Title: Quarterly report of the Pennsylvania Board of Agriculture, no. 44 Place of Publication: Harrisburg, Pa. Copyright Date: 1891 Master Negative Storage Number: MNS# PSt SNPaAg018.3 J 'if FORTY- FOURTH OUAKTBRLY RHPORT OF THE PENNSYLVANIA 3oaRl of Ao;ricLilture 'kj^^-^^ TAXES AND TAXATION 1801. HARRISIUIRG: EDWIN K. MEYERS, STATE PRINTER. 1891. EG30.873 FOKTY-FOUKnr QUARTERLY REPORT OF THE PENNSymNIi^TATEBOARDOFAGRICCLlHE FOR THE YEAR 1891. '! i 7- ^ V MEMBERS EX-OFFICIO. lion, H. E. Pattison, Giwerrntr. HoiJ. Ttios. J. Stewart, Secretarii of Internal Affairs. Dr. D. J. Walker, Jr., Superintendent, of Public Instruction. Hon. Thomas McCainaiit, AudWtr General. Dr. Geo. W. Athortoa, President Pennsylvania State College. APPOINTED BY THE GOVERNOR. Hon. y. R. Downing^, West Chester, Chester county, Pa. Hon. Will H. Powell, Shadeiand, Crawford county. Pa. Col. James Young-, Middletown, Dau[)hin county. Pa. , Term expires. 1893 18«J 1894 ELECTED BY COUNTY AGRICULTURAL SOCIETIES. . , -. ^ Term exp Aaams I. Garretson Biglerville Allegheny W. H. McCullou^jrh Tarentura Armstrong Noah Senor Plumvillc iJtaver A. L. McKibben (ireen Garden . ...... Bedford S. S. Diehi Bedford Berks G. D. Stitzel Reading Bucks E Reeder New Hope Butler W. H. H. Riddle Butler .' . Blair. Frederick Jaekel Hollidaysburjf Bradford R. H. Laning- Towanda Centre J. A. Woodward Howard Chester Thos. J. Edge Harrishu rtr Clarion W. Shanafelt Brinkcrton Clinton T. A. Herr Cedar Springs , Columbia Chandlee Eves Mill vi lie Crawford J. B. Theips Coniu atitville Cumberland C. H. Mullia Mt, Holly Sprmgs Dauphin G. Hiester Harrisbiirg Erie J.C.Thornton Avoiua Fayette G. Hopwood Ui iontown Franklin D. Z. Shook Greencastle , Indiana W.C.Gordon Black Lick Jefferson J. McCracken, Jr '. Frostburg Juniata D. E. Robinson Port Royal Lackawatma H. H. Col vln Dalton Lancaster Calvin Cooper Binl-in-Hand Lawrence Samuel McCreary Neshannuck Falls Lebanon L(>hiy:h J. P. Barnes Alleiitown Luz-erne J. B. Smith Kingston Lycoming A. Fague Picture Rocks Mercer R. McKee Mercer Montgomery H. W. Kratz Norristown Montour 1. K. Murray Potts' Grove Northampton B. B. McClure Bath Northumberland J, Hoffa Milton Perry D. Kistler Kistler Schuylkill I. T. Shoenor Orwig-sburg Somerset N. B. Critchtield Jenner's X Roads Sullivan J. K. Bird Miih iew Susquehanna R. S. Searle Montrose Tioga J. W. Mather Wellsboro' TTnion T. A. (^Jnndy LewisJ)nrK- Venango A. Fra/.ier Cooperstowii Warren Chas. Lott •. North Warren Washington .1. McDowell Washiritrton Wayn<' N, F. Underwood Lake Como Westmoreland F. Y. Clopper Grcensburg Wyoming N.G.Bunnell Vosburg York Dr. W. S. Roland York ires. 1894 1894 1893 1893 1894 1892 1893 1894 1892 1892 1894 1893 1892 1893 1894 1892 1894 1894 1892 1894 189:5 1892 IS9;5 1894 1894 1892 1894 1894 1894 1893 1894 1894 189;^ 1892 1894 1893 1894 1892 1892 1894 18{>2 1802 18t)3 1892 1892 1893 1892 1 892 1892 1892 O F F 1 C 1 A L LIS r. 11. S. Searle, Hon. R. 1'^. Pattison, J. A. 11 err, G. D. Stitzel, <;. i>. stii/.cl, I*re,'iidcu(. Hon. R. E. Pattison. V^ice Presidentn. Kastbnrn Reeder, Executive Committee. J. P. Barnes. S. McCreary, C. Eves, W. II. H. Riddle. J. A. Gundy. C. Cooper. T. J. Edge. Advisory Committee: Chandles Eves, C. Cooper, Thos. J. Edge {ex-ojffici(t). Secretary. Thos. J. Edge, Harrisbnrg. Botanist. Thos. Meehan, Gerniantown. l*omolo(/isf. Cyrus T. Eox, Reading. (Viernist. Or. Wni. Frear, State ColU^ge. Veterinary Surf/eon. pr. F. Bridge, West Philadelphia. Microscopists and ITyfjienists. Dr. II. L-elVniann, Philadelphia, Prof. C. P». Cochran, West (^hester. Ornitholofjist. Dr. U. H. Warren, West Chester. .1. L. llcacock, Quakertown. Meteoroloffists, Maj. Frank Ridgway, Harrisbnrg. Miner alof fist. Joseph Wileox, Philadelphia. Apiarist. Dr. a. G. Groflf, Tie\visburg. Oeoloffist. Prof. J. P. Eesley, Philadelphisu Pennsyiaania State Boaud ok Aciuk iLTUiiE. Offk^e Pennsylvania State Bomid of Agkicultuue, Habrisiutrg, Penna. , Moqf 1st, 1891. In accordance with tlie former policy of the Board in devoting" each of its quarterly reports mainly to some leading* t()i)ic, the foHowiug pages have been largely given up to the topics of Taxes and Taxation. Essays read at meetings of the Board and at local farmers institutes have been made use of, and addresses and discussions at these gatlier- ings have l)een ol)tained through the assistance of a stenograi)her, and are liere given in a con defused foiin. ' As is usual in similar cases, it will be found that extreme vicAvs have been taken by both sides, and that probably the truth is to be found at a ])oint nc^arly equidistant from the two extremes. Those interested in releasing real estate from a i)ortion of its unjust burdens, have some- what exaggerated its rate of taxation and have under estimated its actual value. The same writers, interested in increasing the value of corporate and personal i)roi)erty for the purpose of demonstrating the disproportion in taxation, have also unduly increased their total value, and in many cases have included in their estimate the value of corpo- rate and ])ersonal pro])erty which by huv is exempt froni taxation. AVhen the object to be attained is the comparison of taxation uj^on real estate on the one hand, and upon cori)orate and ])ersoiial pro])erty upon the other, it is undoubtedly fair and just to include all kinds of corporate and personal property whether exempt from taxation by law oi not ; but at the same .time it is manifestly unfair and unjust not to include in the other side, the valuer of the real estate which is also ex- empted by law. Reports of the Secretary of Internal Affairs show that we have in the state, real estate havincr an assessable value of $2,000,- 000,000 : if to this we add $500,000,000 for a difference between the as- sessable and real value, we have an amount, which, if added to the es- timated value of other (taxable) real estate, will o])erate to decrease the mill rate of taxation. If on th(^ side of cor])orate and x^ersonal property, we add that which is exempted by law from taxatiou, we must certainly act fairly by the other side of the account, and add i?>200,000,- 000 to the estimate. Or failing in this, Ave should confine the com- parison to corporate and personal i)roperty which is now assessed and taxed by law. A common error in estimating th(^ value of real estate is to take the figures as shown by the re])orts of the Secretary of Internal Affairs, forgetting that these figures show mcne nearly the assessed value, and that a fair addition should be made for the difference between this as- sessed and real value ; thus, for instance, Suscpiehanna county assesses her farms at about one third of their actual value ; C)-awfor(l assesses hers at fifty -five per cent, of their actual value. On the other hand, (piite as great an error is committ(Hl l)y taking the figures of the Auditor General as rei)resenting the actual value of corporate property, forgetting that these fig-ures are based upon par value and make no allowance for stocks below par or which have nciither market vabie nor dividend earning capacity. In all arguments relating to taxation u])()n different (^lasses of ])ro- perty. care should be taken to definitely explain what class is alluded 4 • QUARTEKLY IIePORT. to The statement that real estate is taxed to the amount of 17 mills in* this states may be correct in the abstract, but such an assertion made at a local farmers institute nearly always leaves the impression upon the audience that farm property is meant. It is evident that the max- imum of taxation is reached in our cities and the minimum on the farms, and tliat between these two extremes we find the tax rates of our borou<4iS Our authorities do not agree as to the comparative rates of taxation upon tliese three classes of real estate, and w(^ find onc^ ot the members of the revenue commission (see pag-e 09 of their rei)ort) claiming- that " the average rate of taxation, based on full value, is not over 5 mills on the dollar on farms, et c, not over 7 mills on property in boron o"hs and not over 8 mills in cities of the first and second class. In hisl-eport, Professor John Hamilton claims that " it is therefore substantially correct to estimate that real estate in the aggregide pays 15 mills on actual value and the ])ortion used as farm property pays about 9 to 10 mills on actual value." . . -. rro i- • ro The Board of Agriculture has obtained the value of 1,558 tarms m o8 counties of the state ; the sum total of their estimated actual value is $14 649,553,aiid the amount of tax paid by all is $114,773.42 ; this would indicate a rate of 7.84 mills on the dollar of actual value.* ; In obtaining this data other matter relating to taxation was inci- dentally obtained, indicating that in Chester county the average tax upon borouirh property was 13.33 mills on actual value, and tlia^ upon farms 8 4 mills UDon a fair actual valuation. It was also iound that m Crawford county the boroughs Avere taxed at the rate ot 26.2 mills, and the farms at the rate of 18.4 mills, and that this rate was based upon an assessment eciuivalent to 55 per cent, of a real value. In the discussions of our local farmers institutes two points were strondv brought out, and it was clearly shown that the farmers oi our state are almost a unit in a belief in their justice ; they were as follows : 1-That real estate is, under our present revenue laws, bearing an uniust proportion of the burdens of local taxation, and that it is but ]ust to real estate that an attempt should be made to secure some basis ot ^^2— ThatThe taxation of the mortgaged portion of the farm, first as value in the hands of the farm owner, and second as value in the hands of the lender, was unjust, and demanded the attention of our legisla- Tt has also been shown by the data collected by the B()ard of Agri- culture that even in the same county and m all cases based upon actual valuation, taxation is very unequal and irregular; these i;eturiis show that in Chester county the taxation on farms (at actual value) appears to vary from 0.4 to 13.13 mills. It is true that a portion of the in- equality may be charged to building new school houses and to unusual damage to roads by freshets which damaged some townships more than others, yet the inequality is too great to be entirley accounted lor m this way. Thomas J. Edge, Secretary. *Tn iho importance than those of John Smith. H(^ has probably mad<^ no further progress in solving these questions than to accei)t what seems to be the currcuit opinion, that in matters of tarifi' and taxation, the wisest statesmanship consists in placing the burden where it will produce th(i most revenue with the least growling. He understands as well the dillerence between ])aying a tax of two per cent, on th(^ money investc^d in a farm yielding liim a return of, say three percent., and tiie tax which his neighbor pays of one half of one per cent, on an investment paying him six ])er cent., as if he carricnl a diploma from a dozen business colleges. And no amount of logic or sophistry will convince him that an arrangement which pcniuits such discrimination is ground(Hl u[)on sound h^gal or business principles. Now the farmer in a general way is possessed of a spirit of fairness, and does not ask or expect from others more than lit^ is willing to concede in return. He is not clamoring to have his belongings i)laced upon the free list, and the wholes burden shifted ui)on tli(^. slioulders of others. He is not quot- ing the inoverb, "turn about is fair play," but interprets fair ])lay to mean an equal sharing of the burden all around. If he shall be met on the part of those charged with the responsibility of redressing wrongs and distributing the burdens incident to all government, m the samc^ spirit of fairness, he will not be fouiul diflicult to satisfy. If, on the other hand, he is still thrust aside, and bade to wait till a nnn'e con- venient season, he is not likely to submit quietly. He feels that th(^ time has come when his rights and interests should receive considera- tion. He reasons that no difHculties should attend the performance of an act of simple justices He knows that redress can only come through the law-making l)odv of the state, and he is already asking of the pre sent General Assembly, if not openly, at least in his own mind " N\ hat do you inttmd to do about it? His request for tax reform has been for years on file among the records of successive legislatures, and no formal renewal of his petition is required. He certainly sees no reason to withdraw his claim, or to abate his earnestness in i>ressing its ccm- sideration. He knows that he has earnest friends in the assembly, and regards the entire body as well disposed towards him. Yet while he sees the i^rospect brightening, he remembers the weary years of Iruit- less struggle and hope deferred, whose shadows are not yet dispelled by the prospect of success. If I read the signs of the times aright his present attitude is not one of great anxiety and solicitude. That feel- ing belongs to the past, and he is not worrying about the final result. He has his weather eve oi)en, and is taking observations, and it occurs to him that others have interests at stake on the issue as well as he. He is not implacable nor vindictive, yet is quite as much disposed to get upon his ear, as to get down on his knees. He is quite willing at present to use moderation, and until forbearance ceases to be a virtue, will refrain from suggesting any alternative. DOI^BLE TAXATION. By Fred'k Jaekel, Member from Blair, IToHidaysburrj, Pa. (Read nt the Annual MoptinK 1891.) De Montesquieu in " Spirit of Law" says : It is a general rule, that xes may be heavier in proi)ortion to the liberties of the people, and taxes may 8 Ql^AliTEllLY liEPORT. tliat there is a necessity for reducing? tlumi m proportion to the increase of slavery. (Ancient nations supixn-tcnl their oovernment from the ])roceeds of the si)oils and ])hinder, obtained in warfare from then- weaker neighbors. The disci ph^s and foDowers of Mohamet, the citi- zens of Mecca, paid no taxes for ceifturies ; the treasury of the govern- ment was filled to overflow with the taxes collected from enslaved na- tions—and tlu^ citizen conquerors received a i^ension, sufficient for them and tlieir families to live.) This maxim of Montesquieu has and al- ways will be the rule. It is a natural rule, which never changes. Taxes are an adjunct of civilization ; weak nations cannot be plund- ered at present conveniently, and with taxes ahme, the machinery of a government can be kei)t in running order. Taxes being a necessity, it follows : that every citizen, every individual, should contributes accord- ing to iiis possessions, and pay Iiis or her pro] )ortionate share toward supporting and maintaining a government, under which strone: arm of protection they enjoy that liberty, and are enabled to pursue that hai)i)i- ness, which alone makes life worth living. To bring about equaliza- tion of taxation, to avoid double taxation, seems to be a problem, Avhich our i)oliticians are prone to tackle, hence they allege that it is very difficult to make each and every individual owner of property, no matter in what form, or of what description, pay for the support of the government a share of his annual income, or the cash value of his or her possessions. . . It seems that with all the modern informations, statistics, etc., on hand, there should be no difficulty for the legislator to pass a law etpiaiizing taxation, and avoiding double taxation. Servius Fullius divided all the i)eopre of Eome into six classes; it was in some measure the fundamental ])rinciple of the constitution ; it thence followed that an equal levying of taxes was so closely connected with this fundamental principle, that the one could not be abolished without the other. The taxes were equally divided, each individual paid according to his means, and that was three thousand years ago ! Th(i fundamental principle on which the constitution of this great country was established, was also one of equality, and knew no differ- ence between men, because one was poor the other rich. All men are equal, is ])roclaim(Hl from the Atlantic to the Pacific Ocean. All men are eqnal before the law, the law protects them all ; and each and every individual living uiuh^i' the protection of the laws of this government, should also contribute his share for the support of the government which protects him, according to the value of his or her posses- sions,whether consisting of lands, houses, manufactories, manufactured goods, merchandise, money on interest, stock, bonds or any other pro_ perty. The man who has in his safe the evidence of having invested in different schemes, or loaned to other people on notes, judgments and mortgages, the sum of $50,000, derives therefrom a largre income, should also ]iay in proportion the same amount of taxes, as the man possessing a Jiouse and a few acres of land, from which by daily toil and labor, he and his family earn a living. This is however, not the case. The poor man, the owner of a house and a few acres of land, pays almost ten times as much as the rich man. The rich man receives the same ju'otection by the government as tlie poor man. Especially at the present time when meu m;iy be the owners of millions, have an annual income of lniii(li(Hls of thousands of dollars, and not own one acre of Lnid in all this broad land. In certain provinces in Eussia, each town, village or township, is as- PennsylvxVnia State Board or Agiucultuke. 9 sessed a fixed amount of taxes, which the municipal officers, chosen by the people, collect from the individual tax payers, and pay over to the government. Whenever these taxes are assessed, all the taxable people, appear before these officers or townfathers, and acknowledge their pos- sessions in houses, lands, cattle, furniture, money on interest, merchan- dise or other things. These confessions are made in the presence of their neighbors; they are not able to hide any large quantity of i)ro- l^erty from being assessed for tax purposes. Only actual value of i)ro- l)erty, less the actual indebtedness against the pro[)erty is assessed. Each ])erson pays according to his means; undervaluation cannot occur; the cry of double taxation is not heard; and these people are only half civilized. That may account fc^r their simplicity in acknowl- edging th(ur possessions to the tax assessors, and not de^em it uncon- stitutional in the assessor to try and ascertain their wcialth for tax })ur- poses, or look ui)on this process as a spyonage into tlu^ private afiairs of individuals. Taxation cannot be a burden for any T)atriotic citizen, but it becomes one if one class of the people have to pay a larger pioportion of it than another, in fact, when double taxation takes place as at present in Penn- sylvania. It is supposed that the people assess themselves, at least they choose one of their number to act as assessor, and he has certain laws and rules before him for guidance. He assesses all the properties he can find, to their full value ; there can be no fault found with him, lie can only assess what he sees ; the other half of the people's wealth, locked up in the safe, consisting of stock bonds, notes and other valuables he cannot see, and of course they are not assessed. Consequently taxation must fall on those who are unable to lock their property in a safe ; those who are not able to compress their possesions in small bulk, have to pay taxes for those who can, and that is one mode of double taxation. If one man, the owner of a few acres of land, off which he and his family, by their daily labor, earn a subsistence, discovers that his neighbor, a rich man, living in plenty and luxury, but whose wealth consists of personal property, ])ays actually less taxes than he, then tln^ payment of taxes becomes a burden, and if he is at all ambitious to live like his neighbor, he will, at the first chance he gets, sell his inherited acres, move into town, and avoid payment of taxes. This at the present time, is the case with the farming community. By this I do not mean that taxes in Pennsylvania are unbearable ; as a Avliolc they are not ; what I mean, and I say it witli all candor and sin- cerity, is that the farmers as a class, and the small property owner, all over this state, pay most or nearly all taxes for municipal |)ur|)oses. For ages past, almost since the dawn of civilization, wliich in its train brings manufacturing and commerce, it has been the endeavor of statesmen to foster manufacturing and commerce, and it is chiefly done by exempting them from the payment of direct taxes ; and many gov- ernments, in ordfn- to encourage their su})jects to trade with other na- tions, liave paid them sul)sides, exonerated all goods manufactured for the puri)ose of exportation from taxation, and also paid a l)ounty to the vessel sailing under the flag of that country, for carrying these goods to foreign shores. For the sake of giving subjects em])loyment, so that by the wages earned, they may provide themselves and families with the comforts of life, become small ])roperty owners, and thereby useful and good citi- zens, it is but just that manufacturers should receive all |)ossible pro- 10 QUAHTEUI.V llErOUT. •tet-tion- 1)iit ulion these manufiicturers receive an annual revenue or income 'from tlu'ir works of a liuudrcl thousand .loUars or more, as munv in Pennsylvania do, and spend the most of their time in foreifru countries, ^vithout paying om; cent of taxes on this immense income then the present system is not oidy double taxation, but malignant ^'''A;u"u''"tly, and also in fact, every article of commerce is directly or indirectly a product of mother earth ; and it wou hi seem that the tillei of tli(! soil, the farmer, eventually must become tlie recipient of all the bounti.^s produced by the manufacturers, iind l>ro"«lit home by the merchant, and as a natural rule, should also bear all tiie burden ot taxa- ^ *"Tiiis however, is an optical illusion; in the first ] dace, the farmer, t<. make his land i-roduce desired cro|.s, has to work long weary hours, for him is no eight hour system existing and in tlie second place, being only H producer of raw material, which he se Is to the manutacturer or merchant, he has to buy the clothes he wears from them at their ibices and also his furniture, groceries and other necessaries ot life being fully convinced that taxes must be paul by some body, and that ma. state when, all men are equal, all receiving alike protection, i* « i^'^W natnrallv follow that all and every individual would i-ay a pio lata share of his or her cash value of i)ossessions, or a share ot las income for the support of the government. And no one sdiould be coinpelled to caiiT a bigger load than he can bear. No one should feel or be con- vinced; that in addition to his own load, he also carries a y-art or the ^vhol.■ of th dollars an acre, it is assessed to that amount lor tax purposes. The value of the farm to that amount is i)atent, and it is but just tliat tlie owner thereof should pay his i^ro rata share ot taxes. The owner or reputed owner ot this hve thousand dollar farm, how- ever is indebted to the amount of three thousand dollars, in tact he owns less than a moiety of these 100 acres, but the taxes are assessed and levied on the whole vahie of it, the d(^bts are never considered, and it is in tliis case, where a-ain occips double taxation Alongside of this 100 acre farm is another tarm containing 100 acres, no imirrovemcmts, n<» dw.^llin- or barn are on it, but inm ore or other minerals are du- out of the o-round. The owner ot this land receives every yc^ir five tliousand dollars royalty from some one who takes the mineral away. He actually realizes from the product of his farm, five thousand dollars a year but for tax purposes his land is on the unseated list assessed about $4.00 an acre. On that amount he pays his pro rata Pennsylvania State BoxVhd of A(jiu('i:ltuue. 11 share of taxes, but nothinsr whatever on his lari^-e income, of which a portion is added annually to the accumulaticm ot his wealth. Here are two ])roperties ccmsistin*:^- of land; one is worth $5,000.00 worked as a farm, assi^ssed $5,000.00 for tax purpose, and for which the owner if he could sell at all, would like to take the assessed value; alon^- side of him is a piece of land for which the owner has repeatedly refused $25,000.00 ; it is not worked for farm purposes, it is considered unseated land ; tlu^ owner thereof, however, receives every year $5,000.- 00 for the produce of this land; and it is assessed for tax purposes, $•400.00. This is not just, this is not ri^ht ! why shall the farmer foi' his land pay over ten times more taxes than tht^ other. Such cases are not isolated, they can be found in almost any county of this state. Numerous cases of this kind, the exeiiii)tion from taxation for muni- cipal purposes of corporate property, tlu^ total exemption froui all taxa- tion of a vast amount of wealth of all descrii)tion of individual or per- sonal proi)erty, make the tjixes for the farnK^' the tiller of the soil, and the smaller liroperty holders in towns very hi<4li— they are truly in jjroportion to the liberty we cnijoy- there is hardly a city, borough or township in this commonwealth, in which tli(^ direct money taxes for a state and municipal purposes are under one dollar and a half per hundred dollars assessed value. This is a very lar^^e sum for taxes on farm ])r()perty, if we take into consideration, that the owner of the land, before he can realize anything from these acres, must be a manufacturer, and merchant, he must plow, plant, harvest and sell his produce. His land is assessed $50.00 per acre, and the net profits ])(^r acre on an average are not more than $5.00 per year. And on the income of $500.00 per year he i)ays a tax of $75. - 00, or 15 per cent, of his income. i • , • The farmer cannot, like the manufacturer or merchant, depend m his profits only on the fluctuation of the money market, indeed he has many more formid{d)l(M)bjections to- encounter and overcome, drouj^ht and rain, heat and cold, fire and water, in fact \w. must take into ctmsidera- tion'in calculating his annual earning-s, all the forces of the elements. If in dry seasons vegetation burnt u]), or in wet seasons the rain spoils all his cro])S, whether he harvests enough grain to the acre assessed $50.00 to seed it again in the fall, or all his outlay, labor and industry are a total loss: it matters not, that farm is assesst^d $50.00 an acre, and for each and every acre he has to pay seventy-five cents taxes. But now what becomes of the d(;bt he still owes on that fayn? viz: $8,000.00. Virtually he owns but two fii'tlis of it, iho ntlwr tlircf iit'ths are not his in reality, it belongs to the mortg^agee, and yet he i)avs taxes on five fifths. The taxes as stated above ar(^ on the whole seldom under $75.00 a year. That man actually worth two thousand dollars pays three dollars and seventy fiv(^ cents on every hundred dollars Avorth of ])roperty he owns. Why overtax this form of prop(nty and exempt others. Now let us compare the income and earnings of a farmer and his family. Taking it for granted that li«' raises all his veg-etabh^s, milk, butter, meat and breadstuff for his table, and that he clears cm 100 acres, $500.00 or $5.00 to the acre, that is a, larg-e average. The most of our farmers, who work tlieir lands worth $50.00 an acres do not onni $500.00 per year over and above the necessary hire for lu^lp in the summer, blacksmith and wagcmmaker bills, purchase and repair of farm machin- ery. It W(mld Ix^ all right if in ])r()sp(Tous years h<^ ccmld lay aside that sum, or part of it, reduce tln^ mortgag-e against his farm, and in course of time become sole owner of it ; and \w would have something 12 QUAKTEKLY KePORT. Pennsylvania State Boahd of Agriculture. 13 to fall back on in bad years ; but out of this sum he has to pay $75.00 taxes, $180.(»0 interest on borrowed money, doctor l)ills,church stipends, clothing', boots and shoes for himself and family, and at the end of a g-ood season, if he is right economical, he will have succeeded to make both ends meet. What, however, is to become of liim when his harvest is ruined by sun or rain, his cattle die, or in one night tlie dogs of soine sportive townsman kills half his sheep? To subsist and go on again, he will have to borrow more money, reduce his income by the payment of additional interest, reduce his ownership in the farm to the actual amount borrowed, and yet he has to pay taxes on $5,000.00 land value, which is nothing" more nor less than the tools by the use of which he earns a living. An averag-e mechanic earns decidedly more, lives better, dresses bet- ter, has more money, and a great deal less care than the averag'e farmer. Now take manufacturers, merchants, capitalists and many other people, who represent the larg-est share of the wealth of this country. People who daily are amassing fortunes, by the labor of others, who are well able to pay their pro rata share of taxation, but in fact pay little or none at all. Take the merchant in a country villag-e, he has a stock on hand worth $10,000.00, he turns that over two or three times a year with g-ain. He is actually w^orth $10,000.00 ; on that wealth he pays a tax of $?5.00 ]H^r year, but none whatever to munici])al purposes. He is iising the roads which the farmer has to make and keep in repair, he is sending his children to the school; for the building of the school house and the salary of the teacher he pays nothing; his poorer neighbor, because he is working on a faim, has to do that. His income over and above his bare living, is surely more than that of a farmer. Or take the capitalist who has loaned out on farm mortgages $50,000. - 00, he virtually o^vns that much real estate, but he does not farm it, and the title by law is not in him until he has taken the farm at sheriffs sale on foreclosure of mortgage. He has an annual income of $3,000.00; his wealth is $50,000.00, but classified as personal property all the taxes he pays are $150.00 ; none whatever for munici]^al purpose. He owns three fifths of the farm worth five thousand dollars or three thousand dollars, and ])ays on it $9.00 taxes. While on the same property, the farm, on which there is a mortgage of $3,000.00, and the taxes on that are $9.00, the farmer pays again but this time his share is $45.00. Tliis is suicl,^ a case of double taxation. Such cases are not few in this state, and it need not be wondered at that after some years of failures and liard struggle, the farmer succumbs under this heavy load, leaves the farm and seeks employment in a manufacturing establisldimeiit or else- where, perhaps where his boys are employed, who saw his collapse ap- proaching, left th(^ farm as soon as they were of age, and are earning: a better living than they ever did on the farm. Do we need to look for distant causes or indulge m speculations to find reasons why so many farms in Pennsylvania are idle and it is so difVu'ult to obtain good tenants? One of the principal reasons of tliis calamity is double taxation. Let every man pay taxes according to his wealth, or better according to his income. Whenever that is done, and not till then, will the farms in this beautiful country, abandoned at [)re-;ent, again be occu[)ied, the click of the reaper and mower be heard, and where now silence reigns, briars and tlic^mbushes stood up in all directions, a happy contentment braced up by honest industry will make its api)earaiice, and the song of the ])loughman will rival that of the lark. Let right and justice prevail, bring about an equalization of taxation do away with double taxation, and the sturdy yeomanry of Pennsyl- vania will arise Phoenix-like and be again, what it always was, the pillar on which the country could rest in peace. MEASURES TO REDUCE TAXATION. By Dr. Geo. G. Groff, Lewisburg, Pa. (Read at Annual Meeting 1891.) It is with much diffidence that I undertake the preparation of a paper upon any subject with which I am not well acquainted. I have not been a student of i)olitical economy, my life being devoted to other lines of work, so that what I ])res(uit to the State Board of Agriculture at this time, must be the casual thoughts which have presented them- selves to my mind, iov it was not possible for me to make a serious study of the great subject of equitable taxation, in the time given for the ])reparation of this paper. It has seemed to me that for my purpose taxes may be grouped under four great heads, viz : 1. Those ivkicli are self-hnposed. 2. Those imposed by the township or county, 3. State taxes, 4. National taxes. Each of these classes will be briefly considered as to the possibilities of lessening the burdens imposed. 1. As to taxes self-imposed. Some of the taxes hardest to meet are self-imposed. One of these, x)rominent in our times, is the tax of rail- way travel. If one is not careful, it becomes a heavy burden. Here also should be placed the tax imposed by a fast horse and a nice buggy, which eats up the earnings of many a young man, and i)re vents him from ever becoming the possessor of a home as good as that of his father. I do not mean here that one should not travel for recreation and to learn the ways of others, but there is such a thing as being away from home to the neglect of business. It is to this that reference is made. Then there is the tax im[)osed by fine clothing, fine carpets, fine fur- niture, expensive decorations, musical instruments, beyond th(^ ])urse of the owners. These things are all right and ])r()per wlien tlie income is sufficient to pay for them, but in too many cases, the income is not adequate. Another tax of our times, is the macliinery tax. This is necessary, but many let it become too burdensome. Farmers certainly might (*o- operate to a great extent in the use of the more expensive machinery, and certainly no one can afford to leave it go unpaintf^l and stand in the weather unprotected. More co operation is needed at this point. Tlie taxes imposed by jigents and middhnnen ar(^ entirelv too lieavy at the present time, and must be lessened by judicious buying and sell- ing. 'I'Ik^ commercial fertilizer tax is necessary on most farms, but should be made small as possible by the collection and saving of home- mnd(^ manures, and the use of clover. The tax for fuel is one which has increased greatly in the ])resent generation. It should be lessened all possible by fuel from the farm 14 QUAKTEIUA liKroKT. woodlot, from which wouhl be derivod ashes valuable as a fertilizer. On many farms the fence tax is unnecessarily heavy. We advocate the division of the farm into woodlot, pasture, and farm land. Put the rougher g-round into permanent pastures, and then there will be need to fence only the pasture, as the farm lands can ^) without fences. The great mass of fences about the farm building's should be banished entirely. Build a chicken yard, and there will be no longer any use for these unsightly fences about the buildings. The tobacco and alcohol taxes are within the control of each indi- vidual and need not be discussed here, nor the taxes imposed by igno- rance, carlessness and shifth^ssness. He is a hap])y man Avho is able to control these self-imposed taxes ; for c(mii)ared with governmental taxes, they are very heavy ; and thrice; hai)[)y is he whose; family is with him abb; and willing to deny themselves of the luxuries which they camiot afford. 2. We next come to the taxes imposed hy the toivnsJdp and the county. These are direct and perhai)s the heaviest of all our governmental taxes, It seems to the wTiter that they are needlessly heavy. A member of this Board recently remarked to the writer, that the average township government w^as the most corru])t in the land. And yet it is nearest the people, and should be the puK^st. If townshii) taxes are heavy, the people have no on(^ to blame but themselves, for they can certainly control the expenditures in the township. The road tax is a great burden. 1. Because nearly all the money ex- pended yearly on the roads is thrown away, no effort being made to permanently improve them. 2. Because in many cases roads are too numerous and are badly located. 8. Because the tax is all collected off' the land owners and not from all the x^roperty in the townshifi, as mone3% railroads, telegra])li coniX3anies, pipe lines, occupations, etc. 4. Because too often the most inefficient man in the township is made sujiervisor. 5. Because all principal roads are subject of state concern, and should be kept in repair by the state and not the township. The school tax has become too much heavy for what is obtained. This tax should be ecpialized and lessened where excessive, (1) by greater state aid, because education of the citizens is a matter concerning the state, not the townshi}) alone. (2) By a demand for higher standard of scholarship in the state normal schools. (8) By the people demand- ing of th(^ directors, the strictest fidelity in the selection of teachers, erection of buildings, etc. (4) All i)roperty of every kind in the town- shii) should c(mtril)ute to the sui)port (^f the schools. 8. The county tax is also d!»'ect, and much too heavy. The mcmey derived from this tax is expended on the poor, the criminals, the bridges, the public buildings, advertising, and a i)ortion goes to the state treas- ury. Can the comity tax be lessened"? Certainly and emphatically, yes. How? In the first place, by breaking up the "political rings" which in so many counties exist to fatten off the county funds. 2. By elect ing first class business men as county commissioners, and not broken down mcni who have failed in every venture of their own. 3. The ]ioor should be ])laced on farms and should, just so far as is com]iatible with strict humanity, b{^ made self-su]^])orting. They shoidd certainly not live better than at any formc^r period of their lives. 4. ( ■riminals should all be re(juii(Hl to labor, and so far as ])<)ssible, be self sustaining. 5. County ofliceis should hv ]>aid salaries (upiivalent to what they could earn at their ordinary occu])ations, and not three or four or more times what they are worth as is now too often the case. There is no reason Pennsylvania State Boakd or Aokicultuke. 15 in the world why the sln^riff, for an illustration, should grow rich from the unfortunates whose affairs he must close, or why the recorder of wills should feast sumptuously from tlu; ])ortion which should goto widows and or])lians. What is most needed to redm^o county taxation seems to be plain common sense ])ut into operation by the voters of every county. Officials should become servants and not masters as is now^ too often the case. 3. State taxes. It is generally supi)osed this burden is lierht in (ku- state, because these taxes are collected from coporations. But we should not lose sight of the fact that cor]K)rations in turn collect them from the peo])le, wdio ultimately pay all the taxes. Nor should we lose siirht of the fact that whereas in this commonwealth, the valuation of real estate and personal pro])erty secern to be about equal, the real estate pays about six times as much tax as the i)ersonal ])r()|)erty pays, \ve hold, 1. That at once the taxes on personal property of every de- scrii)tion should be raised until they equal those of real estate. 2. That in the expenditure of state funds, every precaution should be taken. On this point let us dwell a moment. Our public chaiities appear to cost at least $2, 254, 882. 95 yearly. How much more the writer cannot find out. In the resolution by which the committee Avas ap- pointed to examine the ])ublic (charities, it is affirmed, "With the pur- pose of setting some limit to the great and constantly increasing de- mands upon the treasury for the furtherance of a great variety of schemes, many of which are of doubtful utility." It is understood that the committee after two years investigation consider a number of the charities most doubtful. We recall the management at the Blind Asy- lum, the Soldiers' Orphans' schools under the syndicate, where the profits were possibly $200,000 a year, a ])otent reason why these schools could not be closed. Thus, every institution in the state, of every kind, receiving state aid, shcnild receive the most careful scrutiny, and if it persistently fails to come up to a reasonable expectation all state aid should be firmly withheld, b(; it hospital, asylum, normal school, or college. We mean and include all institutions receiving state aid. Be- cause an institution has received state aid in past timers, is no valid rea- son why it should continut^ to receive such aid through all coming time, des]>ite the reputation of the institution or the quality of the work per- formed. 1 -1 ii At this i)oint we would call attention to the mistaken phUanthropy which 1 daces the pauper incurably insane in our state institutions at $4 or $5 a week, when they would have more freedom, and generally be happier at the comity poor houses on $2 a week, and to the penitentia- ries where the ]nisoners should be in a measure self-sustaining. Salaries of state ofticers should be in harmony wiih the times. Honor in a measure should be lookcnl upcm as compensation. The important offices should go more largely to men of mature years who have made their fortunes. This good custom of the past should be revived. The unseemly contests which we see for the high ofiices of governor and the judg(^slni)s, may to some extent at least, be promoted by the salaries paid. jNEichigan pays her governor l)ut $1,000 a year and on the aver- age seems to secure as good material as Pennsylvania does for $10,000. In the hands of older men, salary shoidd not be so much an object as to young men. ■, • ^ . i. j OfficH^s are also needlessly multiplied. Our late legislature created twenty additional law judges, at an annual expense of $80,000 to the taxpayers of the state, while lawyers in every ccmnty in the state xwill 16 Ql ,\KTEltLY KePOKT. Pennsylvania State Boaud of Agriculture. 17 affirm that law business has fallen off from one-half to even three- fourths. If there is a lack of law business, why then a need of more jud^'es"? Much money is approi)riated by each legislature to objects of very doubtful utility. From the acts of the last leg-istlature, 1 ol:)serve that $390,000 is appropriated to our National Guards, with $12,000 extra for a tri]) to New York city, while the im|K)rtant State J3()ards of Health and Agriculture receive less than $20,000 for the same time. It may l)e that the $390,000 are wisely si)ent, but the WTiter ])rotests against the payment of his share of the same, on the ground that it is money uselessly expended. The last h^gislature api )ro| >riated $81, 500 for mon- uments on the Gettysburg battlefield, and $34,500 for the pro[)agation and ])rotection of fish, and at the same time the magnificent sum of $5,- 000 for the |)rotection of the lives of the peo|)le. All these expendi- tures, running Tip in the total of millions of dollars yearly, may be all riglit, but they certainly ought to be most carefully scrutinized. That |)ublic money all comes out of the hard earnings of the people is too often forgotten. 4. National taxes. I will detain you but a few moments with any thoughts on the subject of national taxation. Admitting that money must be raised to carry on the national government, I hold that the present system of taxing one class and one industry for the su]:>port of another class or industry, is at once ilhx/ical, pernicious, and unconstitu- tional. I cannot understand how^ we have so long deluded ourselves with the idea that the general prosperity could be best promoted by taxing now agriculture to promote manufacturing, and then manufacturing to support commerce, and finally both commerce and manufacturing to support agriculture. The wdiole idea is fallacious, unsoinid, illusory. To give an illustration. Three of the best authorities in the United States (Mr. A. B. Farquar of York, Pa. ; Mr. David A. AVells and Edward Atkinson) calculate that the $50,000,000 tariff levied by the U. S. government on iron, costs the purchasers of agricultural imple- ments in the country from fifty to seventy million doHars a year over what the same would have cost had iron been free. During the ])ast ten years, the tariff on iron has reached from fifty to eighty million dollars a year. For wluit ? AVe are told (1) To secure the American workmen high wages. For ten years we have examined this subject with all the thouerlit w^e possess, and it seems to us, that it is not the American but the foreign workmen who receives the advanced wages. Are ]i()t nine tenths of the workmen in the iron industries of Pennsyl- vania of foreign birth? Jn every protected industry we have been able to examine, the protected w^orkmen are of foreign birth, and year l)y year, of a lower and low^er class of Europeans. That the iron in- dustry is over py^otected, one has only to compare wages paid in iron works wdth wages of farm hands, and then to examine the enormous fortunes which successful manufacturers have been able to accumulate in the past generation. (2.) Manufacturing industries are iirotected to benefit the farming communities adjacent, to i)roduce "home markets." I hold, and I do not fear successful refutation, that those regions nearest ]^rotected in- dustries are most demoralized, and leaving out of tlie question the great rise in the value of farm lands in such jdaces, from the greatly aug- mented population, farming in such places w^ould be to day nearly utterly ruined. 1. By the great increase in wages beyond the ability of the farmer to i)ay, and (2) by making discontented the boys and at- tracting them from the farm, not to higher and better woik, but to the cities wiiere they are lost in the general population. These statements T have reason to believe are beyond refutation. These incidents re- cently occurred. One of our most i)r()mising young business nu^n made a visit to Chester and Montgomery counties. On Lis return, I asked him what he thought of that portion of the state. He replied, " I w^as much disappointed. "Why?" I asked. 'Because the country is so backward in general improvements," was the reply. And just a little later, a young man from Chester county, visiting me, remarked, "It is a constant surprise to me that your farm here in the centval portion of the state, atvay from the markets, have so much better improvements tlian our farms in Chester county." Which condition was also long a mystery to me. Let me here change the topic a little and quote from Edward Atkinson, as to the work which some of our national taxes accomplish. "The internal revenue on domestics whiskey more than pays all the cost of the civil government. The excess of the whisk(\y tax, plus the tobacco tax pays for the army and all the fortifications. The navy floats on beer. The Indian trust fund ])ays all the Indian bills. Miscellaneous receipts cover all the miscellaneous expenses. Sugar and import taxes on liquors and tobacco, pay postal deficiency, interest on the i^ublic debt, and $10,000,000 over." It would seem from this that some of us entirely escape taxation (by the national govern- ment) except on sugar. AVhere then is the need of so many otht^r and heavy taxes? To be squandered on pid)lic buildings, on pensions, and in ])roviding for the necesiities of the oflice holders. In place of lavish- ing money on [)ul)lic buildings (to fatten i^ublic contractors) on pen- sions, on a navy which rots faster than it can be rebuilt, w ould it not be wiser to insist upon the inauguration of measures w Inch would plainly benefit all the people? Of these measures we name some which seem to me plainly i)ractical. The time is ripe for "penny postage." The postmaster general, in his last report, states that he estimates that the letter postage ]^aid by the people, over and above the cost of carriage of letters, is $30,000,000, and that this vast sum is largely used in fur- nishing nearly free trasnportation to V)ooks and newspapers, and to a very (peat extent to the henejit of but a small ])ortion of our population, another flagrant illustration of the taxation of the many for the benefit of the few. Penn.y postage should be furnished the nation without delay. The time is also ripe for th(i "free delivery" of mail matter in all ])ortions of the country, villages and the open country, as w^ell as in the cities. It may not be known to members of th(i Board of Agri- culture, that this lVe(^ dc^livery of mail now exists in i)arts of our state, to the exclusion of other parts. AVhen at Johnstown, I found letter carriers going out into the country to the distance of at least two miles, far outside the limits of the town. The national government can and ought to establish postal savings banks, where the poor could have sure places of deposit for their small savings. And the time is also ripe for the "parcels express," now in operation in all European states. Nor is it too much to ask for government ownership of telegraph and tele- l>hone lines and all railroads. If th(^ ])eople's money w^as expended on such measures, though taxation woidd be heavy, there would at least be something to show for the money, whereas, under the x>resent system, or rather lack of system, there is nothing to show, except the hordes of hungry office seekers and the contractors. I am forced to make these strong pleas in favor of more economical use of public monies, because of the very rapid and constant increase 2 18 Qua rtkht a "REPoirr. Pknnhyi.vania State Boakd of A(HtK:uL'JiTKE. 19 '111 in these expenditures, whicli. since the adoption of our National Con- stitution, have been wtihout a paraUel in the history of any nation, ancient or modern. Quoting* Mr. Carlisle, "We find, however, that v^hile our population in 1890 was only sixteen times as g-reat as in 1790, our expenditures, excluding all payments upon the interest and principal of the public debt, tvere more than 130 times as great. In other words, the populaticm increased from 3,929,214 in 1790, to 1)2,480,540 in 1890, while the ordinary annual expenditures, excludi^ig' payments on the princi])al and interest of thc^ ])ublic debt,rose from $1,919,592 to $261,637,203. In 1810 the cost of the National g-overnment was 73 cents per i^erson, while in 1890 they were $4.19 ])er cai)ita. From 1880 to 1890, in a period of profound peace, while the population increased 24.57 per cent., the ex- penditures increased 55 per cent. The last congress made appropria- tions, in the s^ggregnte not far from cme billion of dollai-s ! In conclusion : 1. To reduce taxation, the first thing for the people to do, is to attend to the assessment, collection and disbursement of their own money themselves, and not to turn this over to the i)rofes- sional politicians. I see no hope of relief from the burdens of taxation, except throug-h the influence of the strictly independent voter, con- stantly exerted. It will not do for him to neglect to make his influence felt in the township, in the county, in the state, or in the national elec- tions. He must be ever on the alert, watcliing, criticising, and esj)eci- ally voting against all improper- acts of the legislators he has created. 2. The i)eople must be alert to demand taxation upon all new forms of property which may arise in the connnonwealth. Formerly, there was but little to tax but real estate. Now, the value of real estate is surpassed by money invested in railroads, telegraph and telephone lines, and pipe lines, in all kinds of manufacturing enterprises, in pro- fessions and incomes, etc. 3. It is manifestly wrong to lay the heaviest burdens of the govern- ment upon the poorest of the people, as is now the case in our govern ment. This our legislators in state and national halls should endeavor to remedy. The writer is not able at this moment to decide that the singh. tax on land, or the income tax alone, would jiroduce the greater equality in the distribution of the biu'dens of government. It does seem, however, that the only way to cope with tlie gigantic fortunes of the age is by means of a graduated income tax, to impose which the State has certainly the power. It is urged that income i'c xes can not be collected. If penalties for failure to make returns to the assessors are made heavy enough, there ought to be little difliculty in reaching these cases. The tr()ul)le is and always has been, that penalties are heavy against the poor, while light against the ])ossessor of money. It seems to the writer, that a law collecting double, or treble of back taxes, when after the death of a man, it should b(^. discovered that he liad made false returns, would go a long way to remedy the evil. Such law is, we understand, in force in some^ of the cantons of Switzerland. 4. Finally, the barest possible amount of money, u[)on which the government can be run, should be colh^cted from the people. If much is collected, it is almost a moral certainty that much will be squandercnl. On this point we are fully in accord with our luesent Governor who in his last inaugural wrote : " Every dictate of ])ul)lic policy suggests that taxation be reduc(»d to the bare needs of the Government. By enforced economy the taxpayer is protected ; his burdens are lessened and his thrift is promoted. A revenue in excess of the actual needs of the state l)uts a premium upon extravagance and wastefullness in legislation." THE TAX PKOBLEM. By Prof. John Hamilton. EEEATA. Page 20, near middle of third ]iaragra[)li, for city school "ditors" read city school directors. Page 2G, first paragraph, for "the private lien" iGnd the private lane. Page 27, note /.', for "capital stock tax and clearly not" read capital stock tax and frith/ieldfrotn. Also in the same note, for " but this is done" read but this is not done: system of taxation that would be free from the objections urged against the old. The commission was selected with unusual care, and after most laborious and painstaking examination of the entire question in all its Eeculiar phases, failed to reach a unanimous conclusion, and its mem- ers have presented several distinct reports, embodying diverse views and suggesting remedies equally at variance with each other. It has occurred to the A\Titer that a plain statement of the system, as it now exists, might aid the people of the state in getting at an accurate understanding of the situation as it is, and thus bring to the solution of the problem, the business sense and professional skill of more persons in the commonwealth than could otherwise be reached, and if, along with such a statement as is proposed, there should go a discussion of the principles that ought to underlie every system of taxation, a knowledge of these foundation princ^iples by the people of the state might lead investigation along equitable, logical and consistent lines, and thus avoid much irrelevant discussion and inconsiderate complaint. With this view the following paper has been prepared. The system of government now in force in Pennsylvania is practically divided into three departments: first, the state, next, the county and last the city, borough and township governments, and all of them are supported by taxes levied with reference to the varying necessities of each. Revenue to meet the expenses of these several departments of the government is raised by taxation levied, for the most part, on the various species of property throughout the state. The autliority to assess or value this property is conferred by act of the legislature on local boards of distri(tt assessors elected by the people, and the species of property that tliey are to value are all specified in the law. On this as- sessment or valuation several distinct sets of public ofticers are empow- ered to levy tax. 18 Quarterly Report. in these expenditures, which, since the adoption of onr National Con- stitution, have been wtihout a parallel in the history of any nation, ancient or modern. Quoting* Mr. Carlisle, "We lind, however, tliat while our poj)ulation in 1890 was only sixteen times as g-reat as in 1790, our expenditures, excluding (ill payments upon the interest and principal of the public debt, ivere more than 180 times as great. In other words, the populaticm increased from 3,929,214 in 1790, to G2,180,540 in 1890, while the ordinary annual ex[)enditures, excludijig" payments on the i^riru'ii^oi and interest of th^ r^nKii^ ^ ' ."Uj. - ., i-F^ xixaco, lu ail Kinds of manufacturing enterx)rises, in pro- fessions and incomes, etc. 3. It is manifestly wrong to lay the heaviest burdens of the govern- ment upon the poorest of tlie people, as is now^ the case in our govern- ment. This our legislators in state and national halls should endeavor to remedy. The writer is not able at this moment to decide that the single tax on land, or the income ta^ alone, would produce the greater equality in the distribution of the burdens of government. It does seem, however, that the only way to cope with the gigantic f()rtunes of the age is by means of a graduated income tax, to impose which the State has certainly the power. It is urged that income ti xes can not be collected. If penalties for failure to make returns to the assessors are made heavy enough, there ought to be little difficulty in reaching these cases. The trouble is and always has been, that i)ena]ties are heavy against the poor, while light against the ])ossessor of inoney. It seems to the writer, that a law collecting double, or treble of back taxes, when after the death of a man, it should ho. discovered that he liad made false returns, would go a long way to remedy the evil. Su(;li law is, we understand, in iorce in some of the cantons of Switzerland. 4. Finally, the barest possible amount of money, u[)on which the government can be run, should be collected from the people. If much is collected, it is almost a moral certainty that much will be scpiaiidei-cd. On this point we are fully in accord with our present Governor who in his last inaugural wrote : "Every dictate of ])ul)lic policy suggests that taxation be reduced to the bare needs of the Government. By enforccnl economy the taxpayer is protected ; his burdens are lessened and his thrift is i)romoted. A revenue in excess of the actual needs of the state puts a premium upon extravagance and wastefullness in legislation." Pennsylvania State Board of A(tRic:ul'jitre. 19 THE I AX PKOBLEM. By PROK. John Hamilton. [Delivered before the l^euiisylv juiia State Board ot Aj^^rieulture, January 'ii^ 1891.] Part I. — The Present Law and its Inconsistencies. That the present system of taxation in Pennsylvania is defective, the most superficial examination will clearly show. It is complained tliat the system as it is carried out in this state causes the exjDenses of gov- ment to fall unequally on the people, that its requirements are based neither on sound economic principles nor on tlui experience of the most successful governments elsewhere in the world, that it is unscientific, illogical, arbitrary and unjust; and so thoroughly have the people come to believe these allegations, that those who have control of governmental affairs are, in obedience to popular demand, reviewing the system and endeavoring to discover whether the accusations are true, and if true, what practical remedies would correct the defects of the present system and allay the popular discontent. With this in view, the last legislature made provision for the ap- pointment of a commission to investigate the subject, and, if possible, agree on some recommendations that would certainly and economically provide the revenue necessary for state and local purposes, and form a system of taxation that would be free from the objections urged against the old. The commission w^as selected with unusual care, and after most laborious and painstaking examination of the entire question in all its peculiar phases, failed to reach a unanimous conclusion, and its mem- bers have presented several distinct reports, embodying diverse views and suggesting remedies equally at variance with each other. It has occurred to the writer that a plain statement of the system, as it now exists, might aid the people of the state in getting at an accurate understanding of the situation as it is, and thus bring to the solution of the problem, the business sense and professional skill of more pc^rsons in the commonwealth than could otherwise be reached, and if, along with such a statement as is proposed, there should go a discussion of the principles that ought to underlie every system of taxation, a knowledge of these foundation principles by the people of the state might lejid investigation along equitable, logical and consistent lines, and thus avoid much irrelevant discussion and inconsiderate complaint. With this view the foH owing paper has been prepared. The system of government now^in force in Pennsylvania is practically divided into three departments: first, the state, next, the county and last the city, borough and tcwnship governments, and all of them are supported by taxes levied with reference to the varying necessities of each. Ilevenue to meet the expenses of these several departments of the government is raised by taxation levied, for the most part, on the various species of property throughout the state. The authority to assess or value this property is conferred by act of the legislature on local boards of district assessors elected by the people, and the species of property that they are to value are all specified in the law. On this as- sessment or valuation several distinct sets of public officers are emj)ow- ered to levy tax. ill' 20 QlTARTERLY IIePORT. PENNSYIiVANIA StATK BoAKJ) OF AgUICULTUKE. 21 I For local purposes in the township, taxes are laid by a board of supervisors for the maintenance of roads, by a board of overseers for the support of the poor and by a board of school directors for the sup- port of schools. The powers of these ofhcers are restricted by the law. The overseers of the poor have authority to levy tax to an amount not exceeding- one cent on every dollar of the assessed valuation of real and personal estate, offices, trades and occupations liable to taxation tor county purposes. The supervisors of roads are empowered to levy tax not exceeding" one cent on the dollar on the assessed value of real and per- sonal estate liable to county tax. The board of school directors may levy tax on all property subject to county tax and not exceeding- the amount of state and coimty taxes authorizcul by law to be assessed pro- vided that any tax on trades, professions and occupations or on sing-le freemen shall in no case be less than one dollar. A special tax for the purchase of g-round and for the erection of school buildingrs may be levied not oftener than once a year, and not exceeding the regular annual tax for that year. . . In boroughs the power to levy tax for borough purposes is vested m the ])orough council, who may lay a tax not exceeding one-half cent on the dollar on the valuation assessed for county purposes, and also for street purposes, and to the same extent as for roads in townships. They also have authority to borrow money for the uses of the borough, not exceeding one dollar in every hundred dollars of the assessed value of the real and personal estate in the borough assessed for county purposes, and have control of streets, pavements, crossings, water works, sewers, etc. Overseers of the poor and school directors in the borough have the same power and are under the same restrictions as in the tmvnships. The power of taxation in cities is mainly lodged in the city councils, a portion of whose duties and some of the limitations of whose power is given in the following extract from the law : " The council shall levy a sinking fund tax of not less than one mill nor more than three mills on the assessed value of taxable property for the extinguishment of bonded and floating debt. And any future debt contracted sliall provide a tax sufficient to pay it off in thirty years— principal and interest.*' Councils can for " general revenue purposes levy and collect taxes not to exceed ten mills on the dollar in any one year on all real, personal and mixed property in limits of cities taxable under the laws of Pennsylvania. A number of special laws exist applying to cities according to their classification too voluminous to state in this paper. City school ditors have power to levy and colh^ct taxes for school purposes the same as simikir officers in townships or boroughs, and for the purpose of extin- guishing existing debt, the school controllers can annually levy and col- lect a tax of not less than one mill nor more than three mills upon the assessed value of the taxable property of said cities to be applied to the extinguishment of bonded debt : Provided, That the whole tax ot such school district for any one year shall not exceed the entire rate now allowed bv law for school and building purposes. Councils also have power to i(3vy tax annually not exceeding ten mills on the dollar on all persons and pr()i)erty taxable in cities, for city purposes, for support ot the poor (act of 13 May, 18b9). , -, i. l The taxes for county purposes an^ laid by the board of county com- missioners, who are required to make up an estimate of the expenses of the county for the coming year, and then h^vy tax to meet these expenses not exceeding one cent on every dollar of the valuation of the real and personal property. They have charge of the equalization of the returns of the assessors of the various townships, wards and boroughs, and hear and decide upon appeals from the valuation of the local boards. Taxes for state purposes are fixed from time to time by the legisla- ture. The present law imposes a three-inill tax on personal property and includes under this title the items contained in the following sched- ule: all mortgages, all moneys owing by solvent debtors, whether by promissory note, or penal or single bill, bond or judgment; all articles of agreement and accounts bearing interest; all public loans whatsoever, except those issued by this commonwealth or the United States ; all loans issued by or shares of stock in any bank, corporation, association, company or limited partnershi]^, created or formed under the laws of this commonw(udth or of the IJnited States or of any other state or government, including car-trust securities, and loans secured by bonds or any other form of certificate or evidence or indebti^lness, whether the interest be included in the principal of the obligation or payable by the terms thereof, except shanks of stock in any corporation or limited part- nership liable to the capital stock tax imposed by the twenty first sec- tion of the act of June 1, 1889, or relieved from the payment of tax on capital stock ; all moneys loaned or invested in other states, territories, the District of Columbia, or foreign countries ; all other moneyed capital in the hands of individual citizens of the state : Provided, That this shall not apply to bank notes or notes discounted or negotiated by any bank, banking institution, savings institution or trust company : And provided. That it shall not apply to building and loan associations. Corporations, and limited partnerships, such as railroads, pipe lines, telegraph, and tel(^]>h()iiecompanies water, gas, etc., excepting manufactur- ing and buildingand loan associations, pay a capital stock tax consisting of one-half mill on the par value of the capital stock for each one per cent, of dividends declared when such dividend amounts to six per cent, or over six per cent, of the capital stock. Wlien there is no dividend or it is less than six per cent, of the par value of the capital stock, then three mills on the valuation of the capital stock, said valuation to be made under oath by two officers of the company. These companies also ])ayatax on mortgage bonds or other securities belonging to them, and also on such securities held in a fiduciary capacity, in such case they pay tax on these securities the same as individuals. Railroads, pipe lines, express companies, telephone, telegraph, sleeping car companies, etc., pay also a tax of eight mills on gross receipts for business done wholly within the state. Railroads, canal companies, etc., pay also a lo- cal tax on real estate held by them and not essential to the conduct of their business. Incorporated banks and savings institutions pay a tax to the state of three mills on the market value of their shares of stock, and said stock is also liable for assessment for local taxes, or the bank or savings institution may elect to collect a tax of six mills on the dollar upon the par value of all of the shares of capital stock and pay the same to the state, and said stock be relieved from local taxes ; these companies also pay tax on their real estate the same as individuals. Private banks, etc., pay a tax of three i)er cent, on their net income and are liable also to local tax on buildings, etc. Incorporated domestic insurance companies pay a tax of three mills on the appraised value of the capital stock and eight mills on gross premiums. Mutual insurance coin[)anies pay tax of eight mills on gross ]>remiums. Foreign insurance companies pay two per cent, on gross premiums on all business done within the state. These fi 22 QrAitTKi:!,^ riij'our companies also pay tax of three mills on all niortg-ag-es held when not included in their capital stock. Notaries public pay a license of $25.00, and five per cent, on ^ross re- ceipts. Counties, municipalities and private corporations pay a three- mill tax on the value of their loans. Fifty per cent, of all the receipts of the office of the register and recorder, of writs, wills and deeds in any one year over $2,000, after deducting- office expenses and clerk hire, is paid to the state. The prothonotary of the court of common pleas pays a tax of fifty cents on each summons issued or judgment entered in the court of common pleas, and twenty -five cents on each transcript. The recorder pays fifty cents on each deed, mortgage, release, etc. The register fifty cents on letters to administrators or executors. Commercial fertilizers pay tax on sales of previous year, if the sales amounted to 100 tons or less, $10.00 on each special brand ; for amounts over 100 t(ms and less than 500 tons the tax shall be $20.00, and of 500 tons or more, the tax shall be $80.00, to be paid into tlie treasury of the state and constitute a special fund to pay for the analyses of fertil- izers, and any balance remaining to be passed into the general funds for the use of the state. Collateral inheritance pays a tax of five per cent, on the appraised value of the estate after deducting $250 and expenses and debts. Retail liquor licenses — $500 in cities of the first, second or third class ; $300 in other cities ; $150 in boroughs ; $75 in townships. In cities of the first class, four-fifths of the same goes to the city and county and one-fifth to the state. In cities of the second and third classes, two-fifths goes to the city, two-fifths to the county, and one- fifth to the state. In all other cities or boroughs three-fifths goes to the city or borough ; one-fifth to the county and one-fifth to the state. In townships one-half goes to the township, one-fourth to the county and one-fourth to the state. The portion that goes to the township to be ap- plied to the improvement of roads. Wholesale liquor licenses. — $500 in cities of first, second and third classes, all to the state ; $300 in other cities, all to the state ; $200 in boroughs, all to the state; $100 in townships, all to the state. Brewers and distillers. — The same as wholesale liquor dealers, and all goes to the state. Bottlers. — Cities of first, second and third classes, $200; all other cities, boroughs and townships, $100. Billiard licenses. — Tliirty dollars for the first table, and ten dollars for each additional table ; all goes to the state. Brokers are assessed by the mercantile appraisers, and pay a license of 3 per cent, on estimated earnings and a tax of 3 per cent, on net receipts. Auctioneers pay license same as brokers. Peddlers, retail. — When they travel on foot, $8; when they travel with one horse and wagon, $16 ; when they travel with two horses and wagon, $25; wholesale, one-horse wagon, $40; two-horse wagon, $50; all goes to the state. Soldiers and sailors disabled by military service, get license without cost. Theatres, circuses and shows. — Pay in Philadelphia license of $500 ; in Allegheny, license of $2uO; and in all other counties, $30. Or may take out a general license by paying $1,000 dollars to the state. Bonus (m charters. — One-foiirtli of one per cent, on tlie capital stock and a like amount for any authorized increase. i -« Pennsylvania State Boakd of Aokiculture. Retailers' License. 23 Annual Sales. ^,000, 4,000, 3,000, 2,000, 1,000, 500, 300, 200, 100, 85, 75, 60, 50, 40, 30, 20, 15, 10, 5, 1, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, 000 00, Class. F(a), E, D, c, . B, A, . 1(b), 2, . . 3, . . 4, . . 5, . . 6, . . 7, . . 8, . . 9, . . 10, . . U, . . 12, . . 13, . . 14, . . Tax. 1 ,000 00, 900 00, 800 00, 600 00, 450 00, 350 00, 200 00, 150 00, 100 00, 80 00, 60 00, 50 00, 40 00, 30 00. 25 00, 20 00, 15 00, 12 50, 10 00, 7 00, Rate. ,00H3 ,0074 ,008A ,01 ,015 ,0234- ,022-1- .025 .03* .031 ,026 .03^ .026 ,025 •027 .031 .03^ ,04i ,06? .23 (This rate or millage is calculated on the assumption that a merchant lias a net gain of three per cent, on all his sales, and the millage would then be as stated in the last column. The millage in the rate column is on the??c^ income.) The present system of revenue, therefore, in g-eneral, provides that real estate, such as lands and buildinf>"s, toofether with the tax on horses, cattle, occupations, trades and professions, shall bear the expense of the township, county and municipal g-overnment, and that other kinds of property be taxed for the maintenance of the state. The assessment and valuation of personal property when not otherwise provided for in the law, is made annually Dy an assessor elected trien- nially to serve for three years, and the assessment and valuation of real estate is made every three years by the chief assessor and two assistant assessors, the latter elected every three years and holding ofHce for but a sing-le year. Tliis board of three assessors are required to visit each piece of property and value it at what they believe it would sell for at a bona fide sale after full public notice. These assessors make their returns to the board of county commissioners, who examine their valu- ations, and, if in their jud<4-ment they are unequal, have power to cor- rect the assessors' lists so as to equalize the valuation. A notice is then sent by the board of commissioners of the county to each taxable on the list statino- the amount of tax assessed ag^ainst him for the ensuing- year and appointing- a time and place for presenting any objection that he may have to his assessment. The foregoing is a brief and consequently an imperfect summary of the tax system of the Commonwealth of Pennsylvania. The law, as I have said, requires the assessors to value all of the prop- erty "according to the actual value thereof, and at such rates and prices for v/hich the same would separately and bona fide sell" (act of 15 th May, 1841). And yet most assessors depart from this plain re- quirement of the law and assess real estate at not over three-fourths to two tliirds of the actual value of the property, whilst others raise the valuation in adjoining- districts to the selling price. In some local- ities where the majority of voters possess but little property liable to taxation, assessors are elected to raise the vahiations on real estate to \ 1 ' HI! 24 QUAKTEKLY BeIM)RT. more than its full selling value, and in towns and cities where the con- stitutional limit forbids contracting'- debt of over seven per cent, on the valuation of the property within their bounds, assessors are sometimes elected to raise the valuation in order that the local debt may thereby be increased. In other districts men of known easy conscience are elected with the distinct understanding that they are to lower the valu- ation and thus enable the property holders to escape the payment of their just share of the taxes paid by other districts in the state. In many instances the men who are elected have desired the position on account of the income that it produces, or because of the local prom- inence that it secures, and so are ready to obligate themselves to favor certain persons or certain interests in their district in the valuations for taxation ; especially is this the case where the assessor is aspiring to higher position, and feels the need of the influence of prominent x>i'o- perty holders for aid in future advancement. Often, also, men are elected to this office who know but little of the true value of real estate, or whose judgment is untrained and therefore unreliable, and conse- quently glaring inequalities appear in their returns. The pressure in the rural districts is mostly for a lower rather than a higher valuation, and in the towns and cities for a higher rather than a lower valuation, and as this pressure increases, the discrepancy in valuation will in- crease, until city and country property will each be very unfairly taxed. To correct these inequalities there is no power but that of the com- missioners of the county, who are authorized to equalize the valuations whenever, in their judgment, such equalization is required. For them to do this justly, would require an intimate acquaintance with every piece of property within the county, and a knowledge of the peculiar sur- roundings of every acre of land and house and lot included in the as- sessor's list. Such knowledge is clearly beyond their power to secure. Commissioners can have this acquaintance only in a limited degree, and the labor and vexation that the present method imposes on the board is almost unendurable and requires duties that no commissioner can fairly perform. • ^ But the evil does not stop with this. Not only do the townships, wards and borouglis dilier in their valuation, but the counties also vary in their assessment from each other and from year to year. This is illustrated by some statistics made up by the Secretary of Internal Affairs in his re- port for 1877, when real estate and horses and cattle were taxed for state as well as county pur]ioses. The tables show that in valuing cattle the prices varied in tlu» different counties, from $8.G1 to $32.80, and in horses and mules, from $17.15 to $82.00. The statistics show that in one county, with a population of 4,863 taxable persons, there wen^ $10,578 worth of pleasure carriages, and in another county, of 12,124 tax- ables, there were but $850 worth of pleasure carriages. The same report shows that there were, in 1877,- but thirty -two watches in the city of Scran ton and 147 in the city of Harrisburg. One county reports an in- crease of 201 per cent, of its taxable property over the year before and another 173 per cent. Another county lost 23 per cent, and another 13 per cent. One county reports that it had 9,401 acres less cleared lan(ii in 1889 that it had in 1888, and that it had l)ut 4,261 acres more timber land in 1889 than in 1888, showing an extraordinary growth of timber in that regie )]) in cme yearof 4,231 acres, andtliat during the sameyearthere had, in addition, dro[)ped from the county 5,230 acres of cleared land. And in the report last referred to, the statistics for the state shows, taking only those counties that reported in full, that there were 230,800 acres Pennsylvania State Boaiid of AGKicui;ruiiE. 25 less cleared land in 1889 than in 1888, and at the same time 221,667 acres less timber land in 1889 than in 1888, or that the state, in some way not accounted for, had lost, in one year, 452,467 acres of its territory. A system of assessments that admits of such inequality and inaccura- cies and inconsistencies is certainly very defective and ought to be modified in the interests of equity and morality. Inconsistent, inaccurate and inequitable as the method of assess- ment of property is in the state, is it any more inconsistent, inaccurate and inequitable than that which follows; namely, the levy of the tax ? An examination of the tax schedule as given in the former part of this paper will reveal some of these inequalities and inconsistencies which are tiie undoubted source of much of the popular dissatisfaction that is manifested wherever the question of revenue is discussed. It is shown by reliable statistics that the tax on real (estate, and in- cluding horses and cattle, varies in the state from 8 to 40 mills on the dollar of valuation, and that the average is about 15 mills on the dollar of the actual value of the property (a). (a) The report of the Secretary ot Internal Allairsfor 1889, page 216, gives theaggre* ' gate of all pr()[)erty taxal)le for county purposes to he $2, iiil,t>53,45'2, and the a^^re- gate amount assessed for county j)urposes to be !? 17,708,260.93, which would show an average of .0083 as the average tax for county purposes in 1881). Add to this the tax for the support of the poor in 1889, see page 309 Secretary of Internal Alfairs' report, $1,665,948.34 ; also same page, Secretary of Tnternal Atlairs' report, for the maintenance of roads, $4,742,701.30 ; making a total ot $t),408,649.64, or 3 mills more, making the average tax for county purposes, poor and road, in 1889 to be .0113. Add the average tax for 1889 for the support of schools, see report of the Superintendent of Public Instruction, 1889, .00932; making a total of .02062. Estimating that the valuation is on the basis ol tliree-fourths of the actual value it would reduce the average on the actual value to. 01545. The above is for all kinds of real estate. The tax on farm property is approx imated in the following statistics: Thos. J. Edge, Secretary of the Pennsylvania State Board of Agriculture, col lected statistics in 1890 from actual sales of farm property in the State of Pennsylva- nia, showing the amount of those sales and the tax that was paid by each piece of property. The total number of farms returned was 566 in forty-eight counties. These farms sold for $4,225,805; the taxes paid by them was $40,282.65; the rates in actual value, not deducting personal property, is .0953; after deducting personal property, .086o. The following rates of tax assessed in the various t'uvnships of Centre county, Pa., for 1890, omitting the boroughs^ shows substantially the same result The average rate in twenty-six townships is .0133 on the assessed value of the property, and on a three-fourth l»asis this would be .0996 on actual value of property in the county outside of the boroughs including horses aiul cattle. It is therefore substantially correct to estimate that real estate in the aggregate pays 15 mills in actual value and the portion used as farm property pays about 9 to 10 mills on the actual value. Rate for 1890. Road. School. Poor. Total. Road. School. Poor. Total. Benner, 5 3 1 9 Miles, . . 3 3 1 Boggs, . . 6 8 4 18 Patton, 3 ^ n 7 Burnside, 6 6 2 14 Penn, . . 3 2 n fi? College, . 2 5 « • • 7 Pol ter, 3 2^ 2^ 7|s Curtin, . . 10 7 2 19 Hush, . . 8 8 7 23 Furgeson, 3 3 n n Spring, . 3 6 21 lOi Gregg, . : 3 31 n 8 Snow Shoe 10 7 10 27 Haines, 3 ^ 1 6^ Taylor, . 15 8 • • 23 Half MooU) 2 2 1 5 Union, . . 7 7 6 20^ Harris, . . 2 3 2 7 Walker, . 2^ H 2^ 8 Howard, . 7 4 18 Worth, . 4 10 3 24 Huston, 11 7 3 21 Jones, Ind. Liberty, 9 62 3 18^ Dist, . * » » • 20 • ■ • 20 Marion, . . 2 2 « • • n 347 County tax (2 mills). Average, .00996; county, 2 mills; total, .01196. I! I! li f 26 Q i: AKTEliL V liEl»OKT. On comparing- tlie rates levied on ditferent objects of taxation we find that mort^at^es on real estate pay a three-mill tax whilst the real estate covered by the mortg-ag-e pays fifteen mills. The mortg-ag-e bears six per cent, interest and the real estate if farm land about four per cent. Banks and saving- institutions pay six mills on their capital stock, and real es- tate pays fifteen mills on its capital stock, or 2 5 times more than the bank. A private banker pays three per cent, on net income after deducting- interest on loans. A real estate holder pays about twenty-five (/>) per cent, on net income and six per cent, on loans besides. A real estate owner pays a tax of fifteen mills on debts whilst bonds and mortg-ag-es in the hands of corporations theoretically pay three mills, (c) but practically pay almost nothing-. A domestic insurance company pays an eig-ht-mill tax on gross pre- miums, and a foreig-n insurance company pays twenty mills on the same property. Taking- the mercantile appraiser's list and counting- that a merchant wdll clear three per cent, in the ag-g-reg-ate on all his sales, we find his tax rated as low as (6|) six and two-thirds mills on his net income, whilst a farmer, with a net income of four per cent., pays two hundred and fifty mills on his net income. Or, if we take the mercantile appraiser's list and compare it with itself, where we would naturally expect consistency we find that it varies from six and two-third mills to sixty-six mills on the same kinds of property in the same town and on the same street. Or, taking- the tax on professions, we find in some localities that a law- yer who has just passed his examination for admission to the bar is taxed equally with old attorneys whose income may be $20,000 per year. Or a minister of the g-ospel who is on some miserable salary, and dex^end- ent on the charity of the community for a bare living-, is taxed equally with the hig-h-salaried preacher of the county towns (d). The only cow of a poor man may be taxed as much as 50 mills on the dollar of her valuation, and the $150,000,000 capital stock of the manufacturing establishment of the millionaire in this State pays noth- ing-. A railroad over nine miles long- reporting a capital stock of $300,000 (f>) A farm wortli ^5,000 will pay a tax of about ten mills, and its net income will not be over lour per cent, or $200.00. This would be a tax of twenty-tive per cent, on the net income. (c) See note (I) page 12. (d) The coiutiiissioners of Centre county, Pennsylvania, in issuing instructions to assessors April 1st, 1890, provided them with the following schedule : So that the valuation of professions, trades, occupations, etc., shall be uniform, you will adopt the following schedules, viz : Lawyers, $250 Bank cashiers, f250 Physicians, Ministers, 200 75 Prolessorsof colleges and academies, 250 Superintendentsof high schools, . 200 Common school teachers, 50 Merchants, 200 Shop keepers, loo Clerks, lOO Mechanics, loO Apprentices, 50 Bosses and foremen, 75 Civil engineers, ... 250 Surveyors, 150 Bank presidents, 400 Editors, 150 Printers, 75 Countysuperintendent, 250 County officers, 200 President judge, 300 Agents, of all kinds, 100 Telephone operators, 100 Telegraph o[>erators, 100 Manufactur(!rs, 200 Inn keepers who have license, . . . 200 Inn keepers having no license, . . . 100 Saloon and restaurant keepers, . . . 150 Gentlemen and men of leisure, . . . 100 Laborers, 50 Invalids and poor, 20 i Pennsylvania State Board of Agrk^ulture. 27 and a bonded debt of $300,000 more, running- two frcuo^ht and four pas- seng-er trains each day, except the Sabbatli, paid $18.00 tax in 1889 (e). A farm in the same couDty assessed at a valuation of $5,000, paid $53 tax, and a dwelling worth $3,000 in the town in which the nu'lroad ter- minates pays $105.00 of local tax. Another road in an interior county 23^ miles long-, reporting a capital of $G00,000 arid bonds to the extent of $364,000.00 in 1888, paid no tax in 1889 (/). The private lien on a Pennsylvania farm pays the full local tax assessed upon the land, whilst the 85,636 acres of vVduable land on which is located the 11,775.46 miles of road bed of the great railway corpora- tions of the state, with all their valuable improvements, are wlioUy ex- empt from local taxation and only slightly taxed for state purposes. The average cost of the 11,775 miles of railroad and their equipment is $69,710 per mile, making the total cost of the railroads in Pennsyl- vania, with their equipment, $820,841,137. This, at 15 mills on the dollar, would be $12,312,617.05 on their real estate and rolling stock, whereas the total tax received from corporations of every kind in Pennsylvania, in 1889, was $2,470,027.87, or all of these corporations of the state com- bined paid less than one-fifth of the amount that the railroads alone should pay if they would pay an equal millag-e with other kinds of real estate. The $575,000,000.00 ((/) returned as the value of the mortgagees, judg- ments, bonds and money at interest in the commonwealth in 1890, paid a 3 mill tax, or $1,725,000. If this property had paid a fifteen mill tax the revenue derived from it would have reached $8,625,000.00, or five times as much (A). The $42,181,342 dollars worth of cattle and horses in Pennsylvania averaged in with real estate, may be said to have paid, in taxes $632,720, whilst the $75,000,000 of stock of building- and loan associations paid noth- ing-. If this last had been taxed at the same rate, it would have yielded a revenue of $1,125,000. The 11,411.01 miles of telegraph and tele- phones in Pennsylvania in 1888, with a paid up capital stock of $6,109,- 729.03 paid into the state treasury $26,218.39 in 1889 or .0042 tax (i). If this money had been invested in real estate it would have paid a tax of $91,645.93, or $65,427.54 more than they did pay. Counties and municipalities are required to pay a tax of three mills on the value of their loans, which loans in 1880 amounted to $98,249,246 (J) in the towns and cities of Pennsylvania, whilst the $697,369,151.41 (^'), on (e)Bellefonte, Nittany and Lemont Railroad, Auditor General's Report, 1889, page 8. Also Report Secretary of Internal Allairs, Part IV, page 87, 1888. (/) liullalo Run, Rellelonteand Bald Eagle Railroad Company. Secretary Internal Affairs Report, 1888, Part IV, page 133. (,r/) Auditor General's report to Secretary Edge, October 20, 1890, gives bonds, mort- gages, judgments and moneys at interest at ^75,000,000.00. (A) Same as above. (i) See Auditor General Report, 1889, tax on corporation stocks and on gross receipts, which show gross receipt tax received from railroads in 1889, ^98,080 38 On capital stock tax from railroads in 1889, 899,740 59 O) See Taxation in American States and Cities, by R, T Ely, page 514. (A:) Secretary of Internal Allairs report, 1888. Railroads, Canals, Telegraphs and telephones, Entire Length. 22,636.13 788.00 172,147.58 Miles in Penna. 16,883.07 680.73 11,411.81 Per cent, m Penna, .746 .875 .066 I 28 QuAliTEKLY IIePOKT. the bonds of the railroad, street car, canal and teleg-raph and telephone corporations of the state paid (/) $49,737.25 in 1889 - .0007. If these corporations paid, as real estate ownei^ pay, 15 mdlson their funded and unfunded debt, this sum would reach $10,460,537.27, which m itself would be more than one-fourth of the entire cost of local and state g-overnment for the year. ^ -, n ^ ^ The aggre^ixte amount of property taxable for local purposes m 1889 was, $2,121,653,452 (m). This at 15 mills would equal a total tax of $31, 824,801. 78. The ag-g-regate amount returned by the counties as tax- able for state purposes was $448,537,130 (n), and the aggregate amount of state tax received was, therefore, $1,345,614.34 (o), or about 3 mills as against 15 mills on real estate. In order to be equal, the receipts for state tax should have been $6,728,076.95, or $5,382,442.61 more than was received. This would have given $2,000,000 more for public schools, $2, 000,000 to the improvement of the roads throughout the state, $1,000,000 to public charity, and $382,442.61 as a balance for contingent expenses. The fact that different kinds of property are valued in different ways, makes it difficult to present a statement that will show the number of mills tax that each pays on the actual value of its property. For in- stance, a real estate owner pays fifteen mills on the actual value of his real estate, but a railway corporation pays three mills on capital stock, eight mills on gross receipts^ and three mills on mortgages and secur- ities held, in all fourteen mills. One cannot conclude from this that the two kinds of property pay tax within one mill of being equal. To compare them it is necessary to reduce the railroad property to its actual value and see what tax it pays on that. The report of the Secretary of Inter- nal Affairs for 1888 shows that the total capital stock paid in on all the roads doing business in the state was $776,066,315.60. That the funded and unfunded debt was $865,723,298.38, aiid that the value of the real es- tate, exclusive of roadway, was $16,059,307.77, making the total value of property owned by companies doing Ijusiness in the state to be $1,657,- 788,921.75. Theactual cost of these roads with their equi])meiit isgivenat $1,068,035,596.47, or $589,753,325.28 less than their reported value, that is, interest and dividends are paid on mcjre than one-half more property than Total funded and Per cent, in Amount in unfunded debt. Penna. Penria. Railroads, $865,723,298.38 .745 ?644 , 923 , 857 . 29 Street (rar companies, • 19' io5'-E2*in Canals 47,406,614. if, .875 41,480, /87. 39 Telegriph and telephones, . . . 12,696,478.13 .066 837,967.55 Total in Pennsylvana in 1888, 1697,369,151.41 See Secretary of Internal Affairs Report, 1888. It is claimed ttiat this is reached in the capital stock tax and clearly not interest paid to resident bondholders, but this is done for a three mill tax on this would amount to $2,092,107.45, whereas the entire tax from corporations (capital stock and gross receipts, was, in 1889, only $2,470,027.87. See Auditor (reneral's Report, page 3, 1889. (/) The actual payment of interest on loans by the following corporations were, in 1889, see Report of Auditor General, pages 94-10(}. Steam railroads, ^?'^^*q4 Street car companies, ir^'on Telegraphs and telephones, • !ll\'T!r. Canals, .... - _!._!. Tot^l, ^^-^^737.25 (m) Secretary of Internal Affairs Report, 1889, page 217. (n) Secretary Internal Alfairs Report, 1889, page 219. (O) Secretary of Internal Affairs Report, 1889, page 219. Pennsylvania State Boaud of AciiacTn/ruRE. 29 the roads and ecpiipments cost, showing- that either the stock has been watered or it has advanced in value to a remarkable de^-ree. The total earning-s of these roads for 1888 are given as amounting to $209,709,- 975.56. Seventy -four and one-half percent, of this, which is the mileage in Pennsylvania, wouhlshowa gross earnings of $150,233,931.79, whereas the companies report their gross earnings in Pennsylvania for that year to have been only $62,207,801.98, or $93,426,729.81 less than the mileage Avould show, and this means that the 5,753.06 miles of railway running out of the state earned $146,902,773.58, and the 16,883.07 miles of rail- way in the state earned only $62,807,201.98: Or, in other words, each mile of road out of the state earned $25,535 per mile, and each mile of road in the state only $3,720 per mile. But taking th(3 figures as they give them, that is, the total receipt in 1888 as $62,807,201.98, an eight-mill tax on this would be $502,457.61, and yet in 1889. the Auditor General reports th(^ gross receipts tax received from railroads to have been only $398,080.38, or $104,377.23 less than the companies reported the year before. If the gross receipts in the state in 1888 had been in proportion to ihe number of miles of rail- road in the state, or 74| per cent, of the total gross receipts of the rail- roads doing business in the state, the sum realized would have been $1,249,871.45, or $851,791.07 more than was realized in 1889. If this dis- crepancy is explained on the ground that the dilfc^renceis due to tonnage transported through, or partly in and partly out of , the state, which can- not be taxed, it still shows that a large portion of tlie tonnage escapes taxation, and the companies are, to tliat extent, relieved from the bur- den of state expense that they ought to sliare. The same report of the Auditor General shows that the total corpo- ration tax on capital stock paid by railways in 1889 was $899,740.59. Adding to this the amount received from tax on gross receipts of rail- ways, $398,080.38, and we have as the total amount of tax paid by these companies in 1889, $1,297,820.97, not counting the $38,004.11 paid on loans and also the commutation tonnage tax (/>). This would represent a tax of more than one and a half mills on the cost of the roads and ecpiipuK^nt in P(-nnsylvania in 1888. Or it would beone mill on tlie capi- tal stock, funded and floating debt, and realestate off the line of road- way, in Pennsylvania in 1888. Or it would be two and a quarter mills on the proportion of capital stock in Pennsylvania in 1888. Or it would be two mills on the funded and floating debt of the companies as re- ported in 1888. Tlu^ Secretary of Internal Affairs in report on railroads to June 30, 1890, gives total earnings and incomes of railroads, $270, 442, 882 80 ; total expenses, $235,560,086 19; making net income for year ending January, 30, 1890, $34, 882, 796 61. He also gives the total cost of the roads and their equipment at $1,311,245,952.80, thus showing that the net earnings tvere two and two- thirds percent, of cost of roads and equip- ment. These companies pay a tax, as we have shown, of more than one («). Report of Secretary of Internal Affairs, on Railroads, 1888. Cost of road and eciuipmcnt in 1888, f; 1,008,035,596. 47 ; per cent, in Pennsylvania, 741 ; amount in Tcnnsylvania, $705,686,519.37 ; total tax tor railroads, ? 1,297, 820. 97 = .00"163. Capital stock, funded and floating debt and real estate, $1,657,788,921.75 ; percent in P(MHisvlvania, 74' ; amount in Ponnsylvania, $1,235,052,746.70 ; total tax from rail- roiK 1 s, ? 1 ,297 , 820. 97 = . 00 1 05. Capital stock, $776,066,315.60; per cent, in Pennsylvania, 74i ; amount in Pennsyl- vania, $578,169,405.12= .00224. Funded and floating' debt, $865,723,298.38 ; percent, in Pennsylvania, 74^ ; amount in Pennsylvania, $(>44,963,857.29 = .002. 30 Quarterly Reim^rt. and ix half mills on cost of road and equipment, which would be 6 per cent, on their net income, whilst real estate pays 25 per cent on its net income. These hg-ures show that these corporations pay about one mill tax on the same value of property as that on which real estate pays 15 mills, namely, on road bed, rolling- stock, building's and bonded debt. If the business of other corporations and subjects of taxation were to be investig-ated, they would doubtless show similar inequality of tax, when reduced to the same basis as real estate. If all kinds of property in tlie commonwealth that ougrht to be as- sessed, Avere taxed in equal proportion, what rate or millage would be required in order to meet the expenses of the state? The property assessed for tax for local purposes in 1889 amounted to (r/), $2, 121, G53, 452 00 Steam j-ailroads in 1888 (r), 795, 686, 519 37 Street railroads, 1887 (error in 1888 report) (s), . . • 12, 326, 068 63 Telephone and telegraph companies, with a paid up capital stock of $92, 571, 652.06, and a total of 172,147.5 miles of wire, 11,411.81 of which are in Pennsylvania, or 6.6 percent. (0, 6,109,729 03 Canal companies, with a capital stock, in 1888, of $50,959,208.00, with 778 miles of canal in all, of which 680.70 miles or 87,5 per cent, are in Penn- sylvania (u), 44, 539, 307 00 5, 980, 315, 076 03 Manufacturing" companies (v), 150, 000, 000 00 Building- and loan associations, 75, 000, 000 00 Mortg-ages and judgments, 575, 000, 000 00 Banking capital, 100, 000, 000 00 Gas companies, turnpike companies, oil lines, ferry, water, steam-ships, market, heating, lighting, power, bridge, mining, etc., estimated, 500, 000, 000 00 making a total of taxable property of $4, 380, 315, 076 03 in the state, the taxes on Avhich must be sufficient to maintain the ex- penses of the government of the state. What are these expenses ? A tax of 15 mills is now levied for local purposes on real estate in the commonwealth, and the total amount of property taxed for local pur- poses is given by the Secretary of Internal Affairs in his report for 1889. page 217, at $2,126,653,452.00; a 15 mill tax on this would therefore be $31,824,801.78, which represents the expenses of local government for 1889 ; tlie expenses of the state government for 1889, were, as per Auditor General's report, 1889, page 183, $8,182,847.34; making a total of $40,- 007,649.12 as the total of expenses of local and state government for that year. The total receipts of the state as reported by the Auditor General for 1889 was $8,465,399.22. Deducting from this $3,013,386.48, which was received from lands, tax on capital stock and limited partnerships, gross receipts of corporations, bank stocks and net earnings, all of which (q) Report of Secretary of Internal Affairs, Part II, page 217, 1889 (r) 8ee note (p), paj?e — . (s) Secretary of Internal Affairs report, 1887. (t) Secretary of Internal Affairs report, 1888. (u) Secretary of Internal Affairs report, 1888. {v) See statement of Auditor Geneial Octoher 20, 1890, to Secretary Edge. Pennsylvania State Boaud of Aoiucultuke. 31 have been included in the above statement of the total taxable projjerty of the commonwealth, and Vv^e have left $5,452,012.74 as the balance re- ceived by the State Treasurer in 1889 from sources not included in the above schedule. Deducting this from the total expense of govern- ment $40,007,649.12, and we have $34,555,636.38 as the amount to be raised by tax on $4,380,315,076.03 of property; this would require a tax of .00788 on the dollar, which would be a reduction of about one- half of the tax now borne by real estate. The present law exempts from taxation state bonds to the extent of millions of dollars. Why these should not pay tax the same as those of X3rivate debtors, is not satisfactorily shown. Such a tax could easily be collected, and without expense, and the holders of these bonds would be injured no more than the holders of county or municipal bonds, and the same ar^^^uments that are used in defence of the exemption of state loans from tax arc equally applicable to every county and municipal loan in the commonwealth. If the argument is sound that state securities should be exempt, on the ground that they can thereby be negotiated more readily and at a lower rate of interest, and since the taxpayers of the state have ulti- mately to pay the principal and interest, tliat it is therefore to their advantage to grant the exemption, because they will have less to pay, then the same reasoning will equally apply to a city, a borough, or a county. An equitable tax system must not permit the state to deal with partiality and grant special protection to a few and forbid it to the mass of her population, and for her to use her supreme power in pro- tecting her special creditors from their just share of the burdens of government, is to take an arbitrary and unfair advantage of the rest of her citizens from whom she exacts the uttermost farthing. To be con- sistent the state should not have preferred creditors, but should exact the same from all. The public debt, as given by the State Treasurer, Decem- ber 1, 1889, was $13,856,971.28, and every mill of tax on this would add to the state revenues $13,856 97. It is objected that it is too late now to remedy this evil that exists, as the bonds cannot now be changed, and the sum that the state would receive would in any case be very small. Wliilst both of these objections are strictly true, still they do not affect the sound- ness of the principle that is involved, and since we are now endeavor- ing to discuss the principles that should control an equitable system of taxation, it does not follow, because the present law forbids the ap- plication of the principle to past or existing methods, that future legis- lation ill this respect shall not be governed by equitabk rules. A large class of industries, representing a capital of $150,000,000.00, has recently been exempted from taxation in this state. I refer to the companies engaged in manufactures in Pennsylvania. Lest I should be misunderstood, I wish to say right here that I am a Republican in poli- tics and believe in the proper protection of American industries, but I do not hold that manufacture is the only American industry. Why this particular form of industry should be exempt when almost all others are liable to taxation is difficult for the average taxpayer to und(3rstand. Tlie only just reasons why property should be exempt from taxation are 1. That the property is unproductive. 2. TliJit tlie expense of collecting the tax is greater than the amount collected. 3. That assessors are unable to discover the j^roperty. 32 Qtiautijua Repout. 4 That the amount of property of the kind is insignificant. 5. Tliat it already pays a tax directly to tlio state ., ^^^_ , . x, 6. That a tax on the business will react injuriously on the mai,s ot tJie '^*7'Xf ti!L° Wiess promises to be of great value to the state, but as vet'it is in a precarious and uncertain stage ot development. 8 That its presence is indispensable to the prosperity and develop- ment of the resour<.es of the state and that a tax would drive the m- dustrv out of the country. ^ . , i? v • ,c. T Public property used for public purposes, actual places of religious worship, places of burial not held tor private or corporate profat and institutions of purely public charity. . i , • % 4.1 4.4. Oln it be truthfullv said that the manufactering industries of the state can rightly claim exemption on any of these, grounds^? Are not these m- diistri^s sulHciently protected by the tariff laws ot the general govern- men wiUumt ite bemg necessary to aid them still further by relieving them from all of the burdens of the state"? Axe they more important than agriculture, or transportation, or commerce, or mining, or many other industries that are now required to support the state > Are their profits so meager as not to justify the payment of their share ot the ex- penses of the government tiiat protects them ? Are they to be classed with the paupers of the country who are exempt on the ground that tiiey are incapable of self-support and are a helpless charge on the charity ot We fully ^rant that these manufacturing- industries are of untold benefit to the people of the state, and their usefulness and importance can hardly be exag-gerated, and on this and many accounts that cannot be here recited, they should be protected from overthrow by loreig-n governments and are entitled to the temporary advantages ot the dis- covery of new and improved processes in manufacture and design, under the laws protecting patents in this land. But when, in addition to these advantages, they ask of the other industries, immunity from all obli- gations to aid in the support of the government that thus protects and guards them, it strikes an unprejudiced observer as unreasonable and unjust Are they to be forever the special wards of the commonwealth ; or if not, wlicn, is it predicted, will they be able to stand alone? Are the other industries forever to bear this burden, or if not, when shall fhov be relieved ? The manufacturing industries, as I have said, represent a capital of $150,000,000.00 ill tliis state; how many more millions must they have before they become able to endure the responsibility of citizenslnp'? Will they ever become naturalized and assume the duties of American freemen? Whenever we wish to impress our visitors, we show them througli these immense and imposing manufactories of Pennsylvania, and their managers, with natural pride, discourse on their completeness and extent. But when they receive a visit from the assessors of domes- tic tax, they instantly shrink into insigiiificent and helpless paupers. Their position is unmanly, unpatriotic, unfair, un-American and unjust. He is rightly regarded as a mean man avIio, altliough able, re-fuses to pay his fare on a railroad train, a street car or steamboat, or to pay for the services of his tailor or boot black or wash woman, but expects his friends to pay his way througli life. Is not an industry likewise de- graded, when it ])ermits its overtaxed neighbors to iiay its fare, though its bonds are sold at par, and its managers live in the aristocratic man- sions of the wealthy? Is it not time to adopt manly, straightforward, Pennsylvania State Boakd ov A(iKRULTUiiK. 33 and energetic business methods in dealing with these iiistitutitms, now the willing recipients of public charity, and [)lace th(^m where they justly belong, in the common list of those who, according to their ability, contribute to the support of the government under which they live? I know that numberless excuses are offered, attempting to justify this exemption from taxation, but the limits of this |)aper forbids dis- l(^ does the state come in at death and claim a slice of tln^ pro])erty that it has sold, and do this, not onc(^ nor twice, but as often as the special conditions arise that are enumeratenl in the act of 1820? If the tith^^ to an estate was pro] )erly acquired in tlu^ fii-st i)lace, all courts of 34 Qi MtTKiti.v TiKroin-. .H,nitv ana iustice recosni/..^ the. risl.t of the ow.ier to transfer it dnnn^ ,?rW("thn. to any inarvidual or corporation that h(. nuij^ sec ht But when l.vwiloi obligation nia.lc (hiring' life he undertakes to trans^ Sw's ^.el-ty to collateral heirs at death, tlu-u a rgt - - -^ l,y the commonwealth to aiM.roi.riate part ot «^ta^, ,/g\,! ;\ '"Z cL thus justly be --^ ^^L' ^:S >ay'"tS' - "^ v^Mrnl-n* tinrV^PSSlOll 111 tlie line, SllOUUl pciy . This is arbitrary and unreasonable, and an hal-e rplace in any equitable system f , t'-^*^^-';.,,^- ^^SeH^ of T)ower is ^ynml-£^ u ill iTi time absorb the entire estate. To tax a leoacy ot 5^1()(yO loilais 50 >er cS ' tvS take one half of the orio-inal amonnt Another tax on thp po tio hat remahis, would reduce the estate to i of the sum at i^^st be uea^^^^ and a third tax of 50 i>er cent, more, wcm d leave only r\fr, to t ( fina le-atee. Tin. tax has reduced th(^ producing power o'^i^itefin^ yeai, or the differanc^ k^tw^ei^ the interest of $1,000 and that of $125. ^V^'^^^^'^'^^'^'^l^^^^^ courao-ement of production, and its manifest injustici^ (m-ht to ex chide it fr()m the statutes of the state. Just here le me quote fixmi ' n inent autliority on taxation, partly because he presents the tr It tint I wish to ui-e, and partly because lie states in brief and c ni r t nsive^^ a principle that will be of first importance m the s se pent discussion :>f taxation in the state; McCu louc^h says: "whenever the l)urden of taxation is not fully compensated by mci^ased production or increased savin-, it must (uicroach on the means of future production, and th(^, (.mntry will l)(^-in to retrograde Taxation, when carried to tliis (^xt(nit, is one of the st^verest scourc^es to which a people can be subiected. By aid; and lays the sure foundation of public povei^y and discn%acein the destruction of individual fortunes. Like fallmo bodies which are in-ecdpitated with a constantly mcreasm- velocity, a system of taxation actin- cm capital, multiplies pauperism and distress in a geometrical proportion, and destroys alike the dc^rre and the rneans of reproduction * * * * of all species of taxes, those w( mid seem the worst which 7UTc.sfdnction, they in so far diminishtlu^ future taxable income ot the country. * * *' '*' Capital ccmsists of produce sav(Ml troni con- sumption and is emidoycMl for the maintainance of those who are m the work of production." To diminish it is to diminish revenue and so inipoverish fli(^ state." The wisdcmi, th(U-efor(\ of the state in contiscat- PeNNSYLVANIA StATK BOAIM) OK A(JHl('T'];n'l{K. 35 mg the original capital of her citizens, is about ])arall(3l with that of the man who owned the celebrated g"oose that laid the golden e^,^". Is it not far better to rest satistied with the usual tax that all property endures, than to g^reedily board a railway train and, with (pocked r<' volver, ccmipel the passengers to hc^ld up their hands and then proceed to collect the toll, or in other words, to do an act because you liave the power, witlicmt reg-ard to the e(piit,y of the i)riiiciples involved. The present law permits another practice; that Avorks injustice and oag-ht to be corrected. I refer to the taxing of the same money twice, or what is known as double taxation. Tlie owner of real estate is now taxed on liis indebtedness, and iho Jiohh^i' of a mortg"ag"e on his pro- perty is also taxed on his mortage. A g-reat deal of loose logic is used by economists to show that this is not double taxation, or that it is in the (md of g'leat advantag'e to the owner of the estate. They discuss what is called the incidence of tax- ation, or the final resting* place of every tax, and arg-ue that to release^ the mortg'ag'or and tax the; mortg-ag^ee is sure to add to the burdens of the owner of the land. But when pressed to show the justice of the; practice they are forced to the admission that it cannot stand in equity, but contend that it is justified on the ground tliat it will lessen taxes on real estate below the present levy. They miss the; i>oint. The com- plaint is not so much ag*ainst the actual aiiKmntof tht; taxes now as sessed, as against the inequitable nature of the system; and it is no answer to this complaint to state that because; the existing* ])laii is not so bad as some that cemhl be proi)osed, therefore the people should be content. To charg^e one man a double ])rice for an article for which every body else l)ays but one, would ])e declared unjust by tin; most ignorant jury in the land, and for some smart lawyer to attempt to justify it on the ground that it is not nearly so bad as some other practice which charg'es tri])h; ])rice for tin; same material, would hardly chang'e the verdict of common sense. Others state that the borrower should pay tlie tax on all that lie has under his control, because he lias the use of the estate. Does he not ]>ay the creditor for such use? And does not tin; lien of the mortg'a^ee on this estate hold g'ood agfainst all the world until the debt is |>aid ? If th(^ debtor were to die would not the claim of the mcn'tgagfee take prectedence of any other? Oik; reason g'iven for the paynn^nt of any tax is that it is due tht^ state for the protection that sin; ])r()yides. In the case before us has not this protection been for the interests of the mortgag^ee, whose ])roperty has l)een tem])orarily in the hands of the occu]>ant of the estate. Would it be considered riglit to assess a tax ag^ainst a renter who has the tem- porary use of proi)erty on which lu^ l>ays tln^ usual rc^nt, and also ex- pect the owner to pay a similar tax on tlie same estate? Surely if this is wrong" the other is likewise wrong, for the cases are essentially the same. It is unnecessary to follow^ all of the ai'f^uments that are used in attempting to justify the ]iresent system, such as the extreme timidity of money ca])ital, and the consequent difficulty of borrowing if this cap- ital is taxed, or the; abuses that they assert Avill follow if del)ts are ex- empt from tax, so long* as their conclusions lead to tli(> justificaticm of a system against which the general sense of justice instinctiv(;ly revolts. The equitable system of taxation would exempt the del)tor from tax- ation to the extent of his ind(;btedness, and require the creditor to pay the tax, and the special ]U'otection that the state; now g-rants to creditors at the expense of the debtor class shoulel be withdrawn, anel ])ermit the debtor and creditor to settle their affairs in the o])en market, and the 36 QUAUTEIILY EePOUT. borrower c-aii rc^^t assured that if the security he offers is amphs capital will uot take to its heels and tly away, and the rate that the borrower must pay will bc^ wholly governed by the (character ot the security that he presents. And it is everywhere a^mnxl tliat of all oi the securitieK that are offered in the business world, real eHiaie indorsement is the best. Such tlnai, Mr. (Chairman and Gentlemen, is a somewhat comprehen- sive statement of the tax system under which we live, and alon^.with it I have presented, as accurately and impartially as 1 could tlie o nmncl of our complaint. How such a structure has been erected, devoid ot plan with only herc^ and there a foundation principle on wliicli to rest, can be discovered only by a careful (examination of the debates and laws of the (l(^neral Assembly of reimsylvania for the past one hundred years The ineciualities and inconsistencies that are here s(4 forth, show the absence of any leadin^:, guiding principles controlling the tax legis- lation of the state, and exhibits, for the most part, a disconnected mass of mere expcnlients, devised from time to time to secure sulhcient rev enue to carry on the operations of tlite state, regardless of any T>rinciph> of equity or rube of right. ^ . • i x i • i i Is there then, no fundamental economic princiide to which our leg islation, on this important matter, should c(ud*orni .\ Have modern " CUvists" no rcemedy to suggest for existing ills, no ideal standard, practical and comprehensive, that will adjust the burdens of the state in an equitable way? Is there no system of taxation that may be uni- versally ai)i>li(Hl, that equity and enlightened civilization wall approve? Can no set of laws be framed that shall take so much of our old system as is not adai)ted to the changed conditions that now surround us, and so adjust it as to meet the requirements of modern life and be m har- mony Avith the poi)ular sense of justice? The writer is confident that such a svstem can be devised, and offers some suggestions with that in view in tln^ following i)aper on an equitcdde system of taxation for the state. Paiit II.— a PiiorosED Equitable System ov Taxation fok Penn- • SYLVAMA. " The design and object of laws is to ascertain what is just, honorable and expedient; and when that is discovered, it is in-oclaimed as a general ordinance, equal and imi)artial to all. " Demosthenes, cited m Christian's notes on Blackstone, All airree tliat to attempt to cure the sick by the use of medicines that violate the laws of health, is not to cure but to aggravate the dis- ease. There must first be a clear und(^rstaiiding not only of the charac- ter of the six^cial illness, but also of the entire structure of th(^ human body and then,the use of rc^medies adai)ted to the nature of the disorder. A like cours(^ must be pursued in the treatment of the ailments of the body politic. It is not enough to know that in certain parts ills exist, and undertaken their curtn without regard to their relation to i\u) other organs with which they are united, but there must likewise be a know! edge of tlie cnitire structun^ of the states and, so far as possible, an ac- curat(i understanding of tlun effect of rc^mculies on tln^ (entire system witli which they have to deal, lest in tln^ (^.ffort to cure a single <)rgan, they do ineparable injury to many others. Erai)iricisni is justitial)le in the early stages of an art or science, but as information is a(H3umulated and experiences gaiiKid, latrs are gradually develo])ed, and at length sul) stantial reasons are reniuircHl for every measure before* it (H)mmends Pennsylvania State Boakd of Agkkuilture. 37 itself to the judgment of mankind. Whilst one cannot say as yet that the science of government is exact, and that a settled policy exists throughout the world, yet it can be said, that the days of political (empiricism ares fast disap])earing, and the time has come when discus- sion is conducted on scientific principles, and ex])ediency is no longer freely granted the right of eminent domain, but it is requirtnl first, to show that the laws of ecpiity and honorable deialing are not ada])ted to to the exigencies of the state. The system of taxation in Pennsylvania (as I have shown) is sadly out of joint. In all the years of its existence, and with all of the repair- ing that it has undergone, no erne seems to have examined the founda- tions to sees whether they are safe and can be relied upcm to bear the weight of the future structures that the state may have to build. Al- ready there are seen the signs of giving way. Some portions now are crushing, and complaint is coming u]) on every side asking for imme- diate relief. Shall we disregard these warnings of over-burdened men, or shall they have relief, and in granting this relief to some, shall we be compelled to commit tlu^ injusti('e of over-weighting others? (^an there be no equitable plan devised that will evenly distribute the burdens of the state according to the strength of those on whose shoul- dei*s the weight must iiunitably rest? Let us for the present disregard (expediency, and ask ourselves the (piestion. What is riifht? What does ejfnity demand? What does equity demand of any syst(^m of taxation that shall meet the recpiirements of niod(^rn society, and satisfy the ])opulai' sense of jus- tice? Eepiity demands that there shall l)e an equalization of tine ])urd(^ns of government among all who share the benefits of gov(ernm(ait,and that the amount that each shall [)ay, shall be in proportion to his ability, which is measured by his income. Equity dimiands that if this prin (iiple is de]mrted from in the case of one individual, or set of individ uals, that it shall likewise, and to tine same extent, be departed from in the case of all otlnn- individuals. Equity demands that no class of ])roperty shall pay more on its net income than otluM- classes of i)ro peiiy pay on their net income. E(piity demands that if oiue class of property is taxed twice, all other (^lasses of ])ro])erty shall also be taxed twice, and at the same* ratio as tln^r i)r()ductive (»ai)acity bears to the productive ca])acity of the first class. Eepiity demands that no dis criminati(Ui be made in faven- of or against any class of i)ro])(erty, on (•count of tlu* use to which thee tax wliic^h it i)ays is to be a[)])lied, but whether it be usenl for local or sate pur|)()ses the tax should be the same. Eeinity demands that all spe^nes of ])roductive propierty shall be taxed, and that no distinction shall be mad(^ betwee^n that beelong ing to natural, and that belonging to artificial peersons. Eepiity de^ mands that the sanne ])rincipl(^s of valuation that ar(^ ai)])lied to one species of ])ropertv shall be ai)])li(Kl to all, and that noiKe but intelli g(mt and consciemtious citiz(^ns shall be entrusted with this valuation. Do tlu^se ])rinciples of (upiity nMjuire that which is impossible? Is it not possil)le lor the stat(e to deal (upiitably with her citiz(»ns? ('an no tax law be framed that will satisfy these conditions? Wliilst it may be im])ossible to constiuct at once, under the varied conditions of the industri(^s and occupations of th<^ ])eople, a syst(^m of taxaticm that will fulfill the requireme^nts of ecpiity in all i>articulars, it is (^tertainly per- fectly feasibh^ to ad()])t e(piitabie ])rinci|)les, and conduct our reforms along tln^se lin(^s,with a view to evf^ntually apjU'oximate th(^ ideeal stand- ard of justi(^e : and in our re-forms wIkmi in doubt, to err in the dir(^ctid attention to the unrc^habh^ character oi the assess- ments made tliron-hout the state, and showed tliat many nieqimli- ties n6w exist, and that assessments under the i)resent system must ecmtinueto do -ross injustice, both to the ^itizens and to the s a^^^^^ It is inmecessary to present a-ain the method now m use tor valuem- propJJty in the commonwealth, and I will only state that an error here is a vital cTror, and nuHpiality or injustice here, is inequalitv and in- justice that, under existin- mt^thods, it is practically impossibh^ to cor- ^^Soine of tlie dimculties with which we have to deal, orig-inate in the (^laracter of the assessments made in the local districts, and ot coui-se, in the character of those who make the assessnnmts instead ot tlie assessors bein- elected by the peoi)le of the distnct, thus opening the way for the nomination and election of ignorant, prejudiced and un- scrupulous persons, they should be appointed by the courts ot the i-ounty, and none should Ix^ (eligible except tree holders, residents o the district and owning real estate to the extent ot at least one thousaiu dollars, these men to be selected for their business intelligence and |)robity of character. The several chairiDen of thes(^- boards ot asses- sors of the various tax districts should constitute a county board tor tln^ revision and ecpialization of the assessments of the county, and lor tins nurposc^ tlnn^ shall meet after all of the assessments have been com- ])leted and go over the respective lists, and pass upon them by vote, and shall then turn them over to the coinmissicmers of the county, who shall record the lists and notify all taxal)les in the county of the amount of their assessment, and give notice^ that appeals will be heard on cer- tain dates at specified places, and the board of appeal shall consist ot the three countv commissioners and the three local assessors m the district in which this apoeal is held, who shall lu^ar and pass upon all 8i)ecial cases that may arise. This wcmld cmsure that s])ecial care would be taken in the valua'tion of property throughout tln^ state, which is the tirst essential in anv e(iuitable system of taxation. What kind of |)r()i)erty shall these assessors list for tax? About this there is great difference of opinion among political economists and writers cm this subject, and corresponding difierence in the i)ractice of the various governnu^its of the ccmntry. No ecjuitabh^ principle or general rule seems to govern the various states in the determination of the question, Imt it seems to be controlled by the passing whim of the hour, or in^ejudice or pecuniary interest. Before stating tln^ rule that I think should guide in determininc: the question of what to tax and what not to tax, I will say that it is gener ally agreed that e(iuity wcmld seem to (permit the exemption of "all churches, meeting houses, and other places of stated religious worship, all universities, colleges, academic^s, school lumses belonging to any ccmnty, borongh or schoc^l district, or incorpcmited, erected, endowed or established by virtue of any law of this commonwealth, with the grounds tliei<'unt() annexed not excecnling acres: also all burial lots, the lands and premises of all cemetery C(mi]>anies wlnp; such pro])erty is held in trust for the sole purpose of improving said lands Mild ])remises, and whose revenues of whatsoevc^r kind, are devoted to that objc^ct, and in no way inure* to tin* benetit or ])r()fit of the corpora- tors or aiiv of tluMu ; also all lumitic asylums, alms houses, poor hcmses, Pfansylvvnia State ]><)Ain» or Aoi:i(Tii/rruK. :}t) housc^s of refuge, penitentiaries and asylums, schools and hospitals su[)ported by the ap[)ro[)riations annually made thereunto by tlui com mon wealth, togc^ther Avith all lands attached to the same ; also all char itabhi institutions provident by charitable gifts or othei-Avise, the chief revenues for the sup[)ort of which are derived from voluntary contribu- tions, togi^ther Avitli the lands attached to t\w same." It is hardly necessary to take time to discuss the reasons for relieving tliese institutions from taxation, altlamgh some "civists" favor the ini- oosition of tax cm at least a fcnv of them. It is sufficient to state that a tax cm thc5se would be in disccmragement of religion, morality and edu- cation in tlic^ state, and in restraint of the exercise of the practical charity that is so beneficial to, and cares for so many of the unfortu- nate and helpless in our midst. An (Hpiitable system of taxaticm will also excmipt from tax the follow- ing : Thci implcmumts of erne's trade or occupation, carriages for per- sonal use, furnitur(\ Avatches, wearing a] )paTel, books, jewelry, gold and silver plate and works of art, on the princii)le that property that is natur- ally nnpi'oductire tihouhl not />c tajctd. No citizen can Avith any show of justice, seriously object to paying his fair share of tax on his income- producing ])ro[)erty, but Avium taxes arci assessed on ])roi)erty that not only is incapal)le of production, but is a scmrce of ccmtinual expense to its ])ossesscn-s, the tax becomes oppressive and is equivalent to ccmiis- cation. Thc^ items that I have mentioned are not income-producing capital, and yet, they are important and even necessary ])arts of the cHlui])nuait of every comfortable hcmie. To tax these, therc^fore, is to lay hold of them piece by piece, until the entire list is confiscated by the state. i 1 1 i. Another and entirelv ecpiitable rc^ason Avhy theses articles shcmld not be taxed, is fcmnd in "^that principles of i)ublic policy that encc)urages the population of a ccmntry to provides themstdves Avith comfortable homes. There can be no civilization Avorthy of the name, so long as the inhabitants of a country live in squalor like the nomadic tribes, and are restricted to tins use of only the crudest implements and the few^est forms of comfort. Thcs unfurnished hcmsc^s of the peasantry of Europe are in striking contrast Avith tins comfortables dwellings of the Avorking mcai of this Avestern world, and yet thc^ contrast here is not so great as that sch^ii in the stolid ccmntcmance of the cxtcupant of the con- tinental hcnne and thc^ Inight, intc^lligc^nt and manly faces that issue every mcn-ning from thcMiiill ions of ccmifortablcs cottages in America. The state clcres avcsU to ])rotect the brie a-brac and AvindoAV gardcsn of the houscnvifcs from the hand of the gathered- of tax, and give fond ])arents a chance to adorn their homes and save their groAving boys and girls frcmi the allurenuMits of tins saloons of vice. The equitablcs principle that should control our laws in assessing and c-oUecting tax is the one that I have partly stated : That all i)roperty naturally uni)roductivc* should not i)ay tax, and jdl income ])roducing property, profession, tradc\ occupation, and industry, including fran- chises of corporations, liccsnsc^s, charters and commissions should be assessed and rcMjuired to i>ay their share of tax. The amount of tax that ciach should pav, should be according to his net income or profit, and profits should consist of gross earnings Ic^ss the necessary c^xpense of operating the business. 40 QlJAKTKKLV ItJlPOliT. Pennsyt.vania Statu Boahd of Adiacri/n ke. 41 This undoubtedly is in theory, and, as I liope to show, in practice^, the only strictly equitable method of taxation that can be devised. A tax on prohts or net income is in harmony with every rule ot equity, and is the only general and safe law of taxation, as it bears impartially upon the just and unjust, the rich and the i)Oor, the individual and the corporation, the land own(a- and the money lender, the protessional man and th(i day laborer. It recpiin^s of no man more than Ins lair share and it com])els every man to do his full share, it iurnishes a sin-le equitable basis, which the most io-norant can comprehend, and . i)rovides a standard of valuation to which no fair minded man c^an object. It a|)pli(^s to city and county and township and ward and borouo-h ; to all vari(^ties of trades, occupations and conditions with whicli we have to deal. The inequalities, inconsistencies and mjiis- tice of our present system exis tin exactly the proportion m whuai there has been departure from this equitabh^ rule. , , . , But some one asks, wliat do you i)ropose to do with the hi<,-h tiuthor- ities, who declare that tlu^ system will not work and cannot be enforced? Before replying, I will also ask a cpiesticm. What do these hig-h au- thorities propose to do with tlu^ still higher authorities, Equity and Justice? TT- 1 ^1 x High autliority has sometimes been mistaken. High authority once stated that the sun moved around the world. High authority once said that the earth is Hat. High authority once declared that no western world lay across the Atlantic. High authority ()iic(^ assumed that the peo]>ie had no rights. But high authority lived to si^ni the Magna Charta, and to behold the civilization of a western Avorld, (established on foundations that all liad I'greed couhl not sustain tlu^ state. We live in times when even the conclusions of Jiigh authoriti(^s are subject to review. This is no visicmary and untried scheme. The (Mitire ex- })enses oi* the English govfanment for half a century have been met from a mc^thod similar to this. Tt has for many years prc^vailed in the Cantons of Switzerland, and, in a modified form, in Italy, France and the (Ternian states, and also to some extent in the state of Pennsyl- vania, in which av(; live. The answc^r, then, that these countries give to high authorities is, "you are ngain mistakcni, it lichs been donc/^ But let us see how this priiicii)l(^ that T have stated may be applied in a system of taxation for the stat(\ The first object is, of ccmrse, to discover w^hat the net inccmie of a l)usin(ess is, and wee are told tiiat this cannot be ascertained, as men will not make such n^port, and any in- quisition that undcn-takes to find out for itse^lf would b(^ obnoxious in a high degree, and no such system could \)o sustained in a (country where the peoi>le have a voice in the manufacturer of their laws. In other words, many men will lie, and withhold th(^ tru(^ amount and value of their ])roperty from the assessor's list, and so defeat the equit- al)l(e working of tlie law. May not the same bt^ said, and with equal force, in condemnntion of the ])ractice of re(iuiring testimony in our courts of justi(*e? l^xH'avise souk men tc^stify to that which tlu\y know to be utterly false*, do we, tlH^n^fore, abandon oaths and aftirmations and call the system a total failure and re-sort to guessing to get at the truth? Does not oui- i)res(Mit systtmi rcupiiix^ that the citizen shall make out and testify to tlie accuracy of his list of pr6])erty, and are not the cor porations and associations of the state now required under oatli to ex- hibit their entire business for the y(\ar? The discovery of iii(H)me by the plan iu()[)()sed, requires no mone oaths than our i)resent system, nor any inquisition that ought to give ofiense to any i)atriotic citizen of the state. And if tin' system secures equity in the valuation of tlui entire i)roperty of the commonwealth, and in the levy and collection of only a moderate- tax cm the valuation so securcnl, will not the large majority of the tax [)ayers in Pennsylvania welcome any investigation that will bring al>out these most desirable results? Inasmuch as the ])lan proposed exempts household goods from tax, no one can (daini that it invades the sanctity of lionie. It deals wholly with the business interests of the country, and only imiuires what this business is, a fact that the state has a perfect right to know. The law of Pennsylvania, in fixing tlie rat(M)f interest, recognizes by imy)lication, six per cent, as a just return for the use of money loaned within the state. If the lender of moneyed capital is thus entitled to six per cent., it would seem Imt proper that those who invest their money in property or l)usiness ought to receive a like return, otherwise t\m Unuhmcy Avould be to withdraw capital from active use and put it in the hands of haulers, and thus check the growth and development of the various industries of the state. It is fair, therefore, to assume that six per cent, is also {d)out an equitable return for money invested in pro])erty or business throughout the state, Jind since a property or busi- ness is valued in the market according to the interest or rent that it produces, it follows that in order to ascertain the true value of any pr()i)erty or business, it is only necessary to know the income, and tlu^n assume that tliis income is six ])er cent, of the true value of the estate. Ap])ly this priiicii)le in valuing pro])erty for tax, and if an estate or business bring in a net income of $00.00 per annum it shro])t»rty in a most substantial sense, is to admit that on(^ is not accpuiintcMl with i\n\ members of the ]n'of(*ssioii. To assert that the skill and knowledge of the i)hysician and surgecm are not pr()p(*rty is to confV.ss that one never has been sick. To say that the skill of the i)luml)er or gas fitter is not property, is to acknowledge that (me has never enjoyed iho use of modern conveniences in his house. Knowledge is ])ower and knowledge is propcrt?/, and it ouglit to be 42 QUAUTEULV llEl'Din-. taxed like other productive property, and its yulne «}"^"l^\^,^,;;J.ff;i;'^- eordins to tlie income that it produces. It this is done, h 1'"?^ »«;«" ini.> win flow into the treasury of the state In ostimatiniZ- net n^omes of professions, trade and occupations, for tlis purpose ot taxation tJiice hundred dollars of the income each year slum .1 1h> 'i"/;'-' iJltl^e citizen for the mainteiiaiice of himself and taiiuly, and this should be exempt from tax. • • i i ,. „.i>;,.i, fi,,. With these i)relimiiiary statements ot the principles b> A%hK.h t ho feduitable system of taxation is to be controlhul let us consider the practical woikin- of tin. plan in its ai-idication to the various industries and occn nations of the state. . .i x i Take a farm on ivliicli tho owner lives. Eeqnire the owner to make out a list of liis liorses, cattle, sheep, ho^s and lumltry, also the value of all his sales and of the produce used by himself or tamdy during- the previous year : also, another list of the live stock and produce on hand at a corresDondin- date the year before, together witli the (expenses ot conducting the farm during the previous year, including all labor em- ployed in planting, producing, caring for and marketing his crops, ex^ eluding the cost of new improvements and additions to live stock and implements, and alh>wing the farmer *3()().0() as wages. The balance that is struck is to be considered his net iiiconu^. for the year. hupi)ose this balance is $400.00, this is six per cent, of $r>,(>G7.00 ; theretore lor purposes of taxation this farm would be valued at this amount, it there were a mortgage of , say $3,000.00 on tlie farm, the income would be ascertained as before, and if it were $400.00, the value ot the farm would be $0 GOT. 00 as in the previous case. The mortgage would then be de- ducted from this value as ascertained, leaving the amount that the farmer would pay tax upon to be $3,6()7.00, and $3,000.00 would be the portion on wliieh tln^ taxes wcmldbe ])aid by the mortgagees If the proi)erty is in the hands of a renter, say for a share of the croi>, the renter makes out a statement of liis stock on hand Avith his share ot the receipts and ex])enditures for the year, and also the amount ot the landlord's share. If the total amount b«^ $400. 00, the total taxable value of the land would ])e $6,G()7.00 as before, if the net income of the tenant was $100.00, and the landlords share $300.00, the tax wcmld be I of the value of the land on th<" tenant, and ^, or the balance, on the landlord. And if a mortgage be on the property, the mortgagee will l)e assessed on tlu^ amount of the mortgage, j: on the tenant and the balance on the owner of tlu^ estate. The (uitin^ tax is to be collected from the occupant of the i)ro])erty, and the tax receipt to be a credit wlien th(^ tenant comes to give the landloid liis share of the produce. If the tenant fails to pay, the tax should be a lien on tlu^ estate to be collected according to law. If there be no net incoiin^ in any year, then the ])roperty shall be taxed as is provided for in the case of un- seated lands. All horses, cattle, sheep, hogs and poultry, no matter to w^hoin belonging, are exempt from direct taxation, but shall l)e listed and valued for tliy the vast area of waste lands in Pennsylvania, and radually distribute ])0])ulation more* (Mpially throughout the state. In case of mineral lands and rights, if these mines are unworkt'd they cr 44 QUAliraRLY EePOKT. i: Pennsyj.vania. Statk Boaud of Agkicultukk. 45 shall be taxed as unsoated lands, and if workcnl they shall be assessed according- to their net income, wliicli will be six percent, ot their value lor purposes of tax. . -, Ground rents should be rated at their average annual inc^rease and then count that this is six ])er cent, of their value for tax. In the case of niort^a^es, treat them as real estate lor purposes ot taxation, and tax tlu^m on the basis of an income of six per cent, the occupant of the oiT^mises to pay the tax and withhold the am()unt out of the interest diu^ the mortg-agee. Dowers should be taxed the same as mortgages. , . . -i • i i. A poll tax shall be assessed on all mah^ citizens and residents oyer twenty -one years of age. This is a tax on nuui as individuals enjoying the protection of tli(^ state, to persons although dc^stitute of property, and should therefore be a general and ecpial tax on all, and failure to pay it shall disfranchise the citizen until paid ; and no pt^rson should be l)ermitted to pav this tax for another. Professi(ms, trades and salaries of every kind, should be assessed on the basis of their net income, after deducting $800.00, so that where an income is $000.00 per year, the deducting of $300.00 leaves the net in- come likewise $300.00,' which is six per cent, of $5,000.00, and therefore the individual will be taxed on $5,000.00. Merc^iants, dealers, butchers, bakers, etc. , should pay tax on the basis of their income. All broking and banking institutions sh()uld be inc()r])orated and bc^ subject to inspection by a state board of inspec- tors, and to be taxed on net income. Theatres, shows and places of amusement should be liccaised l)y the state and subject to a tax in the locality wherci the exhibition is held. Bilbard tables should be licensed and also pay an income tax, and ho rated on the basis of their income. Auctioneers, peddlers and hucksters should l)c licensed and also pay income tax. Taverns where spirituous and malt liciuors arc not sold, should be re- h^ased from tax. Distillers, brewers and bottlers should i)ay liceiisaides, etc, should be taxed on their net income* on th(i basis that 1 have stated and in cases where that might be illegal, the dividends should be taxed for the stock, and the franchise for th(3 bonded debt. For instance, when a company has a cai)ital stock of $100,000.00, a bonded debt of $100,- 000.00, the latter bearing six per cent, interest, if after paying- the in- terest on the bonded debt, the divideiuls are three ])er cent., then the total left to distribute to the stock holders would be $3,000.00, and since this is six per cent, of $50,000.00, the capital stock would bo valued at this amount for the ])urpos(^ of taxation ; while tlit^ franchisee would be valued at a sum of which $(),()()(). 00 is six i)er cent. ; namely, on $100,000.00, making the whole amount of i)ro[)erty of the company liable to tax to be $150,000.00. This would reach through traffic and foreign and dcmiestic bond holders, and while it overcomes the legal obstach^s in the way of the enforcement of the i)resent system of tax- ation, would at the same time, be ecpiitable and treat these companies on an equal basis Avitli other l)usiness. • Such then, Mr. Chairman, is a very impei-fect i)resentatioii of tlu^ principhis that I would urgo in constructing' a tax system for the state. To carry such a system into effect, there should be a per])etual conimis sion of comj^etent men, after the exani[)le of the g-eneral government in the ai^pointment of an interstate commerce commissicm, who should make up annually a budget of the estimated ex])enses of tlue state and local governments for the ensuing* year, with a statement of the amount of property of all kinds assessed the x>revious year, and discov(;r the percentag-e that it will be necessary to lay in order to meet these ex ]Mnises, and tlnni notify all cor])orations a.iul others i>aying" tax to the state that they Avill be assessed at this averag^e rat(^ on the i)rinciples herein stated, and any sur[)lus in the treasury of the state will be re turned to the various county treasurers i)ro rata according to the value of the property in the several counties, to g:o to the credit of the various townshi])s, borcmghs etc., according* to the taxable ])rox)erty of theses localities to be used for local x>nri)os(5S. This commission shall also have (charge of the gem^ral e(pialization of taxes throughout the state, and the enforcement of the tax laws, and shall ])reseiit annually to the legislature a full report ( n tine o[)erations of the law together with such reeonimcMidaticms as they may see fit to mak(^, with a view to ])erfecting the systenn of taxation in tln^ state and providing- an (upiitable, i^ractical and logical method of securing reve- nue for the state. The result of the adoption of an cnpiitable system such as the plan here presented aims to secun^ will be to relieve real estates of at heast one half of its present burdtai of tax, and in accomplishing this it wdll do no injusticH^ to any interest in the states That real estat(\ under our I)resent law is unduly taxed is no longer (luestioned, and that this state ^ Net Receipts of Railway.'^ drfinrd. — '^Oross rocoipts consist of eariiinirs from transportation of freight and passengers receipts from l)on(ls and stocks owned, rents of property and all miscellaneous receipt, from railway business, etc., or otherwise. From these aggregate gross recc^ipts we should -htly tax(Hl, but it nnist come irom those who are oppressed. There nuist i)(^ some oi\i^anized power that shall ur^e the legislature to act. The States Board of Agriculture, organized as it is for just such sei-- vice, has acted wisely in assuniii)<; this duty, and it is to be hoped that, throu^^h its efforts and thost^ of other interested or<^anizations through- out the state,the ])e()ple may be informed of tln^ facts as they are,and by reason of this information, that they may bring such i)ressure upon their re])resentatives in the General Assembly as will compel the adop- tion of some equitable method of n^lic^f. livfvrvncc.s. « lleport of Auditor General of Pennsylvania, 1880 and 1889. lieport of Secretary of Internal Affairs, 1888, Part IV. Keport of Secretary of Internal Afiairs, 1889, Parts I, II, III. Report of State Treasurer of Pennsylvania, 1889. Report of Departmcmt of Public Instruction for Pennsylvania, 1889. Report of Insurance Commissioner of Pennsylvania, 1889, Parts I and 11. Taxation and the Funding System, by J. R. McCulloch. Ijondon. Purdee's Digest of Pennsylvania Laws. Laws of Pennsylvania, 1824 to 1889. Political Economy, bv J. S. ]\rill. Vols. I and II. Social Economy, by Edmund About, fjondon, 1872. RefoJius, their Dillicul ties and Possibilities. D. Apjdc^tcm Sc Co., N(^w York, 1874. Progress and Poverty, by Henry George. 1). A])])leton k Co., 1879. Social I*r()bl( ]us, by Henry George. Belford, (Marke k Co., Chicag-o and New^ York, 1883. The Single Tax, by Henry George. Century Ma<2:azine, July 1890. An Easy Lc^sstm in Statistics, by Edward Atkinson. Forum, 1889. Comparative Taxjition, by Edward Atkinson. Century Magazine, Jun(^. 189U. The Single Tax, by Edward Atkinson, (ycmturv Magazine, July 1890. The Forgottcui Millions, by President ('has. W Eliott. Century Mag- azin(\ August, 1890. Economies of Industry, by A. and ^1. P. Marsliall. McMillen k Co., London, 188(). The Distribution of Pioducts, by Edward Atkinson. G. P. Putnam Sr. Sons, New Y\)rk, 1885. The Public Regulation of l^iilways, bvAV. 1>. Dabney. G. P. Putnam k Sons, New York, 1889. Taxation in American Stat(^s andCitic^s, bv Richard T. Ely. Thos. Y. Crowell k Co., New^ York, 1888. Report of the Maryland Tax (Jcmimissioners. King Bros., Baltimore, 1888. National Income, by V\. Dudley Baxter. M(;Millen Sl Co., London, 1808. The Qmnrn's Taxes, by John Nobhv London, 1870. Taxation as it Affects Farmers, by Hon. J. B. Niles Ijancaster, Pa., 1890. The Tax Laws of Ohio, 1888. ' Historical Sketch of the Finances of Pt^nnsylvania, by T. K. Worth- ing'ton. American Scientific Association, 1887. History of the New York Property Tax, by John Christoplnn- Schwid). American Scientiiic Association, 1890. Local Taxation, by David A. Wells. Eden Dodge k Geo. W. Cay Ion Hayes, New York, 1871. Income and Property Tax(^s, Prof. Gustave ('ohen. Political Sci(Mice Quarterly, March 1889. General Property Tax, Prof. E. R. A. Seligmaii. Political Science Quarterly, March 1890. The Taxation of Corporations, Prof. E. R. A. Seligman. Political Science Quarterly, Vol. V., Nos. 2, 3, 4. Report on Proposed Law, by the P:;nnsylvania Tax Ccmimission, 1890. Proposed Law to Provide Revenue for County Purposes by the Taxa- tion of P(n-s()nal Property, by Gen. Thomas McCammant, Auditor General of Pennsylvania, 1890. The Law of Taxation, by Judge Cooley. Re])ort of Congressionai Committee on Transi)ortation and Labor. Imperial Finances, Sir Thos. H. Forna, Bart. Continental Reviev. , November 1890. City Growth and Party Politics, Wm. Sprague. Forum, J)ecember 1890. 1HE FARMER AND HIS TAXES. By Johnson MiLiiKU, Lititz, Pa, (Ueud at Hamburg nistitute.) Mr. President, Ladies and Gentlemen. The subject; of taxes is one which haft engaged the attention of farmers perhai)S more than almost any other ; for the reason that the amount which he was recpiired to pay has become somewhat of a burden, taking not a little share of tlu^ profits of the farm ; and it is only by such meetings as the cme at which [ am about to read an essay on the farmer and his taxes that these ques- tions iiYi) fully bronglit out for consideration. That tln^ farmer ])ays more than his share of tax, no om^, has ever attempted to deny since this tax question has been discussed in agricultuial societies and by ])riyate conversation, but on the other hand I shall in my own way, I think, prove that he is ]»ayin^ more than his share and while I don't pretend to know more than some of my hearers on this tax question I have come from Lancaster county to i)resent a few facts as they exist in my own county and to brin^c the matter fully before this Institute to be there discussed by more learned and able financiers than myself ; and if by this discussion we may be able to present facts, and figures to show that we must and should have some relief in the change which is about to be mad(^ in the reveiuu^ laws of our state. If I say again we can do this and get our tax laws changed to mak(^ the farmer ])ay less tax, I should feel proutl tli:it T liave accomplished Avhat may prove a direct Inniefit to every farmer, not only here present but to many farmers in ilie com monwealth of Pennsylvania. I think I can illustrate to you by statistics that the farnuM' is t\\o saddles horse and that he pulls the load in the team of taxation : that he 48 QUAKTEltLY liKl'OKT. Pennsylvania State Boaiid oi' AcuiK^ULTurtE. 49 pays millions of dollars for county purposes, and in addition i)ays tho bulk of the local taxes. . i- • i i .. i • i. i in order to consider this matter from an mdivulual stand point and to show th(^ unjust and unfair manner in which the larmer is taxed lei us draw your attention to two farmers whom we will designate '^^Mi. A and Mr. B. A seils his farm to B for $20,000. 1^. having- only $10 000 of his own moiiev, A agrees to take a judgment from L lor the othi)i- $10 000 at five per cent interest whih^ the $10,000 A receives m cash is invested in National banks, city bonds, railroad and other securi^ ties and he retires. The assessor now calls and takes the ass(^ssm(^nt ot Mr A for the $10,000 judgnu^nt and that is all he is assessed, and all he is recniired to pay tax on and then only state tax. He now calls on faruKH' Mr. B whose farm li(^ will most likely assess for about $18,000 (for farms in our county nn) assessinl for al)out what they cost or what they l)rino- when put into the market), and I suppose that the same state of ah'airs exist in your county. This farm is also assessed for $1 000 for stock and personal ])roperty making $19,000. Now a word as'to the amount of tax that each oiu^ of these men pay. Mr. A pays ay, pays the school tax for the benefit of his own children while Mr. A's chihUen are educated at farmer B's expense, wlio could much l)ettt»r afford to pay his share of the tax but does not pay direct a single dollar on his $20,000 capital. Farmers did it ever strike you that such is the situation all over the ])road commonwealth which lias one of the g-randest of common school systems in the world, the fundamental principle of which is, that rich and poor, white and black, should all b(^ (nlucated at the expense of the tax payers of the state, as they should be ; but in the case illustrated the one who could best afford to pay, escapes this tax almost entirely. Again Mr. A has i)lenty of time to use the public roads, while farmer Bis busy at work and yet the farmer must pay the road tax on his whole valuation, whih; Mr. A does not contribut<^ a dime for the same on his $20,000 capital. I have now shown that farmer B, who is woith only $10,000 must pay the sum of $108.50 in taxes annually, while his neighbor Mr. A pays but $80.00 on his $20,000 capital, or in propor- tion to amount of actual wealth as $80.00 is to $157, as he pays $78.50 moiH^. on $10,000, and double that would make the amount stated, or in other words the farmer pays five times as much on the same amount of capital. case ami onivvii iii tiiu iiitun^?»t ul vuv itimit^i, chili n\.j It lo, uuL It J!^ r>nii ])ly one of tli<^ huudi-eds and thousands of similar cases as they exist to day all over the commonwealth of Pennsylvania ; all und(^r the ])resent unfair manner of taxtion rc^gulated by the revenue laws which were made and frann^l in the interest of cor])orations and capital, and against your best inten^st as a farmer. This is not an exceptional case to show the unfairness of the ])resent system of taxation; but let ns ■f consider for a moment who could b(;tter afford to pav the most, if thert^ is to be a difi'erence between farmer and capitalist. Mr. A lias his in- terest on the $10,000 at ^\e j)er cent. $500, his bank dividends and cou- pons probably will be $800, a total income of $1,300. He and his fam- ily may live on $300, leaving a $1,000 profit to be added to his already well invested, clear of tax, ca])ital. Now, a\ luit is Fainier B's income? Himself, wife and children may work hard and his crops at present prices, with the best of care may biing him from $1,000 to $1,200, out of which he must pay his $500 interest to Mr. A, taxes $100, r(i])airs $100, emph)y(\s $300, total $1,000, heaving him a single little [)rofit of $200, or two per cent, (m his $10,000 investment. Would a change in the revenue laws bettcn- his condition? Not a very great deal in dollais and cents, but should it not be so arranged that both would |)ay an ecjual sliaie? The (constitution of your state explicitly dcH'lares that taxation shall be uniform and equal and the good old fathers that framed it niost assunully declared it so to be, but young blood got in your law making- chamber to (change^ the revenue laws of your state aiul to your fellow farmers scnTow that I sa}^ without fear of being contra- dicted, that thev are no tconstitutional. The case that I have presented does not conn^ within the constitutional ideas of your fore fathers Avho framed that instrument, but is as unfair as it is unjust, and this is not all, there are hundreds of cases like the one given where the same money is taxed both by the farmer and the lender, Asliere the borrower and lender both ])ay a tax on the same capital : this is not right, and should be chang-ed so that a man would only pay on Avhat he is really Avorth and not on the money he has borroAved ; this Avould be fair to both th<' capitalist and the farmer. I have now examined and discusscul th(^ fai- mers taxes by an individual illustration and by Avhich it appears that the farmers ])ay five times as much on the same amount of capital as i\w, capitalist, in pr()[)ortion to the assessed valuation of both. This same principle of unequal taxation is the same in Berks cimnty as it is in Lancaster county, and is oi)presive to you as farmers. For illustration hoAV does this ettect the farmers of Lancaster county'^ You will excuse me for taking my own county, for I can better make the calculations. I Avill then give some fiuures concerning your own county l)efore I get through. Tlu^ assess(Hl valuation of tln^ countv of Lancaster is about $86,810,838, on Avhicli a county tax of $220,000 is levied. The census of 1880 shoAV 9,070 fainis containing 55G,314 acres, \^alued and assessed at $B9, 000,000. To this must be added the live stock to the amount of $4, - 000,000, making tln^ total assessed $73,000,000. On this propc^rty the farmers ])ay $195,000 county tax or nine tenths or the whole. Then tln^ school tax of the entire county is $232,200, of this Lancaster city pays $40,000 and the toAvns and boroug-hs $82,000, making- $72,000, leaving $1()0,000 to be ])aid by the farmers. As Ave have no ofiicial records of the road tax Ave knoAv it to be about the same as the school tax in some dis- triccts, and this Avould make $1()0,000 : deduct $20,000 for the towns and boi-oughs and Ave have $140,000 i-oad tax, and $50,000 fire insur- ance tax, Ave have a total of $545,000 of taxes to be paid annually by the farmers of Lancastc^i- county. These fiaures are taken from ofiicial records and cannot W(^ll be disputed. A\ e hav(i iioav shown that the farmers of this county ])ay on aca])ital of $78,000,000, th(» sum. of $545,- (H)0. NoAV we have $24,000,000 of money at interest secured by judg ments and mortg-ages on the nn-cu'ds on which a state tax of $72,000 is paid and that is all. if the farmer would [)ay only as much as the cap- 50 Quarterly Eeport. Pennsylvania State Board of AoiacuLTURE. 51 Mil the italist on their $78,000,000, their taxes woukl be only $220,000 or $325,- S ils'han they now pay, and if this nu^ney at -^^^^^^^ ^0 same as the fanners, tliey wouhl pay into the state tieasmy |1|3,000 ^^ of $72,000, a;,ainy over $100,000^ ^o thelunds ^^^^^^ now ask in all fairness and sincerity is it lair to you laimeis that these men should pay $100,000 less on the amount ot eaiutal or is it justice to he eXe body of tax-payers that the farmer ()t Lancaster county s mlK^^^ $32loOO more than his share. Is this an equal or uniform svsTem of taxation, so expressed, declared and demanded by tlie con- st tuticm of your no])le commonwealth t I ask aoram in all fairness, is it ' 1 will let you jtnswer this question in the -eneral discussion ot this important subject. I say important question lor I very much dcmbt whether there is a more important one to you as farmers, io nuik(. It just and fair to you there must and should be a general reform in the revenue laws of the state, and it is your duty as farmers to keep eve sino-le to your best interests and on the men who are spending e time oS the capital hill, some distance west of this place A few words as to how this system of taxation affects the farmers of Chester county, may not be out of place. The assessed valuation of real estate $47 436,950, and your money at interest about $12,000,000. JNow SieSer coimty has according to the census of 1880. G 110 farms con^ tainin- 467,982.acres valued at $39,217,513,so that about five eighths _of this valuation belongs to you as farmers from recent sj^atistics f rom the official figures; from the records of your county I hnd that Chester comity pays annualy $131,693.0() county tax, $227,8()1.11, road tax and $193 445 68 school tax, making a total $452,999.85, of which the farmers pay four-fifths or $362,400, to this may be added piobably $38,000 hre insurance tax cm your buildings making a grand total of $400,000. JNow let us see how this corresponds with the taxes on your money at interest on which a state tax of $36,000 is paid on the $12,000,000 and that is all ; now you farmers are required to pay $400,000 on your $39,000,000, a little over three times as much in dollars and cents as your money at in- terest Suppose y(m were taxed only as much as your neighl)ors who have their money at interest, you would onlv pay $117,000 or $283,000 less and that would be saved to you : and suppose these money captal- ists 'would be required to pay as much as you farmers they would pav into the state treasury $123,000 instead of $36,000, a gain to the revenue of your state of $87,000; does this seem equal taxation? Is it fan- that you farmers should pay $87,000 mm-e on the same amount of cap- ital on your faims? And yet that is just what you are doing. For example, I take a farmer in Honeybrook townshi]) who has a 200 acre farm valued and assessed at onlv $60.00 : he has $12,000 invested, on whicli he pays abimt $120 tax. AVe take a farm of the same size near your own town, valued somewhat higher, say $20,000 with stock, etc., and I find that the tax is about $170. Now if these two farms were sold and the money put at interest, all the tax would be undcn* cmr present rev- enue laws, only about $96, or nearly $200 less, so we see that you far- mers are taxed to nearly three times what you really should be and why is all this unecpial system of taxation is a question that should engage the attention of every farmer in the state and I say that every fanner's institute in th(^ stat(^ should i>ass resoliiticms condemning our present system of taxation and demanding such a change of the revenue laws that will tax all moneyed interests taxabh^ hn* local purposes, no matter where or in what invested. And right here a few words in re<'-ard to double taxation. For exam] )le the case cited in tlui beginning ;*« of my paper where Mr. A is worth $20,000 and farmer B ouly $10,000 for whicli a^ncniiit he should be taxed only, and Mr. A pays the taxes on his $10,000 invested in that farm ; the way things are now, that numey is taxed twice, the farmer pays on $20,000 and is worth only $10,000 whili^ Mr. A pays a state tax on $10,000 already taxed on the farm ; this is al)solutely wrong ; I believe in taxing a man only for wliat he is in reality worth and not for aixjther man's property, which is also the case under the i)resent system of taxation. We have now shown that the farmers pay in iJi'oixation to other in- vestments much more their share : now what do we get back for all this as farmers of this state? All this money is used somewhere and for some ]uirpose. It is true the machinery of the government costs a great deal to keep it in running order. It must l)e well oiled by well ])aid officials, who if they Avere compelled to live as economical as you farmers and Avork ior as small ])rotits, would soon crease operations as ])ublic servants and office seekers would not be so willing to serve their country. Large ai)[)r()priati(ms are annually made for charitable institutions, as they should be, for they are deserving of public support, but what does the farmer get in return for the millicms he shovels into the public ho[)[)er? Think for a moment. I know of nothing special save a few thousand dollars to run the State Board of Agriculture, in which the farmer takes a deep interest, and is by such meetings as the one you noAV hold, vastly benelited. Thanks to our law makers that they have not altogether forgotten tlu^ farmer. The farmers and tax j^ayers in general are content with ail this, even if it does sometimes take nearly half of his wheat crop to pay all his taxes. The farmer will at all times exercise economy in every department in order to save himself from financcial ruin and destruction, while extravagance is the ruling princii)le of the majority of men in official places in almost every de- jiartment of the government, from the little township office to the Presidential mansion. Salaries are increased from time to time while the number of working hours are reduced and new officials must be added to do the work. My grandfather used to say to me that our law makers used to meet in Lancaster city eighty years ago at three dollars day, and were in ses- sion for twenty days, making salary of $60.00. Now they sit on Capital hill, Hariisburg, over one hundred days at $15.00 a day, or a salary of $1,500 ; of course the business of the state has increased, but not in i)io- portion to this. All this helps to increase your taxes. However, we live in an ag(» of progress and im])rovement,but the subject under considera- tion and the extravagant ex])enditure of i)ublic money is virtually fifty years ahead of the times ; and it may not be out of place some day in the near future to call a halt. Th«at the farmers bear entirely too much of the burden of taxes has, I think, been clearly shown, that the man who lias his money invested in real estate, secured by judgment or in national bank stock or corporations has little to pay cannot be disputed. .Now what is the remedy? I see none, so hmg as you farmers are not better represented in your council chamber by men who have your wel- fare and your interest at heart: so long as you are indifferent to this impoitant matter, just so long you will have no protection. Tlie leg- islature of Pennsylvania, it is said, has for years been controlled by Philad<1phia, Pittsburg and other large cities, and in the int(;rest of corporaticms and capitalists, and it seems there is cmly too much truth in the assertion. 52 QuAurKiiLY Hepokt. Pennsylvania State Boaiid oe Agkicultu]|]-:. 53 (Jilt oi the 250 members oi the senate and house of representatiYt3S, of the leo-ishiture preeeedino- which is now in session, only So were farmers, 52 hiwyers, lOB busiiu^ss men en-aoed m all piotessions ot lif(^ from the rieh iron master down to the traveluii^' a^ent. TlwA'v are about 800,000 farmers in the stnte, and these ^^eve repre- sented by 35 nn^mbers, or about one member for every 8,500 larmers. There are 4,91)2 lawyers in th(^ states and they had 52 members to rt^p- resent tluan, or about one member for every 100 lawyers, other pro- fessions were represent(Ml in abcmt the same proj)ortion as lawyers^ This is the contrast, and 1 suppose the reason why the^ tanner is so well DiotectcHl l)y legislation in his interest is thnt ]n^, is allowed the Ki'and opportunnity of i>ayino- over four-fiths of all the h)cal taxes W hen will this state of atiairs chan- x or better protection to you tanners? Not until you aiv ivpresentcd in the leg'islation halls by nien from your own ranks who have the nerve, the coura^^e and the backbone to stand up and fi-ht for your interests, by creatiuK n refonii in the revenue laws and econoiDV in public expense This must beoiii at home by a reduc- tion of the expenses in all the departments of the oovornmeiit, and not until the men in oliiciid position will feel that the monies at their dis- l)osal are the taxes paid from the hard earned money from the tanner, the mechanic, the merchant and the poor labonna' man. Not until then will there be equal taxation and protection to all alike. Should there be no clian<>e within the next tifty years for a more economical admin- istration and (Hiual taxation, I am inclined to think that ycmr and my children will be an oppressed people, the result of excessive, unequal and unjust taxaticm. .i , .,- ^^ ^ j. In conclusion, brother farmers, T will say that this matter ot taxa- tion is the one which we should all consider and give it our attention, and I did not come here to tell or say anything that you may not have already known, and what I have said in my own way is subjc^ct to fur ther consideration at your hands, and I lioi^e and trust that you will carefully consider the situaticm, and if what I have said, is true, and I suppos(^ pretty clearly proven by facts and figures, I think it the duty of everv farnuM- to coiue before^ the legrislature, now in session, by peti tion and committees and demand that our right must be recogni/ed and that we will no long-er pay more than our share of tax; let the state tax be re])eahHl from monev at interest and every dollar taxed for local.^ county, school or road puri)oses, and that ahme Avould icchice the tax of the farmer abcmt one half, but, savs one, with what will you run the state treasury? To which T say there is no (nirthly us(^ of havini>- several millions in tlu^ state trc^asmy in a season of profound peace and no bonds^ at maturity to ])ay off. I would go furtlu^r and take the state tax ofi* our turn])ike companies and national banks ; all this wcmld not amount to $1,000,000, and would b(^ an immense^ help to i)ay the local taxes wdiieh are now ])aid by the farmer. If tin* state cannot g-et ahmg" with this reduction why not have* an occaqmtion tax on our young people who have no famili(*s to support. I refer now to all the clerks, bank ccmi mission men, store clerks and salesmen, of which there are over 100,000 in this stat(^ and who g-(»t good salari(^s. from $500 to $1,000 a ycnir, and who don't ])ay anv tax now Why should th<\v not ])ay $10.00 to makt^ lip the million of statc^ tax. Thes(» men have an income of $500 to $1,000, why slnmld th(\v not be recpiired to pay tax, Avhen you and I as farmers, on an inconn^ of $1,000 are reay from $50.00 to $100, whih^ these men go scott free. There are a great manv things to be said •i } ■4 on this tax question, but I'll stoj) ri^ht here, lio])ing that the discus- sion may throw more light on the subject than 1 have gvien you. Thanking- you for your attention, T will leave the subject with this determination as farmers. Let us have lac(^s and ()pi)res- sion of the pooi\ " Governments must necessarily create burdens as av<^11 as bestow^ benefit upon th(^g'o veined." Larg-e sums of money are re- quired" which must be obtained from those leceiving- th« benefits and which should extend im))artially to ;ill, sotlu^ burden should Ix^ impar- tially im|)osed ui)on all property without referenc(^ to kind or raid<, without fear or favor, all alike i)ay its just ratio of taxation. * * We proposes to more especially consider- the system of our own cartnients, and i.m cost of conducting- them, also dt^sig- nate tln^ different kinds of i)roperty owned in our state, how it is taxed, for what purposes the mcmey is used and the effects upon the agricul- tural int(irests and industries of tln^ state. The state grovernment,h^g-islative, executive and judicial department^ , interest on puDlicdebt, [)ublic charities, etc., requires tln^ sum of about $(),500,000. The county taxes colh^cted amounts to tin' sum of $15,500.- 000. The supi)ort of i)ul)lic schools cost over $10,000,000. Here official statistics end. Hon. H. N. Williams is certainly correct when ho says : " It is safe to say that city, town and bcmmgh taxes exceed that of c(miity,and it is not too high to ])ut the figures for these purposf^s at $15,500,000, and the poor at $8,000,000. Tlence we find that the ag-gregate costs ()\ the gov- ernment of \]\o ])eople of the State of Pennsylvania amounts to tlie enor- mous sum of not less than $50,000,000. Let us look at the [)roperty, and how it is taxed, whether justlv or not. 1. The rei^ort of the Secretarv of Fnteinal Afbiirs shows that the paid- up stock of the railrr)ads of tli^e state is $f)00,040,7(;7. Also that the bonded debt of the comi)aiiies is $05:3, -447,089 ; total, $1,352, 497, 15G. ;*1 fi-S 54 QUAKTEKIA liKl'Oirr. The cost of coiistrvu-tion Jiiul eqiiipiiicnt ot* these roads ainomits to about $1)00 000,000, witli a large ownersliii) of inineral laiicls, wliarves steam- slii])'liiies, etc. There cannot be any exaot>eration m putting' the rail- road property of the state at $1,000,000,000. , , T . The report of the secretary of the state gives tlie stock of companies organized under the act of 1874 at $450,000,000 (this is certainly away behnv the amount at the present time) . Other corporations organized under the same act and prior laws will reach the sum ot more than lloO,- 000 000 The Insurance Dei)artment shows the capital ()t insurance corporations to be $54,576,100, and tt surplus of S3(>,945,G10. Lusted partnerships, taxed the same as corporations, will reach more than ^oO,- 000,000. - . 1 X. 1 • i- 4-1 4- ^ These sums mak(^ the corporate i^roperty and Iranchises ot the state to be more than $1,71)2,400,000. The rei)ort says they are undoubtedly worth $2 000,000,000, and that this class of proi)erty is among the l)est inyestments of money yielding the highest percentage ot iiH'ome, the amount realize!) fronrit is $2,210,334.75 which amounts t<) but little oyer one mill to the dollar. Bank stock, national and other chartered banks, is $62,212,580, with a sur])lus of $40,000,000; total, $102,212,580, it is taxed six mills to tlu^ dollar for state purposes on capital stocK, noth- ing on surplus or buihlings and pays no local tax. * * Private bankers and brokers have certainly more than $50,000,000, it is taxed at the rate of three per cent, on its net income for state pur- poses only. AVhy not as reasonably tax farmers on net income? The tax amounts to about one and one-fourth mills to the dollar. Judge Williams says, I am told by the Auditor General that over forty private bankers'^in the state have made no report. * * * * If all the property we have herein enumerated is not justly and equally taxed with the pro))erty we will now name, injustice has been done, and the law which permits such gross injustice should certainly be connected at once. * * * * The amount of money at interest returned is $115,833,154 m the re- port of 1886. Judge AViHiams says that this sum is not one-tenth of the true amount, it exceeds $1,000,000,000, and is falsely and fraudulently kept from the assessment rolls. * * * It is the result of the duplicity and deceit of tli<' money lenders it is taxed at the rate of four mills on the dollar for stat(^ school and county purposes but i)ays no road, town, ])oor or borough tax. * * * We now come to the real estate including lands im|)r()ved and unim- prroved, buildings, minerals, etc., owned by individuals and corixna- tions ea:ce/>n//(>^fM^SYY//br c(>r;>07'a^.^7>?()7>o.s'e.s*, * * * * Wljy not as reasonably except buildings and i^roperty used for agricultural purposes? The value of this jiroperty, per assessments and is, for county taxes, $1,663,562,490, it pays a tax of tw^mty mills or two ])er cent. ])er annum * * * AVhy this unrighteous and unjust discrimi- nation'? Certainly not because our farms are ]»aying better incomes than corporate^ ])r()perty — do you, or can you realize two percent, on your farms of a net income and throw in your own, your wife's and your chihlren's labor? Is it not because you liave l>een l)lindly su]»])orting party and per- mitting yourselves to be made the pack mules for corijoraticms. Think of it, ]>aying two per cent, taxes, and I doubt very much whether you can realize one per cent, on your investment after paying the taxes — Pennsylvania State Boaud or AcaucuETUKE 55 I don't believe you can — at least very few can. * * * Hoi^es, mules and cattle above four years old are taxed for all purposes (except state) ; th(^ value returned is $39,921), ()49 If the horses, mules and cattle are the [)roduct of the farm why not as reasonably tax any other })roduct whether it be of the farm or the factory or the mill? Hous(ihold furniture, including silver and ])lated ware above the value of $300, is taxed for state county and school ])ui'p()ses only. * * * It is returned at $2,292,855. Bradford county $300, worth ; Erie, with her wealthy city, $600 : Forest, the i)oorest, $1,800 * * * Pleas- ure carriages, $4,548,998. AVatches, $40,847. Oliices of emolument, judges, sheriffs, clerks of courts, physicians, lawyers and engineers are taxed for state purposes — they slumld be taxed for all puri)oses" — valuation, $77,859,261 ; they should be taxed the same as any other jn'ooerty yielding a like income * * *^^ ^^ >x^ ^^ ^> ^« ^^ ^^ ^^ >^ *^ ^^ ^r^ y^ ^^ ^^ ^^ ^^ *!* *^^ ^^ ^^ ^^ ^^* Hacks, cabs and stage coaches are taxed for state pur])Oses and amount to only $1,229.10. * * * * In addition to this there is certainly a very large amount of proi)ertv not taxed for any purpose, we will name tine paintings, pictures and statuary, diamonds, pearls and costly jewelry. TJiis class of property belongs to the wealth}^ and should be taxed as certainly and justly as tlu^ poor man's only cow. In the name of justic(Mind humanity, why should not tliese luxuries be taxed as higli as the poor man's home? Would it not be well to call a halt and hear and heed the poor man's protest. Ileverse the condition if you please, place the poor man amidst all this finery in a collosal [)alace, make the millionaire his servant, then tell me whether you would call this injustice and oi^Dression or not? Solon, tlie wisest and the noblest of the Grecian sages, said that governments should X)rotect the humblest i)easant as fully as the wealthiest i)otentate. There is a large munici])al indebtedness of cities, towns and counties ; this nets the state about $140,000 (taxed for state purposes only) . W^e fail to see why it should not be taxed for all pur[)oses. * * * * The report says there is a large amount of property invested in the mercantile and commercial aftairs of the state whicli will reach about $300,000,000; the operators pay only a license which i)ays the state the sum $301,558.61, this does not make one mill to the dollar of the capital invested, while it is a notorious facjb that very many of the licenses granted are of very doubtful moral good, and in their demora- lizing working juitl results, cost the taxpayers large sums in protecting community. This license or tax should aid the local government in the pi'otection of the people. Foreign insurance companies and other corporations yield the state $280,560.72. Figures will show the value of all the property of the state to reach the immense sum of more than six billion of dollars. As we stated, the value of the real estate of the state as shown by assessments for county taxes is $1,663,562,490 (which is very nuich less than onc^ thiid of the value of the proi)erty of tlu; state), and pays a tax of twenty mills, or two per cent., per annum, while more than two- thirds of the property pays less than two and one half mills on the dollar. That the tax laws of our state are unequal and unjust, who will have the brazen audacity to deny ? 56 QiAin'KitLY Pvi-roriT. Penxsyt.vaxta S'iwtk BoAjji) oi^ A(iKi(rr;rri{K. 57 ]^ans(^ }L niouKnit, considor, see if our commomvealtli has not fitted np a inaoiiiliceiit liot-bed for tliid oT()wtli and early maturity of these disturbing- and destroying- elennrnts ; yes, toilers and tdlers of the soil and bnrden-bearers, send np your i)rotest and hear th(^ howl Judge AVilliams says, truthfully: "It is not saying too niueh that the tax laws of the state alone justify an on/anized protest^^ from the classes charged with agraiian and connnunisitic? tendencies." As stated, w(^ lined horn reports that all the i>r()perty ot the state amounts to not lass than $G,()()O,()00,0(H), also that the aggregates cost of tlie o-overnment of the i)(M:>])le of the State of Pennsylvania amounts to tluisumof aboTit $50,()0(),()00; if all the proi)erty be taxed m the same ratio and bear an ecpial sharc^ of the burdens then the tax of twenty mills on real estate would hv reduced to only a fractnni over eight "^mills on the dollar. In otlier words, whcvv. we now pay twenty dollars we would i)av a fraction ovct eight dollars. Who will, who can, say that this would IxMUijust? No uts u]) but anew i)io-i)en his taxes are increased. On the other hand the corporation [)uts up a magnificent and costly business house— it goes free. The money lender loiters around our towns eager to take advantage of scmie poor man's circumstanc(^s, lu^ pays but little tax, and thereat estate owners make his roads educate his childiTu, and, perchance, kee]) a near Relative in the i)oorhouse or township. Tlie ijoet was right when he said, ''>raTrs inliimitmity to man Makes (•ountlessinillions mourn.*' J. (t. Wliittier, cotemporary and a cowcu'ker with AVendell Phillips and AVilliam Lloyd Garrison, in the interest of humanity, said : O, for (iod and duty stand, Heart to heart and hand to liaiul, Round tlie old jrraves of the land. Who slirinks, or falters now, Who 8o to the yoke would l)ow, linmd tlie craven on Iiis brow. Perish party, perish clan, Strike together while you can Like tlie arm ol one strong man. THE EQUALIZATION OF TAXATION. r>y Hon. Ha KM AN Vi^kkks, Doi/lrjitoioi^ J*a. ( KxtrmHs of nn address »♦ the Doylestown Institute.) Th(^ (Mpiality of taxation is a subject which lias receievd t\w, attention of financiers almost since the obli^L^'ation of man, as a member of society to sn]^])ort the ^-ovc^rument which ])rotects him ori<2:inated witli th(^ id(»a of government itself. It is im])ossil)le that a subject so full of thoiii^lit, history and science can r(M*eive more tlian a cnrsory trcMtnnMit in the limited time allott(Ml me. '**. % Taxation rests upon tln^ th(H)ry that tln^ actual hmlshii) of the soil is the property ot tlu^ o(,v(.inm(^nt "reat estate, who are all oblio-ed to contribute in the [)r()[)(n'tion to their resi)ective interests in the estate. In the observa- tum or neglect of this maxim consists what is called tln^ ecpiality or in- ecpiahty of taxation. Every tax it must be observed once for all which falls finally uixui om^ only of tln^ three sorts of revenue— rent, wages or proiits IS necessarily unequal so far as it does not affect the (itln^r'two " We have here asserted the right of the oov(u-nment to levy taxes, Avhich rig-ht should be exercised upon th(i basis of an equality of sacri- hce from each subject and the pavment by tht^ citizen for the support and service from the state to him. TIk^ earlic^st forms of taxation were by imposts upon ])r()ducts, wliich, in thos(^, times, wln^i agriculture w^as the i)ri)icipal, if not tln^ only industry, were derived from the soil over which th(^ sovereig-n state held the h)rdshii> and from which of rig-ht it could exact contributions for maintenance and su])port. As th(i immediate sources of profits and Avealth have from tinu^ to time shitted, the tendency has been ta impose such taxes as the contributors paid with the greatest readiness, upon the theory that the citizen, recog-- niziiig- the oblig-ation to contribute towards the support of g-overnmeid, would more willing-ly pay the taxes uinm such of his inoducts as he found most profitable, thus admitting- the justice of the doctrine that taxes should be ])aid l)y the sul)jects of the state " inproi)orti<)n to the revenue which they respectively enjoy under the protection of the state. " The justness of this i)rincii)le is the source of those ])erio(ls of un- easiness and dissatisfaction wliich sometinn^s result in disorders and revolts,and,un(lermoiiarchial g-overnments, culniinab^ in actual revolu- tion and the overthrow of king's, and in republics in tln^ more peaceful revolution of the turning- out of political hwlers and parties. So long- as a ])articular industry is ju-osperous it do(^s not tire of taxation, biit the moment it is d(M>ressed, as is the farming industry of to (lay, it becomes restless under fini budren of a levy which, in more i)ros[)er(')us conditions, it clnu'ifully submitt(Ml to. If W(^ could attain a system ac- commodating- itself to chang-ing- conditions of busin(^ss, a property tax assessed ujion equal valuation and graduated according- to the tneans of the contributor would be the fairest, but unfoitunately chnng-es in tax laws are almost universally the result of revolutionary agitations, when th(^ intem])er;ince resulting- from wrong-s, real or imagrinary, govern the counsels of the leg-islators so that a conservative view is not likely to dictate the inn king- of such a. desirable system, ;ind temporary expedients are movo likely to be 5i(loi)ted. Lixperiments in taxation, founded ui)on tin* (established tlKMn-if^s^ have been practiced by the ablest timniciers Avith. the common result tlnu, in practice, no th(M)ry has withstood nil conditions and changes in the working- of tin* various phases of fin;n)c(\ It is a common nuixim thnt there is nothing* so s(ensitiv(* as mon(\y. No subj(H't is fraug-ht with 5g QUAKTKULY TiKPOirr. more danger to the state and tlHV>eol'V^t•''>^«";;;^e.SB^vl"^^^^^^^ of the novice or those who woukl reguUitc it iu the exthisiAe inteicst oi a partieuhir chiss. ***** <• :>l' yk '{^ *!* ^^ ^^ Tt will be more profitable to consider some of tlu^ inequalities whidi now con^^^^^^^^ of which is not only a subjcet ot le^iti- rLTni^^^ but a boanden duty which the commonwealth owes the ''' t'S there is now in pro-ress one of those revolts of the tax-bearin- peo ie to ^^^^^^ luive referred, and that in some ^-^^-^^;l^^^ mnted ui>on the part of those who garner the produce ot the soil, tJie Tn-invn-v source of all wealth, there is no question. ^ ^^l^U^U^hy reasmi of their connection with the cultivation of S:s:nird their co^isequent fixed l^^^f^taUons dei>end^ and attachment to the -overnnK^it are most ^J^^^^^^^^^^Tlw nlvi^ t of ^ maintenance. This interest is deepened since f ^^^^^ Ji^;f ^^^^^ fj;^^' tion is nrimarilv to raise revenue for the maintenance ot the govem- S Jt 1 h^ may be applied for the promotion of various sochii ends which seriously affect their happiness and prosperity suc^i rthe advancement of education and the suppression of varoius vices and crimes. ^ ^ ^' ^ * * * * * * The support of all these is a heavy burden upon the citizen. Such is the price we pay for the privilege of governing ourselves, but we should not comi)lain— we should seek rather to govern wisely As a result of this complex system and sometimes ot too much govern- ino- the producers and taxpayers are confounded by a variety ot taxes, airuncertainity of the amounts of annual imposts and glaring mequali- ^^Conceding the recognized canons for just taxation to be equality, certainity, convenience and economy, we must admit as sound the proposition that if it is just to tax a man at all it is ]ust to tax his nei-hbor under precisely similar circumstances, or, as it has been other- wise stated, "A tax on rent, wages or profits would be obviously un- equal if those in (me place or employment were taxed while those m an- other were left free. " . . 1 . il li. i? ^4.^4.^ Are we being governed upon these principles m the matter ot state and local taxation t A few years ago I heard a State Treasurer, and a leading financial authority, who was active in formulating our present svstem declare with emi)hasis that th(^ i^eriod of a wise and perfect svstem'of taxation had been discovered iu that which relieved real es- tate form direct taxation for state purposes and created the corporation the tax gatherers of the state It is quite evident he overlooked the subject of local taxation when he pronounced this eulogium AVhen we reflect that the revenues for state purposes into which the corporation taxes are exclusively turned bear such a small ratio to the revenues required for local purposes to maintain county, municipal and townshi]) affairs, and when we observ^e the large amount and value of corporate property exempt from local taxation, by the divisions in which ifc is situated, and for the protection, maintenance and benefit ot which a large percentage of local revenues is exix^nded, how unjust and inequital)le is the system which serves as a cloak to hide so much cor- l)orate proixutv from local imposts. A system which is a pretence, for the corporation taxes do not maintain the state, one-tenth of the local revenues derived from local possessions is annually paid directly Pennsylvania State Boaup oi- x^cuacrLTUuE. 59 M p. into the State Treasury for its maintenance. This does not include^ in- heritance tax. ****** ** ** ** It is natural for a freeman to abhor and evade inquisitorial laws. Tliere is something repugnant to a good citizen in a law based upon the idea that the government which is his and which he supports distrusts him, and when he is confronted with a tax system which places a pre mi - nm upon ])er jury, and which has been invented to pry into his private af- fairs and business relations and to expose them under conditions which imply that his indisposition to sul)mit to an inquisition is regarded by the government as evidence of his dishonesty, he i)refers and seeks to invest his ]>ro])eoty in such a manner as to avoid both the inquisition and the humiliation which the law seeks to inii)Ose upon him. Sucli is the character of the present law for the purpose of ascertain- ing the individual holdings of i)ersonal property liable for state tax, when such property is loaned upon the usual obligations to secure the ])ayment of money in transactions between individuals, and when se- cured upon liens upon real estate, farm lands, etc. As if the purpose had been deliberately conceived to deter the owner of money from in- vesting his ca]>ital Avith individuals or upon real estate securities which obviously would benefit the individual business man, tlu^ farmer and small tradesman, the legislature, apparently taking advantage of the natural distn ste to submit to suspicion and surveillance and determined to coerce the capitalist into trusting his money to cor]Knate ventures and vehicles for investment, has provided a different and more agree- able method of tax collections upon money invested in and through cor- poraticms, so that they may return the amount of their tax \\\Mm capital stock or ])r()fits and the individual holder thereof be exempted from making any return of the same. What is '^the result? Go to Philadelphia and note the immense and magnificient structures w^hich in recent years have sprung up there for the i)uri)ose of corporate dealing in money and securities alone, and to these add the numerous smaller moneyed institutions which have multii)lied in our agricultural towns and villages, as if our farmers ex pected to find their grists at banks rather than at mills. And considei- the millions represented in these investments, and ijiled away in the buildings, and annuallv paid out in salaries and profits, and answer if this indicates a healthy condition. In fact so grc^at is the advantage conferriHl by our tax anil other laws upon cori)orate business that every undertaking recjuiring any considerable am(mnt of caijital is at once in- corporated. When we consider the uncontroverted ] )ro] )osition that the soil and production from it are the sources of all this business activity and apparent prosperity, it seems clear that the producer should keep apace' Avith it, or ruin of the entire fabric must follow. It is now be- ginning to crumble. Formerly it was a common practice, in farming communities, for neighbors toloan money to accommodate each other. This business is now transacted almost entirely tliiough the banks. OiK^ of the cnuses for this change may be found in the law which taxes the money of an iiidivi(hinl h to be borrowers upon their i)roperty, are sul)jected to taxation upon it for both state and local pur[)oses, and they pay to th(^ state upon what they owe,and to the local authorities upon what they do not own. Froni tht^ fact that they are borrowers upon the credit of their property their ability to pay is less than anv otlit^- class. Here is a violation of the rule of taxation, which holds that all should bc^ar the burden of su[)p(n-tino- the g-overnment according- to their res[)ective abilities. Other tax i)ayin<:i- subjix'is are ] protected from doul)le taxation by elaborate provisions of the law. But there is a vast annmnt of property, such as the works, buildings, fixtures, road beds ajid ways of railroads and canals, and re])reseuted by bonds secured by mortgages, and shares in incorporateit comi)ani(^s, which is not liable to taxation at all for local purposes. These securi- ties are liable to state tax onlv. This i)roperty, though it may not be held in fee, is kindred to real estate and constitutes tlu^ chief source of the i)roduction and pioiits of the companies operating it, and there is no ai)parent reason Avhv it should not submit to the same tax exacticms as faini lands aiid other real estate. If equality be a true rule for taxation that method which ])rescribes (me rate and purpose for the ])roperty of one class, and a different rate and i)urpose for tJiat of another class is not warranted, there being no graduation according to the means of tln^ contributors. A system which taxes the productive ])ropertv of one class for state l>urposes only, and that of another class for local pur[)Oses, upon a different basis of valuation, cannot sit equally u])on the shoulders of all the subjects of tlui state. Neither is it just to exact as a state revenue a tax ui)on hmns, made by an individual, Avhih^ the same character of indebtcnlness, owing a banking* institution is exempt. Even tlnrngh the latter may ])ay a tax it is not im]^osed u])(m the pro- ])erty upoji an equal ViiU\ There may be reasons, founded in convenience, Avhy discount loans should be exempted. Still as all loans are made for ])rotit on mcmey, e(piality demands that all be taxed or exem])ted alike. The law which taxes real (*state is inecpiitable through the nn^thod of its execution. What strcm^er tempation could ther(^ be to induce an unjust and une(pial levy than is revealed in a system which vests the valuation of taxal)le j)roi)(a*ty in agents sehn'ted by the contributors, as is the casti under our law, which ])rovides tliat the assessor shall \alur the property of liis own constitu<'i!ts'? What (U)uld more surely lead to partiality, uncertainty and ine(piality ? Tt is said that undcu- tln^ English Land Tax of 1703, where the local authoiities were allow(Ml to mak(^ the assessments, the tax was unequal from the begimiing, sonn* districts assessing" themselves fairly and fully whih^ others evaded the resuonsibility. -'ft.^ ■■m 'i'l 3. Equality in assessments would seem more likelv to be attainable if the levies could be made by some general authority, or mixed board of assessment, uncontrolled by local intiuenct^ or interest ; foi- instance, a county assessor could be appointed to sit with assistant assessors of the several districts, so as to sui)ervise their valuations, and with authority to certify to the commissioners-, for revision and adjustment, sucli assessnuuits as might api)ear to him to require reconsideration, and without expense to the party api)ealing'. This subject of equal taxation is now being- greatly agitated, and there is little doubt that some changes will be made iii^the tax laws of most of the states. It should not be forg-otten, if we are to judgt^ by the past, that any radical and inconsiderate measurti in the directicm of a change may lead to serious results, and those who will make such a chang-e, without fully comprehending the effect, Avill very likely regret their action. Any leg"islation which tends to seriously affect values may be disastrous. It is truly said " There is nothing moie difficult than the task of familiarizing' a people Avitli a new inq)()st." A tax which varies and is uncertain, especially when laid ui^on real estate, seriously affects the value of the land, whereas, if certain and unchangeable, no such result follows. And it is held that "A consid(Mable deg-ree of in- equality is not near so g-reat an evil as a very small degree of uncer- tainty." ' AVhen a tax upon land is certain it, in eff'ect, becomes a rent, which is tak(»n into calculation in buying" and selling find is cimsidered ill fixing the value of the [)roducts of the land in the market. It is shown that land subject to a certain and fixed rate of taxation will sell as hig;li as that which is exem[)t but liable to a lower but ffuctuating- or accidental tax. The value of land iji France is as high, and in Belgium much higher, than in Eng"land, though in both countries tLere is a lieavy land laiul tax. In any undertaking" to enact an adequate and effective system of taxation there is to be considered the difficulty of levying and collecting- in the hands of the owner an oneixms tax, from that kind of personal 1)i"operty which is secured by mortgag-es or bonds, upon morgtages and shares in com[)anies. If too severe the impost might result in a total destruction of the revenue from these sources. Personal pro])erty, in contemplation of law, has its sifft.s wherever the owner is, and is supiK)sed to be in his actual possession. Therefore, when local taxation u]>on it is high enough, in com[)aris(m with that imposed in other places, to make it an object to avoid ])ayment the owner need only to ciiange his place of residence to escape the objectionable tax. This sjiecies of pro])erty, it must be borne in mind, has the advantage of real estate in that any attempt to unjustly tax it defeats itself. It follows that, after all, the substantial dei)endence for a j)ermaiient revenue is upon real estate and kindred ])roperty, wliicli, by its nature, is tang"ibh^ permanent and fixed, and cannot be removed by the owner at will. Such proi)erty consists of the bed, trackag"(\ d(^])ots, stations, fixtures and wcn'ks of railroads and canals although not held in fee. Justices to the larg"est class of real estate owners, the faiineis. warrants that these pi'opei'ties be taxed for local ])urpos(^s. A di](('t tax upcn the pi'operty, based upon its actual value, would be much more ceitain than if imposed upon the* securities \\hich represent that value. It is true that a capital tax may l)e exacted from c^)rporati()us, doing busi- ness in th(^ state but if this course is alone to be j)ui-sued, as now, tlien the equivalent of the value of the tax iqxm their local [)ossessions and .I" ".4' 62 QuAjriEKLY Ekpokt. Pennsylvania Statj: Boakd of Agricultuhe. ()3 wealth should bu diverted iroiii thv state to the county treasuries.^ Such securities as are unquestioned as liens, representing- the value of farms and real estate taxed for local i)ur posies should be relieved ol the taxation for state purposes. This would abolish an unpopular inquisi- torial law and ease the indebted occupants of real estate of the double burden of a state and local tax ui)on tln^ same i)roperty. It must not be foro-otten, however, that the corixn-ation taxes collected by the state relieve the counties, /»o tduto, of the burden of supporting- the state government. Yet the relief is not propcniionate so long- as the corporations l)ut pa,y a states tax, under the present rates, upon their securities, while the actual p]-op(^rty is not taxed at this value, whereas in farming conimunitic^s the hind and securities representing it are both taxed. To give the latter i)roper relief the other property sliould assume a more equal lairden, and the state tax uixui the cai»ital sliould be in creased so as to equalize the total amount of the tax burden with that noon farm and other lands in pro[>ortion to the actual value. Wealth, as has been said, is of two kinds, first, that which is ab- solutely necessary for supporting- industry, second, that which can be saved. The latter kind can alone be taxed. Taxation does not dim inish or destroy capital, it only changes the course and use of it. When ])roi)erly used,^ the revenues frcmi it call labor into activity and distri- butes a porticm of the wealth of the country into the hands of those who eventually pay the taxes— the consumers. In business, i^rices finnlly adjust themselves according to the value of the article marketed. A taxed article is affected, in its value in pro])ortion to the amount of tax to which it is liable, and sells accordingly. Whoever buys a farm estimates its value subject to the tax upon it, which really is a species of rent. When he sells, the same calculation enters into the price. The net income is the basis of Aaluation. An article recently called to my attention puts the case in this way : "The man who really pays the taxes upon a farm is the tenant.. He in turn counts his rent, includinsT that portion of it which really repre- sents the taxes, as forming part of his business and family expenses, and as his business must yield him a livhig or be abandoned, he makes his customers contributt^ their share of the taxes by tli(M)rofits which he adds to the i)rice of his goods. The result is similar l>ut more evident in the case of the duties on im[)orte(l goods and the revenue taxes on tobacco and whisky. Whatever the im])orter and manufacturer pay, in the first instance, they collect it out of the pur chasers of their goods and these in turn do the same from the pur- chasers they sell to, and so the tax is passed along- until at last it rests upon the consumer of the article taxed." The ])roblem of equal taxa tion, of so mucli interest to the farmer, and which sonn^ hot-headed advocates of his interests insist he shall undertake to solve alone, is a most difficult and embarrassing one. It will never become finally and satsfactorily settled, as the sing-le work of any class, (n- when adjusted irom the stand] )oiiit of any interest to the exclusion of others. A broad, patriotic and lasting- disposition of this (piestion demands the careful attention as wt^ll as the united wisdom and joint sacrifice of interests of all tiades, classes, occupations and kinds and orders of men. Whoever undertakes the sctthmient of this (pu^stion assured of an easy outcome, most ])roba]>ly will discover ere long that tlu) trouble does not all arise from unequal taxation. s 4 I have said that the tenant u[)on a farm subjected to a fixed tax, cal- culates the tax with his expenses, and eventually gets it back from the consumers in the prc^fits which he charges upon his ijroducts. As a rule this is true in all branches of business, for so soon as the profits will not pay expenses the business is abandoned for another. But with the farmer the case is ditferent. He may realize that farming (h)es not pay and that he cannot collect his expenses and taxes from his customers and he may desire to seek another busiiu^ss. Ihit his fortune is invested in the farm or stock and im[)lements, and to abandon these is absolute ruin. He is helpless. The troulde is the same as with a tradesman — there is not enough demand for his ware to ensure a living- profit. Wliy? Because more are offered than wanted. There is an over-pro(hiction and he (cannot fix his price according- to the cost to him. It, therefore, a])i)ears to me a settlement of the tax ({uestion, however favorable to the farmer, will not strike at the root of the present evil. Self preservation is the first law of nature ; and the sooner farmers of one section understand that their interests are not identical with those of another it will be better for all. AVhen the farmers of the eastern slope shall become wise enough to so manage their industry as to evade the competition which is crushing them, through the over production of the west, there will be little trouble over the sul)ject of state and local taxq^tion. *-'i^ *^ ^ ^ ^ ^ sSf 3lf ^ sfe Tic ^ ^ *^ ^^ rf* *!* ^1* ^^ ^^ ^^ ^^ ^^ ^^ ^^ *^ TAXATION. By John B. McBride, Cannonabiirg^ Pa. (Read at Lannonsburj? Institute. ) The question of taxation is one tliat, from the earliest history of governments, has been intimately identified with tliem. A revenue for the use of the state is al )solutely essential to the existence of any orderly and successful form of government. In the early ag-es, rulers had other means of supi)lying their wants without resort to regular levies or tri- bute from the ])eoi)le. State x^roperties with annual rentals therefrom, fines, confiscations or com|)ensations for crimes, etc., being- am[)ly suf- ficient. Among the Hebrews, in the time of the theocracy, there was a cai)itation taxof half a shekel (about thirty centsof our money) paya- ble by every mah^ in the nation. Also atribute of the first fruits and of the first born of the domestic animals. A redemption tax,for the first born male of the family, and a tithe system for the sup])ort of the taber nacle service, and for the poor. After the adoption of the reg-al form of g-overnment, taxes were largely increased, and became very oppres- sive. In Kome, under the republic, the si)oils of conquered naticms and the annual ti-ibute exat^ted from them, defrayed the greater pjirt of the expenses of tln^ state. The first approach to modern systems of taxation was niad(^ during tiie middle ag-es by the Re] )ublic of Venice, Avhich levied taxes on the lands of the republic, and duties on manufactures and imi)oi-ts. In France, before the revolution, there was a serious ob- stacle to any e(iuitable system of taxatoin, in the fact that tlie nobility and clerg-y, the privil(\ged classes as they were termed, were exempted from its burdens. In England, for centuries, the finances were badly i I 64 ■ Q^AlriKl^L^ IlKroirr. Tnaim-cd, the ,>rivile-ed classes, as in France were exeinptea^ (men the taxesVere insufficient to meet the expenses ^l^^^'^^^^^^^^'^f ^^^^ ^^J^ h)ans, contributions and constications Aveie Irequent and uiuhi t K se conditions, incUistry became very nnich depressed and ^^^^^^^j^^'^;^;- , ^^ In some of the provinces of western Asm the ooyernment, ^vith the ri-lit of taxation, was ])estowed (m favorites, or sold to the man aMo would pav hi-liHst for it. Their duration was short, but crucdty and extorticin pre^^viled, completely annilnlatm^industiy ^^^^^\^^'^^^^t|;^^";^ countries once prosperous and populous into desert wastes, lluis on down through the centuries, this (.uesticm nieets us and is mcm^oH acceptable, as the burden ujum the peoide is just ^^f ^'Ji^^^^^^^^^^^^^^^^ otherwise. Taxes are classihcHl as direct and uuUrect. ihe toimei uiv thosc^evicHl upon the persons, property, business, income, etc. ot those who are to pay them ; the k tter are levied on commodities m the hands of manufactiUTU-s and dealers, and will be paid ultimately by ccmsumers, as a part of the price of ti.e connnodi y. The ti'ue priiici- Dles of taxation Avere littler undi^rstood until the time ot Achim hmitli, and indeed are yet, in many particulars, the subjcH;t ot controversy This writer lays down the followino- maxims in relation to the subject of taxation. , . i ^ i i ^i " 1 The subjects of every state ought to contribute towards tlie sup- port of th(^ irovernnuait, as nearly as possible, in proportnm to their re- si)ective abilities; that is, in proportion to the revenue which they re- S])ectively enjoy under the protection of tlie state. " 2 Every tax ought to be so contributed as both to take out and keep out of theVockets of the ]HM>i)le as little as possible over and above what it brings into the i)ublic treasury of the state." This maxim is often violat^'d bv large and needless accumulations m the public treas- ury, and it is a' serious one because of the tendency to extravagance, peculation and corrui^tion. „.,,„, -, ^i • • i Professor Walker, in his " Science ot \\ealth,' lays down the principl(^ that "The heaviest taxes should be imposed on those commodities the consumption of which is especially jU'ejudical to the interests of the people." Tins maxim lias been adoj^tcd to ti greater or less degree m every country having any c(msid«'rabh^ taxation. This maxim is one ()f the leading features of our tax systems, both state and national. i i i i r Taxation in the X^nittnl States is arranged uiuU'r the three heads ot fed(^ral, state and municipal. • i • The first is made u]) almost wholly of customs and excise (bities. State taxation is usually f(U' general state purposes oiily^and is laid ui)on real estate, personal pr()i)erty, ()Ccui)ation or ))rivilegps, on the franchises of corporations, etc. Municipal, or local, taxation, by far the most important, because of the heavy burdens it imi^oses, embraces all taxes laid for the gen- eral ])urposes of counties, citi(»s, boroughs, towiishii)s and villages. This local taxation being tlie heaviest drain u])()n the people, it is here that the cpiestion of equjdization should be more fully studied and comprehended by them. Political economy requires the administration of the revenues of nation, state or municipality in such manner as shall best secure the success of individual iiulustry and enterprise, and imnnote the generjd public Avelfaie and deveh)pement. The subject is of vast extent, far reaching and imi)ortant, both in its methods and results. Pennsylvania Staii: Boakj) or Acjjucultuke, 05 ■•<* % Equalization, as laid down in article ninth of the state ccmstitution is u fundamental i)rincipk^ of the tax system of our Comnumweath and it is the bounden duty of both citizen and officer, to set^ I hat it is obeyed There is a convicticm growing in the minds of the j)(M)ple that real • estate has for years borne far more than its siiait^ of tln^ burden of tax- ation in our commomvealth. Well may wo repeat the inquiry of (lovernor Pattison. What delin- cpiency has real estate bec^n guilty of, that it should be thus unfjiirly discriminated against? To see sonuithing of this great injustice W'e have but to look at the re])orts of the Secretaries of Internal Affairs Hiid Auditor General. Prom these reixnts it a])pears that th(i aggregate^ valiu^ of the real estate in Pennsylvania amounts to $1,840,448,540, and pays an average tax of 18.8 mills, amounting to over $83,000,000 per annum. Corjx)- rate i)rop(Tty is valued at $1,800,000,000, to this must be added personal proi)erty amounting to not less than $520,000,000, making an aggregates of more than $2,800,000,000, cori)orate and i)ersonal i)r()i)ertv, paying an average tax of tw^o mills, making a total of about $7,000,000^ colh^cted fiom over $2,800,000,000, ])ersonal corporate juoperty, while $88, 00(^ 0 )() are annually collected from $1,840,448,540, real estate. * The gross injustice of such legislation to tlu^ great agricultural class should be known by all and a speedy remedy provided. This tax equation is widening and deepening in the minds of the farmers. The educatio^.ai si)irit is entering morc^ largely into it, its defects and inequalities are being searched after and will be eliminated. With the constituti(mal mandate that "all taxes shall be uniform upon the same class of sub- jects" and that grand sentiment of tins immortal Lincoln that, "this is a government of the peoi)le, by the people, and for the i)eople," should impel us to go forward with renewed energy and wqth a detei*- mination having the courage of our convictions and When beaten back in many a Iray, Yet newer sirengtli to borrow, And where our vanguard rests to-day Our rear shall rest to-morrow. Mr. Chairman or felUow citizens, Efpialization is the remedy. The ])hih)sopliy<)f govi^-nment i^re-supposes i)ersonal magnetism of sympathy pervading and knitting together into harmony the several constitutent ])arts. Tliis princii)le, so good and true, is, however, largely neutralized by avaric(% du])licity and favoritism. This crisis cannot be met by ])re- senting intricate theories looking to the ultimate distributicm of all taxation. The writer is scarrelv fair in his statement as to the value of real estate; he forgets that the value of SI. S^O. 0(10 OOfJ, as ^i\en from the reports of the Secretary of Tnlernal atfiirs IS the assesed valuci atid not the real or actual value; our data relatint^r to the asse .inent of real estate leads us to beleive that the asssessed value; is at least o^e third below the real value and that instead of the titriiresused by the writer the real estate may be safely placed at not less than ?2,r.00,0()0,000. In his valuation of per- sonal pro|)erry the writer adds the value of property (Mitirely ex;nnpt from taxation by la'-. ; if he does tins in the case of personal ])ro[)erty he shouht also do it in the r sheep, ex- pecting-equal profit and pays nothing-. The agriculturist invests in stock as part of the necessary machinery of his farm and is taxed, the manufacturer's mac^hinery is exempt. Every betterment to real estate (if only a keg of paint on a fence) is seen by the arg-us eye of the assessor and tlic owner is g-ently re- minded that he cannot impi-ove his surroundings, though he at the same time benefits tlie community, without i)ayin.g for the privilege, but the corporation can exi)end thousands and millions (if done without issuing- new stock) and g-oes free. These are some of the inc(msistencies and inequalities of our present laws relating: to taxes, whether they are ])aid directly to the state or to local authorities it does not make mucli difference. But tlie fact that all other ])ro[»erty, than real estate, not exempt or concealed, ])ays a defi- nite fixed amount to the state, and the less valuabh; but visible, real property has to shoulder nearly the whole burden of local taxation, viz., county, S(.'hool and road taxes, is discriminating- ag-ainst the one l(\'ist able to bear the burden. Statistics show us that tlie income of the farms of the state is only twelve per cent, gross, while the averag-e from manufacturing- is thirty one ])er cent, net, can anything- be more unfair? Is it any wonder they can offer superior inducements to labor gg QuAiiTEKiA' PiV.roirr. HU.l drive ns still low..- ia the esti^matiou of th. world ; \'; \l-;>;>^„^^^ is lu.^o^d)l.^ and tlie uvocation o tlu> iarnu.r noble, ["S "' I'^j-^^X income without eaniin- it, und nnsoile.U.an.ls and .■lotlimj.Ms the ^SltrrX'a'":"!a producer ..t^u.ytldn«. tl.;builderandsn,.- poit«- ot the goverurnlnt, 1 Js sunk to the lowest strata ;;;«-;»;>; ^^^^ every trade hikI protessioii is prei(icU)i( lo iii», cm '"HrtSr^-son.1 property of the state ineludin,- ;-^l>-f i^^^.^j^;;^ rnl inorto-.icres Imildiiia- and loan associations live stock etc., is ahout n^i^mim:T^ is live stock, the o.,eater part o whil belongs to the farms, and this ^reat sum only p^s three and lu^lm miUsin taxes (and how much is not reached, 1 leave you to " the farms which cannot be concealed pay an average o n n; and cmedntlf nulls. Is this ahme not a sufhcient reason ^^hy our^ acres are yearly shrinking in value, nobody -|-f^^ ^;;-^ why should they"? Our representatives (in name only) pietei eAei> Sdy ami every thing to the farm audits owner, and put upon him " Thi^is'ril^^ritture enough without dwelling upon the douWe taxation imj^osed upon the holder- of real estate, by compelling him to pay the sum assessed against the whole when in reality his neigh Ik >r owns one-half or other sum by reason ot his mortgages and onh pa> s three mills to the state.. ^^)thing for the sch(>ols, roads and cnmrt^ without which his property of whatever kind would b(^ worthless. ( )n > last week our Supreme Court decided thai trust companies should not pav tax on both thc^ir stock and securities, because ot its being doul'h^'^taxation. Where the state tax on both or double taxation woiihl not reach the amount, we farmers always pay. ^ , ^, . It is with extreme diflidence that I suggest a rcmiedy, tor that a rein edvis needed no one disputes, and our legislature county commis- sioners. Patrons of Husbandry, even our Auditor General hayc^ jm)- P(,s(h1 bills or suggested abnsis, that, in their opinion would give the needed revenue and relief. After such experienced minds have wrestled with the sul)j(M't anythnig I might otTer would be ot little avail. i>ut that investment in farm land is not, and cannot become, a tavorite, as things now stand,, is apparent. Every otln^r business offers a pre- mium saiH^tioiKul by law ; or in other words, w(^ are handicjiped with one Tier cent, more in fixed charges, and if exemptions and under valuations are ccmsider^nl, it amounts in reality to several ])erceiit ;, and tlu^ gen- tleman of the assessors list, the man who lives on his income Ironi m(mey at interest, in your pleasant borough, who toils not, neither do(^s lie spin, who adds not an iota to the world's capital, pays least ot all wlule energv and risk pay his taxes for him. Some of the l)ills rc^ferred to are so sweeping in their character and radical in their changes, that their effect can (mly ho. surmistul and their enactment doubtful. The McCamant bill or sul)stitut(» is tlie u-oduct of on(i experienced in legislation and legislators, and would be perhaps worthy of trial, it would give the needed result wdtliout (employing ih^w machinery or creating new offices, perhaps one of the others may be b( tter when amended and shapenl by the united intellect of our sohms at Harrisburg. I can, however, suggest some remedies, and eminently l)roi)er subjects of legislation that would give us great relief without altering our ])r(^sent statutes reflating to revenue at all, and which some of those who are laboring over the (piestion, will not perhaps think. Pennsylvania State Boakj) ot AuKicuivirHE. r>9 f(n' instance, blot out tlu^ oftic(. of mercantile appraiser, have the ccmi- niercial unm make their return to the county commissioners direct. They return just what they choose anyhow ; the testing of weights cmce a year could not ki.ep a tricky merchant honest and the law was re liealed. lliHluce the fees of our county officers, or disi)ense with fees (mtirely and i)ay them salaries. For what o-ood reason does the register retain five per cent, of the collateral inheritance^ tax. Wluui he is al- ready paid many times over a fair valuer for his services. Wiix^mt that army of otticers in and about our halls of h^gislation. The idea of paying six men $4,000 to do that wliicli one laborer at $1.50 would and could do, multiply this by twelve and you have about the sum wasted on one item alone. Stop the public printer from drawing $331,000 an- nually from the treasury for i)rinting that which so few care to read, instead, furnish a copy of the Jouinal and llecrml, and the rei)orts of the de^|)artments,to each nieml)er and for the public offices and libraries, gratuitous, and then put a limited edition on sale at cost to those wlic) want them. Restore the^ hours of labor in the public service to the number an enter i)rising, self-respecting business man devotes to his own affairs and at the same time stop trying to instill into our young men, by law, that labor is dishonerable. Abolish the Soldiers' Orphans Schools and save $308,500 yearly ; the oiphaiis of thirty years standing should be sufHciently nutured l)y now, and their children should be inmates of the public school with our own. Abolish the manufacture and sale of intoxicants, and save over $3,000,000, now appr()i)riated to our jails and charities and contributed by the counties for the suport of the poor. Beside, one judge? aiiel the old e'ourt he)use would do us tor many years to come. Abe)lish the return features e)f the constable- it is a fare;e\ He se^es neithing bnt the rotten pe>inter post at the cross roads. These things aleme we)uld give? our State Treasurer enough surplus to pay half our road and sclie)ol taxes and very materially reduce our county expendi- tures, e'ven though we bought every bridge on the Schuylkill river. If the? mae'hiiu^ry e)f the state is such that the assessment of corpora- tions, manufacturing and commercial [)ursuits can be? maele me)re ac- curate? and che'ap by them then by lex»al authorities, and I elo not doubt it, let the i)resent system continue, emly collect from each its proper proi>e)rtie)n, and this wemld be no hardship. Do they not enje)v the l^en- etits e)f our courts? \V^)uld they have ever been in existence excei)t for the sche)e)l anel public highway"? W hy should the?y be exalteel above the? labe)re?r wlio i)ays taxes em his n, his industry, the semrce of all wealth? IT])em whemi the curst? of (rod to Adam falls literally, " In the sweat of thy fae*e? shall thou eat bre^ael." Chester cemnty has sixteen elistinctrailre)ads, aggre?gating about twe) hunelred anel tiftee^n mile»s, and occupy soinetliing like erne themsanel tivtOiundreMl ae-res e)f its lanel, wliicli is iie)w un|)i()eluctive of revenue fen- loe-al |»nii)()ses. I kne)W the? e)ther side? also, that emr farms we)uld l)e weu'th less wen-e it ne)t tor these? means ejf ce)mninnicatie)n, but they were ne)t ae-epiired and ini|)]<)ve?el fen* emr interest, but a se^ltish erne to their owners, ami only re?tlex't eui their surre)uii(lings, as one e)f your ])eautifu1 homes adels to the value ejf ne?ighboring pre)p6?rty, ami you are ne)t e?xe'mpt or a e-harity in tlie e'stimatie)n e)f the? tax gatherer. The argument that we will only have te) pay tlie'ir increaseel exnense's iu another form, shemld heavier biirelens be put upon theim, is ne>t 70 Qttahtkklv IIkpokt. founded on facts; supply and demand regulates trans i)c>iiat ion a^^^^ does labor and eaiutal, and tlje great army ot paid oihcials ot the cor^ porations, constantly in attendance at our seat ot ^X^'"^^"^^^^^ L to legislation affecting their interests is otitselt sufficient rei>^;^^^^^^^^ Notwithstanding I advocate the eciualization ot the tax buid i^^^ is not in dollars and cents that the greatest reliet will be ^^It, b t ii elevating the occui>ation of th(^ farmer to par as compared with com- mercial and manufacturing pursuits, and give him a standing m society and politics he does m)t m>w enjoy, and will give o^^i' l;^^^;l%^^^^\^^^^^ market value in the estimation of capital, tor the capitalist (U>es not want that which no one else wants. , , , , • i • +'«^f Were our taxes reduced one half it would not make us ricli, in tact to the great mass of humanity, it would amomit to no more than is frequently si)ent on one holiday for recreation. In my township there are two hundred and twenty assessed voters and one hundred ot them pay less than $1.50 annually for road purposes \\ hde the sum nec- essary this year is $1,330. My experience has been that those having the most to pay, do it easier and more promptly than those having the least Nothing but push and uerseverance will win on the tarm or olt of it and the sooner we realize the situation and accept it, the more quickly will we reach that condition of comfort and contentment tor which }dl strive, though many will fall by the way, as they do m all walks of life, have ever done and always will. Pennsylvania State Board of Ar.KTcrLTTTKE. 71 FIFTY POINTEllS IN THE TAX FUOBLEM. By the Secretary. 1 When our present leading revenue laws were enacted, real estate constituted the leading investment of cai>ital and the visible wealth of our state. The aggregation of capital for the puri)ose of carrying on large undertakine-s was unknown, and, not being anticipated, was not provided for in the system of taxation, Avliich, at the time of its adop tion, fultilhnl thc^ purpose desired and ensured comparatively equal tax- ation. The only cause of inequality being unequal and unfair valu- ations. . . 2. Since that time cori^orate wealth has not (mly greatly increiised until at the luesent time it almost equals in value the real estate of the commonwealth, and even exceeds it in its profits, but acts of incorpora- tion now cover even the use of limited amounts of capital which might readily be furnished by single individuals except for the reluctance of any one to assume the chances of loss. Thus we hav(^ in our state cor- porations with but $5,000 of capital invested, and a few with even less than this amount. 3. It is a point which cannot be successfully disi)utayer, and the point of assessments is not fixed by the point of investnnuit. A citizen of New York, owning stock or personal property in Pennsylvania, will be assessed and taxed in New York. Hence this class of i)roperty, if un- duly or too heavily taxed, may make it an object with the owner to change his location in order to avoid the burden. Thus corporations have, in the past, sold their plant and have removed to auother locality on account of exemption from local taxation otien^d tliem by cities or boroughs. 7. By lieavy taxation it is i)ossible to drive capital out of the state, and cause its investment in other locations in which the owners can reserve more of the profits for his own use, and where he will be com pelled to pay less for the support of the local government. 8. It therefore becomes a very important problem to so adjust taxa- tion that while we relieve real estate we shall not so burden corporate and personal property as to produce the effect noted above, but we do not believe that this danger exists to nearly so great extent as the own- ers of tiiis class of property represent. 9. In very many cases it will be found that in shifting taxes from one subject of taxation to another, the increase in taxations falls where it is least expected, and instead of lowering the taxes of any certain class we may increase them. It is quite ])()ssible to decrease the tax u])()n real estate and increase it upon i)ersonal property so that the owner of mixed proj^erty may find himself paying an increased tax where it was supposed that an opposite eft'ect would have been producc^l. 10. Thus it is very ]:)ossible to decrease the taxfiticm on farms and real estate and increase it on th(^ ))ersonal property used in carrying on those farms to such an extent that tlie farmer will, in the end, find his taxes increased instead of decreased. 11. It is also possible, by an increase in the taxation of fioating cor- porate property, to drive it to other locations and thus destroy tlie market for agricultural i)roducts which the presence and expenditure of this property always creates. Thus, if api)lied to the locality of a single townshi]) or state, it might be possible to so arrange taxation as to drive mjinufacturers away and thus remove the market u])on which the farmer depends. 12. The taxes laid u])on farms and agricultuial pro])erty are largely local, and consist of levies for the support of the schools and the repair 1 72 ^ QuAiriKKJA liKi'oirr. of roads, and in sonu^ counties thc^y juv for the support of the poor. They are distinctly local in botli colh^etion and expenditure, ihey are collected by collectors ekicted by the i)arties taxcul, and are expended by otiicers elected by th(^ same voters. • . ^- • ^^ 18 It is undoubti^dly the ease that the increase m taxation is parti- ally iliie to extravao-aiu-e which crept into all positions during the war, and ar(^ du(^ to increase in salaries, etc., which have never been de- creased with the decrease of other ])roperty and other sources ot reve- ^^4 Much of the increased burden mi^ht be relieved by insisting- ut)on more ri-id economy in the administration of towiishii) and county attairs and by the decreases of salaries and fees. A carelul examina- tion of tlu^ list of salaries paid county otHcials in almost any county m the states will show that this increases still exists and that there lias bet^n little or no decrease. • i i i. i • 15 It is evident that if the same amount is to be raised by taxation, an eciualization can only be attjdned by shifting the burdtui from real estate to other classes of property. As our investments are now ccm- stituted, this can only be accomplished by increasing the taxatum on corporate and personal property. 16. Under our i)resent revenue laws, corporate and i)ersonal i)roperty is mainly taxed for state pur])oses and the resulting funds paid into the static treasury. The proposed equalization then demands a solu- tion of the que^stion as to whether it is best to so arrange this increased taxation that it shall be paid into the local treasuries instead of into that of the state. 17. The increased tax upon this class of i)roperty c^ould very readily be paid into the state treasury and from this i)()int be paid out locally for the improvement of public roads and for the supi)ort of the public scliools. The result would (or should) be a decrease in local taxation l)i()])ortionate to the amount thus received. 18. Tlie constitution names the minimum amount wdiich shall be paid from the state treasury for the support of the i)ublic school system of the state, but it does not fix tln^. maximum. The legislature may at any tinit^ (as it has alrcnidy done) increase this amount indefinitely or until the state shall assume tln^ whole ex])enses of its public school system. l\). While the constitution does not appear to have contemplated the state exercising any control over the repairs or i]n])ov(^ment of (mr i)ub- lu^ roads, yet the fact that the control of these highways (as to right of way, etc.) remains in the state, w^ould point to the fact that the state can assume the whole (or any part) of the exi)eiises of i^ermanently improving or of re])airing the i)ublic highways. 20. Admitting that the tax uixm corporate capital should be so in- creased as to relieve real estate, the i)roblem then resolves itself into the above (piestion, shall the increase be in the slia|)e of state taxes or in the shape of local or township and C(mnty taxation? 21. Again admitting the propriety of an increase in corporate taxa- tion, how and where shall it be api)lied ? Hliall we tax the road benl, rolling stock aixl [)ersonal proi)erty of railroads, or shall the increase be (hn'ived from an increased rat(^ laid upon their i)rofits only? Is not a tax u])on the road bed, rolling stock and persoiud property of a rail- road m th(^ nature of donble taxation? Inasmuch as th(^ funds produced by the sale of stock and bonds was used for the purchase of these im portant it<'ms, and inasmuch as this class of corporate pro[)erty is Pennsvt.vaxia Statk BoAiii) oi' A (iJiicri/nTiiK 73 alit^ady taxed, might Jiot the increased tax l)e taken as double taxa- tion ? 22. Would it not be best to lay this increase upon the profits of the cori)oration rather than upon its personal proi)erty? In like manm^r would it not be more just to tax all "in i>roporti(m to theii- ])r()fits and their ability to pay the tax? Would not this doctriiK^ J^pply as well to the farincu' as to the railroad ^ 28. If the theory that taxation should be^ graded in pi'oportion of the ability of the taxcul to pay, does it not foUow that a tax upon the in- comes and i)rotits is tlu^ fairest and best way to obtain t\w funds neces- sary for carrying on both local and state governments? 24. Is not the fact that in the attempt to cover all kinds of earnings and 1 )rotits, that of salaries has largely escaped attention 1 Why sJiouTd not the employe who has a salary of $1,000 pay th(^ same for the sup- port of goycu-nment as does tlu^ owner of real estate, tlu^ farmer or the capitalist tVom the same income? Is it not a fac^t that salaries escape with a very small proporticm of taxation? 25. Skill and education are just as much a man's cajutal as are bonds, real estate and farm stock. Both enable a man to earn a revenue vary- ing in accordance as he may possess them, being lowest where the least is possessed and highest where most is given. Again, w<^ find a i)oint where an income tax would be the most just, most readily collected and least f(dt. 26. But, admitting that this is corrcK-t, we again meet the evil that, under our present system of taxation, all in the same calling are taxed alike ; the lawyer who makes but $1,000 pt^r year is taxed at the same rate (if neither have real estate) as the one who makes $10,000 ; in some of our counties both would be taxed at $150 regardless of their profits. 27. A tax levied upcm profits may be unfair ; thus, for instance, a tax levied upon the i)rofits of a coal company is ujxui a ])roduct the removal of which decreases the value of the real estate of tlie corporation, while if levied on the profits of s(mui other cor])orati()n (as, for instance, a railroad) it may be follow^ed by an increase in tlu; value of its property and finnchises. 28. The removal of a ton of coal may ])lace the real estate of the (com- pany just that much nearer its minimum value, a\ Idle an increase in the profits of a successfully managed railroad or similar cor[)oration may increase the actual valuer of its projKU-ty. The ability of a railroad to pay an incn^ases of one percent, in its (livid<'iids increase its whoh^ ])ro- ])erty in the same ])roporti(m, but such wouhl not ]h\ the case with the work of a mining- company of an^^ kind. 29. The lu'ofits of investcnl corporate capital, like that in farming, etc., will vary from year to year, and it is ])ossible that in some years no ])rofit w ill be made : taxation based upon the valm^ of tln^ proix'ity controlled, will, therefore, be unjust, becaust^ it is not pro])orti()ned to the i)rofits realized. During the year in which no profit is madf^ the taxes will be quite as high as in i)rofital)le years. 30. Precisely the same argument may be a])[)lied to the vo(*ation of the farnu^r ; by a favorable season he may, by [in un(^x])(H*te(l increase in crops, hav(^ an increase in profits, which may, tln^ next year, be bal- anced by a failure of the sann^ ciop ; and yet his taxes for both years will be the same, while his ability to ])ay them during th<' unprofit.il>le seas(^n will b<^ gic^atly decreased. 31. The ])r(^sent complaints against the im'([ualities of taxation come mainly from our farmers, and, at least, not ivoni the real estate owners \M 74 Ql AKTEULY HkPOIIT. of our towns niid cities. The inequality of the taxation bein<2: based upon the vaUie of real estate, bears upon both classes alike ; tlie city real estate owner is taxed even higher than the farmer, but does not comi)lain to the same extent. 32. The city real estate owner who rents to another, can readily re- cupe himself for increased taxation by increasing" his rent ; the railroad, under the same conditions, may increase its freight rates : tlu^ artisan, in any trade, may increase his charges; the hotel ])roprietor may in- crease the rate of liis board. 33. But of all men the farmer who farms his own land has no such remedy ; he cannot increase the prices of his product for he finds the western farmer in close competition ; if he increase his crops by fertil- izers and good management, the assessor will increase the valuation of his land, and thus he is met with the opposite evil In fact he cannot, in any wav, transfer the burden to another, but must invariably meet it himself. The cause of Lis complaint is therefore evident. 34. In estimat(^s of the actual value of the real estate of r(4insylvania, an insullicieiit allowance has been made for the difference between the assessed and the real value : in scmie counties the assessment is based ui)on-one third value ; in others on one half ; in some on two thirds, and in a few upon but < me fourth value. All of these items should be taken into the account when estimates of actual value are made. 35. The rei)orts of the Secretary of Internal Affairs i)lace the assessed value of the taxable real estate of the commonw ealth at (in roiuid num- bers) $2,000,000,000; this does not take into the account $200,000,000 (assessed value) of real estate exempt from taxation : making a total of $2,200,000,000 as the assessed value of our real estate. 3(). Those who are interested u])on thi) side of real estate in all ques- tions involving taxation are willing to grant an increase of one-fourth for the difference between real and assessed value ; this furnishes us with the minimum or conservative estimate of $2,750,000,000. After some investigation into the rate of valuation and taxation of farms and faim capital, we are satisfied that the real estate of the commonwealth may safely be valued at $3,500,000,000. 37. Taking the minimum value of $2,750,000,000, and the estimate of taxes |>:ii(l amoiiiiting to $32,000,000, we have a tax rate of 11.27 mills; taking the valuation of $3,500,000,000, we have a tax rate of 9.14 mills ; the average betw^een them is 10.02 mills. AVe tln^refore as- sume that the average rate of taxation on the real estate of the common- wealth is not far from 10 mills, or one per cent, on its value in the market. 38. In nearly all the comparisons made between the taxation of real estate and x)ersonal and cor]:)orate x^roperty an injustice is done the latter from the fact that in the valuation of real estate no account is taken of that exempt from taxation, but in considering corporate and personal i)roperty, all is coimted and goes to swell the total. If i)ro])- erty'exempt by law^ is not counted on one side it should not be taken into account on the other. 39. The estimates of the Auditor General show that the value of "stock of manufacturing corporations not subject to tax" is $150,000,- 000, and that the ''value of stock of building and loan associations not subject to tax" is $75,000,000 ; this makes a total exemi)t by law of $225,000,000. This amount, if deductc^l from the usual estimates of the value of corporate and jx^rsonal property would lU'oportionately in- crease the tax rate ui)on this class of investments, and whilt^ it would Pennsylvania Si'mk r>oAiii) of Aoiticui/ruitE. 75 -.»« still b(^. far from being (npial to th(^ tax ratt^ u])on real estate, would decreases the present estimated margin between tln^m. 40. Such estimates also fail to take into consideration the value of the real estate owned by (M)ri)orations and taxed as real (estate, and enters into the total value of the real estate of the state, but which is the product of the money represented by and taxed as stock, etc. , of these corporations; this maybe claimed by corporations as an offset to the taxation of botli the land and the mortgage on tli(5 land. 41. The most reliable estimate's of the total value of the corporate and personal proi)erty of tlie commonweath vary from $2,000,000,000 to $2,750,()()0,(H)0 ; both valuations include the classes of cor[)()rate i)ro- perty which are exempt from taxation l)y law ; the average between the two is $2,375,000. If, as lias been assumed, this class of ])ropertv pays a total tax of $(>,000,000, it follows that it is taxed at the rate of but 2.52 mills, or at the rate of about 25 ])er cent, on the tax ])aid l)y real estate. 42. The Auditor General furnishes the following estimate of the various items making uj) the value of the corporate and personal pro- perty of the state: Salaries and occu])ations, $85,737,000; value of banking capital, $100,000,000; value of corporate cai)ital, excluding banks, manufacturing companies not taxed and buildings associations $G50,000,000 ; mortgages, judgments, bonds and money at interest, $575,000,000 ; stock of manufacturing corporations not subject to taxa- ticm, $150,000,000 ; stock of building and loan associations, $75,000,000. 43. In considerina* the tax problem farmers should bear in mind the fact that the horses and cattle, as valued for taxation, amount to but $42,170,000, while a reasonable valuation jdaces the livestock of the state at $115,000,000; if all property is taxed the whole of this class will be included andvalued in pro])ortion to real estate. The result would add about $71,000,000 of taxable personal j)ro[)erty to the list. 44. Presupposing that an increase in the taxation of corporate and personal proi)erty is necessary to bring about an equalization of taxes, we find two plans open for consideration : The i)resent rate of taxation for state purposes may be increased and the surplus ])aid over to coun- ties or townships for the imi)rovement oi public roads or for the sup- port of the i)ublic school system, or this increase may be provided for by local taxation of revenue from these classes of ]>roperty. In either case the reduction of taxation on real estate should l)e the same. 45. ^l'h(^re does not appear to be anything in the constitution to pra- hibit the stat(^ from assuming the entire cost of the ])ublic school sys- tem, and thus relieving local taxation to the amount of $12,000,000. To accom])lish this it would not be necessary to in any way interfere with the local control of the schools as it now exists ; an increased a])- proi)riation need not in any waj' influence the control of the schools than does the $2,000,000 now api)ropriated by the state for this purpose. 46. Local taxation of corporate and ]iersonal property is open to the objection that by it the increased revenue from this source would not be equitably divided locally ; thus, for instance, some counties or town- ship would, on account of the ])resence of railroads and other corporate j)roperty, obtain a considerable increase while other localities, not so favoiably situated, would not be benefited, or if benefited at all, would not gain in the same i)roi)orti(m. 47. This inability to e(pntably distribut(^ local taxaticm of cor])()rate pi'oi)erty gives us the strongest argument in favor of its increase and colhiction by the state and its distribution to townships or counties ui)on some equitable and just l)asis. i! i k 76. QuAinKULY llEroiiT. 48 It is ovideut that if tlu^ township or county receivra no increase of revenue bv taxation of eorjxnation property, its real estat(-woul(l not be relieved at all, and we would have a very unequal system ot taxa- tion on this class of property. . ^ ^ 4. 49 An increase of revenue by local taxation of corponite i)roi)erty would (^ntail an increased cost of collecting- it, while its colligation as a state tax need not b(^ attend(Ml by such a result. State othcers are salaried, while many county ollict^rs are paid l)y percentages cm the amounts which pass thouj^h their hands. . 50 In the adopticm of any system or in any ch anodes made in our present system, that i)lan which thc^ least investigates the private affairs of the individual will Ix^ tln^- most popular. Our people as a class are oi)posiHl to anything- incpiisitorial on the part ot the assessor, and it is doubtful whether an assessment under oath will be productive of the good results expected by those who propose it. Pennsylvania SiwrE Boaud of Acjuiculture. 77 IHSCITHSIONS OF THE ANNUAL MEETING OF ls<)l Tlie essay of Mr. Hamilton being under consideration by the board, the followng discussion took place, and is here given in a condensed form : i • i J. B. Smith, of Luzerne county, i have been very much interested in the essays read this forcnioon : they w^ere read with a great deal of force. Professor Hamilton says the landed i)r(^perty, house and lots, etc., in Pennsylvania, pays 15 mills on the dollar. Let me give you an illustration of how pro])erty is assessed in our county, and it is sup- posed tliat we pay more than any countv in the state : Our coal land is worth $2,000 an acre, and by renting it to those cori)orations that have no souls, we will get $(),6oO. What is that assessed at? sim])ly $G0 an acre. Where is ycmr 15 mills on the dollar? You take the houses in our valley, I have a house that cost $10, 00 J, and they assess it continuosuly and i)ut the largest assessment on me because they thought I was able to pay for it, and he assessed a propc^rty at $900 that I w^ouldn't take $20,000 for, and every building lot is tax^d $00 an acre. I venture to say that the farmers don't ])ay eight mills on tlui valuation of property in the State of Peimsyjvania. What has a bank to pay? They pay on $100,000 ca])ital, a tax of $000 to the state and more to the government. A neighbor used to talk about corporations and banks not paying any taxes. I said to him, you have a ])r()])erty worth $100,000. What is the total of your taxes? He answered, $500. My answ(^r was, I don't want t(^ know anything more about your pay- ing taxes. The First National Bank of Plymouth,, which I represt^nt, pays $000 on a ca])ital stock of $100,000. The banks pay in as nnich as any railroads or any cov| )orations. You take tln^ railroads, and \n hat do they pay? My friend says th(\v ])ay 3 mills on their earnings, and, besides, about 3 mills more in different ways Sup]>()se our farmers were charged with every ])otato we raise and every turnip wi; get out of tli(5 garden, and every berry we g(^t off of tli(^ l)ushes, and every grain of buckwheat we raise, and were com])elle(l io account for it tln^ same as the railroads, where would we be? They ar(^ not here to explain, but those are the facts. Therci are corporations in Pennsylvania that have never paid a dividend, not a cent. If a farmer buys a fai'in for $10,000 and gives a mortgage for $5,000, and tln^ assessor comes around and he asks how mucli does your farm cost, and you answer $10,000. The State of Pennsylvania dot's not get hold of onc^ (piarter of, the money that is on interest, but if that money was put in such shape that the assc^ssor could get th(^ value of every dollar and i)ut down, th(^ result would b(^ that the state would get four times as much money as they do now. It would be justice to the farmer if the state don't want to tax him unjustly ; he only owns half of that farm, and, conesquently, he should only pay half of the taxes on it. Col. B. F. WiNGEK, of Franklin ctmnty. You hav(3 befon^, you a very important (piestion, that is, taxation, and more particularly as it af- fects th(^ farmer because I take it that this agricultural board ])ays more particular attt^ntion to agricultun^ than any other, yet, as citizens, we must look after the interests of the wholes state. The gentleman wlio preced(Hl me si)oke of where the assessment was $G0 an acre and the land worth $2,000. I come from a county in which there is no coal lands and they assess the land at $G0 an acre, and the man who has a faim discovers that he has a great deal of trouble to make six per cent, or even four i)er cent. He pays on that $00 an acre farm, four mills for county purposes, then about five mills for school ])uri)oses, then he pays two or three mills for road purposes, and I would say that he should ])ay five or six and have better roads. There is five and four are nine and three are twelve, making twelve mills that the farmer pays on his land assessed at $60 an acre. The man who invests $60 in a mort- gage he pays just a three mill tax. He pays upon that acre of land about one and eight tenths ])er cent. He just ]>ays one fouith of the taxes that the farmer does who lias his mcmey invested in tlui $60 acre farm. Wliy investments in other enterprisers should not pay the same proportion of taxes that farms pay, I can't understand. This tliree- mill tax conies to the state and \vi) get a portion l)ack for school pur poses, and still we ])ay five or six mills for school ])urposes. I was very much interested in tlu^ i)ai)er read by Professor Hamilton, and I am satisfied that our system of assessment is bad. We liave the old- Tashioned system of one assessor annually and tliree triennially, and the assessors do not assess equally. I should tliink one way to get at the; proper method of taxation in a county would be to wipe out those old- fashioned laws with reference to township assessors, and have the as- sessments made under the direction of the county commissioners ; have three or four in the county and let them assess all tlie real estate in the county. In that way we would equalize the values of lands in the county. Of course the county commissioners have a remedy ; they can cut it down, but they very rarely do, and they can ])ut k up, and yet they do not arrive at a fair ecpialization in the countv. I think that is a very important mattc^r and would be one ste[) in the direction of proper equalization. The farmer is probably no worse otT than many others; he is probal)ly as successful as many other men in their busi ness. Probably a large ])ercentage who are engaged in farming hold their own, and tliere are fewer failures and bankru[)ts than any otlier lin(M)f business, but Ww t'arnuu- is ])ayingfor taxes and loadcMl with tlu^ princii)a] buinhnis of the government and hi', has a right to com])lain. ■ He is compelhMl to pay a very considerable ])ortion of the national taxes in tlie sliap(^ of indircvt tax on what he consumes. As has been stated, the manufacturers wen' exem]it, but th(^ farmer makes up that defici- enc^y and the manufacturers, as a rule, are the most prosperous peoi)le 78 QU AKTKKIA iiKl'( nVV. in our state. There are failures, but they are the most prosperous people and are more so than any other i^hiss of people. Secretary Edge. I notice that liere, as elsewhere, speakers more or less mix up the different classes of real estate m their statements. When it is stated that '' real estate bears a tax of 17 nulls on tlie dolhir of value," it should be stated that the value alluded to is that at which the i)roi)erty is assessed, and that its real or actual value is not niterred to It should also be stated that all kinds and classes ot real estate are included in the estimate. If care is not exercised m these particulars we are likely to mislead our hearers and be indirectly guilty ot decep tion It may be correct to state that real estate is taxed at tlie rate of about 17 mills upon its assesscnl value, but it is manifestly incorrect to states that farms are taxed at this rate. Soon after the opening ot the taxation (luestion in our state, I made an attempt to obtain da^ta m relation to the taxation upon farms and also ui)oii other classes ot real estate, and I found the average rates to be about as follows : in Ches- ter county borough property was ]>aying a tax rate ot 13.18 nulls, and farm proi)erty one of 8.4 mills, on actual value. In Crawford county, the borouirhs were found to be taxed at the rate of 26.2 mill« to the dollar of a^lifty live per cent, valuation, and that farms were paying a rate of 18.4 mills on the same basis of valuation. It is also im])ortaiit, in all discussions relating to tax rates u])on real estate, that the system of valuation be also distintcly given. A laiiner in Bridgewater township, in Susqut^hanna county, wdl truthtully ivW you that his farm is taxed at th(^ rate of from 45 to 55 mills on the dollar ; unless you know that the basis of assessed value in this county is about oiK^ third of the renl value, you may be misled and may form inconect conclusions. In 1 ike manner, when a Crawf ( )id county farmer gives you his mill rate of taxation, you should, at the same time, be informed that the assessment of that county is based upon a fifty live per cent, valua- tion. When a Pike county real estate owner tells you that he pays taxes at the rate of about 75 mills on the dollar, you will be misled un- less you know that their valuation is about one-fourth of tlu^ roi\\ value. Wliy valuations for taxation are based upon these irreeruhu' plans, and why they should not nil be upon full or actual value, I cannot tell you, but give the data as I have found it. If all real estate was valued at its a(^tnal or real value it would involve no increase of taxation ; we would ])ay the same amount of mcmey annually, but the advantage would 1)(^ that we would bettcn- understand tax rates, and there would be less dissatisfaction with them. In comi)aring the taxation of real estate with that of X)ersonal or cor- ix)rate i)r()])erty, speakers often en* in taking (without so stating) the assessed value of one class, and obtaining the value of the other class from th(^ books of the Auditor General, wliere stocks are valued at their par value and not at real and actual value in the market. Thus the valuations of corjiorate lu'operty often includes much that has no mar- ket value at all, and which has no divdiciid producing capacity This valuation usually includes a class of cor])orate in^opc^rty of mannfactu- rers which is exempt(Ml from taxation by law; if this class of exempt |)roi)erty is taken into account in tlu^ valuation of corporate i)roperty, we shoidd add $200, 000, 000 to the vabu^ of real estat(>, because the offi- cial reports show that this amount is entirely exem[)t from taxation in our state. Confiniiur ourselves to the taxation of farm i)roperty and to the data obtained by the board, we find nnr returns to indicate the following : Pennsylvania State Boaup of AcntKnii/ruKE 79 That 1,558 farms situated in 58 counties of the state have, according to our reporters, an actual and real value of $14,()41),553.00, and that they pay an annual tax of $114,778.42 ; this would indicate an average tax rate of about 7.84 mills to the dollar of actual value. Our returns api)ear to show that the rate varies from ().28 mills in Northampton to 20.32 mills in Cameron, all ui)on actual or real valuations. Mr. Sea]{LE, of Suscpiehanna. How did you find the taxes in Bridge- water township) in our county (Susquehanna) to be dividcHl? Secretary Edge. Mr. Jennings, of the townsliii) named, reports the valuations and taxes about as follows, and as I ([uote from menuny I may not be strictly correct except as to the total mill rate : County tax, 10 mills ; road tax, 10 ; special road, 5 ; contingent road, 5 ; scluiol, 0 ; and poor, 6 ; a total of 45 mills on the assessed value, which, as I have before stated, is al)out one-third of the actual valuation. But, Mr. President, my object in speaking was to call attention to the im[)ortance of completely ex[)laining our statements in relation to the taxation of real estate especially, and, in general, in regard to all kinds of property. G. Hiestek, Dauphin. I am glad that Secretary Edge has brought this point up ; it is the one that struck me of all subjects that I have listened to. I never heard a speaker distinguish between country and city propert3\ I want to say to the farmers of Dau])hin county, not to delude ourselves with the idea when these taxes are ecpialized that we are going to pay any less. We will ])ay 8 mills (m actual value. The farmers of Dauphin county pay 7 mills on the value of real and [>er- sonal property. Those are facts that I have gotten from searching the records in our commissioners' office. I includ(^d two of Co\. Young's farms, and one farm adjoining our own which is among the best in the county, and only one farm that the commissioners knew as a i)oor farm, and have only taken farms that they could give me, as near as i)osible, actual values on, and I found that the farms are paying 7 mills on actual values. J. A. Gundy, of Union. I have been exceedingly interested this entire uK^rning. I should like very much to have the printed matter of Professor Hamilton's i)aper. I am glad lie was able enough to stand up and talk against this collateral inheritance tax. I am not a single man ; I have a wife and irive children, but I sav that this collateral in- heritance tax is unjust. When my friends from Dau])hin county and Luzerne county state how assessments an^ made, it shocks us. I saw a gentleman in a i^arty in which the s(m of Governor Shunk was sur- veyor. H(^ wanted to Imy a farm, and this farm run throui^li tlie valley, and when we were from th(^. liver and railroad alxmt ten or fifteen miles and he could not buv a farm for less than $100 an acns he says, I dcm't see how this is that they ask so much wln^ii it is away from the river and railroad. I have a friend up there who has five thousand dollars ; would vou advise me to advise that friend to come down Iwre and buy a farm of one hundred acres ten or fifteen miles away from the railroad, and ])av fi'vo, thousand dollars in cash, and moi'tgage the farm for the other i\\i' thousand dollars, and pay that off and live and dress in such style in the families and homes of the families holding- possession in the govenimnt ofiices of this state and railroad oftices? James G. "McSrAUiiEX, L'.uicaster county. I liav(^ been very much pleased with them that I have listened to, although the tenor of one of the essays was not the way I am thinking, but was very well ])leased to hear it. There were a few points that I would (Certainly take excep- I -fi la ''I ' ■ t,i -If 80 QrAKTKKLV KKrOUT tioii to, and that is the- iib'a in tliis day, wln^n it is an acknowhul^^-cHl fact on every liand,\vli(Ui every one of us are feeling- it, it niatters not ^vhether we are in d(^])t for our farms or independent of sueli indebtedness, when we are feeling- tht^ dei)ressed condition of our intc^rests and the de ])r(^ciated vahies of our farm lands, and it is rig-ht and proper for us to stop and think a little and not listen to all the chip trap of those who {»re politicians. When we know to-day that farms are deserted, does that mean depreciation? It is not necessary to take a newspa])er re- port for that, but in Vermont they beg-an to count the farms by the dozen when they have a commissioner whose si)ecial work is to Ull up those gai)s and vacancies. In the State oi New Hampshire it is almost as l)ad; in Connecticut it is not cpiite so bad. In our own state there are actualy deserted farms within one hundred miles from Philadcdphia. I would just say here the intimation has been thrown out that through the granges lie tln^ great force through which the farmers may be bene- fited. I would say that the farmers are tliinkimr through the grang-es, through your farmers' institutes, through your State Board of Agri- culture, and it makes no difference whether this h^gishitun^ gives assist- ance or not, it is Ixmnd to come, and it is just as sure to come as the rising of the sun in th(^ morning succeeds the setting of the sun on the previous ev(^ning. You will see that by saving the neat sum of sixty dollars in your taxes you will have eiijlit thousand in forty years. If we are wise, and if history is worth anything at all to us, unquestion- ably the intelligent farmers of this great state should i)ause and con- sider this cpiestion, in order to get at the bottom of these facts that have been so liberally and so conclusively broug^ht to our view. J. H. Landis, of Lancaster. I merely wish to say a few words brouglit about by that which has been alluded by my friend who i)re- cedcnl n\e. Fortunate reference has been made to the desertion of farms in this section and more particularly in the New Eng-land states. From statistics furnished from very reliabh^ sourcc^s to the Kennebec Journal al)out six weeks ago, says, in New England it was estimated that there was there one million more acres of land cultivated than any time be- fore. In a paper by Joseph Griswold, he showed that tliey had the exact nund)er of farms down to 1,247, and they had it so thoroughly advertised with ref(T(^nce to the few deserted farms in the State of New Hampshire, that the few farms deserted a few years ago were taken uj) duiing the ])ast ycnir. We have Inward of farms being deserted in the State of Pennsylvania and heard it referred to at farmers' institutes and othi'r [)laces, and in (»very single case when^ it Avas looked up I find they were occupied. It would be interesting to know what farms in our state are deserted. I think such talk is extremely unfortunate ; it has a ten- dency to cause the farmers to think that their ])ositi(m is far more de ])ressed and de])lorable than what it really is, and talk of that kind, I fear, has a tendency to create a feeling of discontentment and dissatis- faction among the farming classes. W. H. Bkosius, of Lancaster county. The question seems to be whether the farmer Avould be benefited by e(pialization of taxes. If we ar(^ paying about (>iglit mills on the ion] basis, and if we take into consideration tln^re is a billion and over a billion of ])roperty taxed in the real estate and the lands on which tln^ tracks of tin* P(^nnsylvania Piailroad rompany are bnilt upon, w^e are out that much which should be taxed, and back of that there is a feeling of unrest and a sense of injnsticc^ and wronor with reference to the incupiality of taxation, no matter whcither it is fifteen or eighteen mills on the dollar. There is Pennsylvania State Boakd of Agriculture. 81 a question of rigdit involved in this question, not what it will do for my farm in Lancastiu- comity, or for my friend in Chester county but a question ot even-handed justice to us all. In regard to a paifer read bymy triend in reterence to making the farmers rebellious I would say, that I w-jmld have every farmer in Pennsylvania to undi^rstand he IS a citizen ot this great commcmwealth, and that he, as wt^ll as the lab orer, the manutactiirers and all othcT ])(M)i)le, should feel that he is the commonwealth itselt, and it is for him to determine what sort of le-is- lation he is to have, and wlnui you meet here for discussions, remember that you are Pennsylvanians and glory in your citizenship. We come here to discaiss this question not to antagonize the smallest interest or any other interests that is different from ours. Let us discuss the ques- tion with fairness, with justice and with (Hiuity to all. Let us not allow our Pjeiudices to interfere with anybody (dse's interest, but deal out the (xolden Kule to all alike. As a farmer, I would wish to have meted out to others what we would have meted out to us. I claim that there can be no law that can be equitable that d(m't take those rail- road tracks those irons and ties and tax them, and under the constitu-' tion It will be valuable as real estate; tax real estate on our lands in every township and town wherever it exists; tax every telephone pole and telegraph i)ole and everything— let it all be taxed, nothing more nothing- less, and we don't intend to ask any favors from any one' i rotessor Hamilton's ]>ai^er is based, I have heard, on this subject* lo day v/e are told that these peov)le must be taken care of but there IS not one man who will buy a share of stock that don't believe that there will be a profit derived from it. There is no man ])uys a farm that don t expect to derive a i)rofit. I don't ask that all these thino-s shall be taxed mor(\ but ecpially with those that are now ])ayino- more than they should. I want to answer my friend, Mr. Hiester, that it (Ion t belittle the farmers of Pennsylvania tor ])eople to speak of us as being rebellious, because we are tlic^ power among the citizens of Penn- sylvania, and it is for us to say what shall be done. Geo. Hopwood, of Fayette county. To hold up all liigh farm land and illustrate it by making comparisons ])etween hig-h-priced land and land which is low in i)rice is manifestly uii.jnst. Farm land is not worth more than $50 an acre, to compare it with land near cities worth $2,000 an acre is unfair. This question of taxation is an im|)ortant one, and we ought to consider it from a true and fair standpoint, and we oug-ht to talk it over as we are doing here, and settle upon some i)lan that'^we Ixdieve to be best. In my own county we pay about fifteen mills on assessed value. We know that corporations do not; they only pay three mills to the state. Fifteen mills would be on the assessed values ; i^robably some of our farmers are assessed at the actual value and probably the entire assessment wcmld be about two-tliirds of our value. As triennial assessor I know something about it ; of course we farmers don't wish to be understood as paying- all the taxes. We know that it bears heavily (m liouses and lots in the towii. We don't want to say that we pay all the taxes as some demagogues would have us believe. AVe want only what is right and what is fair, and tln^ only way to g-et it is to work for it. D. Z. Shook, of Franklin. Of all the ])a])ers read here this mom- insT, I have felt that I could more fully endorse the tone of Mr. Hiester's ])ap(^r than any other one. I don't believe in stirring the farmers up or stirring any class up to excite another class. If we look candidly u a 82 QUAKTEULY EePOUT. at this we will find that the i'arniers have been favored ; we consider that we are tlie people, and if we carry out the ideas advanced by Mr. Ero- sions the farmers will ^et into deep water and have some dilHculty. Now,' horses, cattle, mules, sheep and ho^s, and everything <)i tiiat kind'are now exem])t fiDm taxation, but when the new tax bill comes up you will iind that otlier interests of the farmer will also be taxed, and all I have to say is let us look on it carefully. G HiESTEK, of I>aui)hin. I want to answer a remark ot Mr. Mchi»ar- ren and Mr. Erosions : In the first i)lace, I don't wish to be understood as castino- a slur on the ^-raiii-e. I consider that they have done a -reat deal of ^ood to the farmers, but the first gentleman I ever heard broach this subject of uiie(iual taxation was a regular grang-e lecturer, and that g(^iitleinan tried to make me believe that tlu^ farmer i)aid eig-hty per cent, of the taxes, and I suppose he put it that way to the farmers in his lectures. I don't wish to l)elittle the farmer, because^ I consider that he is a verv big man. AVhen any speaker undertakes to show the farmer that he'^is bearing an undue proportion of the expenses of the government, he should not stop there, but if he wants to be true and manly he should tell them what the government is doing- at the same time. I claim that f he government is doing: much morti for the farmer in various ways tlian the farmer is doing for the government in the little tax he pavs. I believe when the tax is made (Mpiitable lie might pay a slightly less tax, but not much, and I think it is wrong to delude the farmer that h(^ ought to pay less. I desire to give them a little of the otlier siile and I am anxious t(^ draw it out of them to-day. J. A. HERii, of Clinton. I do not want to disparage the business of fjuiiiing, and I do not want to assume that all our ills are found in the (piestion of tax abuse. It is the only way I have of making a living and I want it to be considered a good business, and I would ratli(U- init a rosy hue \\\Km it than a dark one. I don't care how much you encour- age the farmer and lie only makes two per cent., you can't i)ut a rosy hu(3 er cent. We must take facts as we get them ; ])ay atten- tion to your farm and not to both business. It reminds me very much of a soldier and ofticer in the army : when the officer asked the soldier A\ liat he was doing and he replied that he was thinking ; the officer said, you have no right to think, you are not paid to think ; we are i)aid to think, we think and you do tin* work. If we ni(»et to consult the bett<^r- ment of our condition and find that thc^re is iiKMpiality, we must en- deavor to have it reconciled, and do what we can to better our condi- tion. Every one will say that railroads running through our county are not taxed more than three mills, and I think we will find that we PENNHiLVANIA StATK BoaKI) oJ.' AGllICULTOltE. 83 rro„*iX'"^ tIT ^""'T l'^""'i=^''lv «t'tf «" '"ills. '""1 tJiat is not the only troul, ... There arc things that we have don.., and it is our own fault and tlK^re are others not tjixed who nre making a far greater dividend on then- investment I don't want to discourage fanners, and they should m,t be v.ut in the position of making eonr,.laint, bu it sluS le our desire that he be elevated and educated, and be th is fitted for the bet er pertorniimco <,t Ins work. As a representative body of farmers ^., h.v^ £ f 1 «"':^«>'l^'""^^. I tl""k this is the best subject that we can nave loi' discussion. W. H. Bitosious of Lancaster. I would make this fact broader. We are making this fight tor every real etatse owner in Penu.sylvania. Ihis fight IS being- made for every widow that owns a little house worth three or four hundred dollars. I never . rn;''^ IS the tanner hurt by over-production, why is that in the west ? i he fiut IS that they can droi) liay down at Middletown as cheap as we can sell it, and the consequence is that I have a large nuantitv lett over. VVe are one large family and we must try and pull to^'ether tor our mutual interests. There are wrongs in them all and w^e will have to pull together m order to prevent any wrons-s being committed against us. I wont sit here and let manufacturers be abused without saying something in their behalf ; it is true that there are some who have had made large sums of money, but then there are others who have not done so well. I went to the far west many years ago and I found a friend of mine who liad been there farming, and noticiii"- that there were manure j.iles on tlie |. remises on whitih he lived, I askcnl him wliy it vv-as that ht^ did not haul this out, and I says what is the trouble and why don't you liaul this manure out— everything seemed to be in a bad conddioii. I went back about fifteen years afterwards and my Irit'iid niet ineat the depot with a nice pair of horses and a nice wagoii, and in riding in the conveyance I found lnvliad a very fine t<>am and I was afraid to ask whether it was liis, because I had left him so poor He was going along and I asked him, and he said it is mine, and the l,uo-cry. W'li,.,! we srot out four or five miles, we saw some white-washed tencfcs, and I said, " u liat does tliis mean?" He said this is mine. We went on and T found tliat this man wasi hauling manure four miles from town and hauling wood there. AVe have to bear with this until we : to i a sing il.hacco or somethin<, else. We are one famdy and \'>;.» ,|;™^:l "j^^*/ am a Peunsylvauian and .i part ..f this ^-reat tamily ^\ /';"',?' I'H^^J. lasting good thin- in the time ot a i.anic ; I was m a bank « itli Ueiicial Cameron at the time of a panic in 1857. Wlum this happened Mi^ Coleman said, y..u are broke, but (leneral Camercm says, no, yo are not broke, we will lend you all tlu; money you want, and the Mulclie- town bank was gone then but he did not know it. I made u,. niy mmd that I would buy a farm ; I did have something when the panic came I was determined to get scmu'thing so that I would »';V^ /.ipL anything of this kind occurred. I bought tlu^ tann and Geneial C am- eron says, are you crazy, what did you buy that tor? He Hays, you don't know anything about farming; and he came out about a year after, was nuich pleased with a barn that I had built and otlieriuM.rove- ments that T had made. In 1873 when that paiiic came on, Duffy and Cameron were there and l)rouglit the dispatch with reference to it, and I said that T had so main- farms and I didn't owe anything there is not much money in it, but they are a good thing to have m hard tunes. LEGISLATION AND TAXATION. By Col. Frank Mantor, Conneaulville, Crawfont county, Pa. (An address at Conneautvllle Institute, March 9, 18«1.) Mu President and Fellow Citizens : The rapidity with whic-li the agricultural interest is advancing, and being the substrata to a nation's wealth we approach this subject rea'lizing the necessity of its i)rotec- tion by competent laws. Om^ Juvilanus, a minister of grace and jus- tice, and a member of the council of state, wrote as early as 1800 as follows : It is not the art of cultivating the ground, nor the science to which that art must be indebted for its perfection, but it is the relation which subsists between agriculture and the laws, the inseparable connection between good husbandry and good legislation. This trutli becomes more aprmrent every year as the farming in- terests are blending with every other branch of industry. Its iiro- gress is most rai)id when we comiiare the number of farms and average of tilled laud at the end of each decade. We can readily see the Alf branches of l)nsiiiess are provided with the a])i)areiit necessary laws to ])rote('t thcnnselves. The eori)orations of the state first S()U^'ht to throw around themselves all ntuMlful ruh's and reij^ulations, avonlini:: as far as they could any ereat material restriction ; or, to put the matter more plainly, to assume all power and restrict only such matters as were liable to hold them in check. Therefore, we find corporate bodies ftt. :*i ai)]>ealin^ to the legislative branch of the government for extra legisla- tioji. The fanning iTiterest fails in this particular, because they do not combiner as ca[)italists do to carry their point. If they did, and would make such combinations more general, we would see a different state of aliairs altogt^ther. The times indicate tliat the farming" interests are better j.»-uarded than at any former period in the iiistory of the state. The m()n(^y donated by th(i state in aid of farmers clubs is a g-reat heli> in the direction of calling' out i^ublic sentiment, and it is in such clubs where ditierent subjects are discussed and talked over that the farmer becomes most thoroug'hly introduccid to his calling-. You know more to day than you did yesterday, and when you bring- practical kucnvledge to bear on your calling you will then reap 3^our reward. AVhy this (effort, without some l)etter hope of reward or ])rotection on the iiart of the state? I notice that a general movement is being made in the States of Illinois, Nebraska, Kansas, Iowa, etc. The farmers of those states are organizing very fast ; they are erecting elevators and are opening up cooperation stores. There are 100,000 members of the farmers mutual benefit associations in forty counties in the State of Illinois, and lodges are being organized at the rate of one hundred per week. Tliey have working organizations in twenty ditferent states and will soon l)econie the most j)owerful agricultural society in the world. The grange is said to be ncm-partisan and eschew ]iarty politics, but I am inclined to think th(\y act on the scripture injunction, " That he that provideth not for his own household is worse than an infidel and denies the faith." The legislature of Pennsylvania has, as a general rule, had more of all professions in it than farmers. The legal profession has always been largely represented, and while I have the most profound respect for such a calling, yet when I read some enactments I am reminded of that laconic song denoted " The lawyer's half bushel with hole in the bottom." Every farmer has an equal interest in all laws that tend to the well being and good order of society, yet he is most ])articularly interested in any and every law that in any way goes to advance his ])ei"sonal in- terest. It is a truism that individual interest always foitifies and l)arri- cades the foreground of (wery calling in human life. It is a sort of honoiabh* s(4fishness, yet it may in th(i end prove oppressive to some. "This is a governnunit of the ])eo])le, and for the ]>eo])le, and by the [)eoi)le," and it is tlu^ duty of tli(^ citizens to see to it that no law shall be enacted that will become a trespasser on individual rights. A thonmgh unity of sentiment should exist between all tluj i)eople of a state, and an effort put forth to (mlig-hten their brethren in support of government As soon as society was organised it became apparent that other than the merc^ fact of social order must Ix* protected, the general welfare of the ]>ublic must be provided for. No summary pioceeding would an- swer th(^ ends of a civil government by which revenues C(mld be raised and dis])ensed, and by a thorough civil c()mi)act, every S]>ecies of pro- perty should be comjjelled to bear its proportion or burthen of taxation, becaus(^ of its having, nndor the laws, a common protection. To ecjual- ize such burthens and jdace all classes of i)r()perty on an e(pial footing, it was the ])art of great wisdom of those who were calbnl to revise the constitution of this commonwealth to insert a section which reads as follows : .1 86 QUAJJTEKT.V TiElM)irr. Pennsylvania State Boakd of Agkiculture. 87 Articlk 9. {Skctton 1. All taxes shall be unifonn upon tlie same classes of subjects witliiii the territorial limits of the authority levying the tax, and shall be levied and collected under genei-al laws, but the general assembly nuiy by general law exempt from taxation public property used for public purposes, actual places of religious worship, burial grounds not used or held for ])ri- vate or corporate profits, and institutions of purely public charity. Hkction 2. All laws exempting property from taxation otlier than the property above mentioned shall l)e void. ISkction S. The power to tax corporate property shall not be surrendeied or suspended by any contract or grant to which the state shall be a party. • Such is the exact laiig'UJi^e of our constitution, and you will observe that the sections under the article have been drawn with ^reat preci- sion. The change from a system of taxation, and the raisin^- of reve- nues, as was practiced under the old constitution, is very great, for under it there was no i^ositive declaration or restriction in the constitu- tion, and every form of taxation and exemption was regulated by laws ; but under the article which I here quote, you will see the legislature possesses nearly an unlimited power, yet guarded by constitutionl re- striction. Now, it is not my par])Ose to assail corporations, for in (h)ing' so I find that among some of the very largest — some who obtained cliarter privileg'es in their outset, getting j)rivileges that would be imi)()ssil)le to g:et to day — fall back on their charter rig-hts and a[)[)arently defy leg-islaticm. This independence on their [)art can be maintained so long" as they avoid asking any extra privileges. As a luoof of this, 1 refer you to article XVII of the constitution. In section 10 it reads : Skction 10. No railroads, canal or other transportation company, in ex- istence at the time of the adoption of this article, shall have the benefit of any future legislation by general or special laws, except on condition of com- plete acceptance of all provisions of thiis article. I will here name two of the largest cori)oratiuns in this state that w^ere so thorouLjiily secure by having- all the rights and privilcg-es, that they have never askcnl any assistance at the hand of the legislature. The railroads I refer to are the Pennsylvania Central and the Jieading railroads. Those roads had for long", long- years knocked at th(^ doors of our legislature and any and every demand was g-ranted, until their cor]iorat(' reservoirs were filled to overfiowing. The new constitution of 1863 placed a check on further demands, and to the present they have never acce|)ted article XVII, and therefore have no rigrht to ask for any legislation. We grant you, the legislature has no power to make any chans could thert unload their ii-on <>r<'s from the Lake Superior region at the furnaces in Pittsburgh, and be loaded in return with coal and manufactured articles for the lake ports and the great northeast. whi(di is so rapidly being filled with an enter[)rising t)o[)idation. il 88 * QuAirrF.ia.Y PiJ'I'out. Iiist(uul of tho day of canals and Avater transportation bein^r over, it is i^robable that a return to these early methods of tninsportation will soon take i)laee, and the river system which brings rc^insylvania into connection with the g-reat Mississippi basin, and a canal from Beaver, which would bring- her into connection with the lakes, are to receive more and more and attention. AVith these improvements made in the water-ways named, and fair railway rates secured by honorable h.^gisla tion, there seems to be nothing to prevent the continued i)r()sperity, and ev(3n continued supremacy, of western Pennsylvania in many im portant branches of industry, Pollowino- those sus'srestions made bv Mr. Carnegie, the legislature '■into ])assed a bill forming a commission and making an appropriation of ten thousand dollars to defray the exjx^nses of a survey for a ship canal be tween the lakes and the river. This commission was a])point(Hl and l)roceeded to investigate the most feasible route from Pittsburgh to Lake Erie. They have reported their observations to the legislature, and, while the report is very voluminous, shows conclusively that it was di'awn lu^arly or quite to a mathematical certainty, that such a (liK*t or water-way can be made feasible for transportation of craft with a carrying n^.easurement from 1,000 to 1,500 tons. The estimated cost of this canal is thirty millions of dollars. Passing over the summit n(^ar Conneaut Lake, tlience along the Conneaut creek valley by tln^ way of the old canal to the harbor at Erie. The other route by the way of the West Shenango, entering the State of Ohio some two or thi'ee mih^s south of Pennline, and kee[)ing the lower edge of the western water shed and terminating at Conneaut harbor. This is the shortest and least expensive route, costing some four millions of dollars less than the Erie terminus. We have already pointed out to you the advantagf^ of such a water way, and while we have much faith that in time the work will be accom- ])lislied, yet we are not unmindful of the powerful o])[)()siti()n that will array itself against the project, in the way of the several railways that are engaged in carrying freight l)etween the lake and Pittsbuigh. This project, when carried into effect under tln^ unalterable law in competition, Avould lessen the ex])ense in the transpoiting of freights and would mon^ generally distribute the money into the hands of the general industries. Any system or corporation tiiat tends to destroy any portion of the industry of this commonwealth, to buildup ]»rivateor corporate indus- tries, commits a grievous wrong against the state or any individual thereof. I am giieved when I witness that undue discrimination has been exercised against a living and active capital; capital has been driven from our state and taken ui> its abode in anotlu^- state. Tn Maryland, at S[)arrow Point, a [)laiit has been established for the man ufacture of steel and an hen in active operation will employ more than r),000 men to ccmduct its business, so it has become evident that it is not merely cme section of the state that has felt this significant l)ower, but other parts of the commonwealth are inocndated with this same deadening virus. The people throughout Pennsylvania were at one tim(^ })r(MTght to believe that a competing line of railioad, known as the Soutli Penn railroad, would open up a com]i(^ting thoroughfare from Philadelphia to Pittsburgh, and thereby remedy many of the wrongs in transpoi'tation over and through our state. But tlu^ master pi(»ce or gov(n-ning forces saw by this course that injury would l)e done, and by the use of large money on the ono. hand, and intimidation on •J Pennxylvama Stati: Boaj^d of Agriculture. 8!) til,, otlier, has cause,! siul, nuh„a,l t,. uhun,loa its work aiul Ihovp ,.n r fir -X fl f f t'?*'"1' ":; 'liFi"n"'^iti«'" on tho, part of certain LiilKucIs m th s state. It is to the interest of ,).ir fariDers mechaiii.-s artisans aiul all others t,, brino- rn-.niiets to their ,loors L n^a as ,' ossi' ble. iherelore, every nulustry that is bnilt up will , ^et their re' q.n,...n,,nt^. And every indnstry, liower lar«e or small that is driven tn.in the state lowers the co,n,n,3rcial thermometer and ro s the oeo de 0 what they sh,.nld be entithnl to. We conhl point out to y.niMf we 1 ad the time where certain industries in a-ri culture have been aban doned, and where he value of laiuled estates kei-t pace in va ue wUh Now, turnino- asin his proi„.rty. Several attempts have been made to correct this evd Oominissnins have been raised by the legislature, sanction,,! bv the executive ot the state. These commissioners went forth to ,!utv and after mudi labor a plan was agn^ed m.on by them, and, in ,1,,,. tini,- their report was presented to the legislature. That aug<.st body ,.f bolons paid but little or n,) attenti.m to the report, and it soon found itseit taking a long sleep- a sleep from which there was no awakenin-- 1 eniisy vanians are a slow people to make changes in their purposes and their laws. It is puintul to realize that t,., lay some imp,)itant pro. visions^ in the revi.sed constitution, provisions bearing directly on the protection ot personal rights, provisions that would, if prop,.riv le°-is- lated on, have closed the clamor and ,,uiete,! the pent up distrust and discoiit<.nt among our peoide. But from s,)me unexplained reas,,n those measures were never legislated on, and stand in the organic law th,. same as wlien that great law was sanctioned by the ma"-nificent iHa.|,)rity ,)t one huiuliv,! and forty f,)ur thousand. Ourcmstitutioii has failed to be call,.,! into activtMiperatiim because ot th,. soiv neglect on the part ,)f those who arc; called to represent us Su.h lailures are !)y no means creditable to their intelligence and smacks ot cowardice on the one hand, or l)ribery ,)n the otlier (t,') this rule there may be an occasioanl exception). I admire the stand taken by His Excellency Governor Pattison in his inaugural address; it is the expn^ssion of on,; who is sworn t,) en- force the constituti,>n and tlw laws, lie said : "The present executive will strive t() zealously to maintain the cmsti- tution and tho laws. Onr constitution as approve,! l)y the people, is in many respects, a iiuxhAl of organic law. It breathes the e.ssential spirit ot ]),)pular governrii,.iit tlir,)ugh all its members. By it the general welfare is s,)ught to be pr,)in(jted. In it tli(.re is no hostility to any in- terest, indivithia! or coriiorate. It was drafted by a conv(.)iti,)ii cm- trolled l)v as noble and choice charactt a nuoried woman or insane person, or at the office, usual place of residence or business of each person, a written or printed notice recpiiring such person to uiake out for the assessor a statement of property which by law he is required to list. And section 2748 reads : Every such statement sluill ))e verified by the oath of the person uuiking the same. You will see that under the fore^oin^ sections all property subject to assessment must be listed ami sworn to. Ariotlu^r very important matte) i w ill wier to here, and may refer to hereafter. That is the law govern iui:;- railroad comp)anies. Section 3770 : The county auditors of the several counties in this state in which any railroad company now lias or hereafter may have its track ^1 Pennsylvania State BoAim or Agricultuue. 91 the auditor of Mu,h -nnty ll3'"rstiu"ferch Wu'! '" *"" '"'"'"' ' ""'^ urouertr ^^}^!i ^^IV'"^'''^*''^^"^^*^" ^^^^^ restri..tions as all other propLity. Other states have enacted more stringent laws than Ohio hei mauy laiiioads, dehues all the i,roi)erty of railroads in the ri<-lit of way, side tracks, turnouts, stations to be i^al estate and remii r es . all such property shall be listed and taxed in the severa -ounth:^ towns, villages aii.l d.stricts-that all station houses, depots Si ne shops and other buildings belonging to the road shall be tiixJd 1 e com.ty, town, village district .,r city in which the same are located " t^ t m T '1"?^ t" r^"/'?™ "^« ^*=^t"t'^« "f New York, which r ea.l that all lands uithin the state, whether owned by individuals or cor poratious, shall be liable to taxation." This makes all iv Imul beds ties and rai s, and other fixtures attached thereto as nuich e L e rty • ?f Ihe^^Stt^^i^? iKrilr- -^-^-^'i-.^^- f— - «tc., al.e ipai^ We have m the State of Pennsylvania, as is shown by the report of ^^.}T'^^l t ^"l,T"^l Affairs, 10,820 miles of railrold, whi.'.h cost ,.^, 1 A- If r-'r-xi;j, >vxiit.ii IS paying' lor ail tlie mcidt peiises and for the runnm- ot municipal or state Government ' Allow me to brin^ a (piestion home to your own door. We have here m Crawlord county the Pittsbui-h and Erie railroad, which i)asses over the county a distance of twenty-five miles ; w(. have the New York Pennsylvania and Ohio railroad passin- diagonally across th(. county some^ twenty-seven miles ; we have the Titusville and Cony railroad of about twenty miles ; then we have the Titusville and Union railroad about nmeteeii iniles^: the Meadvilh. and Linesville railroad twenty-two miles ; we have the Meadvdle and Franklin Branch of the North Penn and Ohu) railroad about fourteen miles, makin- 107 miles of railrojul Now while those roads (>ff(U' g-reat facilities for the transportation of persons aiu property, 1 am unable to understand why tliey should not Deal- their shan^ and burthen of taxati(m. I am not informed, nor have I any data at hand from which to calcu- late the cost ot these roads, but, making a rouro])erty that belong directly to the farming classes very largely, and to ])lace the nominal average value to each and tli(^ amount such value will j)n)duce. We will commence l>y saying 600,931 horses, average value *03.H7, amount in value, 5^50,972,613 24,021 mules, average value Jt<104. 18, amount in value, 2,502,508 938,665 cows, average value *28.06, amount in value, 26,338,940 852,267 all other cattle, including oxen, average value f 23. 67, anu)unt in value, 20,173,160 945,002 sheep, average value $3.36, amount in value 3,175,207 1,193,415 hogs, average value f7. 22, amount in value, 8,618,456 Total amount, $117,780,884 Of this amount, as T have just noted, $42,181,342 is taxed, and $76,- 680,850 is not taxed. Can any one give any reasonable^ 'argument why this huge amount of personal and corporate i)ro]>erty should notlx^ar its ])r()p()rtional share of tlie taxes of the state? Sui-ely it is all |)rotected und(a- the laws. Couits of justice are open to punish any offender who Pennsylvania. State Boaud of Agkicultui^e. 03 I may trespass (m the rig-hts of another by appropriatino- such iuoi>erty tor his ()wn use, and yet not one farthing- of revenue is given back in return tor sucli ji)r()tecti()n. Now let us in-esent anothei- ((utistion for your consich^ration We have m this state 217,000 farms. AVe can justly computi^ the personal proi)erty on those farms to average not less than $1,000 each. ^ In this invoice are all houseliold goods, including pianos, organs, oic, and all agncultuial implements, such as mowers, reapers, plows and harrows and all carriages, wagons,carts, sleighs ami farming mills. This would g-ive $217,000,000. And stei>ping from the farm into the cities, villages and small towns over tln^ state, and taking in like pro])erty, you will have a sum of money that will run into thousands of millions of dollars. Yet you ('omplam of high taxes or unecpial taxation -and you have a rig-ht to do so ; but you should see that proper legislation is had to the end that justice shall be ecjually meted out to all concerned. I liave referred you to the value of stocks of manufacturing- corpora- tions not subject to taxation, amounting to $150,000,000. I will here refer you to the law which shields such property. It reads " A further supplement to an act to provide revenues by taxation." This law was passed and ap])roved the 7th of June, 1885,' (see P. L. p. 193) , but the g-reed of the cor[)orations was not satisfied and this law was reenacted and approved the 1st day of June, 1880. You will find in the twenty- first section of the act and closing i)arag-raph of said section the fol- lowing : And provided further, That the provisions of this section shall not apply to the taxation of capital stock of corporations, limited partnerships aud joint-stock associations orj^^nnized exclusively for manufacturing purj)()se8, and actually carrying on uianufacturinj^ witnin this state, excepting com- panies engaged in brewing or distilling of spirts, of malt liquors and such asengageandexercise the right of eminent domain (P. L. 188i), p. 431. etc). The amount herein s])ecifi(Hl is put down at $150,000,000. I am fully satisfied in my own mind that if a con-ect inventory could be had it would reach nearly or quite $200,000,000. The same law exempts all building and loan associations to the amount of $75,000,000. Who can o^ive any valid reason why this amount of nnmey sh(mld be exemi)t? Building and loan associations are in stitutions not wholly made u]) of men wlio desire to get for themselves a home, but shai'es are taken for the investment, out of which they can make large interest. It is very evident that there is an apparent discrepancy in the mode and manner of levying taxes in somti of the counties in the state. Some sections which levy a larsre mill tax make their assessed valuation of one-half or two thirds of the real value, while others which make a levy of less mills, base the rate of levy upon nearly or (^uite the full value. I will i)resent to you the following list of counties, the rate of whicrh is g-iven in mills u])on the actual value of the farms, as obtained from the county coiumissioners and otlna* ecpially r<'lial)le sources. It is the result of statistics gfathered by Hoji. Thomas J. Edge, Secretary of the State Board of Agriculture, and is intended to show tlu; rate of taxation on the actual value of farms. in each county named, and I ask your in- dulgence while I note them. They are as follows. : ■^1 I 1^5 ! J I ,•1 ■ 94 QUAIITEKLY RePOHT. Northampton, 6. 28 mills. ifi^i^'*^ ^-^^ :; Lancaster, ^- '» ^^ York, ^:^^ ^ ^ Dauphin, ^f^ \^ Cumberland, ^-JJ^ ^^ Adams, 7.0^ ^^ }!^^i-»^' ?-J^ .c ( -entre, i' V:? » i^,,,.ks 7.40 "■ Beaver, '-y Columbia, • 7. 69 || Montgomery, 7.»0 ^^ Wvomini^, '• °* Mei-cM-, 7.98 ;| Armstrong, ^-^^ [| Northumberland, 8-^4 Berks, H.06 ;; Westmoreland, ^-^^ Snyder, H-09 - Sehuvlkill, 8. 10 '^ Perrv, 8.47 - Chester, 8.54 ^^| Wasliington, 8. 94 Pike, . i).oo ;; Lycoming, ^1^^ Franklin, 9-19 " Crawford, i). 20 || Delaware, 9-^2 Erie, 9.57 - Somerset, 9.35 l^radford, 9.88 *' Blair, 10.08 - Lackawanna, 10.08 J elTerson, 10. 13 Clarion, 10.26 '' BulHvan, 10. 70 ;' liawrence, 11.05 *' Juniata, 11.27 Clearfield, 11.40 '* Tioga, 11.87 '' Fulton, ' 12.08 '* Carbon 12. 24 " Elk, ,...13.40 ^* Clinton, 13.81 '' Indiana, 14. (iO '' Forest, 14. 64 "• U unt ingdon, 14. 70 '' Fayette, 15.00 '' Venango, 17.20 Warren, 17. 70 ' * Wayne, 19.00 '* Susquehanna, 19. 12 "■ Cameron, 20.32 '* ' These returns include 1,558 farms situated in 59 counties of the state, and many of tli<'ni are actual sales within the past 18 montlis ; their total vahie is $14, (Ml). 553. 00, and the total amount of taxes paid on them is $114,773.42; tliis indicates a tax rate of 7.84 mills upon their actual valu(?. The total amount of tax above stated includes the tax ])aid upon tlje personal property taxed on the same duplicat(^ with the farm. Tliis we find, taking the average of the state, is about ten per cent, of tlie value of the farm. It therefore follows that the amount of money upon Pennsylvania State Boapj) of Agriculture. 1)5 ^vhlch tin. above tax is levied is ten per cent, more tlian tlu^ amount stated : or, m other words, tlie total tax of $114,773.42 is levied and paid upon i)roperty valued at $1(U14,508.()0. This will make a tax rate of rn ,^^ '^^^ , uctual value ot the property assessed f.>i?/ f ^ Hveraoo niill rate of a county, the values of all the fai 1 s K^tuined are added together, and the taxes i»aid on them aiv also add(Hl togY^ther. ihe total amount of taxes, when divided bv the total valu(M)t the larnis, gives us the average mill rate of the coinity when our returns are^ taken as the basis. In like manner the total of all taxes I >ai( I m the states Nvhen divided by tln^ total vabn^ of the farms, will give us the average null rat(. ot tax to tin. dollar of actual or real value There were, two bis introduced in the legislature at its last session, namely : House 13illJVo. 10, or the Grange Bill, and Housc^ ]3ill No. 19,introduced ])y Mr hhepley. At the time of the introduction of these two bills 1 examiu(Ml their provisions very closely, and found much in each ot th(3m to approve and much to disap])rove, and while I will not stop at this hit(. hour to enter my criticism because^ both bills failed to ])ass-i think had either passed His Excellency th(^ Governor would have disapproved it on constituti(mal g-rounds. A commission was ai)])oint(Hl in the last legislature to draft a bill to be r>resented to the next legislature to revise the tax laws This com- missum is C(mi])()sed of some of the best men in tlu^ states After much hard labor and search through tln^ tax laws of many of the states they preparde a voluminous report that was signed by a ma- jority ot the commission. At the sanu^ time three minority re| .orts were also ])ublisli(Ml On January 22 a bill was presented in' the House of Kepresc^ntatives at Harrisburg setting forth the mode and manner for Jissessmg i)ro[)erty and classifying the proi)erty to be assessed I will here note, briefly, some of the im[>ortant features of this l)ill : First all rcial estate of every kind or descrii)tion. The following i)roperty' such as lioi-ses, catth* over tin; ag-e of three vears, sheep aiuf swine over the age of one year, are to l>e listed and taxc^l. You an ill notice that in tin; ass(^ssment of this i)ro|)erty, her(^tof()r(^ hcn-ses and cattle Avere tjixed after they were four years old, and the reductitm of tln^ years will give a large margin from which to collect taxes, and that of taxin<»- sheej) and swine Avill swell the list and add to the revenues of the state hundreds (^f thousands of dollars. It will |)rov(^ (piite too irksome a task to go into every minutije of this l)ill, iind I must content mys(»lf in i)resenting so much of th<^ pro- perty that is to be listed and classified as I find under section 5, whieli T)oints out the duty of the assessor in his intcuToiratcnies. Section 5 reads as follows : " Section 5. The assessor of each ward, townshi]) and liorough of this cominon wealth shall mak(^ special impiiry of each * taxable person,' and require a full and ccmiplete answ^er from each 'taxable person' or his re])resentjitive agent or attorney to the following- interrogatories : First. The number of horses, mules and asses over three years old owned or held by him or her. Second. The number of neat catth; over three years old owned or hrld by him or lier. Third. The number of shee[) and swine over (me year old owned or held by him or ]wr. Fourth. Th(» iiuniher of oumihuses, hacks and j>leasure carriages owned or held b}^ him or her. fi I w V''i '« / 96 QUAKTEllIA llErOKT. Fiftli. The number of all kinds of nuiscial instruments OAvned or lic^d by liim or \wv. ^ ^ • Sixth. All boats or water craft owned or held in trust by him or her wherever registered and whether at home or abroad. Seventh. All numeys and credits owned or held in trust by liim or her. Elqhth. All goods, wares and merchandise owned or held by him or her l)<^n<;'ht or ccmsigned with a view to sellini^" tJn^ same at a proht. Ninth. All material owned or held in trust at the time of listing- [)roi)erty for taxation with a view to being used in whole or in })art m any process of manufacturing, retining, rectifying, brewing, distilling, pressing (n- ccmibining. .^ ^^ i ^ Tenth. All products of mines, quarries, oil wells, salt wells and nat- ural gas wells owned or held in trust at the time of listing. E (event h. All machinery not taxed as real estate owned or held by him or her. Tirelfth. All tools and inii)lements owned or held by him oi- her. Thirteenth. All other ' tangible person property' owned or held by him or her not (exempted from taxation by this act. Fourteenth. The annual income derived from trades, professions, occupations and investments of money or capital. The assesor shall fix the value of the property of each "taxable per- son" in conformity with the provisions of section three (3) of this act, but when the value of " tangible personal i)roperty" in the ownership of each " taxabh^ pers(m and made taxable for local ])ur[)Oses" by this act shall not exceed three hundred dollars ($300) no tax shall be assessed thereon. The assessor shall enter each answer of each taxable on blanks which shall 1h^ furnisluMl to him by the board of revision of taxes or county commissioners, which blanks shall l)e returned to the office of the county commissioners or board of revision of taxes and arranged in order convenient for reference and preserved. The county ccmimis- sioners or board of revision of taxes shall cause to be entered on the assessment books the aggregate value of each class of property as fol- lows : " tangil)le i)ersonal proi)erty" on oiu^ line, " moneys and credits" on another line and " incomes" on another line and a like entry on all certifitnl copies of adjusted valuations required by law shall be deemed sufficient. It is very evident that on a question of so much moment and one in which every (me is more or less interested, no matter what law may be enacted and approved, much dissatisfaction will exist, but I am dis- posed to think that in time we will arrive at a just law that will make every species of ])ro])erty bear its equal l)urden of the expenses of the government. At the same time our lawmakers cannot proceed with too much caution, fen- too much legislation is hurtful, and if it is at- tempted to [)ass that which proves oppressive to class, tlu^ lawmakers will find themselves in a vast labyrinth that has no ending, and it will bring on a confiict that will hamper busim^ss and business interests and destroy Imsiness forces. If you cannot get all you desire, take that wliich will b( st satisfy you for tln^ time being, and await an opportunity for some other enactments which will meet out the desired end. The (piestion of taxation is by no nuMins a new one, and to relieve the biird(m tln^ legislature in 1866 took the tax off real estate for state ])urposes, and in 1873 took the tax off horses and cattle for state pur- poses ; and so, you see, a step was madc^ to relieve the farmer and tax- X^ayer generally. But so long as the farming elements are demanding PeNNVSVIAAMA 8TATK licAlil) OV AgKICULTUUK. .,7 iiig utensils, etc X 1 e exln .t t' T^ '' • ""'f/ "'^'^^^l^*^ ^^ke farm ception if 1- lilroad 1 o 1 J, ^ T *^^-^'^ i'"'' t'^^y camu.t take ex- classes of thei™^^^^^ ""' «t'^t« select certain sn,>pose some o/ZeT. .S t/i^e rih" t oi: ^ if "'"^ 'f ^T^'*- ^"* rather tolerate a nrivite w. nPo fi 1 >'*"", *''''* *'"' 1=^^ would all such persons t at so ii^tu^ Z^i^-"^ T^' ^"T^'^ '''^''^' *" mote fro,n our brother's eve s, Jl. l. ^'^ "I '"'}*''' *" ''^'"^'^'^ *''*' I'luck the beam from our mm ■' ""^ ^'''' '"'"^ '^'^'^ ''^'""•1^' '^'^ ""^«t ^I'^t times threatened the dism<.mbering- of thJ g wn ment Tn^Ht, hV that fostered wron^, and every footfall tlu/bSTvil ac^a n4 'u ^^t tod have had t<. ste). down and out. Now in the establ slmW farmers; allnuu-es, kniffhts of labor, the grange Ldmechlc^^^^^^^^^^^^ tion UM.ons here should be used that care whic dll keen them ^^^ liarmony with every other class of persons; for the fa mer cannot liv and prosper without coiiperation with the mechanic- Sercr,,-,^^ per without the aid of other ass.x-iati.ms and callings ^ it IS iield by some well informed peisons who have studied this t-iv Uwthat':^:.dTr'fi •'>"'^*"'^;'" 1-1'n. tl.utyo„c,";hriH,tmaie Ip, ri.\ I <. '^^''''1'""';*^ !"' ^''^'^ evaded; that pronertv w.ml.l be ho LI Vr"1 '"^irf^ It '« ^T triie that laws .lonot" mak me , c omnntted, yet it is , n.. to society that laws shall be enacted to t lie end thiit justice may ho meted (mt to tlu; offender In House Bill No. 10, known as the Grange Bill, I find the followin- tZr'''' '''^ ''^"I'^'-ty ^^'1'''^'' '■« '-'^'luire.! to be retimied to the a^: A law of this character would be of non -effect— worthless and xve m.ght add, unconstitutional. The right t., <.,ntract is amono- tl e sa cred i.rivileges guaranteed to the citizen, and "no expos/ fm7o law or a law to impair (•ontracts" can be made under our sacred l)i]l „( ii:/"'f;. f.;'';.'^^^^^ oood, and you would or tbird person tbo c^aiin ot tln^/J^ ^^^^ ^j^ ;,t wbo faib.d uroceed ai>ainst sucb i)roi)erty tor tbe tax noi i mt i y lo Xrn the same as a couspimtor to del..u^^^^^^^^^^ .itir riXris=^; :otS:unisWsi..'tl.e ta.es "^ t:,r to obtah. a revenue f^^^e^^^^;^^ i^Placea b^ ??:!;' iSnJto ;rL luli'; (irS^^nlr;;::.^^^ the Auditor Oen^ era! Tr viui n ade an estimate of the total auH.unt uecessary tor state nm;.(.ses u -iveu time, notifies the county commissioners ot each m V what h^ r />ro raa share of the total amount is. As for m- ^c^ Cl^-t'ird cLuty We will say f^^^^l^^^^^^^ fliPiv m-o rata sbare of tbe revenue needed hy the state^is one oi xwo tired boLand dollars. Now tbe Auditor General does not make a d eS lev^^ of tax, but be notifies tbe county eommissioners c>f Craw- W Iwy^hat tbat county must ndse, ^- ^^ ^^^^^^.^^ n *Wven year one or two bundred thousand dollars ibe county com mrJsi^n^^^^^^^^ Crawford county in turn make an estimate on tins same Xati on i)lace(l upcm every conceivable description of taxable prop- .ni of iu' amount required for comity purposes, of tbe amount re^ auL;.l for state purposes, for school purl)oses^ for road purposes, tor ^r urposes and for municipal purposes Then the ccminnssioner^ !.olbH?t all tbat tax, levying just one rate ; tbat is the nm^^^^^^^^^ of mdls total tbat will be required to cover all tbat -round. Iben tbe amount is distributed to the different authorities as the ^^l^^^^'. J<>f ' l?,^;;^ municipal, etc., accordin- to the estimate they bave submitted of tbcui needs to the county commissioners. , i . i 4. 11 4- You see in this" way, you have a central single board tbat collects all taxes ; there is no division of resi)onsibility ; a man knows when be o-oes and i)ays tbe county commissioners ten, twenty or tliirty mills, or whatever the amount is,^tbat tbat is all tbe tax be will liave to pay for any purpose whatever, and tbat he is done. . . Besides this, when an estimate is made to the county conimissioners for tlu^. amomit tbat will be recpiired for these several objects, publicity is o-iven to the matter, an ()in)ortunity is bad f(U- public discussion and the transaction is more open for inspection. Tben, too you are not junioycMl with a system reciuirino- a number of tax collectors; one tax collector does tbe whole business. , e^ :\ a \ f This system of taxation contemplatc^s tb(^ taxing of land, ot coal, ot oil and anv and every form of personal i)roperty tbat has a value— any- thing that has a market value. You see tbat is ecpntable ihis sys- tem would lighten the l)urden of taxation because Crawford county would tax every inch of raiboad property tbat is in it, which they now do not tax at all. It would tax alllhe telegapb and telephone wires that run tbrougli tbat county. That would make radroads and tele- graph and telephone lines bear their i)ro])ortion, not only of state taxes, but of county and municipal taxes as well. Now, in conclusion, I will take occasion to (pioti^ again from Gover- nor Pattis(m*s inausrural : and as it is in perfect baiinony witli tlie sentiments I have expresscnl,' I feel it will not only strengthen all 1 bave said, but will aid you to fully comprehend tbe real necessity of more thorough legislation. V "Of scarcely less im])ortance is the equalization of tbe burdens ot Pennsyt.vania State Boaiu) of ArmicrLTriJK. 99 taxation. For many years ther(^ has been a well grounded com[)laint against tbe insuliiciency, the inequality, the ineffectiveness and tbe partiality of tbe tax laws of tbe state. " The buiHbms of the government should be equally t«;baied,or at least as nearly so, as human laws can contrive. Since our legislative ])olicy is to tax juoperty rather than persons, there can be no possible excuse for selecting tbe bouses and farms of tbe p(x)i)bi to bear ten times as much of tb(^ public burdens as ])ersonal property. If things, and not perscms, art^ to be taxed, common (upiit^' would dictate that the aggre- gate of a man's [)ossessions, irrespective of their kind, and sini[)ly ac- cording to their value, should bear the infliction. What delinquency has real estate been guilty of that it should be thus unfairly discrimi- nated against? It is the most ]u<)ductive, the most needful and tbe most stable form of ])r()])erty. It adds most to our wealth, remains always with us, shelters and sustains our ])eople and at onct; attracts, and, if justly treated, n tains and multi])lies poi)ulatio]i. There is a baleful vice in the form of government tbat inflicts a ])enalty ui>on lands and bouses, and makes their ownership difbcult and burdensome. The farmer and householder has no right to any exem])tion from his fair share of the public expense, but be has a right to just and im])artial treatment tbnt cannot l)e ignored ex(^ept at a cost of social tranquility. The inequality referred to is j)atent to every eye. There is not a citi- zen in the commonwealth ])ayiiig a tax upon bis home or farm who cannot point to some neighbor owning many times as much in i)ersonal goods and idle ca])ital wbo yet l>ays an immeasuiably less amount of tax. It is useless to answ er sucb undeniable facts by any intricate the ory as to tbe ultimate distrilmtion of all taxation. Such unjust discrim- ination is working untold evil to our people; is o])i)ressing tbe poor; is exempting tbe rich ; is, day by day, establishing unfortunate social distinctions tbat are foreign to our ])rinciples of government, destruc- tive of tbe bapt)iness and energies of men and blasting the ho])es tbat we bave all iirayei-fully entertained of our country bc^coming the liome of a contented and ba])py ])eo])le. " Thanking you kindly for the marked attention you have given, I now bid you good night. REVENUE AND TAXATION. (From the MessaRe of Gov. .lames A. Beaver to the General Assernbly, .January ♦!, 1891.) The question of tbe manner in which our revenues are to be raised (Continues to be one of absorbing interest to tbe people of tbe comnum- wealtb. A commission a])pointed under a joint resolution aiqiroved the 25th day of May, 1889, has given careful consideration to this sub- ject and [)repared a report embracing tbe views of all its members, showing a wide divergence of o]>inion as to the principles ui)on which, and the mi^tbods by wbicb, taxes are to be levied and collected. Tbe majority of the c(^mmissi(m agreed iqion a bill which ])rovides for tbe levying of county and 7nnnicii)al taxes upon tbe several kinds of ])rop- erty therein specified, tbe ])rincipal object of which is to bring cor])o- rate and personal ])r()])erty within tbe taxing ])ower of the municipality, with a view^ to relieving real estate from allegcnl excessive burdens. The minority of tlie commission dissc^nt from tbe view* of tb(^ majority t Ui ■ M \T ;le"ii ely in^^em uduntte I on all hands hut there s hif4 alK in ie^iter or less degree, but the extent ot that ine . ■ Until t is ditierence is definitely ascertained it is impossib e to ai.jdy a em dv even if it b*. conceded that a remedy is needed. The report of he mijoiity It'^^ves the entire question of the collec ion ot state rev- enues to be governed by the laws which now exist. This is xvell inas- mi" h as u present revenue laws are better understood and are being mor sat s a'torily enforced than ever before. The ^'f «""«« ^•^Jf^^f under them are constantlv increasing and it is believed that the pio- vSms f the act of 1st .if June, 1889. will y<^t more largely mcre^ise r^e evemies wiiich will be collected under it. The final settlement in the Supreme Court of the United States of what has been known as the "loans tax cases," has largely increased the revenues for the i. resent year and insures a definite income from this important source. In view of the re venu(> which nuiy be reasonably relied upon from this source in the future it seems to me entirely feasible to divert a i)or- tion of the revenues now flowing into the state treasury, uiuh'r tiie pro_ visions of the act of the first of June, 188!), to the county treasury. 1 recommend, therefore, that of the state tax ui)oii personal iir(>perty col lected under the sixteenth section of said general revenue act, the one- half part thereof be returned to the several counties ot tlu- (-oinmon- wealth in which the same is collected, instead of the oiK'-third part as vu-ovided by the said section. I recommend, also, that the_ laws relat ill"- to licenses for the sale at retail of licpiors l)e so amended as to autli- oiT/e the entire amount raised from the granting of said licenses to l)e paid into the treasury of the municipality within which the privileges conferred by the same are to be exercised. T am also ot the o) union that if careful discrimination and reasonable economy l)e exerciese(l in the matter of appropriations to so called charitable institutions, tiie annual aiipro|)riatioii for c.mimon schools may b<^ increased from two millions of dollars to at least two and one-half millions. These changes will iirovide an additional fund of at least two million dollars annually in relief of local taxation and will do so at once and with a certainty based u|)on well settled priuciides. v i ■ In order to replace the amounts thus recommended to be api>lied m relief of local taxatiim, I resi>ectfully recommend that the amount of the tax on corporation stock to be i)aid into tlu^ sinking fund under the twenty-eighth section of the general revenue act of June 1, 188!), be re- duced from the one-half to the one fourth i)ait thereof. This amount, it is believed, will be amply sufficient to provide for the interest of our small remaining debt, and the assets in the sinking fund are am|dy sufficient to itrovide for the payment of any of the loans of the common- wealth which can, under tlu; i)rovisions thereof, be .paid for several years to come. It may l)e ]>roper for me to state that in these recom- mendations both the Auditor General and State Treasurer, who have given careful consi(h^ra.tion to the subject, in tin? main (concur. Pe.mnsylv.\ni.\ St.vte lio.\iiii or .VwiticuuiTHK. TAXATION. 101 (From the InauKurul Address of Gov. II. K. Pattison, January 20, 1891.) Of scarcely less iiiii)ortance is the equalization of tjie burdens of tax- ation. For many years there has been a Avell- grounded complaint against the insulliciency, the inequality, the inetfectiveness and the partiality of the tax laws of tht^ state. The burdens of the <^overnnient should be equally shared, or at h^ast as nearly so as human laws can contrive. Since our legislative policy is to tax property rather than persons, there can be no possbile excuse for selecting" the houses and farms of the peoi)le to bear ten times as much of the [)ublic burdens as personal proi)erty. If things, and not persons, are to be taxed, common equity would dictate that the aggre- gate of a man's possessions, irres])ective of their kind, and simply according to their value, should bear the infliction. What delinquency has real estate been guilty of that it should be thus unfairly discrimi- nated against? It is the most productive, the most needful and the most stable form of lu'operty. It adds most to otu* wealth, remains always with us, shelters and sustains our people and at once attracts, and, if justly treated, retains and multiplies i)opulation. There is a l)al(^ful vice in the form of government that inflicts a penalty ui)on lands jind houses and makes their ownershi]) difHcult and burdensome. Tlie farmer and lionseholder has no right to any exem])tion from his fair share of the ])ublic ex])ense, but he has a right to just and impartial treatment that cannot b(^ ignored except at a cost of social tranquility. The inequality referred to is patent to every eye. There is not a citi- zen in the commonwealth paying a tax upon his home or farm who can- not i)oint to some neighbor owing many times as much in personal goods and idle ca|)ital who yet pays an immeasurably less amount of tax. It is useless to answer such undeniable facts by any intricnte theory as to the ultimate distribution of all taxation. Such unjust dis- crimination is working untold evil to our p(M>])le; is oppressing the liO()r, is exempting th(^ rich; is, day by day, establishing unfortunate social distinctions that are foreign to our ]>rinciph^s of government, de- structive of the happiness and energies of men and l)lasting tlie lio])es that we have all prayerfully entertained of our country becoming the home of a contented and ha])])y ])eoi)le. The state tax on c(^r])orati(ms fills all the recpiirements of a subject for taxation for the support of the state government that can be uniformly assessed U])on establishcHl standards of valuation, and which can be cheaply collected. TIh^ machinery for its assessment is simi)le and the cost of its collection is ncnninal. Corporate^ wealth is purely a creation of the state, and fitly l)ears tln^ burden of its expenses ; but since this and the collateral inlieritance tax together produce ample revenues for the state ex])enses, I suggest that the revenue law l^e so changed that the states remit to the counties all other taxes and license cliarges now levied l)y it. Every dictate of ])ublic policy suggests that taxation be reduced to the bare needs of the governnnnit. By enforced economy the taxpayer is ]n'ot(vted, his buichnis are less- 1 o pro^ la*, re.y enue lu ^^^i ^^i^ <,orporate property. Sfction 1 J^e itencicted by the Senate and Home of liepreserdcdives of r^^Lwealth ofPmlvc^da in General M.emhl !l ^^^t^^^uiUv.^ wherever used n this act, shall be construed and held to havi^ the revend neanin^s stated and defined in this section n^spectively, that L to say '^^^^^^^ and credits" shall V>e held to niean all nu>iio,,o.es, all noneVs owin| by solvent debtors, whether such debtors shall resule h tU "cLmonwealth or elsewhere, and whether the evulenccM>i such debt be promissory note, penal or single bill, bond, judgnuait, article of a-reement, or book account ; all loans issued by any corporation, association, company, or limited partnership created or formed under the laws of this commonwealth or ot the United States, or any othei state or Government, including- car trust securities, and loans secured by bonds or any other form of certificate or evidence of indebtedness, excei)ting- money dei)osited in banks and savings institutions, not draw- iii^'- interest, and subject to clu^ck, and all other moneyed capital in the hands of individuals, corporations, limited partnerships, companies or co-partnerships in this state, and all annuities over two hundred dol- lars, except annuities or pensicms gi-anted by this ccmimonwealth or l)y the United States. n -i i "Transportation companies" shall be held to mean all railnjad com- panies, canal companies, slack-water navigation companies, pipe line companies for the transportation of mineral oil, or natural or artificial gas, exi)ress companies, palace car companies, parlor car companies, sleeping car com[)anies, freight carrying comi)anies, steamboat com- panies, transportation companies, and all other companies, co i)artner- shi])s, cori)orations, or limited partnerships engaged in the transporta- tion of passengers, property, freight, or express ])ackages from a point within any county of this commonwealth to a point beyond the limits of such county, or from ])oints Avithout tin; commonwt^alth to i)oints within the commonwealth, or from i)()ints within the comni(mwealth to l)oints Avithout the commonwi^alth or tlirough t\m commonwc^alth. "Transmission companies" shall hv. held to mean all telephone com- panies and t(ilegra])h companies, incorporated or unincorporated, and all other comi)aiiies, incori)orated or imincor] )orated, engaged in the transmission of messages from a point within any county of this com- monwealth to a i)oint beyond the limits of such county, or from points without the commonwealth to ])oints within the commonwealth, or from points within the comnumwealth to [)oints Avithout the commonwealth or through th(^ commonwealth. " Local X)urposes," Avhen used in connection with the- subject of taxa- tion, shall V)e held and adjudged to mean taxation for the i)ayment of the expenses of th(^ govc^mment of counties, cities, w^ards, boroughs and townships, for the sui)])()rt of ccmimon schools, for the sui)i)Oit of the poor and indigent insane, for the construction and maintenance of roads and bridges, tor the construction of sewers and the lighting, ])aving, and maintenance of streets in cities and boroughs, and for the i)ayment of all township, jjoor district, county, and munici])al indebtedness and tin 5 int(;rest thereon. Tangible personal property" shall comprise all proi)erty other than real, excluding all the evidences or re])resentatives of proi)erty. " Taxable person" shall be held to mean any ix^rson, persons, co part nership, or unincorporatc^d association, limitcHl i)artn(^rsliip, bank, or coi)orati()n whatsoever, formed, erected, or incor[)orated by or in pur suance or under any law of this commonwealth, or of the Ignited States, or of any other state or government, and liable to taxaticm within this commonwtndth, whethei- holding a taxable ])ro]>erty in his, her, or its own right, or as active trustet^ agent, attorney in-fact, or in any other capacity, for tlnMise, l)eiiefit, or advantage of anv other ix^rson, per sons, CO partnerships, unincorporated association, limited i)artnership, bank 6r corporaticm whatsoever, and the luonouns " he" or " his," when referring to the clause "taxable ])ersons," shall b(^ taken and adjudged to mean he or his, she or hers, it or its, they or theirs, as the spirit and intent in each case may require. Section 2. Property taxable in this commonwealth by this act is hereby classifi(Hl as follows, that is to say, all real estate of every kind and descripticm, with the improvements thereon, not necessary for con- ducting the business which " traiispoi'tati<-)n companies" and " transmis- sion comi)anies" are authorized by their resi)ectivfu^harters to transact, including oil-producing land, and gas ])roducing land, and all hvase- hold ris"hts therein, excepting such real estate as is embraced in class eight (8) of this section, also all tangible personal proi)erty not (^m braced in classes two (2) and four (4) of this secticm, and all gross earnings or income from trades, professions, occupations, and invest meiits of money or ca])ital in excess of three hundred dollars ($300) to each natural person, shall constitute class one d) . All real instate and tangible personal proi)erty necessary for trans- acting the business which "transportation companies" and "transmis- sion companies" are authorized by their res])ective charters to transact, excluding oil ])roducing lands, and gas-])roducing lands, and all lease- hold rights therein, shall constitute class two (2) . All moneys and credits exce})ting the mt a salary, and which salary either of one officer or of (^very officer or emidoye in tht^ aggre gate shall not be so great as to diminish or subvert the purpose for which such institution was founded, by the absor])tion of its revenues for ])rivat(^ gjiin. And for the better execution of the ])rovisi(nis of this section, every institution of this class claiming exem[)ti(m from taxa- tion,shall annually render to tlu^ Auditor General of tlu^ commonwealth, and also to the chief accounting officer of the ccmiity, city, borough or township making api)ropriati(ms for the support-of such institution, a statement of its revenues and the source or sources from whence the same are deriv(Hl, and also an itemized statement of its expenditim^s ; and, furtlnu-more, the officers who are chari^cHl Avith the ])ayment of the a])])ropriations made l)y the state* or by municii)alities to any such in- stituticm, shall withhold the same, whenever the board of public char ities shall suggest or an examination of its accounts shall siiow that it is subverting its public object to ])rivate gain, in which case the pro j)erty of such institution shall no longcT \)v exem])t from the taxation imposed upon tlie like classes of [)roperty by this act, unless other wise decreed l)y the courts. Fourth, all school houses, colleges and academies not leased or us(h1 with a view to pecuniary ])r()fit,in which fret^ schools ai-e ke])t and main- taincnl, witfi the necessary curtilage* a])purtenant thereto not excecnl- iiig ten acres, and the furniture, a])])aratus, books, and ])ictures neces- sary for and used therein. Fifth, all i)ublic ])arks owned by muiiici])al corporations, us(mI for general resort, to which the publico have free access. Sixth, regular places of stated religious worshi]), with thc^ necesary curtailage ap])urtenant thereto, not exceeding five acres, and the fur- niture* and musical instruments n(*cessary for and used therein. Seventh, all cemeteries or burial gnmnds, with the* receiving vaults used ther(*in, owned and controlled by associations so organized tliat no private or corporate gain can accrue th(T(*fr(mi. Eighth, all jmblic monuments used for honoring or i)erpetuating the memory of the dead. Whenever tin* classification of property is re- ferred to in this act, it shall be taken to mean the classification stat(*d and s|>(M*ili(Ml in this section. Pennsylvania Spate Boaim) of Acimc^ULTUitE. 105 Sections. All leal estate and "tangible personal i)ro|)ertv" em braced m class one 1) shall be assessed at the price or valiu^for w^^ the same would sell if each piece or parcel of the sameUi4 s^^^^^^^ and separately at a houafde sale after full pnblic. n(>ticranTtle hn^ oiities diiected by law to levy taxes lor any purpose embraced in the definition of local purposes" as defined by section one ShaJt^u^ a 1 gross earnings or incomes embraced in class one shall be as^s^ed a the lull value thereof in excess of three hundred I rs nd '^^^ taxes which may have been paid into the state treasury V^-' o n acf or on acHHmnt ot capital stock representing such property, shall be de ducted Iron, the county tax levied upon such pVopV.t/for the same crS'nSe ti^2^ior'^?^ T"""''"'^ l>r<)pc*rty" excei>ting boats or water f. fed n /L w / r-'^'^ [>urposes" by this act, shall be listed and Section 5 The assessor of each ward, township, and borou-h of this commcmwealth, sliall make special inquiry of eich " taS^i™ and require a uil and coiiiplete answer from each " taxabte person '"^^^^ his^representative agent or attorney, to the following inteiTOSies^ ow^sV'wd >;;t,.t';r''' """'»• " "-' "■"' '»'■ ^--^^ bytim or £'^^"^^^^^' ''^ "^'^^ ^^^^^^^ ^^'^^' **<""' v^^^rs old owned or held Ii.Ml>yhfmoX^^ '^"^^^^ ""^ """^^ over orty for taxation with a view to being used, in whole or n ar^ , ;sr» ."'...'.'iZit''''""""' '"'"""■ '™'''"'-' '■■■-■»''• '■-'•""^ l.l.'voiith, all iiuichiuery not taxed as real estate ownerl or l.ehl l.v nim oi" iwv. '^ Twelftli all tools aiul implements owned or held bv him or her ihirteenth, all oth<>r tan-ihle personal pronerty" owned or held hv Inm or her, not exempt<>: ' -'i •4\ '0 'ii QUAKTKKLY llEl'OltT. this act shall not exceed three hundred dollars (1300) no tax shall be ^^f^::lSr shall ...er tl. answer of ^^^^^^^^^ shall be furnished *«> /'"" i-y^^^f^,*^ ''^^^^^ Xned to the office of the commissioners, which ^;l'^"^^^ Prevision of taxes, and arranged m county commissioners or boa d y^^'J^^^ ° ^ ^j^^ ..Q^nty conimis- order convenient tor reference '^''^ I'^^XcSise to be entered on the sioners or \^o^l^^^^,^;^^^^ class of property, as assessment books the '^^■-'^f '";,,_..," „„ one line, "moneys and cred- foUows: "tangible P«yf«'\\^ /J, ^^^J.^,,' lather line, and a like entry ;if airc::iitd\';:r;;s^\.d^-^^^^^^^^^^ -^.--^ ^y i-^' ^i-" '^^ ally tut «'!l™'UnVI'™'» »S "''.;; ,V"iti''nr evidenco <.t .l.>l>t that Section 7. In addition to tiie taxes levit^y cx it^vitul the tax. The same being the property mentioned, m class seven ol sec ^'''s™^^^^ naticmal bank and incorporated state bank, s^t^^nTbank ortiS institution with capital stock located within a^v counr in boundary with a county m this com- n nwcaltf;, which shall fail to elect to collect from its -l-^-?^^^^^^^^^ and to imv into the stat(^, treasury, on or before the fij^t dav ot Marcii ^^Ae six-mill tax provided for in ^^^J^^^^^^^ ^ an act, entitled " A further supplement to an ^''\^,^''^'^^^^ irrovide revenue by taxation, approved the seventh day of June, An o Cni mie thousand eight hundred and --^^y^v'^^^^^^^^ first day of Jmus Anno Domini one thousand eight hundred and eigMy^ n lie ''shall on or before the first day of April m each year, make to the cm nV ~^^^ or board of revision of taxes a ^-P-^f .^-/-;^^^^^^^^^^ verified l)y the oath or affirmation of the president or ^^^ ^^^ ' ^f ^^^^^^ forth the full number of shares of the capital stock issued l>y ^;;f »^^"^^^ and the actual value thereof; whereuijon it shall be the clu^y ^t the county commissioners or board of revision of taxes to assess the same for taxation for county improses at the same rate as that ^^V^'^f^^^^^^ other moneyed cai>ital m the hands of individual citizens ot the county, or city co-extensive in boundaries with a county, for like l>^^n^oscs that is to sav, at tlie rate of two mills upon each dollar of the actual value thereof; and for that purpose they shall have the prnver and it shall be their duty, in cas(^ they shall not be satished with the correct- ness of the report, to summon th(^ officers of said bank to appear betore them upcm notice so tc do, on a day to be fixed by them, and to bring with them all the books of the said bank showing its business, assets, Pennsylvania Stati: Buaud of AauKUTi/riiitE. 107 and dividends, for their examination ; and it shall ))e their further duty to h(3ar any stockliolder who may desire to be heard on the question of the valuation of the shares as aforesaid, and they shall have the right by otlnu' evidtiiice to satisfy tlu^mselves as to the correctness of the val nation of said shares of stock in said report contained, and to correct said valuaticm ; the county (commissioners or board of n^vision of taxes shall thereupon transmit to the said banks a statement of the valuation and assessment so made by them and tlie amount of tax due tln^ county on all of said shares, which tax the said banks shall, within thirty days after receiving said statement, colh^ct from their shareholders and pay over into tlie county or city treasury: Provided, That if any bank shall fail or refuse to make said report or pay said tax, at the said time herein si)ecified, or shall make any false statement in said re[)ort, or shall fail or refuse, l)y its officers, to app(^ar before the county comniis sioners or board of revision of taxes u[)on notic(i as aforesaid, or shall fail or refuse to ])roduce its books for (examination when re(piired to do so, the county commissioners or board of revision of taxes, after having ascertained the actual value (^f (^ach share of the cai^ital stock of said bank from the best information they can obtain, shall add thereto fifty l)er centum, assess the tax aforesaid, and ])roceed to collect the same from said bank by hny and sale of j^roperty. Section 1). That it shall be the further (luty of tlu^ county commis- sioners or board oi revision of taxes u|)on the returns made to them by the assessors of the several townships, wards, and boroughs, in all cases where it shall appear, on proving the record, that any taxabh^ person has returned a less amount of money at int(er(^st than appears from the records in possession of the commissioners or board of revision of taxes, thereui)on to raise the valuation of the i)roperty of said taxable person or cor])oration to the amount set forth in said records, and forthwith to notify the persons interested of tlu^ said increase of valuation and that the same is subject to be a]>[)ealed from at the same time and tlie same manner as the original assessment. Section 10 That any wilful failure on the part of the county com- missioners, board of nnision of taxes, ward, borough and townshijis as- sessors, to carry out the duties im])osed upon them by the several sec- tions of this act, shall l)e deemed a misdemeanor, and upon coin[)laiiit of any "taxable i)erson" and conviction thereof, the ])erson or persons so failing to comi)ly shall be sentenced to a fine not exceeding five hun- dred dollars and imprisonment not exceeding one y(ear. Section 11. That it shall be the further duty of the county commis- sioners or the board of revision of taxes of the ]iroper city or county, on or before the time of making th(^ annual or triennial assessments in any year, to prepare fnmi the r(H*ords in their res])ective offices a state- ment (H' statements, showing, as far as practicable, the nunib(;r and amount of said mortgages and all other obligations and names of the parties tlien^to in each borough, township or ward in tlnM'ounty, which said statement shnll l)e delivennl to the assessor or assessors of each township, ward or borou^*"!! res])ectively, before said officers shall enter ujion tin 5 discharge ol their i)roper duties. Section 12. That if anv assessor and any " taxable ix^rson" shall agn^e or enter into any arrangement or understanding, that upon tln^ failure of such "taxable pers(3n" to make the return re(iuired by tlie sixth and ninth sections of this Act to be made, such assessor shall return a less amount of property made taxabh^ l)y the fourth, seventh, eighth and ninth sections of this act than should have been returned by such " tax- ■*1 fi -mi 108 QUAHTKFJ.Y TIePOKT. Pennsyla^wia State Boa hi > oi- Agkiculture. 109 •ible Dorsoii/' the persons (Uiterin- into such agreement, arrangenient or understanain- shall be -nilty of eonspiraey, ami upon eonviction thereof sliall be sentenced to i)a.y a tine not exceeding- (me thousand dollars and undergo an imprisonment, either at labor by se])ara e or solitary ccmlinenient or to simple imprisonment, not exceeding three years, at tlu^ discretion fof the court. ^ Section 18 All i)rece[)ts issued to the assessors ot the several wards, townships and borou-hs of this commonwealth by the board of revision of taxes or county connnissioners, for the year one thousand eight hund- red and ninety two, and for each year thereafter, shall embracer instruc- tions relative 'to the asscissment of property m conformity with the i)ro- visions of this act. . i i !• i i Section 14. The assessment of all property taxable tor local pur- i)Oses including new subjects of taxaticm si)ecitied m this act, shall be equaliZ(Hlas nMpiired by existing laws, and nothing in this act con- tained shall be construed as altering, amending or repealing, either in whole or in part, any act of assembly now in force authorizing and re- ([uiring the county commissioners, or boards of revision of taxes of the commonweaHn to^Mpialize the valuations of assessed i)roi)erty in tlieir respective counties or cities co-extensive with counties. Section 15. Whenever the assessors shall be of the opinion that a " taxable person" listing property for himself or for any other " taxable person," has not made a full and complete statement of such property, he shall examine such " taxable i)erson," under oath, as to the numbers, amounts and (piantities of the property he is required to list : and if such taxable person shall refuse to answer, under oath, all (luestions relating to the numbers, anumnts and (piantities of his taxable i)r()p erty and a full discovery make, the assess()r may list the ])roperty of such person or his i)rincipal according to his best judgment and infor- mation, and for administering such oath no charge shall be made. He shall examine the records and lists of judgments and mortgaii-es re- turncHl by the prothonotary and the recorder of deeds to the ofHce of the county ccmimissicmers or board of revision of taxes, under the sev- enth, eighth and ninth sections of the act entitled " A further su])ple- menttoaii act entitled 'An Act to lU'ovide revenue by taxation, ap- l)rove(l the seventh day of Jun(\ Anno "nomini one thousand eight hun- dred and seventy nine, ai)proved the tirst day of June, Anno Domini one thousand (Mglit hundred and eighty nine," or remaining in their re- spective oftices, and assess such defaulting "taxable ])ers()n" with the amount of ;dl such liens, with interest thereon, and add thereto the amount of all other taxabh^ property of which they have knowledge themselves, or obtained from other sources of information deemed by them tc bereliabl(\ which return tln^ county commissioners or board of revision shall have ]iower, and it shall \)c their duty to revise and cor- rect, according to tlu^. best information they can command from the re- cords in th(^ir orlic(M)r otlic^r sources ; and it shall be tlu'ir duty to send f(U' a person, persons anenditures, the net earnings, the cost of con structitm and the market value of the capital stock of each such " trans- portati(m company" and " transmission com])any:" but all pr()])erty taxable for " local purposes" shall be excluded from any estimates made ; and they shall ascertain the average value i)er mile of the line of Avorks of each " transportation company" or " transmission com|)any, " includ- ing " moneys and credits" owned or held in trust by it ; and shall cer- tify the same to each board of revisicm of taxes or board of county commissioners in the commonwealth. In ascertaining* tln^ average value ])er mile of tlu^ lim^ of railroad C(mipanies, the total valuaticm as certained by tlu^ Auditor General, State Treasurer and Secretary of Internal Affairs shall be divided by the total number of miles of track in each line of railroad, including the second, third and fourth track in th(^ main line, and also sidings and switches. The locomotives, cars and all rolling stock of such railroad compan- ies, ])alace car comi)5inies, ])arl()r car com[)anies,slee]^ing car companies and freight carrying companies, as run or ()])erate lines extending be- yond th(^ boundaries of this commonwealth, shall be valued at an amount which shall bear the same ratio to its full vabn^ as the inimber of miles of such lines in this comnnrnwealth bears to the number of miles in its entire line. Section 18. If the proper oilicu^r of any " transportation company" or transmissicm company" shall neglect to make the report to the Auditor General required l)y s(H'tion 17 of this act, for more than thirty (30) days after bfung notified or rcMpiired so to do by the Auditor General, the Auditor Gem^ral and State Treasurer shall im]>os(^ a penalty on such ofHcer of one thousand dollars ($1,000) and shall settle an account against such officer for such ])enalty, and certify the same to the At- t.j 'J M iX] .'' k^ QUAKTEllLX ilKl'OKT. 110 toniey General tor eollectioii And ^^I'^V'l^^^^^^^^^ ^^,. ^^,^, „,,,,,^,.fv shall wilt' ^ assets of a " transportation company Pennsylvania State Board of Aoricultuue. Ill torney ^T'^i^dlv nr^'r false ^^ or statement of the property retary ^l^^^lV^^^l^^ii^^I^^^^^^^^ or transmission company" r rtA^ gSS^^ n res^^^^^ or secretary slndl be to th(^ Anditoi ueneiai, ^ul.ii , ' 4.i,_.i..,f, ,+,,,.,, lu^imltit^s there- mi^^(mei^ rfiaU multip^^ h^^iverage valuation per mile of the line oi ^rilf^cS'' transportation company^' or " transmission ccmipany Kuch lines or works witlun tneir rfhi.uuti>v. vwitxx.xv^^, .............. .--^ secid t^^^^^^^ or fourth tracks in the main line and all side tracks and sSieso railroad companies, and shall lay a tax on the sum thus ;^di^^^^ ^nch tax shall be paid into the pn)i.er county C^u^^^^^^^^^ the respective " trans] )ortation companies" and transmis- s^i cm^ the several county treasurei^ of ^is comnion^ wealth shall have the same power and authority to collect the said Taxes >v levy and sale of property as is ^aven to tax collectors for the collection of taxes for local imrposes by the law_s ot this commonwealth The revenue thus arising shall be appropriated toward the payment of all ordinarv county expenses. Section 20 All male persons over twenty -one years ot age, wiiose cn-oss earnings or income from trades, professions occupations, or the hivestment oi money or capital shall not exceed three hundred dollars ($300) per annum shall and are hereby required to pay a poll tax lor the use of tlu^ county of twenty -five cents annually. Section 21 In lieu of the notice of assessments required by existing laws to be given to taxi)ayers for triennial assessments, the county commissicmers or board of revision of taxes shall cause printed lists to be preT)aivd of all the assessments and valuations in each ward, town- ship or borou-h in the county, or city co-extensive with a county and the severnl assessors shall serve on each taxable resident a printed list of all assessments and valuation in the ward, borough, or townslni) m which the taxable resident resides. i i i . i • x Section 22. All propertv, except bank stock madetaxal)l(^ hy this act, shall be assessed, and the'^several taxes shall be levied for tlie year one thousand eight hundred and ninety -two ; and nothing m this act con- tained shallbe taken and construed to relieve any taxjdde i)erson from the payment of any tax or taxes due or owing to the commonwealth.^ or to the authorities authorized by law to levy taxes for " local purpose^s under any law in force at the time of th(^ passage of this act, l)ut the same shall be collected under and by virtue of the laws by which they were imposed, which laws shall be taken for said pury)Ose to be in full forc(3 and effect. Section 28. All other acts or parts of acts inconsistent w^ith the j>ro- visions of this act are hereby repealed, Imt nothing in tliis act contained shall be so construfMl as to repeal, alter, or amend the law^s now in force for the assessment and (collection of revenues for state puri)oses, the true intent and meaning of this act being to creates additional revenue for *' local purposes," as defined in the first section ; nor sliall anything herein contained be so construed as to alter or repeal laws in existence at the date of the passage of this act, providing for tln^ taxation of all other real estate than that held by " transportation companies" and transmission companies. " Amendments made in the (nil during second reading in the House of Rep- resentatives. Seaiion 2. The words " in (*lass eight (8^ ," were changed to read " in class seven (7) ;" the words " and all annual (^arniiiizs or income from trades, professions, occupations and investments of money or capital in excess of three hundred dollars ($300) to each natural person," were stricken out. In the detinition of class 4 the words " wearing apparel" were stricken out ; the whole definition of class live (5) was also stricken out, and the numbering of the following classes changed accordingly. Classes following class 5 all have their numbers advaiKied one so as to correspond with the class stricken out as above. Section 3. The words " And all annual earniiiiis or incomes embraced" were stricken out so as to correspond with preceding amendments. Near the close of the section the word " same" was changed to " cur- rent" so as to read " for the current year. " Section 5. The fourteenth class was stricken out, and near the close of the section the words " and incc^mes on another line" were stricken out. Section 7. Near the end of the section the word " same" w^as changed to "current," so as to corresi)ond with [)revious amendments. Section 20. The words " whose annual earnings or income from trade, professions, occu])ations or the investment of money or capital shall not exceed three hundred dollars ($300) ])er annum, shall and," were stricken out so as to make the section corrtispond witli former amend- ments. KEPOIIT OF THE COMMISSION APPOINTED TO PIIEPAKE A REVENUE LAAV. To the Senate and House of Representatives of the Conimomoealth of Penusylvania : Gp:ntlemen : During the last session of the legislatun^ action was taken for the ])reparation of a new revenue measure ^ which was em- bodied in the following ])reanible and resolution : Whereas, It is a recognized fact that the ])resent systcmi of taxation, whereby real estate is exempted from taxation for state ]uirposes, has worked an injustice by exempting from local taxati(m large amounts of ])roperty, both n^al and personal, belonging to c()r])orations ; And lohereas, There is no need of increased revenue for state pur- poses, and there is an urgent demand for the reduction of taxati(^n for local i»uiposes ; And tohereas. There are at present no tnistworthy statistics as to the amount of real and personal ])ro[)erty owikmI by citizens in this state, owing to the inequality of assessments in the various counties ; therefore. l>e it Resolved ( if th(^ House of Representatives concur) , That a commis- • ■, Si :-i ■ -.-*£ .«'"8 1 . m JJ2 QUAUTKlilA iiKl'OUT. siou to i.vei.im' n niiifom revenue law coveriii- l.otli state and local Uxatiou! ami to report the same to the next legislatur.,., he created, said couiiiiission to be; composed as tolUnvs : First The Auditor General. Secl'id One person to be selected by the association ot county com- ""rhinrt)ue persoi. to represent the manufacturing interests, to be jiDDointed bv the Governor. . , , i ^ i.i i • j. t ^lAmrth One person xvli.. has given special study to the subject ot taxation, and who may be considered an authority on the same, to be '^ iStt^ ot' Si;on to represent the financial and mercantile in- terests, to be elected by the House. . i ^ i . 4.1 1 • 4- a- Sixth. One person who has -iven snecni study to the subject ot taxation, and who may be considered an nuthonty on the same, to be elected by the House. . 1 • i. *. t. ^.^ Seventh. One person to represent the agricultural interests, to be appointed by the State Grange. Under this resolution the members oi the commission were ap- pointed, who are supposed to represent the state, county, am other interests and classes. It should be added that the original bill pro- vided for the selection of a representative ot the labor interests, but through accident this part of the resolution did not appear m the statute. The commission, however, at their first meeting remedied this defect by the following action : • • 1 AVheheas The House of Kepresentatives amended the original reso- lution as i)assed by the Senate on the same day, creating a commission to i)rei)are a uniform revenue law, by adding to the same : Sections. And one person to represent the wage -workers ot the commonwealth, to be appointed by the Secretary of Internal Aft airs, whicli amendment was concurred in by the Senate, May 2, 1889 ; Jnd wherem. The transcribing clerk of the Senate, in i)reparing the resolution for the signature of the Governor, copied from the original resolution, thereby unintentionally omitting the. annrndment ; tlierefore, be it , » r^ • • i. Besolvcd, That should tlu' Secretary of Internal Affairs ai) point a person to represent the wage workers, the commission will recognize the person a]ipointed as having the same authority to act as the other mi^mbers of the eommissicm. Mr. William Martin having been appointed by the Secretary of In- ternal Affairs, and having accepted the ap])ointment, the ccmimission was comi)leted in accordance with the intention of the h^gislature. Several meetings were held in Harrisburg and Philadel])liia,to which individuals were invited to express their views concerning the defects in tlie existing system, and to suggest remedies. A very considcu'able number of pt^rscms ai)])(^ared who advocated the single-tax theory, as it is usually called : others opposed or advocated exemi)tions for chari- tabl(^ and religious pui-poses, and still others exi)lained the wishes and o])inions of the farming interests of th(^ state. Tlius tlie commissi(m have been informed to some extent of the wishes and opinions in geiK^ral of the tax])ayers. It is fitting, in ]>resenting the several bills, to accompany them with an account of some of tlui difliculties which the commission have en- countered; some of the peculiarities in the existing system, and some of the aims whicli the commission have sought to acconi[)lish. Pennsylvania State Boakp of Acuucultuke 118 The tax system of Pennsylvania differs from that of every other state, except New York, in designating specifically the subjects of taxati(ni. The kinds of property which are not designated escape. The svstems of other states provider that all i)r()])erty shall be taxed, and afterwards exemptions are made. The statutes which specify what property shall be taxed for local puri)()ses were enacted almost a half century ago and have not been subsequently amendc^d. Since that time, however, new forms of prcjperty have been created— railroads, telegraphs, t(?lei)hones, and the like— and which in th(> aggregate possess a very large value. Our lawmakers from time to timti hav(^ inii)osed taxes on this newly- created proi)ertv for state pur[)oses, and as its amounts and value have increased the original sul)jects to taxation have been relieved of state taxes. Thus two distinct systems of taxation have been de veloped which jiavt^ little or no relation to eacdi other The state de- rives nearly all its revenues from property not known to the last genera- ti(m of men, while all expenses of county, municii)al and township governments, t\u) constructicm and maintenance of roads and bridges, and the sup])ort of the ])oor (whenever they are a charge on a separate district) , and the greater ])art of the cost of educating the children of the state, are borne by the few subjects of taxation designated by the act of April 15, 1834, and acts passed prior to the ado})tion of the present system of corporate txatitm, except what the counties, cities, boroughs and !:ownshi])s receive from licenses and from the distribu- tion of the state tax on i)ersonal property. ()ii(^ of the difficulties in framing a tax law is the constitutional pro vision whicili dcn-lai-es that taxation " shall be uniform on the same class of subjects within the territorial limits of the authority levying the tax," and that " all taxes shall be levied and collected iinder general laws" (Art. lY, sec. 1) . Thus, while some sections or classes desire a revision w^ell understood by themselves, other sections and classes desire a different revision ; while, perhaps, another section or class is opposed to any revision. It is evident that all enactments must apply to every section alike. In interpreting tliis constitutional provision the Su|)reme Court have decided that if one article of any class of pro- perty is taxed then all articles of that particular class must be taxed in like manner (Fox's Ai)])eal, 2 Am. 337) . Again, the same article and section of the ccmstitution restricts the legishxture in making exemptions from taxation to " public property used for public purposes, actual places of religious worslii]), ])laces of burial not used or held for private or corporat(^. ])rofii, and institutions of a purely i)ublic charity, " and se^ction two of Article 9, makes void all laws exempting from taxation any other descriptions of property. Legislative discretion in distributing the burdens of taxation is thus naiTowed or withlnOd. Another difficulty in j)erfecting the tax law of the state is the necessity of avoiding any conflict with federal legislation. The act congress establishing the national banking system forbids the taxa- tion of the shares of stock in national banks at a liigher rate than is paid bv other m(meyed ca])ital in the hands of individual owners. Conse([U(Mitly, an e(jual rate must be imposcnl cm the moneys and credits of individuals and shares of stock in all the banks. Federal authority (exists and must be recognize h1 in another direction, to wit, the taxation of transportion companies which extend byond the •5? m H t *• f^ ii.1 1 ,.ri.i/.li iiQo tlipir rollinsr stock without repirdto state hues. ^^^^ ^^-^\ ^./'^^^^ the o-oueral government, states having been ^™i:K^iiidit tax^ l>->l>-ty. itsi>rero-atives "^^^^^^/^^^^ ^'| .\'V .^1 m!^^^^^ perhaps, not fully jH>rtation and ^^^'^^'Z^^^^^^^Il}^ fe^HeJ Sb i^s decided that Ly the state, but tb^ ^m.>reme C^ ^^^^ ^^^^^^^^ rV '' 1 S&ii aT^S^u^^^^^ Oo, 122 y . S. 326) . be taxed ^^^^^ f^ numtioned in c^stablishhig- a tax systeni ^^Atu^nea and p irtly from the opinion that prevails anion - the habit ^1 ^ ;\^^'"'^^;^^ ;;iii i.esult in liditer taxation. Inequality peoph'thata m va^^^^^^ uneciual taxation, and a departure T TCiih^ S Xi^ 1 Sy nt its fair market values i^au|.ht S .S: tirUlt^^^AVhii assessors depart ^^n ^^^ are adrift and without any compass to ^^uuh the n. /\ Jf ^ ^^^^^^^^^ with tlie determination of assessing all ])roperty at twenty, yiiy^.> /^^ totv er eiit below its market value, they are tar more likely to tall Into e™ -hen they keep a i)racticable rule like that mentioned ''^ lintrepSlg the bill which i« herewith presented the commission haw feU the need of accurate knowledge concerning the mequa lities inriniasticc. attending the i)resent system. Some tacts may indeed in edieve that the legislature would act wisely m passing appropriate k-isla- tionhn- the gatlnn-ing of such information. We are quite sure that the public is eager for ccn-rect knowhulgc) ot these matters, and would heartily approve a law enacted for this imri)ose. . Lastlv a f(>wwordsof ex])lanati()n must biMiddcMl concerning the severallulls presentiul. Tln^ iirst report, witli the accompanying bill i>resented and nund)er(Hl 1, is signed by five members ot the commissicm, Mc^ssrs. Price, Taggart, Wlierry, Klione and Martin. The m^xt report, numbered 2, is signed l)y the chairman ot tjie com- missi(ni, Mr. McOainant. AVhih^ agnnung with a pcn-tKUi ot bill JNo 1, it ccmtains object i on abh^ features, and, tlierefore, his signature is with- held Mr. Wright's signature is withheld for the reasons given "^ his report, which is numbc^red 3. The reascms for not signing by Mr. Belles ar(^ given in his re])ort numbered 4. , Thomas McCamant, Chairman. John A. AVihoht, Albert S. Bot.li-.s, Austin L. Taooaut, Leonaud Rhone, Giles D. Price, Samuel M. Wheuuy, Wm. Martin. Pennsylvania State Boa in > of Agriculture 115 KEPOKT of a majority op the (X)MMISSIONERS. yV> the Senate and Iiou.se of liepreseutative,s of the (^onnnoynvealtli of Pennsylvania j Gentlemen : We regard an immediatt^ revision of our law s govc^rning local taxation as an ini])erative duty. It is conceded by all candid and well-informed i)ersons that our present tax system is not only grossly inequitabhi, but that it bears with crushing' weight upon the only in- dustry which, at the present time, can be called dei)ressed, to wit, ag"riculture. If any favors an^ to be shown in th(» apportionnu^nt of public burdens, and if justice and good i)ublic ])olicy i)ermitted favor- itism in this respect, agriculture slumld, for the present, be required to pay a less rate instead of a greater rate than other industries. But ag'riculture is asking, not for favors, but for an (Hpial distribution of the burdens of government. We beUeve that an equal distribution would best subserve the interests of all classes. A law which compels the productions of the soil and the homes of the lalxning classes to bear the bulk of taxation violates all correct i)rinciples of political economy. The commissicm were authorized to prepare a bill cov(U'ing botli state and local taxation. We think, however, tliat for prudential reas(ms the laws regulating the assessment and collection of state revenu(is ought not to be disturbed at the present time. We recommend the conservative cours(^ of introducing innovations only when necessary to secure the desired relief. Nor have we blended the system of local taxation w ith the system of stat(i taxation. They have become separat(Hl, and in our opinion they ought always to remain divorced. A systeni of taxation which requires each county to contribute towards the su]>i)ort of the state government in the ratio of tli(i assessed value of property in each county invariably leads to undervaluation in assessment-;. This has a demoralizing intiuence on the public service and leads to iiKHpialities in assessed value. Even now, without this incentive, the law whicli recpiires that all taxabh' propc^rty shall be valued and as- sessed at th(^ ])rice for wliich it would sell at a ijona P\le sale is disre- g'arded in niaiiy counties. AVe present herewith a bill (nundxTed one) entitled " An Act to provide revenues for local purposes by tln^ taxation of re^al estate, per- sonal pro])erty and c()r[)orate jiropert}'." This bill do(*s not embody the ])arti(ailar th(M)ries of any member of the commission, but is tlie result ot a compromise of individual views for the sake of obtaining' some measure of relief. Section on(^ is devotcul to the definition of such terms as must be frequently used in framing a revenue bill. This method ol)viates the necessity for the tiresome and confusing repetititm of phrases, and i-c^nders the legislative intent clearer. Por the pur])ose of avoiding constitutional difticulties we have, in section two, undertaken to classify taxable property. The rig-ht of the Igislaturf* to classify property f(n' ])urposes of taxation is ui)held l)v emnent legal authorty. Class 1 (embraces all taxable real estate and all taxabh^ tangible per- sonal ])roperty of a marketable value, excepting the ])r()])(M'ty of trans portaticm companies and transmission com])anies, banking ca[)ital, and i^B .f If': ^^^^ QUAKTEKLY UeI'OUT. for in sections «'^teen seventeen and eightc^^ ^^^^^ ^^^^.^^ ^^. trSltSr;in'a^t^^SSn™.ani.i .re treated in -^:i:^ purposely o.nrtt.!^ provide ^^^J^^ ^^^^ and in section ^^te^.^Xiri^'eseimmt under article eight, section of Class 5, to prevent tlieir ^V*';»'^"^,\"^'' {"Ijit ^f iniblic sentiment tends T' iZtt/lS^ tai^on onli^izL in proportion to SaHUtyC^lTictively. Tl-^lg/frU^^^^^ S^SrinSl^^rStr erty has not been entirely futile. In casting al)out for a remedy for existing inequalities it has not occurred to their thinking men that their ])lan of taxaticm ought to be abandoned, or that all i)ersonal ])ro- perty ouglit to be exempted from taxation because it is difficult to as- sess it all. Their present efforts are directed towards the perfecting of their i)resent system. Ex])erience has shown that it is well nigh as difficult to make a perfect cHpialization of values on real estate as it is to secure a full and fair return of personal property. In this connec- tion we respectfully submit this pro])osition : If the objections to a general })ro])erty tax are well taken, then all laws taxing i)ersonal i^ro- |)erty should be re])ealed : if these objecticms are not well taken, then all personal prooerty should be taxed. It is also argued that, under a gen(n;il pi-o])erty tax, or any other system, the burden of taxation will ultimately rest on land, or the occupiers of land, bv the o]ieration of the laws of trade Without stopping to refutes this fallacy we suggest that the more business-like m<'th()d would be to e(pialize by statute without trusting to the uncer- tain mutations of trade. This section would subject incomes to the same rate of taxation as property. The more advanced students of tlu^ subject of taxation be- lieve that the taxatitm of incomes will b(^ tln^ (mly source of public re- venue in the future. However this may be, we believe that our pre- 1! m ^k,. Pknnsyiaama Si'ATi; ]3()aku i>v AaiticuT/niUE. 119 1- 1 >..Kwl tn flio tliorouerli administratioii sent taxing' uuiclnnoi-y »«"«>* ^^^'^'Mil.^^^^^^ sentiment is of such a taxing system, n..r '^<' «,'";{-;' ,iL it more prudent to now ready tV)r such a sweepins' re n . \\ r t >m l^ ^^^^^^^ ,nak<. it auxiliary to a preneral ^'V' '^^JTvioyi^^^^ i ,',^,'7 '^ ',,f J,. ,„,,,u.rtv of this treasury iV,r the ---^^ y^ ^^Z^J^'^ .^il^l^AJ ^ this ch.ss chiss. We can see no othei w '^y [_^','',*^;:"' .,,.'„ J^ni of state revenu.^- of i.roi.erty without .hsturhins ^he > esc t -^y ^t^^^^', ^ • . j^-^.j^ ^.^^^i^ In section five we have^ *'''""::\ i™uld be mm to answer SS.K. !^^Su::!^thear.wers.iv..^^^ ^j--- and not the t=i>^=^l>l« /« J-^^l^^f^*" J^tf.^Sle^^^^^^^^^^^ '"'^^ '''^^!w^ion six imnoses a tax of Uvo mills for local purposes on moneys Hi^^ ms^^^^^ -tat. tax paid by the same property, m i n" a ^o^ Uax of live mills. We believe a lu^lier rate w. mM , >ro^ luce less revenue, and .ould tlWore be m^xp^^^ |^^^^^^^ ,nort'a4d i^^i^TS mou^y^ and credits equal with land ; it svould intensity tS (Wn^ f n->wi^^^ unrecorded obligations t.> escape assess^ ment an w^^^^ tend to cripph. l)orrowers. The states which tax moneyra^^^ credits equal with huided property get but comparativel> E re venue fre ineffective as against contracts made prior to the passage riieac but it wouhl h^gally apply to all c'ontrac s made subse- mientlv and would be a powerful aid in securing a tu 1 assessment. * iTis n<>t c^xpected that the tax imposed ou chartered banks by section ei-ht would yi(4d a revenue for local purposes. It ^v^mld however, compel all such corporations to pay to the state the six mill tax im- posed by the act of June 1, IHTi), and its supplemennts. Sections sixteen, seventeen, eighteen and nineteen propose to lev > a tax for county purposes, of four (4) mills on the dollar on the pro nertv of transportation compani(>s in addition to the tax now ])ai(l l)> such corporations to the state. Tn this ccmm^ction w(^ feel the necMl o1 reliable statistics. We have not been abh^ to ascertain the actual value of the inoperty owned by such corporations, nor what proporliou oi the a^«-r(^gate value of all pro])erty their holdings constitute. NN it h out thes(^ data it is difficult to fix a rate of taxation on such proi)(atv which will l)e equal to the average^ rate pnid by other property thiougli out the ccmimon wealth. Fr(mi th(^ best information obtainal)l(\ w(^ conclude that the i)r()])ertv now subject to local taxation is paying an average rat(^ of from twelve to fifteen mills ; but all propc^rty is not taxed and that which is taxed is not all assess(Kl at lull value. It all property in the state should be assessed, and taxed ui)on its full value, the rat(3 of taxation would be greatly reduced. In a case known as Laughlin's Appeal, reported in 19 W. N. C. page 517, the court api)ointed a master to investigate and report the value of the property and assets of corporations, and th«^ rate of taxa- tion to which the capital stock tax would be equal, and it was found to be equal to one and one-fourth mills on the dollar. As all other taxes collected from cor[K)rations together yield about the same amount of revenue, we conclude that corjxn-ations are now i)aying taxes which would be eciuivalent to two and one half mills on a dollar of the value of tlnur [)roperty and assets. If the four mills imposed by this bill should be added, the aggregate taxation of trans|)ortati()n (•()m])anies and transmission companies would be about six and one-half mills on the dollar. We have no disposition to recommend a rate of taxation on tln^ pro- perty of corporations greater than is imposed on their comix'titors in other states ; and, accordingly, we have consulted the tax laws of the State (^f New York, where their principal competitors are located. We find, first, that cor])()rations are required to i)ay in that state, for state puri)oses, one-quarter of one mill on each dollar of the value of their capital stock for each one per (centum of dividend made or de- clared (Chapter 469 of Laws of 1889) . This is one-half the rate im^ posed by this state by the act of June 1, 1889, (m stock whu^h pays six percent, dividends; second, they pay in that state 3.52 mdls of state tax on the assessed value of their property, these two taxes making a greater rate for state purposes in New York than in Perm sylvania : third, they also pay an equal rate with all other property for local puii)oses in the several counties, towns and wards through which their lines run (See Comptrolh^r's Eeport for 1890, page 14). This bill would impose the duty of assessing this ])roperty upon the Auditor General, State Treasurer and Secretary of Internal Affairs. The fixed property of a transportation company or transmission com- pany extends through many assessment districts, and if local assessors were required to fix valuations ui>on it within their respective districts, uniformity in j^ractcie and equality in valuations would be a matter of chance The assessment of the rolling stock and movable property of such cor[)orations by local assessors Ave consider quiet impracticable. It is proposed, in section seventeen, to place the taxable value on the rolling stock of trans] )(>rtation companies, whose lines extend be yond the limits of the state, at such an amimnt as Avill bear th(^ same ratio to the full value of such rolling stock, as the numlxu- of miles of such lines within this commonwealth bc^ars to tlu^ number of niiles in the entire line. This i)rovisi(m is suggested by th(^ judicial decisums known as Pullman Car C()ni])any ?;. ComnKmwealth, 14 Out. ])age 405 ; Philadelphia and Southern Mail Steamship Company v. Pennsylvania, 122 V. S. page 82() ; Ccmimonwealth r. Lehigh Valley Railroad, 24 W N. C. page 189, and Commonwealth i\ Delaware and Hudson Canal* Company, 22 W. N. C. page 525. Some misgiving exists as to the ccmstitutionality ot taxing transpro- tation companies for local i)urpo«es,for the reason that they are aln^ady taxed for state ])urposes. The Supreme Ccmrt of our state has said that double taxation is not to bei)resumed; but that tribunal has never said that tli(^ legislature has no i)ower to tax property twice or more than twice. If this bill should becomes a law, we think that the pur])()se of levying an additionrd tax for lo( al purposes on corporatums •I 'M 'ill 120 QUAKTKllLV llEPoirr. Pennsylvania Statf. Boahd of AcuticiuyjiniK. 121 i would not have to be presumed, as the le-islatiye intent is so clearly expr^^^^^^ then^in that it may be easily and clearly understood by lawyer, jud^e or layman. Al mib- !^1 property excepting, tln^ superstruc ure ol the road and water stations vas made taxable for county and city purposes m Phila- Llphia iVa^ oi April 21, 1858, P. L. 385, aiul thc^ constitutionality of the act has not been disiuited. Ttis also claimed that some, if not all, ot the corporations of this State have vested ri-hts, scnaired to them by toriner le-islation, whicdi would render all subsequent leoislatures ]K)werless to tax the qi by a new method, or for an additiimal amount. This argninumt is refuted in decisions reported in Gth Casey, ,)a^e 9, and in (iG Penna _htate Ke- Dorts i)ai>e 8(),' in which the doctrine is promuloatcHl thjit the leo-ishi- ture has no power to alienate any of the rights of sovereig-nty, such as that of taxation, so as to bind futures leo^islatures. The question of taxation is a many-sided question and each particulai interest viresent it to the legislatun^ not as a perfect measure, but as the best result obtainable from a (^cmference of various and, in some respects, conflicting in terests and opinions. While all who recognize the necessity of tax re^ vision may not regard it as in all respects the best that might have been pn^sented, all must recognize the fact that it is tlu^ only revision obtainable at this time, for the presentation of anotlua- bill ()r bills to revise our tax laws would tend only to dividt^ th(^ advocates of tax revi- sion, and thus render tax revision imi)<)ssibl(^ for the prc^scmt. We earnestly hope that your honorabe bodies will Ixwactuated by a si)irit of concession as to minor details as we have been, and thus secure refoi-m wdiich is urgently demanded bv a large majority of taxpayers. Giles D. Pkice, Leonard Rhone, Samuel M. Whekry, Austin L. TAGCxAirr, William Martin. EEPOKT BY HON. THOS. McCAMANT, AUDITOli OENEKAL, AND MEMBEll OF THE llEVENUE COMMISSION. 7b tlte Senate and House (tf Representatives of tite Cojumonioealth of Pennsylvania : Gentlemen : The resolution uiid(u^ which this commission is created provides for the prei)aration of a uniform law covering both state and local taxation ; but, in view of the fact that the system of taxation under which the commonwealth derives her rcivenues is well established, and ado [) ted by other states, we have thought best to direct our efforts to devising- a measure in relief of real estate from local taxation. This is the aim of the bill drafted by Mr. Price, and reported by the majority vote of the commission. T regret to say that I cannot ag-ree with my associates in recommending this bill. It is too severe in some of its measures, although I waives this objection in order to secure a report, but I further object to the plan of taxation of the proj^erty embraced in class two, for the reason that I do not believe it to be feasil)le. I ag"ree with Mr. AVright, that an income tax w^ould l)e more uniform than any method we could sug-gest, but as its ado[)tioii would be a radical de[)arture from the laws now on our statute books, and as the general g*overnmeiit found its income tax law% passed during the late war to suppress the rebellion, to be inquisitorial, improperly executed, and its results generally unsatisfactory, I feel sure we are not prepared for such a measure, and I do not recommend th(^. same. That there is now^ an inequality between the taxation of real estate and personal and corporate property, is beyond question ; but such inequality is not so g"reat as represented. I cannot conceive of a system of taxation that w ill not ccmtain some inequalities, even though it be a graduated income tax, and so hmg as revenues have to be raised by the taxation of persons and property, real estate will l)ear tlu^ greater share of th(^ burdens, for the reason that its value can be readily ascertaincKl, and there is no facility for its c(mcealment as in the case of personal pro perty. Furthermore, ])ersonal ]>roperty can be i)laced beyond the jur- isdiction of the taxing ])ower, and, as it changes hands more frequently than real estate, its ownership is hard to establish, and the right to tax denied on constitutional and technical gi'ounds. It is to be regrettcul tliat the commission havti been unable to obtain full and reliable statistic's in the matter of hx^al taxation, and, by reascm thereof, are ])recluded from submitting to the h^gislature such a statt^ merit as would show the exact ratio of difference between the taxation of real estate and i)ersonal i)ro])erty for all ])urposes for which taxes are levied : also, how mu(;h tax of all kinds is paid by (M)r|)orations, and how much by individuals and Arms. It is wrong to r(H*.kon all coii)orate (5a])ital invested in Pennsylvania at its ])ar value, when it is a known fact tlint much of it is worth less than par, and some of it worth nothing wiiatever. It is also a mistake to assume that corporate ca])ital pays no tax for local ])ur])oses. Real estate, in which the ca])ital stock of corporations is invested, i)ays the same tax for all local | >ur| H)ses as does real estati^ owned by individuals, save in the case of raib'oad companies, canal companies, telegraph ccmi- |)anies,or other corporations of a ])ublic character, where the real estate absolutely necessary, for the exercise of the corporate franchise is ex- Mi ' .iJ! m w^\ •5»i ■m. Court ; but such real ^'"t'^t^'H,: exereh^e of their cor, ...rat., frauchises above xvhat is necessary *"' ^^^'^t^'.^t^^'^^nuclivi.luals. Street passenger ,,a,ys the .aiue tax =^«, Jf ' ^^^; ..^'^ ;\\^lnufacturix.g conrpauies have a nuhvay companies, =^"^\""""'j:,:\"*:Vhorses and mules that they are l„Htionof their capital i"^«f, f ,\\;,^^^^^^ obliged to use in carrying on «";" ''"^ ;\';,^;^;. ij^possible, for want ot is taxe.l for local V^^l'lff • „ " ^^ rf corporal, capital invested m statistics, t.. deteTmine tli^,^^"""^! local purpc.ses, but there is no this Conlmou^^■ealth tha r;^.f,,^;;,^,j;;\^^; f It is so taxed. The actual doubt whatever that =\ I'l^^f ^ ^^ ;,^™,'^alth, as nearly as the same value .>f c.)riH)rate caiuta i'| t/^';.™ ,„,,rte to th.^ Auditoi- General s can b.> ascertame,! from tl e '•';J ^^'f "^^^ ,,,,, ..^e able t.. gather, is Depaitm.mt, and r..n. ^ '^_ .^Jj^'^Y)^^) , ^O repres.mting the value oi $«)50,0()0.0()0. )i this »^^^l^^^i, inanufacturing purposes, the capital «t...-k ..t c..r,.on tons iga^^^^^^ ^^^^.j^^^^. i,„ i^^^g. and $75,000,000,. nn-^ese ting «^*' ^.;^1" ,;';/^^ commonwealth. The re- and loan associati.>ns, pays "" J:^'^.,'-* V t.. the commonwealth maining $700,000,000 <^t crpoiate - PiHt,!^^:^^^^. of taxation for state annually taxes aggregating «^^;f »"'3^^ "• ^,f;^^ t,, fourteen mills, in the ,„n-p.>se«, OH corporations, Naius Y' "JXy' ji^iaends less than six case of c.>rp..rations that P^^ .''! ' ^re a ;onx,mtk,n pays a dividend per cent. A greater rate pnn '^i\^^,;^,^'^,^,^„^^^''"',^'™;;'ie, pay the heaviest of six per cent, or over. Railroad c"mi'^n"'?' pVunsvlvania, per reports tax Tlu, valu^M^,f .niK,^^^^^^^ ,„ ■,1,1 revenue ^^^ r^^^^^ interest in Penn- sylvania now subj.rt t. t^;;f ;';'"'^^*:^^^^^^^^ t,,,, 'commonwealth there- «00,00(., ami th.| annm re^^.^^^^^^^^ from foreign insurance r,,:ru i iSses ol- 'van... kin.ls, -nate.d inheritance tax, and LJellaneous s.>urces, t j-uWitjonal s^^^^^^ £m tirtaxation ..f real li()m micuiuciti 1 sources, that these assessments, in the 1111(1 iroin otliei tnisi\v()iiii.y r>uiiiv,r7o, i^x i i. i. .f ♦to Ann 000 ! n.-at(' are much lowc^r than actual valuatu)iis, and that $2 400,01),^ a^^n pai( , au luueii . , , .i r ii ^-.a^^^. of real estate for said i\iM\ WM conservative estimate OI iik. lun N.imt ^^x ^y . ^ 000 i^'^^'l'l^^^'''' f,,]i ^-alue of horses, cattle, salaries, and year, and ^I'^^^'^f^'J^J c leSed crthe. assessed valuations for said occui)ati(ms. ihe ^^^^ ^^^^^^^^J4\ '"' '/^^^^^ .uid for scliool purposes vpnr for countv purposes, was $16,585,Oiii2..HJ, ami loi sc nuiu i i $r8('>9 I^()r5r but we have no statistics to inform us ot the tax collecte for the s^^^^^^^ for road purposes, c^ity and borough purposes and for s >po^ <> the poor, where they are a separate char^n. cm a distric ; n t t le^^^^^^^ taxei were dcmbtless heavy, and amounted m the IrSe t > a lar^e sum (>f money. It must, however, be borne m mind that a ccmsiderable portion of the said taxes came from the real estate and oth(M' proi>erty of cori)orati(ms. PeNNSY1,V\M\ StATK lio.VKl) OF ArrlllCULTUKE. 123 We are also unabh> to ascertain what'anumnt was realized to cities and boroughs from s]>ecial licenses, but frcmi the ilistributiou of t}ie re^ tail liquor licenses for the said year, 1888, there was a revenue for local purposes of $1,820,097.50, jiiid about the same revenue for each of the years 1889 and 1890. The several counties now receive one-third of the state tax on per- sonal property, which amounts, for the year 1890, to $572,679.04, and local taxation is also relieved by the approi)i'iati()ns made by our Leorat(Hl banks and savings institutions, and to substitute in lieu thereof a tax for ccmnty pur])oses on gross earnings. It was also proposed that an act follow, reducing the rate of taxation for state purposes on the subjects namcxl in the first section of the revenue act of 1889 from three mills to two mills, and, as the counties now have one-third of the said tax refunded to them, there would be no change in this respect in our state revenues It further ])roposed that a full credit should be allowed on tlie tax levied on capital invested in nuTcantile and commercial ])ursuits for ail amounts paid for mercantile licenses and state tax, and a one-third civdit on so mnch of the personal pr()])erty of a cori)oration covered by the descripticms i^iven in the first section, as represented capital stock on which a tax was paid to the commonwealth. It wxmld in ettect, increase the tax cm mcmeved capital from three mills to four mills, which is the rate that prevailed from the year 1881 to the year 1885, and I do not regard the same as opprc^ssive . I o-iveacopyof tln^ bill I submitted, also a coi^y of one reducing the state rate on moneycnl capital f^'OTnthnM; mills to two inills, which appear in the Ap])endix, and are marked Exhibit A and Exhibit 15 HI w I'M m Pennsylvania State Buakd of Agriculture, 125 124 Quarterly IIeport. 1, l.«,.i- J-rir lloi.; I.EONAiu. RHONK, Centr<: Hall, an.l Hon. By Hon. (iii.KH 1.. 1 '''\l';.J'^\\',; ,.:",\h„wn, YorhaHa, Pa. -e;j— s:3x3^-^ios.;- ^*i^i^:anS^^ffi^»£l^.^^S= bicniglit ahom uv resented by the eonrnuission, invited Messrs. Price, Rhone and IJrowu to address tlieni in relation to the proposed law. a corporation having tlui right of eminent domain, and necessary for the enjoyment of its franchise, is no longer real estate, but becomes personal property, taxable by the state as capital stock, and withheld from taxation for all local i)uri)Oses. Thus, each charter granted by the fttate to a corporation having the right of eminent domain increases the resources of the state, increases local expenses and diminishes the resources of local government. This process has been going on ior more than fifty years, and is still going on. , And we now have the spectacle of a state treasury overflowing ; .^^itli the subjects of state taxation paying from one-third to one-hall the rates paid by the same classes of property m adjoining states, wliile, on the other hand, the local treasuries are impoverished, the munici- palities heavily laden with debt and the subjects of local taxation over- burdened. . ^ ^ ii • r Efforts have been made from time to time to correct these inequali- ties but the inequalities have steadily continued to grow and were never greater than now. Ileal estate has been relieved from state taxation, so have horses and cattle Ai)proi>riations have been made from the state treasury in aid of common schools and tor other local ^^Tax revisionists have been charged with being unreasonable and ungrateful We are constantly being told that the state requires no taxes from our property, and we are pointed to the munificent appro- priations made for our benefit. But from whence comes the revenue which enables the state to be so generous with us"? It comes from the taxation for state luirpose only of a vast amount of property lying with- in the territorial iurisdicticm of the several counties, cities, boroughs and townships throughout the state. Belts of it run through our farms ; it is occupied by gas companies, and other chartered concerns, dotted over our cities ; its buildings stand within our sight by the side ot our buildings. It is protected by the taxes loe pay What tax revisionists ask is that local authorities may be aUowed to tax all property within their respective limits. If they could do this they w()uld ask no help from the stat(^. to pay their bills. We ask that the state maybe restricted to tlnwimount of revenue necessary to maintain the"^state government, economically administered. We ask that she may attend to the legitimate business ot her statehood, and let all other business alone. tit Our present disjointed condition cannot be remedied by appro- priations from the state treasury, no more than you could resuscitate a dying tree by lopping off its dead branches. You must go for the worm at its root. -, p. i i ii a .j.- +• A bill embodying these principles was drafted by the Association ot County Commissioners, and presented to the last legislature. I he patrons of husbandry also had a bill before the last legislature to re- vise our tax laws. . . . ^ t j. • ^ Each was pushed oy its respective friends, and some antagonism sprano- np Both were beaten, and tax revisionists for the time became the laugliing stock of their opponents. But it led to the creation of a commissi charged with the duty of framing ^' a uniform system ot revenue, embracing both state and local taxation. When that commission took up its work, however, they found them selves unabh^ to agree on anv method of revising our state revenue laws and were therefore compelled to agree to let state revenues alone. The bill recommended by the commission makes no change wliat- m i ■ .• 'h I '<;, -or QlTAllTEKLY REPOKT. ever in state revenues. This <^^^ZJ^%^^^^^^^ work of framing a completean( Isy m^^^^^^^^^^ pi-oduction and But, wl.ilo these 9^-\''''^''^;^\^^.^^,e course we have been presentation of an uleal «y«**^". ™1'"^^ .^^^ A new tax law orce.l to take may prove «i« ^"^^f *;^ '^\*^^: to be decided by ttie court. must of necessity rais.. new i«f . '"^* ^[J'ii'^.ovations which will pro- The bill we recomniwid <-"i tains '^'^'"'^ ^^ ;*^^ ^^ j^.t our system of voke legal contests. It niay be the ^"« *^t com^^^^ ^ ^ ^ ^ ^ jf-^i^i^ ^.^ The first section o our bill ^f ;^^;<^t«;. |{» ^Hj^^^ ".jtu our definitions be frequently used in drafting >* *'.^., 't,, ,.1,^^^^^^ proi-erty for pur- settled we pmceed -l^^i::'^l^;Tvm>erlyA., as is pt)ses of taxation it ^^« ye^V ," xt;' <.onv«e iiiiKht not bo necessary ; contemi.lated l^y he constitution this u use J^^- |^ pt^rposes but it is evident that su.;li property as ?^ "^^T t"^^;^\\;'^ ..^rposes only, nrust be treated ditterent y *'> l-^l-;^^ ^h"^^^^^ I Aixl not ai.peL AVe have, accordingly, "i^^^^^ 'i**^M'=i^'ft^' tn^"\*^^\'' ^So^^^^^ j a' C:'.^n(^ ill flip Mo-crvep-ate, 111 tllO luilias Ol l)Ohht.bt5iUii y^ '^^'^'^ be specially exempted tiom taxation, imi u i", « .1 f „ronerty it it will be treated precisely as millions ot dollars ^.oitli 01 piopei ^ has been treated since the adoption ot the c=ons itutu, . Se,ttion five makes it tlu^ duty ot the assessor to hx ^^'''^^^^^^'^^^^^^^ ot al property, and .nily re.,uires the taxable t.. turnish ^ ""mbe s anoui ts -uid quantities. N.> oaths are recjmred l;^,f « ^ J^^^i^/^ ^ft who have wat<-hed tlu. effect of ,.aths "//•^""«'=*V' ' *'^^, ^^^^^^^^t a 1^ of uroDertv are nearlv unanimous in tlieir cond(>mnation ot such a le q 1 emlfnt.' As an illustration I will relate to you a line o inmj^en s that came under my own notice. The hist money banks I'lLP'-^i^a npursimnce of the Lney-at-interest act of j««-^J' -'l'"^! /i;^*;:;^^! to report tlie number and value of horses and cattle, and m ur coui^y this las done. It slu.wed an amazing diitereiu;e in judgment, borne cows wei4 swoiT -down as low as $10 a head, and other cows 111 the s r locality were sworn up to $25 per head. In one township ess averaged $18, and in an adjoining township they avemged $28 per head We were never able to discover much difterence in tlie cows. This circumstaiico reveals to us a danger far more threatening to the public welfare than the matter of dollars and cents could be. It shows that in the frequent and fli|)pant administration ot oatlis, tiie sanctity of an oath is forgotten. Tlu^ universal recpurement <>t />aths if persisted in, will lead to a general demoralization or debauclieiy ol the public conscience. This is not an evil that is likely to correct it- self Its tendency is to spread and grow worse. j. 1 1 But if oaths are dispensed with, some other method must be (le- vised to secure a full and fair return of taxable prop(n-ty. In section Pennsylvania Statk Boaud oi' Aouicui/rmiK. 127 21 w(! present a plan by which we think this may \m acttomplished. We recommend that a ]>rinted list of all the assessments in a ward, township or borough shall be given t(i each taxable p.HSoii therein once in three years, and thus give to each taxpayer the privilege ot sittino- by his own fireside while he quietly compares his own assess- ment witii every t)ther assesment in th(^ district m which he lives. VV e believe this plan wcnild prove; an effectual protection against suc^i m tentional injustice as is sometimes perpeti-ated bv tlie assessor, tor no assessor would dare to reward his friends or punish his emjinies it he knew that all his acts woul.l surely be scrutinized by every taxpaver in his district, and it will afford the utmost tacility tor the discoveij and correction of such inequalities as frequ.nitly occur through inad- vertence Nor would it be a too puldic exposure ot the affairs ot the individual. Assessments are imblic reamls now, and always liave been These printed slijis would show only what ai)i)ears on the assessment records in the office, of tlit; county commissioners-a line for the description and value of each pi(H-e ot real estate! ; a line tor the ao-o-regate value of tangibh; personal property : a line tor the aggregate ammmtof moneys and credits, with.mt giving the names of debtors and aline for the gross amount of yearly income, the vital point ill adjusting assessed values in ecpiality ot burdt;n fins matter ot equalization involves the id.^a of comparison and, therefore, every facilitv should be given to each taxpayer for making comparisons. It is the duty of th.' government to show mills now collected bv tlu; state, would make an ag- gregate tax of five mills. If ydir rate. The taxationof corp(n-ate proi)erty is |..<.vided tor 111 sc-ctions 1(., 17 18 and 19 If this bill should become a law, railroad c()nipanies, canal companies, pipe-line c.mipanies and telegraph and telephone comT.anies wouhl b< rocpiire.l to pay into tlu. c.junty treasuries ot the resTectiv.' c..unties a tax ..f lour (4) mills on the actual value of their 'tain "11 J 4* '■ It '111 < !l n 4 II ft !■[ ll :r;.'{| 0^ fV\ ■HI 128 QUAUTEIUA IlKVOIlT. Pennsylvania State Boakd of Aghicultuue. 129 It in cJ hWh a'raTe-lmt after lon^und careM study -"'1 ^ in\f ^^J^^^^ii,^.*:- believe it is not other taxi)ayers believe .t .s -<^^^^^-^Xm^^ ^ I'i" «»-"l;j^^l; ^^^ ^^^^^ ^^^^ -^ ^^ they would. to for ^^y-^^^^^^^^^^^ by it. In other .wds, that ':m:^..nvtto shift tlieir i^^^f^^ji^!^,}!:^^ Phliadeliana,lx..u^e rm ^r^e S b^ thi^ bill. They running tlm^^^^^^ to Philadelphia for the same re." i 1 o^^^^^^^ t- Philadelphia ; nor from Harnsburg- ; n?>r f rom K^^^^^ nor from any competing point. It they should be s^unw s/^^^^^ discriminate against non-competing points,, and charge morrfor a short haul than for a hmg haul m the same direction and Tder like circumstances, the legislature has the remedy m its own hands Our belief is that corporations will not be able to shift one dollar of the tax imposed by this bill on to the shoulders of their ^' Irf have already intimated, this bill of the tax commission is the result of compromise. It will not meet the views ot all tax revisionists irSe T p^ icXr (no bill would do that) , but it will give subs antial rebef to property now over-taxed. It is m tlu^ interests of the laboring Tnd prXcing cLses. If this bill, or any bill having the same object, Kuld be suc^cessful, it will be mainly because the farmers (>f this state live it their earnest, active and united support. While it is true that ?eal estate in the cities is as much over-burdened as real estate in the country and more, and while this bill woukl ix3lieAe real estate m the cities as much as in the country and more, it is also true that city real es^ tate owners can and do shift their burdens on to their tenants, the great army of wage earners, and this latter class have an impression that the tax question dcx^s not concern them, because they do not come in direct contact with the tax collector. Without united action among he f arnurs of this state there is no hope of success. This bill has had the endorse- ment of the associaticm of county commissioners, which met m Wil liamsT)ort in November last, also of tlui state grange at its meeting at Harrisburg in December. It has also been endorsed by several con- ventions of tlu^ farmers' alliance in different parts of the state. Each of these organizations have pledged their active support. We now come before this board, composed of representatives agriculturists, and ask for your endorsement— not because we think it will exactly suit every member of the Board in every particular, but Ixn^ausc^ we believe it to be the best to be had at the present time— because we believe it is this or nothing. Every member of the tax commission was earnestly in favor of a revision of our tax laws, as their reports show ; but three of them dissented from the majority report, and it is a sug- gestive fact that no two of these three gentlemen could unite in re- commending a l)ill. Each one of these made a separate report. Un- doubtedly there are gentlemen on this board who would object to some of the details of this bill. I wish to ask these gentlemen, in candor, do you l)elieve you could agree among yourselves on all the details of a substitute for this bill? , .| There will be several substitutes presented to this legislature, but a majority of the oppcments of this bill will be united on a measure to place a light tax, perhaps two (2) mills, on the capital stock of cor- porations and require that the avails shall be paid into the state treasury, to be approi>rited by the legislature in aid of schools, roads and other local purposes. The advocates of this plan would continue the policy of collecting revenues in the state treasury far in excess of what is necessary for state purposes, gra(;iously bestow it upon the needy municipalities throughout the state, and then claim the ai)plause of this ])opulace for doing it. I wish to repeat that if the cities, boroughs and townshii)S can have the right to tax all the property within their respective limits they will need no assistance from the state in the payment of their bills nor in the management of their affairs. The policy of collecting a suri)lus in the state treasury for the purpose of being ' distributed for local purposes, is contrary to all generally accepted rules of good management or good government. It tends to centralize civil power here at Harrisburg and would eventually make the local authorities constant supplicants in the lobbys of the legislature for the means to sustain local government, to maintain higli- ways and to educate the i)(-o])le. » ^, xt t:^ When the Pilgrim Fathers instituted government for the JSew i^ng- laiid colonies they placed all power in the hands of town meetings, and their simple plan has been the type after which all really tree governments have been constructed since their time. The deviations from this plan of ])urely local self-government has been rendered necessary by the aggregation of towns into counties, of counties into states, and of states into a great nation. But the best interpretation of the genius of our institutions has always been to withhold trom the central authority all functions that can be effectively exercised by the local authorities and to leave to the management of county governments only such local concerns as cannot be advantageously managed by cities, boroughs and townshii>s— in short to keep the collection and disbursement of public funds and the administration of public attairs as near to the people as possible. The bill we present to you embodies these prinei])les, and we ask for it your endorsement and hearty sup- port. Hon. Gerard C. Brown s])oke as follows : ... 4. As your chairman has informed you it w\as my expectation to say what I had been invited to sav this evening. Ccmsequently, to speak on this resolution ]nits me in the ]>ositioii of the man who started to go out hunting, and aftcn- \w. got out where the game was ho, l(mnd he had no ammunition fitted for the purpose. The remarks I intended to make were to be in a somewhat different field, or rather to cover the whole field in the time I intended to devote to that luirpose. The resolution I am now called on to spcvak upon is to endorse the bill Tiresented by thcvtax commission. Perhaps it wi 1 be proper that I should say a few words first as to the necessity of taking such action as is called' for on this occasion. I regret that my engagements have prevented me from In^aring the discussions winch have taken T,lac^ m this body. I have listened to some of it with a great deal ot edihca- 9 i t! i r-, y\'.u ■'€A ^1 Tl .*■ ■-.u '1 '■'.* , ^3Q QUAUTEIU.Y RkTH)11T ion t X)eoi able ook aniuBenumt. I have istened »;» " « ^/ ; .j, to coinplain of ; thut thoy the position that the j^'^^i^ j^;;^\ire7bul no reason to comphun, were the people iind that, "1?^*^^°;,*^' *" f • -.^ej ^nv depression it was an they had -^^^f^J'^.^Z^^^^^^^ --« their own tault. llie taimeis oi j .i-.sire to live, and have a respect and treatment as '^"y/^^^^^, ^.^'^'^^is on the face of the earth, right to live, as well as any other class that ^ <>" ^^^^ occupation I i, not know that a ma,i who deN-otes ^^ J^^^ * ^^ \t fair share to thatheniay live, should be ^""I'fM*;;! f^ '^^^^V^^^^^ is just as mer- sustain another class . The labor "'^^''Xr Enterprise, and should not itorious as the ca].ital invested. m f^^ ^^^^ ff Jhare^^ the expenses be re<,uired to pay 7- .g'^^.^^S a ^"^^^^^^^^ of the government I *1"\*, *''??"',, the farm was no industry," and me to day who said tha « ^f f J'^X" hat oftentimes the farmer " it was a mistake to look upon it •''*'^,*^,"Y ;.„ ' ,_forni upon it. I must has a piano in his house and "<; ""« ^'^? ^li^ 1 k^th^^ very much, say that farmers have »<;t]""^t'''^;;™^j^tlihr-s ought not to be ail tbe fact th;|t -- of "^^^^^^ ^,^,^^1, the cap^ „a.tof the l)urdens ot the ^t^^V^ */ , t tht on^^ wi» is invested invested in bank stock or any « '^ "^^^if J^^Xrhetl^eir n.ifits and ent investments are the «"'"-^-« * ™ ,^V e tHms less than livelihood, but the average I'l'^^^/ ".J^^l/'l^'^,,'^ '*";(' "kinnv, by the '^"Tnc: .SmT'-u" by afS r t™tatiXs show us, tlu.t Lere i:m> S S^^^^^^^ -hich brings us so low a return as the form nn t lef irmcT sh.m](l not be compelled to pay a greater proportionate a nu of tlx t/ianthe same amount of --^'y.-^*; -\-,-^,fthe ,,rlnc,fvv T believe the true Inisis ot taxation is to be laul noon tne c^^^^ property; that that yIucIi pioauees m a^nS sS^ \>e taxed acwUlv, and tlntt which ^--^-^^ro^ d ee so profitablv shoidd not l)ear so much ot the taxes; that tiom MnolZrn. is derived should not be calle< upon t^pay amo- tion of the pul>lic- Imrden. Oik^ uKMiuality in the case ot the taimc s n - rty sL to the method of assessnient am\ tluM.^sult ot ^-^sessnu.d. xll vill a^ree that all of it is open to the vh.v ot the ^^-^^^ ^^^^ •ill ooen property; it cannot be concealed or removed, ilieie aie, aL:S^?\he Lt statistic, in tl- returns inade to he o^^^^ about tw7) thousand one hundred million dollars ot that pioperty cie n^^^ val estate found in this state, of which I ccmcede less than ^Z^ is farm property and this is called upon to V-y-f-f^^i;^^ taxes Avhic'h no other class of i)roperty as such is required to pay any ncn-tion of ^vhicll is the tax(. for local pur])oses, and, as it is assessed at about fifteen mills on tlu^ avera-e. it results that the real ^;«tat|M>wii- ers are recniired to pav, for local purposes, somethm- hk(^ tlaity-t\vo or thirtv-three millions of dollars a year Avhich is exacted trom about two thousand million dollars wcnih of ival estate. 1 akin- all property in city as wc^l as town property classcul as real estate, it was so ahiy shown by Professor Hamilton in his essay according:: to the estimate lie made aiid it is abundantly sustained by facts, that not less than litteen Pennsylvania State Boaiuj of AciKicuLTCUE. 131 mills is paid on it. We have the statenu^its of the Auditor General in 1886, and we find that the rate of taxes then amounted to eighteen mills on real estate. I know it is said that the fariii pro])erty is under valued, yet if we take the sw^orn assessments as made here to the Sec- retary of Internal Affairs as being- a fair measure of the valuation of real estate, the estimate made in 1889, was twenty one hundred million dollars in round numbers. No matter frcmi which point you view it, it is an undisputed fact that the assessment upon the average real estate proi)erty was between lifteen and eighteen mills, and that on little over two hundred million dollars worth, all of it taxable for local purposes, and you know just what taxation for local purposes means, it being assessed on proj^erty in cities, towns and townships for schools, roads, and the poor. It would be well to understand what this other i)roperty, denominated corporate and personal property, amounts to. We have very little light on this subject, notwithstanding the oihcers of the state o-overnmeiit have used all diligence to coni])ih5 such statistics as are available. It is true that under law of 1881) the representatives of different classes of property are compelled to make returns here, but so far, except as to transportation corporations, it is almost impossible to tell what the gross amount of such property is, or even ai^proximate to it. With your i)erniission I will briefly consider such statistics as are available on this subject : I had the honor to be on the legislative committee of the state grange and made the calculations from official sources as to the cori:)orate and [)ersonal property. Taking the reports for 1888, w^e find, as the value of Railroads, • • • ■ • $1,641,000,000 Passenger railways, 28,000,000 • Canals 97,000,000 Telegraph, 105,000,000 1,873,000,000 Capital on interest, 500,000,000 Mercantile pro])ertv estimate, 500,000,000 150,000,000 Salaries and occupations 85,(U)0,000 Bank capital, 100,000,000 Horses and cattle, 42,000,000 Building and loan associations, 77,000,000 which makes a sum of over $3,300,000,000 of i)ersonal and cor[)orate proi)erty in Pennsylvania, and I am sim^ that it does not comprehend the whole of it. . -, ^^ i. i.i i. • In the first place, we have not nearly ascertained the amount that is at interest, and, in the second place, we have undoubtedly very much underestimated that classed as merchandise. It will be safe to say that there is thirty-five hundred million of corporate and personal property subj(ictto taxation which is only taxed for state purposes, which only pay's a little more than $4,000,000 a year, or about one and a quarter mills on its ascertained value. Collected from all sources, the total state revenue is eight million four hundred and sixty-five thousand dollars, and I rei^eat that when you come to tak(^ out the licenses and the es- cheats and the miscellaneous and sundries, we find that tlu^ balance which remains in the shape of taxes from the personal and corporate ])roi)erty above enumerated is about four milli(m and ninety-four thous- and dollars, or four million one hundred thousand dollars at the out- §M '■•-'■I I m '^.t. tff '■■«•- ^^2 QUAHTKULY KkPORT. which is less tha.. oi.e and om .h t uUs ^ ^ ^ Haven't ^ve a in tliis state. Haven * ^J« ^ "f |j Led fn .MiiLlves as a people and lio-ht to call upon every powei lc)(i>-t.ii loVlse it in the lesislatm.-? ^p^bers of tho legislature who have as- fbelieve the majority ot «'< members ot t'i ^ .^^^ prei.arwl „end>l.-d here this ^^^'tf-.^f^-H'^^' ^uestly ; I believe they are ^vill- to look at it, and look at it ^^^[^{{"'^/''Xe providing we can unite on ing to give us a fair and ^,<1™ '^ J« £! H^^^^^^^ authority, therefore, a measure an tliem, by bringing cV/ of our intluence to bear on this legislature, will b<- rewarded not only by an alleviation ol the unjust taxation we farmers endure, but by the prosperity which will accrue to all tln^ labor interests of the state. Mr. Leonaih) Rhone si)oke as follows. , , ^ i 4.1 Afr a hah- man and Fellow Farmers : I am very glad to have the ODPortunity to meet with you and convey to you the congratulations of tlie State Grange of P.-nnsylvania. I can assure you m your efforts to bett.u- the wmdition of the farmers you have the entire sympathy of our association. T know this agricultural board can do a great work if prooerly controlle.l. Now it is in the interest of the representatives to sb direct the w,.rk of the board that tlie condition ot the farmer xmII be benefited and thus .n.able the farmer to cheaper production lo assist tluem in sec^'ing remunerative markets for their products and s.'cnre for them such a financial policy of the government that ^u I <>nable them to ,.av their honest indebtedness as honest men shouUb To give you an illustration : A year ago it was my pleasure .t«> go to Washington and inb^rview Mr. Rusk, the Secretary ot Agricultuie. 1^ 1 A» vt J i,r. 134 uskiu^ liiiii to Quarterly Report. • 4. * .,.^;mi frqrlp relations and what tlie^y „ nullum nuiuiiy n.to t»i« f »;\?;,%^j;t;^ tnido in our pro- ;.e"i^"°aoins ami what ^-^^^-^^J^^ ^o^'^^^ «"'>iect. We ducts, and the Secretary inade ;\ ^^''^^^^^fj^^^'^veniraent discriiniuatecl found out more ; we touud that t e W^^ >.» American cutth. were a-aiust the Americau cattle ^'f ^,'' ,^,"\f^ ;'\^ .J^a y.y the Eu-lish (,>iav- shipped iuto the Bntish umrke thejj^ eie 1^ '^^^^ ^^.i^,^^^,^t thisquar- raatiue, whiU. the ^^ttle tn,m Oai uU^^^e^^^ j ^^j .,^,. ,^^,a ask.^d uutine discriuiinatiou We theu 'onsuUcd ^^^^J^ ^ ^^^, ,,.m,, ,„t hi,a whether we could '"^Vlflrfli tmm^^ and it resulted [^r^S:i Xr;!-::' so '^^£S-^^^ the Au.eru.au cattle Pennsylvania State Board of AoRicrLTrRE, 185 ijfiowev. ■ I ^o. there are only three coxulit^.. ^^^ ,:;:!:;.:^?i^ to'l^d.li^^X The first is to remove thes;e }-««t"^'ti""'';,,,^,ftlu' world • and the third values of our prod^u-ts mtlns ««;"^tj^^ ^f ^^b^ th^ta^^ to do what is, to adopt such a tmaucial Y^'l^''^ "^;;^^^^ X<^i- at the close of the war tlie o-overnment was able to do. ion lememuei ai. uh Z Interest on the bonds was seven ^^^^'^l^^^^ .^^ de- creased to t•<'"^'^"'^\P'"•.T^'' 1 .dfirpw cent And m.w if the feated, proi.osed to turmsh bonds at t^J l^",^*^^'^-^^,. ij.^y .vithout fanners can -1<' tl-^.f nie hrn^ an^^^ « J l^^^ ^^^^ cheating their credit<)rs «!«> . '"^ JJ *, 'K knowwhen you launch out ^^iJ^S'^:^^:::'^^:^^ aJe^-^-on. yo/wm .et r,.ht ^^^^ncet^tjussubj^ol^^^^^^ ou"hrrstftt"m ^^ iesentin" facts rebutting the position taken o fl s ues o Senator Brown has sIh.wu from the ^'0"^^!"" Vw t o °r.m-e that the amount invested in real estate is something lil^e J ^o fho saiul mil^ dollars and imys a tax of thirty-tour million.dollais Srhas sli w y<.u that there is over three thousand nullHms invested hi c on Ku' k. s and personal vroperty,and that the entire amounts pays a tax o y ..nr million threl hundred thousand do lars,.or an av-erage t.v of oue-ind oiu- hfth mills. Is this true, and it so, is it just^ It rerear^:;" members of the legislatui. present I a J «--. t*;^-!' f, to the v>osition of the state grange on tins question, and it it is tiut as estimated thr, High its committee I would ask whether there are not S liscriminatTons as should not exist. You have but one course to pmsu in the oaths which you have taken as m..mb(n-s of the legisla- hm. and I can assure you that the state grange ^vlll I'ot take part m oUtics if it receives fair tivatment. I want to assure you that the state !>Taii-e is not a political organization, but we ha^.^ directed your atten- Uon "to manv of the evils existing with reference to the unequal and uii- Mv method of taxation in our state. The taxes collecetd by the state department amomit to four tliousand dollars. Money at interest now navs three mills; the bill reported proposes to add two mills more The same bill proposes to put a tax on transportation comi.aiiies lour mills more (they pay three^ and with that pio)«osed to be added wil make it seven mills on tlu^ir valuation. \\ e b.- leve it all tlic l''d would be six thousand million dollars and the cost ot the o-oveniment is about forty-two million dollars,and the taxes so collected will pay all the expenses of the government, and if you t^an do tins you will cause great thankfulness on the part of the people of th.! state and those who are llepublicans will remain llepublicans still and tliose who are Democrats will remain Democrats still. TiT'PORT OF THE STANDING LEGISLATIVE COMMITTEE oV THE PENNSYLVANIA STATE GRANGE, PATEONS OF HUSBANDIIY. The legislative committee beg leave to report as to the matters which they have been directed to consider and the information tliey were desired to collect on the question of taxation in the state They would say that after the defeat of the tax bill prepared liy them in accordance with the instructions and wishes ot the state grange, the whole subject of taxation has bewi carefully and laboriously inves- ti .rated by the commisssion appointed by resolution ot the legislatuw^ The various leading interests of the state were specially represented in the membership of this commission, and all were given a hearing and due consideration. i -n i • i 4.i,„.. The maiority of this commission have reported a lull wliicU tne> believe will secure substantial equalization of taxation upon all c asses of proi)erty, and will remove measurably the uniust burden ^^hlcll the nresent system entails upon real estate. i , ., t ^ Your committee offers some statistics gathered by them tor your consideration as showing the aggregate amount ot the dilTerent species of Serty belonging to the people of this state, the t^ixes collected, the reform and the proportionate rate of taxation thereon. We regard these as necessary factors to enable us to ascertain the actual results of our present system and indicate the best method ot re- '"K^t'^'al'te* the amounts owned and invested in Pennsylyania be- lon "ing to the various corporathms of the sate. We will take the amounts of capital stock and bon.ls representing the interest-bearing ^iXbtedness as affording a means of fair y f ""'^t^^g. * '';/!J ^^f ?^.^ railroads and other common earners, the transportation and ti.uib- mission companies. ,. , > i a-pp ^,. . .+• iqqq Taking the official reports of the Secretary ot Internal Affairs ot 1888 as authority: . , ^ , , n-, ^ ATir ncc i^r, Ilailroads, paid up capital stock (v 71a) , =?< . M)W.,31,, Railroads, funded debts, ete. (p. 71a) , . . . JG5^,2^ $i,.;41,78'.),«18 Passenger R. K, capital stock paid (p. ^^^ ^^^^^^^^^ PasSger li. 11. ,' bonds,' etc.' '(p'. 'l06a)',' : : W,12,0W ^^ ^^j. ^,,,, Telegraphs and telepiiones, capital stock paid (p. 145a) , ............ ?92, .j71, 00 Telegraphs and teh^'hones, bonds, etc. , . . 12,(,.)f.,oou Total transportation and transmis- sion com])anies $1,873,575,000 ■} ■ 'J :fl'i ^^g QuAUTEiu^Y Report. Estimates of Auditor General to ta^ Com- mission, i. i.- f $5(K) 0(H), 000 Mercantile property estimate, 50o',000,000 Money on interest, 150' 000,000 Manufacturing^ company, 100,000,000 Ba.nkin<^ capital, . • ss', 000,000 Salaries and occupations, ^^^^ 000,000 Building and loan associations, • ^^^'^q^ yoo Horses, 12,000,000 Cattle, 1 1,452,000,000 $3,326,000,000 Total, ^ • This iB>he.ross aggregate c^^p^^^^^^^^^ interests in Peimsylvauia. ^Jo* " f^JL^^ji is beyond question, the list and properly assess «"«1^ ^'ot' Lome and the gross receipts rnost valuable - Jf [^^^^^,t ,"mpte^^^^^^^ 1-^',- 'd^ thereon. Much of it is "».^\exempxeu^^_^^^ ^^^^^^ ^^^ .^ ^^^^^^^ ^^^^^^ sources count of the following items from the btate ireasuiei s repoit ui Collaterial inheritance tax, ^^'iTS'liSi Foreiirn insurance company, 158 ()00 On writs and ^^ - ; i65;ooo For bonus on chartei^, 778 000 For liquor licenses, V ' W " i- 01 /nnn From brewers' , bottlers' and other licenses, 214, 000 Notaries, ; ' ■ ^'^qq Escheats, kVooO Fees of public officers, ^ 1 9? ooo Miscellaneous and sundries, i^o,in7v/ For juvount of sinking- iuml : From Allegheny Valley liailroad, i^n Commutati(m of t(mnage, Irn noo Annuity right of way, ^^' ''''' $4,371,000 Balance taxes collected from personal and corporate . ^ ^^^ ^^^ property, • :/ \' V * "/ ' i. ' Of which the larger item is the capital stock ot corpora- ^ ^^^ ^^^ tions, •'*/'*£ ' noi 000 Wliich with tax on gross receipts of same, ozi^uu Is all that is collected from the value of the same, above, estimated at $1,873,0^3,000 On the other hand we have the real estate, the farms and th(^ liomes of the state chargeable with the burden of the taxation for local pur- poses. Pennsylvania Si ate Boaiu) of AdJticirLTURK. 137 It was assessed for taxation last year at $2,002,942,000. Under the present law this is taxable for local purposes, and only local purposes, what does it pay? To ascertain this wt? have no information at all complete later than the census of 1880. This shows the aggregate amount levied for county purposes is $16,585,000; for support of townshi])s, boroughs, municipal, $17,731,- 000'; total, $34,316,000. Undoubtedly tliis is several millions too low, as the statistics are ten years old, and there has been great increase in the taxes for those purposes. . ,.11 And we have the corroborative evidence of the statistics whicli have been gathered under tlie law of 1889. The forty four counties which have made returns show^ that $29,326,- 912 were collected in tliat year for the maintenance of the county, town- ships and niuiiicii)al governments. ^ Twenty-four counties and the city of Eeading failcnl to rc^Jort in time. It is evidently true that if thtnr reports were included the sum \> ould much exceed the $34,316,000 exhibited above, as such cost in 1880. We are met by the argumennt that the cost of construction and equi]unent more nearly rei^resents the value of the transi)ortation cor- ])orations of the state. While we do not so regard it, because a great factor ot th(3 value ot every such enterprise is that valuable thing which gives life and au tliority to it, its franchise, conveying as it does the right of eminent doniain and other considerations, and the vast sum of accumulated profits and surphis which cannot be included therein, we are prepared to meet all objectors on tlieir own ground, and herewith give estimates based on the official reimrts of the Secretary of Internal Affairs for 1889, as follows : Total cost of railroad ecpiipment (p. 83a) , $1,068,035,000 Total cost of passenger railroad equipment (p. 108a) , 11,515,000 Total cost of canals, 30,258,000 Total cost of telegraphs and telephones (p. 133a) 2,321,000 Total $1,112,13,9000 An amount considerably greatc^r tlian tliat shown by the returns of the same office as the value of all the farms of the state ( )ii this i)ro])erty we find that the railroad corporations ])aid last year cai»it:il stock tax and tax cm gross receipts amounting to $1,210,000, or about 1 1.5 mills. We feel assured that the taxpayers of th(3 state do not appreciate the enormous discrei^ancy of the taxes on real estate and those on cori)o rate pro])erty. Much of this, as tlie stock of manufacturing company, and building and loan associations, among thci more ])rofitable in the state, much' of it yielding fnmi 12 to 20 i)er cent, annual income, is entirely exempted from taxation by law, in defiance and in plain viola- tion of the constitution. The tax which is levicMl upon railroads, is as we have seen, hut one and one-fifth mills u])on the lowest valuation we can ascertain. It is very nnich below that which is laid upon the same property in oiii- neighbor fit'ites Ex-Auditor General Niles has shown this very sharply in the in- stance which the cites of the Pine liidge railroad in Tioga county. M . i ^,t i I f' I < n It ■'.*. f ^ Ql AKTKKLY RKrORT. wliic 1 the law refuse tc. real *^«5f«,^'\Vim mills, for state puriK.ses i>iily. ;:i.nts. Upon this they ,. ay a tax oBlac • im^ ^^ ^^ ^^ ^.^ This railroad earned in 188.), ^ ' f,%'^;;l.l^ 4,);} (52, <,r nearly « per cent it amounted to *f =^-f V^ul ]d lSa1 altr; $300 to the state and ZS^X^i^^^^ t'lih^hJch its75mUesot roadway imis. . /',,wii.esoue and Antrim railroad: Take tlu* Corning, Cowanes(iu« ^ ..$3,250,000 It cost to build and equip, ; 524,000 It cost to run it in 1889 (;81,0()0 It earned iu 1889, •■■•••:• ,V I.: '.'.'. 157,000 It paid clear profit to stockholdeis, 1 + t^nn ve'irlv tax on gross earnings and capital «tock m It pays about ?'^«^\y,^;''^;^.if'^., ' "nothing to the townships or tlie the Pennsylvania state t'^f'^^^ ' ^'^^ .^,a through which 37^ of its county of Tioga, whence all l**?/ "f "'ff!, '" ,,gU Nevv York. It crosses 53 mills run. But 15^ ""^^^ «* ^^^thrertSSps-Smedley, Erwin the state 1 hie and passes g"X" It ,'ws to these townships, for local and Cowing- n New York State It p^^^^^^^ ^^5 ^^^^l ^1,552 res- purposes, their roads f l^O"^.,^"'^. 1'"^^' J 'not evident that we must tectively, or a ^^J", tot^;.,-^* f.^^^^^^ Pennsylvania, that this revision Si: LXTnttett'^ailf tvl;-^^^^^ of k owners of real estate. accompanies this report, will '\«"^';, "!'^^^..f '....operty, so well able to in- the local govcrumunt ot the state. Leonard Ehone, • Gekaiu) C. Brown, E. H. Thomas, A. L. Taggart, James G. McSparran. Pennsyt.vania State Board of AciiLicui/ruRE. 139 i ilEPRESENTATIVES, EEBRUAEY 19th, 1891. Mr Chairman and Gentlemen^/Th^ ComrniHer: The soveiiteciith •trtTcde of the constituti.m of Pennsylvania, m its first «ect on, declares fW "all railroads and canals shall be public highways. That was o more than tue enactment int.. the organic law of a Pvn'.ciple whic a.l 1 n- s^nce b(.en announcnl by the Supreme Coiirt ot this state, and n , vfech the legislature, from the foundation of this state govern- S £acted. It is because properties (,f this kuul are ,.ublic high- wavs and because the corporations which are charteiecl by the state to oi.erate them are .piasi public corporations, that such property has heretofore been declared to be exempt from taxation tor local ijurposes. It is for that reason that these corporations are clothed with the power of eminent domain for th(^ taking of private property, upon the pay- ment of damages, for the laying of railroad tracks and the miljli"^- ot canals Berm banks and lock-houses of canals are undoubtedly real estate in one sense, and so are the statioii houses of riulroad companies, as well as th.i soil upon which the tracks and ties ar.^ laid. J3ut so im- portant was the priucipl.' of exempting public highways Ironi taxation that the Supreme Court found it wise and necessary to liokl that a general tax taxing all real estate under the genera description ot real Sstate slumld m)t be h.dd to embrace pro|.erty ot this kind lu other words tliat the public v>olicy and the; interest (,t the public were so ertv for local purposes that it was not to l)e presumed that the legisla- decidedly against the taxation of sucli propture, m a law wliicli in gen^ eral terms taxed all real estate, intended to include itj "ml «o we find that as early as 1825, in the case of Fraley vs. The Schuylkill Bridge VompuHi,, the court decided that a bridge was not taxable as real estate And in the case of Ridiie Tnrnpil-v (Jampany vs bloever, 6 iv and S 378 it was hehl that tlu; toll-houses of a turnpike company wsre to be considered as part of tln^ public highway, they being neces- sarily iiicid(>iit to its operation. ., . ,. ^ \T tl And in the case of Lehie taxed as lauds and houses, it might iu some instance nrove a^rious detriment to the public, at large, as well as the owners ot ^uch nronert V * * " an.l possibly from this consideration, as well as motives orpnblkfpoUey, the state has never intenti.mally. 1 apprehend, attempted to tax such property." And again, in the case of the Schuylkill XaMon (^'o'^P^r^!''^- ^f''' Commissioners of Berks County, reported m 11 Penn a, 202, Mi. Jus- tice Kogers said : •'No person was ever so absurd as to suppose that aZ-aiwil passing through several <-ounti.-s was the subject of taxation for county purposes. 1 b'^ was conceded ...1 as the canal itself was not liable to assessment as a whole it was TCught that a component part came within the same category; that nreincide^nt followed theS,rincil.al . that part was of the same nature with the whole." And it was, therefore, held in that case that the toll house so built as to bo occupied, not merely as the collector's office, but also as Ins family residence, was included within the exemption. A-ain in Wayne County y^.thc Delaware and Hudson Canal Company. 15 Pennsylvania, 351, the court went so far as to declare that houses and garrtens occupied by lock -tenders and collectors and (-ngineers o the c^^nal must be held to be part of the canal and lu.t taxable as real estate under the act of assembly taxing all real estate for l.x-al pur- ''Tiul again, in Itailroad vs. Berks County, (i Pennsylvania 70. the .same doctrine was applied to railroad property, it being held that i I ... *. t ' ■':l QUAHTKULV HkPOKT. 1 • Ke..miciq.ble to the coiistructiou Jind whatever was f in'urtenau tana m lisi^^^ ^^^^^^ use oi the vo-m\, was f^«» '^^V'^, „ £ lan-uafie of ,lu.l-e Bradley, ot Now, 1 just waut to vea.l *! >^ ""A ^'^^^ in C'Am-«//o, lUilwaukee and St. the Supreme CJourt ot ^"^^^ ku J States, 418. He says (p. 461) : 1 t w fm- the purpose of pertoniiing ..When a vailroa,'. cotnpany is '''-[te^d t^'?/<^ arte?e ^ ^^^^ these pul.lir highways at And yet, by this bill, ff . ^^^"1 ^k u,^ then. f^^m^^^^^^^ valuation, the public road leading t[;^" , ,f « ^'^t^^^'^ty purposes. It is upon and cut the same into "" ,^^ '^ *t„ree removecl from the taxation of the same principle f ^^ ^'"'^ , *;Xr^^,^^^^^^ is constructed court l-"-«',!^^J;ftl S "giite^^^^^^^^^ «- ^^ ^-"1*- under public hiw with uu. i» ^ ■^3 , . , , j ^ j^t ^ee the maehm- How ^--^^yrVZ^fi^T^'rJ^ i« to be assessed for ery in this bill. I tind that a t. v '^J^ ^ • ^j ^,.^,^4 ^i f.^iUne or county purposes. How is >* * ,> .'^>*/;^^*^;; ^^^ {Section 19 says that refusal of the corporaion^^^^ for the collection ot the tax the. ^ev*i.u i .y ^^ ^.^^ the same power an.l ^^*^t'''>" f/^ '^f f^^iJi",! . t e collection of tax.^s of the property as is given to ^'f ,^ f ^^J™" ,, ;,' it], " It is doubtful for local 1|-1--- '4 i'£;;^ e l"nX ria co^^ -'»- if, without *'""™e';'^*l^"i'"X; ;mwei"s COT^^ by previous acts upon fer upon <>"| J* "^^^f^^^^^^^^^^^^^ p^uUasers to do with another, J^'fl'^ffi|;"'„ty buy within a single county? It is niani his own county. Would jus^UtaK^^^^^^^^^ ^^^^^^^^^ .^ ^^^^^^^ Si'S^ty'^'i^i po^^^^^^^^^^^ to the county of Oaupl,.!. lh.ft the rml lie has in the continuous and fa.thlul operation ot that T^^^i^^ hi 1«>J ^« one-tentli the rate of taxation is proportionately highei. In order to obtain a tax of 7 mills upon the actual value, ";«-,-- :;^':^"';^i,«^™d pose 70 mills upon the assessed value. It you take that <0 mills and vera-e 1" against the 4 or 5 or 6 or 8 mills in some other county, and mt them together in that way, you arrive at a very ^^f^^ ^at^ of taxation. But those figures, I think I will bo able to show you, are ^'"fco^m^n^n investigation into the tax rates of the ™^^^ ties of a-ricultural property. Finding that a department ot the state toveri ment had preceded me in that field I called upon that depar - menT ™s ch information as it had c^.tained I axldressed a com'nm i^ cation to the secretary of the State Board of Agriculture. I will tcad you 1118 reply. Pennsylvania State Boakd ok A(iiacui;niuE. 143 142 QUAUTEIUA' llErOItT. ..HAURiSB.nw, PA., i-'^^'wa'j/ lb, 18ai. *%t^^VX^ia tab.r w^l .ive y^ tl-J-sltal /e 1 Vrom various source. ^n^lSe'' us to base a satisfactory ^ It'c^uufy, the uun.ber ot faru.s ^' Our object was directed almost exclus^^^^^^^ ^^jj answer >oui !"H3i'SSES,"=i% in boroutchs and cities, 1 am *' Respectfully yours, "Thomas J. Edge, " Secretary, etc. In this statement which he has .h^n -f^^^^S^i^^y seven counties of this ««i'»^"^®'^\*^^;.,.,i*tliiitv seven farms, and the i„i°irS «.««»'> ••' 'it whllc'lS' "'SelS'o™'™- Cameron in that comity is taxed at ^O'^f "V^"! . ^ ^j^ ,. ^^^.y ^mall c-onnty of course, a very high rate. i''*"f'\.J,7? ''lance wouhl give you 20 i°o'„r,.?X .r^UsMKl a "..... ly ta which there are a great „.«,.y roadft and a ^reat many school houses to bij built, and wlioso expenses for ail local purposes are enormous. In Monti^-omery county twenty farms leturned showed a tax rate oi 7.80 mills upon tlieir actual value. Mr. Edge in a subsequent letter says : "Pardon me for omitting to jrjve you the summary in my former letter. It is as follows: ai.iw..n~-> '^Total m/weof farms returned, *l4,()41),.).).5^ ^^ ^ - Ihtal amoUNt of tax paid on same farms, *^114, - ''>-4- -This would indicate an average taxation at the rate of /.84 nnlls on their ^""Thfse returns include fifty-seven counties of our state, and I believe that thev not only include the county having the highest rate oi taxation, but als7the one having the lowest. The rates given include county and local taxes of (f// kinds on farms. " As showino- the methods by which real estate is taxed throughout the commonwealth, I have here an ofHcial notice from the county comims- sioners of Lac^kawanna (xninty to the assessoi^, with reference to the making of the last triennial assessment. It is under the seal ot the county commissioners. I read simply this parapaph : You will as^ sessreal estate and personal property at a full valuation, as the law directs but on the hooks that yon return to this offix'c enter only one- half of fan valuation for county jmrjjoses." That is the way they do it m La'ckaw^aniia county. couin certaTn matTersT^ For'instance, they are directed in assessing occupa- tions, trades and professicms to follow these directions : "Laborers, drivers, watchmen, teamsters and waiters, $40 "Brakemen, donkey engineers, " Firemen, printers, shoemakers, "Miners, butchers (employes), section boss(.»s. l)aggage mas- ^^ tpi'«a b'likers '**. ^' ' ' " Clerks', teachers, telegraph operators repoite^., curriers, bar- bers, tinsmiths, cigarraakers, carpenters, blacksmiths, paint- " Stati()nerv' engineers,' upholsterers, wagonmakers,boiler-make^^^^ bricklayers, machinists, masons, plasterers, stone-cutters, Jiai- ^^ nessmakers, (ilergymen, ^^ " Bartenders, millers and c tl (Mi ^^^ QUAUTEllLY llEP()in\ .... . i...,.,wx,.o .iiwl orlif.ors. but it nhare " Architects, cashiers, druggists, commission arul ^vllolesale mer-^^^^ chants, physicians, liotel Iseepers, 250 " Contractors, • • • • 300 " Brewers and superintendents, • ^qq- " Bankers and coal i);trons, The word liere is " "P^^-'^t^'^^l'i'/l^V'IfemS; horse at $30. Kate all h:^:^= af .^O^Sr n S:5^ :;i:^ive valuation, beef must ^^^KmS:^s would further -.-t Uia. jn a.essin. all^cl^^s Now, Mr Chairman, -? .''""i-^' "^^^ ^^^^^ a^epo^ of the n;;;eting- of the Pittsburgh Commercial of 1' ^^ "f,;^,^^^' t-ix levy for 1891 . I find the county commissioners to fix the millagc tax ie\y loi there a statement that PENNeVLVANlA StATE BOAltU <)1' AgUICULTUUE. 145 rog^Vl.er with tlK- i-^f^^^^^:;^^^]^']^\^'-;;;'<::^rii the real the valuation 'V°'"® '^'.V.?! low t&ear the board of revision will have value. If the returns are too low this ye'J^;^^",,"j^ns an equitable assess- no hesitancy in i"feas,n« ^e ^•aluat on By these mcan^ ^^^^ Z'^ll^eZfJul t" o ".nilV'^ri' sdll net the county a sufficient revenue." I will state my own experience i" /o^ff «7"*y',^.;»^/.«.^ ^t^S*; •ti,;. ., TO..!- fl ^iiivill lot of srround for which I paid 11,400. it is in tlf boio.r^h Of «is >ort.^ I took the trouble to look up my tax recoil a^^^^^^^ that that lot was assessed not to me, but betore I bouiht it, at $125, and that the tax assessed thereon was 70 mms. It seemed nerfectly frightful, and ot course, it you add that iO mills to b S from some other county, and 8 from another, and use it m the S'ne^^^^^^^ i^ "^^^^^^ ^n> a very large average millage upon rea fst ite but when you consider that it was assessed upon one-eleventh Sts actual value, it brings my actual tax down to between (> and 7 mills and I hnd that I have no occasion to complain ^ ^, . , ., . - &se statistics, Mr. Chairman, are the most reliable I think that have been offered upon this subject. They are certainly more to be denended upon than general estimates taken from the assessment lists wliich do not show the actual value of the property taxed, and in which assessments tliey are included at all the way from halt ot the actual value to |)erhaps 80 per cent, of it. I want to show you that on the other hand corporations are ass(^ssecl, when'th(^y come to pay taxes, at the actual value. Corporations, as vou know, are requircHl, particularly railroad and canal corporations, and trans] )ortation companies of all kinds, to report their cai)ital stock to the Auditor General annually, and if they pay no dividends, or il the dividends paid amount to less than G per cent., they are required to ai)praise that capital stock at its value as it (existed between the first and fifteenth days of November. 1 have heard it stated here that cor- porate i)i'operty is not taxcnl at its actual value. As showing the con- trary to that statenn^nt, I will call attention to the return of the Lehigh Valley Ilailroad Company for the year 1890, as filed in the Auditor General's ofiice, and of whicli I have here a copy certified under the hand and seal of the Auditor General. The treasure]- and secretary being sworn according to law a])i)raised the common stock, 800, G96 shares, at $52A2j^jj per share, amounting in the Avhole to $42,292,651.19, $52A2-^^j per share. That is, between the first and fifteenth days of November, 1890. I hold in my hand the Philadeljdiia Press of Novem- ber 8, 1890, in which Lehigh Valley stock is rei)orted at $49J per share bid, and $50 asked. That is to sa.y, it was offered at $50 per share in the market. We have appraised the whoh^ stock at $52.42 p(^r share. As Ave have ap])raised the stock at 5 per cent, above the price for w^hic^li it sells in the market, that company at least cannot be accused of under- valuation. Mr. Taggart. That was for last year? Mr. Olmsted. 1890. The price w^hen we made that report was $50 a share, and w^e api^raised it at $52 and more. Mr. Taggart. But it was $55 at the beginning of the year. Mr. Olmsted. It may have been. The average price was about $52, and we must appraise it at the average price. That disposes of the statement that cor|)orations of this kind are ix^iniitteHl to ai)praise their stock below its actual value. If any corporation should ai)])raise below actual value, the Auditor General has am[)le i)ow^er to raise the appraise- ment to suit liimself, and I am very sure that while Auditor General McCamant and (corporation Clerk Glenn are in charge of matters, there will no corporation escape upon an undervaluation of its ca])ital stock. As showing you how railroad property is affected, it ccurs to me to show you how the People's Passenger Kailway Company of Philadel- phia is taxed. That company has $8.33 paid in on each share of its capital stock. By some sort of fictitious l)oom the price of that stock was run up in tliat year— 1890 — to $07 a share, with only $8.33 paid in. It was not wortli any such sum, and those figures lasted only a few days. There probably were no genuine sales. They were stock ex- change transactions, and the stock suddenly dropped to something below $40, at which i)rice it rules now. It was offered at $43 between the first and fifteenth days of November. Yet this company had to api)raise it and pay a tax upon it at $53.25 a share, and only $8.33 paid in. Mr. Taggart. That was the average price for the year? Mr. Olmsted. That w^as the average stock quotation price. Mr. Taggart. Sales? Mr. Olmsted. The sales of a few^ shares, perhaps, if there were any genuine sales at all. And yet we have to pay a tax of threc^ mills upon the a])])rais('d value of that stock- -over twenty mills on tln^ amount of cai)ital paid in. We have to pay tax on a valuation twenty five per cent, above w^hat tlic^ stock could ;ictually be; sold for. As showing you how^ coal companies are affected — I have here the account of the l^arrish Conl Company for 1888. That company is tak- ing out its coal. Every time it takers out a ton of coal it takes out part of the body of the property. Tlu^ i)resident of tlu^ com])any,Mr.Charles Parrish, accompanies his report to the Auditor General with a state- 10 c\ ar I i ! QUAJHKKIA ilElH)liT. Pennsylvania State Boakd or A(iKi("i;i;n he. U7 upon the par of tlie stc.ck f ^J, f^^;;-'^,,-^;, ^t bo accused of t.scapu.^' its tlker. out. C^ertaiiily that ^^^^^^^ V " ."^^^^^ „f ^^,^ foct tliat its piop- fair Imraeiiot taxation, paituu ai.y i „f every nuiiiufacturiufi com- ertv and that of every coal «""l""''^.' ;" '\ i .fvery other species of cor- puu;, and every real estate <'";"1'=^ '> ' fi^rcLpanies^xre inchulea ,or=dioris except- and eveu 1^1 oU-^-^^^^ f,,,„ the rai road s„ far as any proi.erty they '>';;,.„ „„ch as statioris and k,ck- itself and property «««'^"tut*'l. *' i st the same as farm property, house's -all that property ^^ *' ^Z .' ^^^ f 'uposes, except that we have and it is all taxed^ust the same tor kx a 1^^^ I ^^^ ^ j^. j^^^. ,,a„,vtion ^^^v. That is the reason the Parrish Coal Company pays ^•' •»'''"• ^ 'Pl.Mt is the state tax alone. They pay that in Mr. Olmsted No. -Tl^i^;^^^ ^^.Us right straight into the state lonainj; to uidu-iduals^ ^^^^ earnings? ; Mr. FiNLEV. i>!nti^^;> ,^'Yf 1 'tate tax based on the divulend, 1,K..I toeo tor t'VT%«S;rr ^.lfeo" A' tlm«-.mll tai thev'iay 8 per cent, dividend, the tax is 4 mdls; if 10 per cent., o '"'iow'^rhZ «e not many railroad companies, unfortunately, which Nou, tht le "e "ot m j ^^^.^^ companies which pay such '1'^ •^•■^J^- '' taT^he ■ r..ads in better times to other cor. were f<.rtunate enough to ka^^ have to continue to pay the '"^" 1 T . lli io.rtX capital stock tax of 3 mills, they must pay ?Hx of 8 n ills t e' gvo'ss receipts fron, business wholly wdhm l^l.is . te In all on to tfxat they are re.pi.red by law to de.luct from interest ^".icli they pay to their bondholders a further tax of 3 mills^ 1 eorv of SirHe, tl a^^^ imi'osed upon the bond in the hands o tl rbo'^dholders ; but as an actual fact it comes out <.i the treasury of the corporation, because tuther the corporation must a.i-'ret^ in the bond to pay a certain rate of interest without deduction for taxes, or else it must sell its Ixmd at a greatly rc^duced i)rice. Either way you X)ut it, the corporation foots the bill. There you have 3 mills on cap- ital stock, 8 mills on gross receipts, and 8 mills on loans issued by the comi)any. In other words, they tax us not only for what w(^ have and what we receive, but also for w hat we owe. Further than tliafc, we are recpiired, in many instances, to duplicate these taxes over and over and over again. For instance, for many years the Lehigh Valley Eailroad Company owned all the preferrcnl capital stock of the Pennsylvania and New York Canal and Railroad Comi)any. That company paid a dividend and was reciuired to pay a tax to the state on that account. The dividend went into the trt^asury of the Lehigh .Y alley Eailroad Company, which, in turn, divided it among its own stockholders, aiid again paid a tax to the state in its own name upon these sanie profits ; so that the taxes were paid twice over on that ])r()])erty, and for a series of years were dujjlicated to the extent of $2(),0()0 per annum. Many railroad companies own stocks of other roads, frequently for the pur- pose of controlling and getting rates, and sometimes f()r the purpose of controlling freight over them or obtaining and securing freight for their own roads. Thus they are taxed over and over again, scmietimes two and sometimes three times. Furthermore, as w as sugg(^sted the other evening during th(^ remarks of ColonelJordan, I think the suggestion came in answ^er to a question from my frit^ul from Cameron county. Captain Johns(^n, these bonds wliich are issued by railroad ccmipanii^s and upon which they nmst pay the tax really rei)resent their investment in roads in other states. Take the "Ptamsylvania Eailroad Company. It has issued millions of dollars of its ow^n bonds for the purpos(^ of investing that mcmey in roads which it has constructed in other states. So the Lehigh Valley Eailroad Company has issued its own bonds to the extent of millions of dollars for the j)urpose of constructing railroads in states outside of Pennsylvania. And so in the case of tln^ Delaware and Hudson Canal Com])any, wdien you tax its ca[)ital stock and l)()iids you affc^ct 942.77 miles of railroad '^ and canal of which cmly G3.28 are in Pennsylvania. The bonds rei)resent all that property. That is to say, they represent capital which has gone into the construction of that jn-operty. Mr. Taogaut. It is only bcmds held in this state that are taxable here. Mr. Olmsted. Only bonds that are held in this state. I am obliged for that suggestion. It is that fact which w^orks still greater injust- ice and more unecpial taxation u])on clients which T represent. You take the Lehigh Vallev Eailroad Company, the greater proportion of its bonds are held in the state. It is therefore liable to the state for the tax. Ycm take its neighbor— I could mention another corporation that has as many miles of railroad in this state as the Lehigh Valley, and, perhaps, as valuable, and over which nearly as much traffic i^issc^s. It hasnot a dollar of bonds held in this state. They areall held in for- eig-n countries. T1iat corporation doesn't have to pay a cent of tax into the state treasury in res])ect of thosc^ bonds, wliih' the taxes assessed against the Lehigh Valley Eailroad Company uiion its boiuls amounts to about $78, ()()() 1 tliink. That is an inecpiality in the present law. The Delaware, Lackwanna and Western Eailroad Company has a capital stock of $26, 200, 000. Jt owns a vast system of railroads, own i! 4-1.0 niiv of New York to tlie and leases miles of n«(l '^^^"^^"L HeunsyW^^^ and New York, city of Buffalo, thrauf? i ^ew J« -e> 1 eunsy .^^ ^^^,^ Yet it pays to the State ot l<'»ii-^y'''{"J'V,,,,.ijed in this state. tal stocLu.\ a iurtlH;r tax ui.cm ewy bo Kl -^^^^^^^^^ 1^^^,, to f^ive A MeMBKU OK THK CC.MMITTEE. \J I t he .^^^^ ^^^^j. -^^ tj^^ the value of the Delaware. Lackawanna auU niurketl ,, ^^tj^^ ,„iper I have here gives quota^ 1 have here before ui(. the report of " ^^'^trthJ'^eirculars sent out to f,n. 188'), and I read from tl-;"»«;Xs^hroughout the various cx,unU the c,>mnussu.nersand too lu> ]^^^^^^^^^^^ the reduction an <,f the commonwealth toi tlie 1'^ ^pos ^^^ According the average price ot I'f ";,i;™; ^.^*\£\,ticf oTsome pro^ bas in^ to these answers, 1 hud that ^ " ^*'"'j^'ti^^,e has been a reduction ot creased considerably yet on *!'« '^^^r^^f^^f ^ teen vears. That is un- from 20 to 30 per cent, in .tbe last *" .«; J"^;^ «ufforine to that ex- doubtedly true, and our friends « ^ ;^""f'j^^^t'';^[pue in that particular, tent. But let me show you «f ;«yXoad compauieB fare in these Let me show you for "'^t'^"^*' , ^J' X^^^ Lehigh Valley times. In 1808 the averap duag col^^^ Railroad ^o^^T^^^^^M aboit the same In 1886 it per ton per mile ; m 18ut into betterments last year Ml OlSed Just about enou^^li to keep the track m repair What- ever '^^S^^^^^^^ i^ ^^-^^'^ ^V-^^^^ ^^^^ ""^ construction and does not go into the maintenance of the lines Mr Taggaut A hirge amount was paid lor betterments? Mr. O^m. We bonx>wed money last year to put mto better- "'The Lehigh Valley liailroad Company, whicii manages to make 5 Pennsylvania State Boaud oe Aguicultuue. 149 X^er cent, dividends is/as you know, one of th(i best and most success- fully managed railroads in this country. According to the statistical rei)ort of the Interstate Commerce Commission for 1889, which 1 hold in my hand, G1.67 per cent, of the capital stock of all the railroads in the country i)aid no dividends whatever. That capital stock which received no dividends whatever amounted to $2,624,439,792. A Member oe i he Committee. Does that embrace the South Penn ^ Mr Olmsted. That only included railroads in operation. $82,000, 000 received under one per cent. ; $62, 000, 000 between one and two^ Sixty-one per cent, of all the caL)ital stock invested in railroads received no return whatever, and 8 per cent, more received less than 4 i)er cent., and the few remaining per cents received various sums from 4 to 10 ])er cent. You will liiid a table c>f dividends received on page 29. I wish I had with me the railroad report of this state which 1 in- tended to brine-— the railroad report for 1888—1 think that is the last one. ' 1 . • J.1 -1 1 (At this point a messenger was sent out to ol)tain the railroad re- port for 1888) . ^ . ^ ^ ^ Our agricultural friends complain of hard times, but running a Penn- sylvania farm is a big bonanza as comi)ared with running most rail- roads in these times. Take as an illustration a company which I have the iionor to represent in company with my friend and c(jlleague Mr. Hancock who is here, the Western New York and Pennsylvania Ivail- road Company. Its road is built through a portion of the^ {i^Y^^^ rev)resented by Cai>tain Johnson, and a portion of the county ot Potter, in which I originally lived, and I am, therefore, somewhat tamiliar with it. The main line from Emporium to Buffalo was built a number of years ago to th(3 great enhancement of the property of the counties through which it ran ; so that property in Potter county which could not be soM for $5.00 an acre immediately became worth $25 at least, and m Cameron, I have no doubt, the value was equally increased. It had a branch oriirinally built by the Oil Creek and Allegheny Eiver Railroad Comi)any \unning down into the oil region, which, for number ot a years, paid 10 per cent. dividends, until the oil mostly vanished and pii>e lines came in and carried away what remained at prices so low that the railroad company could not compete, and it ceased to pay divnlends. The company has 840.05 miles of road, of which 430. 8(> are iii 1 enn- sylvania, a capital stock of $30,000,000 and a debt of $29 000 ()00 It is unable to pay the interest upon all of its bonds, and the stockholders have never yet, in this consolidated company, received a cent ot return I hapi)en to be myscOf so unfortunate as to hold a hundred shares and the only dividend I have ever received is what is commonly known as an "Irish dividend;" that is to say, I had to pay to the company in- stead of getting something from the company. It cost me $200 on my hundred shares to keep the comi^any from going out of existence en- tirely Now, that company which is struggling along doing the t)est it can for the interest of the commonwealth, would be taxed very heavily und(M- this bill. The stockholders and bondholders who have gone without (bvideiids and without interest for all these years would certainly have to pav the taxes. I do not see how they could keep the com])anv in existences unless they would still further pay personally out of their pockets these taxes, for that is where it would come liom in the end. That is a case of excc^eding great injustice Mr. Taggart. They pay a larger amount m New York under the New York law. vf? '- i . Pennsylvania State Boakd of AcnacrLTritE. 151 150 QlJAinEia.V llEPOKT. real estate Mr. Taggaut. Mr. Hanc^ock. five to seven. Mr. TACKiAin youbctt... than l.ut ;.■!>- tf^ t^el"what taxes they may i)Uii)()scs iuv just oiic-li.iii OI U.l ^ay^'or local ,.ur,.os..s l;;';',,;;;'; J,,*';^^^^^^^ is 5 nulls, aud ou stock it Mr. Hancock ^ "i' ^f,^ "^"^/ux upon bonds ^vllatevel•. is „ne and (.n.vhalt nidls, ^ ^^^^^^^^ i,ur|.os.'st Mr. TACHiAiiT. You arc taxed 1. 1 w«;<^i 1 » l • ^ as yon propose to Mr. Hancock, /rii^ tax tor l<.cal ym poses sJ^^^^^^^^^^ ^^^^^ the make it npon the real estate ..^ts^^^^^^^ this respect. In Fenn- New York bnv and the j^^'^^'r^'XlT In New York we take the ^S:^Il^:rt^t:^}^ Sa.d then pay tax npon it as TT. I ]ust want t:^;,;2id;rs tU S^^ and North The .\rnot and Pine Creek paid 5 per cent st.Hk iSd 5 per cent, upon its $1,300,000 prefeiTsd stock, and notlMu^ ot ^.V^'^^'V.^^' . ,i :^^ .fml tl^^^^^ 8ns(inelmmia and Western liail- Ouf TC h nSe a ul forty -three railroad companies whicli paid , 1 L^Hte n 1888 only sixty -two paid any dividends to stoek- :"lill -11 operate It is in tlu> <.tie. an^^^ bormidis that real estate taxation is heaviest. We have to pay for SeMa^^^^^ for street liditin^, and for water and for a^reat Variety otothVr purposes for which taxation is not imposed m the country districts. It is in the citit^s that the ])roiK>rty of corporations is most valuable. You tak(% for instance, the Pennsyl\ania liailroad Comi)any. Its property in Philadelphia, a very few^ miles in length — three or four, i)erhaus — cost more than any otluvr twenty miles of road; yes, than any fifty miles, throut^h the country districts; yet by this bill you make one appraisement of the conii)any's entire i)roi)erty and cut it up into counties. You actually j^ive to the county of In- diana where tlu^ road runs throug-h the woods its pro])()rtioiiate i)art of the exceeding* great value of this company's terminal facilities in Phila- delphia. 1 confess I do not see why any member from any city or from any town or boroug-h should vote in favor of this bill, which taxes l)roi)erty in his city, town or borough for the benefit of remote dis- tricts. And again, this bill proposes to include in that valuation moneys and credits. It is a fact with which thosi^ of you who are lawyers, and with which my friend Judge Kirk[);i trick, who has just retired from the Attorney General's ofiice, is very familar, for we have discussed it and foug-lit over it more or less — the decision of the 8u[)renie ('ourt in 15 Wallace in the Case of the State Tax on Foreu/n-heJ(l Bonds, wdiere it is held that such property is taxable only at the residence of tln^ holder. It is sup])()sed to follow the i)erson holder, and wdiere that holder is a corporation it is supposed to be and (^xist at its general i)lac(^ of busi- ness— its g-eneral office. That is to say, in the case of the Pennsyl- vania Railroad Company, or the Lehig-h Valley Eailroad C'ompany, in Philadeli)hia. For this reason our g-eneral revenue law requiring: cor porations to r(n)ort for taxation the mortgrages they own requires them to report to the assessors in the county in which the general ofiice is located. (See first proviso to sec. 2, act June 10, 1889, P. L. 421.) These railroad comi^anies hold millions of dollarsof securities— moneys and credits. You put them into the general valuation, and instead of g-iving- that valuation to the cities in which the most valuables i)ro- l)erty is located and which do contribute so largely to the business of tiie road, this bill proposes to spread that out over the counties Avhere these securities are not taxable. How does that operate^? How^ do you ex])ect tliat to operate in the casc^ of the Delaware^ and Hudson Canal 0(mii)any, for instance, se of interst;it(^ transjjortaticm, as the Pullman cars are brought. The State of Pennsylvania sought to tax tln^ ca])ital stock of the Pulbnan Company representing- those cars. Th(^ Supnniu^ Court of the United Staters heard the case arg-ued, and aft(u- some months ordered are argu- ment which was also h(\ard mor<^ than a year ag-o and the court has ^ffht to cars thc.nsolveB for -'"/tj; I'^XI^^^^-rel^U ftiou of\'I^ whiSh the tax that roll in- stock at all. it is a i*;«™y", jj ^-oustitution left states are not permitted to make, but xvhich ih bj Uie cousc entirely with congress. viln-ition of that rolling stock the rurther than hat, you a. ci f */'^ ;'^^^^^^^^^^^^ tj,,, ,,ity of Chicago, and morieys and <,redits owned by ^f'^^'^^^^'' ti,e counties in Venn you propose ^- f^'^^^^^^^'^^^'^ is nearly every county s:^:^^:^ ^i:^iii^^^\^sri to the vai|.i..je^ have jurisdiction either of the owner or ot th.^ tiling taxed. ''1 ;::ijltnsume your time but a few minutes -^-^^;^J1^^^:^ nrcrp.if iiecessitv for this revenue which we have been lea to oeiieve. ^^'i^^S^tur^ regions are. depressed as -^^^'--;^ That other interests are depressed is equally true. It is only by tne ftricte^^^^^^^^^^ in these days that any corporation or any individual '^^'^i^:^^ and in farin hmds is not greater thaii^^ is in corporate dividends, and in the valuation ot cori)orate stocks. TluA^l^m General, and the Govenior in ^-^}-^^^^t^ at h.ist they do not rcH.onnn(.Kl, this system ot taxatio The A ulitor General particularly advised against it He said, and i tlunk tiie WesI W^iven^ bear hini out, that railroad companies pay fhe heaviest taxes. They did point out how the ^^oun^ies co^^^^^^^ 1 eved by the diversion c^f money now coming into the state tieasury K^^ohei purposes, to the counties for county purposes. They pointed t how great relief could be had in that drrection And I may ca your attention to the fact that a decision rendered a few days since w Lake a very material difference hi the revenue of the ^ f ^'|^ !;^^. ;r\\\^^^ Btill further diversion of stat(^ money lor local benefits I^ ^^j.^^^^^^^^^ decision bv the Dauphin county court m the case ot the ±.ast liaiigor S ConS^^^^^ ThL opinion is written by Judge Mc4>herson m which it is understood that Judge Simonton concurred, so that it is the unan- imous opinion of that court, to the effect that manufacturing com- panies whose business is in part mining, or jiny tiling aside from manu^ facturing are no longer exempt from taxation, even as to the part oi their caT)ital which is investcul in the manufacturing business. Under the act of 1885 it was held by the courts that if a company was engaged in manufacturing and also in mining, the proportion ot its capital in- vested in manufacturing was exempt, and that engaged m mining was to bo taxed T\u^ Supreme Court sustained that doctrine m the cases of the T.ackawaima Iron and Coal Comi>aiiy, and the Mahoning l^;>lbn^ Mill Company, and in a number ot* other cases. But the act ot 188J exemi)ts oidy corporations organi/Anl exclusively for manufacturing pur- poses and upon that word "exclusively" the court has lunged a de- cision'which rcMpiires every such company to pay upon its (U)tire capital stock As you all know, most of tlu^ large manufacturing conii)anics, the Lackawanna Iron and Coal Company, Cambria Ircm Company, Pennsylvania Stciel Company, and in fact almost every largci maiiu- Pennsylvama S'catk I^()Aiii> OF AauicuivruRE. 153 facturing corporation in th(i state has some capital invested either m mining, or in i)urchasing and selling, or some department outside ot its stnctly manufacturing business. Under this decision they must all pay upon their entire capital stock, with no exemption whatever, and I should say that that would increase the revenue of the state any- where from $300,000 to $500,000 per annum. n ^i . . i But if furtlu^r taxation is necessary, or if it should be found that the railroad companies ought to pay more taxes, then I say that the i)roper way is to impose it for state puri)oses- increase their Imrdens for state taxes if it must be done at all, and do it in such way that the taxation imposed falls equally upon all of them. I do not think any railroad company wishes to escape from its fair share of taxation. Ihey realize that they must pay the expenses of the state government, and so that the tax "fall (Hiually upon them I do not think they will ever object to a fair share fof the taxes. But they do not want to pay all the taxes. I think that taxation should b(^ imposed upon these corporations -uixm these public highways— only for the interest of the general public— the commonwealth herself, and if the commonwealth has too much herself she may divert still further portions of her revenue to the counties tor local purposes. Let it be done in that manner. Do not attenipt to cut up these public highways into sections and put them m position to be so sold out for local taxes. >• i • Mr. Wherhy. Your fundamental principle, or, rather, your hist prin- ciple, is that this tax is contrary to public policy. Mr. Olmsted. Yes, sir. - xi_ o Mr. Wherry. Who forms i)ublic ])olicy m Pennsylvania, the Supreme Court or the legislature? . ^.^i i i .. Mr. Olmstp:d. To a certain extent it is the province ot the legislature to declare what shall be considered public policy. Mr. Wherry. Is it not exclusively so? Mr. Olmsted. The legislature is subject to— Mr. Wherry. The limitations of the constitution ? Mr. Olmsted. Certain limitations ; yes, sir. ^ . i 14. Mr. Will- RRY. What business has the Supreme Court to declare what is public ])olicy? ^. ^ .• • i. Mr Olmsted. Perhaps it would be a little i)resumpti()us in me to determine what business the Sui)reme Court has to do with the things that it has already done. But the men who sit upon the supreme bench have always been men of gi-eat learning and wisdom. Mr. Wherry. Is public policy to-day the same as public pohcy was twenty five or fifty or a hundred years ago? , ,. ^ . , . .. Mr ''Olmsted. In respect of having the i)ublic highways under the control of the state and subject only to regulation by the state, or to sale by the state, or to taxation by the state, I should say it is. Mr Wherry. You said the state built the first railroad that was built in Pennsylvania. It was public policy then that the state should own and control. Public policy was shifted and the railroad was put m the hands of ])rivate corporaticms. -4.1. ,i.k.> Mr Olmsted. Public i)olicy is not now deemed to require the pub ic to own and ()])erate these public highways, but it is that they shall be in the hands of corporations selected and iiK^orporated by the state tor that purpose. ., , , ,. ^ . 1-^4. Mr Wheruy I simply wantiul to show you that public policy is shitt- ing, just as publico opinion, on every question. The legislature deter- 4:. ^g^ QUAUTKKTA TlKPOliT. Jines pnl.lU- poUcy and iu an.swe.t.. .-uhlu- seuti,n..ut in the conunn- iiities. . • If the h.^Mslat,u-e should say «•"! 'l^;;^'-^^! ^ ^^^^ o Tt^ n motion, and shouhl he taxed, the Supreme <-''"it ^'*"H "*f ' ^,'a it to impinge upon in its o^vn^visdom «ay otherwise, m ess 1 eyto^^^^^^^^ l .^ ^^^^^^, some constitutional provision. Ij"'^*'',X '"^ ,. interest and the *^"1V" ::!i^.;;e':\t y :ii: hSta?s^ as S it'; that the Siipreme Sl^^ouM mJrpi" ?.t "it to W;>een intended even where the lan- guage of the "tat^ite inc'lmled all rea „. u will not follow that ations, may declare such property taxable ^^ » i^t yn it is -ood i.olicy nor to tbe public mterest so to tax it Mr Whkuky Now as to your second point, and I thmk there you jrive away your whole case. ■ . ^■ TVT,. ^^TMMTTfTi Tliat was not my intention. M ?Vm Yon second point is that the railroads pay more taxes tixat oi si ul rest ec.nulh- upon these various kinds ot l-roperty ^^Mr O.^TED. I think you have missed my -j^'";-", •\,i^^^^^^^^^^^ ;r ?r.:roV^:^n t 'u^:^^^^^^^ v-^f- ^^^^^^ ^--sx Mr WhfLy I said, under the state tax system y(m admit that the l,urden of government should fall dually upon corporate property and ""^lif oSmsted All thin-s b.nng taken into consideration. I am not hefe to^s™ t rJon^ of its being a coproration, Qlimild T)av less tax than an iiulividnal. , Ml \\SiUY. You say that railroad property pays more taxes than real estate'? , i , i xi i. -4. i Mr Otmsted I have attempted to show that It does Mr \ EHi™ Now, if the gentlemen on the other sule represented bvtlmtc.enth.nan belund me can show that real estate pays more tax tln.rraiTrV,!ul properties, then yon will admit that the tax upon rail- '^Mr oiTm'ifTte the policy of the state that they shonld pay '^Z''^;^.Yo^t^^ the proposition that rail- roads should pay equally with real estate Mr Ot.msted. There mav be reasons why railroads should not pa\ as much as individuals, as individuals have advantaps that railr^^^^^^^ do not have. I do not tliink that a strip of -round occupied by ties and rails and which has no bc.iefit from street improvements or water taxes or road taxes, or, possibly, from school taxes-there may be very good arc^uments whv it should not pay that kind ot taxes. Mr WuKiiliY. From whom do(>s the railroad collect its revenues'? Mr Oi.MSTED It derives all its receipts from those who use it. Mr Wheriiy From the shippers : and no matter w^hat burdens may be placed upon them they have a right to diffuse those burdens. Pennsylvania State Boahd of Achiiculture. 155 Mr. Olmsted. They may have the right and still be unable to ex- ercise that right. • . r • u i Mr. AVheuky. Now, wheiv and how are the ]U'ices ot agricultural pro- ducts determined ? ...... i i xi 14. Mr. Olmsted. I sup])os(» the pricc^ is detennmed by the market. Mr. Wheuhy. Which market? Mr Olmsted. Tln^ market in which they are sold. Mr Whekuy It may be the American market and it mav be a foreign market. Don't ycui know, Mr. Olmsted, that the market for every bushel of wheat and every pound of meat is determiiuHl m tlie loreign market? ^ . . , , . i 1 i. • 1 i-i Mr. Olmsted. I do not know that it is absolutely so determmeil there, but it doubtless is affected. .,. . i • i -i 1 Mr AVhekhy 80, then, when a tax ot 15 nulls is levied (m railroad corporations, it can collect that tax from those who i)atronize its road, • it can diffuse it among its shippers. But the real estate owner, where can he diffuse the tax? . Mr. Olmsted. The railroad company cannot dittuse its expenses upon shi])pers fnmi other states. . Mr Wherky. (\ntainly, but we are speaking ot shii)pers m i enn- sylvania, and we are speaking of producers in Penns>dvania. Mr Olmsted. But a railroad com] )any cannot diltuse its expenses among its shippers if its shippers are interstate shippers. Mr Wherry But it can tax those taxes upon sliipi)er m 1 eimsyl- vania, and it does ; yet the producer of agricultural products cannot tax his taxes out of his ccmsumers. ,, ^ ^, ^t^ . xr . Mr Olmsted I do not tliink, for instance, that tlu^ Western New York and Pennsylvania Railroad C\)mpaiiy could recou]> its taxes out of its shippers for the taxes it pays. They could not increase then- rates one farthing. , ^ i i • i 4. Mr. Wherry. Neither could a bankrupt farmer produce his products if he was bankrupted. , -. , .^ • 1 1 -^ i- i xj • 1 4. Mr. Olmsted. The ground would still yield its truits. He might lease it ^ . i i • r rpi .4. ; . Mr Wherry But a bankrupt farmer cannot work his farm Ihat is as dear as daylight. Now, you want to know how they would be conr- pelled to pay this tax. How do they collect it in the btate of New York? Mr. Olmsted. I do not know. .• xi /^ Mr. Wherry. Is their any reason why the powc^rs ot the Common- wealth should not be great enough to collect it? Mr Olmsted. I have no doubt as to the power of the commonwealth to collect it My argument was addressed to the wisdom ot allowing the counties to collect it. The (luestion was as to the wisdom of per- mitting the counties to levy upon and sell out these railroads in sec- ti(ms. , i- 1 ii Mr. Wherry. I thought you questioned the power. Mr. Olmsted. Oh, no. Not in so far as the tax is constitutionally ^ Mr. Wherry. Another question. Do you hold that the taxes of the citv and borough for light and water are taxes? i\v Olmsted. They are assessed as taxes m scmu^ cities. My. Wherry. AVell, as a fact, are they taxes m the sense m which we discuss the question of taxes here? ^ v 4. a INlr. Olmsted. Of course, that is a questum open to disi)ute. A i?i*! Ij 156 QUAUTEULY liEl'OliT. city has the right to tax its inhabitants for the supply of water and I I CT Ml Ivir Whehry. What do they get for it? Do you know of a rural district in the commonwealth that woukl not be glad to pay tor just such privileges of light and water as are furnished m the cities and '' Mr!"OLMSTED. Possibly tliey would, but I do not see why a railroad company should ])av for light and water for the inhabitants ot the cities and borouglis^ I do not see why a railroad running throui-h tne country should pay for my light and my water. .,- ^ 4.. Mr Whkrky. You objected a moment ago to taxing cities tor the benefit of the rural districts. Your argument won't work both ways. Mr Olmsted. If vou ask why the railroads should i)ay that tax, 1 say there is no reason why they should pay the heavy taxes necessary for the pur])oses of a city. Neither is there any reason why railroad property in a city should be iiixcd for the benefit of a remote country district. t i . j. i -i.- - 4. \ Member of the CoMMrrrEE. I understand that the position is takcin that there is no machinery in the bill for collecting this tax. Mr. Olmsted. I suppose it would be by levy and sale of the pro- perty, and my argument was directed to the unwisdom of such proceed- ings whereby a raihoad, instead of being sold as an entirety, would be cut u]) into fragments, greatly to the »/ublic detriment, whereas for a state tax it wouhl be sold in its entirety and, for the purpose of serving the ])ublic, would remain intact. The property, if sold for state taxes, would be sold as an entirety— all the property in the state, and the franchises— and the law provides how the purchasers may be reorga- nized and a new cori)oration formed, so that the ])ublic service would not stop for a day. Member of the Committee. If you sell the real estate within the county, you stop that part of the whole line? Mr. Olmsted. If you sell the whole line you won't stop it for an instant, whereas, if one county should sell the portion lying within its borders for taxes, and another county the portion lying within its bor- ders, you would have one party owning part of the line and another party owning another i)art. Member of the Committee. Would not they be willing to come to- gether and run tlie line in harmony? Mr. Olmsted. I do not know A\hether they would or not. I tliink I know some people who would be very willing to buy a section of the Lehij^rh Yalh^y railroad who would not be willing to operate it in harmony with the balance of the road. Member of the Committee. Would not they be compelled to operate the line or forfeit tlieir charter. Mr. Olmsted. I know plenty of people who would buy a section and be glad to lose all the money they i)ut into it if they would by so doing prevent the present successful comj^etition of the Lehigh YalU^y line. But it is not to the interest of the state to liave that done. Member of the Committee. Could not tlic^ state operate it? Mr. Olmsted. I tliink you would have a very curious state of affairs if you had the state operating the middle of a road and several com- panies operating the ends of it. It is the propositicm contained in this bill, and I say it is a very absurd ])roposition. A Mi:mber of thr CoMMrrTEE. It is in the l)ill that they are to be Pennsylvania State Board of Agriculture. 157 taxed for county i)ur})oses, and if tlu^ tax can l>e colltn-ted at all it would be collected in the way ft is collected on [)ro[)erty. Mr. Olmsted. The same as in the collection of tax upon real estate. If these taxes should not be paid they can be returned to the county commissioners and become liens u])on the real estate. A Member of the Committee. Would there be any objection to its being done in this way upon railroads? Mr. Olmsted. There would be no objection if the lien would be upon the whole road, and the whole road sold together. My objection is to cutting the railroad into sec^-tions. A Mem]*>er of the Committee. Do you think there is any possibility of the Lehigh Valley Eailroad Com[)any refusing to pay the taxes assessed against it? Mr. Olmsted. The Lehigh Yalley Eailroad Company is a pretty faithful taxpayer. It never has required the state or any locality to go to that length ; but there are roads which would be absolutely un- able to ])ay this tax. I don't know where the Western New York and Pennsylvania Eailroad Company to-day would get money to pay this tax if it had to pay it. A Member of the Committee. Are a railroad company's bonds sub- ject to tax in Pennsylvania and other states at the same time — the same bond? Mr. Olmsted. No, sir. A bond owned in Pennsylvania is subject to taxation here, no matter where the railroad is. A bond owned in another state is subject to taxation in that state where the owner resides. A Member of the Committee. But the same bond would not be sub- ject to taxation in two states at the same time? Mr. Olmsted. No And so I say that a bond, for instance, owned by the Delaware and Hudscm Canal Comjiany, or Pullman Palace Car Comi:>any, foreign corporations, cannot be added to the valuation, and made the basis of taxation here, although this bill attemt)ts to do it. A Member of the Committee. I thought the impression was given out, at least in my mind, at the last meeting of the committee and during a portion of this discussion, that those bonds were subject to taxation in one or more states at the same time. Mr. Olmsted. My proposition is that they cannot be made subject to that kind of a tax. Your attempt here is to tax in Pennsylvania bonds owned in other states, and taxable there, which, under the de- cisions of the Hui)reme Court of the United States, are not taxable here. And right here, Mr. Cliairman, there is a vast source of revenue to the state that is theoretically taxed but is never reached, that is, the bonds issued by foreign corporations not doing business in Pennsyl- vania, such as the Northern Pacific, Texas Pacific and Union Pacific railway companies, and the millions of dollars of western farm mortga- ges owned in this state. There are more western farm mortgages in this state, and more bonds of the Union Pacific, Texas Pacific, Central Pacific, more of these securities ahme, owned in this state than all the money returned for taxation. Th(^ assessors don't reach it. If they Would get that rev(^nu(\ th(^ third that tlie counties would get would go very far toward mec^ting all the expcMises of the counties. What you need is a more faithful execution of the laws already upon your statute book. Mr. FrNLEY. I would Mki) to ask you one question. Can you tell me wliat relation the part of your road in the state bears to its whole capital stock as returned for taxation to the state ^ I ni [ r f ir,g (^UAiniUilA' llEl'OKT. Mr Or.MSTED. You refer to the Lehigh Valley ? ^ , . , , , , . , ■ M ■ F NLK-; Yes, sir. How much of the ca,.ital stock is hel.l outsi, e ,.f'tl.e state? Is there a greater amount ot hues outsule of the state than there is of capital stock held outside ot the state ■Mr Olmsted. No ; I thiuk there is more stock hehl lu the sta e ot thS corporation, a arger proportion <.f stock he d m the state thai. leL^ot^^e railroad n. the state. That corporation while this .ill roceeds apoii the prevalent theory that a corporation has iio soul to be saved and no l.ody to be kicked-tliat -'^;i;'«;^Si'«ths of ho^ holders and it may snrp r se you to know that three-titths ot tliose 8 000 s^lare u> ders are women. One of the heaviest stockholders is the Lehigh University at which, under the benefic.;nt t.-rms o Asa Ru'ker s will.lnv young man may acquire a nu.st excel ent scientifac edncatiou fi4e ,.f tuition charges. St. Luk<.'s Hosi.ital is another heavy stock- holder These people, these wonu^n and these charitable institutions, are entitled, perhaps, to as much consideration as any other interest m the conimoiiwealtli. . _ -^ , i.i • i n 4.1 ..4- Mr FiNLKY. I don't think you -i^t my idea. Under this bill the pait of the T.(^hi-h Valley road that would be taxed would be only that part of it withinlhe stafe, apportioned in a certain way and valued in a cer- tain way Now, the idea that I want to g-et at is this : Su])posin^- the L(Oii-h Valley railroad to be 500 miles long, and 100 ot it being m P(^inl^y 1 vania. It is a Pennsylvania corporation. You pay tax on the capital stock that r(i)res(4its 500 miles, don't you? Mr. Or.MsTED. Yes, sir. ^ Mr FiNLFY W<41 onlv 100 miles, or one-filth, being m the state the millag(^ ]>aid by you is five times what it would l)e if you were taxed as realty under this billt , ,, , i. 1 i. u Mr. Olmsted. Of course those figures are not coiTect, but the i)rin- ciide is correct. . ,^ ^ ^- ^ Mr. FiNLEY. You would be i)aying then five times as much as you would be i>aying if it was taxed as realty? ]Mr. Olmsted. Yes, sir. Ml. FiNLEY. lender this bill. • ^ .^ . , .„ . • . Mr. Olmsted. Yes, sir, except that under this bill we contmue to pay what we are now paying, and we have to pay this four mill tax m addition. . , . ^- .• .^1 i. -i. i • Mr. FiNLEY. I was trying to get at what ])r{)p()rtion oi that capital is re])resented by property in the state and how much l>y i)roperty out- si d(^ of the state. Mr Olmsfed. Well, it would be very difiicult to get at that even under this bill. Our main line is 1(10 miles long, about 100 miles of which are within, and GO miles without, the state. AVe own a ^reat many branches in the state, and we lease a good many roads both in and out of the state. Precisely how this bill means to treat those leased lines I am unable to say. It would be a very difiicult matter to adjust these taxes under this blil. ^ . i i i i 1 Mr. FiMiEY. Do you sui^pose there is m(n'e of your ca])ital stock held outside of tlie stati' than ther(^ is of the line outsiih' ? Mr. Olms'ii:i). When you take leased lines into considiM-ation perhaps it is about ecjual. Mr. FiNLEY. 'File fact is that you are |)aying to the state now not imly tV)r lines outside tln^ state owned by your conii)any but you are paying also for investments inaih^ by people outside of th(^ state. Mr. Olmsted. There is no doubt about that, and not cmly as to this Pennsylvaxl\ St.\te Board or Acjiucultuke. 159 company, but as to th(^ other c()ni[)anies I have mentioned here, the [)r()i)ortions would be much greater. Whiles their pro[)erty is in the state, a greatt-r [)roportion of their stock is held by non-residents. But this bill does not relieve us of any of the taxes we'^now pay. It simply adds a new tax of four mills for county ])urposes. Mr. Ta(k>akt. Suppose your company was organized in New Jersey, how would you pay tax here ? Mr. Olmsted. We would pay tax here just exactly the same as we do now. A foreig-n corporation pays just the same as a Pennsylvania corporjition. The Delaware and Hudson Canal Comi)any is a foreign cori)oration, but it pays tax here the same as a Pennsylvania c()r[)ora- tion. Mr. Taggaut. On the whole amount of its capital stock ? Mr. Olmsted. No : there was an act passed urescribing the i)ropor- tion upon which it should be taxed, tln^ intention being- to tax it ui)on that [)ortion of its property in the state. Mr. Taggakt. The capital stock is no fair measure of value, anyhow, is it? Mr. Olmsted. It is a measure of value to the stockholder of his in- terest in the company and its [)roperty. Mr. Taggakt. It would be no measure of value to get at the thing's for taxaticm. Mr. Olmsted. The capital stock is frecpiently a g-reat deal more than the actual value — Mr. Taggakt. It is oftener a great deal less. Mr. Olmsted. And sometimes less. Mr. Taggakt. You know that railroads are built with a very small amount of capital stock only partly i)aid in, and Ixmds are issued to ])ay for it. Mr. Olmsted. Not within the last few years, because the Constitution of Pennsylvania forbids it, and tln^ act of 1887 makes it a penitentiary ofFense to build a road in that way. Mr. Taggakt. That must be very lately. Mr. Olmsted. I don't tliink a corporation would like to build a rail- road in that way. I should not like to. Mr. Whekky. Does not the Lehigh Valley Railroad Company have a very valuable^ franchise apart from its pi'o[)erty? Mr. Olmsted. It has a valuable franchise, and that enters into the value of its capital stock. Mr. Whekky. In other words, is not the capital stock tax sini[)ly a franchise tax? Mr. Olmsted. No : it has been decided by the Supreme Court to be a i)ro[)erty tax. Mr. AVhekky. Isn't it simply the equivalent of a franchise tax? Mr. Olmsted. No : it is a tax upon the property, and the franchises are included as part of the ]iroi)erty. Mr. AVitekky. Isn't that the material part? Mr. Olmsted. No: without the ])i'operty the franchises would have no value. Mr. Wtierry. And without tln^ fi-anchises the pro])erty would liave less value? Mr. Olmsted. Yes. The Lehigh Valley Bailroad C(mi])any has, of course, valuable franchises. Mr. Wm:i{KV. But the ])roperty is represented in part by its mort- gage debt? > ' 2(;q (J.UAUTEltl.Y liKl'UUT. Mr Olmsted TIk; market price represents the value of the property and fnuSs.^; You take alv=,y the property o the Lehigh Valley U'lilroad ComDaiiy and its stock would sell tor little. A Me the CoMMrrrEE. If you ].ay tax m Peimsylvama on your toUl capital stock, would it be subject to taxation m ^^y;^^^^ Mr. Olmsted. The shares of that stock ini.i>ht be taxed m another < . ^ ix Mr. Olmsted. The discussion between Mr. Fmley and myselt was not upon the same point. If the State of Pennsylvania taxes more of a company's property than it should, that fact will not exempt the com- pany from taxatioihin another state upon so much of its property as may be tiiere located and lawfully taxable there, and, therefore, it is im])ort- ant to the companies that Pennsylvania attempts to tax only what is fairly within her jurisdiction. I do not believe it to be to the interest of the i)ublic tliat railroad property shall be locally taxed for local pur- poses as i)ro]>osed in sections seventeen, eighteen and nineteen of this bill. Pennsylvania State J>oai:i) of Aoukuiltuke. EEPOKT OF HON. ALBEKT S. BOLJ.ES. Mkmkkh ok thk State Revenue Commission. 161 A Oetlei' .system of taxation is needed. A system ()f taxation grounded in rational principles, and by its equitable and satisfactory operation stimulating the healthful develop ment of the state, is a great need of time. No state possesses such a system, and notwithstanding the imperfections in the Pennsylvania system, it will bear a favorable comparison with that of any sister com- monwealth. Let no one though be led by this remark into the delusion that the impeiiections are few or unimportant. They are many and are grievously borne, and should b(3 corrected without delay' A rational syst(^m is demanded alike by expediency and justice Any other shatters state pride and increases lawlessness ; and the game of grab IS inirsued with greater eagerness, and less regret, when one feels that the state, the source of public power and the ideal of public good- ness, regards with indifference the conduct of its members. Clossification of taxpayers. With respect to the disposition of tax-i)ayer&, they may be divided into three classes: those who are desirous of comi)lving with the law and who do pay all that is required; those who seek to evade its re- quirements and escape with the payment of the smallest possible aniount ; and those who would comply with the law if all had a similar disposition. There are, indeed, many Avho seek to evade the plain requirements of the law ; either who think tliere is no dishonor in swindling the state or who do not care. But tlu^ nund)er is also great who would obey if they were not sure that those around them were doing otherwise They are willing to pay their fair share of the cost for maintaining the state ; but if they must also pay more in consequence of the d(din(juenci(»s of others, they rebel and seek to escape the legal recpiirement. If, ihv.m. fore, a system of taxation can be devised which would deal i^ffectively with the second class, the first and third classes would botli be law- abiding. Kinds of tax system. All theories or systems of taxaticm may be divided into two, the taxa- tnm of income and the taxation of property from which income is de- rived. We do not liesitate to maintain that the taxation of income is a more rational l)asis for taxation than tli<^ taxation of ])roperty ; that a system resting on this basis is much simpler; that the tax can be more easily and cheaply collected, and that less evnsion and fraud would be ]>i'acticed under such a system after it was firmly adopted n,nd the ])ro])er agencies for its collection were effectively c^mploycMl. This 8yst(^m has been explained so fully, and with such masterlv ability by one of my associates, Mr. Wright, there is no occasion for me to retnvce the ground. I shall merely answer two or three objec^tions, and then proceed to other matters. 11 I if t \% i^ 102 QiiAiiTKULV llKroirr. Popularity u/thc income tax system. PENxNSiLVAMA StATE lioAlIJ) ()!■ AtiKLClLTrjiE. 163 th.-. largest incomes should pay Jji^, "^^ ^'^'i^V-t. taxes but iiulirectly. to. It is true the very ['^l\*,^",^'j',li^.,.y little personal prop.-rty Mr.W.H. Vau.h.rl..ltaeclarecU tl c 1^^^^^^^^^ 1^ ^^ ^^^^ j^^^,„ which was subject to taxation, l'"\ ' J^^^^'J^^^^ on $1,0()0,0()(. annu- and a law breaker, he *-*7«^'''tf\,*?'^",Xni-^isV4at wealth was in- ally. He doubtless made =m l'^'*^^ ,.,,*; .^n,;,f^vhich i.aid the taxes vested in sto<.ks and bonds .^^.^ '^^ Xf,*\ ! j,] ."ere outside the pale assessed on then, or "^f ;™^^a H^^^^ there was a SutK>^^;:i;id i:::^ L" "o,de lo^SteX the e^islence of his great fortune. Otyji'ctions ansirered. One oi the obiecti.>ns t,. >- n— tax is ^^;^^^^^^^. This objection may be ^''^f 'J *« ,^;^;^>. between statin >^ty , ':^^ 1 ^ jj^ ..oUecting a tax on property as m tair, quite as much is if eauci m r. j^^^^, u,,^],,. n,, collecting xistin.^ law. Nay, ih. ev s ..ns X V pi cticed furnish strong gi'oniuls tor adopting a 4,!.n ^f OSS ble by which evasions cannot be so easily practiced. ''a th r iTe '^^^ m an iiu-ome tax is tiiat the exposure involved of Auotmi ^'"J";'. . , • ijt y{ ],p iijis no mc(mie, or one below one's 'i^^'ii,'^ "V^y/\' "' '^ut",^;^^^^ Imt if he should make a fair flio trpiipral beliei, liis creciiL iii f^unt i . »/»iw . -i iic lo jt- ^a f f^^'pTo^^^ I loix^rty, Nvonia not this liave a similar effect? It is Btatemento 1. M oi^^^^^^^^^^ excessive income, one niicrht bind SiS^k a ;S U^^m lo" hnul credits which they .ouhl not otli^r- wise ir On theotlier hand, if the disclosures of income were dis- u W^^^^^^^ -^ t^^^^i^- ^^'^'-^^^ ^tniount tlH^ stat(^ nno:ht be arousenl t re d^ inquiry into the returns. In any event, it a person is 4Xs o lulhllin- the law in the payment of his taxes why shonhl e carrto maii^^^^^^^ secrecy concerning' his i>roi)erty? And it the biect be tc^^^^^^ creditors, or tlu^ public oenerally, then ins ccmduct s iuld be^^^^^^^^ The desin^ to swindle state or creditors is not a vaU reas<>n for resisting an inciuiry by the^ state at inoper times into ti;^ wealth of its members, for the purpose of d(^ternunin- whether they are payin- their fair sharc^ of the public (expenditures T. truth there is no o-ivater exposmv by this system than » the T.rUent one It is tnic tlmt when a naticmal income tax was collected the newspapers ymblished tiie retunis. which were as Ijleasing reading to s(^^re >ersc>ns as they were displeasinc, to others Those who were dishcmest in returning too 1itth> were not particularly happy over the PXDOsuiv while those who retunied too much repiced over the im^ provi'd prospect of phiyin- a false part in business and society. 13ut supi)Ose the returns under the iiresent system were i)iiblisluHl (and there is no law to prevent it) , and all the particuhirs of a tax[)ayer's [)roperty were known, would lie not have* precisely the sanne feelings as he had when his annual iiieome was i)ublished'? If he is now evading the law and making returns of only a small portion of his proi)erty, would not the [)ublieatioii and (ex])osure of his conduct have the same effect on his eredii and social standing as the publication of his in- come'? Both syst(mis are ecpially inquisitorial ; there is not the smallest difference betwecm them in this regai'd wlnuuner they are effectively administered; both, too, are e(iually public, and the taxpayer is simi- larly affected in a business aiul social way by his conduct in making returns, and by the ])ublic knowlcMlge or use of them. Another objection raised to an inconne tax system is that fraudulent returns would increase. \V(^ admit that if iiicompet(^iit or dislionest of- ficers were chosen to administer the laAv gross injustice would inevit ably follow ; but this wouhl simply be a repetition of oui- past and [U'e- sent experience. On the other hand, with competent and lionest ofiicers it wcmld be easier to administer such a system effectively than is tlie present one. There would not be such an oi)i)ortunity to make false returns as many sui)pose. Nearly every form of wealtli is tangible ; and its ownershi]) can be ascertained. If all corporations were required to make retuns of their dividends, and to whom they were i)aid ; and also the ownershi]) of their bonds and stocks : and the requisite infor- mation of all recordtul liens on perstmal and n^al estate was made to the ])]•()] )er authorities, the opportunitic^s for evasions of the law would be greatly narrowed. At first, there might be some frauds ])ractic(Hl, but after the ownership of all forms of pro|)(^rty was fully known most of the aveunes for making false returns would be closed. Ev(^n money- loans by i)rivate individuals are chiefly on s(^curity of some kind, and the transactions are recorded. It Avould be easy to show that many checks, quite as effective, conerning other ])r()perty could \h' devised and ai)])lied. Thus, in due time, the knowledge^ of the ownership of nearly all ])ro[)erty having been acquired by the officers of the law, the income tlnn'efrom in most cases could Ix; accurately determined. Difficulties in tJic ]>roperty tax system. Reirarding an income tax as the fairest that can be assesscnl and Collected, and the diiliculties attending the administration of the ])ro- perty tax so great that it must ultimately be sui>erseded, any attempt to patch that system must be temporary work and disa])pointing in its results. For the difficulties in the system are inherent, and cannot be wholly removed. In scmie states tln^ im[)erfectioiis are fewer than in others; but to day, after long ex])erimeiitation in many states, it is admitted everywhere that tln^ system is unjust in its operation, so un- just, ind(HHl, that many classtes of ]ieopl(» are discouraged and discon- tented, and loudly demand reform. Let us consider one of the difliculties inhering in the existing system. The assumption will not be (piesti()iied,that many taxpayers do transfer the tax whenever they can to the ])rices of their cornmoditic^s, to tln^ir rents, or labor, and thus escape wholly, or in ]>art, tlu^ ultimate pay- ment of the tax. In tlie light of this assumption, some persons who ])rofess to know most about such matters maintain that the greatest im]>rovement in taxation would be to tax land, that the owner would H add it to the price of lus -'ts o^.r^I^ts .n |^^ be borne by the consumev ..^ "^'•"^'X hu mms that he could not h><;hift the burdfi. on his tenant, and he, in turn, add it to tJie price Srctniie. Anoth.. - l^^'^de^ ^^iX'Jd g t VllS ; nlwM^ another and less eli^nble ^Ir of . city where bus ness is slower, where the tendency of rents St?, shrii^k could not v<.ssibly get any increase, whatever migrht be the new demand of tlu. state. And lastly, one landlord nnght seek to shifUh." ur en whenever he could on his tenant, while ano her would have 1 such disposition. This would produce an inequality m the Sen borne by the two, and which, under su<-,h a systeiu, ,s beyond '"^Turninff to the farmer, the same conditions prevail. If his tax was rais d he cSi d not shift the burden to the purchaser of his products, fo r 1 ; reason that he is quite powerless to fix he i.rice The prices ofwheat c^rn, cattle, ancl the like are not fixed by the Pennsylvania f rmer but by the producers in the far west, who produce under the lioT favorable conditions and at the lowest cost, or else by foreign vers In any event, the Pennsylvania former to-day is quite power- essTn determining the price of anything he sells, unless it be the price of S perhaps, and a few of the less important products of his farm. The prices of his wheat and other grains, his cattle and horses, his butter and eggs are not fixed by him, and therefore an addition to his tax could not be transfeiTed to the purchaser of his products, but must be borne by himself. , , , .„ j.- „„ With this assumption before us, that the taxpayer will sometimes shift or transfer his tax if he can to the purchaser of Ins prodiu-ts. and that IK) unifonn law or rule prevails, or can possibly be established with respect to the transfer, what principle of e(,uality can be adopted as a basis of a property tax? Suppos.. tlu' principle be adopted of im- DOsiiK^ the same rate of tax on all pr(>i>erty regardless ot the sul.se- quell the the unwelcome mirtien. xne rmnuiiLi v:v;xxii;ixiij y^xi. .i.v .v, ^.v^xvc.,^ — rates of traiis|)ortation at iioii comi)etitive T)omts: the laiulloid, it i)OS- sible will increases his rents ; and the majority of taxpayers, it may be fairly assumed, Avill manifest the same dis]>osition. But many do not know how to ^et anvthiner more for their lal)or or other ])roducts, even if having the disposition to escape the burden. Others see clearly the hopelessness of getting any increase for their i)roducts, because this is wholly beyond their control. Thus a tax, which we will assume was fairly assessed on all property in the beginning, i^^-oves a highly unjust tax in its operation. Some are obliged to bf^ar the whole burden, tliey can shift no part of it : otlu^rs are more fortunate, and shift a portion : others are engaged in such a business, or happily are owners of such proy)erty, that they can shift th(^ whole, or nearly the whoh% Imrden. These are no fanciful suppositions : they are the outcome of the ox- Pennsylvania State Board of Agrk uetitre. 165 isting system; nor do we perceive any mode of j^reveiiting such in- equalities. Enact a law for the collection of a property tax Avhicli shall impose the same rate of tax on all property, and elect the most com- petent officers to administer the law, and let it be fairly collected, the incidence or shifting of the tax may be so great after it has been fully and fairly paid that the grossest inequalities in the burden finally borne will everywhere exist. Suppose that a tax should be im[)Osed on the principle of equality oi burden after the shifting has been done, thus assuming that every one as far as possible will throw the burden on others, would that yield more satisfactory results? We think not. The unequal operation of the incidence of taxation has been already explained. It would not be possible to enact a law based on that assum]ition that would distribute the tax fairly on all proY)erty. In view of these glaring difficulities inhering in a property tax, it is exceedingly difficult to work out any improvement. Let the legislature enact a law imposing the same rate of taxation on land and capital alike, whether owned by individuals or corporations, Avhich is faithfully and completely enforced, and the unequal shifting of the tax would ultimately result in the grossest inequalities. If this seems a strong statement, it is ami)ly verified by the experience of all the states from the beginning. 7^h<' rate is not the only element dete/nniniiKj equality. A gi'ave difficulty in dealing with this cj[uestioii is our lack of knoAvl- edge conceriniii:- the inequalities in the existing system. We know that different rates of local taxation prevail ; that the local and state rates differ. We also know that property is assessed at different valu- ations by the state and by the municipalities. We know that, if a ])iece of proj^erty is assessed at half its value in one county, and a sim- ilar piece is assessed at its full value in another, and the rate of taxa- tion is not twice as great in the latter county as in the farmer, the owner of the i^roperty in the former county bears the smaller burden. The rate, therefore, is only one element in determining the inequality. What is the com])arative value of the ] property assessed by the counties or other munici])alities is cpiite as important. The need of more hnowledeje on the suhject. In trying to ascertain the nature of these inequalities, unfortunately tliere are no facts to illumine the subject. The resolution providing for the appointment of the commission d(Hdared that there were " at pre- sent no trustworthy statistics as to the amount of real and personal property owned by citizens of this state, owing to the inequality of assessments in the various counties. " In my judgment one of the most useful services that a tax comraissioiu^r can ])erform is to collect all tlio facts relating to the assessnunit and collection of taxes, the inequalitif^s in the rates and assessments, the defects in the laws pertaining to their assessnu^nt and collection, and a full ex])osition of local and state ex- penditures. Until these are gathered no one knows the (^xtent of the evils to be corrected ; nor how to ]U'oceed intellig(nitly to correct tlieui. The preamble to the resolution wliic-h we have just cj noted, would lead ft one to suiM-ose that.tho -'-•---,; 1 " o was not cuufened investi-at.ou ; but, in tr^^.'^Y' ';;..• ^ 3,,,,, wcnld be better prepared H.i,l til., ficts been ascertained, tlie legisiaiiut, n^ > t^;lal .ith the subject of amending- the tax system. nerr n,ay h. h.,nalll!, In the harden with e.a.r1 .p,.lU, !. rate.. Bnt it is asserted that ^^^'Zl^ ^'^^^S'^^^^ ^ u.) instification for soiu.- ot ttie detects »; ^li. xi. " f .^ ^ ,.^| especially the varyin.y rates ot t'^^'^ti" "1^ [' f^, ^.-eit detriment whereby ca,.ital -";l '-il-^*^''"^!! , ' rn^^^^^^ To tlds it may be re- especially of landed proi)erty '^"^^he t.iimCT^^^^^ io ^^^^^^ ^^^^^^ piled that if the taxation of "^^^''^^'^^^^^V.d the same rates. For ill kinds of pn.l.erty ou-ht not to be t-^^^^^^^'^^ ^.i^j^.i, ,„, i,,,.oine is example, su,.pose a man owns a l'ie«^%"; f ^\Vaid on am.ther piece of derived, shonld he pay the same tt^ that is ^^^ ■ ^^^^, Under the same value from ^vbi-l^^the ownei denveb . lii^^e^^ .^ ^^^^ theexistin^^syst..mn<..bstnu.tio isi^^^^^^^^^ t/^ pU erty that a man taken into accoun '"J *^'^>^ J'^^ ^f^e it s L\- ■ possesses.and which may b ^^^i^^f /"";' .^,jj if its value corr.'sr.ond Property varies Sr->dlv n p d, t ei ess xncl^ ^^^^ ^^^ ^^^^^^ ;::f^rSs^;^:iSt^^^ same (luriiii; tne eiiiiit i^t^n^^ . rxuu-U tax one year as the otnei , '""''• . „,.e„ter burden to him one year than the ot lei. S'^Jt^l:^r^ore, yieiO. inenulitie. of a most serious ,!• ture i 1 v^ew of tlie constantly varying ability o taxpayers But t „}' I id till f the productiveness of a farm varies, so will its value, u;d^tt t e f;-n ei will be asssessed on a smaller vahiation whenew hZ 1 n ds IV unfruitful . The statement contains some truth. If the V, n..lu ct v« ess f nds d.^dined pc-rmanently -if a smaller monetary re tm WIS ikelv to be perman..nt-d<.ubtless tliey wou d decline m value unless lev could be us.mI for another purpose ; but ,t a laiiner has Tpooi cropt 1 ^vear his farm may not be worth a dollar less, because the event s not likelv to happen the next. He can probably se 1 his flrn for as , -1 as he could had his crop been abundant and sold at Whf^^mes Future ,.rospects, no less than present conditions, are ileientriircleter uininl' its value. Consequently, lie may have a poor crop and e^^W^^^ «ven this ,mly at a low price and thus have iu le at nieans to pav his tax, and yet be reciuired to pay as much r h sup o;t<.f the state as thcmfrh he had beeri bless.Hl with an alun ant crop which he had sold at high prices. These are tannhar fa s li(h n ay be veriti(>d by almost any farmer. We repeat then, tfnfut I'rE on all kinds of property were the same, and he law- was effec ively adn.inistered, the burden of the tax would tail very unequalTy b, Jause the fund from which it is paid, the "'.come or re^ Ss from business or property, ,s so variable. Admitting that at present the rates are verv unecpial on differe.nt kinds ot pr,>i.erty, it Pkn.nsvi.v.v.nu State Bo.mih ok Aoiiicii/rvuK. 1(17 does not follow that under the bill re<;ommeuded by the majority of the tax commission the burden of taxation would tall a whit more equally than it does fall und.>r the existing law. Nay the inequality mi"ht'be (iven greater ; no man can prtsdict wliat woul.1 be the ultimate effect of such a measure. If the princii>le b<^ correct that those should Day the most taxes who can best afford to pay tliem - m other words, who have the largest incomes, and all others in the sann^ i)roportion to their inc(mie the bill proposed is just as defective as any that has preceded it, and probably would yield just as many and great iiie qualities Under tiiis bill a manufacturer having a plant wortli $1 OOO ()(»0, and whicli he has run for a year at a lo.ss, must pay quite as much tax as another manufacturer having a plant of similar value trom which he has acquired an income or profit of |25{),0()0. A tanner having- a farm W(n-tli $10,000, which he has conducted at a loss, must piiy just as much as another farmer having a $10,000 farm from which helms reaped a handsome profit. Such is the system whicli it is proposed to continue, a system of inecpialities so general and glaring that it may be truly said thiit hardly two individuals or cori)orati()ns owning the same amount of proi)erty bear a similar burden. Ex)>endifures are a proper preliminary inquiry. A wise and just system of taxation must have its origin in the needs of the state. A preliminary impiiry, therefore, must or should be made, before adopting any system of taxaion into the Pyi'l'«f,\, ™' which revenue is required, and the amount. But it is contended that even if some of the present expenditures are not expedient this is no excuses for withholding contributions by persons or corporations, iliey Bliould i)ay. it is contended, their fair propoiiiou ot the obh-ations incurred without questioning their expediency or honesty. We cpies ■ tion this doctrine ; it is a very dangerous *J"e-that ()t paying one s bills firs: and examining into their accurancy atterwards. Lertainl.v this is not the way private business^is conducted and it it were we can easily imagim^ the consqnences. In private affairs we wish to kiu nv before paying whether ^ve are getting .mr nioney s worth. I« n!.!! 2 aplication of this doctrine to public affairs just as rational as to i. ivate ones* AVe ought to know for what purpose our money is needed and if money is squand.Mvd under the existing system the first thing to sj Tliis has been th.- subject of incpiiry by a committee of the Legislat e (hirino- the last two years, and the evidence will be presented at the coim- session. The facts need not be reviewed here, for they aiv^ in th olsSon of every one. It is said that the fanners prefer the j^gg QuAiiTi-.ni.Y Ki'.rouT. existin- roads, while admittii,- their badness, to better ones and the aSS on-d ex ,e„se that ..ust be incm-red to -eat', h^^^^^^^ But^ - ^^t fvnPtli'it better roads must increase individual Inmleuhf in iium, would Tt not be cheaper to borrow the money to ^l^^-f^^^;:^lJ'Z Sal roads in the state, and to pay the interest thereon than to co - tinue the present wasteful system ? In other words, vvould not tl e in^ terest aid on the money used for the creation ot such roads, and the sma urn ^Kueafter required i-^ ^^ .^f^^T:!^ ^^^^. blv less tlian the amount now annually paid tor the exist.ng higlnyays . We are iiic lined to think that there would be a balance m tavor ot the Zm accoimt At all events there is enough K^^'^'^Xrady ten warrant a thorouo-h inquiry into this subject, if it has not alieady been undertaken. Expenditures for charities. The expenditures for state purposes should be the f^^^ff ^^^^^^ iiuiuirv A Liri'-e sum is annually api)roi)riated for the maintenance o Etief c^^t- Wious kinds. Except in a few cases, no rule is re- t^^ assisting- them. I have been told ^^J ^^^J^^^^ know that in some cases the amount appropriated by the state is more tlvuTnec^^^^ to pay the entire annual expenses of the institutions to wS re7^^^^^ gmnted. They are actually acquiring a surplus winch fs to be used in the erection of new buildings, or m other ways. Many of their affairs are kei)t in the dark, not because they mean to use their resources wrongfully, but for the ]>urpose of securing largrer appro- pdXns to extend their charities. This h.ck of sys em m ma W ^ pro])rations is deserving of serious criticism. In the hrst place the state, by appropriating so generally, is drying up the interest ot in- dividuals in oiWnized charities. Our people have acquired great wealth, and their sympathies should be cultivated m every possible manner. Nothing can be worse than a state policy which does every- thing for the people, leading them away from direct interest and kindly regard in one another. Tlie state can never do through lis .long per- functory arm acts of mercy with the same degree ot efliciency and kindly interest as individuals who live nearer the scene of reliet and who have a more direct interest in the sufferers. The state is without sympathy and aifection : these are personal qualities, and can be exer- cised by persons alone. The state is now giving so much tliat indivi- duals feel there is less for them to give ; and so the existing policy has the uiupiestionable effect to lead people to do less and to take a smaller interest in personal suffering. ., . - ^i • i.- But another, and more serious evil springs from thus a])propriating the i)ublic money, the demoralizing of our legislators. The steps by which they are reduced from an honest and desirable independence to debased servitude may be briefly described. This may be preceded by stating the fact tliat the demoralization begins as soon as the speaker is elected. When this is done, the friends of the " chanties" ap])ear on the scene, and endeavor to secure the appointnuait of a committee on appro|)riations that shall be favorably inclined to recommend lavish distributions. AVlien this preliminary is finished, the work of the leg- islator begins. He must never lose sight of the appropriation for the "charity" in his district. He must, therefore, keep on good terms with everybddy ; he must antagonize no one ; he must oppose no scheme, M Pennsylvania SrATi: JioAitD of Agukjultuuk. 109 however bad it may be ; he must heli) others whether their bills are meritorious or not all these things must hi\ done in ordf^r to secure an approDiiation for the " charity" in his own district. And still more, the less desc^rving th(^ " charity" the harder he must labor, the mor(i h(3 must debases himself in order to succeed. For, if he does not, he fears that political death will follow. Most of our legislators, it maybe assumed, are deeply conscious of the unwisdom of many of these char- itable appro] uiations ; they deeply feel the impairnKuit or almost total destruction of their influence by the charitable^. millstoiK^ which they are compelled to carry. Those at honu^ often wonder why their repre- sentatives, of which much was expected, play so feel)le a ])art in leg- islation ; the explanation in many cases has just beeai given, ('onflne ap[)ropriations for charities by fixed princi[)les within more rational limits, and *i\w, character of our legislaticm would immediately risc^ to a higher i)lane. Our legislators, like prisoners escainng from unlawful, bondage, would rejoice in their greatly desired freedom, and be stimu- lated to labor for more worthy ])urposes. While we do not deny that the state should do something in these regards, we do maintain that its appropriations should be based on a principle, and not simply cm the wishes of legislators. Probably the expenditure of this nature which would receive the most general ap- proval is the maintenance of the insane, the deaf and dumb, and the blind. They belong to no comniunity ; their efflcient treatmemt re- quires the existence of large and costly institutions; and these in turn require able men for their efficient management ; and the entire expen- ditures is on so large a scale that the state may very pioperly be re- sponsible. But it is very questionable whether the state should go further. Certainly with respect to the hospitals of an ordinary char- acter, the existing policy is open to severe condemnation. Tn the first plar'e, if the state is justified in contributing to a hospital in Philadel- phia or in Harrisburer, it is justified in contributing to one wherever it may be desired. No city or place has a special claim on the state in this regard. Within a few years seven hos])itals have been built in the mining regions. While all will admit that the miners ])erform a work that is unusually hazardous, and therefore the need of hosyutals may be greater in those regions than elsewhere, this furnishes no ])lea for action on the part of the state ; or, if the ]dea be a good one, then the state ought to serve every community desiring a hos])ital in the same manner. This is class legislation, which, \v(^ are (piite sure, has never received general approval. The best informed persons doubt tli(^ constitutionality of the act whereby theses hospitals were established; but if the ])rin('iple on which they are founded is wrong, why is not tlu^ system of contributing to the existing hospitals equally under the con- stitutional ban? Whei*e can the line be drawn between establishing and maintaining? Do not appropriations for both purposes exist or fall together? :f! % ill I State and municipal expenditures should, he periodically examined. With i(\sp(ict to other state expenditures, they should in; thoroughly examined. It should be ascertained wherein they can be increascul with advantage to the peo|)le, and also where they can be eliminated without (hitriment or harm. Every state, in short, ought occasionally to undertake an investigation of this kind, not so much for the pur])ose .; t ' } ■ inislit b<. aiscovrod, as to learu n t sUU. " U^-aticn Mf this kind .ua what beiu^tits aro a.n-ivo. tn tl^^^^ '^vorv uluinistratiou, by a eom- by every legislature, o < "^. •_> ';^" ^^M, the aid of exi>erts, would bo petent coui.n. tee^ot ^l'^ f^^'^'i^I^ff/^.a,.^, to consider the eciuali/.ation a wise volu-y tor th(> state. It '^ "'^ • , n.idertaken of learllln^^ of taxation until this i-rioi "'^'"1. -^ ^^ {\\' ^^^^ ,, aitur^ in every thinj,^ that is l-^-^l'l'; |;;:";:";"^ \^4rov K tL state and n.nnicipal short, what eau be done m the ^f -V f • " ^^ , j^^j^ i,,, ,nade into tlie ex- service. An.l (>s,.e.nally shou d •^';;^/j- X inequalities an.l other istins revenue laws, and '^\«" *'\;it>.^,t ui fail' or nnfaithful adndn- evils are the conse(,n..nce of an ".'*/^^i" ;• ,• , ' J^,i.tained Innv. and for istration of the laws t'- -<^ -- ;^ J; ^^ the what purposes, state and Ocal t*,^!;*;'",,!' ,.....(, <,{ efficient state and a„,ounts thereafter -f <^^, ^ "^^^t "^^^^^^^^^ be laid for preparing L^f eSirrtasur-rioH^btinin. the nu>ney needful to pay such exi)eiiclitures. . Various ob}ed. of toxathm to the counties should he surrenckred. counties >m 1 ffc M m , a y^^ shoiald complain. The cpiestion 8cho.)ls, ^^'V •'* i,. n t ^-ut off some of th.^ sources of state revenue, LtX officers This is not true of a railroad company. Theie are XrT> o^^ and the state 1 >e entirely relieved irom either the task of cu)llrctiiig- or the sum collected from this source. Manufacturing companies. 'Php veunrk is ecnially applicable to mamifacturin^ companies. Thireis n smaU cU^ L the imposition of a state tax on their capi- tal but if the state is collecting far more reveaue than is needful lor St ite i- poses, and if, as a consequence of this, expenditures are made W so^^^^^^^^ without a fixed principhs and m a haphazard and cert^n w^^^ why should the state income be increased by addition. U^SivomihiH source^ Does not the remedy lie m precisely the oiuK X Stion^? We think all the mainit.ctur.n<;M'oinpames ol the sir si oil be subjected only to local taxation. Most of them exist in a siiilo townsliip or county,and are under the .puisdiction o t a sm^^le ckss of officers. If this were done, many evils would be avoided. In the first plac'e, they would share more justly the burdens of taxation ^EN^sYLVANIA Htatk Boakd OF AliKlClLrrilE 171 with the i)ersons and property around tiiein. In the second phice— and a point Avorthy of thi^ highest consideration -if it be desiiabh' to ex emi)t manufacturing companies from taxation for a i)reiod, or to a cer tain extent, tlieii the local authorities can do so without complaints .from outside. It lias been said, in justification of the present systt an *of state exemption, that manufacturing companies have been induced to locate in this state, and that th(^ general welfare has been thereby [)romoted. Probably there is not a littk^ truth in this remark, but the same object could be attained, and far more eliectively, by local ex- emption' In some of the townships and cities premiums have been offered, and exemption from taxaticm, in order to encourage tlie loca tion and development of manufacturing com])anies. If this whole sub ject was remitted to the municij^alities, the state would escape a serious contention. This, we believe, to be the most just and satisfactory way of settling permanently the question. Insun ince companies. There are some difficulties in the way of abandoning the state taxa- tion of insurance companies arising from tlie ])ursuit of the business by foreign c(mipanies within the commonwealth. If none did business here ''the taxing of the home comi)aiiies might be entirely local. In' this connection it may be remarked that at present the law oper^ ates very liarshlv towards some classes, particularly the taxation ot mutual insurance companies in which manufacturers are insured. Ihe simi)h^ rule that ought to prevail on this subject is to tax all companies of the same kind or class, whether foreign or domestic, in the same manner; that is to say, all life insurance com] )anies, whether foreign or domestic should be taxed alike ; all fire insurance companies having a fixed capital should form another class ; and all mutual fire insurance companies, another : while other classes might be added to cover mutual life insurance companies, tontine companies, and the like. And not onlv should such a princiide ]>revail here, but it sliouhl pre- vail in all the^states. The state should tax domestic and foreign in- surance companies, of tlu^ same kind, at the same rate that have a home or existence in otlier states where a similar rule prevails. And then, having passed such a law, the state should makc^ it known to the auth- orities of other states, and thus a movement be started for the recipr(N cal taxation among all the states respecting pro])erty and peisonsc>t an interstate character. The present i)olicy, by which ejich state tries to bea litth^ smarter than the others in these matters, is child like, 5ind only need be mentioned to show its absurdity. The polmy is unworthy of adoption anywhere. It is very transparent, and the sooner this species of protection on home companies and restriction on foreign companies is abandoiunl the better. Licenses, Ao-ain the revenues from licenses and tlu^ tax on pi-ocesses should be collectcui entirelv bv the counties or other municii>alities. Ihere is no reason wdiy thef should be collected by the state and then sun-eiuh^vd to the counties in the form of larger appro]>riations for the ^^''f^^^^ thf^ like Is not the better policy to surrender the right to collect thest) irj2 QuAiiTEKLY Report. revenues? If the state could collect them ^^""..f |Sm Yhet^^^^ counties, or could get the greatest .possible \>^^;^^^^^^ would be a Justification ^--j^^--^^-,^ S^nSiiS^."clluS not needed for maintaunng . the sac i^ absorb every dollar, not leaving anything to be Sturuil th^c unties. Every one who is considering the subject can eas [rpL^^^^^^ the vice which overshadows all others is the collec tLn y too"^^^^^^ revenue by the state, and the ^'f]^^^^^^^ collect less The simplest method, we do not say the best, ot correct ng t he evil - to cut olf some of the present subjects o tax^.t^m^^ stfte and thus broaden the scope ot local f f 7; ^ .^>. "^^^^^^^^^^ unnecessary surplus would no longer be collected, and the county rt^c uues would be enrichd. 21ie most jn-adicabk policy. The most practicable remedy, therefore, is to reduce the appropria^ dons to charities within reasonable limits and to yield some ot the ob tional revenue, a sum sumcieni tu ^tuux^ .^--..-^^y^^-^^ Sr^l' ',,^,,A^o^ sent policy of collecting the revenues not needed lor state pui poses, and then of turning them over to the counties is very questionable. In tlu^ first place, as we have seen, a considerable portion is not thus sent back, but scpiandered by unwise legislative appropriations; and there will always be danger of this so long as the state revenues are m excess of state needs. There is nothing peculiar m the action of oui legislature in this regard ; it is simply the repetitum ot universal ex- perience. AVhenever an unnecessary surplus has been created, mstead of spending it wisely a large portion has always been wasted. I lie obvious remedy is for the state to collect less and thus enable the coun- ties to collect more. In the second place, if the present policy is con- tinued of appropriations for questionable chanties and the like they will i)robably soon exceed the revenues; and when this turn ni things shall occur there is great danger that the legislature will adopt the opposite policy and make insufficient appropriations for needtul pur- poses In other words, if every so-called charity or other interest can- not get whatever is desired, there is danger that every appropriation will be opposed as far as possible. This has been the course of our legislative history in other days, and it is likely to be repeated if the present inconsiderate policy is continued. From opulence to baiik- ruptcy, so history T)roves, has more than once been a very short de- scent ; 'and the applications already made for six millions of the reve- nues of the state for charitable purposes ought to open the eyes of the dullest to the danger of a speedy emptying of the treasury. If the state did not have such a large and unnecessary surplus, the raiders would diminish in nundx^r and energy. Clearly, therefore, the state should collect less, leaving more for the counties and other munici])al- ities, and thus local relief from taxation, which is so greatly desired, would be obtained. Furthermore, if the local governments desired to maintain the char- ities now assisted by the state, they could do so with the revenues col- lected from the new sources above mentioned. If tlu- managers and ( ' Pennsylvania State Boaud of AoKT(nTi;ruKE. 173 other si>ecial friends of charities fear that local appropriations to such institutions in many cases would be reduced or w ithheld for the reason, either that they were not needed, or that the need for otlier institutions or objects was greater, is not this an equally valid reason for reducing or withholding the state ap[)r()[>riations to the local charities which now receive them, or for granting these approi^riations to other local objects'? In any event, if new subjects of taxation thus tell to tln^ local governments, of course they could use tln^ revenues fiow ing from tluiin for whatever purposes they pleased ; and if they should expend them in the same manner as the state funds have been expended, they would lose nothing by a reduction in the state appropriations for loc^al chari- ties. It is true that some persons, perhaps many, believe that every ap- propriation which can he. obtained by a county or other inuniciimlity from the state is a lu^t gain, but this belief usually rests on no rational foundation. The revenues come from the people, and though some localities may get larger state appropriaticms than others- — far more tiian their share on the basis either of wealth, population, or taxes — the entire state api)ropriations are no larger than the entire contribu- tions by the people to the state treasury ; consequently, the net gain to them is nothing. The truth of this remark is so transpannit that no argument or illustration is needed to enable any one to see it. The state treasury possesses no magical fructifying power. Nothing is more certain than this, if some cities or counties in the biennial raffle which now takes place draw a larger amount than they originally con- tribut(3d, other cities and counties are short by the exact amount of the excess of tlie lucky drawers. The only justifiable exception to this policy is in those cases in which the state can act more efficiently in making collections or expenditures than the local governments. If, for example, the state could make better highways than the townships and at less expense, this would be a valid reason for taxing the people by the state for highway purposes. Usually, however, local expenditures can be more wisely incurred by the local governments than by the state ; and whenever tliey can be, ought not the local government to control them? And is not local knowhnlge as superior to state knowledge in the expenditures for hos- pitals as in those for the highways or the poor*^ It The principle revenue for the state should he from railroads. This would leave the railroads as the princii)al source of state re- venue and there are many reasons why this source should be re- tained. In the first place, the state must have a revenue of some kind, collected either by its own agencies or indirectly through tlu^ counties. In the second ])lace,tlie state alone is capable of dcitermiiiing the proper amount of tln> tax, and of assessing and collecting it efficiently. Sup- pose the railroads should be required to pay the average rate of tax that is paid on farming hind. In the one case the state assesses and collects th(^ tax on the entire valuation of the pro]>erty ; the counties assess and colh^ct on a valuation ranging from thirty per cent, to nearly the full valuation. Would this be a fair distribution of the burden? Again, if railroads were assessed by the countic^s in which they are located, for the property therein existing, at the same rates as othn- ])r()perty, then danger of another kind would arise. The counties might elect otfic^ers >■■ k ^-^ QUAK'I'Klil.V Ur.l'OHT. •1.1 .,v,..>M-tv -it ii lii"-h«r vahxiition tluui other wlu, would assess I'^'l'' ; »' "l/; f,^. '^^i ,o ul c.ini.ani.'s iniKhtbe wide awake and ha\e iiitliK nu ?"""'r> -,1 ....innaiiv is the creation ot favor tlKur interests Again, as '^.^ '^ ' ' ' ' "^t^^ ^•"^^''t *'* «^"^^® the statene«t in the way ot a revenue from them. Iru.,uality fron, h^ffi^U and, unfair execution ,rf existing la.rs i. ,reaUr. ' • than aiij/ other. T.Lstlv there is left for consideration the inequalities in assessment 1 tnlle'eti iXris 11- from the inadequate executioiiot existing- laws. TWmi 1 asZwH he rates of taxation on different kinds ot i.roperty ; ^ f di- V m V be the treatment received by. the laiuled mt^ests corn^ red 'vi h tie corporate interests; the inequahties and injustice S ti fr ilsmnVi-'lship, political power and f-^^^^^^f^^^^^ ^^ < +1.;^ «ovt -ire of long- standing and universal. W hat is tlie use oi re- V li t u d e qualizi g the rates if the property on which the rates are isses";. d c on i mes io be valued iu the unequal unjust manner yhidi m^-T-dls a mos everywhere? What is gained by eiuu-ting a perfectly ust 1 w in principle, if it is to be set aside and rendere.l unequal in • ts o, emtroi r Sier; one knows that the existing laws relating to the assessment of taxes are ignored, that assessments are gross y unequal. ^™Ss of this nature are as old as the government itself The fiist aiKl most important remedy is to select competent and just n.lm iiis rators of the tax laws ; and until the people d(. that, it is not wo™ h w lie to spend mu.Oi time in trying to improve the laws wlmh lev are to administer. This is the greatest need of th.- time. One county assesses property at fifty per cent, of its valu.., another = sixtv oer cent., another at seventy, and so on. A page ron> the K?t re ort of the S..-vetary of Tnt.nnal Affairs may be added here:-. "Tn the value of all real estate taxable for county purposes there is an increase of $l(;2,r,08, 587 over the previous year. Below i« a com parative statement of the c72 Increase, $J, -113, 698 " Some other counties show a fair increase in the vahie of real estate, vvhiki twenty one show a slight decrease. In many districts ol 1 lie state real estate is assessed at about one-third of its value, and it is presumed that in the counties referred to in tlie above table, an effort has been made to correct this illegal mode of rating property hereto- fore followed, and that the figures given ai)proximate the actual en- cash value, as required by law. That there should be an increase in the value of taxable real estate in Dauphin county of nearly thirty millions of dollars, over sixteen million of dollars in Blair, fourteen millions in Beaver, and nearly eighteen millions in Lebanon, cannot, by any means, be attributed to the actual increases of the intrinsic value of real estate. To what then must l)e ascribed this apparent advance of values'? Almost (mtirely to an efl\nt made, in tln^ counties named, to obey a law which before had been disregarded. To what extent does a disregard of this law exist in other counties? This is a serious ([uestion. Its answer might disclose a condition reflecting upon those who executes the assessnu^nt laws, and at the same time ])e a sad com- nientarv on the ecpiality of taxation: for inecpiality in assessments of necessity i)rodnces inequality in taxation, and, therefore, does violence to the spirit, if not the clear mandate of the constitntion. If, in one district, proi^erty be assessed at one half its value, in another district at its full value, and both subjc^ct to the same rate of taxation, then we can readily see how unjustly our tax laws fall uixni those who loyally submit, but at the same time must realize that (Mjuity does not h{>ve full sway in the matter." Again, in tln^ same county and township, villager and city, two i)ieces of lu'opc^rtv having the same value are quite as likely to be assessed unecpially as otherwise ; or two ])ieces of unequal valuf^ may be ecpially assessed. Facts of this S(n't are so familiar to all that th(\y need not be mentioned. Whv, we n^peat, in the clear light of such facts should an attempt he. made to correct the lesser evils of ine(pialities in the ratt»s, when th(^ larger evils of inequalities in assessments are ignon^d? The truth is, this entire business of tax n^foiin has luM^n begun at the •^rj^ QUAllTKUIA rvFlH)UT. 1 1.V i. 4.u^, v.c.r.r.U^ if tlu^v wisli t(^ luivo justice done, should imd lUst assessments ot tli( |)r()i)i-ii.v >y „„,,„f„i ,,r rf»lMfierty for a hundred years, and instead of improving it, the system has^^rown worse. The forms of wealtli are more and more di- versified andcomi)lex; even the land is becoming" transfonnod into negotiable pr()i)erty, whereby its value is enhanced, and the demand of the taxiratherer is more easily eluded. In the modern world of wealth nothing is more wonnderf ul than the giving of wings to land, and to nearly every kind of tangi])le property, by means of mortgages and other liens, and by forming railroad, land, manufacturing, and other companies, enabling the owner to Inde his possessions and to escape from his just duty as a taxpayer The consecpience is that the existing svstem of taxation is constantly diminishing in effectiv(aiess and fairness. After the long trial which it lias had m all the states, with very unsatisfactorv results everywhere, is not the plain teaclimg of this vast experience that the system should be supplantc^d by nnother containing a larger and more inspirintr ])r()mise of derivme: from all just contributions for maintaining the state"? Pennsylvania State lioAiiD oi' Agkicultuhe. 177 DEAFT OF AN ACT PKOPOSEl) BY HON. THOMAS McCAMANT, AUDITOR GENEEAL. AN ACT To provide revenue for county purposes by the taxation of personal property. Section 1. Be it enact rd by the Senate and House of Representatives of the Comraonvealtli of Pennsylvania in General Assembly wet, and it is hereby enacted l>y the authority of the same. That for the calendar year one tlumsand .liip, bank or'corjH)ration whatsoever, formed, (UXicted, or incorporated by, under, or in pursuance of any law of this commonwc^alth or of the United States, or of any other state or government, and located and transacting business within any county of this commonwealth, or within two or more counties of this commonwealth, whether such personal property be owned, held, or possessed by such i)erson or persons, co-])artnerslii]), unincorporated association, company, joint-stock company or association, lin)ited part- nership, bank, or corporation in his, her, their, or its own right, or as ac^tive trustee, agent, attorney-in fact, or in any other capacity, for the use, benefit, or advantage of any other person, persons, co-partnership, unincorporated association, company, joint stock company or associa- tion, limited partnership, bank, or corporation, is hereby made taxable for county pur[)oses at the rate of two mills on each dollar of the value thereof, that is to say : — AH mortgages, all moneys owing by solvent debtors, whether by pro- missory note or penal or single bill, bond or judgment. All articles of agreement and accounts bearing interest. All public loans whatsoever, except those issued by this common- Avealth or the United States. All loans issued by or shares of stock in any bank, corporation, as- sociation c()mi)aiiy or limited partnershi]), created or formed under the laws of this commonwealth or of the United States, or of any other state or government, including car-trust securities and loans secured by bond or any other form of certificate or evidence of indebtedness, whether the interest be included in the princi]:>al of the obligation or payable by the terms thereof, except shares of stock in any bank, or savings institutions incorporated under the laws of this commonwealth or the United States, that elects to collect from its shareholders and actually pays into the states treasury in or before the first day of March of each year, the six-mill tax provided for in the twenty -fifth section of the act, entitled "A further supplement to an act, entitled, 'An act to provide revenue by tn xatioii, ' approved the seventh day of June, Anno Domini one thousand eight hundred and seventy-ninf^' approved the first day of June, Anno Domini one thousand eight hundicul and eighty nine," all moneys loaned or invested in other states, territories, the District of (yolumbia, or foreign countries; all other mont\y€?d cap- ital in the hands of individual citizens of any county of this common- wealth : Provided, That this section shall not apidy to notes of issue used as a circulating medium, and commonly known as bank notes, nor to ])romissory notes discounted by any bank, banking or savings in- stitution : Provided also, That a credit for cme-third of the amount of tax levied and collected for state pur[)Oses under the twenty first section of the act, entitled " A further supplement to an act entitled * An act to provide revenue by taxation, a])])roved the seventh day of June, A. D. 187t),' approved the first day of June, A. D. 1889," on so nnicli of the mortiragos, bonds and other securiti(\s of corporations and limitcMl ])artnersliips constituting a ])ortion of their assets included within the appraised values of their capital stock, be allow^ed to such corporations and limited i)artnerships on all taxes levied against them under this section. 12 ■ ' I ^^y QUAUTEKLY KkI'OHT. Se™ 2. That fo. the ^■^^^^^j:^,^^^ tlSe S't and ninetv-two, a.ul each ^^l^"'!"*^"* ^' ''l^'^^yf ei-ht mills ou each feviod and collectenl tor ^^.^,^ ,,^. «„„,, benefit, or advantage of f "'*'f ?^' "\1 f:'^^, .,, ,,iJted association or as- co-partnership or co-partiiershii ''^' ,; "" " ^^^^^^ partnership sociations, joint-stock ^^^^^^'^'^ ^^J^^^^^M^^ shall also be or partnei>.hips, or 'jorporatnmoi coil orations ai ^^^^^^^^^ ^^ levied and collected tor county l^f ^f.',/'^°"'^ .ji ^.^les in excess of and dealers iu live stock, a tox f J^-^ J^™]^^^^^^^^ can be es- one th.>usand dollars made ^ [J . *:!^Vf „ ade the last preceding calen- timated or ^Iftermined troin ttu u ^f - , ^^^^^^ Jf ,n taxes levied under '^tKtt.t-In addition to f^^^^Z^^^^^^t^^^ county purposes, as; mentioned in ^.^^^^i^^^^^^.f.^.^^^^^^ the calendar shall be levied ^d co - -^^^^^^^^^ subsequent year one thousand eight lumdiul ana ""' ^^V j^ ^. ^^ ^j .^^^ earnings calendar year, a tax ot ten mills on eac i^aoliai ra ^^^ ^ brokers and for the 1-evious calenda^^y^^ ^^. ^,^,^^ busj Sr ^Al Sii^Ar^^pt' to the time when the tax on ..^^^k^^vhi^ i^^ ^^^t^ of rict'^entitled "A fm'ther supplement to an act entitled ' An act to provide revene by taxation, approved the seventh day ot June, Anno V\S one thousand eight hundred and seventy-nine, ' approved the fi;Trv S j"Anno Domini one tlumsan.l eid.t lu.ndvcd and e.ghty- ,,ine '• slvd on or before the first day of April, m each and every year m ko to h coun y commissioners or board of revisi,.n of taxes a report V^, irith" verified bv th<> oath or affirmation ot th<. preside^it or cash- ier s^tng forth the full number of shares of the cai.ital stock issued Pennsylvania State Boaiid of Agkkjultuue. 179 by such bank, and the actual value thereof ; whereui)oii it shall l)e the duty of tlie county commissiontas or board of revision of taxes to assess the same for taxation for county i)urposes at the sanie rate as that im- posed upcm other moneyed caijital in th(^ hands of individunl citiztnis of the county, or city co-extensive in boundaries witli a county, for like puri)Oses, that is to* say, at the rate of two mills upon each dolhir of the actual value thereof; and for that purpose they shall have the power and it shall be their duty, in case they shall not bt^ satisfied with the correctness of the re[)ort, to summon the ofhc^ers of said bank to ai)- pear before tliem upon notice so to do, on a day hxed by them, and to bring- with them all the books of the said bank, sho\viny of tlie same to every taxable person CO partnership, unincor])orated association, joint-stock association, and com])any, limited partnc^iship, and corporation in his respective ward, district, 'borough, or township, or to any ofticer, agent or emi)loye found at tlu^ place of business of any such limited partnership or cor- poration in his ward, district, borough, (u- township, upon which blank each taxable i)ers(m, co-partnership, unincorporated association, c(mi- pany, limited i)artnership, joint stock association, and corporation shall respectively make return ainiually of the aggregate amount of all the different classes of personal i)roperty made taxable by the first, second, and third sections of this act, which return shall be nuide and sworn or affirmed to by such taxable person, and in the case of co partner- ships, unincorporated associations, and joint stock associations and com]>anios by some member thereof, and in the case of limited partner-* ships and c()r])()rations by an officer, ag-ent, or attorney-in-fact thereof : Provided, That in the case of a corporation, joint stock association or limited partnership doing business in two or more counties, and liable ^g(3 *QuAirrKiuA' IIei>out. .1- 4. , ..vot.prtv where the value of the same for taxation uruler «f^, '^f "^.^S^Xpor^^^ thou and in that in each comity cannot be asceitaniu| <>i <;' . ^ • ^j ^.^,u„ty where th^:^i^S £ : A^'l^lSat^n, Sln^^cU ass.>eiation,or limited section shall he. made be ore tlie 1 'I'^^^.^^^.^Xthat the return is full, thorized to administer oaths, and sh. 1 '^'^ . * ^^^^;;[^ ^^ ^„a belief ; and true and correct to the best o ^^J^^ £ whari;iierbiiiiN uhhav^w^i ^v^oV^ «i rptnrn i)roT>erlv veritied by stock association or ^'^^'I'^'-'J 1°"; *Xs icl within ten days after beinj oatli or affirnration - -*1 ^^i^^,*^^ , > i^^^^^^ to ^ake a return R;?1i1 tax j e pers^In,^^^^ ^^^.rScll'a^ociaiicm^Unnted^^^^^^^ intormation he c o^^m . he^s^^U xn u ^„^^ ^^ judguients and ""'tff<;-«^ ^^\"^" j. the county commissioners or board corder ot deeds, and to the <;* «j;*;„' f^^^i^i^ ^^^ ninth sections of iTof^nti 1. 1 " A f"SertiATmo"t to an 'act, entitled 'An Act to ,nnvid; revenue by taxation, appvoNx-d the seventh day oi June, Anno V^ r^^lronrXmsand >niini one thousand eight hundred ind ei-htv nine "or remaining in their respective offices, and assess such hSui "g person, co-partnership, unincorp<.rated association imnt stock association, limited partnership or corporation with the «Tonnt of al such liens with interest thereon, and add thereto the a^oun f al ."l-taxabh- property of which they have kn«>wledge tlu'mselves, or obtai.KMl from other sources of intormation de* med by Iw to be reliable which return th(M'ounty commissioners or board ot tev^iin Shan ha^ power, and it shall be their duty, to revise and cor- rect according to the best intormation they can command in>m tl e iecont in their office or others ources, and it shall b., their duty to lend for a person, persons and papers, and to administer an oath or affinn t < . to him or tlu.m in such form as shall be pescmbed . and 8U1™ led by them, the said county commissioners and board of revision Pknnsyta'ania State Board of AciitunTT/iTRE. 181 of taxes, to which revised and corrected estimated return the proper coimty commissioners or board of revision of taxes shall add fifty per centum, and the ag^gre^ate amount so obtained sliall be the basis for taxation : Provided, That if such taxable person or co partnership, or unincori)orated association or company, limited i)artn(U'ship, joint stock association or corporation, on or before the day fixed for a^jpeals from assessments, shall present reasons, su[) ported by oath or afhrmation, satisfactory to the proper county commissioners or board of revision, excusing a failure to make a return such as should be made to the assessors, and shall then make such return, the proper coimty com- missioners or board of revision may substitute such return for that re- turned by the assessor and corrected as aforesaid, to have like effect as if no failure to return had occurred. Section 9. That if any assessor and any taxable person or members of any co partnership, unincori)ored association or company, officer, or stockholder, or meml)er of any limited partnership, joint stock as- sociation or corporation, shall agree or enter into any arrangement or understanding- that upon the failure of such taxabhi person, co-i^artner- ship, unincorporated association, company, limited partnership, joint- stock association or cor])oration, to make the return required by the fifth and sixth sections of this act to be made, such assessor shaJl re- turn a less amount of property made taxable l)y the first, second, and third sections ol this act than slioidd have been returned by such taxable v)erson, co-partnership, unincorporated association, company, limited partnership, joint-stock association or corporation, the i)ers(ms entering" into such ag-reement, arrangement, or understanding, shall be g"uilty of conspiracy, and upon convicticm thereof sliall be sentenced to pay a fine not exceeding* one thousand dollars, and undergo an im- ])risonment, either at labor by separate or solitary confinement, or to simple imprisonment, not exceeding: three years, at the discretion of the court. Section 10. That it shall be the further duty of the county commis- sioners or the board of revision of taxes of the x)roper city or county, on or ])efort^. the time of making: the annual or triennial assessment in any year, to prepare from the records in their respective offices a statement or statements showing*, as far as practicable, the number and amount of said mortgag-es, and all other ol)ligations and names of the parties thereto in ea(^h townslii]) or ward in the county, which said statement shall be delivered to the assessor or assessors of each township or ward resiiectively, before said officers shall enter upon the discharge of their pi'opcH* duties. Section 11. That it shall be the duty of the assessor or assessors, in making- up their valuations of money at interest in their respective districts, to compare^ the return made by each ])erson, co-partnership^ association, limited ])artnershii), joint stock association or corporation with the statement furnished tliem by the county commissioners or board of revision of taxes, and if the amount of said mortgages or other oV)ligations as contained in said statment shall exceed the amount set forth in the return of finy person, co-partnc^rshi]), association, limited partnershii^ joint stock association or corporation, to note the fact and mak(^ r<^turn of the same to the commissioners, or board of revision of taxes of the ])ro|)er city or county. Section 12. That it shall be the further duty of the county com missioTHTS or Itoard of revision of taxes, upon the returns made to them by the assessors of the several townships, wards and boroughs, lV^ ^^^2 QUAUTKUIA llEPOKT. i, ,n cases whero it shall a,,..a., i;x:r;'^iS;:."ir,''vSrt^s .,„, ^o.v^-^^--^-^l^''i::^'::i^^ iLsfamounl, oi money at iu- sociation or corporation has i^""' ;' ' ,_.gi^,i, ,,f the commissioners terest than api-ears trom the m-orjs in } "^.^^^^^^ :;,a,,,,tion of the pro- or 1.oar.l of revision ot taxes, tl"H"l'«"**\ : J^,^,, '^["iteai.artn.^rsliip, pertv of said pcrson,co-rartnerslnp, '^^^l''''^*^" ,^;,„\'^'* . V< rth in said S:>int-stock asso..^nm <- 37£";, *^,t ^o' ".lerships, associa- ''^g^Srr tC;;- any wilful failure on «. V-^^^^^^, missionors. board of revision ot t'^^^,''' ^I'V J' f ^^^ „• the several assessors to carry ^;^^i:'£Z^^::::Z^, and, upon convic- sections ot this act, snau iH f.iliriP^ to complv shall be i.- i^iw.^.^/a* fh^ T^ersoii or i)ers()iis so Tailing lu Lunij^iv BcnleiSoaJiL'norex^^^^^^^ hundred dollars, ami imprison- ment not exceeding <'i»e y^^r. inoonsistent herewith are und 1 huvs ill existence at the date of the passage of «"« act on what- ever is nKule the subject of taxation for county purposes by this act. rENNsvi.vvNi.s. State Boaiu) ok Aghicultube. 183 T?\-n? A^T^ FTIOM THE REPORT OF JOHN A. WRICiHT\ EHQ. , MEMBER OF THE ST ATE^EVENUE COMMISSION. State taxes. "^SZ^^ttlii^li^Zt^, to eUte the laws of the com- monwealth and broadly to care for "'.e .f'«<>yl<;- ■.^^^,„ „f ^ „,.neral These duties are embodied m I'^ovidinp: h.r all interests ot a pr,^^^^ or public nature, including the expens,>s ot the ^};f'^^'^"Xl^^e ?[vi departments, the costs of the election of rresident.aleectois state f>ffir.prs and iud"'esof the supreme and other courts, the suppoit ot Tiie ?,kiS oTcoi r s oT law. of the pul>lic schools, of state prisons, ot m- sanf asybims, <.f institutions for the care of the young, of houses of correction, military organizations, etc. Tjocal (oxen. The tax laws for counties, cities, boroughs and townships should be confined an.l limited to the raising the moneys necessary for the care and su pSo the respective l.x.il int.Tests. These shoud include the hS of the people, the pr..viding inferior courts ot law, and Ssticesr magistrates to supervise local disturba,nc<.s ot the peace, a olice in cities, a constabulary in townships, and provide jails, poor- Cuses establish and maintain streets and roads, budd bridges, sewers furnish water, light, public parks, markets, and take care of the public property. These laws should provide for the higher education ot the children, the expenses of the election of all local othcers. and such other expenditures as are for local purposes, and fri mi which the real property will derive protection or i)r<)fit. _ , .i " <. +„ ,.,wi After this general definition of the proper duties of tli<> state and local goveniinents, the principles on which revenue laws aiJecting them may be considered. First An to raimnq revenuc.fi for the slate:— A. All taxes should be levied on earnings ot invested capital or real estate, and not cm the principal. iw fnrMcm iV'ote.— This is an important principle, and is adopted by toreign nations as the only equitable rule. , . i i k„.„i,. „„ ,m Taxes based tions '. " The exception of notes or 1^|l^«/---f. J 1 V 1 ..^ ia r^l^Mvlv in violation ot article iX oi tlie consiiiuiion. Sr; be ono^T tSeiro^^ legislation that has become very .ommon more c(.ni. mm than commendable, the object of which is to fZr pShrchtssat the expense of the rest ot the connnunity. So far a^ s c legislation aftects the cpiestion of taxation, the consti^ tntion has nut an end to it. There can be no more o it, nor should • there be To constitution protects all ,.arties alike ; the poor and he r ich <>qually enjoy its benefits, and all nmst share the burden which t "n,.oses. However popular such legislation may be, it cannot be fciiiRfqiiied under our present constitution. .. ni. £ Everrc tizens owis to the state such proportion of his profits, from wlStevL source^ as may be required to meet its wants, and as a requeue the omission to tax any profits or property or to release froni taxation any profits or property is to place on others the burden the owners os^ich property .,r profits should bear This inequality is one of the striking defects of the present laws lu that all the profits of capital <.t subic^t to the mercantile laws, and all the profits from real estate aid from bonds held in other states and foreign countries are exempt Von taxation ; and the laws levying taxes on the principal of securities luld and money loaned, do not recogni/.e the varying rates on te rest and, thereby, work great injustice. Any proper system of ?L" tUm will reach all the profits of all the people and b,. n.a.lc to bear equally. Pknnsylvania State Boakii ok Aoiuour/rDRE. 185 E It will be noted that this broad claim for tlu! taxation of all inofits from all sources, and that tlH«(^ should be no exemptions, would rule out the generally acceptiid policy of excMiipting tnmi taxation personal property to the extent of some fixed amoaut. In tins day thei-e is but little reason for such an exception to a healthy priiuaph^ But it such an exemi.tioii is made applicable to all cdtizens, then it simply reduces the total amount of profits in the state liable to taxation which again means that the rate of taxation would have tt) be increased to meot this deduction from the total amount of taxable profits. To a limited ex- ■ tent such deductions would help the laboring classes. It has been su-.'-ested that any inequality arising from such an exemption might beluet by requiring that all natural persons whose gross earnings from labor, trades, occupations, professions, or the investment ot money, or capital, shall not exceed $300 per annum, shall be required to i.a> a poll tax to the state of twenty five cents annual y, or it might be added an amount that would be eciual to the product ot the adopted rate ot taxation on a profit of $300, which would be less than twenty -five cents. F The taxes should be levied ui)on as few articles as possible, thereby simplifying the workings of the law, rendering its provisions more easily understood, and securing a tairer return ot the amount ot iH'ofits or of property. ,., i , ,i i i.- *• Note —This result would be most readily secured by the adoption ot the suggestion, as to levying taxes on net i.rofaH«^ as it will make .ut one amount to be returned. The tax aw ot 1889 is so intricate that but few persons understand it • its intricacy is a capital illustration ot what a law should not be ; this has been a characteris ic ot the revenue laws of our state, and as a sequence the courts are tull oi cases insti- tuted by the state to find out what was the mtent and meaning ot the laws as noticed by Judge Paxson. . .. • v • i G Revenue laws should avoid intruding on the privacy ot individ- uals, of families, of corporations, or conferring on the assessors undue inquisitorial powers. .,, ,, ,. ,, . . t t,,. H A well-devised revenue law will secure the fullest return ot tax able property when legislators keej) such a control ot the expenses ot the state, Thai tlu. late of taxixtion will be the least burdensome to the ^""FThe administration of oaths as to returns should bo rarely used. Note —Their indiscriminate use in this country is rapidly lowering the public appreciation of their solemnity and of the moral responsi- bility of the individual to God. The taking of an oa h is too gone.al ly accepted as a mere form, and as a i.art of an ofiic.al s>-stem, and the respect of the citizen for the law and for the government is loW.ne(>TlT. "'r 'rauxr" ':tS:'ii;iv '»"■•■ » ■" ■"- ""■"■- ■■' *" profits, from whatever s.juree .l.^nved taxation as to the ^ iV.,/e:-No aistinct.on shouhl »><;'"' ^^^^^^^^^^ "a1 honest n^eth-xls of sources from which «!« l'«>^t^ "'.'^^J'^, J'^ ^^ o^ennuM,bjecti..ma.le inovisions <^^J^^^^ ;^,,„i,,«„« tlian on rates of taxation are levied upon ^^ "*' j.;\'\\f t\tere were undue profits others, as if there were scHnethngnmn^^^^^^^^^^^ ^^^^^^ ^^^ ^,^,^^^ ,„ in such employments, ihis is a leiuiuu the earlier acres. , pullpntion of the revenue of the /.. The methods of assessment a^\'l'^"f^^"? reduced to a miuinuim. state should be carefully V^^f^^^^^^Zd, be appointed ^ote. -The assessors should, "' 1' ;^'^ , 7.'T' ^iitelligent and capable by responsible officials and the <'1^S?.>^A to I^o nmand the services of citizens. The salary «»'«"l'ii;;,*^:,\^{\' ,e 1 e S^^^^ and confidence men who will be fully --^I'f,^"^;^^^ j^,^^f,/a,^^^ and collection of their fellow-citizens. The Pje^^"* ? f ' average about ten (10) per of state revenue by local -'''?';f„^^,\","f; ;,,ia l^^^^ reduced, cent. This is an e^ti-eme charge ^"^{^'Yt^y state takes on the profits The enforcenuiiit of a law that '^''"''^J^/y ', ,,„„,,ertv of the citizens arising from the capital, ^^e f al and^^rsona 1^^^^^^^^ of the state, woud relieve (I) Jl", «m^^« ™ H ^ , • j„ assessing Atton>ey -General from «^^7,,;*.*1'^" ; f |oX«nate from a mass of and colh-cting state taxes, a"ainj^>'"|/ft*^^^'„"ia relieve the dockets words their true intent and mc^n ng. , J^24";;^;'*^ourt, now crowded of the Dauphin county ^^^^^^^l^^.^^rrre.i.ion, county com- w th state cases. (3) ihe «f''?f^"^°' " ,,. mu,, citizen, the corpora- S^rKlf a ™^^ =tslSS fcrrors and with a low Lte offer f«we\ir^rf"l«"tlf*;n dlcms'sofullv the proper basis of a I hav(. thought It desirable to '^i^«"^^ „^° ™'^ •" j, 'litv in the views revenue law f- ^-^^^^^^^^^ of, the leg- eral laws which would be more IJ^J^'ll^^^'^y^'^^^l {'^^''^i i889. The principles of state constitution than our 1 resu^^^^^ ^j^.^j^ framers of our state ^f f t^t^'J^^" ,^*'^L^^ei^„ee fo^^ exemptions, would 1--" ,Sle\o f^i^^^^^^^^ more general in thi^li^iraKSrU^fot o^^^^ policy <^f' ^^i^ ^^^^^^^^*^^^ ^^ ^ f * **:.*** ^ ***** * Tax 0AKl> OK AcUUCULTUUE. 187 owner of iinprov.^ ^^ -^f^'ti^i^^oftxl^l^n^^^ ^.^1^^ .^^ property ^l''"^'« »Xm i '^^ r^ C to -ay his share, for the tax be- house, farm, mill, ;- '1'' , ^,^'^ ,, , of a room, the boarder m a private comes l)art of the rent ; tlic "^^ J.'^ "^ f ^^-^J^,^ contributes his share house, the lod.n.r in a 1-tel ^^^^^ *^*^, "t' Ihe taxes is adxled to the feu the amount of taxes, '^^',;'\"^';j"'^^ ,, . .,,„ ..^gj, of a nitrht's lodging, rent of a room, the l'"-' <'';-" Jl '^cause t can be levied ui-on the Further, it is a just and ^f ^ax J^f ^'^-^i^^,, i^ case of unimproved rental or productive ^'^^"'Vliw.sed.n its value in the open market, real estate, the taxes ^'l^l^t :r^^ • sed on theprinci,.leof confining When th.^ taxes on real estate '^f '^y,'^^* V^' \" ,vU liavean interest the expenditures of the "^""^y^^"^ :*n*\ ^^^^^^^^^ estate becomes i„, and are (mhanced by, use of ^7^' f .'^^^i Xrds the best basis for not only the best vepresentativ'f3 of value .tnd.m^^^^^^^^ ^^.^.^^^^^ taxation, but it is the -' f, ^'J^^*,, ^'^i^ ^..^^ £* Id be subject to local positi(m totlH! theory taat l'»^'?'/"»'''Vtwli"v^^^ laxation, and is therefore ^J ^f ^J^.^^^^^^^^ does it afford What does a tax on real estate lepicseui protection to life and personal Pr«pwty • represents the The answer to these .juestiosw^ulb^^ or borough in care and protection ot the p( op e ]\"^;:'. j^^-'g .^id outgoings, and the occupancy of their '"»mes in then ^^^^^^ J-- ^j,^ interchange of this is all The intercourse of citize w itli ^^J^^^n ^^^^^^^ ^ ^^^^ business, all transactions of the P«/^f l« 1^^" ;;,''„"^^^ with citizens of protection and care of the state ; ""'^iness transact government. Uer states come under the Protection o the jener. ^ „^^ ^^^ These are important distinctions ij^^^^l*^^,^ ^-^^^i,, county, city, or , vide any more protection to the n^^^rciwm ^ving salaries or borough! nor to the Protessiona man to those r^^^^^^^ tliose owning stocks or shares m banks oi o hei mco i ^^^^.^.^^^^^ than is given to every other- citzen^ local bodies to those holding per- tection or extra privileges given by^^^^^^^^ ^^^i^^ ,,,, their rea , :Xt rltltSw "^ retme claim made for taxing personal "'^^^eL farmer, who, in addition to his f|.ni -ns 'j.tJ^i^^iS (|1,„00) bond of a .-iJ-f^^.S^c Sanv^oH^ stock in a bank, or in an in«7'^"{;®,^^'''^\ n(i;)\ on a farm in tlie county m or a m.»rtgag(> of a tlx.usaud >^<> ' ;^/. f ^'^^Jip" county or state, or any which he resides, or on real ''^^^^^''{{'^'^^^^^{^iJsX.onVX be taxed other kind of personal P'-P^j:*^' ^^l/^^.T^^ in which he on these bonds, or shares, or "'•"\-''-^^;,^r^- ,' f„- iji, in the way of Ze.l He argues that * ---^y does nothing ^^^^^^^^^^ ^^^ protecting him m 1"« l'?**^"!^"' H* 'f,,! mortgage, and is protected m an annual tax on «"<^1\1''?"^^^'„^ ^'^^j.^^^n^utlH-As: Where there is no such holdings by the state ^is answei luu ^^ ^^^ ^j^^^ benefit to be uld subje c h ". f^;"^^,, ^^..^j,,,,,, the small A-Tain the profits of the merdiant, *1;'^ *'\^'^'^;;,J; ,,.,,,,'sented in the and large manufacturer, he labon^ are ^^^^ J,.,^ , t,„„, for i ) jgg QUAUTEKLV llErOUT. .vhcthor it is derivea from labcn- ^-^Z^^^^::;::^':^ ITSoHh: local bodies thus directly n;ach }f\\^^'l^^^^''- ,.Ji estate, horses peoi-le thr..ugh the taxation ot { ' " ^^'^^^i c-itizens for labor and carriageB. etc. A^-ani the f I'f '^^^^V, t' "^lit^i ''i^^ eniploynieut to . Buppli-, within tl-/'-"f^^'^ t;^:;^ 1 "y eimbled to {.a/taxes to others, who lives i", '''f .^'^'?.''"'V \V,,, w^jj^^ a very large the local bodies, so that indu« ctlv tli^^^'f .^ ,.i^-„„.j^ whether or not co'itribution froni.tlie pergonal l'-n>«rty o^f e ut /e^^^^ ^.^^^.^ ^j^^ such property is invested m ^^j^f "-^^ ^ive^^ ^^i^ within the bounds of a municipalbody. ***** ****** * Proper system of taxation. conflicting- interests? , ^vsteni which will most It must bo apparent to every one tha «^-yf ^";^;,„„,, represents nearly secure these resiilts is on« based^^^^^ "^'oT pv..fes8ional skill and the earnings derived trom o^^l"' "^ ^fc^^^^^'ti of houses, from the knowledff.s from cultivation ot l'^"'!;,^*^";'^^^?'^^^^^^ „„« of nuichinery, ndnes, fron>. the manufactory, ^'^''f.J^l'TX^-^^oxhy niil, from tlie from transportation, ^hetl^^"- "''J^f/^^^f' buy hi^and selling, from interest derived from money '» ^^'J^f'^^j^^'^^'^f ^f^ means and all the the employment ot cash ^^P^^^^; ''^ Svfng In a mass it represents a ways devised by man to secure a, living. nation's earnings, or that of »■ «tate- , nations is an attempt to of property. . . ^j established, the pr()]>hMii KS:;>E^^^HngKriiir:&is^ tl. amount of *^tirr;Voi:hrb:'for ' t^^^^^ conunission is to devise such measures Another proDl.Jii. I ,i ,„,ev8 it requires and to the cities, r>ils! WughstdltnS" "the'means Jf raising money for their Pennsylvania State Boaud of Agbicultubk. 169 local wants- harmonizing both claims so that there will be justice done to all the -iti^^-f'^^^^rrsl"! base the revenue laws in.the To secure these residts it ^y»l' »^'^; ^^ ,„ ^,^^,0 as their operations following general principles, varying tiom tuem may be inexpedient or H"^!';^*}*^;*^^';^- • ^^^^^ its citizens their con- FW^t. Tiiat the state is entithnl *» {«;«{^f J ^^^^^ ^,f tin, social system, tributions for the (.reservation ;";^, '^^^f^Xtf ai cl that such eontri- in the protection ot their persons and I'l'^Pf^^^' '"/^ pror)erty in the ution or taxes should be levied upon «^« T'< r«,o a proi > «t.ate and on the real^s^a e ^ ^^^^^i:£\^ protection and knowledge, skill ana ^"^^t..V '^'^ encouragement attorded by its laNvs. KotiItq ond savinsrs institn- "IW. That all -^l-^VSes'S wi''^^^^^^^^ «1><-Id tions, and associations and bu^i"f ^ ^^ n\*; ^^ ;\^^^^ ,,^ ^ natural person, l^=^SStingtr ^^^^^^^ - ^-^ '^ "-- :^r ^iii^widiiii^^^^.^^^ -- - ^^-- all corporations, associations, h™«; «*^;^)^f ^^^^ j^^^^r, skill, and capital The state proi.erly looks to *'\*^'^^"{';,j,o,,ertv as a whole ; it is not of its i>eople and their use of \' f/^7^\j\'^^ ^^^ire into the details of within the proper province rrect. T e f*f [ ® {' {^t^. j^g^^ of the individual. with the amount money b"i'-"^^«;\\*^,*,^^" ^ jfAart of his private busi- This properly be ongs to each person ^^J^V^^^ ^ ^^ ^t^te pre- iiess If a citizen borrows money on a house or id , ^-^^ sumes it is done wisely as a <^«°''^f,^*;'t a moSe it s done by au- railroad or otherwise, bon-ows f^^-f,,^" ^j^" d t,Xa system of taxation would Fourth. Thatwlule ^'O/^^"^^ ^^ "'^^- jes K^^ produce a larger revenue than *1»' "f^^^f {!f ,^r<>per, fair and just that require, and while it ^vouldnisnich cases be l^ao^ ^^ the state should (through its l^g s atuxe) re un i ^^^^ ^^^^.^^^^ of such revenue to the counties "ff «• f^^^^^i^ J ^^ f the counties, cities, it should also be I'^ovuled that tl^^auth^^^^^^^ taxes as may boroughs, and townships shall ^e empowered to ley^ ^^^ ^^^ ^^^ be required for their, local necessities « the rea ^^ ^^^^ ,^^ ^^^^^^^^ liorses, wagons, carriages, etc., witnin uieu thereto. , ., „ ;„„>i(.,li'«to advantage of the owners These expenditures ai^ for ti'«"";;,f,ty, or borough, affecting of the real estate and residents "^ j' eo ™ ..eopl.rbv securing ^^^ QlJAKTEKlA RePOKT. KiriS^nUl'mllH^^^^ V-t P=-tKaiy and uuiu-ectly represent« 1'*^"^> ^"A, .,/ xi,- jj. Jouble taxation, that profits. Tt is argued on the one side *] J J "^^ ^^^^"^^i.t between the t is not in harnumv with the comity ^^'^ ^^ ^j^^^^^f «,,, 0(mstituti f''"'';^^ to protect and Ew-'-tliat the right to levy a tax '1«1X^« *" ;^;j^^"^rprotecti<)n ; that that the principle of taxation goes ^'^^^ .f ^^' ^;^.^ ^j^AJ of its citizens the State of Pennsylvania do.3sot p « tect \*»-^t*;"^\^^i/ , ,^,,ty. in otlier states, and, tl^f f "f^ l^n.v o such a law is to drive capital It is further argued that the t™'!^"^ °\X^''/the^e is no such tax. from the state to New York ^"^ , ?\^**'^' i'^,'^^^^^^^^ That it prevents we^tei.i cam ahs^s wh^na^^^^^^ .aid from ''-1;}';^-^. ^^^iTrS y el^ndSrherTand thus builds up ^r^: i.^i^J^:ier.:^^ rL property-and m other ways contributes to the state and local taxes individual is On the other side it is argued that ^^^^"Xtever source it may be the proper place to pay tax on ^P''^^^' *[^^'"„^^^^^^^ question of deriled! I" ^ ^^f^, the discussion may b^^^ ^^^.^.^^^ ^f public policy and e<|uity. In the absence ot ^^y -^ per- [he Supreme Comi o ^^^^YieemeStmorS the states, that property, IhlftaYe^rS^^tn:!!^^^^ and that its revenue laws should include such income.^ ^ ^ ^ Pennsylvania State Boa.h. ok A(iitu;ui;iT;uE. 191 FARM TAXATION. By the Skcbetaby. r'' ^'r hf f^'^ctS twtoF hLr asse^ ^^ the same basis fednustSt^d^S^^^^^^^^ Ways and Means, by H^n M. E Ob sted in an a^^ ^ ^j^^^ tion to th«> House revenue bill ('''llj^ • -^J"> commissioners of one of following from the inst^^^^^^^ JroPty ara'fuU v^^^^^^^ the law .Urects, but on the books that you return to this office enter only one-kalf of tk. full val^ion for «TrSiKI=;'lntliority we find t^^ cmmiy .>m^toers^^ county issuing the folu-ving uistnicti^^^^^^ ^^ ^^^^ ^^^^^^e ''^^iiKi:^!^ thi wS ^of ^^ the law in form, they are ^'^yy"'^ b mi t ^^ ^^^f;^^^^^ Craw- sesses at about one-tourth value Ssq^^^^^^^^^^^ ^^^ ,bout full ford at fifty-five per ff^;J^'^^^i;^l^,A a^e^^ng ^ VOi^U. value ; the other counties ot oui state wui ul, between these two extremes. which W(^. can compare ""'it therefore follows that ^^^^^t^^S^^^>^^-^^^ "'^""""'^ the rates ,,f county =uidW^^^^^^^^^^ ^TsJes'^at thl rate of fifty^five tion when we state tbat busqucnanu ^^j ^^^^^^ jj^^jj^ mills on the dollar, and uit ^^f ^t^^^^nna county taxpayer is taxed to a stranger it appears that te ^^^^^^^^^^^^^ i,,,x yet the facts o at six times the rate ot tli« « « "i™? Susqiiehanna, as compared the case show that the rate "^.^-^^X'tio of nineteen and eight and with tlu)se of Chester ^^%-''\'^'''c-^Zn^^^^ ^^^^^ and North ZX^^Ii^:^^^^^^^^^^^ impression to the hearer, and is of no l"-'^«t|^''^^]'«?f ^^irslmfagricultural meeting in Canada While m attendance ivt a laige semi a^^^ statement made by a recently, the writer was .f^fher suums a ^^^^^^^^ of the Unit.-d prominent Canadian ofiicial to tueeneci ^j^,^^ ^^^^ j.^^. kates were being taxed ab...st out o^^^^^^ ,,f eighteen mills mersof Pennsylvania were being ^^^^ ' this was incorrecvt, on the actual value " "'^^^'X ^f t^e statements made by our pub^ but it was but a repetition "* f^^^'^.f J"t„ment by another to the effect lie speakers, who do not quality the *'t;^temem uy ^^^ ^^^^ thaUhey refer to the ^X's't^Tf our st^^^^^^^ '^"^^ ^°*?"f adian friends do not "n<^«y^*f°.^^ „""!, Sic papers, naturaU such statements, not corrected j" ou pumic 1 ^^^^^.^ ^^^ ^^^^_ that they are correct and they l»'^J.«/,^f ™ Vie^^^^ two per cent, upon sylvania are being axed at th^^'^f^ ^^^J^^^J^^Xperty, and this is used the actual value of their farms 'f/J 1 fT>*^";Vfarm property in Canada, as a contrast with tl>e l<>^^^f «'*^, ,'^^;^;'^^^^^^^ sliould not be as- We fail to note any good re*i>^*'", ^ ' ^ '^.''.V ,^ system would not ni- sessed at its actual yf,;«> J ^ ^i'^^ iU ^^^^^ of course be pro- crease the amount ot the taxes tl^ " ' ^ ^^ ^ , the result to which now exists. luVu.nltv to the student of this branch of Another point which is a -?' . . 7.81 J;^- i' 13.33 ^<»- 8» _ 9.50 ^*'- VA *'.!.. 8.00 No. 10, . 6.46 mills. 10.13 '' n u it (i ^T 11 ... 8.95 mills. No. lit 10 *i7 '* No- 12, ; ; :i;]:i4 .. No. 13, Y Y9 ^/>- It' : : : : ; vUb ^/^' \7 ... 12.00 ^/>- ^ ... 11.00 S^^- ^' ... 9.43 No. 19, 14 ii a n sliiv'S and that each township DurpoBe, because the most glari Avhicii iill real estate is under the same shii) m that the upon the ^ - .^ ~ _ , ,. actual and real one, and valuations iiu- variations come from the same town "^ ' mill rate; the fact is the alues placed roin the excuse or iil.()loff.V can be given or '■^d^'="»^^i^,, ^ f-Li-mers of our state to know the ^Believing "lat it would be^^^^^^^ ^^ have collected "'r"e nimber of farms in the state and with the ...e of each have ^^t:t^^ C^JC^ £^ S average rate of taxation, m each county tl™ual values of a 1=-^---^- « ^^^ )f each have obtained tli h1 for this year. These or lOUS SXlivir^ or ;rttog up estates have be, C live been placed ui.on farms -in<.u>wn to and the amount of tax paid, o^*'^" f.^^^^ \TJ^' ' ^;^^th^^S:^'Srr:!^rin^eS:^^neHlierover^un^^^ estimates. Care has been taken, a^ county commissioners, iiieu uy x.x.......^ to the county records obtained from persons well acquamtecl IS much as possible, to obtain these that the averaged 'V ''^^ivt^'li't^riudS hSf ^to «;;';Si;:i.m^to -b^f reader mav be abl t ''' - ^^°^ f^^ the whole county. It will be tached () the m, 1 late ;!;*; <" •^^'''/^^-^.'i,.,,^, j^ the list the total amount iH.ted that m a few of tlie con.,t, s ^^^ J^ ^ , ^^^ ^^ ^^^.^i^er Pkn-nsylvania STAT1-. B...Mii> ov Aowciu/ruuE. 193 quainted were valued by them the^^^^^^^^^^^^^ c!omity records and the ^vei. ge coun y i ^,,^^ his data it no? XSanI J^'^-^her J^^e, only ible to state the average "l^tr portions of this -Port U-ages^J ^,^1^ 94^ of this ^vork are stated ; .f ^«i*;,;Yt ,„ Ste paitial results were made to persons interested ui the i«^"^, ' ';^\J' {!^t"«iilhtlv increases the aver- age rate as first stated but m \ ;^ '^^^.'^^^^J^^'^'^ the average rate of the the amount of property ^'^Ij^-f '^f^^.^^^^X of^^e ^'^t""^^ *'^""' *^'^i*' county, and each addition t^^Vf, ^^'^^ ^ J"a« expressed in mills large decreases the '^^■f'^S*',^^Jf this table t must be remembered that In any sam.. dupli- sonal property t'^?^«^\^y'*^^,, fl^ 1 of e tax paid includes that paid cate; in all counties the sun total ot tl^^^^^^ I duplicate w;ith the iipon persoiiid property and ta-^^ , "}^>" V ^^-^^i^ to obtain the rate tlrm Ahis being the case it h^Uo-^^^ ^l^^, j^.^,,,t the amount ,,f taxation levied upon the UncU one w^^ position to turnish a paid upon personal propeiiy •• «i«^;^^; '^t .^^ ^idering the state as a Reasonably co^^-ecVSlhet^xespIhl by formers are levied upon per- whole, ten per cent, of *!'«;*• f.^^l'-^'^f,. "^^t is represented by the per- sonal property, or rather that ten pci ce^t.^,^ ^ jf this estimate is sonal iioperty on the ^^^^^ Sed fnlductS per cent from the accepted as correct, ^je aie Jistihc ^ ^ ,^^^^^^^f ,,,ty and couiitmg total tax as representing that Je^ ?^ ^ ^ . ' j ^ ^ ^„, the farm itself. . theieni.iningiune- en hsasluu ^^^^^^^ .^^ ^j^^ ^ , ,,, Another principal of ""^^U^^^'t^'^^d for taxation ; in some sections .vhich farm personal V,^-«l?f ^^ ^^",f ^^^n each horse, cow or other animal , of the state a, fixed value is placec "1'«" „ j the actual value of the returned, and this ^'f^^.P^Z^^^^ei at twenty-five dollars animal : thus in s.mie localities hoists aic a proportion ; m some actual value. f^eci^^w of the same character are all valued, In a similar i"=^i'»<'i"l'^"*'^®^'''T?.:i Anns the lawyer with a practice for taxation, at a fixed ^'^'^^^'^^^^'^ ^o.e practice s worth $10,000 per year P^^^^J ^,^„^^„^e\. j^^^^^^ *'^l;ih being the system wh.M-^^^^^^^^ tion it follows that even wit <'«;«^i;Pf ^^^t that law, we will still have noticed, is to be found. 13 li QUAiaElll.V r.l I'OltT. .AKM TAXATIOK BY CO^^Jf^l^'' "" ''^ ''^'''' YALUE OF THL FAiiMh. - Adam? Alleglieny Armstrong Beaver Bedford Berks Blair Bradford Bucks Butler.* <3ambria, * •Cameron Carbon Centre <:;he8ter, Clarion Cleartteld, Clinton, Columbia <;rawford,* . . • • Cumberland, ... Dauphin Delaware, . . - • Elk Krle Fayette.* Forest Franklin FultoE <}reen€ Huntlng<3oJi. . . • Indiana .lefferscm. . • • • .lunlata Lackawanna. . • liMiirfiHter l.awrf'iice JjebanOE.* . • • • LehljiCh Xiuzerne I.ycomlng M<'Kean Mercer Mifflin Monroe Montgomery, • Montour Northampton. - Northumbcrlund, Perry Philadelphia. . Pike.* Potter Schuylkill. . . . 8nyder Somerset, . • • Sullivan Susquehanna. . Tioga Union Venango Warren Wnshlngton. . • Wavtic West iiioroland, Wyoming, . • -York, ly 14 14 18 81 12 • • • 7 15 14 2C. 9 15 2o;^ no 198, UOO 120,408 llH.fiOO 72.500 157.140 88.H10 75.r>13 C2,r>:w 48,1 HO 242,855 10.750 15:^,720 «>45.:t8l 1J574.013 l.Kir. 07 975 09 1,079 35 77r. 44 2,i«7 07 1,091 41 533 29 1.075 54 852 2«l 2. 177 77 317 95 1,243 :^^ 4,271 14 11 432 91 8.1« S.09 9 14 10.70 18.r.2 13.10 7.05 17.20 17.70 8.»» 18.98 8. OH O.Ol 6.8:i INDEX BY AUTHORS, • • • 129-133 3-4 70-76 190 13-18 19-36 36-47 7-13 53-55 84-99 . • • Page. , ....ean. »-«.. ...... ...■ «— :-:::r;:r.i „.»«. -: '■ -» ^ * v?ovf>tnie and taxaiion , ^^^ I61-i7n Beaver, Hon. -T- A., Ke^enue ^^^^ commission, . . • • l Brown, Hon. <.. C ^'^ ^^^^^ • • . „^ Preface ; assessment and Uxation, . . • EU^e, Th..H. J. (Secretary), Pj«^^^^;;.„^„, ;„ uie tax problem, . • Farm taxation, Oroa, .>r.O.<^.. Measure tauen to reance taxation. ....•• •• „.„.n,on, ...Un, ';;'-;- P-^:;:^,,-,,.- taxation .or Pennsylvania, Jaokel,PreaoHck, Double taxation, ... Prol' 1> AV., Taxation, rr:;;ooi..n-,.^e.^a.<^^^^^^ McCamant,Kon.Tho,..Report^o,^^^^^^^^p^^^,j,y^ . . ^^^ . 'i-he farmer and liis t'^xos, gg^gg Miller, .Tohnson, 1 be tarm M..n.i.l-. ....h" B., Taxation, . -^ • • '^^^ ,„ ,,,^ions 16, 17, 18 and Olmstcl. Hon. >l. K., Ar^^ ^^^ ^^^ ^^^^,^^,^ ,,,, p,o,„«e<. by ^^ — ^^^ „ „ „E Taxation ; extract from tbe inaugurai address raltisoii, Hon li. t^-M 1** — Hon. G. D. ^^^^:^^:Xefor. State Board of A.r.nUtir. Khonr, Hon. Leonard, Addiess , . HoT)()rt of committee Ot, State (iianj;tN K(P<>»^" , H... fvii-niers 1 V V Taxat on and the tanners, . Underwood, N. 1^.1 t^^X'^^ ; . ^ ^ X TTx tracts from report ot, . • • • , 66-70 . 124-129 . 133-135 . 135-138 5-7 . 182-189 . 56-63 ¥ From sstimates of county officers. END OF NUMBER