 shall, held, that a tax on stock of the United States , held by an 
 individual citizen of a State , is a tax on the power to borrow 
 money on the credit of the United States , and cannot be levied 
 on the authority of a State consistently with the constitution. “Can 
 anything be more dangerous,” he continues, “or more injurious, 
 than the admission of a principle which authorizes every State and 
 every corporation in the Union, which possesses the right of taxa¬ 
 tion, to burden the exercise of this (borrowing) power at their discre¬ 
 tion A tax on the stock, or bonds of a State is, therefore, a tax on 
 the borrowing power of such State. 
 
 The court further held, that a tax of this description was a tax upon 
 contracts;* using the following language: “Congress has power to 
 borrow money on the credit of the United States. The stock it issues 
 
 * What interpretation the Supreme Court puts upon the word "contract." as found in that clause, 
 of the Constitution of tlie United States, which provides “ that no State shall pass any law impairing 
 the obligations of contracts, is made clear by the following language employed by Chief Justice Mar¬ 
 shall, in giving the opinion of the court in the celebrated case of the Trustees of Dartmouth College h. 
 Woodward: “The term contract must be understood as intended to guard against a power of at 
 least doubtful utility, the abuse of which had been extensively felt, and to restrain the Legislature in 
 future from violating the right to property. That anterior to the formation of the Constitution, a 
 course of legislation had prevailed in many, if not all, of the States, which weakened the confidence 
 of man in man. and embarrassed all transactions between individuals, by dispensing with a faithful 
 performance of engagements. To correct this mischief, by restraining the power which produced it, 
 the State Legislatures were forbidden ' to pass any law impairing the obligations of contracts,' that 
 is, of contracts respecting property, under which some individual could claim a right to something 
 beneficial to himself; and that since the clause in the Constitution must, in construction, receive 
 some limitation, it may be confined and ought to be confined, to cases of this description; to cases 
 within the mischief it was intended to remedy." 
 
Supplement. 
 
 64 
 
 iB evidence of a debt created by the exercise of this power. The tax 
 in question is a tax upon the contract subsisting between the govern¬ 
 ment and the individual. It bears directly upon the contract. While 
 subsisting and in full force, the power operates upon the contract the 
 instant it is framed, and must imply a right to affect that contract. 
 If the States and corporations throughout the Union possess the 
 power to tax a contract for the loan of money, what shall arrest the 
 principle in its application to every other contract? What measure 
 can government adopt which will not be exposed to its influence? 
 The right to tax the contract to any extent, when made, must operate 
 upon the power to borrow betore it is exercised, and have a sensible 
 influence on the contract. The extent ot this influence depends on 
 the will of a distinct government. To any extent, however incon¬ 
 siderable, it is a burden on the operations of government. It may be 
 carried to an extent which shall arrest them entirely.” 
 
 It is interesting to note that this decision establishes the economic 
 principle, so far as a court of the highest resort can by its decision so 
 establish such a principle, that when a State imposes a tax on its 
 own obligations or on the obligations of its municipalities, it in effect 
 taxes its own borrowing power / and to the extent ot the tax reduces 
 the value of its bonds or obligations when issued. The Anal result 
 of all which procedure is that the State defrays the expense of the 
 assessment, collection and disbursement of an odious, inquisitorial 
 tax without deriving the least advantage from its imposition. All 
 taxes, therefore, levied on evidences of debt, must be in effect bur¬ 
 dens on the borrowers, who are usually the persons least able to sus¬ 
 tain the weight of taxation. But if the taxation of the instrumentali¬ 
 ties of one State by another State is constitutional, the commissioners 
 would ask if such an act is not both inexpedient and unfriendly, espe¬ 
 cially when it is remembered that some of the States issue their State. 
 and municipal obligations, exempt from all taxation ? Does not 
 comity and good neighborhood require that the instrumentalities of 
 one State should be respected by all the others as a part of the 
 sovereignty of the State creating the instrument in question ? 
 
 Limitations of Territorial Sovereignty and Limitations of the 
 Taxing Power Co-extensive. 
 
 It would seem to be in the nature of a self-evident proposition, 
 although in fact it is by no means so regarded, that the power of a 
 State to tax must be exclusively limited to person and property within 
 its territory and legal jurisdiction. “ All subjects ,” says Chief Justice 
 
SUPFLEMESJ. 
 
 65 
 
 Marshall, ill giving the opinion of the Supreme Court, in the ease of 
 McCullough v. Maryland, “over which the sovereign power of the 
 Slate extends are objects of taxation / 5w£ over which it does not 
 extend are on the soundestprinciples exempt from, taxation. * * * 
 
 The sovereign power of the State extends to everything which exists 
 by its own authority or is introduced by itspermission .’’ 
 
 “Every nation,'” says Wheaton, “possesses and exercises exclusive 
 sovereignty and jurisdiction throughout the full extent of its terri¬ 
 tory. It follows, from this principle, that the laws of every State 
 control, of right, all the real and personal property within its terri¬ 
 tory. The second general principle is, that no State can, by its laws, 
 directly affect, bind or regulate property beyond its own territory. 
 This is a consequence of the first general principle ; a -different, 
 system, which would recognize in each State the power of regulating 
 persons or things beyond its territory, would exclude the equality of 
 rights among different States, and the exclusive sovereignty which 
 belongs to each of them.” (Wheaton’s International Law, chap. 2, -5 
 2; Fcelix International Prise, §§ 9 and 10.) 
 
 Protection the correlative of taxation. —The correlative of taxa¬ 
 tion, furthermore, is protection ; or, in other words, according to the 
 political theory of our governments, national and State, and in fact of 
 every government claiming the title to b a free, taxes are the compensa- 
 t ion which property pays the State for protection. “ Taxes are a portion 
 which each individual gives of his property, in order to secure and 
 have the perfect enjoyment of the remainder. Governments are estab¬ 
 lished for the protection of persons and property within the limits of 
 the State, and taxes are levied to enable the government to afford and’ 
 give such protection. They are the price and consideration of the 
 protection afforded." Ingersol , J., Circuit Court of the United States, 
 Dues' v. Small. “There is nothing poetic.about tax laws. When 
 they find property , they claim a contribution for its protection .” 
 Lowrie , Chf. Justice, Tinley v. The City, etc., 32 Penn., 381. Mon¬ 
 tesquieu, writing with the monarchial institutions of France mainly 
 or solely in view, discusses this subject in his “ Spirit of Laws” (Book 
 13, chap. 1.), as follows: “ The public revenues are a portion that each 
 subject gives of his property, in order to secure or enjoy the remain¬ 
 der /” and he further enunciates this common sense and equitable 
 principle, which very curiously the majority of those who undertake 
 to discuss taxation in the United States, wholly ignore, “that thepublic 
 revenues ought not to be measured by the peoples abilities to give, but 
 by what they ought to give.” “And what they ought to give,” as has 
 
Supplement. 
 
 m 
 
 been remarked by another writer, “ can of course only be measured 
 by the benefit they are to derive.” 
 
 These fundamental principles, defining sovereignty in respect to 
 taxation, are, however, violated, either in theory or practice, by most 
 of the States in the exercise of the taxing power ; as, for example, in 
 Massachusetts, where the law defines personal estate for purposes of 
 taxation to include “ goods, chattels, money and effects, wherever they 
 are; ships, public stocks and securities, stocks in turnpikes, bridge., 
 and moneyed corporations within or without the State." 
 
 The claim or argument, however, which the advocates of such a 
 system set up in its defense is, that personal property has no situs, and, 
 therefore, follows and adopts that of its owner. The inconsistency 
 and absurdity of such a claim is well set forth in the following extract 
 of an argument made before the committee of ways and means of the 
 New York Assembly in 1862 , by G. P. Lowrey, Esq., in respect to a 
 proposition to amend the laws of New York in such a way as to 
 neutralize a decision of the court of appeals, to the effect that visible, 
 tangible property of citizens of New York, situated beyond the terri¬ 
 tory of the State, was without the jurisdiction of New York for the 
 purposes of taxation : 
 
 “ Inconsistency and absurdity struggle for the first place in this 
 claim. Inconsistency, because we reject the rule, by taxing the per¬ 
 sonal property of non-residents when it is here; absurdity, because it 
 is a confusion of essential ideas ; an attempt to make a rule, whose 
 very form admits the actual absence of the property, govern a case 
 where the essential requisite is its actual presence. This most excel¬ 
 lent rule ot law, so meritorious as to have gained a place in the code 
 of international comity, would be much abused by such an application. 
 Mobilia jjersonam sequuntur is one of the benevolent maxims of the 
 law. It was invented for the convenience of the owner of property; 
 never yet was it made the ground of a demand upon him. It is also 
 a device of comity, by which the State holding jurisdiction of the 
 property permits an act, done by the non-resident owner at his domi¬ 
 cil, to have the same effect, touching it, as if done at the locus sitaz- 
 It means, simply, that for the purpose of sale, distribution, or other 
 disposition ot the property, any act, agreement or authority, which 
 is sufficient in law where the owner resides, shall pass the 
 property where it is. The use of it is to facilitate affairs of 
 commerce and the distribution of decedents’ estates, by enabling 
 parties to dispose of their property without embarrassment from their 
 ignorance of the laws of the country where it is situated {Gatlin v. Hall, 
 
Supplement. 
 
 67 
 
 Vermont, 152.) It would be a more accurate rendering of tbe 
 rule to say : “ Personal property follows the Jaw of the owners 
 domicil,” and not as in effect claimed ; that the law of the owner’s 
 domicil follows the property. “ In fictione juris e quit as existat.'' 
 
 No fiction,” says Blackstone, “ shall extend to work an injury ; its 
 proper operation being to prevent a mischief or remedy an incon¬ 
 venience, which might result from the general rule of law.” At 
 any attempt to misapply a fiction, it falls within and is terminated by 
 that other authoritative maxim of logic and the common law, cessante 
 ■ratione legis , cessat ipsa lex.' “Fictions of law hold only in respect 
 of the ends and purposes for which-they were invented : when they 
 are urged to an intent and purpose not within the reason and policy 
 of the fiction, the other party may show the truth.” Lord Mansfield.* 
 But it may be said, that the State in taxing personal property situate 
 beyond its territory, does not in fact tax the property, but the owner, 
 over whom the State has jurisdiction in respect to such property. 
 In answer to this claim the commissioners quote further from tke 
 argument of Mr. Lowrey above referred to. 
 
 This claim involves a dangerous inaccuracy, and “arises from a 
 confusion of the idea of the assessment with the idea of the tax. 
 These two stand upon altogether different bases. The assessment 
 is to the person in respect to the property ; but the tax is to the 
 property in respect to itself alone. In the order of consequence 
 a tax goes before an assessment. A tax stands upon an existing rela¬ 
 tion between the property and the State, as protector and protected, 
 and is that portion of the public burden which the property ought 
 to bear because of that existing relation. An assessment stands upon 
 the existing relation between the property and its owner or possessor; 
 it follows the tax, and is merely the method of securing it. The 
 danger, in saying that the tax is to the person in respect of his pro¬ 
 perty , is, that, by the form of the expression we justify an assessment 
 upon a person for all property indiscriminately. We transpose the 
 subjects, and make the law seek out the person, and then tax him 
 according to his property, instead of first seeking property which it 
 has a right to tax, and then as a secondary matter, a person to whom 
 it may be assessed. Even if a knowledge of the property is obtained 
 by inquiry addressed to the owner in the shape of a general assess¬ 
 ment, still the rationale of the matter presupposes the right to tax on 
 
 * Examples of double or even greater taxation by different States at the same time on one and the 
 ■same property; and the gross inconsistencies of procedure which follow the application to taxation 
 ■of the principle that, "personal property follows the owner,” have been already given in this report, 
 sec page 15. 
 
Supplement. 
 
 G8 
 
 account of the property and our relation to it directly. If we dis¬ 
 regard this rationale, we may, perhaps, register an assessment where 
 we are not entitled to levy a tax.” 
 
 “ The person to whom the assessment is made need not be the 
 owner. He may be the agent, trustee, guardian, executor or adminis¬ 
 trator. This is because the property, which owes the tax by reason 
 of being protected, has not hands wherewith to take from itself a por¬ 
 tion of itself, to pay for protection to be accorded to the remainder, 
 Therefore the law, following the property to get the tax, makes its 
 demand upon whoever it finds in possession, without inquiring upon 
 what interest the property is based. This it does, ignoring all persons, 
 beneficially interested in the title, even the owner himself. “ Every 
 person,” says the statutes of Hew York, “shall be assessed, etc., for 
 all personal property owned by him, including all property in his 
 possession, or under his control, as agent, trustee, guardian, etc.” 
 
 “ Thus it will be seen that for the purpose of assessment, possession 
 is a title superior to ownership. And I now reiterate, that according 
 to the theory of our government, a tax stands upon the just obliga 
 tion of all property to contribute to the support of the power which 
 protects it; but that the assessment stands upon the possession or 
 power of the person assessed, over the property taxed. This may be 
 further illustrated. Movables can never be out of the actual or con¬ 
 structive presence of some one, and, therefore, there is always a per¬ 
 son in esse to whom the assessment may be made. But the case is 
 very different with immovables, and therefore, lands are often taxed 
 and assessed by their own name and designation, and specifically sold 
 to satisfy the specific assessment, no person’s name anywhere appear¬ 
 ing in the proceedings. 
 
 “Keeping this vital distinction between an assessment and a tax 
 clearly in view, the mind will come by easy steps to an understand¬ 
 ing of how it is that a tax, to a man who has no property in the State,, 
 is a tax upon his person. Process is the eye of the law. Its vision 
 is limited by territorial boundaries. Whatever does not exist within 
 that limit, does not, for any purpose of law, exist at all. The rich 
 man, whose property is in Europe, and the pauper, whose property is 
 nowhere, are then equal, as persons, before the law. A tax upon a 
 pauper would be a personal tax. A tax upon the rich man is, by 
 unimpeachable parity of reason the same. Such a tax would be a 
 gross solecism on our system. The philosophy of our plan of volun 
 tary political association, is that all individuals, and all the values 
 within a community, shall aggregate into one mass all the power 
 
Supplement. 
 
 69 
 
 I which they separately contain, which sum total shall constitute a 
 sovereignty of the whole, 'fliis sovereignty—the soul of the State, 
 
 I which cannot be impaired, and the State survives—reflects back upon 
 I' its constituents in detail, all that it has received from them. What 
 I it receives, and what it returns, is of two kinds, as to both source and 
 I object, viz., individual service to the government, and protection to 
 I the individual from it. Thus in his individual capacity, a man is 
 [ bound to perform military service, and the State by the military arm, 
 
 I is bound to protect him from invasion. He is bound to do jury duty, 
 
 I and the authorities are bound upon his demand, to provide him a 
 I jury. He is bound to aid the sheriff, and the sheriff is bound to exc- 
 ■ cute process in his favor by posse comitatus if necessary. These per- ' 
 I sonal services correspond to those which in feudal times, the mesne 
 I lord holding a frank tenament, owed the lord paramount. They can- 
 I not be compounded for, for their value consists in their being rendered 
 [ in kind. Their performance is the only price which the citizen pays 
 I for his citizenship. The terms are not only consistent and harinoni- 
 [ ous with our general scheme of government, but are highly politic. 
 
 I They are a liberal invitation to all men to come and add to ours their 
 | lives, their hopes, their strength, labor and courage, that we may 
 [ build up a nation. To all political privileges we admit each one by 
 [ virtue of his being a man, free born and of lawful age ; we ask him 
 nothing concerning his property, unless his property asks something 
 I from us.” 
 
 Tax on Breathing. —In the time of Anastasias, emperor of the 
 I east, the capitation, or personal tax was called a tax on breathing, 
 gnimarwn trihuturnT The same expression might still be used with 
 great propriety to designate the personal tax which States or towns 
 [ impose on their citizens for property beyond their territory and jurisdie- 
 [ tion ; for such taxes are in fact taxes on breathing, or existence in tin* 
 
 [ place where a person does his breathing and not where his property is 
 I located. So long as this rule exists, there can be little doubt that 
 I people will resort to those places where breathing is made easy, free, 
 and least expensive ; neither can there be any doubt, that if the State 
 [ makes breathing difficult, it will pay the penalty in loss of population 
 [ and wealth. People will always be most sensitive to any obstruction 
 to breathing. 
 
 Again, f we are to tax personal property beyond the sovereignty 
 and jurisdiction of the taxing power by reason of the possession of the 
 person of the owner, and for the purpose of augmenting the revenue; 
 il why not,” says Mr. Lowrey, in the argument above referred to, 
 
70 
 
 Supplement. 
 
 “carry the principle to its logical conclusion.” Why not tax real 
 property also ? No reason can be givefti for a distinction, although 
 pretexts claiming to be reasons may. One claim is as good as the 
 other. A robber who should draw romantic distinctions between 
 watches and purses would fail in business. If we are to be robbers, 
 in practice, let us, at least, secure some grace by honesty in our pro¬ 
 fessions, and admit that what we thus take is not a tax received as. 
 the just recompense of a benefit conferred ; but a compulsory levy* 
 having its cause in our greed, and its justification in our power ; and 
 as these reasons are as good for a large levy as a small one, and the: 
 whole of a man’s estate is greater than its part, why not take the- 
 whole ? 
 
 “ Still further; if we tax a man (in New York or Massachusetts) 
 who has come from Connecticut or England to stay a year, for the 
 property he has left behind, why not the man who has come for a 
 week ?” If we are to do business upon the principle that “ might 
 makes right,” would it not be a brilliant stroke to station ourselve's 
 at all the avenues of ingress to the State, and cry, “stand and 
 deliver to the passengers ?” 
 
 This maxim, “ mobilia personam sequuntur ,” which we call a 
 a legal fiction, when perverted from its original and beneficent purpose,, 
 therefore, deserves no better than to be called a legal tie; and it is 
 worthy ol note also that in Rome where the fiction originated, its 
 applicability to property was never held, according to Savigny, to- 
 extend beyond Roman territory. 
 
 From the above citations and arguments, the conclusion would 
 seem to be inevitable, that when a State assesses property situated 
 beyond its territory and jurisdiction, and which its laws and processes 
 aie not competent or able to either reach or protect; or, assesses one- 
 of its own citizens in respect to such property, the act has no claim to 
 be legalded as taxation, but is simply arbitrary taking , no wavs differ¬ 
 ent in principle from confiscation. 
 
 Effect of the Fourteenth Amendment on the Powers of the 
 States in Respect to the Arbitrary Appropriation of Pro¬ 
 perty. 
 
 i It ib curious to note, that prior to the recent amendment to the 
 Constitution of the United States, there does not appear to have been 
 any restrictions on the power of the States of the Federal Union to. 
 deal with the persons and property of their citizens in any manner it 
 may have seemed to a majority of their voters .to be expedient. 
 
Supplement. 
 
 71 
 
 That this was so in regard to persons is evident from the fact that, 
 prior to the thirteenth amendment to the Constitution of the United 
 States, a large number of the States exercised without question the 
 power of holding a portion ot their population in slavery ; and in the 
 States where slavery did not exist, the abrogation of this right and 
 the non-exercise of the power was the voluntary act of the people 
 themselves, and might have been resumed at any time, in case a 
 majority had so determined. 
 
 Now, while no higher privilege obviously could be claimed for pro¬ 
 perty than was granted to persons, the right of the States to deal with 
 the property of their citizens in any way they may have seen fit, was 
 made the subject ot a decision of the supreme court of the United 
 States, in the case of Baron v. The Mayor of Baltimore , January, 
 1S33 (7 Peters, 243). In this case the city of Baltimore, in the exer¬ 
 cise of its corporate authority over the harbor, etc., so diverted certain 
 streams of water that they made deposits of sand and gravel near the 
 plaintiff’s wharf, and thereby prevented the access of vessels to it. 
 A writ of error was taken from the judgment of the Maryland court 
 of appeals, refusing damages, to the supreme court of the United States, 
 on the ground that this decision was in violation of the fifth amend¬ 
 ment to the Constitution of the United States, which prohibits the 
 taking of public property for private use without just compensation ; 
 the plaintiff contending further, “ that this amendment, being in favor 
 of the liberty of the citizens, ought to be so construed as to restrain 
 the legislative power of a State, as well as that of the United States. 
 The court, however, by Chief Justice Marshall, held that this amend¬ 
 ment of the Constitution “ is intended solely as a limitation on the 
 exercise of power Iny the government of the United States , and is not 
 applicable to the legislation of the States ; which was equivalent to 
 saying, viz., that if the several States choose to arbitrarily take or con¬ 
 fiscate the property of any of its citizens, there was no higher sove¬ 
 reignty to restrain them. 
 
 At the close of the late civil war, however, when it was deemed 
 desirable by Congress to impose some restrictions on the reconstructed 
 States, so as to prevent the former disloyal element of their popula¬ 
 tion in the event of the contingency of regaining legislative power, 
 from dealing arbitrarily or unjustly with any class of their fellow- 
 citizens who might happen to be obnoxious, the following clause was 
 made a part of the fourteenth amendment, and through its adoption 
 has become the supreme law of the land: k< Nor shall any State deprive 
 any person of life , liberty or property, without due process of lain." 
 
7 2 
 
 Supplement. 
 
 Now the force of this amendment obviously depends upon the 
 meaning of the last clause, “due process of law and it is also clear 
 that “ due process of law ” does not mean a procedure in conformity 
 with any law which a State legislature might enact, or with any 
 provision which the people of a State might put in their Constitu¬ 
 tion ; for if such be the interpretation of this phrase, then this clause 
 of the fourteenth amendment referred to, would practically read as 
 follows: “ Nor shall any State deprive any person of life, liberty or 
 property, except in conformity with such laws as it may enact.” 
 
 The general meaning of the phrase, “ due process of law,” and of 
 the synonymous expression “law of the land,” has, however, been made 
 so often the subject of discussion and legal decision as to be in no sense 
 a matter of doubt. Mr. Webster, in the Dartmouth College case, 
 defined these terms as follows: “ By the law of the land is most clearly 
 intended the general law, which hears before it condems, which pro¬ 
 ceeds upon inquiry, and renders judgment only after trial. The 
 meaning is, that every citizen shall hold his life, liberty, property and 
 immunities under the protection of the general rules which govern 
 society. Everything which may pass under the form of an enact¬ 
 ment is not the law’ of the land.” And in commenting on this defini¬ 
 tion, Justice Cooley, in his treatise on “Constitutional Limitations,” 
 uses this language: “This definition of Mr. Webster, is apt and 
 suitable as applied to judicial proceedings, which cannot be valid 
 unless they proceed upon inquiry, and render judgment only after 
 trial. It is entirely correct, also, in assuming that a legislative 
 enactment is not necessarily the law of the land. The w r ords, “by 
 the law of the land,” as used in the Constitution, do not mean a 
 statute passed for the purpose of working wrong. That construction 
 would render the restriction absolutely nugatory, and turn this part 
 ot the Constitution into mere nonsense. “ Due process of law”, there¬ 
 fore, continues Mr. Cooley, after reviewing the interpretations of 
 various other authorities, means, “ such an exertion of the powers of 
 the government as the settled maxims of law sanction, and under such 
 safeguards for the protection ot individual rights as these maxims 
 prescribe.” 
 
 u The very idea of taxation, the very elements of the terms tax—taxa¬ 
 tion implies that it is an imposition or levy up'on persons or property 
 in due course or order, treating all alike in the same condition and cir¬ 
 cumstances. The burden ot taxation must be equalized by this mode 
 in order to preserve its character. It is in any view taking private 
 property for public use; and it cannot be so taken, without an 
 
tiUPPLEMEST. 
 
 7d 
 
 equivalent both as to the government or the citizens. It is not 
 competent for the government to convert private property to public 
 use, by way of taxation and without compensation, any more than by 
 any other mode.” (Redfield.) 
 
 ■Xow the exact applicability of . the fourteenth amendment in 
 restraining the several States in the exercise of their so-called “ tax 
 im? powers,” the commissioners hold to be this: 
 
 Taxation implies protection. It is held by every authority to bo 
 the equivalent for the protection which the goverment affords to the 
 property of its citizens. When, therefore a State taxes property, 
 either directly or indirectly, out of its territory and jurisdiction, which 
 it cannot protect, and which its processes cannot reach, the act is not 
 taxation, but a mere arbitrary exercise of power; not in accordance 
 with any “ process of law,” and forbidden bv the Constitution of the 
 United States ; and as involving a principle under the Constitution. 
 Furthermore, the question of restraining a State from the exercise of 
 such arbitrary powers would seem to be one legally within the right 
 of any citizen aggrieved in virtue of the fourteenth amendment, to 
 carry from the courts of his own State to the supreme court of the 
 United States. 
 
 As another method by which a citizen of a State, agrieved by an 
 imposition of an ex-territorial tax, might test the constitutionality of 
 the same, the following is also worthy of consideration: 
 
 A citizen of Massachusetts taxed on personal property situated in 
 Illinois, might obtain a writ of certiorari in an Illinois court, and 
 raise the question, that, inasmuch as personnl property is held in law 
 to follow the person, the property in question was not taxable in 
 Illinois. And after the courts of Illinois had rendered an adverse 
 judgment, as they undoubtedly would, the owner taxed for the same 
 property in Massachusetts, could obtain a writ of certiorari in the 
 courts of that State, and raise the following questions: 
 
 1st. "Want of jurisdiction in respect to the property on the part of 
 the State of Massachusetts. 
 
 2d. Violation of the Constitution of the United States in 
 denying full faith and credit to the “public acts (tax laws of 
 Illinois) and judicial proceedings” of a sister State. 
 
 It needs no argument to prove that under the provisions of 
 the Constitution of the United States, above referred to, both 
 the laws and judicial proceedings of one State are as valid 
 and as much to be respected in another State, as the laws and 
 judicial proceedings of the latter State itself If the courts of 
 
SUPPLEMENT. 
 
 74 
 
 Massachusetts, following precedents in that State, should decide 
 that personal property situated beyond the State, follows the person 
 residing in Massachusetts, and so disregards the judicial proceedings 
 and public acts of Illinois, a question under the Constitution of the 
 United States would arise, which would give jurisdiction in the 
 United States Court. And as one and the same thing cannot occupy 
 two places at the same time, the federal court must finally decide 
 in which State is the situs of the property for taxation in the case 
 presented. The principle involved in this case would seem to be 
 identical with an attempt on the part of a State to convict a citizen 
 for an offence committed beyond her jurisdiction, in respect to which 
 judgment had already been rendered in a sister State, where the 
 offence had been committed. 
 
 As further bearing upon this subject, reference is made to the fol¬ 
 lowing judicial decisions : The court of errors of New York, some 
 years ago, decided that private property could not be forcibly taken 
 for a private road, even if compensation was made by the party bene¬ 
 fited ; because the act was the taking property arbitrarily, and not 
 according to due process of law. 
 
 The national bank act acknowledges, and the courts of the United 
 States have so held, that a bank has a situs and its shares a situs 
 where the bank is located, and not where the stockholders reside. 
 The national bank act, therefore, discards the usual State principle 
 of taxation, that personal property follows the owner. 
 
 The principle that two States cannot tax at the same time the same 
 property , and that a State cannot tax property and rights to property 
 lying beyond her jurisdiction, has been also affirmed by the 
 Supreme Court of the United States (December, 1S68), in the case 
 of The Northern Central Railroad v. Jackson (7 W allace, 262). The 
 railroad corporation in question, extending from Baltimore in Mary¬ 
 land to Sunbury in Pennsylvania, was the result of the consolida¬ 
 tion of four railroad companies; one incorporated by the State of 
 Maryland and three by the State of Pennsylvania. The latter State 
 imposes a tax of three mills per dollar of the principal of each bond 
 issued by said road, which tax the company, at their office in Balti¬ 
 more, deducted from the coupons of the bonds of said consolidated 
 road held by Jackson, an alien, resident in Ireland. The court, by 
 Mr. Justice Nelson, decided adversely to the tax, on the ground 
 that the bonds were issued upon the credit of the line of the road, a 
 portion of which was within the jurisdiction of the State of Mary¬ 
 land, and that the security, bound and pledged for the payment of 
 
Supplement. 
 
 /;> 
 
 the bonds and of the interest on them, embraces the Maryland por¬ 
 tion of the road equally with that portion situated in the State of 
 Pennsylvania; respecting which condition of a if airs, the court used 
 the following language: 
 
 "It is apparent, it the State of Pennsylvania is at liberty to tax 
 these bonds, that to the extent of this Maryland portion of the road 
 she is taxing property and interests beyond her jurisdiction. Again, 
 if Pennsylvania can tax these bonds, upon the same principle Mary¬ 
 land can tax them ; this is too apparent too require argument. The 
 consequence of this, if permitted, would be double taxation of the 
 bondholder. The effect of this taxation is readily seen; a tax of three 
 mills per dollar of the principal, at an interest of six per centum, 
 payable semi-annually, is ten per centum per annum of the interest; 
 a tax, therefore, by each State, at this rate amounts to an annual 
 reduction from the coupons of twenty per centum ; and if this con¬ 
 solidation of the line of the road had extended into New York or 
 Ohio, or into both, the deduction wonld have been thirty or forty. 
 If Pennsylvania must tax bonds of this description , she must confine 
 it to bonds issued exclusively by her own corporations. Our conclu¬ 
 sion is, that to permit the deduction of the tax from the coupons in 
 question would be giving effect to the acts of the Pennsylvania legis¬ 
 lature upon property and interests lying beyond her jurisdiction .” 
 

 CODE OF L A W S 
 
 FOR THE 
 
 VALUATION AND ASSESSMENT 
 
 OF THE 
 
 REAL AND PERSONAL PROPERTY 
 
 OF THE 
 
 STATE OF NEW YORK. 
 
 TREl’AKKD BY 
 
 The Commissioners for the Revision of the Laws for the Assessment 
 and Coelection of Taxes, in conformity with an Act of 
 the Legislature of New York, Passed, May, 1871. 
 
AN ACT 
 
 To amend titles one and two, chapter thirteen of the Revised 
 Statutes, in relation to property liable to taxation and the 
 assessment thereof. 
 
 The People of the State of New York , represented in Senate and 
 A ssembly , do enact as follows : 
 
 Titles one and two, chapter thirteen, part one, of the Revised 
 Statutes, are hereby amended so as to read as follows: 
 
 Title 1 . Of the property liable to taxation. 
 
 Title 2. Of the place and manner in which property is to be 
 assessed. 
 
 TITLE I. 
 
 Of the Property Liable to Taxation. 
 
 Sec. 1. Real estate subject to taxation. 
 
 2. Meaning of the term “land,” “real estate,” and “real 
 
 property.” 
 
 3. Specified personal property liable to taxation, the shares 
 
 and corporate franchises of moneyed corporations. 
 
 4. Real estate subject to supplemental taxation, on building- 
 
 occupancy valuation equal to three times the rent of 
 buildings. 
 
 5. Building occupancy assessment an equivalent of the personal 
 
 property, expense and consumption of occupiers. 
 
 6. Building occupancy tax may b<^ recovered by owners from 
 
 occupiers. 
 
 T. Meaning of “taxable property,” and “building occupancy 
 valuation.” 
 
 8. Land sold by the State, though not conveyed to be assessed. 
 
 9. Property exempt from taxation. 
 
 Section 1 . All lands within this State, whether owned by individuals 
 or corporations, shall be liable to taxation on their full, real and actual 
 value, subject to the exemptions hereinafter specified. 
 
so 
 
 Code of Taxation. 
 
 § 2. The term “land,” as used in this chapter, shall be construed 
 to include the land itself, all buildings and other articles erected upon 
 or affixed to the same, all wharves or piers, including the value of the 
 right or grant to collect wharfage or dockage thereon; all bridges, 
 railroad structures, cuts, embankments, culverts, sidings and tracks, 
 and the iron thereon, and including the iron and other fixtures owned 
 by any railroad company, and permitted or authorized to be laid or 
 placed in any public roads, streets or grounds; all gas and water pipes 
 owned by any incorporated company, including said pipes laid in any 
 public street or place; all trees and underwood growing thereon, and 
 all mines, minerals and quarries in and under the same, except mines 
 belonging to' the State; and the terms “real estate,” and “real pro¬ 
 perty,” whenever they occur in this chapter, shall be construed as 
 having the same meaning as the term “land,” thus defined. 
 
 § 3. The following personal property shall be liable to taxation : 
 
 1. The shares of banks, or banking associations, organized under 
 the national banking law, located and doing business within this State. 
 
 2. The shares and corporate franchises of banks, or banking asso¬ 
 ciations or individual bankers, doing business under the general 
 banking law of this State. 
 
 3. The shares and corporate franchises of all trust companies doing 
 business within this State and organized under the laws thereof. 
 
 4. The shares and corporate franchises of all other corporations, 
 divided into shares, organized under the laws of this State, and 
 engaged in the business of receiving deposits. 
 
 5. The shares and corporate franchise of all fire, inland and marine 
 insurance companies, organized under the laws of this State, and the 
 privileges of foreign fire insurance companies. 
 
 § 4. All real estate subject to taxation shall be liable to an addi¬ 
 tional or supplemental taxation, on an additional or supplemental 
 assessment of a sum equal to three times the rent or rental value of 
 all buildings thereon, for the length of tirtie actually occupied, during 
 the year terminating December 31st previous to making the assess¬ 
 ment, or for the parts of said buildings occupied as aforesaid; but no 
 assessment shall be made, under the provisions of this section, in 
 reference to buildings or parts of buildings occupied by the corpora¬ 
 tions enumerated and made subject to taxation on their corporate 
 franchises and privileges in section three of this title. The tax 
 imposed according to the provisions of this section, shall be known 
 as the “ building occupancy ” tax, and shall be a charge and a lien the 
 same as other real estate taxes on the lots or parcel of land on which 
 
Code of 2'axation. 
 
 81 
 
 the occupied buildings are situated, and may be collected by dis¬ 
 traint on the personal property of the person to whom said tax may 
 be assessed, or by sale of the premises, or otherwise, and in the same 
 manner as other taxes upon real estate are collected. 
 
 g 5. The building occupancy assessment shall be deemed to be the 
 equivalent or estimate ot the value ot the personal property owned, 
 in the possession or under the control of the occupiers, as owners or 
 tenants (and not as boarders or lodgers), of buildings or parts of 
 buildings, or the index of said occupiers’ expense or consumption 
 made liable to taxation. 
 
 6. Any o\v ner ot real estate paying, or his real estate being sub¬ 
 ject to the building occupancy tax, may add the tax, or the pro rata 
 proportion of it, to the rent payable in respect of such occupied 
 buildings, and he shall be entitled to collect the said tax from the 
 tenant by distraint, and he shall have the same remedies for recover¬ 
 ing the same as for rent in arrears, unless there is a contract between, 
 the parties that the landlord shall pay the building occupancy tax. 
 
 g 7. “ Taxable property 1 shall be construed to mean taxable assess¬ 
 ments or valuations, and “building occupancy valuation” shall be 
 construed to mean a sum equal to three times the rent or rental value 
 ot the buildings, or parts ot buildings, occupied for the previous year, 
 which are subject to building' occupancy valuation by the provisions 
 of this title; and all annual or other direct taxes levied on “ taxable 
 property,” by a rate or per cent, shall be levied upon the aggregate 
 of the real estate, personal and building occupancy valuations within 
 the district or territory where the tax may be levied, and assessed 
 according to the provisions of this chapter. 
 
 §'8. Lands sold by the State, though nut granted or conveyed, 
 shall be assessed and taxed in the same manner as if actually con¬ 
 veyed. 
 
 § 9. The following property shall be exempt from taxation: 
 
 1. All property not made subject, to assessment and taxation by 
 laws hereafter enacted, or by title first and second of this chapter. 
 
 2. All property exempt from taxation by the Constitution of this 
 State, or under the Constitution of the United States. 
 
 3. All property belonging to this State, any municipal corporation 
 thereof, any town, county, school district, or the United States. 
 
 4. Every building owned and occupied by an incorporated college, 
 academy, or other incorporated seminary of learning; every building 
 for public worship, and the several lots whereon such buildings are 
 situated. 
 
 6 
 
82 
 
 Code of Taxation. 
 
 5. The property of charitable and other corporations exempt from 
 taxation according to the provisions ot their charters. 
 
 G. The property of every public library. 
 
 7. Cemeteries, tombs, and rights of burial, so long as the same shall 
 be dedicated for the burial of the dead, and the property of a “ sol¬ 
 dier’s monument association.” 
 
 8. Every poor-house, asylum or hospital for the poor, every alms¬ 
 house, house of industry or industrial school-house, every house 
 belonging to and occupied by an incorporated company for the refor¬ 
 mation of offenders, or to improve the moral condition of seaman. 
 
 9. All lands belonging to any agricultural society, and permanently 
 used for show grounds, during the time so used. 
 
 10. And Indian reservation lands while in the possession of Indians 
 in tribal relations and exercising tribal authority. 
 
 TITLE II. 
 
 Of the Manner in which Property shall be Assessed. 
 
 Art. 1. Manner of assessment of the building occupancy tax on 
 real estate. 
 
 Art. 2. Manner of assessing the shares and corporate franchises of 
 specified moneyed corporations. 
 
 Art. 3. Manner of assessing real estate. 
 
 Art. 4. Manner of making the assessment roll, and the duties of 
 assessors and supervisors. 
 
 Art. 5. State tax commissioner, his duties, and the ecpialization of 
 the State tax. 
 
 Article First. 
 
 Of the Manner and. Place of Assessment of Building Occupancy 
 Tax on Land. 
 
 Sec. 1 . When building occupancy tax shall be assessed, and to whom. 
 
 2. Manner of estimating the’ rent of buildings. 
 
 3. The rent or rental value of building to include certain land. 
 
 4. Aggregate building valuation assessed on each lot of land. 
 
 Section 1 . Land shall be assessed for the building occupancy 
 valuation to the same party to whom it shall be assessed in the assess¬ 
 ment roll for the real estate valuation. 
 
 § 2. In estimating rent or rental value of any assessably occupied 
 building, the actual and bona fide rent thereof, if the said rent has 
 been a fair and equitable one, and proportionate to the value of the 
 
Code of Taxation. 
 
 83 
 
 •property, shall be the basis of the assessment, but, if otherwise, or if 
 the building, during the previous year, has been occupied by the 
 owner thereof, or has not had a known marketable rental value, or an 
 established rental value by comparison with similar buildings actually 
 rented in the immediate neighborhood then the rent shalt be esti¬ 
 mated at a sum equal to ten per cent of the value of the building. 
 
 § 3. The building, for the purpose of estimating the building occu¬ 
 pancy valuation, shall be deemed to include the land upon which it is 
 constructed, and so much of the unbuilt portion of the lot as is usu¬ 
 ally used as a yard, or court-yard, or a means of convenient access 
 .and occupancy of the building, for the purpose for which it is used, 
 but not to exceed one acre of land adjacent or contiguous to one 
 main building, and the main building shall be deemed to include all 
 stables, bams or other out-buildings on the same lot of land. 
 
 § 4. The building occupancy valuation shall be assessed in one 
 •aggregate sum for all occupied buildings, liable to assessment, in 
 amount equal to three times the rent or rental value of the parts 
 thereof occupied for the previous year, on each lot or quantity of 
 land entered in the assessment roll, and said aggregate building occu¬ 
 pancy valuation shall be entered thereon on the same line as the real 
 estate valuation, but in a separate column, under the caption of 
 
 building occupancy valuation.” 
 
 Article Second. 
 
 Manner of Assessing the Shares and Corporate Franchises of specified 
 Moneyed Corporations. 
 
 Sec. 1. Manner of assessing and collecting tax on shares of certain 
 moneyed corporations. 
 
 2. The tax may be recovered by the corporation from divi¬ 
 
 dends or shareholders’ property in the corporation. 
 
 3. Lists of shareholders open to the inspection of assessors. 
 
 4. Assessment of the privileges of foreign fire insurance com 
 
 panies. 
 
 Section 1 . The shares and corporate franchises of the moneyed 
 corporations or associations enumerated in divisions 1, 2, 3 and 4, of 
 section 3, title 1 of this chapter (national and State banks, and indi¬ 
 vidual bankers doing business under the general banking law of this 
 State, trust companies, and other corporations of this State divided 
 into shares, and authorized to receive deposits, and fire, inland and 
 marine insurance companies), shall be liable to taxation in the town 
 or ward in which said corporation shall be located, on the par amount 
 
84 
 
 Code of Taxation. 
 
 of said shares, less the proportionate value of the real estate belong¬ 
 ing to said corporations, but the assessment shall be made on the 
 assessment roll, in the name of each corporation, in one sum, less 
 the value of the real estate belonging to such corporation, for the 
 shares and corporate franchises of said corporation, and the tax shall 
 be paid by the corporation, and in default of payment the same 
 remedies shall be enforced against the corporation as for the collec¬ 
 tion of other taxes. 
 
 § 2. The shares of such corporations or associations, made liable to 
 taxation, shall be subject to the tax paid thereon by the corporation or 
 the officers thereof, and said officers may retain so much of any divi¬ 
 dend or dividends belonging to stockholders as may be necessary to 
 pay any taxes assessed under this title, and the corporation and the 
 officers thereof shall have a lien on all the shares in the corporation or 
 association, and on all the rights and property of the shareholders in 
 the corporate property for the payment of said taxes. 
 
 § 3. There shall be kept at all times, in the office where the busi¬ 
 ness of such corporation or association shall be transacted, a full and 
 correct list of the names and residences of all the stockholders therein, 
 and of the number of shares held by each; and every individual 
 banker doing business under the general banking law of this State 
 shall keep a list of the amount of his capital, and if he has partners, 
 the amount of their capital invested in such banking business; and 
 each $100 of such capital, for the purpose of this act and for the pur¬ 
 pose of taxation, shall be held and regarded as one individual share in 
 such banking business; and the aforesaid lists shall be subject to the 
 inspection of the officers authorized to assess taxes, during the busi¬ 
 ness hours of each day in which business may legally be transacted. 
 
 § 4. Every foreign fire insurance company, as defined in chapter 888 
 of laws of 1871, shall be assessed and taxed on the privilege of doing 
 business in this State, at the place of the principal office of said com¬ 
 pany in this State, at a sum equal to the capital as certified, according 
 to the provisions of said chapter S88 of Laws of 1S71. 
 
 Article Third. 
 
 Of the Manner of Assessing Real Estate. 
 
 Sec. 1. Persons to be assessed in town or ward where they reside 
 for lands in such town, etc. 
 
 2. If land occupied by another person, it may be assessed in 
 name of owner or occupant, or as the land of a non¬ 
 resident. 
 
Code of Taxation. 85 
 
 -3. Unoccupied lands not owned by residents denominated 
 “lands of non-residents.” 
 
 4. ]S T o tax void in consequence of error in name of owner, 
 occupant or classification of land. 
 
 •5. Real estate of incorporated companies, where taxed. 
 
 fi. Where land and bridges to be assessed when divided by 
 division line of town. 
 
 7. Manner of assessing water and gas pipes owned by incorpo¬ 
 
 rated companies. 
 
 8. The assessment of real estate of railroads, including super¬ 
 
 structure, in public highways. 
 
 9. Duty of town assessors to apportion railroad valuation 
 
 among school districts. 
 
 10. The apportionment shall be filed in town clerk’s office. 
 
 11. In case of neglect of assessors, the supervisors shall make 
 
 an apportionment. 
 
 12. Town clerk shall furnish certified statement of railroad 
 
 apportionment and location. 
 
 13. In case of alteration of school district, who may change the 
 
 railroad apportionment. 
 
 14. 15, 16. Manner in which lands of non-residents are to be 
 
 designated in the assessment roll. 
 
 17. When necessary, assessors to have survey made of the lands 
 of non-residents. 
 
 Section 1. Every person shall be assessed in the town or ward 
 where he resides, when the assessment is made, for all lands then 
 -owned by him within such town or ward, and occupied by him or 
 wholly unoccupied. 
 
 § 2. Lands occupied by a person other than the owner may be 
 assessed to the owner or occupant, or as lands of non-residents. 
 
 § 3. Unoccupied lands, not owned by a person residing in the ward 
 or town where the same are situated, shall be denominated “ lands of 
 non-residents,” and shall be assessed as hereinafter provided. 
 
 § 4. Ho tax or assessment shall be void in consequence of any 
 lands being erroneously classed or omitted from classification as the 
 lands of non-residents, or as the lands of unknown owners, nor in 
 consequence of the omission of the name of the rightful owner or 
 occupant on the assessment roll, but in such cases no tax shall be col¬ 
 lected except from the real estate assessed. 
 
 ,§ 5. The real estate of all incorporated companies, or the real 
 
8G 
 
 Code of Taxation. 
 
 estate of which said companies may be occupants, may be assessed to- 
 said companies in the town or ward in which the same may be situa¬ 
 ted, in the same manner as the real estate owned or occupied by 
 individuals, residents of the town or ward, is assessed. 
 
 § 6. When the line between two towns or wards divides a farm or 
 lot, or divides any bridge owned by any company, corporation or 
 individual, each part shall be assessed in the town or ward in which 
 the same shall be situated. 
 
 § 7. All gas and water pipes owned by any incorporated gas or 
 water company, and laid in any public streets or grounds, or laid in 
 any private lands or grounds, shall be assessed to said company at the 
 full value thereof, for the purpose used. The valuation of said gas or 
 water pipes shall be entered in the column of real estate valuations,, 
 on the assessment roll, in one sum, for all the gas or water pipes 
 belonging to any incorporated company, in the district for which the 
 assessment maybe made, and the words “gas pipes ” or “water 
 pipes” shall be entered in the column of quantity or description of 
 lands. 
 
 §8. Infixing the valuation of. the real estate of any railroad cor- 
 . poration, the assessors shall estimate the property for the purpose- 
 used, and as part of a complete and continuous line of railroad, inclu¬ 
 ding the value, at the time, of the assessment, of all tracks, roadbeds,, 
 embankments, cuts, lands, buildings, culverts, bridges and super¬ 
 structures, and superstructures shall include all iron chairs, rails, 
 spikes, frogs and switches laid or affixed to any public streets, high¬ 
 way or public ground, and said superstructure, in public grounds or 
 highways, shall be entered on a separate line of the assessment roll,, 
 the valuation entered in the column of real estate valuations, and the- 
 words “superstructure in public grounds” entered in the column of 
 quantity or description of land. 
 
 § 9. It shall be the duty of the town assessors, within fifteen days- 
 after the completion and review of their annual assessment list, to- 
 apportion the valuation of the property of each and every railroad 
 company which appears on such assessment list, among the several 
 school districts in their town in which any portion of said' property 
 is situated, giving to each of said districts its proper portion, accord 
 ing to the proportion that the value of the said property in each of 
 such districts bears to the value of the whole thereof in said town. 
 
 § 10. Such apportionment shall be in writing, and shall be signed 
 by said assessors or a majority of them, and shall set forth the num¬ 
 bers of each district and the amount of the valuation of the property 
 
Code of Taxation. 
 
 87 
 
 of each railroad company, apportioned to each of said districts; and 
 such apportionment shall be filed with the town clerk by said asses¬ 
 sors or one of them, within five days after being made; and the 
 amount so apportioned to each district shall be the valuation of the 
 property of each of said companies, on which all taxes against said 
 companies in and for said districts shall be levied and assessed, until 
 the next annual assessment and apportionment. 
 
 § 11. In case the assessors shall neglect to make such apportion¬ 
 ment, it shall be the duty of the supervisor of the town, on the appli¬ 
 cation of the trustees or board of education of any district, or of any 
 railroad company, to make such apportionment in the same manner 
 and with the like effect as if made by said assessors. 
 
 § 12. The town clerk shall, whenever requested, furnish to the 
 trustees or board of education of each district, a certified statement 
 of the amounts apportioned to such district, and the name of the 
 company to which the same relates. 
 
 § 13. In case any alteration shall be made in any school district, 
 affecting the property of any railroad company, the officer or officers 
 making such alteration shall, at the same time, determine what 
 change in the valuation of the said property in such district would be 
 just on account of the alteration of the district, and the valuation 
 shall be accordingly changed. 
 
 § 14. The lands of non-residents shall be designated in the same 
 assessment roll, but in a part thereof separate from the other assess¬ 
 ments, and in the manner prescribed in the two following sections. 
 
 § 15. If the land to be assessed be a tract which is subdivided into, 
 lots, or be part of a tract which is so subdivided, the assessors shall 
 proceed as follows: 
 
 1. They shall designate by its name, if known by one, or if it be 
 not distinguished by a name, or the name be unknown, they shall 
 state by what other lands it is bounded. 
 
 2. If they can obtain correct information of the subdivisions, they 
 shall put down in their assessment rolls, and in a first column, all the 
 unoccupied lots in their town or ward, owned by non-residents, by 
 their numbers alone and without the names of their owners, begin¬ 
 ning at the lowest number and proceeding in numerical order to the 
 highest. 
 
 3. In a second column, and opposite to the number of each lot, they 
 shall set down the quantity of land therein liable to taxation. 
 
 4. In a third column, and opposite to the quantity, they shall set 
 down the valuation of such quantity. 
 
88 
 
 Code of Taxation. 
 
 5. If such quantity be a full lot, it shall be designated by the num¬ 
 ber alone; if it be a part of a lot, the part must be designated by 
 boundaries, or in some other way by which it may be known. 
 
 § 16. If the land so to be assessed be a tract which is not subdivided, 
 or if its subdivisions cannot be ascertained by the assessors, they shall 
 proceed as follows: 
 
 1. They shall enter in their roll the name or boundaries thereof, as 
 above directed, and certify in the roll that such tract is not sub¬ 
 divided, or that they cannot obtain correct information of the sub¬ 
 divisions, as the case may be. 
 
 2. They shall set down in the proper column the quantity and 
 valuation as above directed. 
 
 3. If the quantity to be assessed be the whole tract, such a descrip¬ 
 tion by its name or boundaries will be sufficient; but if a part only is 
 liable to taxation, that part or the part not liable must be particularly 
 described. 
 
 4. If any part of such tract be settled and occupied by a resident 
 of the town or ward, the assessors shall except such part from their 
 assessment of the whole tract, and shall assess it as other unoccupied 
 lands are assessed; and if they cannot otherwise designate such parts, 
 they shall notify the supervisor of the town, who shall cause a survey 
 and two manuscript maps to be made, for the purpose of ascertaining 
 the situation and quantity of every such unoccupied part. 
 
 5. One of those maps shall be delivered by the supervisor to the 
 county treasurer, to be by him transmitted to the comptroller, and 
 the other shall be delivered in like manner to the assessor. 
 
 6. The assessors shall then complete the assessment of the tract, 
 and shall deposit the map in the town clerk’s office for the informa¬ 
 tion of future assessors. And the expense of making such survey and 
 maps shall be immediately repaid to the supervisor out of the county 
 treasury, and it shall be added by the board of supervisors to the tax 
 on the tract, distinguishing it from the ordinary tax. 
 
 § 17. Whenever it shall be deemed necessary by the assessors of 
 any town to have an actual survey made to ascertain the quantity of 
 any lot or tract of land of non-residents which is divided by the town 
 line, they shall notify the supervisor, who shall cause the necessary 
 surveys to be made at the expense of the town. 
 
Code of Taxation. 
 
 89 
 
 Article Fourth. 
 
 Manner of Making the Assessment Roll , and the duties of Assessors 
 • and Supervisors , and General Provisions. 
 
 Sec. 1. Assessors may divide their town, city or wards. 
 
 2. To ascertain taxable inhabitants, and ascertain and estimate 
 
 taxable property. 
 
 3. Form of assessment roll. 
 
 4. Manner in which persons are to be assessed as trustees, etc,. 
 
 5. Manner of assessing lands in villages and cities. 
 
 6. Assessment roll, when to be completed and where to be left, 
 
 notice thereof. 
 
 7. What notice to specify. 
 
 8. The assessment will be inspected during twenty days speci¬ 
 
 fied in notice. 
 
 9. Rights of persons whose property has been disproportion¬ 
 
 ately assessed. 
 
 10. In case of non-payment of tax, assessed to a resident, duty 
 
 of supervisor. 
 
 11. Lands imperfectly described may be added to the assess¬ 
 
 ment roll, correctly described by the supervisor. 
 
 12 Reassessment of lands in villages and cities, on account of 
 previous inaccurate description. 
 
 13. Lands omitted the previous years to be assessed ; errors cor¬ 
 
 rected by reassessment. 
 
 14. Board of supervisors shall levy tax to enforce collection of 
 
 previous taxes, and correct errors and omissions. 
 
 15. What taxes are to be deducted from the taxes of the current 
 
 year. 
 
 16. - Oath which shall be subscribed by the assessors and written 
 
 on the assessment roll. 
 
 17. When and to whom assessment roll shall be delivered. 
 
 18. Assessors to follow instructions of State tax commissioner. 
 
 19. If any assessor shall omit to perform his duties, the other 
 
 assessors to perform them. 
 
 20. Penalty upon assessors for neglect of duty. 
 
 21. Assessment roll to be examined by board of supervisors, 
 
 and equalized, on full valuation on towns and cities. 
 
 22. The board may alter the description of the lands of non¬ 
 
 residents. 
 
 23. To estimate the tax to be paid ; limitation of rate of taxation. 
 
DO 
 
 Code of Taxation. 
 
 24. To add up and set down aggregate valuations, and furnish 
 
 certificate to Comptroller and State tax commissioner. 
 
 25. To cause a copy of corrected roll to be delivered^ to each 
 
 supervisor. 
 
 26. To cause a copy to be delivered to the collector of every 
 
 town, ward or city. 
 
 27. Warrant of supervisors to be annexed ; its form. 
 
 28. Account of rolls and warrants to be sent to county treasurer. 
 
 „ 29. Warrants to conform to the laws respecting cities. 
 
 30. Collectors’ fees not to be added to the list or warrant; 
 
 existing laws for the collection of taxes re-enacted. 
 
 31. When tenant paying tax, may sue therefor or retain out 
 
 of rent. 
 
 32. Assessors in cities to keep books of divisions of property, 
 
 and other books open to public inspection. 
 
 Section 1. The assessors or tax commissioners in each town, city 
 or ward, may divide the same, by mutual agreement, into convenient 
 assessment districts, not exceeding the number of assessors in such 
 town or ward. 
 
 § 2. Between the first days of May and July, in each year, they 
 shall proceed to ascertain the names of all the taxable inhabitants, in 
 their respective towns, cities or wards; and they shall also ascertain, 
 by careful examination, all the taxable property, and by a careful 
 estimate, the full and actual value thereof, within the same; but the 
 annual assessment, in all incorporated cities and villages, shall be 
 made at the time, or within the time, now designated by law in 
 respect to said cities and villages, or until hereafter changed by law. 
 
 § 3. They shall prepare an assessment roll, composed of seven 
 columns, in which they shall set down according to their.examina- 
 tions and estimates: 
 
 1. In the first column, the names of all the taxable inhabitants and 
 corporations in the town or ward, as the case may be. 
 
 2. In the second column, the quantity of land to be taxed to each 
 person or corporation. 
 
 3. In the third column, the full, real and actual value of such land, 
 according to the definition of the term land, as given in the first title 
 of this chapter. 
 
 4. In the fourth column, the building occupancy valuation, as 
 defined in titles one and two of this chapter. 
 
 5. In the fifth column, the taxable or assessable value of shares, 
 privileges and corporate franchises of moneyed corporations and 
 
Code of Taxation. 93 
 
 companies whose shares, privileges and corporate franchises are liable 
 to taxation and assessable to said corporations or companies. 
 
 6. The sixth column shall be reserved to be filled, as hereinafter 
 provided, with the amount of the tax, at the rate levied, on the real 
 building occupancy and personal valuation. 
 
 7. The seventh column shall have the caption of “Remarks of Dis¬ 
 senting Assessors,” and every assessor, tax commissioner, or other 
 officer, acting as a member of a Board of Review of Assessments, 
 shall, if he dissents to any valuations, established by a majority of the 
 members of said board, write his name, or make suitable ditto marks 
 under his name, in said column, on the line of the assessment to 
 which he object, and shall designate the real, the building occupancy, 
 or the personal valuation to which he dissents, or he shall, by appro¬ 
 priate ditto marks, indicate the valuation or valuations to which he 
 dissents. 
 
 § 4. Where a person is assessed as trustee, guardian, executor or 
 administrator, he shall be assessed as such, with the addition to his 
 name of his representative character, and such assessment shall be 
 oarried out in a separate line from his individual assessment. 
 
 § 5. In assessing lands as real estate or for building occupancy 
 valuation in any ward, city, village or town, in which any officer of 
 said city, village or town, or any county treasurer, is authorized by 
 law to sell said lands, on default of payment of taxes, the assessors 
 shall place in the first column of the assessment roll, the name of the 
 owner or occupant of the land, if known, and if unknown, they may 
 enter in said first column the word “unknown,” and then proceed in 
 the second column (the column of quantity and description) to des¬ 
 cribe the land to which the name of the owner or occupant, or the 
 word “ unknown ” relates, by a brief and proper description, or by 
 dimensions and boundaries, by ward map numbers, by established 
 street numbers, or by any other proper designation which will indi¬ 
 cate the land intended to be assessed and taxed. 
 
 § 6. The assessors shall complete the assessment roll on or before 
 the first day of August in every year, and shall make out one fail- 
 copy thereof, to be left with one of their number. They shall also 
 forthwith cause notice thereof to be put up at three or more public 
 places in their tow r n or ward. 
 
 § 7. Such notices shall set forth that the assessors have completed 
 their assessment roll, and that a copy thereof is left with one of their 
 number at a place to be specified therein, where the same may be 
 seen and examined by any person interested, until the third Tuesday 
 
92 
 
 Code of Taxation. 
 
 of August; and that on that day the assessors will meet at a time and 
 place, also to he specified in such notice, to review their assessment^. 
 It shall be the duty of the said assessors to meet at the time and place 
 specified, and hear and examine all complaints, in relation to such 
 assessment, that may be brought before them, and they are hereby 
 empowered, and it shall be their duty, to adjourn from time to time, 
 to hear and determine such complaints ; but in the several cities and 
 villages of this State the notice required by this section, shall con¬ 
 form to the requirements of the respective laws regulating the time 
 and place for the revision of the assessments in said cities and villages, 
 in all cases where a different time and place is prescribed by said 
 laws, from that mentioned in this article. 
 
 § 8. The assessor with whom such assessment roll is left, shall sub¬ 
 mit the same during the twenty days specified in such notice, to the 
 inspection of all persons who shall apply for such purposes, and dur¬ 
 ing the period, and one week day thereafter, that the assessors or tax 
 commissioners are acting as a board of review, the assessment roll 
 shall be open to the examination of the public at all reasonable 
 hours, under the supervision of an assessor, tax commissioner, or liis 
 assistant clerk or representative, but the assessors or tax commis¬ 
 sioners, when acting as said board of review, shall have such control 
 and handling of the assessment roll as will enable said assessors or 
 tax commissioners to perform their official duty as a board of review 
 
 § 9. Any person, or his representative, deeming himself dispro¬ 
 portionately assessed by a valuation of his property at more than its 
 full value, or by an undervaluation of the property of other persons 
 in the assessment roll, may appear before the assessors or tax com¬ 
 missioners while sitting as a board of review, and may introduce the 
 testimony'of a competent expert, and the board of review may also 
 call a competent expert, and an oath shall be administered to said 
 witnesses by any member of the board of review. The witnesses 
 shall be interrogated as to the real value of the property valued in 
 the assessment roll and the building occupancy valuations thereon, 
 and as to the real value of the claimant’s property and valuation, and 
 if it shall appear to the satisfaction of the board of review, that the 
 claimant has been disproportionately assessed by a valuation above 
 actual assessable value, they shall reduce said claimant’s assessment, 
 and if it shall appear to the satisfaction of said assessors or tax com¬ 
 missioners that the claimant has been disproportionately assessed by 
 the undervaluation of the assessable property and valuation of other 
 persons on the assessment roll, they shall raise said valuations of 
 
Code of Taxatiox. 
 
 93 
 
 other persons to the full, real assessable valuation, and thus give 
 relief to the aggrieved party. The examination shall be in writing, 
 or a printed form properly tilled in, and shall be subscribed by the 
 persons examined, and each of said experts, shall, in said examina¬ 
 tion, give his opinion of the per cent of the aggregate valuations on 
 said assessment roll as compared with the full assessable aggregate 
 valuation which ought to be thereon, and said written testimony, 
 with the decisions of the tax commissioners or assessors thereon, shall 
 be immediate^ forwarded by mail to the State tax commissioners at 
 Albany. 
 
 § 10. If any taxes on real estate or on lands for building occupancy 
 valuation, assessed to a resident occupant, shall be returned as unpaid 
 in consequence of such premises becoming vacant by the removal of 
 the occupant before the collection of the tax imposed thereon, or in 
 default of goods and chattels of the occupant or owner to satisfy such 
 tax, the supervisor of the town in which such land was assessed shall 
 add a description thereof to the assessment roll of the next year in a 
 separate part thereof, and shall assess and charge the said land with 
 the uncollected tax of the preceding years and the arrears of interest, 
 and the same proceedings shall be had thereon in all respects as if it 
 was the land of a non-resident, and as if such tax had been laid in the 
 year in which the description is so added. 
 
 § 11. Whenever the State comptroller shall have rejected any tax 
 on account of any inaccurate or iqiperfect description of the lands on 
 which such tax was laid, and shall have charged the county to which 
 it shall have been credited, the superviscr of the town in which such 
 lands are situated shall add to the next assessment roll of such town, 
 in a separate part thereof, an accurate description of such lands; and, 
 if necessary, may cause the survey of such lands at the expense of the 
 town, and shall assess and charge said lands with the tax of the year in 
 which the imperfect description was made, and the arrears of interest. 
 
 § 12. Whenever lands, assessed in any city or village, or in any 
 town where lands are liable to be sold by authority of law, in default 
 of payment of taxes, shall have been imperfectly or inaccurately 
 described, they shall be accurately designated and entered on the 
 assessment roll, in a separate part thereof, by the assessors or tax 
 commissioners, in the village, town or city where said lands are situ¬ 
 ated, for the amount of the tax of the year of the defective description 
 and arrears of interest thereon. 
 
 § 13. Whenever it shall appear to the assessors of any town, city, 
 village or ward in this State that any land legally liable to a taxation 
 
94 
 
 Code of Taxation. 
 
 in said town, city, ward or village lias been omitted from the assess¬ 
 ment roll of the next preceding year, it shall be the duty of said 
 assessors to enter said land in the assessment roll of the current year 
 at the valuation and rate of taxation of the year in which said land 
 was omitted, in a part of said assessment roll separate from the assess¬ 
 ment and valuation of said land for the current year; and if, by any 
 mistake in transcribing or copying the assessment roll of the preced¬ 
 ing year, any lands have been placed on the assessment roll annexed 
 to the warrant delivered to the collectors, at a valuation less than that 
 actually appearing upon the original assessment roll, signed by the 
 assessors, the assessors shall enter said lands in a part of the assess¬ 
 ment roll separate from the assessment of the current year, upon a 
 valuation equal to the difference between the actual value made by 
 the assessors and the amount at which, by such mistake, they were 
 placed upon the assessment roll, and at the rate per cent of the tax 
 imposed upon said lands in said town, village or city in the year in 
 which said mistake occurred. 
 
 § 14. The board of supervisors of the county or city in which lands 
 are situated, which have been re-assessed for non-payment of taxes, or 
 for any inaccurate or imperfect description, or for errors, or assessed 
 for omissions of previous year, as provided by sections 10, 11, 12 and 
 13 of this article, shall proceed to levy taxes on said lands to the 
 amount of previously imposed taxes, or (as the case may be) to the 
 amount of taxes on said lands, oirytted the previous year, and shall 
 charge said lands with the amount of the previous taxes and the 
 interest in arrears thereof, or to the amount of the omitted tax of the 
 previous year (as the case may be), stating the tax of each year sepa¬ 
 rately, and shall direct the collection thereof, and such taxes and 
 interest shall, for all purposes of this article, be considered as the 
 taxes of the year in which the description shall be perfected. 
 
 § 15. The whole amount of taxes levied upon the re-assessment of 
 lands, or upon the omitted valuations of lands the previous year, 
 according to the provisions of the preceding section, shall be deducted 
 from the aggregate taxes to be levied upon said town or city for the 
 current year, and none of the reassessed valuation or valuations 
 assessed on account of omissions of previous year, shall be included 
 in the valuations of the current year for the purpose of levying the 
 tax of the current year; and said reassessed taxes and said assessed 
 taxes for omissions of previous year, shall be collected by the same 
 authority and in the same manner as the ordinary taxes of the current 
 year are collected. 
 
Code of Taxation. 
 
 95 
 
 § 16. when the assessors, or a majority of them, shall have com¬ 
 pleted their roll, they shall severally appear before one of the justice* 
 of the town or city in which they shall reside, and shall severally 
 make and subscribe before such justice an oath in the following 
 form: 
 
 We, the undersigned, do severally depose and swear, that we have 
 set down in the foregoing- assessment roll all the real estate valuations 
 and all the building occupancy valuations of lands situated in the 
 town, city or ward (as the case may be) and all the personal valuations, 
 on property subject to taxation in said town, city or ward (as the case 
 may be) according to proofs before us, and according to our personal 
 examinations and estimates of the full assessable real estate, building 
 occupancy and personal valuations, and our estimates of real estate 
 valuations have been made at the full, actual market value of the 
 land, if sold in convenient or suitable parcels and partly on credit; 
 and also that every valuation in said roll is the full actual assessable 
 value of the property assessed according to the deliberate judgment 
 and decision of a majority of the assessors. 
 
 Said oath shall be written on said roll, signed by the assessors, and 
 certified by the justice; and no assessment roll shall be valid unless it 
 contains said oath before the final action of the board of supervisors 
 thereon; and every assessor who shall willfully swear falsely in taking 
 and subscribing said oath, shall be deemed guilty of, and liable to the 
 penalties of willful and corrupt perjury. 
 
 § 17. The roll, thus certified, shall, on or before the first day of 
 September in every year, be delivered by the tax commissioners of the 
 city of New York to the clerk of said city, and by the assessors of 
 every other city, town or ward to the supervisors thereof, who shall 
 deliver the same to the board of supervisors at their next meeting. 
 
 § 18. The assessors, in the execution of their duties, shall use the 
 forms and pursue the instructions which shall from time to time be 
 transmitted to them by the State tax commissioner. 
 
 § 19. If any assessor shall neglect or from any cause omit to per¬ 
 form his duties, the other assessors of the city, town or ward shall 
 perform such duties, and shall certify to the supervisors with their 
 assessment roll, the name of such delinquent assessor, stating therein 
 the cause of such omission. * 
 
 § 20. If any assessor shall intentionally and knowingly approve of 
 any assessment made at less than the real and actual assessable value 
 of the property, or values assessed, he shall forfeit to the people of 
 this State the sum of $500, and in default of payment shall be 
 
96 
 
 Code of Taxation. 
 
 imprisoned in the county jail until said amount shall he paid, in suit 
 to be commenced by the attorney-general of the State, at the written 
 request of the State tax commissioner, setting forth the reasons why 
 lie believes that said assessor is subject to said penalties or forfeiture; 
 and if any assessor shall willfully refuse or neglect to perform any 
 other duties required of him by this chapter, he shall forfeit to the 
 people of this State the sum of fifty dollars. 
 
 § 21. The board of supervisors of each county in this State, at their 
 annual meeting, shall examine the assessment rolls of the several 
 towns, wards or cities in their county, for the purpose of ascertaining 
 whether the valuations in one town, ward or city bear a just relation 
 to the valuations in all the towns, wards and cities in the county, and 
 they shall increase the aggregate valuations of real estate and building 
 occupancy valuations in any town, ward or city, by adding such sum 
 upon the hundred as may, in their opinion, be necessary to bring up 
 said valuations to the full assessable values; but they shall in no 
 instance diminish the aggregate real estate and building occupancy 
 valuations, in any town, ward or city, unless said valuations are found 
 to be clearly above the full assessable valuations. 
 
 § 22. The board of supervisors shall also make such alterations in 
 the descriptions of the lands of non-residents as may be necessary to 
 render such description conformable to the provisions of this chapter; 
 and if such alterations cannot be made, they shall expunge the 
 descriptions of such lands, and the assessments thereon, from the 
 assessment rolls. 
 
 § 23. They shall also estimate and set down in the sixth column 
 of the assessment roll, reserved for this purpose, opposite the several 
 sums set down as the real estate, building occupancy, and personal 
 valuations, the respective sums in dollars and cents, rejecting the por¬ 
 tions of a cent, to be paid as a tax thereon ; provided, however, that 
 the board of supervisors of no county shall levy a tax without special 
 authority of the legislature, on any town, to exceed one per cent on 
 the total valuations on the assessment roll thereof, nor in any ward 
 or city, to exceed two per cent on the total valuations on the assess¬ 
 ment roll thereof; and no contract, obligation or liability, nor any 
 number of contracts, obligations or liabilities, shall be entered into, 
 made or incurred by any town, ward or city, or by the constituted 
 authorities thereof, which, in the aggregate, shall exceed in any year 
 the amount that may be realized by taxes at the limitation of rate 
 defined in this section, after deducting from said taxes the amount of 
 the liability of the town, ward or city, in each year, for maturing 
 
Code of Taxation. 97 
 
 interest or principal of bonded indebtedness, and for the State and 
 county tax. 
 
 § 24. The said board of supervisors shall also add up and set down 
 the aggregate valuations of real estate, building occupancy and per¬ 
 sonal valuations, in the several towns, wards and cities, as corrected 
 by them ; and cause their clerk to transmit to the Comptroller and 
 State tax commissioner a certificate of such aggregate valuations, 
 showing separately the aggregate real estate, building occupancy and 
 personal valuations in such town, city or ward, as corrected by the 
 board. 
 
 § 25. They shall cause the corrected assessment roll of each town, 
 ward or city, or a copy thereof, to be delivered to each of the supervi¬ 
 sors of the several towns, wards or cities, who shall deliver the same 
 to the clerk of their city or town, to be kept* by him for the use of 
 such city or town. 
 
 § 26. The board of supervisors of the several counties in this State 
 shall cause the corrected assessment roll of each town, ward or city in 
 their respective counties, or a fair copy thereof, to be delivered to 
 the collector of such, town, ward or city, on or before the fifteenth day 
 of December in each year. 
 
 § 27. To each assessment roll so delivered to a collector, a warrant, 
 under the hands and seals of the board of supervisors, or a majority 
 of them, shall be annexed, commanding such collector to collect from 
 the several persons named in the assessment roll, the several sums 
 mentioned in the last column of such roll, opposite to their respective 
 names. 
 
 If the warrant be directed to the collector of a town, it shall 
 direct the collector, out of the moneys so to be collected, to pay: 
 
 1. To the (town superintendent) of common schools of his town, 
 such sums as have been raised for the support of common schools 
 therein. 
 
 2. To the commissioners of highways of the town, such sums as 
 shall have been raised for the support of highways and bridges therein. 
 
 3. To the overseers of the poor of the town, if there be no county 
 poor-house, or other place provided in the county for the reception 
 of the poor, such sum as shall have been raised for the support of the 
 poor in such town. 
 
 4. To the supervisor of the town, all other moneys which shall 
 have been raised therein, to defray any other town expenses; and 
 
 5. To the treasurer of'the county, the residue of the moneys so to 
 be collected. 
 
 7 
 
98 
 
 Code of Taxation. 
 
 If the warrant be directed to the collector of a ward, it shall direct 
 the collector to pay all the moneys to he collected, after deducting his 
 compensation, to the treasurer of the county. 
 
 In all cases, the warrant shall authorize the collector, in case any 
 person named in the assessment roll shall refuse or neglect to pay his 
 tax, to levy the same by distress and the sale of the goods and chat¬ 
 tels’of such person; and it shall require all payments therein specified, 
 to be made by such collector, ou or before the first day of I ebruary 
 then next ensuiag. 
 
 § 28. As soon as the board of supervisors shall have sent or deliv¬ 
 ered the rolls, with such warrants annexed, to the collectors, they 
 shall transmit to the treasurer of the county, an account thereof 
 stating the names of the several collectors, the amount ot money they 
 are respectively to collect, the purposes for which the same are to be 
 paid; and the county treasurers, on receiving such account, shall 
 charge to each collector, the sums to be collected by him. 
 
 § 29. Whenever the laws respecting cities shall have directed the 
 moneys assessed for any local purpose, to be paid to any person or 
 officer other than those named in the preceding twenty-seventh sec¬ 
 tion, the collector’s warrant may be varied accordingly, so as to con¬ 
 form to alteration. 
 
 § 30. Whenever any board of supervisors shall make out any tax 
 list and warrant, they shall not add thereto the tees ot the collector, 
 if fees are allowed said collectors, by law, but such fees shall be paid 
 and collected in the manner prescribed by laws providing for the col¬ 
 lection of taxes, and all existing laws for the collection ot taxes are 
 hereby re-enacted as far as applicable to all the taxes assessed accord¬ 
 ing to the provisions of title one and two of this chapter. 
 
 § 31. When the tax on any real estate, including lands for building 
 occupancy valuations, shall have been collected ot any occupant or 
 tenant, and the owner, by agreement or by force ot law, ought to pay 
 such tax or any part thereof for himself or for his tenants, other than 
 the tenant or occupant who shall have paid said tax, said occupant 
 thus paying said tax shall be entitled to recover by action the amount 
 which such owner ought to have paid, or to retain the same from the 
 rent due or accruing from him to such persons for the land so taxed. 
 
 § 32. The assessors or tax commissioners in every city in this State 
 shall keep in their office, in suitable books to be provided for that 
 purpose, a record of all information which they may receive or be 
 able to obtain in respect to the taxable property, and of all changes 
 in the divisions of real estate of which they can obtain informa- 
 
Code of Taxation. 
 
 99 
 
 tion and shall file all assessment rolls. The books, records, maps and 
 papers mentioned in this section, are public records, and must, at all 
 reasonable hours and times, be open to public inspection. 
 
 Article Fifth. 
 
 Of the State Tax Commissioner , his Duties , and the Equalization 
 of the State Tax. 
 
 Sec. 1. State tax commissioner nominated by the governor. 
 
 2. His powers and duties. 
 
 3. May appoint a deputy ; his powers. 
 
 4. Salary of State tax commissioner. 
 
 5. State tax commissioner or his deputy shall visit, officially, 
 
 all counties annually. 
 
 6. Duty of State tax commissioner to equalize real estate and 
 
 building occupancy valuations. State tax imposed on all 
 
 valuations in all counties, as certified by State tax com¬ 
 missioner. 
 
 7. Each county shall pay amount of State tax certified by the 
 
 comptroller. 
 
 8. Oath of office of State tax commissioner and his deputy. 
 
 9. Duties of said commissioner. 
 
 10. Books and papers of State tax commissioner’s office ; pub¬ 
 
 lic records. 
 
 11. Town or ward disproportionately assessed may appeal to 
 
 the State tax commissioner. 
 
 12. Repeal of former laws. 
 
 Section 1. There shall be nominated by the governor, and 
 appointed by and with the advice and consent of the Senate, an 
 officer by the name of the State tax commissioner, who shall hold 
 his office for three years, from the first day of April after his appoint¬ 
 ment and confirmation by the Senate, and until his successor shall be 
 duly qualified. 
 
 § 2. The said State tax commissioner shall have power to administer 
 an oath and compel the attendance of witnesses before him, and to 
 make all such examinations of persons and papers as he shall deem 
 necessary to enable him to form a correct opinion of the full value 
 of every property or assessable value on any assessment roll in any 
 town, ward or city of this State, and the State, town, county and city 
 officers shall furnish him with all information belonging to, or con¬ 
 nected with their respective offices, and copies of all papers in their 
 
100 
 
 Code of Taxation. 
 
 various offices which said State tax commissioner may require of 
 them in the discharge of his duties. 
 
 § 3. The said State tax commissioner shall have power to appoint 
 a deputy, who shall receive a salary of per annum, and who 
 
 shall have the same powers as the State tax commissioner in adminis¬ 
 tering oaths to witnesses, and taking testimony in writing, and collect¬ 
 ing information for the consideration of the State tax commissioner. 
 
 § 4. The State tax commissioner shall receive a salary of 
 per annum, and in addition to his annual salary he and his deputy 
 shall receive, when absent from the city of Albany, in the perform¬ 
 ance of their official duties, full condensation for expenses and dis¬ 
 bursements, and including all railroad and other fares actually paid, 
 and the sums of said bills, including the incidental expenses and dis¬ 
 bursements of the office shall be verified by affidavit by said commis¬ 
 sioner aiid his deputy, and shall be presented to the comptroller. 
 
 § 5. The State tax commissioner or his deputy shall visit officially 
 every county in the State, at least once in every year, and shall examine 
 the records of transfer of real estate, and when he deems it necessary, 
 <f may take a memorandum of the considerations of transfer of real estate; 
 and the said commissioner shall prepare annually a written digest of 
 such facts as he may deem most important to enable him to equalize 
 all taxes on lands and building occupancy valuations in all the coun¬ 
 ties throughout the State, and to enable him, in all respects to dis¬ 
 charge the duties of his office. 
 
 § 6. The State tax commission shall be invested with the power of 
 equalizing the building occupancy and real estate valuations between 
 the several counties of this State for the purpose of establishing the 
 just relation of said valuations between the several counties, and he 
 shall commence examining and revising the real estate, the building 
 occupancy and personal valuations of the several counties as returned 
 to his office, and to the office of the comptroller at the city of Albany, 
 on the first Tuesday of September, in each year, and fixing the aggre¬ 
 gate amount of assessment for each county, on which the comptroller 
 shall compute the State tax. He shall increase the aggergate real 
 estate and building occupancy valuations in any county, by adding 
 such sum as, in his opinion, may be necessary to bring up said valua¬ 
 tions to the full assessable value, but he shall in no instance diminish 
 the aggregate real estate and building occupancy valuations in any 
 county unless said valuations are found to be clearly above the full 
 assessable valuations. A statement of the amount of assessment for 
 each county, as fixed by. him, shall be certified by him, and a certified 
 
Code of Taxation. 
 
 101 
 
 copy thereof deposited in the office of the comptroller, as soon as 
 completed, and before the tenth day of October in each year. The 
 comptroller shall immediately ascertain from the assessment, the pro¬ 
 portion of State tax each county shall pay, and send a statement of 
 the amount by mail, to the county clerk, and the chairman and clerk 
 of the board of supervisors of each county. 
 
 If the name or residence of the chairman or clerk of the board of 
 super\ isors shall be unknown to the comptroller, he may inclose 
 such statement in an envelope, addressed to him by his name of office, 
 and directed to the county town of the county. The county clerk shall 
 file the statement received by him in his office, and immediately send a 
 copy thereof to the chairman of the board of supervisors of the county. 
 
 § /. The amount of State tax which each county is to pay, as so 
 fixed and certified by the comptroller as aforesaid, shall be raised and 
 collected by the annual collection of taxes in the several counties in 
 the manner now prescribed by law. 
 
 § 8. The said State tax commissioner, before entering upon the 
 duties of his office, shall take and subscribe the usual oath of office 
 before the secretary of State or a justice of the supreme court, and he 
 shall administer the usual oath of office to his deputy before he shall 
 enter upon his duties, which oath shall be subscribed and filed in the 
 comptroller’s office. 
 
 ^ 9. The State tax commissioner shall, from time to time, issue 
 instructions to the assessors and city tax commissioners in all the 
 cities, wards and towns of the State, instructing them as to man¬ 
 ner of making assessments, and warning them of the penalties of 
 non-performance of duty in failing to assess property at full valua¬ 
 tion; and whenever he deems that he has information that any 
 assessor has intentionally and knowingly undervalued or approved of 
 any undervaluation while acting as a member of a board of review, he 
 shall request the attorney-general, in writing, to commence a suit 
 against said assessor for the penalty imposed by law. 
 
 § 10. The said State tax commissioner shall preserve all books, 
 papers and documents pertaining to his office, and including all testi¬ 
 mony of experts as to the actual value of property on the assessment 
 roll in any town, as compared with the assessed value of the year to 
 which the testimony may relate ; and said papers and records shall 
 be deemed public records, open to examination, at all reasonable 
 times, by the public. 
 
 § 11. Any supervisor may appeal in behalf of the town, city or 
 ward which he wholly or in part represents, to the State tax commit- 
 
102 
 
 Code of Taxation. 
 
 sioner, from any act or decision of the board of supervisors in th 
 equalization of assessments and the correction of the assessment rolls 
 under the provisions of title second 'of this chapter. Such appea 
 shall be brought by serving a notice, within ten days after the cor 
 rected assessment rolls shall be completed by the board of supervisors 
 on the chairman and clerk of said board, and also by filing such notict 
 in the office of the clerk of the county, together with the affidavit ol 
 the supervisor so appealing, that in his opinion injustice has been dom 
 in such town, city or ward by the act or decision appealed from 
 The State tax commissioner shall hear the proofs of the parties 
 which may be presented in the form of affidavits or otherwise 
 as he shall direct; after hearing such proofs, he shall determiiK 
 whether any, and if any, what deduction ought to have beer 
 made from the corrected valuations of such town, city or ward t( 
 bring down said valuations to the real but full assessable valuations 
 and he shall determine in what town, city or ward of the said count) 
 the 1 valuations on the equalized assessment rolls were below the fill 
 real value; and in the assessment of and collection of taxes of tin 
 next following year, the town which has been, according to the proofs 
 disproportion ably taxed, shall be credited with the excess or dispro 
 portionate amount of tax, and the same shall be levied and collected 
 in just proportions from the other towns and cities of the count) 
 which were not sufficiently assessed the previous year, as comparec 
 with the aggrieved town, city or ward. 
 
 § 12. Chapter 312 of laws of 1859, passed April 14th, 1859, and 
 all other laws inconsistent with the provisions of title one and two of 
 this chapter, shall be inoperative after the first day of January, 1873 
 when the new method of assessment and taxation, established in the 
 amended provisions of said titles one and two of this chapter, slial 
 take effect; but the State tax commissioner shall be appointed before 
 the first ot September, 1872, when he shall commence to receive 
 salary, and when he shall assume the duties of his office in reference 
 to the assessment ot taxes for 1873, and the assessors and tax com¬ 
 missioners of cities may commence to make the new' assessment 
 herein provided for after the first day of September, 1872. 
 
 Respectfully submitted. 
 
 DAVID A. WELLS. 
 EDWIN DODGE. 
 GEORGE W. CUYLER. 
 
 To His Excellency, John T. Hofb'man, 
 
 Governor of the State of New York. 
 
 Albany, February, 1872.