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UNIVERSITY OF ILLINOIS LIBRARY AT URBANA-CHAMPA1GN
UNIVERSITY OF ILLINOIS STUDIES
VOL. Ml. NOS. 142 MARCH-JUNE. 1*14
A History of the General
Property Tax in Illinois
ROBERT MURRAY HAIG, Ph. D.
Instructor in Economics, Columbia University
Sometime Garth Fellow in Economics, Columbia University
PUBLISHED BY THE UNIVERSITY OF ILLINOIS
BY THE UNIVERSITY OF ILLINOIS
p^ This study found its inception in the seminar of Dean
David Kinley, of the University of Illinois, during the
*? winter of 1908-1909. The seminar that year devoted its
attention to the subject of taxation in the state in antici-
^ pation of the movement for the revision of the tax system
7^ which culminated in the appointment of the special tax
i commission of 1910. Considerable material, gathered by
.) the members of the seminar, dealing particularly with the
present day situation, has been made available for this
undertaking; and acknowledgment is made in this special
manner to Dr. A. E. Swanson, Dr. E. J. Brown, Mr. T. E.
Latimer and Mr. J. R. Moore for the assistance afforded
by their seminar studies. Moreover, material on various
phases of the subject gathered by Professor M. B. Ham-
mond, of the Ohio State University, and by Professor Na-
than A. Weston, of the University of Illinois, was also very
kindly contributed by them and was of no slight aid in the
work. For this generous cooperation I desire to render
While the library of the University of Illinois was
found to be rich in material, considerable use was made of
other libraries. The collection of early state documents in
the State Historical Library at Springfield, Illinois, was
particularly valuable. Material was gathered also in the
New York Public Library, the Indiana State Library, the
Library of Congress, the Illinois State Library and the
Columbia University Library. Thanks are due to the offi-
cers of these institutions for many courtesies extended. I
am particularly indebted to the custodian of the public
documents in the office of the secretary of state at Spring-
field, for access to the manuscripts of the unpublished
territorial laws, and to the auditor of public accounts, for
access to the original account books of the state for the
4 HISTORY OF TAXATION IX ILLINOIS [4
early years of its history. For criticism of the manuscript
and for suggestions as to the use of material, I desire to
thank Professor E. R. A. Seligman, Dean David Kinley,
Professor C. W. Alvord, Professor J. A. Fairlie, Professor
E. L. Bogart, Professor G. W. Dowrie and Professor H. B.
Gardner. Acknowledgment is made of financial assistance
rendered by the Carnegie Institution of Washington,
Finally I wish to record my deep gratitude to my wife,
whose aid has been invaluable.
ROBERT M. HAIU.
NEW YORK CITY,
MARCH 2, 1914.
A. PRE-TERRITORIAL ORIGINS
ORIGINS OF THE GENERAL PROPERTY TAX IN ILLINOIS 9-24
The French Period, 1669-1763 9
The English Period, 1763-1778 n
The County of Illinois, 1778-1784 n
The Northwest Territory, 1784-1800 12
The Territory of Indiana, 1800-1809 20
Summary - 23
B. THE FORMATIVE PERIOD, 1809-1838
ECONOMIC CHARACTERISTICS AND THE FINANCIAL PROBLEM 25-34
The Sphere of State Activity 26
Taxable Capacity of the People 27
The Agreement with the United States Government 29
The Failure of the First Banking Venture 31
The Financial Problem in General 33
LEGISLATION, 1809-1838 35-58
Property Taxed and Rates Imposed 36
Assessment Methods 44
Collection Methods _ 49
Special County Levies and Municipal Taxes 51
EFFICIENCY OF THE TAX SYSTEM 59-73
Fiscal Results 59
Administrative Results 68
C. THE DEBT-PAYMENT PERIOD, 1839-1872
TAXATION FOR DEBT PAYMENT, 1839-1848 74-92
The State Debt and the Tax Problem 74
Tax Law of 1839. 78
The First Interest Tax 83
Economic Depression 85
Changes in the Tax Laws and the Canal Loan 88
Improved Outlook 91
TAXATION FOR DEBT PAYMENT (CONTINUED), 1848-1872 93-125
The Constitution of 1848 93
The Revenue Code of 1853 99
Financial Conditions 103
The State Debt and Interest Funds 106
The Illinois Central Payments 108
Summary of the Sources of Debt Payment 109
Finances During the Civil War in
The State Board of Equalization 113
Computation of the Tax Rate 114
Debt Payment, 1864-1872 115
Taxation of Corporations 117
Taxation for Roads and Schools 119
Summary and Criticism 120
D. PRESENT-DAY PERIOD, 1872-1913
TAXABLE PROPERTY IN GENERAL AND ITS ASSESSMENT 126-137
Constitutional Provisions 127
Property Taxed and Exempted 128
Assessment Methods 132
State and Local Officials ' 132
Valuation of Property 133
Local Assessors 134
Return of Assessment Lists 137
Publication of Assessments 137
THE ASSESSMENT OF PERSONAL PROPERTY 138-165
The Process of Assessment 138
Definitions and Deductions 138
Manner of Listing. 141
Oaths and Penalties _ 143
Efficiency of the Personal Property Assessment 144
Mortgages and Credits 146
Bankers' Credits 153
Tangible Personalty .". 160
THE ASSESSMENT OF REAL ESTATE 166-172
Definition of Real Estate 166
Manner of Listing. 166
REVIEW, EQUALIZATION, EXTENSION AND COLLECTION I73-IQ9
Review and Equalization 173
County Board of Review 173
Sjate Board of Equalization 176
Extension of Taxes 180
The State Tax 180
Local Rates 183
The Juul Law 189
Collection of Taxes 194
Collections and Settlements 195
Tax Lien and Tax Sales 196
Property Forfeited to the State 198
THE TAXATION OF CORPORATIONS 200-216
The Corporate Excess Plan 200
Corporations Subject to State Assessment 200
Assessment Methods 202
Efficiency of Assessments 203
Teachers' Federation Case 206
Telegraph Companies 212
Insurance Companies 214
SUMMARY AND CONCLUSIONS 217-228
Early Success _ 217
Present Defects 218
The Necessity of Reform 219
Suggested Reforms 224
TABLES IN TEXT
1. Receipts into the State Treasury from the Tax on Property,
2. Receipts into the State Treasury from the the Tax on the Prop-
erty of Non-Residents and the Percentage formed by them
of the Total Receipts from the Property Tax, 1820-1838 62
3. Total Ordinary Receipts into the State Treasury and the Per-
centage formed by the Receipts from the Property Tax,
4. Total Receipts and Expenditures of the State Treasury, 1818-
5. Estimates of the State Debt at the Time of the Suspension of
Specie Payments 77
6. Statement of the State Debt Fund 107
7. Revenue from the Tax on the Gross Earnings of the Illinois
Central Railroad 109
8. Local Assessments, 1839-1872 122
9. State Tax Rates, 1839-1872 123
10. Assessed Value of Credits, Not Including Bankers' Credits,
11. Comparison of Cook County with the Remainder of the State
in Respect to the Assessed Value of Credits, Not Including
Bankers' Credits, 1873-1912 149
12. Taxable Mortgages in 1880 and 1887 in Cook County and in the
Entire State 150
13. Assessed Value of Bankers' Credits, 1875-1912 154
14. Calculation of the Net Taxable Credits of the State Banks of
Chicago on June 5, 1893 155
15. Calculation of the Net Taxable Credits of the State Banks of
Cook County on April 27, 1900. 159
16. Assessed Value of Moneys, Not Including Bankers' Moneys,
17. Comparison of Individual Bank Deposits with Assessed Values
of Moneys, Not Including Bankers' Moneys, 1889-1912 164
18. Assessments of Corporate Excess by the State Board of Equali-
zation, 1873-1912 205
19. Total Equalized Assessment of Railroads, 1873-1912 211
A. PRE-TERRITORIAL ORIGINS
ORIGINS OF THE GENERAL PROPERTY TAX IN ILLINOIS.
The organization of Illinois as a territory in 1809
involved no radical change in the character of the existing
institutions. No new code of law was substituted for the
one in force in the territory when the change in the form
of government was made. On the contrary, the old code
was carried over in its entirety and used as the basis for the
new, subject to such modifications and changes as were
deemed appropriate by the territorial legislature. 1 The
system of raising public revenues by levying a tax upon
property according to its value was one of the inheritances
received by the new government from the old. Conse-
quently one must look to the pre-territorial legislation for
the primary sources of the general property tax system in
The pre-territorial history of Illinois is the history of
a small group of French settlements, established about
1TOO, which led an unprogressive life for nearly a hundred
years before they were submerged by the flood of settlers
from the seaboard states after the close of the Revolution.
The political control over this group of settlements was
subject to frequent change during the century, passing suc-
cessively from France to England, from England to the
State of Virginia, and from Virginia to the United States.
The French Period, 1699-1763.
The period of French domination began with the
establishment of the mission stations of Kaskaskia and
Cahokia as outposts of the great French empire in the
of the Territory of Illinois, 1809-1811, p. i ; Laws of Illinois
Territory, 1812, p. 5.
10 HISTORY OF TAXATION IN ILLINOIS [10
Mississippi valley, which had been the dream of Colbert,
the minister of Louis XIV. 2 It closed at the end of the
Seven Years' War, in 1763, when France was forced to
cede her claims to the region to England. 3 In so far as any
direct bearing on the problem in hand is concerned, the
period during which the settlements were under the con-
trol of the French is unimportant. The population re-
mained small, probably not exceeding two thousand persons
at any time, 4 and such governmental functions as were
performed seem to have been exercised largely through
military and ecclesiastical authorities. 5 In the annals of
the villages, as kept by the parish priests, there is no evi-
dence of the levy of any tax or of the existence of any
formal financial system. 6
2 C. W. Alvord, "Illinois; the Origins", Military Tract Papers (Illinois
State Reformatory Print), no. 3, p. /. The French settlement, of which
these two villages were the beginning, was situated in the bottom lands
of the Mississippi River, in the south-western part of Illinois. Cahokia
was founded in 1699 and Kaskaskia a year later.
^he actual transfer was made in 1/65. Illinois Historical Collections,
4 Alvord, Origins, p. 9.
5 J. B. Dillon, History of the Early Settlement of the Northwestern
Territory (Indianapolis, 1854), p. 60; Joseph Wallace, History of Illinois
and Louisiana under the French Rule (Cincinnati, 1893), p. 309 et seq.;
E. G. Mason, Kaskaskia and its Parish Records (Fergus Historical Series,
no. 12, Chicago, 1881).
///. Hist. Coll., V; Mason, op. cit.
It is known that some income was obtained from fines. Thus, in one
place the record shows that a fine of twenty-five lizres, payable in deer
skins, was imposed upon those selling liquor to savages or slaves. It was
specified that the proceeds from the fines should go for the support of the
poor. ///. Hist. Coll., V, 117. Licenses for trade were issued but whether
fees were charged for them is not known. Ibid, II, Ixviii.
The effect of the early French settlement upon the financial system
of the state was indeed so slight that one might remain entirely ignorant
of the fact that there had been any early settlement, were it not for the
legacy of some land title disputes and for the common fields of some of
the villages which were several times the subject of legislative attention in
later years. Art. 8, Const, of 1818; Private Laws, 1826-7, p. 22; Laws,
1909, p. 425.
11] ORIGINS OF THE GENERAL PROPERTY TAX 11
The English Period, J763-1778.
The change from French to English domination seems
to have been accomplished without disturbing, to any great
extent, the local customs of the settlements. 7 The English
supplied a military government, the expenses of which
were provided for without appeal to the French settlers. 8
The County of Illinois, 1778-1784.
A similar arrangement was continued after the occu-
pation of the region in 1778 by George Rogers Clark in the
name of the State of Virginia. An act of the Virginia
legislature in October, 1778, provided that the expenses
of the military government and of those officials to whom
the inhabitants were not accustomed should be paid out of
the state treasury, but that the expenses of the civil govern-
ment to which the population was accustomed should be
paid in the same manner as formerly. 9 During this period
an independent local government was maintained in a very
efficient form in Cahokia and in a less efficient form in
Kaskaskia 10 ; but the sphere of governmental activity was
small and the cost formed no problem. 11 The record book
7 Dillon, op. cit.
8 IH. Hist. Coll., II, xxv ; Captain Phillip Pittman, The Present State
of the European Settlements on the Mississippi, etc. (London, 1770), pp.
In 1768, however, the English did establish, at Fort Chartres, one of
the French villages founded about 1720, a court of law with seven judges.
This was said to have been the first court of common law jurisdiction
west of the Allegheny Mountains. E. G. Mason, Old Fort Chartres
(Fergus Historical Series, no. 12, Chicago, 1881), pp. 41, 42. This court
proved to be a failure. Alexander Davidson and Bernard Stuve, History
of Illinois (Springfield, 1874), p. 165.
8 'III. Hist. Coll., II, lii et seq.; C. E. Boyd, "The County of Illinois,"
American Historical Review, IV, 624.
Another act specified that the religion and customs of the inhabitants
were to be respected. Mason, op. cit., p. 49 et seq.
10 Ill. Hist. Coll., II, Ixiii et seq., cxlvii et seq.; Alvord, Origins,
p. II et seq.
"/tf. Hist. Coll., II, Introduction.
12 HISTORY OF TAXATION IN ILLINOIS [12
of Colonel John Todd, the first county lieutenant, shows no
evidences of taxes collected.
It is true that the inhabitants were sometimes levied
upon for supplies for military purposes. But these levies
were not really taxes, for, although they were compulsory
in character, the contributors were to be reimbursed. 12 In
form, however, they were very similar to taxes. The record
reads that "the justices of the court of Kaskaskia assessed
the inhabitants of the village according to their wealth, and
that by August 31, (1779) there had been delivered into
the store-house 54,600 pounds of flour. . ," 13 In Cahokia,
also, each person was compelled to furnish supplies accord-
ing to his means. 14 For a large proportion of the people,
the levies were practically taxes ; the supplies were not paid
for until years later, and by that time the orders had passed
out of the hands of the original owners for the most part,
many of them having been sold to speculators for a mere
The Northwest Territory, 1784-1800.
When Virginia resigned her claims to the region in
favor of the central government, in 1784, a different kind
of history began in the Illinois country. For a little time,
it is true, the French were left largely to their own de-
vices ; but when attention did begin to be paid to them, local
institutions were no longer respected. A well defined at-
tempt was made to change radically their system of local
government in order to make it identical with that of the
eastern section of the Northwest Territory, of which Illi-
nois now became a part. Thus the history of Illinois after
1784 cannot be interpreted in the same manner as the his-
tory of the preceding years. It is no longer the story of a
succession of careless, military governments, maintained
from some far-away treasury by an authority which cared
little whether the inhabitants made use of a particular
form of local government; it becomes the story of a civil
12 1 bid., p. Ixxvi.
is lbid., p. Ixxvii.
14 /&irf., p. Ixxxiii.
13] ORIGINS OF THE GENERAL PROPERTY TAX 13
government seeking to organize, in thorough manner and
according to a uniform plan, a very large district. To this
government there arises the problem of so changing and
molding the institutions in the French settlements as to
make them conform to the large scheme for the government
of the entire north-western region.
It is not necessary to speak in detail of the movement
of population from the eastern states to the region north-
west of the Ohio River, which began in real earnest soon
after the Revolution and continued with ever increasing
rapidity, until the whole territory was thickly settled; or
of how the region, originally organized under one juris-
diction, was divided time and again into independent, self-
sustaining parts until the present arrangement of state
boundaries was evolved. It is important, however, to recall
this much. When the Northwest Territory was first di-
vided, Ohio was formed. The remainder was called the
Territory of Indiana. As soon as the region embraced
within the wide boundaries of this territory had developed
strength enough to undergo the operation, further divisions
were made whereby the territories of Michigan and Illinois
were formed. Such divisions and adjustments continued
for many years; the boundaries of Illinois, for example,
were not definitely fixed until 1840. So between 1784 and
1809 the settlements in the Illinois country were organ-
ized successively as a part of the Northwest Territory, of
the Indiana Territory, and, finally, as the Territory of
It was almost inevitable that a movement such as this
should diminish to the point of extinction the influence of
the French settlements upon the institutions and customs
of the country. The nature of the process of organization
made any other result almost an impossibility. Through
the early period of Northwest Territorial government, these
far western settlements were ignored. Indeed they had no
effective representation in the law-making bodies of the
territorial governments until 1805. 13 The first attempts
15 Shadrach Bond was the representative of Knox County in the legis-
lative assembly of the Northwest Territory in 1798. J. B. Dillon, History
of Indiana (Indianapolis, 1859), pp. 391, 392.
14 HISTORY OF TAXATION IN ILLINOIS [14
to organize them as a part of the Northwest Territory met
with poor success. They were, therefore, of necessity left
to shift for themselves until the element composed of set-
tlers from the United States became strong enough in the
neighborhood to organize a government without regard
to the desires and wishes of the French settlers. The
French always had an overwhelming majority against
them. At first, they were pitted against the whole north-
west, then against the great Territory of Indiana, and by
the time the Territory of Illinois was formed, they made
up a relatively small element in the population of even
that district. 16 As a matter of course, the various terri-
tories, as formed, perpetuated the laws and institutions
familiar to them and the whole body of the law of this sec-
tion of the United States presents a homogeniety which
would be truly remarkable were it not for the explanation
that it swept on in this fashion from the east.
Technically the Illinois settlements passed out of the
hands of the State of Virginia in 1784. 17 But the control
of the Northwest Territory was not made effective before
1790. In that year, Governor St. Clair first visited the
section, organized it into the County of St. Clair, and at-
tempted to establish a civil government. 18 The changes
which he attempted to institute were not popular, how-
ever, and very little was accomplished. In June, 1793; a
correspondent of the Governor wrote: "There has not
been a review these eighteen months past, so that it would
appear that we have no organized government whatever." 19
18 In 1790 there were but 131 American settlers in the Illinois country.
During the following decade, however, this figure increased to 1500, suf-
ficient to outnumber the French element, which at this time was about a
thousand strong. After this the immigrants increased rapidly in number
and the French were soon almost completely submerged. Alvord,
Origins, pp. n, 14, 15.
"///. Hist. Coll., II, cxix.
18 Boyd, op. cit., p. 635.
l9 The Life and Public Services of Arthur St. Clair, with his Corre-
spondence and other Papers. Edited by W. H. Smith (Cincinnati, 1882),
II, p. 317.
15] ORIGINS OP THE GENERAL PROPERTY TAX 15
The first legislation of the Northwest Territory which
concerned itself with matters of taxation was passed in
1792. It dealt with the problems of raising a revenue for
the local governments, the counties; legislation providing
for a territorial tax was not passed until somewhat later.
This law was entitled an act "directing the manner in
which money shall be raised and levied, to defray the
charges which may arise within the several counties in the
territory" and it prescribed a rudimentary form of the
general property tax as the means for raising the revenue
required. 20 It provided that the county court of quarter
sessions in each county should, annually, make up an esti-
mate of its expenses for the coming year and send it to the
governor and judges of the territory. After considering
the estimate and determining what items should stand,
they were to certify the resulting amounts back to the
courts for levy and collection. This was to be accom-
plished in the following manner. Every county was to be
divided into small districts for which commissioners were
to be appointed by the court. 21 These commissioners,
meeting together, were to decide the exact proportion of
the total sum needed which should be raised in their
respective districts. The apportionment was to be made
on the basis of the population and the wealth of the various
districts, which were assumed to be the best evidences of the
ability of the different communities to bear the burden of
supporting the government. The commissioners were spe-
cifically empowered to take a list of all the male inhab-
itants over eighteen years of age, "stocks of cattle, yearly
value of improved lands, and every other species of prop-
erty which ought to affect the apportionment." 22 The
20 August i, 1792. Territorial Laws, ch. 26.
21 For each district having less than 60 inhabitants, there was to be one
commissioner; districts having more than 60 and less than 100 inhabitants
were to have two commissioners; and those having over 100 inhabitants
were to have three commissioners.
22 In 1792 there was also passed a law requiring merchants, traders
and tavern keepers to pay a small license fee. T. L., ch. 24. Later
laws imposed license fees on billiard tables and ferries. Jones and John-
16 HISTORY OF TAXATION IN ILLINOIS [16
work of dividing the sum to be raised within a particular
district among its residents was to be done by a board of
assessors, consisting of three men in each district who were
also appointed officers. They were to rate the individuals
"in just proportion to their wealth in the county and
their ability to pay either in money or in specific articles,
agreeable to the order of assessment." In case of dissatis-
faction with the assessment, any individual might appeal
to the courts. The assessment lists, when completed, were
to be returned to the county courts who were to deliver
them for collection to the sheriff, the constable, or to some
special collector appointed by the court. The collection of
the taxes was to be enforced by the sale of the property
assessed or by the imprisonment of the owners.
Although it is not definitely known whether any taxes
were collected in the Illinois settlements under this law,
and although it is even probable that none were collected
there, it is worthy of note that the first tax law which
applied even theoretically to this section provided a form
of the general property tax.
In 1795 the law of 1792 was replaced by one taken
from the statutes of Pennsylvania. 23 The property subject
to assessment remained practically the same as under the
old law but the idea of income as the measure of tax lia-
bility was made slightly more prominent than formerly.
Taxes were to be apportioned among the property owners
according to the "yearly value or profit" of their holdings. 24
All unimproved and unsettled lands were exempted from
taxation. The methods of administration were changed
quite radically. Thus estimates of the annual expenses,
instead of being made up by the county court directly and
being approved by the territorial legislature, were to be
prepared by a county board composed partly of elective
son, Laws of Indiana Territory, ch. 79, pp. 475-77, ch. 49, pp. 347-66. The
license on traders applied at first only to those who dealt in liquors or
goods not produced in the United States. Later it was made to apply
only to those selling goods not produced in the territory.
**T. L., ch. 53-
84 This seems to be a variety of the so-called "produce tax."
17] ORIGINS OF THE GENERAL PROPERTY TAX 17
and partly of appointive officers. 25 The board was, first,
to audit the county accounts, allow all just claims, and
determine the sum to be raised. Then, taking the lists of
property, which were to be furnished it by the township
constables, it was to apportion the sum to be raised among
the property owners. The constables' lists were to give
under the name of every free person a description of his
servants, live stock, lands and tenements; they were to
show how much of the land was settled upon and culti-
vated ; they were to give an enumeration of all water-mills,
boats of the "burthen of twenty barrels and upward and
every ferry and other species of property providing a yearly
income." The limit on the tax rate for the county levies
was placed at seventy-five cents per two hundred dollars
valuation. A small head tax was provided for single men
over twenty-one years of age, whose taxable property
did not exceed one hundred dollars, the maximum for this
tax being placed at one dollar. 26 The taxes were to be
collected by appointed officials, as had been the case in
the old law; but the commissioners were to make the
appointments instead of the court, as the old law had pro-
vided. Appeal might be made to the commissioners in case
of dissatisfaction with the assessments.
In 1798 the governor and judges copied a law from the
code of Kentucky which made a distinct change of policy
in taxation. 27 This law added to the list of property sub-
ject to taxation unimproved and wild lands which until
this time had not been taxed. 28 Thus a departure was made
at this point from the general idea which had underlain leg-
islation until this time, namely, that the annual income was
25 The county court of quarter sessions was to appoint three commis-
sioners for each county and each town was to elect one assessor; these
officers made up the board.
26 The legislature at this time also passed a law permitting the over-
seers of the poor to levy a rate for the purpose of providing for the indi-
gent poor. In laying their rate they were to have "due regard'' for the
county assessment. T. L., ch. 54.
"St. Clair Papers, II, 438.
28 T. L., ch. 82.
18 HISTORY OF TAXATION IN ILLINOIS [18
a proper test of ability to pay taxes. These unimproved and
wild lands were to be divided into three classes according to
quality. The rates were to be thirty cents per one hundred
acres on land of the first grade; twenty cents on lands of
the second grade ; and ten cents on third grade land. The
methods of assessment and collection were not changed.
This act refers specifically in one clause to the Illinois
counties of Knox, St. Clair, and Randolph so that it is
certain that the legislature intended that law should be
enforced in the Illinois country. 29
Prior to this time (1799) the legislation had dealt with
taxes which were to be levied only for local purposes and
no provision had been made for a territorial revenue. 30
But now the legislature evolved a scheme of taxation which
provided for both local and territorial expenses and which
was destined to be of permanent significance, for it re-
mained in force practically unchanged in its essential
features for twenty-five years and through three changes
in the form of government. This legislation, which was
passed by the First General Assembly of the Northwest
Territory in 1799, dedicated to the territorial government,
to be used for general territorial expenses, all taxes received
from the levy made upon lands, and to the local govern-
ments all other taxable property to be used as the basis
for the country levies. 31 The most interesting point in
this law is its utilization of a method of segregating the
sources of the taxes. But the segregation was of a different
type than that urged by present-day reformers, the land
being taxed by the central authority and the personalty by
the local, instead of vice versa.
There were no elected assessors under this law, the
administration being placed wholly in the hands of com-
id., p. 208. Knox County, although in fact an Indiana County, in-
cluded at this time a large part of what is now southeastern Illinois.
80 This ignores the slight income which may have accrued from licenses.
In 1795 Governor St. Clair writes that he knows of no territorial fund
for the payment of territorial expenses, such as postage, for example.
St. Clair Papers, II, 349.
81 T. L., chaps. 90, in.
19] ORIGINS OF THE GENERAL PROPERTY TAX 19
missioners appointed by the court of quarter sessions. In-
stead of the property being listed by a constable, the new
plan provided that the property owners should, of their
own accord, deliver to the commissioners the lists of their
Land, the basis for the state tax, was to be classified,
as in the act of the previous year, into three grades accord-
ing to the quality. Lands in the first grade were to be taxed
eighty-five cents per one hundred acres; second rate lands,
sixty cents; and third rate, twenty-five cents. It should
be noted, however, that these rates are not comparable
with the rates of 1798 for now not only were unimproved
lands to be classified, as had been the case in the act of
1798, but the cultivated also. This explains the increase
in the rates over the former scale. 32
The .property made taxable for county purposes was
as follows: all houses in towns; "mansion-houses" in the
country worth more than two hundred dollars; out-lots;
water- and wind-mills; ferries; horses, mules, and asses,
over three years old ; neat cattle ; and bond servants over
twenty-one years old. Able-bodied single men whose prop-
erty did not amount to more than two hundred dollars
were subject to a small head tax. The rates varied on the
property enumerated above. There was to be charged "on
every horse, mare, mule or ass, .... a sum not exceeding
fifty cents; on all neat cattle, twelve and one-half cents
each ; on every stud horse, not exceeding the rate for which
he stands at the season ; every bond servant . . . . , a sum
not exceeding one dollar ; and every able-bodied single man
of twenty-one years and upwards, who shall not have tax-
able property to the extent of two hundred dollars, a sum
not exceeding two dollars nor less than fifty cents." The
other property was to be valued by appraisers appointed
by the county court. The rate of taxation on such property
was not to exceed fifty cents on every one hundred dollars
of appraised valuation. The power to estimate the revenue
needed and to levy the proper rate was given to the county
32 Lands in Illinois were not to be rated higher than second class.
20 HISTORY OF TAXATION IN' ILLINOIS [20
The Territory of Indiana, 1800-1809.
The following year (1800) the Territory of Indiana
was set off from the Northwest Territory, Illinois now
being included in Indiana. The tax laws of the Northwest
Territory were carried over by the new government with
relatively slight modifications. 33 The division of the prop-
erty between the territorial and county governments for
taxation purposes remained unchanged, the revenue from
the land taxes going to the territorial government and that
from other taxes to the local governments. 34 Before 1809
however, when Illinois became a separate territory, a num-
ber of changes had been made in the methods of assessment
and collection and in the rates of taxation which are worthy
The manner of securing the lists of property subject
to taxation for county purposes was several times revised.
One of the first acts of the new government was to change
the old law of the Northwest Territory which directed that
these lists be turned over to the commissioners by the own-
ers of taxable property of their own accord; constables
were reintroduced by a law passed in 1801, as the means
for securing the lists. 35 In 1803 the sheriffs were directed
to receive the lists, going to each township for that purpose
on a previously advertised date and administering an oath
to each person as to the correctness of the statement sub-
mitted. 36 In 1806 it was further required that the sheriff
should apply personally to every individual subject to tax-
ation for a list of his taxable property instead of merely
advertising his presence in the township for the purpose of
receiving the lists. 37
33 O. W. Howe, "The Laws and Courts of the Northwest and Indiana
Territories." Indiana Historical Society Publications (Indianapolis, 1895),
II, 14, 15
84 The case of the special land tax for county buildings should be noted
here as a possible exception to this statement. Cf. infra, p. 22.
a *Laws of the Territory of Indiana, Governor and Judges, i Sess.,
p. 63, Nov. 5, 1801.
3 *L. T. Ind., Gov. and Judges, 4 Sess., p. 63. Nov. 5, 1803.
"Laws of Indiana, I Terr. Ass., 2 Sess., p. 17. Nov. 24, 1806.
21] ORIGINS OF THE GENERAL PROPERTY TAX 21
A penalty for false estimate or failure to return the
lists was now imposed (1803) ; this was to be a fine of
fifteen dollars and a triple tax. 38 The lists were to be de-
livered by the sheriff to the court of common pleas; this
court was to estimate the expenses and levy the taxes.
It will be remembered that in the former law some of
the property returned on the lists was subject to specific
rates. Some of these rates were changed during this period.
Thus in 1803 the maximum rate per head on neat cattle
was made ten cents in place of twelve and one-half cents. 39
In 1808 this particular tax was repealed. 40 The property
qualification for the tax on single men in 1803 was made
four hundred dollars instead of two hundred dollars, and
the maximum rate two dollars and fifty cents in place of two
dollars 41 ; in 1806 the property qualification was reduced to
two hundred dollars and the maximum rate to one dollar, 42
and in 1808 the tax was entirely abandoned. 43 By a law
passed in 1803, two free-holders in each township, ap-
pointed by the county court were to appraise such property
as lots, houses, wind-mills, etc., and the maximum rate
on this class of property was reduced from fifty to thirty
cents for each one hundred dollars of valuation. 44 The age
at which slaves and bond servants were subject to taxation
was changed to the period between sixteen and forty years ;
formerly all over twenty-one years of age were taxable.
A very important law from the administrative point
of view was the one passed in 1805, prescribing the manner
in which the territorial tax should be levied. 45 It provided
a method quite different from that outlined in the law of
1799 and took a long step toward modern practice in a
number of particulars. Under this new plan, the land
38 L. T. Ind., Gov. and Judges, 4 Sess., p. 63, Nov. 5, 1803.
3 Ibid., p. 68.
40 L. Ind., 2 Terr. Ass., 2 Sess., p. 31, Oct. 26, 1808.
41 L. T. Ind., Gov. and Judges, 4 Sess., p. 63, Nov. 5, 1803.
42 L. Ind., i Terr. Ass., 2 Sess., p. u, Nov. 24, 1806.
L. Ind., 2 Terr. Ass., 2 Sess., p. 31, Oct. 26, 1808.
44 L. T. Ind., Gov. and Judges, 4 Sess., p. 63, Nov. 5, 1803.
45 L. Ind., i Terr. Leg., i Sess., p. 30 et seq., Aug. 26, 1805.
22 HISTORY OF TAXATION IN ILLINOIS [22
was not to be grouped into a small number of classes
according to quality, as had been the case under the old
system, but was to be assessed according to its exact value.
There was to be a regular annual assessment made by a
county assessor appointed by the court of common pleas.
Each land holder was to deliver to the assessor, under
penalty, a list of the lands owned by him. The assessor
was also to be furnished, by the territorial government,
with lists of lands in each county, made up from records
of the United States land offices. Using these lists as a
basis, the assessor was to determine the value of the land
per one hundred acres, "according to the quality of the soil
and the relative situation", ignoring improvements. The
rate of taxation was to be fixed by the auditor who was
directed to strike a "rate sufficient to produce the sum
required" for territorial expenses. The sheriffs of the
various counties were made the collectors of the tax. Two
years later, in 1807, the assessment of land was made quad-
rennial instead of annual. 46 In the years when no general
assessment was to be made, the territorial auditor was to
add to the county lists those lands which had been pur-
chased from the United States during the previous year,
valuing such purchases at two dollars per acre. At the
same time the power to strike the tax rate was taken from
the auditor, the rate being now fixed by law at twenty
cents on every one hundred dollars valuation.
An additional use for the territorial tax machinery
was authorized in 1808 when the legislature made provision
for a special land tax to be levied exactly as the territorial
land tax was levied, for the purpose of providing funds
for erecting county buildings. 47 The maximum rate which
might be levied for this purpose was ten cents on the one
hundred dollars valuation.
Efforts to administer the territorial land tax in the
Illinois counties met with rebuffs at the very outset.
Probably the first territorial tax levied in the Territory of
4 'Jones and Johnson, op. cit., ch. 79, pp. 475-477.
"L. Ind., 2 Terr. Ass., 2 Sess., p. 31, Oct. 26, 1808.
23] ORIGINS OF THE GENERAL PROPERTY TAX 23
Indiana was in 1805 when the law was passed placing a
tax on land according to its value, for the purpose of pro-
viding for the expenses of the territorial government. In
1806 it appears that no tax was collected in the Illinois
counties of St. Glair and Randolph; this failure was due
to the fact that the courts of common pleas of these counties
had failed to appoint the assessors and collectors. 48 In
1807 the assessor in St. Clair County refused outright to
make the proper assessment for territorial taxes; in the
same year the assessor in Knox County had, for some
reason, failed to do so, and an attempt to assess the tax
in Randolph County was accompanied by various irregu-
larities. 49 Again, the next year, 1808, trouble was caused
in two of the counties by the failure of the assessors to
make out and return the assessment lists. 50 The case of
Randolph County in 1807 is the first certain evidence of
a tax actually being levied and collected in Illinois.
By 1809 the legislation of Indiana Territory had
reached a stage of development in regard to assessment
methods which was not attained by the State of Illinois
until thirty years later. For, when Illinois separated from
Indiana, there was a retrogression in this particular and
the scheme of classifying land into rough groups which
was again adopted, persisted in the state legislation until
1839. By 1809, however, a system approximating the genera}
property tax was in force in the Illinois country and was
the chief source from which both central and local govern-
ments derived their revenues. Since the expenses of the
government were very slight during these years, and since
there were other sources of revenue such as fees and
licenses, the taxes levied were undoubtedly insignificant.
The system, too, was crude and rudimentary in character.
* 8 L. Ind., i Terr. Leg., 2 Sess., p. 3.
49 Jones and Johnson, op. cit., ch. 75, pp. 465-468. The irregular col-
lection of taxes was legalized by this act but the sales of lands for taxes
50 L. Ind., 2 Terr. Leg., 2 Sess., p. 39, Oct. 26, 1808.
24 HISTORY OF TAXATION IN ILLINOIS [24
Very large exemptions were made and the idea of the
income from the property taxed rather than its capital
value was often emphasized. From these same territorial
beginnings, it would have been possible to develop
quite naturally a property tax somewhat similar to the
English local rates, where the income from the property
is the test of its value and the basis for the apportionment.
But the principles established by this territorial legisla-
tion were adopted and so extended by the government of
the new Territory of Illinois, as to result in the particular
form of the general property tax now found in the state.
The influence of the French settlements upon the
system of taxation adopted was insignificant. They
neither developed a system of their own during the years
of their isolation before they became subject to the control
of the Northwest Territory, nor did they take an active
part in the formation of the system which is found in
existence in 1809. Doubtless they could not have made,
their efforts effective, had they tried, outnumbered as they
were in the political division in which they were situated.
A form of the general property tax, then, was the
system adopted by the Northwest Territory when the inter-
ests of the far western settlements were too slight to be of
consequence and when the actual application to them was
not seriously attempted. This system w r as continued by
the Territory of Indiana, whose attempts to administer
it in Illinois met with difficulties and, in certain instances,
with the positive refusal of the county authorities in the
Illinois region to cooperate. It was adopted by the terri-
torial government of Illinois because the American ele-
ment in the population had, by this time, become strong
enough to disregard the early French settlers in the Illi-
B. THE FORMATIVE PERIOD, 1809-1838
ECONOMIC CHARACTERISTICS AND THE FINANCIAL PROBLEM.
It is important in taking up the study of the general
property tax in Illinois during the early period of its his-
tory, 1809-1838, to inquire about the demands made upon
the government at this time and about the possibilities of
the system of taxation in force as a source of revenue to
meet these demands. From one point of view, at this early
stage, the two things were really one; for, as will appear,
the demands made upon the government at this time were
limited almost entirely by the possibility of obtaining rev-
enue to meet them that is, the fiscal problem was, pri-
marily, what could be afforded rather than what should
The years under discussion make up the period of the
state's childhood. Even in 1840 Illinois was still a fron-
tier community, containing only five hundred thousand
inhabitants. During these years everything which must
be done to make a wilderness a place of habitation for man
remained yet to be done for Illinois. There were no public
buildings and few school houses ; the state owned no public
works; there were few roads or other artificial means of
communication; courts had to be established and jails
erected. In short, Illinois was without a "capital ac-
count"; it had no "plant". The state lived, so to speak,
in an unfurnished house. It was necessary not only to
pay running expenses but to buy the furniture. In addi-
tion various unusual calls were made upon the young gov-
ernment. For example, the dearth of a circulating med-
ium very early served as the basis for an appeal to the
government to loan its credit as security for the issue of
bank notes. Thus the financial difficulty was not only that
of operating a government but also of providing the
machinery and plant with which to work.
26 HISTORY OF TAXATION IN ILLINOIS [26
The Sphere of State Activity.
On the other hand the problem of deciding upon the
sphere of the activity of the government was somewhat
simplified by the delegation to private companies and to
individuals of many of the functions which are usually
considered governmental. Thus, many of the early turn-
pikes were built as private enterprises, the promoters
seeking through tolls to obtain their return from those
using the roads. 1 Bridges were often constructed on the
same plan. 2 Ferries were operated by individuals
under legislative acts which usually sought to make the
enterprises attractive by granting monopolies for a given
distance up and down the streams. Schools were almost
entirely maintained through private initiative during this
period. The dependent poor, instead of being cared for in
county institutions, were usually farmed out to persons
who could use their labor. The penitentiary even was,
for a time, turned over to private individuals for manage-
ment in order to save money. 3 Among the many devices
resorted to for lessening demands which would normally
be met by taxation was the lottery. A number of such
schemes were projected to meet the expenses of some of
the internal improvement projects. 4 There was a custom
of locating the county seat at that town within a county
which would offer the largest donation of land or of money
to be used toward the expenses of erecting county build-
ings. 5 The location of the state capital itself was deter-
mined primarily on this principle. Part of the plot of
1 The governmental activity in these cases usually extended far
enough to fix the maximum rates of toll which might be charged.
2 Sometimes individuals would advance the money for a bridge with
the understanding that the county would reimburse them after a speci-
^Auditors Report, 1839, P- I 2 -
*Laws 1819, pp. 257, 310; L. 1838-9, p. 56.
'Any number of examples of this practice might be given. Some
sixty-seven cases of this sort were noted during these years. The acts
usually prescribed a minimum grant of twenty acres.
6 The town of Springfield was chosen as the capital because of
the donations pledged to the state treasury. The act passed February 25,
27] ECONOMIC CHARACTERISTICS 27
land on which the first state prison was built was sold
to raise money to build the walls and workshops. By
such methods the government was able to some extent to
share in the increment of value which accrued to the land
at the place where public buildings were erected and
public business transacted. The utilization of the fee
system for compensating many of the public officials made
possible a smaller tax levy than would otherwise have been
necessary. When salaries were paid, they were extremely
Taxable Capacity of the People.
To a certain extent it is true that, as the demand for
the increase of governmental functions grew, the means for
meeting this demand also increased. In 1810, when the
territory of Illinois had a population of only twelve thous-
and people, not so many school-houses, courts and roads
were needed as thirty years later when the population was
nearly half a million. The increase in population was in-
deed remarkable in itself, and it may be thought that it
should have served as an entirely adequate basis for in-
creased taxation. During the first decade, from 1810 to
1820, the population quadrupled; during each of the two
following decades it trebled. 8 But it must be remembered,
that it was entirely rural even at the end of the period un-
der discussion. 9 The settlers were largely land-hungry im-
migrants who had pushed west because of economic press-
1837, locating the seat of the government, fixed the amount of the mini-
mum donation at fifty thousand dollars and two acres of land. L. 1836-7,
p. 321. In Vandalia, the former capital, public buildings were erected
mainly from the proceeds from the sale of four sections of land which
had been given to the 'state by .'the federal government for that
purpose, although some donations were received from citizens. John
Moses, Illinois, Historical and Statistical (Chicago, 1895), I, 327; J. N.
Reynolds, My Own Times (Chicago, 1879), p. 137.
7 L. 1815-16, pp. 73-76; L. 1816-17, pp. 52-54; L. 1817-18, pp. 98-100. .
^Twelfth Census; Population, part I, p. xxiii.
9 In 1832, Chicago was an unincorporated village with about 250
inhabitants and in 1837 had a population of only 8000. See Illinois in
1837, A Sketch (Philadelphia, 1837), p. 119.
28 HISTORY OF TAXATION IN ILLINOIS [28
lire behind them and with the thought of economic better-
ment foremost in their minds. The little money they had
was usually exchanged at once for land which was capable
of yielding only a small immediate return because of the
difficulty of securing a market for their products. In
1825 the correspondent of Niles Register wrote : "At pres-
ent, wheat is hardly worth twenty-five cents per bushel, and
corn and oats will not fetch more than eight or ten." 10
This was, in large part due to the lack of transportation
facilities. As someone has put it, the West, during this
period, was "a good place to make a poor living". In 1824
General Coles received a request for information concern-
ing the system of poor relief in Illinois. 11 He replied that
he was unable to furnish it, because of "the fact that Illi-
nois has no poor ; at least so few that I have not been able
to learn anything about them." But if there was little
danger of starvation, there was also little probability of
securing any fortune except the potential one depending
upon the rise in land values. Because of this absence of
immediate returns the actual taxable capacity of the people
was very small indeed. 12
To this must be added a pronounced indisposition on
the part of the people to submit to taxation. It was a part
of the spirit of the frontier. The settlers seemed to think
there was something ignoble about paying taxes. An
example of this spirit is seen in the speedy repeal of two
laws passed at the legislative session of 1825, levying slight
Niles Register, XXIX, 165, Nov. 12, 1825.
"///. Hist. Coll., IV, 51.
12 The situation was very well summarized by Governor Edwards in
his inaugural address in 1826, when he said :
"In a new state, progressively settling as ours is ; without manufac-
tures ; furnishing but few articles for exportation ; consuming a con-
siderable proportion of those produced by the labor of others ; and
obliged to employ the most of its active capital in the building of houses,
opening of farms, and other improvements which yield no immediate
profit ; a scanty circulation of money ; and consequent difficulty of paying
high taxes ; are results so probable in themselves, and so fully verified
by our own experience that they cannot be overlooked. . ." S. J., 5 G. A.,
i Sess., p. 47, 1826.
29] ECONOMIC CHARACTERISTICS 29
special taxes for schools and roads. Governor Ford, in
commenting on this repeal, says:- 13
"The very idea of a tax, though to be paid in labor as
before, was so hateful, that even the poorest men preferred
to work five days in the year on the roads, (as under the
old poll arrangement) rather than to pay a tax of twenty-
five cents, or even no tax at all." The members of the
legislature well knew the temper of the people on this ques-
tion and steadfastly refused to pass laws which involved
the levy of additional taxes. Indeed they sometimes went
to great extremes to avoid levying taxes, as when they sold
school lands and borrowed the proceeds for the current
expenses of government. 14 If they had imposed taxes to
meet their legitimate expenses, the lands could have been
held for a much more favorable market or could have been
retained indefinitely under a lease system. As it was, the
heritage of the state in school land was frittered away, in
the opinion of many contemporaries, by the reluctance of
the legislators to risk their popularity with a tax hating
people, by a proper levy of taxes.
The Agreement With the United States Government.
Illinois made an agreement with the United States
government when the state was admitted into the Union
which had important effects upon the taxation problem in
the following years. The terms of the agreement were
briefly these : the federal government was to give the state
one section of land in every township for the use of schools ;
it was also to give all the salt springs within the state
with certain reserves of land about them; it agreed, fur-
ther, to give five per cent of the proceeds from the sale of
lands lying within the state, two-fifths of which amount
was to be spent under the direction of the federal govern-
ment in making roads leading to the state, and the residue
13 Thomas Ford, History of Illinois from its Commencement as a
State in 1818 to 1847 (Chicago, 1854), pp. 58-60; L. 1824-5, P- 121; R. L.
1826-7, P- 364-
"Gerhard, Illinois As It Is etc. (Chicago, 1857), p. 65; Ford, op. cit.,
p. 77 et seg.
30 HISTORY OF TAXATION IN ILLINOIS [30
to be appropriated by the state legislature for the encour-
agement of learning; and, finally, the federal government
was to allow the state one entire township for the use of a
"seminary of learning". The state, in its turn, agreed to
exempt from taxation all lands sold by the government for
five years after the date of sale and to exempt all lands
granted by the federal government as bounty lands for
military services while they remained in the hands of the
original patentees or their heirs, and for three years there-
The state government leased the saline springs, but
used the revenues to improve the properties in order to
increase the output of salt, not depending upon them to
any great extent as a financial resource for the payment of
the expenses of the government. 16 When, about 1830, the
springs became worthless for the production of salt, the
reserves surrounding them, which amounted to some forty
thousand acres, were sold by the state government and the
resulting revenue was used in internal improvements. 17
According to the bargain with the United States govern-
ment, this was the only revenue which the state was free
to appropriate, the enabling act specifying that the balance
should go to the support of education in one form or
Discontent with the arrangement became apparent
very early. In some counties where a large proportion of
the land was made up of bounty lands which were exempt
from taxation, it was found necessary to grant subven-
15 The enabling act. R. S., 1909, p. 25.
19 S. J '., 7 G. A., I Sess., p. 60. In 1819 an attempt was made to borrow
$25,000, the proceeds from the Ohio Salines being offered as partial
security. ///. Hist. Coll., IV, 7-8.
"//. /., 8 G. A., i Sess., p. 94-
"It should be noted, however, that the money which was paid into
the various school funds by the federal government was almost invariably
borrowed by the state and used to pay current expenses. Thus in 1834,
December 4, the state owed these funds approximately $114,000. 5". /.,
9 G. A., i Sess., p. n.
31] ECONOMIC CHARACTERISTICS 31
tions from the state treasury to enable them to meet their
local expenses. 19
The provision which exempted newly sold lands for five
years also worked hardship because Illinois was being
settled very rapidly at this time. A real injustice was
caused when it was necessary to meet all expenses of gov-
ernment in a given year from taxes levied on the land of
those settlers only whose land had been bought from the
government at least five years before. During this period
the population of the state, roughly speaking, doubled itself
every five years so that the land subject to taxation under
this agreement was approximately one-half of the land
sold and normally subject to the rates. This was the cause
of a great deal of bitterness in some quarters, the older
settlers feeling that they were being wrongfully taxed to
support others. This feeling found expression in an in-
teresting message of Governor Edwards to the legislature
in 1830, in which he recommended such drastic action as
the abrogation of the agreement made in the enabling act. 20
The Failure of the First Banking Venture.
The part played by the state in the banking ventures
of the time is another element which affected the problem
of taxation to a considerable extent. During the years
just preceding 1820, a great number of banks had been es-
R. L. 1832-3, p. 518; L. 1835-6, p. 231. The amounts expended from
the state treasury to counties in the military tract were as follows :
Two years ending Nov. 30, 1828 $2938
Two years ending Dec. I, 1830 $4875
Two years ending Dec. i, 1832 !..$895o
Two years ending Dec. i, 1834 $8950
Two years ending Nov. 30, 1836 $8550
Dec. 3, i836-Dec. i, 1838 $6000
20 S. J., 7 G. A., i Sess., p. 49. By a long and subtle argument the
Governor thought he proved that the public domain remaining unsold
within the state really belonged to the state, and he suggested that there-
after taxes be levied on all lands as soon as sold, without regard to any
claim to the supposed exemption. In 1837 a delegation was appointed by
the legislature to urge upon Congress "the propriety and expediency" of
repealing the law making these exemptions. Joint Resolution of January
6, 1837. L. 1836-7, p. 337-
32 HISTORY OF TAXATION IN ILLINOIS [32
tablished in the new western states. Ford states that Ohio
and Indiana had incorporated about forty each. 21 There
were two more in St. Louis and the territorial government
of Illinois had chartered two. These banks all issued
notes on insufficient security and began to fail about 1820.
Their notes had driven out specie, so with the failure of
the banks, the country was left without money of any sort,
except such as came into the territory with new immigrants
and from taxes of non-residents. It was to meet this need
that the first state bank was established in 1821. Its only
asset was the credit of the state, the legislature pledging
this as security for interest-bearing notes, to be redeemed
within ten years. 22 One hundred dollars could be borrowed
by individuals upon personal security and a larger
sum upon the security of real estate. The officials of
the bank were charged with having paid little attention
to the security offered. That they did not lack borrowers
under these conditions is shown by the fact that nearly
$300,000 was loaned out "almost at once. 23 Many people
borrowed with no intention of repaying. The notes
never circulated at par, and they fell steadily in value from
twenty-five cents to fifty and seventy-five cents be-
low par. 24 Auditors' warrants payable in bank notes
depreciated with the fall in the value of the bank notes,
so that the government in buying its supplies had to
pay much more than the market prices to allow for this
decline. Only about one-fifth of the $154,878.87 worth of
warrants issued by the auditor in 1825 and 1826 were at
par. Nearly one half were at 33 1-3 cents on the dollar
and the balance ranged irregularly between these two ex-
tremes. 25 In 1826 the government recognized the depre-
ciation by setting a discount rate for bank paper paid out
at the state treasury. 26 Paper received at face value for
21 Ford, op. cit., p. 43.
22 L. 1821, p. 80; ///. Hist. Coll., IV, 7.
235". /., 9 G. A., I Sess., p. 297 ; Ford, op cit., p. 43 et seq.
24 S\ /., 5 G. A., I Sess., pp. 22, 57 ; Ford, op. cit., p. 43, et seq.
2s Aud. Rep., 1826, p. 37.
2 L. 1826, p. 90.
33] ECONOMIC CHARACTERISTICS 33
taxes was paid out at as much as fifty per cent discount.
Those state officers who received their compensation in the
form of a fixed salary were seriously embarrassed by this
depreciation and found it necessary to appeal to the legis-
lature for the passage of special relief acts increasing their
salaries to make good the losses caused by the bank
paper. 27 But the state at last extricated itself from this
embarrassing situation. The value of the bank notes after
a time was gradually raised by the periodical destruction
of those received as taxes and in payment of obligations
to the bank; and finally the remaining liability was paid
with money obtained from a loan. One hundred thousand
dollars was borrowed for the purpose, the famous "Wig-
gins Loan." This was the beginning of the state debt. 28
The currency situation had important effects upon the
problem of the collection of the revenue but here it is in-
tended merely to point out its effect upon the amount of
money which had to be raised by taxation. The state's
connection with this early banking scheme increased that
amount by approximately one-fourth. 29
The Financial Problem in General.
But in spite of all this, when one examines the actual
amounts involved in the transactions in this time, he is
27 A law passed in 1823 added 50% to salaries. L. 1823, p. 131 ; L.
1824-5, p. 10; Reynolds, My Own Times, p. 143; 5". /., 5 G. A., i Sess.,
28 Reynolds, op cit., p. 144. The only possible exception to the above
statement is, that in 1819 a loan of $25,000 was authorized and an attempt
was made by Governor Bond to negotiate it. No evidence was found in
the accounts of the state treasury of this money ever having been
received or repaid. L. 1819, p. 16; ///. Hist. Coll., IV, 7.
29 5. /., 5 G. A., i Sess., p. 64. A report made in 1835 shows that the
state was held responsible for almost three hundred thousand dollars
($299,910.88), minus whatever could be realized from outstanding assets
whose nominal value was at the time of this report $118,523. S. /., 9
G. A., i Sess., p. 297. The responsibility for paying the one hundred
thousand dollars loan was taken over by one of the later state banks as a
way of paying the state some of the profits made by the state in a deal
in bank stocks. But this bank also failed and the debt fell back upon the
state once more. The banking venture of 1821 increased the state budget
l>v about one-fourth.
34 HISTORY OF TAXATION IN ILLINOIS [34
impressed by the feeling that this was indeed the era of
small things. The largest amount received into the state
treasury in any biennium during this period was only $ 150,
000; the sum total of the budgets for the whole period of
thirty years was less than a million dollars. Even at the
end of the period, the state was thinly settled and the de-
mands for revenue for purposes whicli require very large
sums to-day were then ridiculously small. Scattered
through the state reports, one frequently finds amusing
instances which emphasize this. In 1833, for example,
the finance committee of the House of Representatives
recommended that the annual salary of the warden of the
penitentiary be reduced from $600 to |300, because, as
the report reads, "During the last two years, only four con-
victs have been confined in the penitentiary; that two of
these have been pardoned by the Governor; that the timfc
of one has expired, leaving only one at this time in confine-
This brief consideration may serve to point out some
of the more important factors which shaped the financial
problem of the state. It appears, in regard to the scope
of this problem, that, first, the state was confronted with
the task of organizing itself, and of providing itself with
the necessary tools with which to do its work ; that, second,
the scope of the activity of the state was narrower in some
directions, as, for example, in the matter of road building,
and broader in other directions, such as banking, than is
the case at present. In regard to the ability of the state
to solve its financial problem, the examination has pointed
I out that the taxable capacity of the people was not great,
V* chiefly because of the poor immediate returns from their
investments which consisted largely of land; that the
state was handicapped by its agreement with the United
States government with regard to the exemption from tax-
ation of certain lands, and that, finally, the state's unfor-
tunate experiment in banking, increased very appreciably
the financial burden which had to be carried by the strug-
gling young commonwealth:
80 H. /., 8 G. A., i Sess., p. 138.
Although the legislation of the Territory of Indiana
was carried over in its entirety by the Territory of Illinois
upon its formation in 1809, it must not be thought that all
the revenue laws thus adopted were at once put into opera-
tion. In fact, it is very probable that there were few In-
diana tax laws used in the Territory of Illinois without
specific reenactment by the Illinois legislative authorities.
As the needs for revenue presented themselves, the Illinois
legislature passed laws to meet them, patterned very large-
ly, it is true, after the laws of Indiana, but after the In-
diana laws of a period a little earlier than 1809, when the
actual separation took place. This was because Illinois
was about a decade behind Indiana in her economic devel-
opement and when she came to choose her laws, she found
that those which had been in force in Indiana a decade be-
fore, better fitted her needs than those in force contempor-
aneously, in the neighboring state.
At almost every session during this period, the legis-
lature meddled and tinkered more or less with the revenue
system. Changes were often made one year, only to be
repealed the next. Governor Ford, in speaking of the con-
dition of law-making before 1827, said r 1
all the standard laws were regularly changed and altered every two years,
to suit the taste and whim of every new legislature. For a long time,
the rage for amending and altering was so great that it was said to be a
good thing that the Holy Scriptures did not have to come before the
legislature; for that body would be certain to alter and amend them, so
that no one could tell what was or was not the word of God, any more
than could be told what was or was not the law of the State.
Indeed there was often misunderstanding even on the
part of administrative officials as to exactly which laws
'Ford, Hist, of III., p. 32.
36 HISTORY OF TAXATION IN ILLINOIS [36
were in force. The revisions of the code were very care-
lessly made. For example, the first territorial legislature
in 1812 declared all the Indiana laws which were in force
on March 1, 1809, and which had not been repealed by the
governor and judges during their regime (1809-1812) to be
the laws of Illinois. 2 Yet a revision of the laws of Illinois
made in 1815 included the revenue law of Indiana almost
exactly as it stood in 1807, ignoring the changes made by
Indiana, from 1807 to 1809, by the governor and judges of
Illinois, from 1809 to 1812, and by the legislature of Illi-
nois, from 1812 to 1815. 3 A great deal of confusion of this
period can be traced to this compilation. 4
Property Taxed and the Rates Imposed.
The Indiana law for levying a territorial tax on lanfi
which was nominally adopted by the governor and judges
of Illinois in 1809, was evidently little used; perhaps the
only time during the three years, 1809 to 1812, was in 1809
when an act was passed which provided for the levy of a
slight tax on land, the maximum rate being ten cents on the
one hundred dollars' valuation. But here, although the
machinery of the territorial tax was used, the tax was in
reality only a local one, for the income went not to the
-L. 1812, p. 5.
^Revised Laws, 1815, p. 614.
4 In the first section of the law, which describes the property subject
to taxation, neat cattle were omitted. These had been exempted by the
law passed in 1810. But in the section which specified the rates which
were to be levied on the various kinds of property, neat cattle were in-
cluded. P. 614. That the taxation of neat cattle was really not intended
by the legislature is shown by the fact that in 1816 an act was passed
refunding such taxes as having been levied by mistake by the courts of
Edwards and Gallatin Counties. L. 1816-17, pp. 4-5 ; L. Terr. III., 1809-
1811, p. 28. The tax on each free male inhabitant who did not pay a mini-
mum land tax was repealed by an Indiana law in 1808. It was reenacted in
1813 only to be repealed the following year. This tax was re-imposed
by the law published in the compilation of 1815, the section being copied
from the Indiana compilation of 1807. Manuscripts in the office of the
secretary of state, acts approved December 11, 1813, and December 14,
37] LEGISLATION, 1809-1838 37
territory but to the counties and was used exclusively for
the erection of county buildings. 5 It seems probable that
the funds received from the fees and fines proved sufficient
for the needs of the territorial government from 1809 to
One of the important questions discussed at the first
session of the territorial legislature in 1812, was that of
levying a tax for the purpose of raising a territorial rev-
enue. As soon as the legislature had heard the governor's
message and had adopted rules of order, a committee was
appointed to consider how a fund should be raised to sup-
port the territorial government, and three weeks later the
governor signed a bill providing for the levy of a tax for
this purpose. 7 Instead of the land tax law inherited from
Indiana by which each piece of land was separately eval-
uated, this act of 1812 reverted to a scheme similar to that
which had been in force in the Territory of Indiana before
1805. The land was roughly grouped into three classes
according to quality: the bottom lands of the Ohio and
Mississippi were considered first grade lands and were
taxed at the highest rate, one dollar per hundred acres;
all other located lands in the state were rated as second
class lands and were subject to a tax of seventy-five cents
per one hundred acres; the third class was made up of all
claims to land, confirmed by the proper authorities but not
yet located, and the tax on this class w r as thirty-seven and
one-half cents per one hundred acres. 8
5 L. Terr. III., 1809-11, p. 8. This law was similar to the Indiana law
of 1808. Cf. supra, p. 22.
8 An act passed in 1809 set aside certain fees and fines which were to
constitute a fund to defray the expenses of the territorial government.
Ibid., p. 10. No mention is made in the executive register of any tax on
land whose proceeds accrued to the territorial government.
7 Journal of the House of Representatives, in E. J. James', Territorial
Records of Illinois, 1809-1818, ///. State Hist. Library Pub., no. 3, pp. 78,
94, 100, 117; L. 1812, p. 17 et seq.
8 It may be worth while to note a law passed in 1813 and repealed
the following year which, in a sense, was supplemental to the land tax.
This law imposed an annual tax of fifty cents on each "free male
inhabitant" in the territory, over twenty-one years of age who did not
38 HISTORY OF TAXATION IN ILLINOIS [38
For six years, until the state had been admitted into
the Union in 1818, the act of 1812 remained in force with-
out changes of importance. The division of the property
for taxation between the territorial and county govern-
ments remained as it had been under the Territory of In-
diana, land being taxed by the territory and certain speci-
fied property by the counties. The only point of interest
is the reversion to the old method of valuing the lands by
general groups rather than by individual appraisement.
In a territory where a form of the general property
tax had been known and used since the time of its organi-
zation, it is rather to be expected that this system should
be prescribed in the constitution when that territory be-
came a state. So when it is found that Illinois stipulated
the general property tax in its constitution adopted in
1818, discovery is not a surprising one. A very interesting
fact comes to light, however, when one endeavors to trace
the origin of this constitutional clause. Then it appears
that, although the constitution of 1818 was copied for the
most part from the constitutions of Kentucky, Ohio, and
Indiana, 9 no tax clause such as this appears in the con-
stitutions of those states. And furthermore, when the ex-
amination is widened to include all the state constitutions
adopted prior to 1818, it is found that in no other instance
is the general property tax prescribed with anything ap-
proaching the definiteness with which the Illinois clause
commits the state to this policy. The clause appears,
peculiarly enough, in the bill of rights and reads :
That the general, great and essential principles of liberty and free gov-
ernment may be recognized and unalterably established, we declare : . . . .
That the mode of levying a tax shall be by valuation so that every person
shall pay a tax in proportion to the value of the property he or she has
in his or her possession.
Strange as it may appear, this clause in the Illinois
constitution seems to have been adopted as a matter of
course in the constitutional convention. It was included in
the first draft of the constitution as originally reported
pay an annual land tax to the territory. Manuscript in the office of the
secretary of state, approved Dec. n, 1813, and repealed Dec. 14, 1814.
Moses, Illinois, I, 284.
39] LEGISLATION, 1809-1838 39
and remained unainended throughout the entire conven-
The Maryland constitution of 1776 contains the clause
which most nearly approximates the one found in the Illi-
nois constitution. It reads:
XIII. That the levying of taxes by the poll is grievous and oppres-
sive, and ought to be abolished ; that paupers ought not to be assessed
for the support of the government ; but every other person in the State
ought to contribute his proportion of public taxes, for the support of the
government, according to his actual worth, in real or personal property,
within the State; yet fines, duties, or taxes, may properly and justly be
imposed or laid, with a political view, for the good government and
benefit of the community. 11
It will be noted here that the final clause provides a
loophole large enough to allow for the introduction of an
entirely different system.
Shortly after the adoption of the new constitution
(1818) the state, for the first time, 12 yielded a share of the
land tax to the counties and, in turn, diverted to its own
coffers some of the revenue from the taxes on personal
property. 13 Three types of property were to be taxed
under ordinary circumstances land, bank stock and
negro slaves. One of these, bank stock, seems to have
the honor of being the first species of intangible property
to be mentioned in an Illinois tax law. However, when
not enough revenue was received from the tax on personal
property to meet both state and county expenses, a tax for
county purposes only could be levied on "Town-lots, car-
riages for the conveniences of persons, distilleries, stock
in trade, and such other personal property as they
(through their county commissioners) may think pro-
^Journal of the Convention, 1818, p. 40, et seq.
"B. P. Poore, Federal and State Constitutions (Washington, 1877),
12 Perhaps the unimportant exception of the slight, special land tax
of 1809, for county buildings, should be mentioned. Supra, pp. 36, 37.
13 L. 1819, p. 313 et seq. The amount received by the state from the
taxes on personal property was very small, indeed, practically all of the
support of the government until 1833 coming from the land tax.
"The power to tax these specified articles and "such personal property
40 HISTORY OF TAXATION IN ILLINOIS [40
No provision was made for a possible shortage in
the revenue for the payment of state expenses. The tax
rate on all property was fixed at one-half of one per cent
per annum of the value of the property. The state was
to take all the revenue from the tax on bank stock while
the counties were to receive that from the taxes on negro
slaves. The revenue from the tax on land was to be divid-
ed between the state and the counties; the former was to
as they might think proper" was made more definite by acts passed later.
Thus in 1827 (R. L. 1827, p. 325 el seq.), some additional property was
specifically mentioned as available for taxation, as horses, mares, mules,
asses, and neat cattle above three years of age, and watches and their
appendages. In 1829 (R. L. 1828-9, p. 123), ferries were added. They
were to be assessed on the basis of their value or annual income and not
more than $300 was to be collected from any one ferry in any single
year. The proceeds of this tax were to be applied to the opening and
repairing of roads leading to the ferry. In 1823 (L. 1823, p. 203 et seq.),
town-lots were to be taxed by the counties if they were not subject to a
tax of one-half of one per cent or more to support a town government
In the law of 1827 (R. L. 1827, p. 325 et seq.) town lots were declared
taxable for county purposes if not taxed by the trustees of the towns.
The following general provision was found tucked away in a special
act passed and published the same year, 1827, (Priv. L. 1826-7, P- 4).
entitled "An act for the relief of the Town of America, in Alexander
County, and for other purposes" : "Hereafter, no tract, or lot of land,
lying within the incorporation of any town or village, in this state,
shall be liable for any tax except for county or corporation purposes."
This is somewhat in Conflict with the provision of the general law quoted
above. If lots were not taxed by the trustees of the towns, they were
subject, according to the general law, to taxation in the regular manner,
the revenues being divided between the counties and the state. This
special provision would seem to bar the state from receiving its share
of such a tax. Whether this difficulty arose in practice is not known.
A slight exemption was made by a law passed in 1836 and repealed
about a year later (L. 1835-6, p. 254; L. 1836-7, p. 49), which decreed that
such bulls as might be designated by county inspectors as suitable for
breeding purposes should be free from taxation.
In some special cases the legislature exempted particular bits of
property from taxation by the county commissioners. An example of
this is an act passed in 1819 (L. 1819, p. 44), authorizing John Small to
build a toll bridge. The minimum rate was fixed by the act but aside from
that restriction, the county commissioners were empowered to regulate
the rates. But, the act reads, "said bridge shall not be taxed by the
county commissioners under any pretense whatever." A peculiar provision
41] LEGISLATION, 1809-1838 41
have all from the lands owned by non-residents of the state,
and two-thirds from the lands owned by residents; the
counties were to take only the remaining third of the rev-
enue from the resident land tax.
The class to which a piece of land belonged w r as less
arbitrarily fixed by this new law of 1819 than under the
territorial law; the class was to be declared by the owner,
being no longer determined by such considerations as mere
geographical location. Land of the first class was to be
valued for taxation at four dollars per acre, land of the
second class at three dollars, and land of the third class at
two dollars. This valuation, subject to the one-half of one
per cent rate, meant a tax of two dollars per one hundred
acres for first class land, one dollar and fifty cents for
second, and one dollar for third. Under the law in force
during the territorial period, the best land had been taxed
one dollar per one hundred acres and the poorest thirty-
seven and one-half cents per one hundred acres. The new
law, then, at least doubled the tax on land per acre.
After the passage of the law of 1819, the division of
the revenue from the tax on land between the state and the
counties was twice readjusted before a satisfactory ar-
rangement was attained. In 1821 the counties were given
two-thirds of all the land taxes, both on residents and non-
residents, in place of one-third of the resident land tax
which had been their share by the law of 1819. 15 At this
particular time the condition of the state treasury was
excellent, the income being greatly in access of the lia-
was that contained in the charter of the Mount Carbon Coal Company
(L. 1834-5, p. 194), which provided that when the dividends should exceed
twelve and one-half per cent per annum, the company should pay a tax
into the county treasury, evidently exempting the property of the ompany
until such a state of affairs should come to exist. Interesting also are
the charters of two railway companies (L. 1835-6, p. 95, Incorp. L. 1836-7,
p. 341), which specified that a tax of one-half of one per cent should be
laid upon the amount of capital actually employed in the companies in
lieu of all taxes upon stock and property for both state and county
15 L. 1820-21, p. 182.
42 HISTORY OF TAXATION IN ILLINOIS [42
bilities. 16 But this state of affairs did not long continue,
and in 1823 the state found it necessary to recall from the
counties the share in the revenue from the non-resident
land tax granted them two years before, leaving them
merely the two-thirds of the resident land tax and the
local taxes on other kinds of property. 17 This plan of di-
vision held for the remainder of the period until 1838.
The arrangement under which non-residents paid their
land tax to the state and residents one-third to the state
and two-thirds to the counties, had several interesting,
incidental effects. Thus, while the residents contributed
only a small sum to the support of the state government,
^ind the non-residents paid no local taxes whatever, there
was considerable bitterness in some quarters where the
percentage of land owned by the non-residents was high;
for the residents felt that they were bearing the entire bur-
den of making the local improvements which were adding
value to the lands of the non-residents. 18 It is impossible
to determine how far this state of affairs tended to decrease
the sense of responsibility of the state legislators who
spent the state money but represented electors who con-
tributed but little to the state treasury; but it is evident
that, as a general policy, the practice was an unwise one.
In its immediate results, the plan was fiscally successful;
it increased the state revenues. Yet, even at best, the ar-
rangement could be only temporary, for it was almost in-
evitable at this period that the land should come more and
more to be owned by residents and that the state revenue
should therefore decrease part passu.
In 1823 the bank-stock tax was abandoned. It had
proved of no significance fiscally. 19 The auditor's report
16 Governor's Message, Dec. 6, 1820. S. /., 1820, 2 G. A., I Sess., p. n.
"It is pleasing to remark upon the flourishing condition of the treasury.
The debt of the late territorial government has been extinguished ; the
demands against the treasury bear but a small proportion to the funds
17 L. 1823, p. 203 et seq.
18 Ford, op. cit., p. 77.
19 L. 1823, p. 203 et seq.
43] LEGISLATION, 1809-1838 43
for the two years, 1820-1822, shows that less than one-
hundred dollars ($97.77) was received from non-resident
stock-holders and that the revenue from the stock owned
by residents was included in an item of $7,268.23 which
represented the total amount received by the state from the
local collectors, including the state's share in the residents'
land tax. This income was the only support received by
the state government from a tax on personal property
during this period, the entire state revenue with this slight
exception being raised from taxes on land.
By an amendment passed in 1825, counties which
found themselves unable to meet expenses under the one-
half of one per cent rate were permitted to increase that
rate to one per cent. 20 But two years later tbis rate was
again reduced to the old mark. 21
An act of 1831 changed this classification of lands for
taxation by abolishing the third class. 22 This, of course,
had the effect of raising the valuation of those lands which
may have been rated as third class lands from two to three
dollars per acre.
Eagerness to make the taxes as light as possible to new
settlers can be seen in the special provision made in the
law of 1821 for persons who were paying for their land by
installments. 23 "Lands entered and purchased from the
United States", the law reads, "whereon only one, two
or three installments of the purchase money shall have
been paid, shall in no case be valued higher than in propo-
tion to the amount of money actually paid thereon".
With the enabling act in force which released newly
purchased lands for a period of five years such a measure
was needed only to care for cases where the payments for
land were extended over a long space of time. Perhaps
this law may be assumed to have some significance as
marking the earliest attitude of the state toward the ques-
tion of the deduction of debts.
20 L. 1824-5, p. 172 et seq.
21 R. L. 1826-7, p. 325 et seq.
22 L. 1830-1831, p. 125 et seq.
23 L. 1821, p. 182 et seq.
44 HISTORY OF TAXATION IN ILLINOIS [44
.. It is evident from this survey that, although not all
* property was taxed by each governmental authority, taxes
were levied upon nearly all the objects of value in the com-
munity. Such exemptions as were made were demanded
by the social exigencies of the times. It was a composite
system and a more or less haphazard one, the state taxing
some types of property and the localities others. This
division of property for the purposes of taxation varied
slightly from time to time. The main support of the state
was the tax on land. The counties, how r ever, shared in
this tax after 1819. They received all the proceeds from
the personal property taxes, except those from the tax
on bank stock which were negligible in amount. Land,
as the most valuable item in the social wealth, bore the
if largest share of the burden. The rates, although raised
sharply in 1819 and again in 1831, were much lower all
through the period than they are at the present time.
Finally the tax was a charge primarily upon the "thing"
rather than upon the "person" and was, in form, a per-
centage rather than an apportioned tax.
As might be expected the methods of assessing the
taxes were very crude. During the greater part of the
period under consideration, the procedure for listing the
property of residents was that outlined in the law of 1812
which was briefly as follows: the official assessor would
advertise a date on which he would be present in a town-
ship; on that day residents of the township who owned tax-
able property would present themselves at the place ad-
vertised and, having been sworn, would list their property
with the assessor; penalties for failure to list or for fraud
were provided ; the assessor would then make up the neces-
sary lists and turn them over to the proper officials. 24
Few changes were made in this system until 1827 when
there was substituted for this very primitive method the
more modern one by which the assessor called at the resi-
2 *L. 1812, p. 17 el seq.
45] LEGISLATION, 1809-1838 45
dence of each property owner and demanded a statement
of his property. 25 If the property owner was not at home,
this law provided that the assessor should estimate the
value of the property to the best of his ability, holding the
estimate subject to revision upon complaint of the person
assessed. This new system was evidently necessary to
secure the listing of personal property in particular, for in
counties where no tax on personalty was levied, the assessor
was not required to call at the residence of the property
From the present day standpoint the penalties im-
posed under this system seem harsh and unusual. By the
law of 1812, in any case of fraud in listing, all the property
involved was to be forfeited to the state. 26 This law was
repealed in 1814 and the property, instead of being con-
fiscated in such cases, was declared subject to a triple
tax. 27 The triple tax was at this time also imposed for
mere neglect on the part of the owners to list their pro-
perty. 28 In 1817 a five dollar fine was added to the pen-
alty for each case of fradulent listing. 29 By the law of
1821 the penalty of the triple tax for failure to list was
somewhat accentuated by the provision that land not listed
regularly by the owner should be considered first class
land and the triple tax levied on that basis. 30 Then, per-
haps in disgust at the inefficiency of the heavy penalties,
the legislature in 1821 swept them all away but only to
reenact another set two years later. 31 These new penalties
were a triple tax for fraudulent listing and a double tax
for neglect or refusal properly to list the property for
R. L., 1826-7, P- 325.
28 L. 1812, p. 17 et seq.
2T Manuscript in office of secretary of state, dated Dec. I, 1814.
2B Ibid., Dec. 8, 1814. A law passed Dec. 8, 1814, provided that any
land which had been forfeited under the act of 1812, might be redeemed
by paying the triple tax.
29 L. 1816-17, P- 45.
30 L. 1819, p. 313 et seq.
31 L. 1821, p. 182 et seq.
32 L. 1823, p. 17 et seq.
46 HISTORY OF TAXATION IN ILLINOIS [46
Practice varied in regard to the particular officers
designated to list the property subject to taxation. By
the law of 1809, the sheriff was made responsible for this
work so far as the county levies were concerned. 33 Under
the Indiana law this had been done by two free-holders
in each township. But all was changed by the law of
1812, by which the assessment for both county and terri-
torial taxes was assigned to an appointed commissioner in
each county. 34 Two years later, in 1814, county treasur-
ers, appointed by the governor, were given the task of list-
ing the lands for the territorial tax, 35 and, in 1815, the
assessments for county levies were again assigned to two
free-holders in each township, according to the old Indiana
plan. 36 This reenactment of the Indiana law of 1808 was
evidently an unintentional blunder, for haste was made to
repeal it and to reestablish the provisions of the law of
1812. 37 By the law of 1819 the assessment in each county
remained in the hands of a single appointed official but he
was now called a treasurer rather than a commissioner. 38
For two years, 1825-27, this officer was called an asses-
sor, 39 but after 1827 the treasurer was the officer in charge.
It is seen, then, that almost without exception the listing
and appraising of property for taxation before 1837 was
done by a single assessor in each county, who was an ap-
pointed rather than an elected official.
As early as 1812, residents were required to make
oath to the correctness of their lists of property, as given
to the assessor. 40 In 1817 the oath was made very specific.
It read as follows:
I, A. B., do solemnly swear or affirm, as the case may be, that this
list contains a true and perfect account of all persons, and every species of
88 L, Terr. Ill, 1809-11, p. 7.
34 . 1812, pp. 17, 31.
85 Passed Dec. 24, 1814. R. L. 1815, p. 500.
M R .L. 1815, p. 614.
"L. 1816-7, P- 45 ft seq.
a *L. 1819, p. 313 el seq.
89 L. 1824-5, P. 172; R. L. 1826-7, P- 325.
40 L. 1812, pp. 17, 31.
47] LEGISLATION, 1809-1838 47
property belonging to or in my possession or care, subject to taxation,
and that no contract, change or removal whatever has been made or
entered, or any other mode advised or used to evade the payment of
The oath was retained as part of the system by the law
of 1819. 42 In 1821, the efficiency of this plan as a means
of securing full valuation was evidently questioned, for
power was given to the assessor to go behind the sworn list
submitted by the property owner. 43 In cases where he be-
lieved the valuation to be too low, he was directed to call
the matter to the attention of the county commissioners
who were to give a hearing to the property owner, and, if
he were unable to show why his property should not be
rated higher, they were to assess him on the basis of the
A most interesting change was made by the law of
1829. At this time, strange to say, the oath was given up
as an instrument for securing a full assessment. The law
Whenever, in the opinion of the county treasurer, any person shall
list his property below its real value, it shall be the duty of said treasurer
to alter the valuation thereof, in such manner as to make it as nearly equal
to the general valuation of the same species of property as possible; and
no person shall be compelled to value his property under oath. 44
It would be interesting to determine the effect of this
change in the law ; but so far as it is possible to make any
statement from the data available, the presence or absence
of the oath requirements seems to have had little effect
upon the assessment, one way or the other. The data are
very unsatisfactory, however; and the state was increas-
ing so rapidly in wealth and population at this time as
to make comparisons of one year with another almost
Property belonging to non-residents was assessed
under a plan entirely different from the one outlined
above. Under the law of 1812 such property was to be
4iL. 1816-7, p. 46.
42 L. 1819, p. 313 et seq.
43 L. 1820-21, p. 182 et seq.
4i R. L. 1828-9, p. 121 et seq.
48 HISTORY OF TAXATION IN ILLINOIS [48
listed annually by the owner with the state auditor. 45 In
1816 the law was made more detailed and explicit. 48 The
auditor was empowered, in case of neglect on the part of
the owner, to list the land according to the best informa-
tion he could procure. Annual registration with the audi-
tor was made unnecessary by the law of 1823. Once listed,
the property was to stand until a transfer in ownership
was made. 47
Persons owning land in counties other than those in
which they resided were directed by the law of 1827 to list
their land with the state auditor in the same manner as
non-residents. 48 In 1829, they were given the option of
listing such land with the state auditor or with the county
officials 49 ; but, in 1835, the county officials were directed
to administer an oath, in such cases, that the bona fide
owner of the land resided in the state. 50 This law had
been necessitated by the fact that agents frequently listed
land, belonging to non-residents, in their own names. This
practice, aside from confusing the classification upon which
rested the division of the revenues between the counties
and the state government, was the cause of loss to the
state through the seven and one-half per cent fee which was
paid to the county sheriffs for collecting such taxes. 51
The arrangement for the assessment of bank stock,
which was taxable for state purposes in the early twenties,
is worthy of note. 52 This, it will be recalled, was the first
attempt to tax intangible personal property. Evidently
the difficulty of securing a return of such property was
apparent, for the law required the banks located within
the state to cooperate in the assessment by furnishing the
L. 1812, p. 17.
4 L. 1815-6, pp. 57-61.
47 L. 1823, p. 203.
48 L. 1826-7, p. 325-
**R. L. 1828-9, P- "9 et seq.
B L. 1834-5, p. 51-
"5". /., 9 G. A., i Sess., p. 174. The auditor's reports show that these
refunds were very insignificant in amount.
"L. 1819, p. 313 et seq.
49] LEGISLATION, 1809-1838 49
county treasurers with lists of the resident stock-holders.
The treasurers then were required to inform one another
by an exchange of communications, of stock owned by resi-
dents of various counties, very much as the lists of mort-
gage owners are exchanged in some states at the present
In general these assessment methods were so exceeding-
ly primitive that it seems remarkable that they secured the
listing of any property at all. Before 1827, the property
owner was depended upon not only to assess himself but
also to hunt out the assessor in order to declare his proper-
ly. The penalties were very heavy, it is true, being double
and triple the amount of the tax for neglect or fraud. But
the practice of depending upon penalties to enforce laws
has usually been far from successful. Heavy penalties
were more likely to be effective at this stage than later,
however, for all property was of the sort which was dif-
ficult to conceal, so that the risk of detection in cases of
fraud was relatively large.
The method of collecting the taxes was quite simple.^*
The list of resident tax payers was given to the sheriff who
proceeded to collect the amounts charged to each individu-
al. 53 After 1827 the sheriff was directed to call at each
person's residence and demand payment. 54 Heretofore,
this had not been required. Collection was enforced by
distress and sale. The taxes of non-resident land owners
were payable for most of the period at the state treasury.
A date was fixed on which the sheriff was required to
account for the money collected by him 55 and heavy pen-
53 L. 1812, p. 20; L. 1819, p. 313 et seq.
5 *R. L. 1826-7, p. 325 et seq. All through the period the sheriff was the
pfficer in charge of the collection of the taxes of the residents. He re-
teived as his compensation a percentage of his collections. Seven and
one-half per cent was the usual rate.
55 This date was often changed during the period. For a time it was
December i ; then it was changed to November i ; then to December 10
etc. L. 1812, p. 19; Manuscript in the office of secretary of state, Dec. 24,
50 HISTORY OF TAXATION IN ILLINOIS [50
allies were provided for delay in turning the funds into the
proper treasuries. 56
When the sheriffs found it impossible to collect the
taxes, they were empowered, by the law of 1812, to sell the
property after a forty day notice, and to pay the taxes
out of the proceeds. 57 Land was not to be sold for taxes
if there was sufficient personal property to make up the
amount of the tax. The laws passed later in the period
merely elaborated this procedure. Thus, the law of 1829
only changed the code by specifying in detail the methods
to be used in advertising property for sale. 58 Until 1833
the state conducted the tax sales of the property of non-
residents; but, at that time, the task was assigned to coun-
ty officials who turned over the receipts to the state treas-
Arrangements were made whereby persons whose pro-
perty was sold for taxes could redeem it within a reason-
able time. This redemption period was made two years
in 1812. 60 From 1821 to 1827, the period was shorter,
one year, but then at the suggestion of Governor Coles it
was again lengthened to two years. 61 In 1819, for minor
heirs, it was lengthened until one year after the date when
the youngest heir should become of age. This provision
held through the rest of the period. 62 The person seeking
to recover his property sold at a tax sale had to pay a large
premium to the purchaser. By the law of 1812 he was
}8i4; L. 1817-8, p. 41 ; L. 1819, p. 313 et seq.; R. L. 1826-7, P- 325 et seq.;
L. 1836-7, p. 194.
59 In 1818 the penalty was made one per cent per day; in 1823 it was
changed to one per cent per week for state funds and one per cent per
month for the county funds ; and, finally in 1827, it was made one per cent
per week for counties also. L. 1817-8, p. 41 ; L. 1823, p. 203 et seq.; R. L.
1826-7, P- 325 et seq.
"L. 1812, p. 20.
**R. L. 1828-9, p. 122.
89 /e. L. 1832-3, p. 528.
L. 1812, p. 20.
91 R. L. 1826-7, p. 325 et seq.; L. 1820-21, p. 182 ft seq.; S. J '., 5 G. A.,
I Sess., p. 26.
82 L. 1819, p. 313 et seq.
51] LEGISLATION, 1809-1838 51
compelled to pay the person who had bought his property
the purchase price plus one hundred per cent. For part
of the period the penalty stood at this figure and part of
the time at fifty per cent, the proportion being changed
from one figure to the other several times. 63
Property sold to the state for taxes could be redeemed,
under the law of 1827, by paying the purchase price, plus
fifty per cent and subsequent taxes. 64 In 1833 the fifty
per cent penalty was removed and there was substituted an
interest charge of six per cent per annum on the amount of
the taxes and costs. 65
In cases where property was twice sold for taxes with-
in three years, it was arranged, in 1829, that the original
owner could redeem by paying the purchase price and the
costs of the first sale and double the amount of the pur-
chase price, interest and costs of the second sale. 66
Special County Levies and Municipal Taxes.
Aside from the general uses to which the general prop-
erty tax was put, mention should be made of the county
levies for various special purposes and the utilization of
the general property tax in municipal finance. The county
levies for special purposes were made then by the county
commissioners. Usually, though not always, such levies
were authorized by special acts of the legislature, which
permitted the commissioners to order the collection of an
additional rate for some particular object upon the property
ordinarily taxable for county purposes. These objects were
63 The penalties were:
1812, Purchase price plus one hundred per cent.
1821, Purchase price plus fifty per cent, plus cost for advertising.
1823, Purchase price plus one hundred per cent.
1825, Purchase price plus fifty per cent.
1827, Purchase price plus one hundred per cent, plus interest and
costs and interest on subsequent taxes. L. 1812, p. 20; L.
1820-21, p. 182 et seq.; L. 1823, p. 203 et seq.; L. 1824-5, P-
172 et seq., and R. L. 1826-7, P- 325 et seq.
**R. L. 1826-7, P- 325 et seq.
8 /?. L. 1832-3, p. 528.
6 /?. L. 1828-9, P- 122.
52 HISTORY OF TAXATION IN ILLINOIS [52
y always specified; they included schools, bridges, roads,
county buildings, and the improvement of navigation of
rivers. One of the most important of these special taxes
was one authorized by a general law in 1825 which per-
mitted the county commissioners in any county of the state
to levy a general property tax for road purposes. 67
Before 1825 no provision had been made for the build-
ing and maintenance of roads aside from a poll tax, pay-
able in labor on the roads, and whatever the counties might
care to undertake and pay for out of ordinary revenues.
The state, indeed, occasionally made a small appropri-
ation toward the expenses of laying out a new road. 68
But this new law provided a distinct revenue for road pur-
poses. Power was given to the county commissioners of
the various counties to levy a maximum rate of one dollar
and fifty cents on every one hundred dollars' worth of tax-
able property. The counties were divided into road dis-
tricts and supervisors were appointed for each district to
see that the property owners discharged the tax in labor on
the roads or commuted it by providing a substitute to do
the work for them. This bill was in force only two years,
being repealed by the legislature of 1826-27. 69 Governor
Ford gives for the cause of the repeal of this law the hatred
of the people for taxation. 70 The rate however was quite
"L. 1825, p. 27.
68 Sums were expended from the state treasury for roads and bridges
during this period as follows :
Roads Bridges Total
' Jan. i, 1823, to Nov. 30, 1824 $3.556.66 $3,556.66
Two years ending Nov. 30, 1826 2,344.50 2,344.50
Two years ending Nov. 30, 1828. 3,228.56 $ 880.00 4,108.56
Two years ending Dec. i, 1830. 1,700.00 1,100.00 2,800.00
Two years ending Dec. i, 1832 97.62 1,048.50 1,146.12
Two years ending Dec. i, 1834. 2,296.64 300.00 2,596.00
Two years ending Nov. 30, 1836
Dec. 3, 1836, to Dec. I, 1838. 780.00 780.00
69 L. 1827, p. 47 ; Ford, Hist, of III., pp. 58-60. The poll (labor) tax
was continued. Bridges were kept in repair from the county road tax.
L. 1827, p. 62.
Supra., pp. 28, 29.
53] LEGISLATION, 1809-1838 53
high and some of the opposition was probably warranted.
In its operation the law seems to have been eminently suc-
cessful. "The roads were never before nor since in such
good repair. . ." is the testimony of Ford, a number of
years afterward. 71
After the repeal of the road law in 1827 no taxes of
this sort were levied until 1831 when a much weaker law
was passed which made property the basis for a charge
in case a three-day labor requirement was not sufficient.
The rate was one day's labor for every one hundred dollars
worth of property. For commutation purposes a day's
labor was to be reckoned at fifty cents. 72
In 1835 a different arrangement was made. A tax
could be levied for road purposes either on real estate or
on personal property, but not on both the same year. 73
If on real estate, the tax, at the most, could be equal to one-
half of the state tax collected in that county. If on per-
sonal property, the maximum rate was twenty-five cents
on every one hundred dollars worth of property. The
commutation rate was seventy-five cents per day, but by
1845 it had been raised to one dollar. 74
The amount which could be collected for roads was
limited in 1836 75 to one-third of the county receipts of the
In this same year, 1825, when the first road law was
passed, there was also passed a school law which provided
for the levy of a tax similar to the road tax. The rate was
not to exceed one-half of one per cent. This law suffered
the same fate as the road law, becoming unpopular with the
people and being repealed in 1827. A voluntary tax was
enacted in its place under which no person could be taxed
without his consent in writing. 76
71 Ford, op cit., p. 58.
72 L. 1830-31, p. 159.
73L. 1835, p. 129.
R. S., 1845, P- 485 et seq.
L. 1835-6, p. 207.
76 J. M. Peck, A Gazetteer of Illinois in Three Parts (2 ed., Philadel-
phia, 1837,) p. 66; L. 1827, p. 364.
54 HISTORY OF TAXATION IN ILLINOIS [54
A good example of the tax levied for bridge purposes
is that of an act passed in 1831, "authorizing the County
Commissioners' Court of Shelby County to levy a tax for
certain purposes." It permitted the commissioners to levy
a tax on land and personal property for the purpose of
building a bridge over the Kaskaskia River. No limitation
was put on the rate. The sheriff's collection fee was re-
stricted to five per cent." In 1824 the legislature author-
ized the commissioners of Sangamon County to collect a tax
of not less than one-fourth nor more than one-half per cent
on all the taxable property in the county for the purpose
of improving the lower course of the Sangamon River. A
referendum to the people was provided. 78 County buildings
were some times paid for under this same arrangement.
Thus, in 1825, the Gallatin County commissioners were
required to lay a tax of one and one-half per cent upon the
value of all property subject to county taxation, to build
a court house and jail. 79 The court house of Crawford
County was built with the proceeds of a tax of one per cent
on the property of the taxable inhabitants. 80 Legislation,
of which the acts quoted above are typical, was very com-
mon all through the period under discussion. At every
session many such laws were passed and the county taxes
collected under this arrangement must have made up a
large proportion of the total county receipts.
Although throughout this early period the towns were
small, the beginnings of municipal taxation are to be found
in the legislation of these years. The powers of towns to
act as public corporations came, for the most part, through
special charters granted by the legislature. In 1831 a
general incorporation law was also passed, 81 but it was
merely permissive in character and most of the munici-
palities, continued even after its passage, to go to the legis-
lature for special charters.
77 L. 1830-31, p. 23.
78 L. 1824-25, p. 28.
79 L. 1824-25, p. 165.
^Private L. 1832-33, p. 28.
81 L. 1830-31, p. 82.
55] LEGISLATION, 1809-1838 55
It is to be expected that under such a system there
should be the greatest diversity among the powers granted
to various municipalities. In respect to the property sub-
ject to taxation, however, the practice was fairly uniform.
During the early part of the period, it was not usual to
designate specifically all property subject to taxation for
municipal purposes; with but one exception, the charters
granted during these early years specified that only the
town lots lying within the corporate limits "without refer-
ence to the value of houses or other improvements" should
be made the basis for the levy of taxes. The exception is
the Mt. Carmel charter of 1825 which designated that the
tax should be laid on both "the real property in such town
and on personal property owned by persons living in such
town." 82 Somewhat later in the period it became custom-
ary to declare "real estate" taxable, without further defin-
ing the term. In 1837 Chicago was granted a city charter
which authorized the common council to levy a tax upon
"real" or "personal estate." There are scattered examples
of similar grants of power, as in 1835 (Mt. Carmel), and
1840 ( Carrni ) , 83 During the same year charters were also
granted to the city of Alton and the town of Ottawa, which
finally designated that all property should be used as the
basis for the levy. 84 Taxes were to be levied in the case of
Ottawa, "upon all real estate and personal property," and
in the case of Alton upon the "real and personal property
within the limits of said city." About the same time a sim-
ilar charter was given to Galena. 85
The levy of a municipal tax usually exempted the pro-
perty within the corporate limits from any county tax. So
it would seem that, except in such scattered cases as those
mentioned above, the general property tax, strictly defined,
did not exist in the municipalities of Illinois during this
82 L. 1824-25, p. 72.
83 L. 1836-37, p. 50. Real estate was made taxable by the general law
of 1831, by the Chicago charter of 1835 and the Lower Alton amendment
of 1835. L. 1834-5, PP. 172, 210; L. 1839-40, p. 70.
84 L. Sp. Sess. 1837, pp. 17, 96.
85 Incorf>. L., 1836-37, p. 16.
56 HISTORY OF TAXATION IN ILLINOIS [56
early period. How this condition was reconciled with the
provision of the state constitution requiring the general
property tax is not evident; the question appears not to
have been raised.
The maximum rates which were specified in these early
charters varied from one-fourth of one per cent to four per
cent, upon the value of the property designated for tax-
ation. Most of the acts, and particularly those passed b^
the later legislature set the rate at one-half of one per
cent. 8 '
As in the case of the counties, power was sometimes
granted to municipalities to levy rates for special purposes.
Thus by a law of 1821, the trustees of the town of Alton
were permitted to levy a tax on all town lots not exceeding
seventy-five cents per lot per annum for the support of
schools. 87 In 1837 Alton was again empowered to levy a
school tax. 88 By this act the council was authorized to
assess upon the real estate of the city the sums necessary to
purchase lots and erect buildings, and to assess upon per-
sonal property a tax sufficient to raise the necessary sums
for the support of the schools. The rate was not to exceed
one-fourth of one per cent and the receipts were to consti-
tute a fund to be used exclusively for the support of the
common schools. 89
A spirit of rivalry often rose between towns desiring
to be designated as the county seat and to secure the lo-
8 *The following list of references to charters granted, grouped ac-
cording to the tax rates specified, will give more specific information on
this point :
One-fourth of one per cent L. 1835-6^ p. 180.
One-half of one per cent L. 1823, p. 142; L. 1824-5, pp. 22, 75.
L. 1834-5, PP- 204, 214; L. 1836-7, p. 50; L, Sp. Sess. 1837, pp. 17, 102.
One per cent L. 1819, p. 249; L. 1834-5, p. 210; L. Sp. Sess. 1837, pp.
One and one-half per cent L. 1824-5, p. 72.
Two per cent L. 1819, pp. 48, 259, 305 ; L. 1820-21, p. 160.
Three per cent L. 1819, p. 368; L. 1820-21, p. 176.
Four per cent L. Sp. Sess. 1837, p. 94 (Springfield).
8T L. 1820-21, p. 39.
88 L. Sp. Sess. 1837, p. 17.
89 C/. L. 1836-37, P- 50.
57] LEGISLATION, 1809-1838 57
cation special inducements were frequently offered. Towns
would sometimes submit to special taxation to raise money
for donations to the counties. Thus in 1837, Beardstown
was given power to collect a six per cent tax on all real
estate in the town for the purpose of raising a sum of ten
thousand dollars to secure the county seat of Cass County. 90
The municipalities had other sources of revenue, such
as those from special assessments and from licenses, but
undoubtedly the major portion of their income was from
the taxes authorized by acts like those referred to above.
These taxes, although not strictly general property taxes,
were for the most part similar to them in their nature ; and
even before the end of the period there were a few cases of
what might in a strict sense, be called general property
Thus the years between 1809 and 1838 formed a period
of considerable legislative activity. The general system
carried over from the Territory of Indiana had first to be
adjusted to the more primitive conditions existing in the
Territory of Illinois; and then, as the state grew, particu-
lar problems had to be met as they arose. The property
subject to taxation changed very little, due, of course, to
the fact that from the beginning practically all property
was taxed and that the forms of property did not change
materially during those years. Since the chief form of
wealth was land, the land tax was the backbone of the rev-
enue system. What little personal property was in the
state was made subject to taxation, the local communities
depending entirely upon the income from this class of pro-
perty during the early years. The land tax was shared by
the state with the local communities in varying proportions,
after 1819 the local communities taking a larger and larger
part until they finally were receiving two-thirds of the rev-
enue from the general land tax.
Compared with those levied today, the rates during this-
period were very low, although at the end of the period
90 L. Sp. Sess. 1837, p. 95-
58 HISTORY OF TAXATION IN ILLINOIS [58
they were considerably higher than they had been at the
beginning. Had they been very high, such assessment
methods as those used would probably have been impossi-
ble, in spite of the ease with which the predominating type
of property loaned itself to assessment.
Frequent changes were made in the details of assess-
, ment and collection. It is true that the general scheme
of valuing lands by grouping them roughly into classes ac-
cording to quality persisted throughout this period; but the
composition of the groups was changed a number of times.
The assessments were made both with and without the aid
of oath requirements. Part of the time very heavy penal-
ties were prescribed for fraud in listing property for tax-
ation ; and, again, for a time there were no penalties at all
in such cases. Changes were also frequently made in the
regulation for redeeming property sold to enforce collec-
The condition of affairs as a whole during this period
can best be described by saying that, although the principle
of the general property tax was prescribed in the state con-
stitution drawn up in 1818, the period was primarily one
of experimentation. The system was adjusting itself; the
details were not fixed; plans were being tried out and dis-
carded. Much of the action was haphazard; it was mere
groping. Fortunately the economic and fiscal conditions
were such as to make possible this formative period ; the ex-
periments were not too expensive. Had the responsibilities
and strains, which came a few years later, been laid upon
the financial system at this time, without the opportunity
for experimental legislation and for observation of the
weak points of the system in vogue, the results could scarce-
ly have been other than disastrous.
EFFICIENCY OF THE TAX SYSTEM
In the vault in the office of the state treasurer in the
capitol at Springfield is carefully preserved a plain, wooden
box, scarcely more than a foot long; this box is the recep-
tacle in which the state funds were kept during the early
years of the state's history. As it rests today, tucked away
on one of the shelves in the massive vault which has suc-
ceeded it, an interesting contrast is presented of the im-
portance of the financial affairs of the state at that time and
at present. For the amounts involved in the early financial
transactions were indeed trifling. Exact statistics, are,
in some cases, hard to obtain. Thus the sums raised by
taxation for local purposes are almost entirely wanting for
the years before 1838 j 1 and it is only after 1820 that com-
plete statistics are available for the receipts from taxation
for state purposes. However, some fragmentary informa-
tion exists concerning the total revenues of the state from
all sources for earlier years. For example, it is known
that the total amount expended from the state treasury
1 According to the reports of the state auditor and treasurer, the fol-
lowing amounts were transmitted to the counties as their share in the non-
resident land tax. They were entitled to share in this tax by a law which
was in force for two years, 1821 to 1823.
Jan. i, 1823 to Nov. 30, 1824. $ 808.12
Two years ending Nov. 30, 1826 1,617.96
Two years ending Nov. 30, 1828 358.13
From special reports made by the auditor at the request of the legis-
lature in 1835, it appears that the revenue to the counties from the land
tax inj 1835 to $26,451.49. (5". /., 9 G. A., 2 Sess., p. 64.) An estimate of
$31,374.89 is made of the probable income of the counties from this source
in 1836. These statistics do not include the taxes which may have been
levied on personal property for county purposes.
60 HISTORY OF TAXATION IN ILLINOIS [60
during the six years that Illinois was organized as a terri-
tory of the second grade, December 31, 1812, to December
31, 1818, was approximately twenty thousand dollars, an
amusingly small sum compared with present day budgets. 2
This figure represents fairly accurately the amount re-
ceived by the territorial government from taxation. For
the territory, it will be recalled, had no sources of revenue
of any consequence aside from the tax and there was no
money in the treasury at the end of the year 1818 when
the report was made.
If the above estimate is correct for the territorial
period, the amounts received from taxes in the late years
of that period were very much larger than those received
in the earlier years. For it is known, from a report made
to the first territorial legislature, that during the one year,
from December 1, 1817 to December 1, 1818, the territorial
revenue from taxation amounted to $9,528.05, 3 leaving only
about $10,500 to be raised during the other five years. 4
The size of the budgets, however, began to increase
sharply as soon as the territory was admitted to the Union
in 1818. During the first two years as a state, money was
2 A report to the House of Representatives in 1819 puts the figure at
$20,415.79. But the old revenue and warrant ledger in the vault of the
state auditor at Springfield states that this amount was only $19,982.36
Whatever may be the explanation of this discrepancy, the total amount
was approximately twenty thousand dollars. H. J., i G. A., 2 Sess., p.
30; Revenue and Warrant Ledger, Class 3, I, 32.
//. /., i G. A., 2 Sess., p. 30.
4 Reynolds (My Own Times, p. 105) says that the taxes imposed from
November i, 1811 to November 8, 1814 amounted to $4,875.47. "Of this
sum," he says, "$2,516.89 had been paid into the treasury and $2,37847
remained in the hands of the delinquent sheriffs to be paid over." The
two items, added together, do not make the sum mentioned first.
Moses, (Illinois, I, 266) says that the total amount of revenue from
November i, 1812 to November I, 1814 was $4,875, of which $2,516 was
collected and $2,359 remained uncollected in the hands of the sheriffs.
Neither Reynolds nor Moses gives exact references to his sources.
Moses's statement that the state treasurer received $1,508 in 1817 and
$2,471 in 1818 is at variance both with the reports to the assembly and with
the books of the state auditor.
61] EFFICIENCY OF THE TAX SYSTEM 61
paid out of the treasury to the amount of $52,809.70.*
There was also a cash balance left in the treasury, on Janu-
ary 1, 1821 of |17,720.13. This would seem to indicate
that for two years the entire receipts at the treasury, al-
most all of which probably came from taxation, were
After 1820 the regular reports of the state auditor
give precise information concerning the receipts of the state
treasury from all sources, including the various types of
taxation. The receipts from the tax on property for the
period are shown in Table 1 : 6
TABLE i. RECEIPTS INTO THE STATE TREASURY FROM THE TAX ON PROPERTY,
Jan. I, 1821, to Dec. 27, 1822 $45,803.75
Jan. i, 1823, to Nov. 30, 1824. 78,942.20
Two years ending Nov. 30, 1826 93,011.22
" " 1828 00,110.25
" " " " " 1830 73,444-88
" " " " " 1832 95,001.56
" " 1834 - 76,863.94
" " 1836 84,309.37
Dec. 3, 1836 to Nov. 30, 1838 92,365.20
These figures represent the state's share in the receipts
from the tax on property. This revenue came almost en-
tirely from the land tax, the only exception being in the
first figure where a small part of the $45,803.75 came from
the tax on bank stock. All the tax on other personal pro-
perty went to the counties. Moreover, during the early
years, most of the money received by the state came from
a tax on the land of non-resident proprietors; for not only
was the larger share of the tax paying land owned by per-
sons living outside the state, but after 1823 the counties
retained two-thirds of the revenue from the land of resi-
dents, only the remaining one-third going to the state. The
taxable land of non-residents consisted largely of claims
B Revenue and Warrant Ledger, Class 3, I, 32. This indicates that
the statement of Moses, (I, 306) is inaccurate. He says that the receipts
from October 18, 1818 to December 31, 1820 were $53,362.22 and the ex-
"Compiled from the reports of the auditor of public accounts.
62 HISTORY OF TAXATION IN ILLINOIS [62
in the military tract which had been bought up by specu-
lators from the original grantees. 7 Congress had appro-
priated about three million acres of this land as bounties
for military service. As Governor Coles pointed out in a
letter to the governor of Maryland, 8 this policy had the
effect of greatly increasing the non-resident list, for much
government land was made taxable which otherwise would
have remained exempt as property of the United States. 9
The temporary advantage coming in the way of increased
revenues from this source was largely counterbalanced,
however, by the fact that the settlement of that part of the
state where the land was situated was somewhat retarded
by this form of ownership.
The sums received at the state treasury from the non-
resident tax and the percentage which they formed of the
total receipts from the state tax on property are shown in
Table 2 :
TABLE 2. RECEIPTS INTO THE STATE TREASURY FROM THE TAX ON THE
PROPERTY OF NON-RESIDENTS AND THE PERCENTAGE FORMED BY THEM
OF THE TOTAL RECEIPTS FROM THE PROPERTY TAX, 1820-1838.
Jan. i, 1821, to Dec. 22, 1822 $38,437.75 83.9
Jan. i, 1823, to Nov. 30, 1824. 72,639.48 92.
Two years ending Nov. 30, 1826 82,569.54 88.8
" " 1828. 83,176.28 92.3
" " 1830. 70,396.16 95.8
" " 1832 88,218.32 92.9 .
" " 1834. 42,20841 55.
" " 1836 8,172.67 9-7
Dec. 3, 1836, to Nov. 30, 1838 13,484.69 14.6
The most striking condition revealed in this statement
is the rapid fall in the non-resident receipts after 1832.
Aside from the steady transfer of the ownership of land
from non-residents to residents, another cause may be re-
sponsible for this, namely, the hard times of the thirties,
which undoubtedly bore heavily on many persons holding
7 Ford, Hist, of III. p. 48.
8 /. Hist. Coll., IV, 45 et seq.
"For conditions under which bounty lands became taxable, see supra,
63] EFFICIENCY OF THE TAX SYSTEM 63
land as a speculation, causing them to lapse in their taxes.
The item in the auditor's report called receipts from "rev-
enue clerks" shows a large increase as the receipts from
non-residents diminish. These "revenue clerks" were the
clerks of the county commissioners, to whom in 1833 was
assigned the task of selling the land of delinquent non-
residents. It is probable that most of the receipts from
"revenue clerks" were sums realized from sales for non-
payment of taxes. It may be, however, that by some ad-
ministrative order, unsanctioned by formal legislative
action, the county clerks were made receivers of state taxes
on non-residents' lands. The sums received by the state
treasurer from the revenue clerks during this period were :
Two years ending Nov. 30, 1834. $13,158.72
" " 1836. 45,748.63
From Dec. 3, 1836, to Nov. 30, 1838. 70,015.70
Table 3 shows the ordinary income of the state by
two year periods and the percentage of these sums which
came from the property tax. 10
TABLE 3. TOTAL ORDINARY RECEIPTS INTO THE STATE TREASURY AND THE
PERCENTAGE FORMED BY THE RECEIPTS FROM THE PROPERTY TAX, 1820-1838.
Jan. i, 1821, to Dec. 22, 1822 $62,226.70 73.6
Jan. i, 1823, to Nov. 30, 1824. 86,586.93 91.2
Two years ending Nov. 30, 1826 93,880.07 99.1
" " 1828 96,106.94 93.8
" " 1830. 87,145.08 84.3
" " 1832.. 106,498.09 89.2
" " 1834- 103,534.28 74-3
" " 1836. 1 10,3 10.62 76.5
Dec. 3, 1836, to Nov. 30, 1838. 158,086.78 584
In order to show with what degree of adequacy the
revenue from taxation met the needs of the state, it may
10 The figures in this table do not include the items of "State paper
funded and interest on the same,'' which were receipts into the treasury
of securities taken up by sums secured chiefly from the "Wiggins Loan,'*
(Of. supra, p. 33.) These amounts were, 1830-32, $105,987; 1832-34, $3,79or
J 834-36, $217. Moreover, the figures do not include receipts from loans.
The decreasing percentage finds at least a partial explanation in the in-
creased receipts from the school funds.
HISTORY OF TAXATION IN ILLINOIS
be of value to examine the general condition of the state
treasury during these years. Owing to the carelessness
with which the accounts were kept, it is not possible to
give a perfectly balanced account of the state finances ; not
only are there gaps between the reports, but there are also
gross inaccuracies in the record of warrants drawn on the
treasury, as a result of which the statements of outstanding
warrants given in the reports are seldom trustworthy.
Table 4 presents the receipts and expenditures together
with the balances, as nearly as can be ascertained, against
or in favor of the treasury, at the end of each biennium
during the period.
TABLE 4. TOTAL RECEIPTS AND EXPENDITURES OF THE STATE TREASURY,
Period ending Oct. i, 1818
Period ending Jan. i, 1821
Jan. i, 1821, to Dec. 27, 1822
Jan. i, 1823, to Nov. 30, 1824.
Two years ending Nov. 30, 1826...
" " 1828...
" Dec. i, 1830...
" ' " " 1832..
" " 1834.-.
" Nov. 30, 1836..
Dec. 3, 1836, to Dec. i, 1838
(a) Each succeeding treasurer and auditor during these early years
seems to have assumed the right to make his own estimate of the amounts
outstanding against the treasury. The figures in the "balance" column
must be used with this in mind. The discrepancies of 1824 and 1836 find
their explanation in this fact. A gap between reports is responsible for
the discrepancy of 1822. The figures for 1820-1822 do not include the
receipt of $5,955.82 from the United States treasury or the expenditure of
$150.94, the cost of transferring the sum.
(&) Not including redemption fund.
(c) Includes $100,000 from the "Wiggins Loan" and $105,986.98 in
discharged state paper.
(rf) Includes $215,968.66 in state paper redeemed and burned.
(e) Includes $144,049.96 borrowed from School Fund, but does not
include the $335,592.32 appropriated to the School Fund and then borrowed
from it. It does include the item of $477,919.14, surplus revenue, received
from the United States government.
65] EFFICIENCY OF THE TAX SYSTEM 65
Just as the territory was about to become a state, Oct-
ober 1, 1818, the auditor reported an unpaid balance of
$7,588, showing that territorial revenues had not quite suf-
ficed to pay expenses. 11 The revenues for the following
two years proved ample not only to meet this deficit and the
current expenses of those two years, but also to leave a
favorable balance of $17,720.13. For the next four years
the finances of the state remained in very comfortable con-
dition. In 1825 and 1826, however, the harmful effects of
the state bank began to make themselves felt. Yet had
there been no depreciation in the bank notes, there would
have been no deficit ; for the sums received were nominally
much in excess of the expenses. Governor Coles, in his fare-
well message, said: "The annual revenue derived from a
tax on land amounts to upwards of $45,000, while the aver-
age annual expenditure of the state, on the supposition
that there will be no extra session of the legislature, will
not exceed $23,000 in specie." 12
He went so far as to recommend a twenty-five per cent
reduction in the taxes levied
under the firm conviction that three-fourths of our present nominal rev-
enue will be amply sufficient to defray the ordinary expenses of govern-
ment and leave an excess to be annually increasing as well from the ad-
ditional quantity of lands subject to taxation as the appreciation of the
currency, to be applied to the great and vital objects of education and in-
ternal improvements. 13
However, the 1826 deficit of $34,015.62 increased to
$45,999.64 by 1828. At the end of the next two year period,
1830, it had dropped to $7,395.86 but at this time, provision
being made for the redemption of the notes of the state
bank,, the treasury was really well along toward recovery. 1 *
From 1834 until the very end of the period, the treasury
was not embarrassed. In 1834, according to Governor
Ford, "The treasury of the state for once had become sol-
"//. /., i G. A., i Sess., p. 35-
12 S. /., 5 G. A., i Sess., p. 24.
Ibid., p. 25.
14 "The finances of the state are fast emerging from that deranged and
depressed condition into which they had fallen a few years since, and are
now assuming a sound and substantial character." Governor's Message,
December 4, 1832, 5". /., 8 G. A., I Sess., p. 12.
66 HISTORY OP TAXATION IN ILLINOIS [66
vent, paying all demands in cash." 15 Governor Duncan
in his message of 1836 wrote: "The public revenue of
the state is believed to be ample for all the ordinary
expenses of government." 16 However, the treasurer's bal-
ance sheet during the later years of this period was made
to appear to much better advantage through a somewhat
questionable method by which the money received from
the United States for schools was turned into the Gen-
eral Revenue Fund for general expenses. Instead of
levying taxes to secure revenue to meet appropriations,
the legislators, afraid, as some have charged, of the
wrath of their constituents, voted to use for ordinary ex-
penses the money in the School Fund, obtained from the
sale of school lands and other sources. This arrangement
was technically designated a loan and interest on the sum
borrowed was regularly appropriated for the use of the
schools of the state. But the principal was never repaid
and the appropriations for schools, always larger than the
interest on the sum, have gradually swallowed it up. In
his message to the legislature in 1838 Governor Duncan
states that the debt to the School Fund amounted at that
time to $719,784.61." This included an item of $335,592.32
which was part of the surplus revenue received from the
United States government, appropriated to the School Fund
and then borrowed to purchase bank stock. Had it not
been for this extra source of revenue the receipts into the
treasury at this partiuclar time would have been altogether
"Here we have now no taxes, excepting those which are
raised on the principle of our country rates, and they are
scarcely perceptible," gleefully writes Morris Birkbeck in
1818 to his friends left behind in England. 19 But not
many of Birkbeck's Illinois neighbors had his memories of
heavy English taxes to compare with the rates which they
"Ford, op. cit., p. 169.
19 S. J., 10 G. A., i Scss., p. 20.
1T 5. /., ii G. A., i Sess., p. 13; Peck, Gazetteer, p. 65.
19 S. J., ii G. A., i Scss., p. 13.
19 Letters from Illinois (London, 1818), p. 41.
67] EFFICIENCY OF THE TAX SYSTEM 67
were called upon to pay. They compared them quite nat-
urally with the rates imposed in the states surrounding
them ; and on this basis, at least after the admission of the
territory into the Union, they found cause for bitter com-
plaint in rates of taxation in Illinois. The situation was
so complicated by the currency disorders that the true state
of affairs is difficult to discern. In 1826, Governor Coles
observed : "The rate of taxation is, nominally higher in
Illinois than in the neighboring states, and if continued
will operate injuriously to the prosperity of the state."
As the currency rose in value he considered it proper that
the taxes should be lowered. 20 Nothing was done toward
lowering them. Again in 1829 Governor Edwards men-
tioned the oppressive rates of taxation, pointing out that
the people of the state were "already taxed to an extent
unparralled (sic) in any western state, and precisely eight
times as high as their brethren of an adjoining one (Ken-
tucky)." 21 The non-resident proprietors of lands seemed
to feel that the rates were very heavy, 22 and Governor Rey-
nolds in 1831 and 1832 urged a reduction of the tax rate
on the ground that it was "excessively high" and oppres-
sive to the people." 28
The sale of property for taxes is good evidence of the
oppressiveness of the burden; and the facts at hand seem
to show that an unusually large portion of taxable property
was sold under the sheriff's hammer during the later part
of this period. If the sums credited to "revenue clerks"
in the auditors' reports represent receipts from tax sales,
*S. /., 5 G. A., i Sess., p. 24.
21 ///. Hist. Coll., IV, 148 ; Governor's Message, 5\ /., 6 G. A., i Sess.,
"Governor Coles requested James Mason to inquire of some of the
non-resident landholders of New York City concerning their willingness
to lend financial support to the Illinois and Michigan Canal project.
Writing to Gov. Coles in 1826 concerning his conference, Mr. Mason said :
"I also had a conference with Mr. Benior and Mr. Munn who are two of
the largest holders of military bounty lands in the city, but their reply was
that they were very anxious to have a canal made but that they could not
do more at present than to pay the high taxes we had imposed on their
land." ///. Hist. Coll., IV, 107.
23 5-. /., 7 G. A., I Sess., p. 62.
68 HISTORY OP TAXATION IN ILLINOIS [G8
these sales were indeed very large. 24 Peck testified con-
cerning the military bounty lands, that "many thousand
quarter sections" were "sold by the state for taxes and are
past redemption." 25 It was reported in Nilcs Register that
as many as seven thousand tracts of these bounty lands
were advertised for sale for taxes at one time. 26 But high
as the rates seem to have been, compared with those of
states in a like economic condition, and oppressive as they
were considered both by the settlers and the non-resident
landowners, efforts to reduce the rates were uniformly
If one were to generalize concerning the success of
the tax system during these years from a fiscal point of
view he would necessarily conclude that it accomplished
measurably well the task which was assigned to it. The
deficit left from the territorial period was not large and
until the complications due to the banking disaster arose,
the condition of the treasury remained satisfactory. It
must be kept in mind that the tax system was in no way
responsible for the state bank. A severe test of the effi-
ciency of the system was averted during the thirties by the
practice of borrowing from the school funds, the aid from
these sources averting the necessity for heavier taxation.
The rates, at least after 1820, seem to have been higher
than those in neighboring states ; but it is difficult to deter-
mine exactly how just were the complaints so generally
The success from an administrative point of view is
a different story. The task of assessing and collecting the
tax was not an easy one. In the first place the frontier
conditions which prevailed were themselves sources of
many difficulties. The poor means of transportation meant
numberless delays in transmitting money to the state treas-
2 *Cf. supra, p. 63.
25 Peck, op. cit., p. 81.
Niles Register, XXIX, 165, Nov. 12, 1825.
27 C/. supra, p. 67.
69] EFFICIENCY OF THE TAX SYSTEM 69
ury. 28 The frequent changes in county lines due to the
sub-division of large counties into smaller ones were pro-
lific causes of misunderstanding as to the duty of tax offi-
cials. 29 But perhaps nothing was so productive of admin-
istrative difficulties as the disordered condition of the cur-
rency. Money was always either scarce or bad. As Governor
Edwards pointed out in his message of 1826, "In nothing
can the want of an adequate circulating medium be more
inconveniently felt than in the payment of taxes." 30 Even
the session laws contain evidence of the troubles due to this
cause. 31 After the establishment of the state bank in 1.821,
its notes were receivable at the state treasury for taxes. 32
The inequality in the value of the various kinds of money
in circulation, combined with the fact that many unpaid
auditor's warrants were in existence during almost the en-
tire period, presented an opportunity to sheriffs to manipu-
late their collections so as to turn them into the treasury
in the cheapest acceptable form. Sheriffs took advantage
of this situation to such an extent that laws forbidding the
practice were 33 passed. The frequency with which laws
were changed and the carelessness with which they were
drawn formed further obstacles to efficient administra-
. L. 1819, P. 239.
29 cy. L. 1824-25, P . 85.
*S. /., 5 G. A., I Sess., p. 47-
31 For example, in 1819 (L. 1819, p. 300) the sheriff of Union County
was relieved of the penalty for delay in paying in his taxes, owing to
the fact, as he explained, that the description of money required was
"scarce and very difficult to procure." At this time the taxes had to be
paid in money which was receivable at the United States land offices in
payment of government land. Bank notes in circulation varied so widely
in short periods that they sometimes caused trouble to collectors ; those
good one month were often bad the next. Thus relief was given to a
sheriff in 1819 (L. 1819, p. 235) because, although he had collected the
taxes in lawful money, he found that by the time he came to turn over
his taxes some of the bank notes were no longer receivable at the gov-
ernment land offices, and were therefore refused by the state treasurer.
82 L. 1823, p. 208; L. 1827, p. 335-
S3 5 > . /., 5 G. A., i Sess., pp. 25, 74 ; R. L. 1826-27, p. 325 et seq.
70 HISTORY OF TAXATION IN ILLINOIS [70
tion. 34 Officials were often uncertain as to exactly what
laws were in force. 35
From the evidence available, it would seem that the
state and local officials whose duty it was to administer
the tax system were remarkable neither for their ability
nor for their character. During these years two state
treasurers were found to be short in their accounts, Treas-
urer Field having defaulted, according to a report dated
Nov. 30, 1828, to the amount of $19,491.70, and Treasurer
Hall, on December 1, 1832, for $4,503.72. Subsequently
$5,500.06 was received from Field and his securities and
$2,922.16 from the estate of Hall in part payment of their
From the following quotation Governor Edwards seems
to have entertained no flattering opinion of the efficiency
with which the revenue system was administered: 37
From the complexity of our revenue system, and the confusion that
reigns in the accounting department, it is not thought possible, by any
lights which the accounts of the latter will afford, to ascertain the amount
of those (taxes) that were demandable, even, for the past year: Since,
without any effort to discover the extent of that confusion, it has become
notorious, throughout the state, that, while many persons have been
charged in the Auditor's books for lands, that did not belong to them ;
and our own citizens with taxes, which either had been previously paid,
or were payable to Sheriffs' or County Collectors, other tracts of land
owing taxes have neither been charged by him, nor included in the lists
he was required to transmit to the several counties in which the taxes on
them were collectable.
34 Ford, op. cit., p. 32.
88 In 1817, in several of the counties no tax was collected because of
difficulties which arose over unclear changes in the law. L. 1817-18, pp.
51-52. In 1821 it was discovered that no provision had been made in the
revenue law for the compensation of the sheriffs for collecting the taxes
in 1819 and 1820. But this legislature contended itself with simply voting
the sheriffs their compensation (L. 1820-21, pp. 4-6), and failed to remedy
the matter permanently by changing the revenue law. As a result it was
found presently that no compensation had been allowed for the sheriffs
in 1821-22 and further action was necessary. (L. 1823, p. 80).
38 Reports of auditor and treasurer ; Pr. L. 1832-33, p. 123. More-
over, the governors' letter-books show that Gov. Edwards appeared to
have considerable difficulty with the auditor in securing reports from him
in regard to the affairs of his office. ///. Hist. Coll. IV, p. 118 et seq.
37 S. J., 5 G. A., i Sess., p. 49.
71] EFFICIENCY OF THE TAX SYSTEM 71
Moreover, from the same message of Governor Ed-
wards, 38 it is evident that some of the state officials had
been using their positions to benefit from the sales of land
Evidences of corruption and inefficiency among local
officials are even more manifest in the records than is the
case with state officials. Early experience with county
sheriffs led to the inclusion in the state constitution of the
following clause: "No sheriff, nor collector of public
moneys, shall be eligible to any office in the state, until they
have paid over according to law, all moneys which they may
have collected by virtue of their respective offices." 39 Rec-
ords of several instances where sheriffs ran away with pub-
lic money were found in the course of an examination of the
session laws. 40
Governor Ford gives a description of some of the prac-
tices of these early sheriffs which is very illuminating to
one who seeks a view of the administrative conditions of
the period :
During all this time, from 1818 to 1830, a very large number
of sheriffs elected by the people were defaulters to the State or
to counties for taxes, or to individuals for money collected on execution
The practice was to take the moneys collected on execution and with them
to pay up for taxes, for without getting certificates of all moneys charged
to them for taxes, the sheriffs were not allowed to be commissioned when
re-elected. The people generally felt but little interest in the collection of
moneys for debt, and paying it over, so that a defalcation here was not
apt to injure the popularity of an officer, who would tend [probably
lend] the people money to pay their taxes, and who was compelled by his
official duty to be constantly around among them, giving him ample op-
portunity to make friends, contradict charges, and thus secure his
* 9 R. L. 1833, p. 47. Cf. L. 1819, p. 109 and R. L. 1826-27, p. 374. The
letters of the governors show that a provision of this sort was needed and
that an earnest attempt was made to enforce it. ///. Hist. Coll., IV., p. 15.
40 Those who had acted as securities for the sheriff of Gallatin County
in 1824-25 were forced to make good short-comings of that official. Pr.
L. 1832-33, p. 120. A law passed in 1821 makes it evident that the sheriff
of Jefferson County had absconded (L. 1820-21, p. 29), the act making pro-
vision for the election of his successor.
41 Ford, op. cit., p. 82. A law passed in 1827, (R. L. 1826-27, p. 372),
contains a provision which permits those who have advanced money for
72 HISTORY OF TAXATION IX ILLINOIS [72
In view of all these difficulties it is not surprising that
the administrative machinery should run with a great deal
of friction. The session laws of every legislature are full
of evidence that such was the case. Taxes were not col-
lected on time ; tax officials were not appointed at the times
required by law; assessments were made too early or too
late. Indeed, the machinery seems to have been stalled at
one time or another in about every place where trouble
could have occurred.
Even as early as 1809, when Illinois was first organ-
ized as a territory, there were already irregularities in the
tax collections. It appears from a law passed in that year
that the former sheriff of Randolph County had "neglected
to collect all the county levies." 42 He was given six months
to collect what was due him. In this same year it was
necessary to allow extra time for assessment purposes in
Randolph County. 43
Striking evidence of the inefficiency of the administra-
tion is furnished by the high percentage of the taxes which
were never collected. The extracts from Moses and Rey-
nolds, quoted in the note on page 60, agree that almost half
of the taxes due were not collected in the early years of the
territorial period. In 1813, in two counties, the assessors
were not appointed until after the time when the returns
of the assessment lists should have been made. In one
county no assessors were appointed at all, and in another
county, for no assigned reason, the assessment was not
made. 44 Laws passed in 1816 extended the time for the
collection of the taxes in two counties, because of tardiness
on the part of the assessors in preparing the tax list, ancl
the time was extended in one county because the tax list
had been refused by the commissioner's court on the ground
that it had been made out prior to the time specified by
any tax payer to make collections after the expiration of their terms of
office. Thus at least part of the practice which Ford describes was recog-
nized by the legislature.
L. Terr. ///., p. 5.
**Act Approved Dec. I, 1813. Manuscript in office of secretary of
73] EFFICIENCY OF THE TAX SYSTEM 73
law. 45 In 1819 it developed that in one county no taxes
had been collected for the preceding three years. 46 In
another county the taxes for 1818 remained uncollected 47 ,
on account of the neglect of the county court to levy the
taxes in accordance with the provisions of the law. 48 In
1821, in 1823, and indeed at practically every session there-
after, it was necessary to pass acts extending the time limit
for paying over the taxes. 49 As late as 1835 the taxes for
1833 had not been collected in Fulton county, and those for
1829 had not been collected in St. Clair county. 50 Irregu-
larities in assessment are also apparent from numerous
Thus it appears that it was in spite of crudely drawn
statutes and loose administrative methods that the general
property tax in Illinois reached the degree of financial suc-
cess which it attained. The chief explanation of its measure
of success is to be found in the simplicity of the economic
situation. Practically all the property worth taxing was
tangible, and unconcealable. Part of the explanation is
doubtless the lightness of the tax ; for in spite of the com-
plaints of contemporaries the rates were quite low, com-
pared with present-day standards. Certainly the examina-
tion of this early period reveals little that would be of
comfort to those who feel that the general property tax
was until very recently an unqualified success. Even when
the great modern problem of intangible property was not
present to complicate the situation, the early history of
Illinois furnishes no picture of a general property tax
operating efficiently and economically. Even under simple
conditions, the tax system was far from ideal.
*&L. 1815-16, pp. 21, 30.
46 L. 1819, pp. 168, 266.
"Ibid., p. 164.
4S S. /., i G. A., 2 Sess., p. 25.
49 L. 1820-21, p. 19; L. 1824^25, p. 172; L. 1826, p. 58; R. L. 1826-27, p.
338; L. 1834-35, P- 72; L. 1836-37, P- 323-
5 L. 1834-35, PP. 38, 60.
"L. 1824-25, p. 80; R. L. 1826-27, p. 338.
C. THE DEBT-PAYMENT PERIOD, 1839-1872.
TAXATION FOR DEBT PAYMENT, 1839-1848
The State Debt and the Tax Problem.
The key to the development of taxation in Illinois dur-
ing the middle decades of the century is the state debt.
The story of the creation of this debt and of the struggle of
the state to rid itself of it is as interesting as it is impor-
tant. During the late thirties, the years of debt formation,
the course of events moved with startling rapidity. A
commonwealth which in 1835 was young and poor but
nevertheless respectable, suddenly developed an imagina-
tion, a daring and a recklessness in spending borrowed
money which in a few years worked its almost complete
ruin. In 1842, Illinois was a discredited state. Every
project which she had undertaken had gone to pieces. An
enormous load of interest-bearing indebtedness remained
as almost the sole evidence of the millions she had
The action during the years following does not move
so rapidly; they were the years of debt payment years
when every dollar which came to the state treasury found
not one but a thousand claims crying for settlement. The
young state had lived beyond her means ; her debts greatly
exceeded her assets. It was a serious question whether
even at a more mature age she would develop enough eco-
nomic strength to pay her obligations; some thought not.
How far her growing strength might be levied upon by
taxation was the vital question which had to be answered.
During the trying years of the forties the solution was
75] TAXATION FOR DEBT PAYMENT, 1839-1848 75
worked out. The burden which appeared overwhelming to
the state at twenty-three years of age seemed not unreason-
able during the late fifties and became a mere trifle toward
the end of the period.
The financial troubles of Illinois were due to banking
and internal improvement schemes. The actual loss due
to the banking ventures was inconsiderable compared with
that attributable to internal improvements. This was not
because the banking investment was a wise one, but rather
because the state was fortunate in the settlement with the
banks. Of the internal improvement schemes, the Illinois
and Michigan Canal, although a great financial problem
for a time, finally worked out its own salvation. Thus the
great "Scheme of Internal Improvements" must be held
responsible for the bulk of the debt.
Because of the incompleteness of the records and other
reasons, the estimates of the state debt given in various
places vary to an astonishing degree. In the following
statement an attempt is made to summarize the verifiable
facts as to the extent of the indebtedness in the early for-
ties before the resumption of interest payments. 1
(1) The banking liabilities of the state before the
settlement were (a) $2,665,000 in state bonds issued to the
bank for stock, some of which were sold on the market and
some not; (b) $335,592.32, borrowed from the School Fund
and paid on bank stock; (c) losses through depreciated
bank paper received for taxes after the banks had sus-
pended specie payments losses which cannot be accurately
estimated; and (d) a possible claim for $100,000 paid for
state bank stock, depending on the source from which the
money came. A minimum estimate would be $2,665,000,
not considering the money borrowed from the School Fund
a debt and disregarding all paper money losses. A maxi-
J Lack of space makes it impossible to give in this place a full state-
ment of the creation of the state debt and of the basis on which the
estimate given here is based. If present plans carry, the data will be
published soon in separate form.
76 HISTORY OP TAXATION IN ILLINOIS [76
mum which would cover all possible liabilities on account
of the banks would be $3,300,000.
(2) The canal liabilities were (a) bonded indebted-
ness estimated in reports when the trustees took charge at
$5,383,000, including the Wright and Company bonds and
therefore rightfully subject to a reduction of $722,000; (b)
miscellaneous indebtedness, including scrip, orders on the
commissioners etc., to the amount of $1,084,449; (c) inter-
est charges amounting to about a half-million dollars in
1842; (d) claims for damages to the extent of at least
$230,000; and (e) a share of the bonds lost through hy-
pothecation for interest prior to January 1, 1842, either
$150,000 or $400,000, according as the sum actually lost
or that of outstanding securities is taken as the basis of
estimate. Therefore $6,625,449 would be a very conserva-
tive estimate and $8,000,000 a liberal one.
(3) The liabilities on account of the General System
of Internal Improvements consisted of (a) the bonded
debt, $5,085,444 in 1842, but properly subject to a million
dollar reduction because of the Wright and Company
bonds; (b) scrip issued in 1840 and 1841, $1,424,585 ; 2 (c)
interest due January 1, 1842, approximately $250,000; (d)
a share of the bonds hypothecated for interest (see 2 e
above), $150,000 to $400,000. A minimum of about $5,-
909,829 is thus arrived at; $7,500,000 may be taken as a
(4) The bonds issued to build the state house
amounted to $128,000.
(5) Unpaid auditor's warrants and overdrafts on
December 1, 1842, amounted to $272,094.43.
(6) As a part of a maximum estimate of the state's
liability the $477,919.14 surplus revenue received from the
federal government might be included.
(7) The borrowings from the school funds might, like-
wise, be included in the maximum. In 1842 these
amounted to $808,084.18.
^Reports, 22 General Assembly, 1861, p. 414.
77] TAXATION FOR DEBT PAYMENT, 1839-1848 77
The estimates then stand as shown in Table 5.
ESTIMATES OF THE STATE DEBT AT THE TIME OF THE SUSPENSION
OF SPECIE PAYMENTS.
(1) Banks $2,665,000 $3,300,000
(2) Canal 6,625,000 8,000,000
(3) Internal Improvements 5,909,829 7,500,000
(4) State House 128,000 128,000
(5) Unpaid Warrants and Overdrafts 272,094 272,094
(6) Surplus Revenue 477,9 J 9
(7) School Funds 808,084
Totals $i 5,599,923 $20,486,097
Thus the state debt was somewhere between fifteen
and a half and twenty and a half millions; in the opinion
of the writer, probably nearer the second than the first
The magnitude of the financial problem of Illinois in
the early forties is difficult to comprehend. It is only
when one reads the contemporary documents the reports
of the state officials, the messages of the governors, the
reports of the legislative committees and the frantic press
letters of the citizens and investors that the gravity of
the situation is understood. A considerable part of the
total liability of the state was cancelled by means of favor-
able settlements with the banks and with the canal inter-
ests. A few additional assets of varying degrees of worth-
lessness were available; but after the fluster was over and
the dust had settled, the people had to face the necessity
of raising large sums of money year after year by disagree-
able methods of taxation. 3 The means by which the state
3 Such resources included "two mill seats on the Wabash River; fifty-
five miles of finished railroad; various commencements of other rail-
roads ; railroad iron ;" lands acquired in connection with the internal im-
provement enterprises (42,291.65 acres) ; lands selected under the act of
Congress of September 4, 1841 (209,060.05 acres) ; and sums of money
due the state ($730,500). Senate Journal, 13 G. A., i Sess., pp. 12, 37;
Auditor's Report, 1850, p. 20. The fifty-five miles of railroad referred
to extended from Springfield to the Illinois River, and had cost about
78 HISTORY OF TAXATION IX ILLINOIS [78
taxed itself back to financial respectability are now to be
It will be recalled that the primitive form of the
general property tax persisted until the late thirties, land
being valued by classification into rough groups, 4 and the
state sharing the proceeds with the counties. Under the
arrangement in force in 1838, the state received all the
taxes on the land belonging to non-residents. It will also
be remembered that, during the late years of the early
period, the solvency of the treasury was preserved by
generous borrowings from trust funds. Under the system
in force the state's share in the tax revenues grew propor-
tionately smaller, for the land was passing more and more
into the hands of residents; and yet the need for revenue
was rapidly increasing. The School Fund could not con-
tinue indefinitely to play the role of the fairy godmother
and the necessity presented itself of reforming the tax
system so as to bring more revenue into the state treasury. 5
Tax Law of 1839.
The tax system established in 1839 was in force when
the exaggerated financial plans of the legislators tumbled
down about their ears in the early forties. It must be
remembered that it was not planned to meet extraordinary
demands for revenue. At most it was to provide for cur-
rent expenses. The internal improvement schemes and the
banks were expected not only to take care of themselves but
also to bring in a profit which would perhaps make taxa-
tion entirely unnecessary. Instead of this happy result,
the tax system had to be relied upon during this period to
bear the entire burden. Revamped somewhat it was called
upon to meet the ordinary expenses of a rapidly developing
commonwealth, and, in addition, to pay off a staggering
one million dollars. In 1846 the governor recommended that it be offered
for what the iron would bring. Senate Reports, 15 G. A., I Sess., p 133;
Ford, History of Illinois, p. 189.
4 Supra, pp. 41, 43.
*S. /., ii G. A., i Sess., p. 13.
79] TAXATION FOR DEBT PAYMENT, 1839-1848 79
The state auditor seems to have been the first official
to point out that the land was getting into the hands of
residents and that a change in the law was therefore neces-
sary. "The period has arrived," he declared in December,
1838, "when an amendment to our revenue laws can be no
longer postponed." 6 The governor in his message sug-
gested a change in the rates, which he thought need not be
great since the amount of taxable land was "rapidly in-
creasing." 7 But, contended the auditor, the decrease of
revenue from the non-resident tax would "counterbalance
any accession" from lands becoming taxable for the first
However, the law which was passed in February,
1839, went far beyond a mere change in the rates. It
swept away entirely the old system of rough classification
as a means of valuing lands for taxation and specified that
both land and personal property should "be valued accord-
ing to the true value thereof." It broadened the definition
of taxable property and narrowed the exemptions. It
abandoned all distinctions between property taxable for
local purposes and property taxable for state purposes,
making the state and county rates apply to the same base.
Specifically, the law declares that
all lands, tenements, and hereditaments, situated in this state, claimed by
individuals, or bodies politic or corporate, except such lands as may be
owned by societies or corporations for the purpose of burying ground,
church grounds, and grounds for the use of literary institutions, not to
exceed ten acres, whether by deed, entry, patent, grant, bond for con-
veyance, or otherwise, except lands belonging to the United States, or this
state, and such other lands as are exempted from taxation by the terms
of the compact between this state and the United States, are hereby
declared subject to taxation; also the following personal property, vis:
stud horses, asses, jinnies, mules, horses, mares, cattle, slaves, and
servants of color, clocks, watches, carriages, wagons, carts, money actually
loaned, stock in trade, and all other description of personal property, of
the stock of incorporated companies; and so that every person shall pay
a tax in proportion to the value of the property he or she has in his or
her possession, the aforesaid property declared subject to taxation shall
be valued according to the true value thereof, as hereinafter directed. 8
S. /., ii G. A., i Sess., p. 52.
7 1 bid., p. 13.
8 L. 1838-39, p. 3 et seq.
80 HISTORY OF TAXATION IN ILLINOIS [80
It scarcely needs to be pointed out that in this law
is found, at last, almost the purest type of the general
property tax. It may be objected that instead of stating
baldly that all property should be subject to taxation, the
law specifies particular articles. But it will be noticed that
included in the list of taxable articles is a comprehensive
item taxing "all other description of personal property."
Certainly this law makes something of a shift in the point
of view; the tax is less a tax "on the thing" and more a
tax "on the person."
One of the new items specified in the list of taxable
property is that of "money actually loaned," the first in-
stance of the taxation of credits in Illinois. No arrange-
ment is supplied for deducting debts.
By making a departure from the older system of des-
ignating certain types of property as taxable for state
purposes and certain other types for local purposes, an
element of elasticity was introduced into the situation.
Now the state could increase or decrease its revenue by the
simple process of varying a single rate which would be
extended on all property. Before, it was necessary to effect
a general readjustment between local and state rates, or
to redistribute taxable property between the localities and
the state. The state rate was fixed in 1839 at twenty cents
on each one hundred dollars of taxable property. For
counties a maximum of fifty cents (one-half of one per
cent) was established.
The change instituted in the basis of assessment by
this same law makes very difficult any comparison of the
new rates with those in force before. This much of a com-
parison is possible, however. Assuming that the land
rated first class under the old arrangement had a fair cash
value of four dollars per acre the sum set in the early law
to be the value of such first class land the taxes under the
old arrangement amounted to two dollars for one hundred
acres, compared with a maximum of $2.80 under the new
(county taxes, two dollars; state tax, eighty cents). The
adoption of the new law resulted in an immediate aug-
81] TAXATION FOR DEBT PAYMENT, 1839-1848 81
mentation of the state revenues. The receipts from the
property tax in 1836-38 were approximately $90,000; for
the next biennium they amounted to over f 125,000.
A few of the administrative features of the new law
are also of interest. The tax officials, both assessors and
collectors, were appointed by the county commissioners'
courts. 9 The assessor was to be furnished annually with
lists of lands; 10 he was then to call upon each property
owner, value his land, and assess his personal property.
He was authorized to require any person to swear to make
"true and distinct answers" to all questions. If the person
was not at home, the assessor made an estimate which stood
unless complaint was made. Refusal to list rendered the
person liable to an arbitrary assessment and a fifty dollar
fine. In case of dissatisfaction, an appeal could be made
to the county commissioner's court; no other review or
equalization was provided. Collections were to be made
by means of personal calls at the residences of property
owners. Personal property was first to be seized for unpaid
taxes, then real estate. The tax deed was to be given to
the person offering to exact as penalty the least number of
acres from the east side of the tract of land in question.
The redemption period remained unchanged ; land could be
reclaimed within two years upon payment of double tht*
amount for which the tract was sold plus subsequent taxes
with interest. 11 This period was more extended in the
case of minor heirs; it was indefinite when the land had
been forfeited to the state. Except for assistance from the
auditor in making up the land lists, there was no super-
vision or cooperation with the state authorities.
In the law of 1839 the property owners of the state
encountered something different from what they were
*Ibid., p. 3 et seq. The number of assessors might be one or more,
according to the original law. An amendment passed in 1841 restricted
the number to one. L. 1840-41, p. 34.
10 An amendment passed in 1839, directed the assessor to add lands
which he might discover to be missing. L. 1839-40, p. 4.
11 Six per cent by the original law; ten per cent in township counties by
an amendment. L. 1853, p. 81.
82 HISTORY OF TAXATION IN ILLINOIS [82
accustomed to in the earlier laws. The county taxation of
personal property under the system in force prior to this
time must have been extremely insignificant, for the at-
tempt to put the new law into effect aroused a storm of
protest. Both the auditor and the governor remark about
the hostility to the law. 12 Complaint was made particu-
larly about the "details'' of the law, probably referring to
personal visits of the assessor to value property. The rate
of taxation was also the cause of dissatisfaction. So strong
was the feeling that "some of the counties . . . resisted
it by a refusal to list their taxable property".! The gov-
ernor pointed out the absurdity of such an attitude; he
expressed his approval of the principle of the law, viz.,
"that each person should pay a tax in proportion to the
value of his property" ; describing some of the "details" as
"justly . . . objectionable," he recommended their modifi-
cation; and, finally, he pointed out the impossibility of
reducing taxes, "the present revenue not being sufficient to
defray the ordinary expenses of the State Government."
Indeed at this very time a joint committee of the two
houses of the legislature was considering the question of
raising still greater sums by taxation. Interest payments
on the state debt were becoming a very serious problem. 13
The committee declared it to be a "certainty that we must
ultimately resort to direct taxation to meet our liabilities" ;
but additional taxation was not a possibility at that par-
ticular time because the people were "not in a condition to
bear it." 14 The legislature responded with a few slight
administrative amendments, for the most part changes in
dates and fees. 15
About this time work was abandoned on the internal
improvement scheme and the struggle to raise money to
meet interest payments reached an acute point. 16
12 Aud. Kept., 1839, p. 12; Message of Governor Carlin, Dec. 10, 1839,
Senate and House Reports, 11 G. A., 2 Sess., p. 10.
13 $592,8oo was the amount annually accruing at this time. Aud. Rept.,
1839, p. 14.
14 S. J., ii G. A., 2 Sess., p. 145.
18 L. 1839-40, p. 3.
l *Ibid., p. 93.
83] TAXATION FOB DEBT PAYMENT, 1839-1848 83
The First Interest 'Tax.
The legislature which met late in 1840 authorized the
hypothecation of state bonds to pay interest an act which
greatly irritated the citizens of the state. 17 Governor
Carlin realized that the course adopted was a suicidal one
and "ere long must be abandoned. 18 It ought not to be
concealed that if the vast debt which has been incurred on
account of our internal improvements is ever to be paid,
it must be done through the medium of taxation." Know-
ing that the weight of the tax burden already imposed
precluded any increase in the tax rate, he made the clever
proposal that the state increase its revenues at the expense
of the counties. His suggestion was that the county maxi-
mum rate be reduced from fifty cents to twenty cents per
one hundred dollars of valuation and the state rate be
increased from twenty to twenty-five cents. By this plan
the total tax rate "would be reduced instead of increased
and the counties would still, with proper economy, be sup-
plied with means to meet all necessary expenditures."
But the governor's suggestion did not appear judicious
to the legislature. The course adopted included a fifty per
cent increase of the state rate, making it thirty cents, but
involved no deduction in the county rate. 19 The revenue
from the additional rate was to "be set apart exclusively
for the payment of interest on state indebtedness." This
act included another noteworthy provision, whose signifi-
cance may be variously construed. It provided that the
minimum valuation of lands for taxation should be three
dollars per acre and that each assessor should be required
to swear "particularly" that he would "in no instance value
any land at three dollars an acre, that he, in his conscience,
believes to be worth more." Of course this clause may be
merely an attempt to get more revenue from low class land
than was exactly just under the general principle of the
system in force. But the much more probable explanation
is that the legislators were very much alive to the fact that
"Niles' Register, LXI, 242 et seq.
16 Repts., 12 G. A., i Sess., p. 8.
19 L. 1840-41, p. 165. Minor changes in the administration of the sys-
tem were made by an act passed in February, 1841. Ibid., p. 34.
84 HISTORY OF TAXATION IN ILLINOIS [84
evils of undervaluation were in existence even during these
early years. 20
Although the necessity for heavy taxes was clearly
apparent, the difficulty of imposing them was equally evi-
dent. Governor Carlin, upon giving up his office late in
1842, included this paragraph in his parting message to
To increase the rate [of taxation] at the present time would be to
inflict general embarrassment and distress, and to impose upon the people
a burden which they could not possibly endure. Therefore I am forced
to the unpleasant and humiliating conviction, that you cannot from this
source [taxation], or any other at your command, make any permanent
provision for the payment of interest. 21
He recommended "going into liquidation, now, by
placing those lands, by legislative enactment, at the option
of the holders of our bonds."
The summary of conditions in the message of the in-
coming governor, Thomas Ford, was quite as gloomy. 22 He
showed (1) that the total taxable property of the state
amounted to less than seventy million dollars; (2) that the
state contained less than one hundred and twenty-five
thousand men between fifteen and fifty years of age; 23 (3)
that the tax rate was already heavy, being fifty cents for
county and thirty cents for state purposes; (4) that good
money was very scarce, probably not exceeding "double
the amount to be raised for taxation for a single year";
and finally, (5) that Illinois was in the agricultural stage
and not able to pay such high taxes as commercial and
industrial states. There was a bare possibility, he thought,
that "a most rigorous system of oppressive taxation would
yield a sum sufficient to pay interest for a single year. But
such a tax could not be repeated."
In view of these circumstances it seemed to the gov-
ernor that nothing remained to be done but to declare the
20 The law fixing this minimum valuation was repealed in 1849. L.
1849, i Sess., p. 124.
21 S\ /., 13 G. A., i Sess., p. 18.
28 The census figure for the total population in 1840 was 476,183.
Census of 1870, Population and Social Statistics, p. 23.
85] TAXATION FOR DEBT PAYMENT, 1839-1848 85
state a bankrupt. This he proceeded to do in the following
Thus we arrive at a conclusion of painful interest, that the state is
not in a condition to fulfill its solemn engagements. And however mor-
tifying it is to our pride, there is still one consolation, that it has been
produced by a want of ability and not by a want of inclination. The main
thing with which the world can justly reproach us is that we were vision-
ary and reckless : that without sober deliberation we rushed headlong
into ambitious schemes of public aggrandizement, which were not justi-
fiable by our resources. Nor are our original creditors free from reproach
on the same ground. They, as men of intelligence, sufficient for the
proper management of large capital, ought as well as ourselves, to have
seen our future want of ability and the constant catastrophe which our
common error has produced. 24
But messages to the legislature pointing out that
everyone concerned should have known better did little
toward relieving the condition. Moreover the situation
was particularly acute because of the economic depression
which developed and continued through 1843 and 1844.
Governor Carlin had announced late in 1842 that the ex-
pected increase in the amount of land becoming taxable
for the first time had been about counterbalanced by the
decrease in value of all property because of the bad times. 25
In December, 1844, Governor Ford complained that "for
the last two seasons the crops have not been so abundant
as usual" ; that high waters had destroyed much property ;
and, what is perhaps even more important, the people were
"oppressed with the apprehension of evil from the magni-
tude of the state debt." 26 The debt was a "continual source
of terror to the people. They have lived in the expectation
of oppressive taxes. ... It is a fact too notorious to be
concealed that nothing but the utter impossibility of sell-
2t S. ]., 13 G. A., i Sess., p. 38.
26 Ibid., p. 17. This decrease had taken place, it should be noted, in
spite of the law fixing the minimum valuation of land at three dollars per
29 S. Repts., 14 G. A., i Sess., p. 3 et seq. At this time the arrears of
state taxes amounted to $59,304, more than one-third the annual tax
86 HISTORY OF TAXATION IN ILLINOIS [86
ing real estate, prevents the rapid decrease of our num-
bers." 27 "Many would dispose of their property at a
considerable sacrifice with a view to emigration." 28 The
settlers in the northern tier of counties circulated petitions
praying Congress to change the boundary of the state so
as to include them within the limits of Wisconsin. 29 Im-
migration, it was declared in 1842, had almost ceased. 30
It is true that a census made in 1845 showed that in five
years the population had increased nearly forty per cent; 31
and that the regular decennial census showed that between
1840 and 1850 the increase had amounted to nearly eighty
per cent. But nevertheless these figures reveal a distinct
slowing up in the rate of increase, for during the preceding
decade, 1830-40, the population had increased two hundred
Although the outlook was dark and no one seemed to
know whence the necessary funds were to come, the people
as a whole were never quite willing to acknowledge that
the debt could not be paid. The faith of the majority in
the future of the state was great enough to silence the
repudiation talk of the minority. 3 * The legislators, early
in 1843, with an empty treasury, officially registered their
protest against repudiation in the following words:
Resolved .... That we fully recognize the legal and moral obligations
of discharging with punctuality, every debt contracted by any authority,
agent or agents of this state for a good and valuable consideration ; and
that the revenues and resources of the state shall be appropriated for that
purpose as soon as they can be made available without impoverishing and
oppressing the people. 33
One might well ask what more could they do. What
assets the state owned were unmarketable at the time. 34
27 Ibid., pp. 10, ii.
**S. /., 13 G. A., i Sess., p. 37-
*NilesT Register, LXI, 416.
*S. /., 13 G. A., i Sess., p. 37.
31 Ibid., 15 G. A., i Sess., p. 71.
"Governor Ford was firm in his attitude against repudiation. 5". /.,
13 G. A., i Sess., p. 36; Gerhard, Illinois As It Is, p. 105.
33 Joint Resolution, adopted Feb. 21, 1843. L. 1842-43, p. 335.
34 A report on Nov. n, 1844, shows that 17,624.97 acres of land had
been sold by that date. These sales produced only $65,031.27, and this
87] TAXATION FOR DEBT PAYMENT, 1839-1848 87
Negotiations were under way for a settlement with the
banks and for a loan for the completion of the canal. Noth-
ing more could be done than they did, viz. to declare their
intention of paying in full when able, and then to wait
until they should be able. This meant waiting until con-
ditions became such that large sums could be raised by
taxation and the assets of the state in the form of land
In September, 1842, state bank paper was outlawed
for tax payments. 35 As such paper was much depreciated,
this action, of course, had the effect of making tax collec-
tions much more difficult. In December, 1842, it was re-
ported that the people were "scarcely able to pay" in specie
the additional rate imposed for interest purposes. Sympa-
thizing with the tax payers in their struggles to meet their
payments and probably feeling that the burden was weigh-
ing even more heavily than had been intended, the legisla-
ture in February, 1843, decided to cut the tax rate for the
preceding year in half, making it fifteen cents instead of
thirty. 36 Any person who had already paid his taxes at
the thirty cent rate could substitute one-half the amount
in specie and receive back all he had paid in. Where the
taxes were yet uncollected they were to be paid only in
specie or in certain types of auditor's warrants. The state
rate for 1843 was made twenty cents, the normal tax under
the act of 1839. No special ten cent rate was levied for the
Interest Fund, the legislature suspending the law for 1842
and 1843. 37
The real purchasing power of the state revenue under
the fifteen cent rate, payable in specie, was probably fully
sum was in the form of internal improvement bonds and script. S. Repts.,
14 G. A., i Sess., p. 3 et seq.'; cf. Aud. Rept., 1844, p. xxiv.
35 The proclamation of the governor was reinforced by an act of the
legislature, passed February 23, 1843. L. 1842-43, p. 39. The state had in
its possession at this time $75,660 in the paper of the banks. Under the
authorization of the legislature the treasurer paid this out at fifty per
cent discount. Ibid., p. 231 ; Treasurer's Report, 1844, p. xxvii et seq.
36 L. 1842-43, p. 228.
87 /&u/., p. 231.
88 HISTORY OF TAXATION IN ILLINOIS [88
as great as a thirty cent rate, payable in paper. However,
this reduction, as well as the suspension of the ten cent
rate for the Interest Fund, had a very unfortunate effect
upon the canal creditors. Just at this time they were con-
sidering the proposition that they lend an additional
$1,600,000 to complete the canal, and before agreeing to
the proposal were merely awaiting from the state some
expression of willingness to submit to heavier taxation, if
necessary. 38 The agents of the state were seriously embar-
rassed in their efforts to float the loan because of this
purely nominal but very ill-timed reduction of the rate of
taxation. 39 The creditors insisted upon the restoration of
the interest tax, saying that until the legislature and the
people of the state "manifested some public regard to their
obligations," they felt themselves unable to furnish further
Changes in Tax Laws and the Canal Loan.
Various influences combined to bring about an in-
crease in the tax rate in 1845. The governor in his message
had pointed out that the state taxes were "three times less
than they are in the great and flourishing state of Ohio." 41
"It will be impossible," he said, "to raise money enough by
taxation to pay the entire interest ; still something may be
done." Mention is heard of petitions signed by large land-
holders praying for heavier taxation. "All classes" were
reported in favor of it. 42 The influence of the pending loan
C/. ibid., p. 54-
39 5. /., 14 G. A., i Sess., p. 13 ; S. Repts., 14 G. A., i Sess., p. 93.
Governor Ford urged that the rate be not reduced. ///. Hist. Coll., VII, 46.
*S. Repts., 14 G. A., i Sess., p. 93; J. W. Putnam, An Economic His-
tory of the Illinois and Michigan Canal (Reprinted from the Journal of
Political Economy, XVII), p. 291; Gerhard, op. cit., p. 104 et seq.
"S". /., 14 G. A., i Sess., p. 18.
* 2 Niles Register, LXVI, 340. One wonders, however, whether the
circulators of petitions were not the owners of the lands which would b
particuarly benefited by the completion of the canal and who would natu-
rally not be averse to assuming an additional tax, along with all the other
property owners of the state, in order to bring about this desirable
object. This was certainly the situation in Chicago, which was the source
of other such petitions during this period.
89] TAXATION FOR DEBT PAYMENT, 1839-1848 89
from the canal creditors was probably greater than any
other factor. At length the legislature agreed to the con-
ditions of the creditors, the loan being consummated in
1845, 43 and after a bitter struggle and many reconsidera-
tions, a law reimposing the interest tax w r as passed. 44
Resort was made in this contingency to the old plan of
Governor Carlin, advanced in 1840. The county tax was
scaled down ten cents and the state rate was raised that
amount for the year 1845. 45 This ten cent rate or one mill
tax, as it w r as more generally known, was to be increased
fifty per cent in 1846, viz. to fifteen cents or to one and one-
half mills, and was to continue indefinitely at that rate.
In 1845, moreover, the legislature took occasion to
repeal a law passed two years before which had modified
in quite a reactionary fashion some of the administrative
features of the act of 1839. 46 The act of 1843 had reverted
to the old plan of delegating the assessment to county
treasurers and collection to the sheriffs. 47 It had done
away w r ith the personal calls of the assessor, providing
instead that notices should be posted of the time when the
county treasurer would be present in each election district,
depending, as in earlier times, upon each property owner
* 3 ///. Hist. Coll., VII, Ixxvi.
"Ibid., p. Ixi.
* 5 L. 1844-45, p. 3 et seq. The general limitation on the county tax rate
was quite frequently negatived by special acts of the legislature which
empowered particular counties to increase their tax rate beyond the limit
for various purposes. Ibid., pp. 125, 126, 251.
46 Among the minor changes during these years were several con-
cerned with the pay of tax officials (L. 1842-43, p. 236; L. 1844-45, P- 23) ;
specifying the kinds of money receivable for taxes (L. 1842-43, pp. 39,
237) ; exempting land lying within the corporate limits of cities from
taxes for corporate purposes when not laid out in town lots (Ibid., p. 238) ;
exempting property used exclusively for educational purposes, including
land up to 160 acres (Ibid., p. 70) ; taxing Illinois and Michigan Canal
lands sold on credit, but restricting the lien to the interest in the land
paid for by the purchaser (L. 1844-45, P 42) ; exempting for five years
internal improvement land sold (L. 1842-43, p. 193) ; specifying in more
detail the procedure in connection with the sale of land for taxes (Ibid.,
p. 235, L. 1844-45, PP- n-13 et seq.).
* 7 L. 1842-43, p. 231.
90 HISTORY OF TAXATION IN ILLINOIS [90
to present himself at the designated time and give
an account of his taxable property. Moreover, it had
adopted a similar plan for collecting the taxes. The pen-
alties of the old law had been reenacted almost without
change. But the receipts from the general property tax
for 1842-44 showed a considerable decrease over those of
the preceding biennium, from approximately |280,000 to
$225,000. A number of factors were responsible for this
the change in the rates, the general depression in the state,
and, perhaps, the change in the assessment methods. At
any rate the legislature made haste to modify the assess-
ment methods prescribed in the law of 1843. It reestab-
lished the system of personal calls of assessors and collect-
ors. It did not, however, restore the former method of
choosing these officials; the treasurers and the sheriffs
were to continue to assess and collect the taxes as under
the law of 1843.
The new act frankly makes the law general. "All
property," reads the first section, "real and personal within
the state, shall be liable to taxation." 48 The usual exemp-
tions are enumerated, the list closely approximating that
of the law of 1839. Real property was defined so as to
include not only lands but also buildings and improve-
ments. Personal property was made to embrace every
species of property not included in the description of real
But even with the banking and canal indebtedness
provided for and with a mill and a half interest tax in
effect, the state was yet in an extremely uncomfortable
position in regard to the state debt. By December 1, 1846,
the new interest tax had produced only $62,024.33. But
the yield for the following biennium was much more sub-
stantial, amounting to $234,943.92. 49 However, such sums
as these were far from sufficient to meet the accruing
interest charges and of course could contribute nothing
toward paying off the overdue interest or toward discharg-
ing the principal of the debt.
48 L. 1844-45, P- 3 et seq.
49 Aud. Kept. 1846, p. ii; ibid., 1848, p. v.
91] TAXATION FOR DEBT PAYMENT, 1839-1848 91
On the other hand, in 1846, the general outlook had
begun to brighten. The balance against the treasury
had been reduced to a relatively insignificant amount,
$31,000, and as a result, auditor's warrants, which had
passed at a fifty per cent discount, rose to seventy-five per
cent in 1844 and to par in 1846. 50 As soon as it became
evident that repudiation would not be resorted to, there
was a favorable reaction in the market price of state bonds.
Quoted at from 14 to 18 late in 1842, they began to in-
crease rapidly in value. 51 Moreover, there had been a
marked increase in land sales. From April 1, 1844, to
December 1, 1846, 91,629.30 acres of land were sold land
which had been purchased by the -state in connection with
the internal improvement enterprise and $379,721.44 had
been realized from the sales. 52 The figures for the two
years ending December 1, 1848, however, show a decided
slump, only 15,212.42 acres being sold, the receipts being
The question of increasing the rate of taxation con-
tinued to agitate the state. Governor French, late in 1846,
declared that he did "not feel called upon to recommend
any increase." 54 What should first be done was to refund
the debt, "preparatory to a more united and vigorous exer-
tion for its payment." 53 The debt was in a most confused
state. No accurate record existed of the classes, numbers,
and descriptions of the outstanding bonds, so that it was
impossible to determine the precise amounts of the indebt-
edness of the state, its character, and the date of payment.
The legislature responded by supplying the governor with
proper authority to treat with the creditors in regard to
the matter. 56
50 Aud. Kept., 1844, p. 23, S. Repts., 15 G. A., i Sess., p. 2.
Aud. Kept., 1844, p. 24 ; H. /., 14 G. A., i Sess., p. 12.
* 2 Aud. Kept., 1846, p. 37.
Ibid., 1848, p. 12.
"S. Repts., 15 G. A., i Sess., p. 15.
55 L. 1846-47, P. 161.
M Ibid., pp. 161, 167.
92 HISTORY OF TAXATION IN ILLINOIS [92
Among the projects brought forward as a means for
raising additional revenue was a proposal to establish a
poll tax. But it seemed wise to the legislature to throw
the onus of such a measure upon the constitutional conven-
tion, whose delegates were about to be chosen. 57 Moreover,
all the more important measures in taxation seem to have
been held in abeyance until the results of the constitutional
convention should become known. The regular fifteen cent
interest tax, the twenty cent state revenue tax, and the
forty cent county tax were levied in 1846, 1847, and 1848.
In addition a two cent tax was levied in 1847 and 1848 for
the insane hospital. 58
"Ibid., p. 33-
58 Several changes of relatively slight importance were made in 1847.
United States lands, Congress having given permission, were made
taxable as soon as sold, thus removing a cause which had occasioned
great dissatisfaction in earlier years. Supra, p. 31 ; L. 1846-47, p. 83.
An appeal to the circuit court was" provided for property owners who
were dissatisfied with the decision of the county commissioner's court as
to the correctness of their assessment. Ibid., p. 80. The penalty upon
sheriffs for delay in turning over tax collections was also reduced. Ibid.,
TAXATION FOR DEBT PAYMENT (CONTINUED), 1848-1872
The Constitution of
The convention which framed the constitution of
1848 had as its main concern the formation of a plan for
paying off the state debt. The instrument which they pre-
sented for ratification after their deliberations has been
characterized by Governor Palmer as "the expression of
the determination of the people of that day to meet every
obligation, and to practice the most rigid economy, until
the claims of the public creditors were placed in a condi-
tion that would satisfy them." 1 The new constitution
made sure of two things : first, that the public credit should
not be further abused, and, second, that something should
be paid every year upon the principal of the state indebt-
Of least importance, perhaps, were the provisions for-
bidding the state to borrow money provisions passed
after its credit had been destroyed. The door of the empty
treasury was locked by the following clause :
No other debt [beyond a $50,000 bond issue to meet casual deficits or
failures in revenues] except for the purpose of repelling invasion, sup-
pressing insurrection, or defending the state in case of war . . . shall be
contracted, unless the law authorizing the same shall, at a general elec-
tion, have been submitted to the people, and have received a majority of
all the votes cast for members of the General Assembly at such election.
Moreover, provision for the payment of interest was re-
quired to be made at the time of the authorization of the
loan. 2 Another paragraph specifics that "the credit of the
state shall not, in any manner, be given to, or in aid of,
any individual, association, or corporation." 3 No state
bank was to be created and the state was not to be liable
^Senate Journal, 27 G. A., i Sess., p. 13.
Constitution of 1848, Art. Ill, 37 ; L. 1849, I Sess., p. 3 et seq.
3 Art. Ill, 38.
94 HISTORY OF TAXATION IN ILLINOIS [94
for any stock in any corporation or joint stock association
organized for banking purposes. 4 The legislature was
urged to encourage internal improvements, but only by
the innocuous method of "passing liberal laws of incorpo-
ration for that purpose" ! 5
The clause which arouses the greatest interest is that
imposing a twenty cent tax for the repaj'ment of the prin-
cipal of the internal improvement loan. It reads:
There shall be annually assessed and collected, in the same manner as
other state revenue may be assessed and collected, a tax of two mills on
each dollar's worth of taxable property, in addition to all other taxes, to
be applied as follows, to wit : the fund so created shall be left separate,
and shall annually on the first day of January, be apportioned and paid
over pro rata upon all such state indebtedness other than the canal and
school indebtedness, as may for that purpose be presented by the holders
of the same, to be entered as credits upon, and to that extent in extin-
guishment of the principal of such indebtedness. 6
In this manner the people bound themselves by a con-
stitutional clause, the strongest bond possible for them to
weld, to tax themselves a substantial amount for the pur-
pose of paying off the principal of the state debt.
There was a movement in the convention in favor of
fixing a maximum rate of taxation. The committee of
revenue was by resolution "instructed to inquire into the
expediency" of such a plan. But the committee, after
some delay, requested to be discharged from the further
consideration of the matter, and the constitution went to
the people with no restrictions upon the power of the leg-
islature to raise money by taxation. 7
The constitution permitted the levy of a poll tax of
from fifty cents to a dollar upon each able bodied, free,
white, male inhabitant between the ages of twenty-one and
sixty years. 8 The proposal for a poll tax as first made in
the constitutional convention, was quite different from that
finally adopted. As first reported from the revenue com-
4 Art. X, 3.
7 Journal of the Convention of 1847 (Springfield, 1847), pp. 88, 97.
Art. IX, I.
95] TAXATION FOR DEBT PAYMENT,, 1848-1872 95
mittee it was to be a compulsory levy for the specific ob-
ject of paying interest on the sums borrowed from the
School, College, and Seminary Funds. 9 As finally passed,
the clause permitted, but did not direct the legislature to
levy the tax and it specified no particular object as the
Of great interest, also, from the point of view of this
study, are the provisions regulating the general system of
taxation. The property tax was prescribed in the follow-
The General Assembly shall provide for levying a tax by valuation, so
that every person and corporation shall pay a tax in proportion to the
value of his or her property ; such value to be ascertained by some person
or persons elected or appointed in such manner as the General Assembly
shall direct and not otherwise; but the General Assembly shall have
power to tax peddlers, auctioneers, brokers, hawkers, merchants, commis-
sion merchants, showmen, jugglers, inn-keepers, grocery keepers, toll
bridges and ferries, and persons using and exercising franchises and
privileges, in such manner as they shall from time to time direct. 10
This clause marks no distinct departure from the theory
of the system already in force, with the single exception of
its clash with the minimum valuation law of 1841. 11
Property of the state and counties was specifically ex-
empted from taxation but the right to make such other
exemptions as might be desirable for school, religious, or
charitable purposes was delegated to the legislature.
Nothing more of importance from this point of view
was contained in the instrument except a clause providing
for certain formalities before granting clear titles to hold-
ers of tax titles and another regulating local taxation,
which required "that all the property within the limits of
municipal corporations, belonging to individuals," should
be taxed "for the payment of debts contracted under au-
thority of law." 12
In submitting the result of its labors for ratification,
the convention presented an "address to the people," ex-
9 Journal of the Convention of 1847, pp. 79, 412-414.
10 Art. IX, 2.
11 Supra, p. 83.
12 Art. IX, 5.
96 HISTORY OF TAXATION IN ILLINOIS [96
plaining the plan for debt payment as embodied in the
new constitution. 13 In nineteen years, the two mill
(twenty cent) tax provided for in the new constitution
would yield enough to pay the principal of the debt, except
for about $50,000. The principal amounted to $6,24p,380,
it was estimated, exclusive, of course, of canal indebted-
ness. The plan contemplated not only paying off the
indebtedness before it became due but also paying it off
before catching up on back interest payments, and even
before making sure that current interest charges would be
met. Already there was unpaid accrued interest to the
amount of $2,248,372, and this amount would increase to
$6,559,916 during the nineteen year period. To meet inter-
est charges, there would be available about three-fifths of
the income from the fifteen cent (one and one-half mill)
interest tax which had been levied since 1846, and which,
it was proposed, would continue to be levied. 14 Receipts
from this source, it was frankly recognized, would not be
sufficient to take care of all the interest charges, but what
would be unpaid at the end of nineteen years ($3,775,316,
it was estimated,) together with the unpaid principal
($51,380) could be cleared off by six years more of taxa-
tion at the same rates. "All this, too," urged the address,
could be accomplished "without materially increasing our
burdens, when viewed in connection with the proposed
reduction of state expenses." 15
The constitution was adopted "with a unanimity of
sentiment scarcely paralleled." 16 The two mill tax was
submitted separately and adopted by ten thousand ma-
But the enthusiasm of the people for the new consti-
tion was not shared by the bond holders. "You can
scarcely conceive of the feeling that exists in relation to
"Merchant's Magazine, XX, 86.
"The other two-fifths of the tax was necessary to meet interest
charges on canal indebtedness.
16 Loc. cit.
S. /., 16 G. A., i Sess., p. 7.
"Gerhard, Illinois As It Is, p. 132.
97] TAXATION FOR DEBT PAYMENT, 1848-1872 97
the two mill tax provided for in the constitution," wrote
Julius Wadsworth, agent for refunding the state debt,
from New York, in December, 1848. "Many openly de-
nounce it as a species of repudiation." Strong objection
was made to "the gradual reduction of the principal, leav-
ing the accruing interest unpaid for." 18 Moreover, he
complained that from his point of view the law was im-
practicable, for to pay to each bondholder his share of the
amount which might be collected annually, would necessi-
tate calling in all the certificates each year and issuing
new ones in their place for the amounts to which the bonds
had been reduced by the payment. He urged that the pro-
ceeds of the two mill tax be made applicable to interest.
In spite of the creditors' clamor, a law was passed in
1849 carrying the two mill tax clause of the constitution
into effect. 19 But soon after, the legislature proposed a
constitutional amendment which was expected to meet the
difficulty; the revenue from the tax, instead of being ap-
plied each year in driblets to paying off the debt, was to
go to a sinking fund which might be used to discharge the
indebtedness as it became due. 20 Strange to say, when
finally this very reasonable amendment was voted upon by
the people in 1852, it was lost. 21
The tax code of Illinois was destined soon to adjust
itself into the form set by the constitution of 1848. Within
a few years the necessary modifications were made and,
moreover, the revenue code came to bear a remarkable re-
semblance to the present law. In mere matters of phras-
ing as well as in the more fundamental respects, the stat-
utes as they stand to-day have much in common with those
of the early fifties.
As soon as the new constitution was adopted, an im-
mediate necessity confronted the legislature of adapting
the law to its provisions. 22 So serious did the necessary
18 ///. Hist. Coll., VII, 294, 295.
19 L. 1849, i Sess., pp. 126, 127.
20 L. 1849, 2 Sess., p. 54; L. 1851, pp. 107-09.
21 Gov. Mess., S\ /., 18 G. A., i Sess., pp. n, 12.
22 S\ /., 16 G. A., i Sess., p. 8.
98 HISTORY OF TAXATION IN ILLINOIS [98
changes appear to the governor that he included them
among his reasons for calling a special session of the legis-
It is true that the minimum valuation law of 1842,
which specified that no land in the state should be assessed
at less than three dollars an acre a provision in direct
conflict with the valuation requirement of the new consti-
tution had already been repealed. 24 But a complication
had been introduced by the constitutional clause authoriz-
ing the township form of government. It was made op-
tional whether a county should retain its old form of
organization or should adopt the township system. Some
thirty counties immediately adopted the new system;
others retained the old. 25 This practically necessitated
two revenue systems, one adapted to each form of govern-
ment. Here is the beginning of the dual system in Illinois
which is in large part responsible for the complexity of
the statutes of that state.
The township organization act as passed in 1849 took
the management of most fiscal affairs in such counties out
of the hands of the county court, 26 and vested it in town-
ship officers. A new bit of machinery was introduced by
this law in its provision for the review and equalization of
assessments. The assessor was to give notice of a time
when he should consider complaints, and on an affidavit
of a property holder that the value of his personal property
did not exceed a certain amount, the assessment was to be
reduced to that figure. Two years later the review was
transferred to a board which included, besides the assessor,
the town clerk and the supervisor. Valuation of real
property might be modified in cases where a majority of
the board deemed it advisable. 27 The law of 1849, more-
over, provided for an equalization of the township assess-
ments by the county board composed of the supervisors of
28 //. /., 16 G. A., 2 Sess., p. 8.
24 Supra, p. 83; L. 1849, p. 124.
2S Aud. Reft. 1850, p. 25.
26 L. 1849, i Sess., p. 190 et seq.
"L. 1851, p. 57-
99] TAXATION FOR DEBT PAYMENT, 1848-1872 99
all the townships included within the limits of the county.
It was a function of this board to make the valuations in
one town bear a just relation to those in other towns. In
its manipulations the board was not permitted to reduce
the aggregate valuations of all the towns below the origi-
nal aggregate. 28
Both assessors and collectors were to be elected at the
town meeting. 29 The county treasurer was to assume the
duties formerly borne by the sheriff in connection with the
collection of delinquent taxes.
Probably as part of the new plan of economy, a law
of 1849 forbade the county clerks to make out new lists of
taxable lands each year, unless specifically ordered to do
so by the county court. Ordinarily they were merely to
add new items to the old lists. 30
But these changes were more or less hastily made and
considerable confusion resulted when they were put into
operation. 31 It was evident that the tax code needed a
thorough overhauling. Slight modifications were made in
1851, 32 but the task of completely revising the code was
postponed. Meanwhile the auditor was asked to prepare
a model revenue bill. He presented such a measure to the
legislature in 1852, 33 and in 1853 a code was adopted which
remained on the statute books for fifteen years without a
single amendment of consequence.
The Revenue Code of 1853.
The new revenue measure of 1853 encountered strong
opposition in the General Assembly. A great hue and cry
was raised because the new law required "all property to
28 L. 1849, i Sess., p. 207 et seq.
30 Ibid., p. 124.
^Aud. Kept. 1850, p. 25.
32 Closer cooperation was provided between the state and the town-
ship authorities. L. 1851, p. 58. Inspired, evidently, by a belated pang
of conscience, the state made the notes and bills of the State Bank of
Illinois receivable at the treasury and offered to pay two per cent interest
on them. Ibid., p. 120.
33 Aud. Kept. 1852, p. 5.
100 HISTORY OF TAXATION IN ILLINOIS [100
be assessed at its true value in money." 34 This seems very
strange in view of the constitutional requirement and the
act of 1849 repealing the minimum valuation law of the
early forties. The only explanation is that the tax payers,
even at this early date, had become so accustomed to con-
siderable undervaluations that any other condition seemed
unnatural and unfair.
The new code was dual in form, distinct acts applying
to township and to non-township counties. Naturally
enough the first section, specifying the property to be
taxed, was the same in each act. It reads: 35
That all property, whether real or personal, in this state ; all moneys,
credits, investments in bonds, stocks, joint-stock companies, or otherwise,
of persons residing in this state, or used or controlled by persons resid-
ing within this state ; the property of corporations now existing or here-
after created, and the property of all banks, or banking companies, now
existing or hereafter created, and of all bankers and brokers, except such
property as is hereinafter expressly exempted, shall be subject to taxa-
tion ; and such property, moneys, credits, investments in bonds, stocks,
joint-stock companies or otherwise, or the value thereof, shall be entered
on the list of taxable property, for that purpose, in the manner prescribed
in this act.
Real estate was so defined as to include buildings and
improvements. Under "personal property" was to be
listed "every tangible thing, being the subject of ow,ner-
ship, whether animate or inanimate, other than money and
not forming part or parcel of real property." "Money"
included bank deposits and cash on hand. "Credits" were
every claim or demand for money, labor, or other valuable thing, due or
to become due, or every annuity or sum of money receivable at stated
periods, and all money invested in property of any kind which is secured
by deed, mortgage, or otherwise, which the person holding such deed,
or mortgage, or evidence of claim, is bound by any lease, contract or
agreement, to reconvey, release, or assign, upon the payment of any
specific sum or sums.
Pensions, which would fall naturally under this definition,
were exempted from taxation.
**Ibid., 1854, P- 5-
88 L. 1853, PP. 3, 35-
101] TAXATION FOR DEBT PAYMENT, 1848-1872 101
The law includes the following paragraph intended
to eliminate double taxation :
No person shall be required to list a greater portion of any credits
than he believes will be received or can be collected; nor any greater
portion of any obligation given to secure the payment of rent, than the
amount that shall have accrued on the lease, and shall remain unpaid at
the time of such listing. No person shall be required to include in his
statement, as a part of the personal property, moneys, credits, invest-
ments in bonds, stocks, joint-stock companies, or otherwise, which he is
required to list, any share or portion of the capital stock or property of
any company or corporation which is required to list or return its capital
and property for taxation in this state. . . .
More liberal reductions were allowed for debts than
are permitted at present. In making up the item of
moneys and credits, the property owner was permitted to
deduct all his bana fide debts, 36 with the qualification that
no deduction would be allowed
on account of any bond, note, or obligation of any kind, given to any
mutual insurance company, nor on account of any unpaid subscription to
any religious, literary, scientific, or charitable institution, or society; nor
on account of any subscription to or installment payable on the capital
stock of any company, whether incorporated or unincorporated.
Foreign Insurance companies were taxed at the regu-
lar rates for both state and local purposes upon their gross
receipts in the state.
Merchants were assessed on the average value of their
stock during the preceding year, manufacturers on the
average value of their materials.
The following peculiar and indefinite provision was
included to govern the question of allowance for debts:
Provided that from the value of any property, being a product of this state,
the merchant or manufacturer listing the same shall be entitled to deduct
the amount owing by him for such property, or for moneys invested
therein; And, provided further, that from the value of property, being
the product or stock of this state, the farmer or dealer listing the same
shall be entitled to deduct the amount owing by him for such property,
pr for moneys invested therein.
The exemptions included the usual items of property de-
voted to educational, charitable, and burial purposes, of
property belonging to the state etc.
38 This provision did not apply to banking companies.
102 HISTORY OF TAXATION IN ILLINOIS [102
Property was to be assessed "at its true value in
money, excluding the value of crops growing thereon/'
"But the price for which property would sell at a forced
sale" was not to be taken as the criterion of such value.
The most interesting change in the plan for assessing
property was the introduction of biennial assessments of
real estate. Before this time all property was assessed
annually, except in so far as this practice was interfered
with by the act of 1849. 37 Under the new law (1853) per-
sonal property was valued each year but real estate only
every other year. 38 This change seems to have been first
suggested by the auditor in his report for 1850. 39
The listing of personal property was secured by the
circulation of tax lists. Each property owner was com-
pelled to sign a statement of his personal property, item-
ized under fourteen heads. Strangely enough, no oath was
required. The reason that no such requirement was in-
cluded becomes apparent when one reads the auditor's re-
port for 1854. After commenting upon the difficulty expe-
rienced in ascertaining the value of moneys and credits,
where "correct information" lay "solely within the knowl-
edge of the owners or persons controlling" the property,
the auditor suggested that it might be necessary to require
that such property be returned under oath. But his mis-
givings in regard to such a course found expression in these
words : "It must be remembered, however, to what a great
extent the security of property and the protection of char-
acter and life depend upon the sanctity of the oath; for
this reason I am not disposed to require oaths to be admin-
tered to parties on matters where they are directly and
personally interested, if it can be avoided." 40 Later expe-
rience has shown that the dangers mentioned are need-
zl Supra, p. 99.
38 An amendment passed in 1855 instructed assessors to add any real
estate which had become taxable and new buildings, and to subtract in
the case of destruction by fire, flood, etc. L. 1855, p. 38.
* 9 Aud. Kept. 1850, p. 24.
*Ibid., 1854, P. 6.
103] TAXATION FOR DEBT PAYMENT, 1848-1872 103
lessly encountered; for the oath seems to have but slight
success in accomplishing a full assessment, the end de-
The dissatisfied property owner was provided, by the
law of 1853, with an appeal to the board of supervisors in
counties under the township system and to county courts
in other counties. The decisions of these bodies were not
to be considered final, however, until approved by the audi-
tor of public accounts. 42
The collection of the taxes was to be accomplished by
advertising the day when the collectors would be present
in various election districts to receive the taxes. Overdue
taxes were subject to a fifty per cent penalty. Jury cer-
tificates and county orders, as well as coin, were receivable
for county taxes and auditor's warrants were acceptable
for state taxes levied for the revenue fund. But the special
state taxes were payable in coin only. 43
With this law of 1853 in force Illinois collected the
great bulk of her sums for debt payment. Not a change of
importance was made until 1872 with the single exception
of the act of 1867 establishing the state board of equaliza-
tion, and this act was an addition rather than an alter-
Having traced the evolution of the tax code during
these years to the point of relative stability reached in
1853, attention must now be directed toward the use of
* l lnfra, p. 144 et seq.
42 In 1854 the board of supervisors was empowered to amend the
assessment or to declare it void and order a new one if it were grossly
inaccurate. In the latter case, special collectors might be appointed. L.
1854, pp. 27, 28.
43 A law passed in 1863 added United States legal tender treasury
notes and postage currency to the list of moneys receivable for taxes.
United States bank notes and United States fractional currency were
added in 1869. L. 1863, p. 82; L. 1869, p. 353.
44 The return to annual assessments of real estate in township coun-
ties is not of sufficient moment to be considered an exception to this
-statement. And. Rept. 1856, p. 5.
104 HISTORY OF TAXATION IN ILLINOIS [104
the tax system to produce the much needed revenues.
Taking an account of stock in 1849, the governor esti-
mated the state debt at about $16,660,000, which sum in-
cluded canal claims and interest charges to date. 45 -Two
years later his estimate was but thirty thousand dollars
less than this amount. 46 Under the funding operations
begun in 1847, some three million dollars worth of original
stock had been refunded by 1849, and over five and a half
million by 1851. 47
With a tax rate of twenty cents for interest, twenty
cents for state debt, fifteen cents for revenue purposes,
two cents for the insane hospital, and one cent for the blind
asylum, the governor in 1849 considered the state taxes
"as onerous as the people ought, at present, to be called
upon to sustain." 48 The insane hospital tax was soon in-
creased to three and one-third cents. 49 The insane hos-
pital and blind asylum rates were discontinued after
1854, the balances being turned into the revenue fund in
In 1849 an additional resource was added to the
means for discharging the state debt, when a law was
passed directing the governor to invest in Illinois bonds
any school funds received from the United States govern-
ment. Not much of the debt was purchased from this
source, however, only $139,664.31 in all being used. 51
Conditions in general continued to improve. The
assessed value of property increased from $82,327,105 in
1845 to $119,868,336 in 1850. The twenty cent rate for
revenue purposes brought in sufficient revenue to meet all
demands for current expenses and to leave a surplus
**S. ]., 16 G. A., i Sess., p. 11; ///. Hist. Coll., VII, 201.
*//. /., 17 G. A., I Sess., p. 9 et seq. Cf. Census, 1880, VII, 625.
* J S. /., 16 G. A., i Sess., p. 9; Gov. Mess., 5". /., 17 G. A., i Sess.,
p. 9 et seq.
**S. /., 16 G. A., i Sess., p. 8.
* 9 Aud. Kept. 1850.
*Ibid. 1854, 1856.
B1 L. 1849, i Sess., p. 70; Aud. Kept. 1850, p. 17; Repts., 22 G. A., r
Sess., p. 439.
105] TAXATION FOR DEBT PAYMENT, 1848-1872 105
besides, so that in 1850 the auditor was able to report that
"for the first time since the formation of our state gov-
ernment, we have in the treasury a sum equal to, and which
will be applied for, defraying the expenses of the present
session of the General Assembly." By Nov. 30, 1850,
|165,788.81 had been received from the twenty cent state
debt tax, and in the following two years $492,166.53 was
received in addition from this source. The fifteen cent
tax for interest purposes which had yielded $234,943.92
for the biennium ending December 1, 1848, produced
$296,326.89 during the following two years and $366,-
393. 75 52 in the biennium next succeeding. Some progress
could now be made toward debt payment. Between 1850
and 1852, $375,274.29 was paid from the State Debt Fund
besides some minor payments from other sources. 53 In-
deed, the affairs of the state were now being carried
along on the crest of a wave of prosperity. Exceptionally
good times were reported. "For the period embracing the
last two years," said the auditor in 1854, 54 "no state in the
Union has made more rapid progress in the development of
its resources, and in the accumulation of wealth, or can
show a greater degree of general prosperity than the great
state of Illinois." The good times were also commented
upon by the governor. 55
The assessed value of property increased by leaps and
bounds to $137,^18,079 in 1851, to $149,294,805 in 1852,
and to $225,159,633 in 1853, the year the new revenue law
went into effect. The increase for 1853, amounting to over
fifty per cent, is ascribed by the auditor almost entirely to
the natural growth in value of property in the state and not
to the operation of the new revenue law, but it seems doubt-
ful whether the revenue law of 1853 should be denied
52 $372.89 of this sum was refunded.
53 These include $23,080.57 turned over to the governor from the
School Fund for the purchase of state indebtedness, and payments from
the Revenue Fund for debt purposes amounting to something over ten
**Aud. Kept. 1854, p. 4.
* 5 H. J., 18 G. A., 2 Sess., p. 5 et seq.
,.. . . , - ,
106 HISTORY OF TAXATION IN ILLINOIS [106
credit, in view of the upward trend which has been so
characteristic a phenomenon subsequent to the introduc-
tion of new revenue codes.
Levied on this rapidly expanding base, the twenty cent
rate for revenue purposes increased faster than ordinary
expenses. For the two years ending 1852, the revenue tax
yielded $443,503. Governor Ford recommended that the
rate be reduced to ten cents, 56 a suggestion which was
adopted forthwith. At the suggestion of the auditor, all
unappropriated and surplus funds in the treasury were
to be turned into a surplus revenue fund to be applied to
the purchase of state indebtedness. 57 But because of the
cut in the rate for revenue purposes, a cut which reduced
the receipts to the revenue fund from $443,503 to $387,510,
the amounts turned over to the Surplus Revenue Fund were
'The State Debt and Interest Funds.
But in spite of debt payments, the governor's estimate
of the total debt on January 1, 1853, was larger than that
of 1851, the figure being placed at $16,724,177. Accruing
interest charges were, of course, not yet being met. But
taxable property was increasing in the state more rapidly
than the interest on the debt, so that the governor esti-
mated that within five years the income from the interest
tax would be sufficient to meet the full amount due annu-
ally upon the outstanding bonds. 59 The task of paying off
the debt was now much more hopeful than it had seemed
Each year the receipts into the State Debt Fund and
the Interest Fund increased, due to the increase of taxable
property in the state. Table 6 shows the receipts and dis-
bursements for the State Debt Fund for the entire period
M S. ]., 18 G. A., i Sess., pp. 12, 13.
*"Aud. Rept. 1852, p. 4; L. 1853, P- 200.
58 $ 1 37,053.82 was paid into this fund in 1853 and 1854. $117,053.82
was used in purchasing state indebtedness and the balance, $20,000, was
refunded to the Revenue Fund in 1856.
n S. J., 18 G. A., i Sess., p. 10 et seq.
107] TAXATION FOR DEBT PAYMENT, 1848-1872
during which the twenty cent tax was imposed. How
portant was the role played by this tax in paying off the
state debt can be appreciated at a glance.
STATEMENT OF THE STATE
To Nov 30, 1850
DEBT FUND, (a)
From Dec. i, 1850 to Nov. 30, 1852
From Dec. i, 1852 to Nov. 30, 1854.
From Dec. I, 1854 to Nov. 30, 1856
From Dec i, 1856 to Nov 30, 1858 . . .
i, 387. =^3.02
T, -z/MnR/i fin
From Dec i, 1858 to Nov. 30, 1860
From Dec. I, 1860 to Nov. 30, 1862
From Dec. i, 1862 to Nov. 30, 1864.
From Dec. i, 1864 to Nov. 30, 1866.
From Dec. i, 1866 to Nov. 30, 1868.
From Dec. i 1868 to Nov. 30, 1870 .. .
1. 637.07 5. TO
7 32. 367.O3
From Dec. i 1870 to Nov. 30, 1872
Amount in Treasury in 1872
Total oaid out and balance
(a) Aud. Kept. 1872, pp. xvii, xviii.
The receipts of the Interest Fund were correspond-
ingly large, amounting for the biennium ending December
1, 1854, to |525,931, and for that ending December 1, 1856,
to |904,420. With such an income as this the state was
able to resume complete interest payments even earlier
than had been anticipated. In January, 1857, this was
accomplished and an end put to the increase in the state
debt through the cumulation of unpaid interest charges. 60
Arrangements were made to fund the unpaid interest
which had piled up before 1857. That which had fallen due
before 1847 was to draw interest after 1857, while interest
was allowed on the share which had gone unpaid between
1847 and 1857, after January 1, I860. 61
60 S. /., 20 G. A., i Sess., p. 14.
91 Treas. Rept. 1856, p. 4; L. 1857, p. 104.
108 HISTORY OF TAXATION IN ILLINOIS [108
Now at last Illinois was once more financially respect-
able, meeting her legal liabilities in cash as they fell due,
and holding out to her bond holders a reasonable expecta-
tion of repayment. On January 1, 1857, the net debt of the
state was $12,834,144, over four and a half million having
been paid during the preceding four years. 62 As expressed
in one of the ornate orations of the day, "The heavy debt,
from the contemplation of which so many shrank back
appalled, now presses no more heavily upon her energies
than the curtain of the morning mist rests upon the bosom
of her prairies." 63
The Illinois Central Payments.
A source of revenue for debt payment which by 1857
was already of importance and which was destined to play
a large part in the payment of the state debt was the Illi-
nois Central Railroad contract. All railroads in Illinois
were assessed under the general property tax except the
Illinois Central which was taxed in a special manner be-
cause of special privileges granted to the railroad by the
state. It is not within the scope of this study to make a
detailed examination of the Illinois Central tax. Suffice
it to say that in the early fifties the state assigned to the
railroad considerable railroad property salvage from the
internal improvement project of 1837 and a princely
grant of land which had been given to the state by Con-
gress for the purpose. In return the company agreed to
pay to the state a percentage of its gross receipts. The
rate was to be five and later seven per cent. This was in
lieu of all taxes. 64
The returns from this contract began to reach the
state treasury in 1855 and were devoted to debt payment.
The amounts received from the tax during this period are
shown in Table 7.
2 5 1 . /., 20 G. A., i Sess., p. 12 et seq.
"Oration of Robert Bell, Esq., delivered at Fairfield, Illinois, quoted
by Gerhard, op. cit., p. 12.
"Census, 1880, VII, 625.
109] TAXATION FOR DEBT PAYMENT, 1848-1872 109
REVENUE FROM THE TAX ON THE GROSS EARNINGS OF THE
ILLINOIS CENTRAL RAILROAD. (a)
Two Years Ending
Oct. 31, 1856 - $107,383
Oct. 31, 1858 277,621
Oct. 31, 1860 309,662
Oct. 31, 1862 389,432
Oct. 31, 1864 705,909
Oct. 31, 1866..... 923,546
Oct. 31, 1868 872,405
Oct. 31, 1870 929,518
(a) Compiled from Treas. Rept. 1904, p. 28. Before 1857 the revenues
represent five per cent of the gross earnings; after 1857, seven per cent.
But the direct financial return was not the greatest
benefit conferred by the Illinois Central Railroad. Its ser-
vices in developing the economic resources of the state, in
inducing immigration and increasing taxable values, just
at the time when such service was particularly needed to
aid in the solution of the problem of debt payment can
scarcely be overestimated.
Another source of debt payment, a non-tax source,
however, was the State Land Fund, which consisted of the
receipts from the sale of state lands. For a short time
these amounted to considerable sums. Thus, during the
two year period ending December 1, 1854, the receipts
amounted to $280,894, and during the following biennium
to $122,812. By 1856, however, practically all the lands
had been disposed of. 65
Summary of the Sources of Debt Payment.
From these sources, then, was the debt paid; (1) the
receipts from the operation of the canal and from the sale
of canal lands applied by the canal trustees to the canal
indebtedness; (2) the State Debt Fund supplied from the
twenty cent (two mill) tax on property in general ; (3) the
Interest Fund, supplied from a tax rate levied on prop-
erty; (4) the Illinois Central fund, supported by the gross
65 Only 6,458 acres remained. Aud. Rept. 1856.
110 HISTORY OF TAXATION IN ILLINOIS [110
earnings payments; (5) the State Land Fund, consisting
of the receipts from the sale of state lands; (6) the Surplus.
Revenue Fund, consisting of left-overs, unexpended bal-
ances in the treasury, etc. ; (7) borrowings from the school
funds; and (8) various payments from the Revenue Fund
whose chief support was the state rate levied on property.
In addition the receipts to some of these funds were in the
form of state indebtedness instead of cash. Certificates
of indebtedness were received, for example, in payment for
state lands. 66
In 1857 and 1858 the debt was reduced fl, 166,877, so
that in January, 1859, the amount outstanding against the
state was $11,138,454. 67 By December 1, 1860, this figure
had been cut down to f 10,277,161. 68 But now the rate of
taxation, probably because of the financial depression, be-
came the object of bitter complaint. 69 A committee
appointed by the legislature reported in 1859 that the
taxes were "more onerous than is favorable to the growth
of a new state, whose resources are developed by that class
of population upon which they bear most heavily, and who
will and do shun our borders in consequence of their
existence." 70 The most attractive point of attack for those
who desired a reduction in the rates was the twenty cent
rate for the State Debt Fund. The dissatisfaction of the
bond holders with this tax has already been noted. 71 The
inconvenience of surrendering their securities annually to
receive the dividend due them was so great that many
persons simply refrained from presenting them. This
made it appear that the tax was being needlessly assessed.
It has been decided to use the unclaimed portion of
the State Debt Fund in purchasing state bonds in the open
market. But the rise in the market value of the securities
"Ibid. 1850, p. 20.
n S. J., 21 G. A., i Sess., p. 18.
68 This did not include the MacAllister and Stebbins claim. Repts.,
22 G. A., i Sess., p. 5.
Murf. Kept. 1858, p. 5.
TO G. A. Repts., 21 G. A., i Sess., I, 294.
Supra, p. 96 et seq.
Ill] TAXATION FOR DEBT PAYMENT,, 1848-1872 111
made this course inadvisable. Bonds could only be bought
at a considerable premium. 72 A bill introduced in 1859 to
suspend the collection of the twenty cent tax failed to
pass. 73 But in 1861 when it developed that less than three
per cent of the fund collected during the two preceding
years had been called for by the bond holders, that the
Revenue Fund was empty, and that the assessed value of
property had decreased, the legislature held back no
longer. The preamble of the law, as passed, reads :
Whereas, our present financial condition requires that provision be
made for an increase in the Revenue Fund, while a just regard for the
interests of our state and the prosperity of her people imperatively de-
mands that such provision shall be made without increasing, but 'on the
contrary, if possible, by diminishing our present heavy rate of taxation,
the collection of the twenty cent tax was declared sus-
pended for the years 1861 and 1862 and the balance in the
State Debt Fund, amounting to more than $500,000 was
turned over to the Revenue Fund. 74
Finances During the Civil War.
Even while these arrangements were being made, the
financial problems of the Civil War presented themselves
for consideration. In the next two years the bonded debt
was increased by a $2,000,000 issue for war purposes, a
$50,000 issue for revenue purposes, a $65,000 issue for the
Normal University, and $182,000 for the settlement of the
"Thornton loan." These amounts, with the outstanding
indebtedness on December 1, 1860, brought up the funded
debt to $12,574,161.36. 75
Practically nothing was done toward the reduction of
the funded debt before 1863, but by December 1, 1864,
payments from the canal trustees and from the Illinois
72 Aud. Ref>t. 1858, p. 5.
13 G. A. Repts., 21 G. A., i Sess. I, 293 et seq.
7 *L. 1861, i Sess., p. 208 et seq. The constitutionality of this measure
seems to have been the subject of difference of opinion. Cf. Repts. of
Senate Committee on Finance.
75 5". /., 23 G. A., i Sess., p. 26. To pay interest on the war debt, the
auditor levied a tax of five cents on the one hundred dollars valuation.
Ibid. 1863, p. ii et seq.
112 HISTORY OP TAXATION IN ILLINOIS [112
Central Railroad, the only sources for debt liquidation
since the suspension of the State Debt Fund levy, had
brought this sum down to $11,246,210.
The war bonds sold at a discount, only $1,767,395 being
realized for the $2,000,000 issue. The state may be con-
sidered a loser to the extent of this discount. However, a
large share of the proceeds from the bond sale was used
to discharge the direct tax levied by the United States on
real estate. The state paid an assessment of $1,146,551.33
with $954,568.67, being able to take advantage of the
fifteen per cent discount allowed where the states paid the
money directly. 77 The total claim of the state against the
United States government on account of the war amounted
to $3,812,525.54. These claims were met promptly, $1,841,-
129.08 having been refunded to the state by 1863 and prac-
tically the entire amount by 1865. 78 On the whole, the
war was far from a serious financial catastrophe to the
state government. The money cost was probably not much
more than a half million dollars; but this does not take into
consideration the direct tax assumed by the state. 79
General economic conditions were very satisfactory indeed
during these years. "As a state, nowithstanding the war, v
said the governor in his message of 1865, "we have pros-
pered beyond all former precedents." 80 Assessed values of
taxable property decreased somewhat, but in the opinion
of the state officials these declines find an explanation in
undervaluation rather than in a true shrinkage of value. 81
This decrease in the tax base was the cause of an im-
portant change in the machinery of taxation. The assess-
ments were characterized by the governor in his message
of 1863 as "absurdly low" and "in many cases very vari-
78 The policy of buying bonds in the open market was definitely aban-
doned in 1863. L. 1863, p. 76; S. J., 23 G. A., I Sess., p. n el seq.
78 The amount of unsettled claims in 1865 was $85,732.67. Ibid., 24
G. A., i Sess., pp. 45, 46.
Ibid., 23 G. A., i Sess., p. 11 et seq.
M Ibid., 24 G. A., i Sess., p. 15 et seq.
81 1 bid., 23 G. A., i Sess., p. n et seq.; Aud. Kept. 1856, p. 5 et seq.
113] TAXATION FOR DEBT PAYMENT, 1848-1872 113
able." "The question arises/' he said, "whether some
measures may not be devised for the equalization of assess-
ments throughout the state." 82 Beginning with 1863 the
assessments show a steady increase annually, but there
seems nevertheless to have been great undervaluation. In
1867 the governor testified that "in many parts of the state
different persons are taxed 25, 50, and 100 per cent more,
for the very same species of property, than other persons
are in different counties, for property of the same kind.
. . . Were the spirit and the intent of the law properly
carried out, the assessments would be more than double
what they are now." 83
The auditor and governor joined in recommending the
establishment of a state board of equalization, 84 and their
recommendation was accepted by the legislature. 85
( The State Board of Equalization.
Under the provisions of the act the governor was to
appoint one member from each senatorial district (there
were twenty-five at this time) and these with the auditor
were to compose the board. The appointed persons were
to be supplanted by members chosen at the elections to be
held in 1868. The term was fixed at four years. The mem-
bers were paid eight dollars per day plus mileage at the
rate of ten cents per mile. At first the sessions were lim-
ited to fifteen days. In 1869 the time was extended to
thirty days. 86
The board was to assemble at the state capitol annually
and after examining the abstracts of property assessed
in the various counties, was to equalize them "by directing
to be added to the amount of property so assessed in each
county, or to be deducted therefrom, such rate per cent as
said board may deem equitable." But the board could not
reduce the aggregate amount of property assessed in the
*-S. /., 23 G. A., i Sess., p. 14.
* 3 Ibid., 25 G. A., I Sess., p. 17.
**Ibid.; Aud. Kept. 1866, p. 6.
85 L. 1867, I Sess., p. 105.
L. 1869, p. 353-
114 HISTORY OF TAXATION IN ILLINOIS [114
state. Annual assessments of real estate were restored
in all counties. The clause specifying more in detail the
manner in which the assessments were to be equalized,
reads as follows:
In equalizing the value of personal property in the several counties,
said board shall cause to be added together the average values of each
kind of domestic animals and enumerated articles in each county, and
the sum so obtained as compared with the added general averages of the
same items throughout the state, shall be held by such board to indicate
the proportion which the whole assessment of personal property in each
county bears to the whole assessment of personal property throughout the
state; and said personal property shall be equalized by said board in the
manner hereinafter provided for equalizing real property. Real property
shall be equalized by adding to the aggregate assessed value thereof in
every county in, which said board may believe the valuation to be too low
such per centum as will raise the same to its proper proportionate value,
and by deduction from the aggregate assessed value thereof in every
county in which said board may believe the valuation to be too high, such
per centum as will reduce the same to its proper value. When the rela-
tive valuations of real and personal property shall have been considered
separately, said board shall combine the results in such manner as may
be deemed equitable, and determine a uniform rate per cent to be added
or deducted from both classes of property in each county, which rate per
cent shall in all cases be even and not fractional ; Provided, that nothing
herein contained shall be construed as interfering in any manner with the
laws now in force in regard to the equalization of assessments as be-
tween the different townships by the board of supervisors in counties
adopting the township organization.
By an amendment passed in 1869 the board was to
consider separately the following classes of property:
lands, town and city lots, railroad property, and personal
Computation of the Tax Rate.
In 1867, moreover, the present-day method of com-
puting the tax rate was introduced. 88 After the equaliz-
ation had been accomplished the auditor was to compare
the total amount of the equalized assessment with the total
amount of the appropriations made by the legislature and
of the other demands upon the treasury and to strike a
* 7 Ibid., pp. 352, 353.
88 L. 1867, I Sess., p. 105 et seq.
115] TAXATION FOR DEBT PAYMENT,, 1848-1872 115
percentage. This percentage was to be the state rate, which
was then to be certified to the local authorities.
The operation of this method resulted at first in con-
siderable variations in the rate from year to year. The rate
levied for revenue purposes in 1866 had been twelve cents.
For the first year under the new plan, 1867, the rate was
twenty -five cents; in 1868 it dropped to fifteen cents; in
1869 it was eighty cents. The rates for 1870, 1871, and
1872 were, respectively, twenty-five, fifty-five, and thirty-
five and three-tenths cents. This irregularity was due to
the heavier expenses which were met in legislative years.
Much of this variation from year to year has now been
Debt Payvvent, 1864-1872.
During the late sixties great progress was made toward
the liquidation of the debt; $2,607,958.46 was paid from
December 1, 1864, to December 1, 1866, leaving an out-
standing debt of $8,638,252.21 at the later date. 90 A reduc-
tion of about the same amount, $2,687,114.01, was made
during the next biennium, the debt on December 1, 1868,
being $5,988,453.53. There had been an increase of $50,000
in 1867, a bond issue for the penitentiary. 91 The rate for
interest purposes was reduced to tw r elve cents in 1867 and
to ten cents in 1868. In 1870 it was done away with en-
tirely. By December 1, 1870, the debt outstanding against
the state was but $4,890,937.30, and there had accumu-
lated in the treasury to meet this debt, $3,082,104.22. 92
It might w r ell be true, as Governor Oglesby remarked in
1869, that the debt had "ceased to cause any general solici-
tude." 93 The receipts from the canal and from the Illinois
89 A minor change in 1869 eliminated from the taxable list goods
belonging to non-residents assigned to commission merchants for sale.
. 1869, p. 58.
S. J., 25 G. A., i Sess., p. 13 et seq.
01 Ibid., 26 G. A., i Sess., p. n et seq.
92 Ibid., 27 G. A., i Sess., p. 26 et seq.
93 Ibid., 27 G. A., i Sess., p. n et seq.
116 HISTORY OF TAXATION IN ILLINOIS [116
Central tax were great enough to justify the recommen-
dation that the twenty cent state debt tax be repealed; 94
and this tax, which had been of such great assistance in
paying off the debt was levied for the last time in 1870.
On December 1, 1872, the bonded debt amounted to $2,060,-
150.63. During the preceding two years $3,080,786.67 had
been paid, but a quarter of a million of revenue deficit
bonds had been issued. These bonds were delivered to the
city of Chicago as part payment of a debt of $2,955,340 to
the city, which the state at this time chose to assume. The
municipality had advanced funds to assist in building the
canal and had taken a lien on the canal as security. In
sore need because of the devastating fire, Chicago was
to some extent relieved by the state through the payment of
this money. A tax of fifteen cents on the one hundred
dollars was authorized for 1871 and 1872, the proceeds of
which were to go to the city, along with the resources
available from the Illinois Central Railroad Fund and the
canal. 95 By November, 1872, nearly half of the debt to the
city ($1,378,307.68) had been discharged.
Thus by 1872, when the new revenue code was adopted,
the state debt had ceased to be a factor. The amounts
falling due were easily met, and by 1881 the state debt was
declared entirely paid. At this time the proceeds from the
Illinois Central Fund were transferred from debt pay-
ment purposes to the Revenue Fund. Only $23,600 in
bonds was outstanding, which should have been presented
years before and on which interest had ceased to accrue. 96
Before summarizing the foregoing discussion it is
necessary to complete the treatment by a short description
of the special methods used to tax banks, insurance com-
panies, and railroads, and of the taxes levied for roads and
**Ibid., p. 14.
9 *Aud. Rept. 1872, pp. xi, xii.
9 *L. 1881, p. 25. Some of these bonds have been presented since. Cf.
ibid., p. 51; L. 1887, p. 58; L. 1889, p. 49.
117] TAXATION FOR DEBT PAYMENT, 1848-1872 117
Taxation of Corporations.
Little special effort was made before 1872 to tax cor-
porations in any different manner than by the regular
general property assessment. A law passed in 1851, how-
ever, prescribed that the shares of the capital stock of
banks should be assessed as personal property, the value
to be determined by the bank commissioners, and that the
tax should be paid by the corporation and not by the indi-
vidual stockholders. 97 The bank commissioners were
directed by an act of 1853 to assess incorporated banks
on the basis of notes and bills discounted. Stocks deposited
by these incorporated banks with the state treasurer were
to be taxed at the rate at which they were deposited. 88 In
1857 a law was passed which directed the president or
cashier of a bank to list the capital stock of his institution
to be taxed as other property. In valuing the stock he was
to deduct the amount of the capital invested in real estate
and list that separately. Surplus profits and reserve funds
were also held to be taxable.
In 1867 the law was so changed as to shift the theoret-
ical base of the tax from the corporation to the stock
holders." The value of the capital stock, minus the
assessed value of the real estate owned by the bank, was
assessed to the owners of the stock, wherever resident. The
bank was required to furnish a list of its stockholders.
Moreover it was responsible for the payment of the tax.
This was accomplished through an arrangement whereby a
part of the dividends, sufficient to cover the tax charges,
were retained by the banks until notification was received
that the taxes had been paid. As the plan actually worked
out, of course, the bank assumed all responsibility and con-
sidered the tax a charge which had to be met before divi-
dends were declared.
From 1843 until 1853 three per cent of their gross pre-
mium receipts was charged foreign life insurance com-
9T L. 1851, p. 165 et seq.
W L. 1853, p. 3 et seq.; p. 35 et seq.
"L. 1867, i Sp. Sess., p. 6.
118 HISTORY OF TAXATION IX ILLINOIS [118
parries as a license fee. 100 Gross premium receipts were then
made assessable under the general property tax, at the same
rates as personal property. 101 This system remained in
force until 1869, practically until the end of the period.
Special provision was made for the taxation of rail-
ways in an act of 1849. Railway property was to be listed
with the auditor by some officer of the corporation and was
to be taxed at the regular rates. The income from the taxes
on railways was to go toward the extinguishment of the
internal improvement debt. 102 No record can be discovered
of any revenue collected under this law. In 1853 the entire
plan of assessment was changed. The property of the rail-
road real and personal property, money and credits was
to be listed in the regular manner with the assessors of the
counties where the property was located. The value of the
movable property was to be distributed among the local
jurisdictions for assessment purposes, in proportion to the
value of the real estate and fixed property in each. 103
Under a law passed in 1855, 104 the return of railway
property in counties under township organization was to
be made to the county clerk, instead of to the assessor,
and the clerk was to lay the return before the board of
supervisors when they met to equalize the assessments.
The board could accept or modify such return. In all
counties the list was to be made up of four classes of pro-
erty. The first was real property, consisting of a descrip-
tion and valuation of every parcel of real property owned
by the railway. In the valuation of all the improve-
ments except the track or superstructure were to be
included. The second class, called fixed and station-
ary personal property, consisted of the length and value
of main and side tracks and turn-outs and the value
of the improvements at the stations where such stations
100 L. 1842-43, p. 165.
101 L. 1853, p. 3 et seq.; p. 35 et seq.
102 L. 1849, 2 Sess., p. 30.
103 L. 1853, pp. 3, 35 et seq. The same system was applied to telegraph
104 L. 1855, p. 35 et seq.
119] TAXATION FOR DEBT PAYMENT, 1848-1872 119
were not part of city or town lots. The third class con-
sisted of rolling stock, called "personal property."
Finally, the fourth class included all other personal
property of the railroad. The length of the whole
of the main track in the state and the total value of the
rolling stock were also to be given. The rolling stock was
to be distributed according to a new plan, viz., in the pro-
portion which the length of the main track in the juris-
diction bore to the whole length of the road. All other
property was to be taxed where located.
Taxation for Roads and Schools.
The poll tax continued to be the main support of the
roads. By the act of 1841 105 authority was given to re-
quire from one to five days of service on the roads. But a
supplementary tax on property was also provided. The
maximum of this tax varied : it was ten cents on each one
hundred dollars of valuation in 1841 ; twenty-five cents in
1843, 106 and twenty cents in 1845. 107
Road taxes were levied by the counties until 1849
when that function was surrendered to the townships in the
counties which elected to organize under the township sys-
tem. For each township organized, highway commissioners
were elected. Use was made of both the poll tax and the
tax on property. All taxable property was levied upon
for road purposes with this exception, that for ten years,
1851-1861, only real property was available for this pur-
pose. 108 From 1851 to 1867 the maximum levy on property
for road purposes was twenty cents on the one hundred
dollars of taxable property ; after 1867 the limit was forty
Before 1869 any tax payer who desired to do so could
"work out" his property tax on the roads. 109 After 1869,
105 L. 1840-1, p. 237.
106 L. 1842-3, p. in.
107 L. 1844-5, P. 79-
108 L. 1851, p. 66.
109 At first his labor for an eight hour day was valued at only $0.625/2.
This amount was increased to $0.75 in 1851, but it remained at that figure
until the end of the period, 1872.
120 HISTORY OF TAXATION IN ILLINOIS [120
however, the township determined by a majority vote
whether the labor system should be used at all. 110
Non-residents, of course, could not be compelled to
labor on the roads. But under the first township organiza-
tion act their land was subjected to a special levy to com-
pensate for the poll tax imposed upon residents. The
charge upon his land was so planned that each non-resi-
dent had to provide one day's road labor for each .$300
worth of land.
The practice, now so common in Illinois, of vesting
independent boards with taxing powers, was not highly
developed during the debt payment period. The best
example is that accorded by the boards which levied
taxes for school purposes. The first levies of this kind
seem to have been made in 1855. School taxes before that
time were authorized by special vote of the people, and
collected by a special collector. The distinctive taxing
authority has always been the board of school directors,
or in cities, the board of education, such a board being
provided for each school district. 111 The law of 1855 gave
power to these boards to determine the sum necessary to
maintain the schools for six months. 112
The law of 1857 put no limit on the taxing power of
the boards when the receipts were to be used for ordinary
expenses 113 ; but when money was needed for such pur-
poses as purchasing buildings and grounds and for extend-
ing the school term beyond six months, a majority vote
of the electors was necessary to levy the tax.
Summary and Criticism.
In the foregoing pages an attempt has been made to
tell briefly the story of the payment of the state debt. As
has been seen, the state learned the joy of spending bor-
"L. 1869, p. 406.
ni An exception should be noted ; the Board of Township School
Trustees for two years, 1855-57, were empowered to levy a deficiency
tax. L. 1855, p. 79.
112 L. 1855, p. 51 et seq.
1857, P. 274.
121] TAXATION FOR DEBT PAYMENT, 1848-1872 121
rowed money before it had learned the terrors of heavy
taxation. Before 1838 the rates of taxation were almost
insignificant, and the methods of assessment and collection
were extremely crude. Under the pressure of necessity, the
tax system was improved until in 1853 it approximated
very closely the code of 1872 which is still in force to-day.
The changes in the tax laws began in 1839 when the
rough classification of lands into grades for taxation pur-
poses was replaced by a plan which assessed land at its-
true value. Taxable property was more closely defined and
personal property was made taxable for state as well as
local purposes. The assessor was to make personal visits
upon property owners and was authorized to administer
A backward step was taken in 1841 when a law was
passed fixing a minimum valuation of land. Moreover, a
law passed two years later reverted to some of the anti-
quated assessment and collection methods of the previous
period. But laws passed in 1845 and 1849 set all these
matters right again.
The general property tax was prescribed in the consti-
tution of 1848, a tax was imposed for debt payment, and a
township system of organization was provided for such
counties as desired it. Some modifications were made in
the statutes to accommodate them to the new constitution.
But a thorough revision of the code was not made until
If to the code of 1853 one adds an oath requirement,
the railway tax law of 1855, and the sections dealing with
the state board of equalization, the result would closely re-
semble the present tax code of the state. The description of
taxable property and the general processes of assessment
and collection are strikingly similar. It was under the
provisions of this law of 1853 that the people of Illinois
raised such enormous sums for debt payment.
Before 1848, when the new constitution was drafted,
the state was in no position to raise large sums by taxation.
Only the remarkable economic development of the state in
122 HISTORY OF TAXATION IN ILLINOIS [122
the thirty years under discussion made the payment of the
debt possible. It can not be too strongly stated that there
was no magic in the manner in which the debt was cleared
away. The general property tax was helpless in the early
forties and had to wait until economic conditions reached
the stage where large levies might safely be made. Between
1840 and 1870 the population increased five hundred per
cent (from 476,183 to 2,539,891). In 1850 the state con-
tained only one-third as many people as in 1870 (851,951).
In 1850 Chicago contained 29,963 persons ; in twenty years
it increased ten-fold. 114
The assessed values of taxable property, in spite of
the fact that they are much smaller than they should be,
tell the same story of remarkable expansion. Table 8
shows the local assessments year by year.
TABLE 8. (a)
LOCAL ASSESSMENTS, 1839-1872.
1839 58,889,525 1856 349,951,272
1840 58,752,168 1857 407,477,367
1841 70,166,053 1858 403,140,321
1842 72,605,424 1859. 366,702,053
1843. 72,416,800 i860 367,227,742
1844- 75,747,765 1861 330,823,479
1845 82,327,105 1862 312,924,349
1846 88,815,403 1863 331,999,871
1847 92,406,493 1864. 356,877,837
1848 102,132,193 1865 392,327,906
1849 105,432,752 1866 410,894,993
1850. 119,868,336 1867 502,638,344
1851 137,818,079 1868 464,278,913
1852 149,294,805 1869 480,859,732
1853 225,159,633 1870. 480,031,703
1854 252,756,568 1871 409,636,910
1855 334398,425 1872 508,875,392
(a)J. A. Fairlie, Report on the Taxation and Revenue System of
Illinois (Danville, Illinois, 1910), pp. 202, 203.
From the data presented in this table and the census
figures given above it would appear that the assessed value
of taxable property increased twice as fast as population.
114 Census of 1850, p. 701 ; Census of 1870, Population and Social Sta-
tistics, pp. 23, no.
123] TAXATION FOR DEBT PAYMENT, 1848-1872 123
STATE TAX RATES, 1839-1872.
Interest tion Fd. Total
Cents Cents Cents
IS 3 l /3
15 3 l /3
6 7 *
.... - 20
6 7 *
l8 5 8
6 7 *
5 -- 40*
5 .... 72*
35 8 Ao
4 T Ao
*No officer of the government took it upon himself to report regu-
larly the rate of taxation levied each year. The information given above
has been gathered from widely scattered sources all official, however.
No direct statement was found to the effect that the rates marked with
the asterisks were actually levied. The data in these cases are based upon
laws authorizing the levies. . The total rate for 1852 is given as (x> l /3.
One statement was found which gave this rate as 60, but it is believed
that this is a misprint. Aud. Rept. 1854, p. Ixv.
124 HISTORY OF TAXATION IN ILLINOIS [124
The rates levied upon this taxable property varied
greatly during the period. Table 9 gives these rates so far
as it has been possible to determine them. The rate for
revenue purposes shows, until the later years, a tendency
to decrease. It is in this rate that the greatest irregulari-
ties appear, due to its determination in the late years of
the period on the basis of the appropriations made by the
legislature. More or less complaint was made of the
weight of the taxes all through the period, but particularly,
as one would expect, during the years of industrial depres-
During this period the general property tax estab-
lished its reputation. But its good name rests entirely
upon a fiscal foundation. It succeeded in bringing large
sums into the treasury, but this end was accomplished only
at the cost of considerable injustice and inefficiency. All
through the period the assessors found difficulty in reaching
all property and assessing it at its real value. One who
believes that complaints about the tax system are of recent
origin, that they are hasty attacks of reformers upon an
institution with a long and honorable history, will be
quickly disillusioned if he reads the official documents of
the debt-payment period. Property in general was under-
valued fifty per cent in 1852. Moreover, there were great
inequalities. "Property of equal value in adjoining coun-
ties was assessed at rates varying fifty per cent and in
some cases even more." 115
The law of 1853 did not help matters much. "Either
the law is not understood or it is not considered good au-
thority," was the discouraged conclusion of the auditor,
for in his opinion there could "be little doubt" that there
was great undervaluation. 116 The following excerpt from
the auditor's report for 1862 has a familiar ring :
I have learned of several instances where candidates for the office
of assessor have openly offered, as an inducement to voters, that, if
elected, they would assess property at rates less than its value. It has
also been suggested to me that it is the practice of town assessors to meet
. Kept. 1854, P. 5-
/</. 1856, p. 5.
125] TAXATION FOR DEBT PAYMENT, 1848-1872 125
and agree on fixed uniform rates for valuing each description of property
taxed, without regard to the lands or other property listed. 117
In 1866 the valuations were declared by the auditor to
be "manifestly below the actual worth of the property." 118
In spite of the efforts of the state board of equalization,
undervaluation persisted to the very end of the period. In
1870 the assesment of property did "not exceed . . . one-
quarter of its actual value." 119
In addition to the undervaluation and inequality, the
assessment was marked by a considerable degree of irregu-
larity. The case of the refusal of the officers in various
counties to assess property under the act of 1837 has
already been noted. 120 Less serious disturbances and de-
lays are referred to in almost every volume of the session
laws. 121 In 1846 the auditor complained that at least one-
half the assessors did not complete their assessment within
the period required by law. 122 Tardiness and irregularity
in assessments involved irregularities in collection and
difficulties in tax sales. 123 In addition there seems to have
been considerable dishonesty among collectors. In 1850,
the auditor complained about "the large amount lost annu-
ally by defalcation of collectors." 124
In spite of poor administration the tax system proved
equal to the strain laid upon it in the debt-payment period.
Even with the complications of the Civil War the system
emerged with a good record as a revenue producer. But
the highest praise which can fairly be given the general
property tax in this, the most successful period of its exist-
ence, is to say that it was a system which fitted in a rough
and ready fashion the rather crude economic conditions of
1862, p. 5.
118 Ibid. 1866, p. 6.
119 /&tU 1870, p. 4.
120 Supra, p. 82.
121 C/., L. 1842-43, p. 14 ; L. 1849, I Sess., p. 121 ; L. 1853, p. 236 etc.
2 Aud. Kept. 1846, p. 38.
12S C/., ibid., 1848, p. 15; ibid., 1850, p. 2; L. 1844-45, pp. 163, 183, 199;
L. 1846-47, p. 75 et seq.
12 *Aud. Kept. 1850, p. 23; cf., L. 1842-43, pp. 68, 239.
D. THE PKESENT-DAY PERIOD, 1872-1913
TAXABLE PROPERTY IN GENERAL AND ITS ASSESSMENT
In 1910 Illinois with 5,638,591 people was the third
state in the union in population; in 1870 it had less than
half that number (2,539,891). In the importance of its
manufactures it was surpassed only by New York and
Pennsylvania, but the rate of increase in Illinois has been
greater than either of these states. Between 1902 and
1909 the state has pushed from sixth to second rank in
mining. 1 A few facts such as these are sufficient to show
clearly that the problems of Illinois are no longer the prob-
lems of a thinly settled, agricultural community. Com-
merce and industry have developed and have earned for
themselves places beside agriculture. Moreover, Chicago,
with less than 300,000 inhabitants in 1870, has grown to
be the second city in the United States and her growth has
raised problems for Illinois which can scarcely be matched
by those in any other state. Within one hundred years
this whole development has come about. A century ago
there were no cities, no mines, no commerce, no manufac-
tures, and almost no population. During this entire time
the principle of the general property tax has been in force.
How slight were the modifications made in the system must
have been impressed upon any one who has read the fore-
going pages. The origin of the system and its adaptation
to the needs of the trying period of debt payment have been
described. It remains to show to what extent the present
code, arrived at after a slow, evolutionary process, and
established in almost exactly its present form, over forty
years ago, has met the needs of this new industrial state.
^Thirteenth Census, Abstract, p. 543.
127] TAXABLE PROPERTY AND ITS ASSESSMENT 127
The revenue law in force in the state was formulated
in 1872. It rests upon the foundation laid by the revenue
section of the constitution of 1870. The law has been
modified in a number of particulars during the last forty
years, especially in 1898, when the assessment arrange-
ments were given an overhauling, but it has never been
supplanted by a new general law. 2 When it was intro-
duced in 1872 it was not, in many particulars, a new law ;
it was for the most part merely a codification of statutes
already existing. Certainly such a codification was needed,
for it appears from the repealing clause that the new
measure replaced nearly fifty old acts of the legislature. 3
The movement for a new revenue law in 1872 seems
to have found its source in the state board of equaliza- v
tion, which as a fountain of reform suggestions has long
since gone dry. In taking up its duties in 1867 the board
found the existing code to be inadequate and ineffective.
In 1868 resolutions were passed recommending a revision
of the law. 4 Three years later the revenue measure, drawn
up by the chairman and secretary of the board, was laid
before the General Assembly. While under consideration
it was actively supported by the board and upon its adop-
tion, the board did not hesitate to assume credit and re-
sponsibility for the new law. 5
Although the new law was passed soon after the adop-
tion of the constitution of 1870 it can not be said to have
been made necessary by the constitution; for the revenue
article in the new constitution did not differ greatly from
that of the constitution of 1848.
The necessary state revenue was to be obtained, as
under the old constitution, by a tax which should fall
upon the owners of property in proportion to the value of
*L. 1898, p. 36.
3 L. 1871-72, p. 69.
^Proceedings of the State Board of Equalization, 1868, p. 81.
*lbid., 1867, pp. 37-39, 58, 59; 1870, Oct. 7 to Oct. 27; 1872, p. 61.
128 HISTORY OF TAXATION IN ILLINOIS [128
the property owned. No provision, it was true, was made
for a capitation tax. The list of "pedlars, auctioneers,
etc.," who could be taxed in such manner as the assembly
should direct, was augmented by the addition of liquor
dealers, insurance, telegraph and express interests or busi-
ness, vendors of patents, and corporations owning or using
franchises or privileges; but a specification was added that
such taxes should be levied by general law and be made
uniform as to the class affected. The exemption clause
was made more specific; property "used exclusively for
agricultural and horticultural societies, for school, reli-
gious, cemetery and charitable purposes," might be re-
lieved of tax charges. Some modifications were made in
the provisions regulating tax sales and redemption, mak-
ing them more general. The General Assembly was for-
bidden to release any local body from its share of the
state tax. 6 All taxes levied for state purposes were to be
paid into the state treasury. A tax limit of seventy-five
cents on the hundred dollars valuation was imposed upon
counties, exception being made in case the tax was levied
to pay debts previously contracted. A higher rate might
be levied, however, upon vote of the people. A debt limit
of five per cent of the assessed valuation was placed upon
all local bodies; and such bodies, when incurring a debt
in the future, were required to make provision for the
accumulation of a repayment fund through direct taxa-
tion. 7 Local improvements might be paid for "by special
assessments or by special taxation of contiguous property
PROPERTY TAXED AND EXEMPTED.
The general statement of property subject to taxation
in Illinois since 1872 reads as follows: first, all real and
personal property in this state; second, all moneys, cred-
6 By an act passed in 1872, the legislature sought to bring about the
condition of uniformity prescribed here. L. 1871-72, p. 753.
7 This does not comprehend the amendment of 1890 for World's Fair
bonds. L. 1890, p. 8.
129] TAXABLE PROPERTY AND ITS ASSESSMENT 129
its, bonds or stocks and other investments, the shares of
stock of incorporated companies and associations, and all
other personal property, including property in transitu to
or from this state; third, the shares of capital stocks of
banks and banking companies doing business in this state ;
and fourth, the capital stock of companies and associations
incorporated under the laws of this state. 8
This statement of taxable property has stood undis-
turbed during the entire forty years, except for one amend-
ment in 1905 which exempted the capital stock of certain
corporations but which was promptly declared unconsti-
Of the property included in the foregoing statement
the following classes have been designated by the General
Assembly as exempt from taxation : 10
first, school lands donated by the United States, not sold or leased and
all property used exclusively for school purposes; 11 second; all property
used exclusively for religious purposes, or used exclusively for school
and religious purposes, and not leased or otherwise used with a view
to profit; 12 third, all lands used exclusively as grave yards or grounds for
8 L. 1871-72, p. i.
9 Infra, p. 201 ; L. 1905, p. 353 ; Consolidated Coal Co. v. Miller, 236
Illinois 149 (1908).
10 The constitutional provision under which these exemptions have been
made reads as follows:
"The property of the state, counties, and other municipal corporations,
both real and personal, and such other property as may be used exclusively
for agricultural and horticultural societies, for school, religious, cemetery,
and charitable purposes, may be exempted from taxation; but such ex-
emption shall be only by general law. In the assessment of real estate
encumbered by public easement, any depreciation occasioned by such
easement may be deducted in the valuation of such property." Par. 3,
Art. VIII, Constitution of 1870.
The language of the law of 1909 exempts all property belonging to
schools, whether it is exclusively devoted to school purposes or not, pro-
vided that it is not used with a view to profit. The supreme court has
declared this broad exemption unconstitutional. The People v. Deutsche
Gemeinde, 249 III. 132 (1911).
"L. 1913, p. 511. In 1909 the wording was changed from that of the
act of 1872. L. 1909, p. 309.
12 The law of 1872 was slightly narrower than this. L. 1871-72, p. i;
L. 1909, p. 307. In 1905 residences used by persons devoting their entire
130 HISTORY OF TAXATION IN ILLINOIS [130
burying the dead ; fourth, all unentered government lands ; all public build-
ings or structures of whatsoever kind, and the contents thereof, and the
land on which the same are located, belonging to the United States ; fifth,
all property of every kind belonging to the State of Illinois ; sixth, all prop-
erty belonging to any county, town, city, or village, used exclusively for the
maintenance of the poor; all swamp or overflowed lands belonging to
any county, so long as the same remain unsold by such county; all public
buildings belonging to any county, township, city or incorporated town,
with the ground on which such buildings are erected, not exceeding in
any case ten acres ; seventh, all property of institutions of public charity,
when actually and exclusively used for such charitable purposes, not leased
or otherwise used with a view to profit ; and all free public libraries ; 13
eighth, all fire engines or other implements used for the extinguishment
of fires, with the buildings used exclusively for the safe keeping thereof,
and the lot of reasonable size on which the building is located, when be-
longing to any city, village or town ; ninth, all market houses, public
squares or other public grounds used exclusively for public purposes ; all
works, machinery, and fixtures belonging exclusively to any town, village
or city, used exclusively for conveying water to such town, village or city ;
all works, machinery and fixtures of drainage districts, when used ex-
clusively for pumping water from the ditches and drains of such district
for drainage purposes ; 14 tenth, all property which may be used exclusively
by societies for agricultural, horticultural, mechanical and philosophical
purposes, and not for pecuniary profit.
In 1905 the following section was added, 15 but the
exemption was declared unconstitutional: 16
time to church work were exempted (L. 1905, p. 357) but the act was
declared unconstitutional. Consolidated Coal Co. v. Miller, 236 III. 149
(1908). An amendment to the general incorporation law in 1889 restricted
the amount of land a religious corporation could acquire to twenty acres,
only ten of which were to be exempt from taxation. L. 1889, p. 94.
Trust funds, the incomes from which were devoted to cemetery im-
provement, ornamentation, etc., were exempted in 1889. Ibid., p. 63. By
a law passed in 1895, cemetery associations were restricted in their acqui-
sition of land to an amount necessary for burial purposes. L. 1895, p. 81.
A law passed in 1903 provided that cemetery associations to be exempt
must pay no dividends. L. 1903, p. 90.
18 The wording of this section was slightly changed in 1909. L. 1909,
p. 309. The statement of the exemption of library property was amplified
in 1891. L. 1891, p. 157.
"The addition of the property of drainage districts was made in 1913.
L. 1913, P- Si i.
"L. 1905, p. 357-
"Supreme Lodge v. Board of Review, 223 III. 54 (1906).
131] TAXABLE PROPERTY AND ITS ASSESSMENT 131
eleventh, all the money collected and on hand within this state of every
kind and nature of fraternal beneficial societies and the subordinate lodges
thereof which are organized and exist or admitted to do business under
the laws of the State of Illinois, and used exclusively for the purposes of
such societies, and not for pecuniary profit.
Unsuccessful also have been the repeated attempts to
secure the exemption of the stock and notes of mutual
building, loan and homestead associations. In 1887 17 it
was declared by statute that since all money paid to such
corporations was at once loaned and placed into taxable
property, the shares of stock and notes "being simply evi-
dence as to where such money has been placed, therefore
such stock and notes shall not be subject to taxation." The
courts declared the exemption unconstitutional. 18 In 1895
the legislature made the stock taxable but allowed a deduc-
tion for real estate owned by the corporation. In 1901 an-
other attempt was made to exempt the stock. "No stock
of such association,*' the new proviso read, "while pledged
upon by, and pledged as security to the association assum-
ing it, to an amount equal to the par value of such stock,
shall be subject to assessment.*' But when this law was
tested in the courts it also was declared to be contrary to
the constitution. 19
The Illinois revenue law, then, defines taxable prop-
erty in the most inclusive fashion. Property of every
description is included within its scope. Only the most
meagre exemptions are allowed by the constitution and,
moreover, the courts construe the constitutional exemp-
tions in the strictest manner.
17 L. 1887, p. 131 ; the same provision is included in the law of 1891.
L. 1891, p. 89.
"Loan and Homestead Association v. Keith, 153 III. 609 (1894).
19 /n re St. Louis Loan and Investment Co. 194 III. 609 (1902). A
law of 1872 exempted members of fire companies from the road tax and
a law of 1895 provided that no taxes should be levied on teachers' pension
funds. L. 1871-72, p. 455; L. 1895, p. 312.
132 HISTORY OF TAXATION IN ILLINOIS [132
State and Local Officials.
Although, under the system in vogue, the greater part
of the burden of assessing property falls upon the local
authorities, a certain share of the responsibility is assumed
by the state. To the local assessors is assigned the task
of listing land, lots, improvements and personal property,
both tangible and intangible; but in a few cases where,
because of their limited jurisdiction and for other reasons,
the local assessors have proved particularly inefficient,
they have been relieved of the task of attempting to fix
assessment values, and this function has been assigned to
the state board of equalization. Thus, thg ^g^anent of
"corporate excess" of corporations and the assessment of
most railway property is made by this central authority.
The assessment methods of the state board of equaliza-
tion are considered in the treatment of railroad and cor-
poration taxation and the local assessment receives de-
tailed consideration where the topics of real estate and
personal property assessment are discussed. 20 But before
these special topics are taken up, the machinery of local
assessment which is used indiscriminately in both the real
estate and the personal property assessments will be
sketched in general outline.
When counties are organized by the township system,
the township is the unit for assessment purposes; where
there are no townships, the county is utilized. The only
exception is Cook County, where since 1898, in spite of its
township organization, a special method has been used. 21
The officials of these local units assess the great bulk of the
property which forms the base on which state taxes are
levied, with the scantiest sort of supervision on the part
of any central authority. The state auditor is required to
prepare forms which are sent to the local officers, and
gives his opinion and advice when asked to do so. 22 But
20 Infra, pp. 138 et seq., 166 et seq., 200 et seq.
21 L. 1898, p. 37. This phase of the law was sustained by the supreme
court. The People v. Comrs. of Cook County, 176 III. 576 (1898).
22 L. 1871-72, p. 64.
133] TAXABLE PROPERTY AND ITS ASSESSMENT 133
this constitutes the sum total of the state's interference
with local officials. Effective oversight and criticism, such
as is now provided in a number of states, is here entirely
Valuation of Property.
From 1872 to 1898 the statutes prescribed that all
property should be assessed at its fair cash value. 23 In
1898 the legislature recognized the existing undervalua-
tion by declaring that the assessed valuation for the pur-
poses of taxation and limitation of indebtedness should be
one-fifth of the full value. 24 Two columns were to be pro-
vided in the assessment books; one was to be headed "full
value," and one-fifth of the amount appearing here was to
be set down in the second column marked "assessed valua-
tion." In 1909 this fraction was raised to one- third. 25
Theoretically, this scheme for distinguishing between the
real and the assessed valuations has nothing to recommend
it. As has been pointed out by one critic, it was invented
by some "legislator, who argued that the tax payers would
be more willing to make honest schedules if they could be
fooled into the idea that they were paying taxes on only
one-fifth of their property." Strange as it may seem, the
local assessors do find the scheme of some practical value
in that they can often persuade a man to raise the valua-
tion on his property by explaining that he will be taxed
on only one-third of what he declares anyway ! Indeed the
law itself seems to be drawn with the idea of deceiving the
property owner by making him believe that in some man-
ner this legalized undervaluation will result in lower
taxes. Thus the explanatory notice which is printed on
every schedule of personal property reads: "You are to
give a full, fair cash value of the articles mentioned as
well as the amount of money required to be returned. Only
one-fifth of the several amounts will be taken and assessed
2S Ibid., pp. 2, 3.
24 L. 1898, p. 36.
25 L. 1909, p. 308 el seq.
134 HISTORY OF TAXATION IN ILLINOIS [134
for the purpose of taxation." 26 The high tax rate necessi-
tated by this legal undervaluation is often misunderstood
by persons unfamiliar with the situation and in number-
less cases has doubtless worked to the disadvantage of the
In counties with townships, each township elects
its own assessor. 27 Under the law of 1872 there was one
assessor for each township. From 1894 to 1898 those
townships which desired it and had a population of from
40,000 to 100,000 could have a board of three assessors in
place of a single assessor, but this arrangement was dis-
carded in 1898. 28 Since 1898 a county supervisor has been
provided, in the person of the county treasurer ex officio,
whose function is to oversee the work of the township asses-
sors. 29 He assembles all the assessors annually for consul-
tation and instructions as to the methods of assessment to
In the counties which are not organized under the
township system, the county treasurer acts as county as-
sessor, 30 and appoints deputy assessors. 31 For a short
time the county assessor was appointed by the county
board under the law of 1872 which stated that some person
should be thus appointed to act as assessor until provision
should be made by the legislature for the election of an
assessor. 32 An act passed in 1873 brought about the pres-
ent state of affairs where the county treasurer acts as
2 L. 1898, p. 36.
27 In townships included within cities the city clerk acts as township
assessor. L. 1901, p. 314.
28 L. 1893, P. 735 L. 1895, P. 317; L. 1898, p. 36.
Ibid., p. 36; L. 1903, p. 295.
30 L. 1898, p. 36; L. 1903, p. 299.
81 L. 1871-72, p. 20. The provision of the act of 1898 which specifically
allows county assessors to district their counties and appoint assessors
was repealed in 1903. L. 1898, p. 96; L. 1903, p. 293.
82 L. 1871-72, p. 20.
33 Revised Statutes, 1874, p. 455.
135] TAXABLE PROPERTY AND ITS ASSESSMENT 135
The change in the manner of selecting assessment
officials in Cook County came in 1898. The experience of
electing assessors of townships had proved very unsatis-
factory. Inefficiency was evident upon the face of the re-
turns and corruption was freely charged. 34 It was in an
attempt to remedy this condition that Cook County was
made an exception and given different assessment officials
from those of other counties organized by townships. The
general supervision of the assessment is now entrusted to
a board of five persons, one or two elected every second
year for a term of six years. This board appoints deputy
assessors for all townships in the county except those
which lie, in part at least, outside of Chicago. 35
The Cook County board of assessment is to a great
extent subject to the supervision of the county board of
review, consisting of three elected members. Thus the
board of review must approve the compensation of assess-
ors, the amount and the compensation of clerical help
employed by the assessment board, as well as all appoint-
ments of deputy assessors. 36
The general system of township assessors was snarply
attacked in the report of the revenue commission of 1886. 3T
The abolition of the system and the substitution of a
county assessor elected for four years, with power to ap-
point deputies, was one of the commission's recommenda-
tions but it suffered the common fate of all the reform
The compensation of the assessors varies with the size
of the county. Since 1898 limits have been fixed in the
statutes. 38 All assessors are bonded to a minimum of
$2,000 in Cook and to a maximum of $500 in other coun-
ties, and each assessor must have two or more "sufficient
34 S. E. Sparling, Municipal History of Chicago (Madison, Wis.,
1898), p. 106; Chicago Tribune, Feb. 25, 1898; R. H. Whitten, "The As-
sessment of Taxes in Chicago," Jo. Pol. Econ., V, 175.
35 L. 1898, p. 36; L. 1899, p. 335; L. 1913, p. 509 et seq.
S6 L. 1899, p. 335.
37 Re port of Revenue Commission, 1886, pp. vi, vii.
38 L. 1898, p. 295; L. 1903, p. 299.
136 HISTORY OF TAXATION IN ILLINOIS [136
Township assessors were formerly elected annually
but in 1909 their term was lengthened to two years. 39 In
counties without townships the term of the county treas-
urer, who is also the county assessor, was made two years
by the law of 1873, 40 but this was changed to four years in
The revenue law of 1872 required that all assessors
take the regular oath prescribed for state officers by the
constitution. 42 But the law of 1898 went further and pro-
vided the following special oath for assessors :
I do solemnly swear (or affirm) that I will support the constitution
of the United States and the constitution of the State of Illinois, and
that I will faithfully discharge all the duties of the office- of assessor,
deputy assessor, or supervisor of assessments (as the case may be), to the
best of my ability; that I will without fear or favor appraise all the
property in said county at its fair cash value, said value to be ascer-
tained at what the property would bring at a voluntary sale in the due
course of business and trade ; and that I will assess said property when
so appraised at one-fifth 43 of its said cash value; that I will cause every
person, company, or corporation assessed to sign his, her, or its assess-
ment schedule, and I will administer to each and every person so signing
said assessment schedule the oath thereon, and return said schedule so
signed and file the same with the county clerk. 44
Special penalties were provided in 1898 for tax offi-
cials who failed to do their full duty. Threats to apply
these penalties have been used to good effect as a club over
the heads of negligent officials. 45 Guilty assessors, as well
as other tax officers, may be fined for each offense from
$100 to $5000 and imprisoned in the county jail for one
year. They are also liable upon their bonds for damages
in case the interests of any one have been injured by the
89 L. 1898, p. 36; L. 1909, p. 470.
*Rev. Stat. 1874, p. 455.
41 L. 1881, p. 62.
42 L. 1871-72, p. 20.
43 One-third by amendment of 1909, L. 1909, p. 308 et seq.
"L. 1898, p. 36.
"Notably in the Chicago Teachers' Federation case.
*L. 1808, p. 36.
137] TAXABLE PROPERTY AND ITS ASSESSMENT 137
Return of Assessment Lists.
The manner in which the local assessors proceed to do
the actual work of listing property for taxation and how
the assessments are equalized are considered in detail in
another place. 47 Suffice it to say that after this part of the
work is completed, 48 the assessors sum up their books and
prepare statements of the detailed assessments contained
therein. After they have verified their assessment books;
by an affidavit, all the documents are turned over to the-
county clerk, passing, on the way, through the hands of
the county treasurer as county assessor or as supervisor
of assessments. 49
Before 1898 township assessments were subject to re-
view by a town board. At present Cook County has a re-
view by the county board of assessors before the formal
review by the county board of review. In other counties
the assessment receives its first review by the county board
The county clerk makes an abstract of the county
assessment and forwards it to the auditor for the use of
the state board of equalization. 50
Publication of Assessments.
In 1898, in the vain hope that publicity would prevent
undervaluation, the law was so changed as to require the
publication of the assessment lists. Newspapers \were to
be used for this purpose in all counties except Cook where
pamphlets were to be printed and sent to all taxpayers. 51
In all counties except Cook, the assessment is published us
soon as made, before review. Here the real estate assess-
ment is not published until the changes made by the board
of review can be included. 52
47 Infra, pp. 141 et seq., 166 et seq., 173 et seq.
48 This must be done before June 10; previous to 1898, before July 10.
49 L. 1871-72, p. 23; L. 1879, p. 244; L. 1881, p. 134; L. 1898, p. 36.
BO L. 1871-72, pp. 23, 26; L. 1873-74, p. 57; L. 1879, p. 244; L. 1881, p.
134; L. 1898, p. 36.
"/&., p. 45-
B2 L. 1905, p. 361 ; L. 1907, p. 499.
THE ASSESSMENT OF PERSONAL PROPERTY.
THE PROCESS OF ASSESSMENT.
Definitions and Deductions.
Although the law clearly defines real estate, it gives
no formal definition of personal property. It is evident
from the description of real estate that land, "buildings,
structures, and improvements, and permanent fixtures"
are not considered personal property. 1 Moreover several
types of property are specifically designated in the law
as personal property; among these are money secured by
deed, nursery-stock, franchises, accrued interest on ex-
empted stocks and bonds, a purchaser's interest in ex-
empted lands, gas mains and pipes, street railway tracks
and roads and bridges owned by private companies. 2 The
capital stock of corporations is also considered personal
property under the revenue law. However the stock of
corporations organized under the laws of Illinois, with
certain exceptions, is assessed by the state board of
equalization and this topic is treated elsewhere. The local
assessor is supposed to list as personal property the value
of the capital stock of the excepted corporations, e. g.
"those organized for purely manufacturing and mercantile
purposes or for either of such purposes^ or for the mining
or sale of coal, or for printing, or for the publishing of
newspapers, or for the improving or breeding of stock." 3
A more distinct conception of what the assessors at-
tempt to list as personal property may be gained by read-
ing the items in the schedule which must be filled out by
every property owner. Under these thirty-six items fall
J L. 1871-72, p. 68.
-Ibid., pp. 5, 6, ii.
*Ibid., p. 2; L. 1905, p. 353-
139] THE ASSESSMENT OF PERSONAL PROPERTY 139
all possible varieties of property, except those described
as real estate. The schedule is as follows :
First, the number of horses of all ages, and the value thereof; sec-
ond, the number of cattle of all ages, and the value thereof; third, the
number of mules and asses of all ages, and the value thereof; fourth, the
number of sheep of all ages, and the value thereof ; fifth, the number of
hogs of all ages, and the value thereof ; sixth, every steam engine, in-
cluding boilers, and the value thereof ; seventh, every fire or burglar-proof
safe, and the value- thereof ; eighth, every billiard, pigeon-hole, bagatelle,
or other similar tables, and the value thereof ; ninth, every carriage and
wagon, of whatsoever kind, and the value thereof ; tenth, every watch
and clock, and the value thereof ; eleventh, every sewing or knitting ma-
chine, and the value thereof; twelfth, every pianoforte, and the value
thereof ; thirteenth, every melodeon and organ, and the value thereof ;
fourteenth, 'every franchise, the description and the value thereof ; fif-
teenth, every annuity and royalty, the description and the value thereof ;
sixteenth, every patent right, the description and value thereof; seven-
teenth, every steamboat, sailing vessel, wharf boat, barge or other water
craft, and the value thereof ; eighteenth, the value of merchandise on
hand ; nineteenth, the value of material and manufactured articles on
hand ; twentieth, the value of manufacturer's tools, implements and ma-
chinery (other^than boilers and engines, which shall be listed as such) ;
twenty-first, the value of agricultural tools, implements and machinery;
twenty-second, .the value of gold or silver plate and plated ware; twenty-
third, the value of diamonds and jewelry; twenty-fourth, the amount of
moneys of bank, banker, broker, or stock-jobber; twenty-fifth, the amounts
of credits of bank, banker, broker, or stock-jobber; twenty-sixth, the
amount of moneys of other than bank, banker, broker, or stock-jobber;
twenty-seventh, the amount of credits of other than bank, banker, broker,
or stock-jobber; twenty-eighth, the amount and value of bonds and
stocks ; twenty-ninth, the amount and value of shares of capital stock
of companies and associations not incorporated by the laws of this state ;
thirtieth, the value of property such person is required to list as a pawn-
broker ; thirty-first, the value of property of companies and corporations
other than property hereinbefore enumerated ; thirty-second, the value of
bridge property; thirty-third, the value of property of saloons, and eating
houses ; thirty-fourth, the value of household or office furniture and
property; thirty-fifth, the value of investments in real estate and improve-
ments thereon required to be listed under this Act ; thirty-sixth, the value
of all other property required to be listed. 4
Several of the items of this schedule need explanation
before they become intelligible. Credits are defined in the
4 L. 1871-72, pp. 7, 8.
140 HISTORY OP TAXATION IN ILLINOIS [140
law as "every claim or demand for money, labor, interest,
or other valuable things, due or to become due, not in-
cluding money on deposit" 5 But Credits of bank, banker
etc. are by no means coordinate with Credits of other than
bank, banker etc. Bankers' credits are arrived at by the
following method: from "the amount of checks or other
cash items" (excluding money on hand or in transit and
funds in the hands of others subject to draft) and "the
amount of bills receivable, discounted or purchased, and
other credits due or to become due, including amounts
receivable and interest paid and unpaid," is subtracted
"the amount of all deposits made with them by other
parties" and "the amount of all accounts payable other
than current deposit accounts." 6 Formerly the "amount
of checks and other cash items" was taxed as moneys
and was therefore not subject to deduction. 7
The item of Credits of other than bank, banker etc.,
is not the sum total of all the valuable claims of the tax-
payers who are not in the banking business, for before a
property owner sets down the amount of his credits, he is
permitted to make certain deductions for debt.
The deductions allowed appear to be more substantial
than they really are. In the first place deductions for debts
can be made only from credits* Debts can not be used to
offset any other property on the assessment roll. Unless a
man owns something which falls under the technical defini-
tion of a credit, he may be utterly bankrupt with debts and
yet unable to secure a deduction from his assessment.
Moreover, not all debts are considered valid for deduction
purposes; the law specifies that no deduction shall be al-
lowed on account of any obligations to insurance com-
panies on premiums or policies, unpaid subscriptions to re-
ligious, charitable, and other societies, or unpaid install-
ments on the capital stock of any corporation. Finally,
not all credits, even, may be offset by debts ; it is provided
&Ibid., p. 68.
'Ibid., p. 10; L. 1903, p. 294.
7 L. 1871-72, p. 9.
Ibid., pp. 8, 9.
141] THE ASSESSMENT OF PERSONAL PROPERTY 141
that no deduction shall be allowed from the amount of any
bonds, stocks, or money loaned. Thus, after all the condi-
tions have been met, little of importance except book-ac-
counts for goods sold are legally subject to deduction for
No one can find a theoretical justification for the
policy pursued in Illinois in the deduction of debts. For
example, money due in payment for a loan is a credit not
subject to deduction. Money due in payment for goods sold
is a credit also, but is subject to deduction. Such distinc-
tions must base whatever justifications they may have on
the ground of expediency. It is interesting to note that
local tax officials say that these distinctions are not always
observed in actual practice. Thus notes held in part pay-
ment for land are many times declared not subject to de-
duction for debts.
Moneys of bank, banker etc. are described as "the
amount of money on hand or in transit," and "the amount
of funds in the hands of other banks, bankers, brokers, or
others, subject to draft." 9 Moreover, the figures appearing
under the Bank, banker etc. items do not include the prop-
erty of the state and national banks which are taxed in a
different manner. 10 The other items of the schedule of
personal property need no explanation.
Manner of Listing.
Every person in thestateis called upon annually to
list his personal pro|5Sr!;yT*''vv'hen intangible personal
property is to be assessed, self-assessment seems almost in-
evitable. The only type of personal property which the
assessor attempts to reach without the aid of a confession
by the individual property owner, is the stock of the state
and national banks. A particularly archaic provision to
continue upon the statutes of a woman suffrage state is
that which provides that the property of a wife shall be
listed "by her husband, if in sound mind ; if not, by herself."
g Cf. supra, pp. 128-129.
10 'Infra, p. 212.
"L. 1871-72, p. 3.
142 HISTORY OF TAXATION IN ILLINOIS [142
Since 1898, property has been listed in April and May,
with reference to the amount owned on April first. 18
Formerly the assessments had been made one month later>
during May and June. 13
The general rule that personal property is listed where
the owner resides is not adhered to in all cases. 14 Thus
the capital stock and franchises of corporations are taxed
where the principal office is located; in case the owner
of live stock or other personal property connected with a
farm does not reside on it, such property is listed where
the farm lies rather than where the owner lives; a pur-
chaser's interest in exempted lands is taxed where the
lands are situated ; water craft are taxed where licensed ;
property of companies such as banks, bankers, brokers,
stock-jobbers, etc., is assessed where their business is car-
ried on; 15 Illinois life insurance companies are taxed
where, according to the articles of incorporation, their prin-
cipal office is located, unless another place has been chos-
en ; 16 gas mains and pipes, street railway tracks, roads and
bridges are taxed where laid or located; the property of
stage, express, or transportation companies is taxed where
To secure the listing of personal property the law pro-
vides that the assessor call upon each resident of the
state during the assessment period, and require him to
fill out and sign an itemized schedule. 17 In case of sick-
ness or absence at the time of the call, a blank is left which
is to be filled out and returned to the assessor. If, for any
reason, a person fails to fill out this schedule, he must
submit to taxation on the basis of a statement made out by
the asessor according to his best judgment and inform-
12 L. 1898, p. 36.
L. 1871-72, p. 3-
14 Ibid., pp. 4, 5, 6.
15 L. 1905, p. 356.
17 L. 1871-72, pp. 2, 21. For this schedule see supra, p. 139.
18 1 bid., p. 22.
143] THE ASSESSMENT OF PERSONAL PROPERTY 143
Oaths and Penalties.
Before 1879 the law permitted, and since 1879 it has
required that the assessor administer an oath to every
person making out a schedule. 19 He may also examine
under oath any person whom he may suppose to have
knowledge of the personal property of any one who refuses
to fill out his schedule. 20 Finally, a special oath is pre-
scribed in cases where debts are presented to counterbal-
ance credits. 21
The assessor is supported by elaborate penalties in his
task of securing the listing of personal property. Since
1879, it has been the law that fifty per cent shall be added
to the assessor's estimate of the property of the person who
refuses to make out a schedule. 22 Moreover, refusal to
schedule such property was made a misdemeanor punish-
able by fine. If a person swears falsely he is to be prose-
cuted for perjury. 23 In case property is discovered which
has been escaping taxation in the past, back taxes with ten
per cent interest are to be collected. 24 By the law of 1898
the person who turns in a false or fraudulent statement
with the intention of defeating or evading the law renders
himself liable to the heavy punishment of a fine of $5,000
and imprisonment for one year. 25 As a spur to the zeal
of the state's attorney in prosecuting such cases, a special
Ibid., p. 8; L. 1879, p. 252.
20 L. 1871-72, p. 21.
21 Ibid., p. 9.
22 L. 1879, p. 252; L. 1898, p. 36.
23 L. 1871-72, p. 8.
24 Ibid., pp. 64, 65. The force of this section was partly overcome by
a decision of the supreme court in 1885. Allwood v. Cowen et al. in
III. 481 (1885). It was held that in the case of credits, the assessor as-
sumed a judicial position and that, therefore, his act could not be re-
viewed by another assessor in after years. But actually this judicial
activity is only a simple arithmetical calculation. Every person who
desires a deduction for debt must list both his debts and credits; the
assessor merely subtracts the one from the other. Cf. The People v.
Sellars, 179 III. 170 (1899).
25 L. 1898, p. 51. By a law of 1872 a lighter penalty was provided.
L. 1871-72, p. 17.
144 HISTORY OF TAXATION IN ILLINOIS [144
fee of twenty dollars for each conviction together with
ten per cent of all fines collected was allowed. Moreover,
the board of review 26 has power to call witnesses, assessors
or others, and to inquire of them as to the correctness of
valuations. Special punishment of fine and imprisonment
is provided for the assessor who breaks his pledge to assess
all property according to the law, to compel every person
to sign and swear to his schedule, and for the assessor
who omits to list property or undervalues it. 27 A fine
is prescribed also in cases where fraudulent statements of
deductions are made. 28
Surely it would be unreasonable to ask for more s^rin-
gent regulations governing the listing of personal property
than those provided in the code. Ample powers seem to be
given the assessors to compel the property owners to de-
clare their taxable goods. Oaths, fines, penalties, and
powers of inquisition are supplied him ; and if the assess-
ment is not full and fair it would seem not to be the fault
of the legislators who have provided the authority to the
local administrative officers. A brief study of the revenue
law is enough to convince anyone that the fault of what-
ever evil conditions may exist does not rest there. Either
the system is an impossible one or the administrative
officers, because of inefficiency, negligence, or cupidity,
fail in their duty.
EFFICIENCY OF THE PERSONAL PROPERTY ASSESSMENT.
In considering the taxation of personal property,
especially of intangible personal property, the discussion
necessarily assumes a character as complex as that of the
famous Pooh-Bah. Whether a statement is true or false de-
pends entirely upon the point of view; it makes all the
difference in the world whether one speaks as Chancellor
of the Exchequer or as Attorney General. It seemed,
when the question was considered from the viewpoint of
the statutes that personal property was taxed in Illinois,
- e Cf. infra, p. 173 et seq.
"L. 1898, p. 39-
28 L. 1871-72, p. 9.
145] THE ASSESSMENT OF PERSONAL PROPERTY 145
for as has been seen it would be difficult to devise a more
stringent set of penalties, oaths, and instructions than
those prescribed for the taxation of such property in the
present revenue law. But the matter takes on a different
aspect when viewed by the Chancellor of the Exchequer
and from the amount of revenue brought in the treasury
from the tax on personal property, one would be inclined
to discount the evidence of the statute book.
In taking up the examination of the efficiency of the
law it is interesting to recall that one of the prime causes
of the revamping of the revenue law in 1872 was to secure
the listing of this particular kind of property. When the
governor sent a message to the legislature urging a revision
of the revenue law, he enclosed as an argument a letter
from the state auditor which said that "the first necessity
for an immediate and radical change and revision" of the
revenue law grew out of "the undeniable and admitted
fact" that the great mass of intangible personal property
escaped taxation; $150,000,000 of such property, he be-
lieved, escaped the assessors each year. 29 It must be con-
ceded that the legislature was not backward in its response.
It gave the state a code which should have succeeded in
reaching personal property if any code depending upon
self-assessment, oaths, and penalties could be successful.
But after a trial of forty years it is evident that the at-
tempt has been a failure.
In seeking to test the efficiency of the assessors, one
difficulty presents itself at the very outset in that the
data furnished in the auditors' reports are not well adapted
for the purpose. The assessment figures are not in a form
easily comparable with the estimates of true values ob-
tainable from other sources. Thus under the item of
Credits of Banks, Bankers etc. are given merely the results
of deducting certain debits from certain credits, none of
the original terms being supplied. The figures given under
Credits of other than Banks, Bankers etc. are also result-
ants, no specification being made of the fund subject to
Re ports, 27 G. A., 1871, III, 101.
146 HISTORY OF TAXATION IN ILLINOIS [146
deduction for debts. Moreover, no distinction is drawn
between the various kinds of credits mortgages, notes,
book-accounts etc. Moneys of other than Banks,, Bankers
etc. represent not only cash which tax payers may have on
hand but whatever money they may have on deposit in the
various banks. It will be readily seen that these conditions
make precise statements about the efficiency of the assess-
ment of intangible property very difficult. But as it hap-
pens this is not particularly important, as the evasion and
undervaluation is so gross as to render precise statements
superfluous. After making every possible allowance for
indeterminate factors the assessment, as will be shown,
appears still to be extremely inefficient.
Mortgages and Credits.
It has seemed well to examine in detail several items
on the schedule of personal property as test probes of
the efficiency of the assessment. As an example of the
assessment of intangible personal property, the item which
appears in the auditor's reports as Credits of other than
Bank, Banker, Broker, Stockjobber has been chosen as the
first to be examined. All property owners except banks,
bankers, brokers etc. are expected to list their credits
under this head. Credits do not include bonds and stocks
and money on deposit ; they do include all other claims or
demands for anything of value except in so far as these
claims are counterbalanced by debts. It will be recalled 30
that some credits, such as those for money loaned, are
not liable to deduction and some debts are not available
for counterbalancing credits. The amounts returned to
the state auditor under this head should, then, include the
total amount of all money loaned as well as all other
valuable claims not cancelled by bona fide debts. Table
10 gives the assessed value of this class of credits for
the years mentioned.
, pp. 140-141.
147] THE ASSESSMENT OF PERSONAL PEOPERTY 147
ASSESSED VALUE OF CREDITS, NOT INCLUDING BANKERS' CREDITS, 1875-1912.
Entire State Cook County
1875 $24,018,237 $ 146,124
1880 17,680,302 211,815
1885 13,102,498 250,239
1890 11,175,380 190,535
1895 10,342,774 67,660
1900 22,181,440 2,819,312
1905 21,467,724 2,751,212
1906 22,720,543 3,463,790
1907 25,866,300 5,803,866
1908 21,418,528 1,357,322
1909 45,464,043 10,852,091
1910 38,681,356 4,063,277
1911 37,738,112 4,194,186
1912 38,561,691 5,090,345
One needs only to glance over the amounts of credits
assessed year by year to realize that undervaluation or
evasion exists to a considerable degree. What other reason-
able explanation can be made when upon investigation one
discovers a drop from nearly thirty-six millions in 1873 to
less than eleven millions in 1892? In 1898, just before
the new revenue law went into effect, the assessment of
credits was scarcely one-third what it had been twenty-five
years before and during that time the population of the
state had nearly doubled.
In 1899, with the introduction of a law which legal-
ized undervaluation by authorizing an assessment on the
basis of twenty per cent of true value, but which at the
same time strengthened the hands of the assessors, the
returns leaped from twelve millions to twenty-six and a
half million. Again, although the increase of the figures
for 1909 over 1908 must be ascribed in part to the law
changing the valuation from the one-fifth to the one-third
basis, this line of explanation will not account for the
increase in the Cook County returns from a little over
one million to nearly eleven millions. Who would stand
sponsor for the statement that in one year, from 1909 to
1910, the credits in Cook County decreased in value from
148 HISTORY OF TAXATION IN ILLINOIS . [148
eleven million to four million dollars? More than one
hundred times as much credits were taxed in 1899 as in
1895. After comparing the return of eleven millions in
1909 with the $67,660 assessed in 1895, or with the $80,-
101 assessed in 1897, or even with the five millions assessed
in 1912, any reasonable mind will be convinced that a great
many mortgages in Cook County escaped the assessor's
net in those years.
Another test of undervaluation and evasion is secured
by contrasting the assessments of the various counties.
In a state like Illinois it may be safely assumed that at
least as many credits are owned by city people as by those
who live in the agricultural districts. It is probable that
the current of borrowed money is even stronger from the
city toward the country than vice versa. Such statistics
as are available for Illinois seem to bear out this assump-
tion. 31 Therefore Cook County, the city county of the
state, should have a per capita assessment of credits at
least as large as the agricultural counties. But as is dem-
onstrated by the material presented in Table 11, the
returns from Cook County are unable to stand this test.
Indeed in only one year, 1899, did it bear its share of the
burden, population being taken as the test of the amount
owned in the different communities. In every other year
the returns from Cook County show evidence of evasion.
The most startling figures are those for 1895. At this time
Cook County contained one-third of the population of the
state and yet listed but one one-hundred-and fifty-fourth of
the credits assessed for taxation. The showing for many
other years is almost as poor. In 1908 about seventy-five
cents worth of credits ($.738) was listed for each person in
Cook County, while nearly six dollars and seventy-five cents
worth ($6.72) was listed for each person outside of Cook
County. In that year Winnebago County listed almost
as many credits as Cook County ; the population of Winne-
bago County is less than fifty thousand; that of Chicago
is over two million, three hundred thousand. However,
81 C/. Report of the Illinois Bureau of Labor Statistics, 1888.
149] THE ASSESSMENT OF PEBSONAL PROPERTY 149
considerable improvement is apparent in the distribution
between counties since 1898.
COMPARISON OF COOK COUNTY -WITH THE REMAINDER OF THE STATE IN
RESPECT TO THE ASSESSED VALUE OF CREDITS, NOT INCLUDING
BANKERS' CREDITS, 1873-1912.
1870 6:1 1880 4:1 1890 2:1 1900 1.6 :i 1910 1.3:1
t 1910 9:1
t 1911 8:1
1892 88 :i
[ 1912 7:1
1894 21 :i
Thus far, merely the internal evidence of the auditors'
reports has been presented. These reports show only the
property which has been assessed. Therefore, as yet,
nothing definite has been shown about the property which
should have been assessed. Here help was secured from
the Report of the Bureau of Labor Statistics made in 1888,
which contains data on the mortgage indebtedness of the
state in the years 1880 and 1887. It happens that this
report contains most of the data necessary for making
the proper deductions from the gross amount of mortgages
in force, thus furnishing a figure truly comparable with
the assessment. Although the data are old, they never-
theless have a present day significance.
As will be seen by referring to Table 12 the first
item to be substracted is that of mortgages for deferred
payments, such mortgages, according to the letter of the
law, being eligible to deduction for debts. Although in
actual practice few deductions are allowed from such
credits, in order to be very conservative all of them are
HISTORY OF TAXATION IN ILLINOIS
TAXABLE MORTGAGES IN 1880 AND 1887 IN COOK COUNTY AND ENTIRE STATE.
Entire State Cook County
1880 1887 1880 1887
I. Mortgages in force
(a) $196,656,074 $402,053,118 $ 64,156,754 $220,603,230
2. Mortgages for
ments, (b) 36,396,957 104,176,179
3. Mortgages for
(c) 21,936,152 30,9355i5 6,268,329 13,283,899
4. Mortgages own-
ed by building
and loan as-
sociations (d) 1,025,176 20,449,352
tions $ 59,358,285 $155,561,046 $ 16,590,582 $ 83,231.155''
5. Total taxable mort-
gages $137,297,789 $246,492,072 $ 47,566,172 $137,372,075
6. Assessed value of
Credits of Other
than Bank, etc $ 17,680,302 $ 12,160,825 $ 211,815 $ 117,170
(a) Item i, Mortgages in force, was obtained by multiplying the
mortgages in force recorded during the year by their average length of
term, a method criticised by J. P. Dunn, Jr. (Political Science Quarterly,
V, 73), but one which is accurate enough for this purpose.
(b) Item 2, Mortgages for deferred payments, includes unaccrued
interest, as does also Item 4, Mortgages owned by building and loan asso-
ciations. Sufficient data for eliminating the interest in these two items
are not supplied in the report.
(c) Item 3, Mortgages for money loaned, owned by non-residents,
was obtained from the figures given in the report for all mortgages held
by non-residents. The average term of a mortgage of this class for 1880
is not given in the report. It is assumed that it was the same for 1880
as for 1887. It would not be proper to subtract all mortgages held by
non-residents, for some of these have already been subtracted in the Item
2, Mortgages for deferred payments. It was assumed that the same pro-
portion of mortgages for deferred payments was held by both residents
and non-residents. Following this assumption the figure in the table was
151] THE ASSESSMENT OF PERSONAL PROPERTY 151
considered in the calculation to be blotted out by decla-
rations of debt.
The second item subtracted, mortgages owned by
non-residents, is also over-conservative, for many mort-
gages on property in other states were owned by residents
of Illinois perhaps as many as the Illinois mortgages
owned by non-residents.
But the figures as they stand after the foregoing
substractions still include the mortgages of banks and
other such institutions whose credits are listed under a
different form. Perhaps the most important of these com-
panies, and the only ones for which information is ob-
tainable, are the building and loan associations; their
mortgages are accordingly subtracted also.
The figures obtained after making all these deduc-
tions, represent the value of the mortgages which should
have been listed in 1880 and 1887. 32 It will be recalled
that the item of the auditors' reports with which these
figures are to be compared, is supposed to include not only
these mortgages but also notes not recorded, accounts,
mortgages for deferred payment, mortgages in other states
owned by citizens of Illinois, and every other demand for
a valuable thing, not cancelled by debts. The assessed
value of credits should have been, then, considerably larger
than the total value of the taxable mortgages. But in
1880, as is shown in the table, when there were over one
hundred and thirty-seven millions of taxable mortgages
alone in the state, the assessors were able to find only
about eighteen millions of all kinds of credits. In the same
year when there were nearly forty-eight millions in mort-
arrived at by using the following proportion : the total amount of mort-
gages is to the total amount of mortgages for money loaned as the total
amount of mortgages executed to non-residents is to the amount of mort-
gages for money loaned executed to non-residents, or x.
(<0 No average terms being given for 1880, those for 1887 were
used. A proportion similar to that used in Item 3, was resorted to in
this case in order to eliminate the mortgages for deferred payments be-
longing to building and loan associations.
32 No account is taken of the fact that some mortgages given to resi-
dents of Illinois are afterwards transferred to non-residents.
152 HISTORY OF TAXATION IN ILLINOIS [152
gages which should have been taxed in Cook County, the
assessed value of all credits in this county was only $211,-
815. The figures for 1887 are even more unfavorable.
By that time the taxable mortgage value for the entire
state had risen to $246, 492, 072, but the assessed value of
credits had actually fallen over five millions from the 1880
figure to $12,160,825. In Cook County, it would appear
from the assessors' returns, the total value of credits was
only $117,170. But in that very year the taxable mortgages
alone amounted in this county to $137,372,075. This
meant that in Cook County the assessment efficiency was
about one-tenth of one per cent. Or, to state it in another
way, about nine hundred and ninety-nine mortgages out
of each one thousand escaped taxation. It is true that
real estate and property in general were considerably un-
dervalued at this time. But mortgages, when reached
by the assessor, are seldom greatly undervalued and there-
fore the great bulk of the discrepancies between real and
assessed values must be ascribed to evasion. 33
It is not difficult to make a rough estimate of the ef-
ficiency of the law at the present time. The assessment
in 1912 was about thirty-eight and one half million dollars
as compared with the twelve million in 1887. What the
increase in taxable mortgages has been can only be con-
jectured; but material gathered in Jo Daviess County
between 1900 and 1906 shows that in this single county
the value of the mortgages subject to taxation had about
trebled. 34 If this were true for the entire state, it would
indicate that the taxation of credits in Illinois at the
present time is but little less a farce than it was in the
eighties. Indeed, the testimony of the officers who enforce
the law confirms this view. The special counsel for the
board of review of Champaign County, in a recent campaign
against tax dodgers, declared that not one mortgage in
83 This statement assumes that the mortgages recorded in Cook County,
except those owned by residents of other states, were owned by Chi-
3 *Wisconsin Tax Commission Report, 1907, p. 339.
153] THE ASSESSMENT OF PERSONAL PROPERTY 153
twenty was taxed and the county treasurer bore him out
in this estimate.
A very interesting way to become enlightened
about the efficiency of mortgage taxation is to attend a
hearing of a county board of review. There you find
that about the only person who lists a mortgage is
the man whose property has recently been acquired
through inheritance and whose possessions are known
to the assessor because of the recently probated will y
or perhaps an occasional woman, who, terrified by
an order to appear before the board, trembling admits that
she owns a mortgage, and submits to a tax which takes
from her nearly half of her interest. Sometimes the re-
viewers do not even bother to summon skillful business
men whom they know to have mortgages and who are
conversant with the rules of the game. Indeed the manner
of some of the officials would indicate that they consider
it more or less of a joke when a person is foolish enough
to admit that he is the owner of credits.
Of odds and ends, therefore, is the item of credits
made up. Instead of the great mass of evidences of debt
which the law seeks to tax under this head, only an oc-
casional mortgage is reached. It would seem that forty
years was a sufficiently long time to experiment with the
self-assessment system of intangible personal property.
The result of the experiment is known to all who have
made the slightest inquiry into the situation; there is no
one bold enough to pretend that it has been a success.
The violent fluctuations from year to year in the assessed
values, the wide differences between the returns from va-
rious counties, the great disparity between the assessment
values and the estimates of the actual values of taxable
credits, and the testimony of common observation all
condemn the present plan for extracting a revenue from
this class of intangible personal property.
The next item used as a test of the success of the
property tax in reaching personal property is called
Credits of Bank, Banker, Broker, Stock-jobber. This item
154 HISTORY OF TAXATION IN ILLINOIS [154
is an excellent example of the complicated nature of many
of the provisions of the law which the local officials are
called upon to administer. As has already been ex-
plained, 35 it is very different in content from the item
just considered. Table 13 shows the values assessed
under this head for selected years.
ASSESSED VALUE OF BANKERS' CREDITS, 1875-1912.
Entire State Cook County
1875 $1,953,223 $ 349,573
1880 1,414,971 55,342
1885 1,337,114 105,610
1890 1,050,489 30,308
1895 1,724,611 12,225
1900 1,919,722 236,366
1905 3,539,058 233,013
1906 2,173,885 286,069
1907 3,872,426 247,924
1908 3,902,282 229,073
1909 5,722,372 481,619
1910 7,180,020 1,686,397
1911 8,375,682 2,559,073
1912 - 7,8i9,935 1,257,024
The insignificance of these amounts together with the
fact that the item is obviously intended to gather up the
left-overs, makes extended comment inadvisable. A few
points may be noted, however, as being indicative of the
general inefficiency of the assessment. Thus the bank
credits reported in 1892 from Cook county, including Chi-
cago, amounted to the miserly sum of $8,200. Between
1898 and 1899 they jumped from $12,180 to $1,919,433.
The sudden rise in 1899 was probably due to the change
in the revenue law of that year, which did not redefine
credits but merely modified the assessment machinery.
Changes in the law which one would expect to see clearly
reflected in the assesment returns seem to have had little
or no effect. Thus the law of 1901 exempting banks incor-
porated under the state law caused no falling off in the
assessment values; this would seem to indicate that the
as Supra, p. 140.
198,313.57 $ 157,501.76
CALCULATION OF THE NET TAXABLE CREDITS OF THE STATE BANKS OF
CHICAGO ON JUNE 5, 1893 (a)
Gross Tax- Deductions Net Tax-
able Credits Deductions over Credits able Credits
1. Bank of Com-
merce $1,309,115.96 $1,586,973.39 $ 277,857.43
2. Bank of Illinois
3. Central Trust
4. Chicago City
5. Chicago Trust
6. Com me r cial
Loan and Trust
7. Corn Exchange
Bank 7,043,022.79 7,857,974-15
8. Dime Savings
Bank 480,856.76 503,438.62
9. Garden City
Trust Co 1,081,646.30 1,051,279.22
10. Globe Savings
Bank 693,278.42 649,721.59
11. Home Savings
Bank 236,751.59 315,546.78
Guaranty Co 264,050.00 21,862.93
13. Illinois Trust
Bank i5,oi5,375-97 18,856,185.58 3,840,809.61
14. Industrial Bank
of Chicago 271,995.79 129,737.33 142,258.46
15. Interna t i o n a 1
Bank 1,406,957.31 958,592.89 448,364.42
16. Merchants State
Bank 25,000.00 25,000.00
(a). Compiled from the reports to the Auditor.
HISTORY OF TAXATION IN ILLINOIS
TABLE 14 CONTINUED
Gross Tax- Deductions Net Tax-
able Credits Deductions over Credits able Credits
17. Milwaukee Ave.
State Bank 759,983.64 590,014.31 169,969.33
18. Northwes tern
Trust Co 722,076.42 646,349.47 75,726-95
19. Royal Trust Co. 884,368.60 531, 154-53 353,2i4-<>7
20. South Side
State Bank 107,502.49 18,202.65 89,299.84
21. State Bank of
Chicago 2,087,165.85 2,101,863.54 14,697.69
22. The American
Trust and Sav-
ings Bank 3,937,478-98 4,876,751.57 939,272-59
23. The Hibernian
ciation 2,962,716.02 2,954,354.53 8,361.49
24. The Merchants
Trust Co 9,456,229.52 10,517,370.85 1,061,141.33
25. The Northern
Trust Co 4,264,573.75 5,849,280.90 1,584,707.15
26. The Prairie
and Trust Co.... 1,458,853.54 2,283,862.65 825,009.11
27. Union Trust
Co 2,148,769.14 3,074,530.16 925,761.02 _
Total Net Taxable Credits $2,497,721.80
credits of the state banks had not been reached for taxa-
tion. The law of 1903 classing sums in the hands of other
banks subject to draft and certain cash items as credits
seems to have had little effect toward increasing the as-
sessment. Indeed, the amount returned in 1906 was
smaller than that returned in 1902 ($2,173,885, as com-
pared with 12,800,441).
In attempting to secure a figure with which to com-
pare the sum returned as bank credits, recourse was made
to the reports of the state banks to the auditor in his
157] THE ASSESSMENT OF PERSONAL PROPERTY 157
capacity as bank examiner. One calculation was made
from the reports of June 5, 1893, and another from reports
rendered on April 27, 1900. 36 The report made on the
date nearest the assessment day was chosen but in each
case it fell some days away, and during this time it is pos-
sible that the figures in the bank statements changed quite
radically. The results of these calculations, therefore,
should be accepted with these facts in mind.
By referring to Table 14 it will be found that in 1893
the state banks of Chicago had net taxable credits to the
amount of |2,497,721.80, according to their statements of
condition made thirty-six days before the date of assess-
ment. The credits for all the state banks, for all the pri-
vate banks, brokers etc., in Cook County, including Chi-
cago, were assessed that year at |22,375. Property in
general at this time was undervalued greatly, but it re-
quires a great degree of undervaluation to explain how
two and one-half million in credits could be listed at
twenty thousand dollars. These figures would seem to
indicate evasion of the grossest type. 37
36 The tests were made on these particular dates for these reasons.
The first was made from 1893 data in order to check the results of the
Report of the Bureau of Labor Statistics (cf. note 37). The year
1900 was chosen for the second test because it is probably the most nor-
mal of recent years. In 1899 the new revenue law went into effect and
in 1901 the state banks were exempted from making their returns in this
form. L. 1901, p. 266.
S7 In a report on taxation, published as a part of the Report of the
Bureau of Labor Statistics for 1894, the following table is given to show
the efficiency of the assessment of bank credits. The table is compiled
from a report to the auditor showing the condition of the state banks- in
Chicago on June 5, 1893 (p. 34), and is reproduced exactly, no attempt
being made to eliminate errors.
Resources of Twenty-Seven Chicago Banks as Shown by the Auditor's
Loans and Discounts $59 995,715.29
Bonds and Stocks (other than U. S.) 8,099,450.78
Total Taxable Credits $68,196,851.07
158 HISTORY OF TAXATION IN ILLINOIS [158
In 1900, on the other hand, the assessment figures tell
a somewhat different story. This is evident from Table 15.
On April 27, twenty-seven days after the assessment date
of that year, the net taxable credits of twenty-five state
banks in Chicago were $568,700.49 according to the bank
statements. The bank credits reported for taxation from
Cook County on April 1 of that year were valued at $236,-
366. But this valuation was avowedly on the one-fifth
basis, so that it should be multiplied by five to get the real
cash value of the credits assessed. From this it appears
that twenty-five state banks in Chicago had one-half the
whole amount of credits listed for all the bankers, brokers,
Subject to the following deductions:
Savings Deposits $21 ,275,598.93
Individual Deposits 33,578,645.52
Demand Certif. of Deposit 2,049,027.18
Time Certif. of Deposit 3,686,203.97
Certified Checks 852,145.65
Cashier's Checks 498,367.74
Due to Other Banks 5,132,847.11
Total deductions $67,138,745.82
Net Taxable Credits, June 5, 1893 1,058,105.25
Net Credits Listed, May i, 1894. 10,000.00
The errors in this table are so serious as to make it utterly worthless.
First of all, the item of Bonds and Stocks should not be included among
the credits, for the law provides that these securities shall be listed as a
separate item on the assesment roll and that no deduction shall be al-
lowed from them. The subtraction of this item leaves no balance of
taxable credits at all.
But much more serious than this first criticism is the one which must
be made against the general method employed. The table is merely a
computation made from the sum totals of the various items included in
the statements of the twenty-seven banks. But the assessor does not treat
the banks collectively. Instead of taking them as a group as is done in
this statement, he assesses each one individually. Therefore in order to
make a fair comparison, it is necessary to ascertain the net taxable credits
for each individual bank, add them together and contrast with the credits
assessed. By this method (cf. Table 14) even more startling results are
obtained than were presented in the report.
THE ASSESSMENT OF PERSONAL PROPERTY
and the stock-jobbers in Cook County a statement which
on the face of it reveals no great undervaluation or evasion.
It appears then that, although the evidence in regard
to the assessments of the credits of bankers is somewhat
conflicting and inconclusive, it is probable that underval-
uation and evasion are to be found here to a considerable
CALCULATION OF THE NET TAXABLE CREDITS OF THE STATE BANKS OF COOK
COUNTY ON APRIL 27, 1900. (a)
Gross Tax- Balance of Net Tax-
able Credits Deductions Deductions able Credits
Avenue State Bank,
Oak Park $ 108,753.05 $ 224,940.27 $ 116,187.22
Bank of Chicago
Heights 131,451.09 188,339.26 56,888.17
Bank of Harvey 105,907.73 171,149.43 65,241.70
Chicago City Bank.. 546,703.56 501,587.74 $ 45,115.82
Banking Co 2,573,144.62 2,160,053.58 413,091.04
Garden City Bank-
ing and Trust Co. 2,025,473.39 2,332,622.44 307,149.05
Association 4,890,160.79 7,294,309.78 2,404,148.99
Home Savings Bank 1,291,725.28 1,291,725.28
Illinois Trust and
Savings Bank 34,905,790.61 59,601,610.24 24,695,819.63
La Grange State
Bank 112,658.76 128,164.81 15,506.05
Lemont State Bank.. 15,023.70 23,060.33 8,036.63
State Bank 1,152,044.11 1,465,809.49 313,765.38
Oak Park State
Bank, Oak Park.... 590,992.54 742,418.84 151,426.30
Credit Co 751,023.96 669,051.88 81,972.08
Prairie State Bank.. 2,369,318.53 3,121,209.60 751,891.07
Pullman Loan and
Savings Bank 822,352.03 1,440,052.46 617,700.43
Royal Trust Co 1,936,892.85 2,364,323.77 427,430.92
State Bank of Chi-
cago 4,552,061.94 5,474,348.95 992,287.01
(a) Compiled from the reports of the Auditor.
160 HISTORY OF TAXATION IN ILLINOIS [160
TABLE 15 CONTINUED
Gross Tax- Deductions Net Tax-
able Credits Deductions Deductions able Credits
State Bank of Evan-
ston 628,083.30 1,129,788.20 501,704.90
State Bank of West
Pullman 63,656.00 82,153.33 18,497-33
American Trust and
Savings Bank 6,225,791.68 9,854,399-96 3,628,608.28
Merchants Loan and
Trust Co 13,334,768.38 21,097,983.40 7,763,215.02
The Northern Trust
Co 9,266,281.56 17,101,825.51 7,835,543-95
The Western State
Bank 591,783.03 563,261.48 28,521.55
The Union Trust Co. 2,937,505.13 4,383,724.14 1,446,219.01
Total Net Taxable Credits $ 568,700.49
The assessor has had poor success also in reaching
tangible personal property for taxation. The long col-
umns of figures in the reports of the state auditor, which
present the results of the assessors' efforts in this direction,
belie the tradition as to the dryness of statistics. So rid-
iculous are some of the returns that not long ago they
were made the text for a sketch by a popular writer which
appeared in the comic section of a syndicate of newspapers.
What could be more preposterous, for example, than the
statement that the full cash value of all the diamonds and
jewelry in Chicago in 1911 was only about a half-million
dollars? 38 and this finds a worthy companion in the state-
ment that there is not a single patent of value owned by a
resident of the city. 39 According to the assessment figures,
melodeons and organs have been relegated entirely to the
rural regions for not one instrument was found in metro-
politan Cook County. 40 Pianos in Perry County have a
38 $576,900; assessed value $192,300. Auditor's Report, 1912, p. 432.
39 Ibid., p. 430.
"Ibid., p. 428.
161 J THE ASSESSMENT OP PERSONAL PROPERTY 161
fair cash value of about fifteen dollars apiece. 41 But in
spite of their apparent cheapness, the number assessed
shows that they are quite scarce; there were not one hun-
dred and fifty thousand in the entire state in 1911. 42
Watches and clocks are also surprisingly rare in view of
their extremely low cost. The average timepiece in 1911
had a fair cash value of about six dollars and a half, 43 and
yet there were only 328,306 in the entire state. In Cook
County, only one person in every one hundred and eighty-
eight could afford a watch or clock. Cook County is
twenty-five times as populous as Kane County, but con-
tains only a few more watches and clocks. 44 It is a heavy
blow to the literary reputation of the state to have the
statement published broadcast that only eighty-five per-
sons in the state were the fortunate possessors of annuities
or royalties of any sort in 1911. 45 Again, franchises were
listed in Cook County to the number of seventeen with a
total cash value of $7,782. 46
A very satisfactory item for use in comparing real
with assessed values is that called "Moneys of other than
bank, bankers etc." All persons not included in the legal
41 $IS-S4; assessed value $5.18. Ibid., p. 427.
43 $6.5i ; assessed value $2.17.
44 The population of Kane County is 91,862 and that of Cook is
2,405,233. 12,780 watches and clocks are listed for Cook County and
10,663 for Kane.
45 Aud. Rept. 1912, p. 429.
"Assessed value $2,594. Ibid., p. 428.
A resident of Champaign County bought an automobile in 1912 for
$2,500. He gave its fair case value to the assessor as $1,000. Some time
later, prompted by a qualm of conscience, he contemplated increasing his
valuation but before doing so, happened to recall that a neighbor, a
county tax official, had paid $3,000 for a machine and decided before
making any change to see what valuation this man had placed on his car.
When he found that the new $3,000 automobile was listed at $200, he
decided that his own statement needed no revision upward.
Instances of this sort might be multiplied indefinitely.
162 HISTORY OF TAXATION IN ILLINOIS [162
definition of bank, banker, broker etc. 47 are required by
the law to list whatever money they may possess under
this item. This is practically a tax upon bank credit in
the hands of private individuals 48 and it is possible to test
its success by comparing the assessed values with bank
But first it may be well to glance at the assessment
figures for the whole period. The assessed values of this
item for the years specified, as shown by the auditors' re-
ports, were as follows :
ASSESSED VALUE OF MONEYS, NOT INCLUDING BANKERS' MONEYS, 1875-1913.
Entire State Cook County
1875 $15,248,399 $ 294,712
1880 13,014,803 1,207,874
1885 9,345,88o 1,164,552
1890 9,456,573 1,061,264
1895 9,176,947 M59.384
1900 15,115,652 1,675,331
1905 18,435,506 1,757,465
1906 18,773,144 i,9H,927
1907 18,944,236 1,761,304
1908 18,728,241 963,907
1909 31,257,604 1,368,952
1910 32,204,798 1,819,565
I9H 35,525,479 3,733,947
1912 33,828,858 2,173,277
The variations in this case are not so great as they were
in the assessments of credits. An increase from about
eight to eighteen million dollars in 1899 as compared with
1898 is eloquent, however. It is also quite surprising to
learn that there was only a little more than two hundred
thousand dollars (f 212,601) in Cook County in 1878.
Again, as in the case of credits, Cook County fails under
* 7 Supra, p. 141 ; L. 1871-72, p. 68.
48 The definition of money given in the revenue law is as follows :
gold, silver, or other coin, paper, or other currency used in barter and
trade as money, in actual possession, and every deposit which the person
owning, holding in trust, or having the beneficial interest therein, is enti-
tled to withdraw in money on demand.
163] THE ASSESSMENT OF PERSONAL PROPERTY 163
the population test to bear its share of the burden. In 1875
when there were six persons in the rest of the state for
every one person in Cook County, fifty-one 'dollars were
listed for every dollar in Cook. In 1909 each person out-
side of Cook County paid fourteen times as great a tax on
his money as did the resident of Cook County on his money,
assuming per capita wealth to be the same. In this year
Cook County's share of the assessment, under this assump-
tion, should have been f 19,536,002; its actual assessment
amounted to $1,368,952.
The amount of deposits in the state banks has been a
matter of public record only since 1889. The deposits of
the national banks are available during the whole period.
No figures at all, however, are obtainable for the private
banks in the state. 49
Table 17 presents the amounts of the money on deposit
to the credit of individuals in state and national banks
for the past twenty-three years, and contrasts with them the
assessments of money during these years.
49 The information in the table has been secured from the Reports of
the Comptroller of the Currency of the United States and the Reports of
the Auditor of Public Accounts of IlKnois. The item called individual
deposits in the national banks reports is used, and in the state bank reports,
the three items, time-deposits \savings, demand-deposits individual, and
demand-deposits certificates were added together to give the result pre-
sented. The reports made nearest the assessment dates were chosen in
each case. The national banks in Cook County, but outside of Chicago,
were ignored because sufficiently detailed information is given only in
reports which are separated widely in time from those which had been
selected as desirable for this table. The item is negligible in this connec-
tion, at no time being more than two million dollars. The amount of the
deposits in the state banks in Cook County in 1891 is not accessible. In
the table it is assumed that it was the same as that of 1890.
HISTORY OF TAXATION IN ILLINOIS
COMPARISON OF INDIVIDUAL BANK DEPOSITS WITH ASSESSED VALUES OF
MONEYS, NOT INCLUDING BANKERS' MONEYS, 1889-1912
1904- - 519,943,194
of Money, etc.
of Money, etc.
This table speaks for itself. In not a single year does
the assessment approach the amount of the bank deposits.
In 1889 the best showing is made, but even here the assess-
ors reached only one dollar in thirteen. This assessment
is somewhat better than it seems to be at first, for real
estate and property in general were undervalued at this
time. In 1898 when only about eight million was taxed,
two hundred and forty-two million was on deposit. Cook
county, as usual, can show a record even worse than that
of the whole state. Each year shows a lower percentage
165] THE ASSESSMENT OF PERSONAL PROPERTY 165
than was taxed in the state at large. But the climax is
reached in 1908 when less than five millions was assessed
in the county ($963,907 representing a twenty per cent
valuation), while over four hundred and forty million
stood to the credit of individuals in the banks. The assess-
ment for 1912 is almost as bad as that of 1908. Comment
on these figures is superfluous. Evidently from the stand-
point of the exchequer, money is not taxed in Illinois.
To examine further the various items of the personal
property schedule could have no other effect than to con-
firm what has already been shown clearly enough for the
purpose in hand. It is quite evident that the general prop-
erty tax has most woefully failed to reach personal prop-
erty for taxation.
THE ASSESSMENT OF REAL ESTATE
Definition of Real Estate.
The second great class of property is real estate. By
the definition given in the revenue code this term includes
not only the land itself, whether laid out in town or city lots, or other-
wise, with all things contained therein, but also all buildings, structures
and improvements, and other permanent fixtures, of whatsoever kind,
thereon, and all rights and privileges belonging or in anywise pertaining
thereto, except where the same may be otherwise denominated by this
The few exceptions to this general description are noted in
the discussion of personal property. 2
Thp prpnpraj real pgfnto asspssmpnt is made quadren-
nially but corrections and additions are made annually. 3
Annual assessments of all real estate were made before
1899. 4 An act passed in 1879 provided that an assessment
should be made in 1880 and every four years thereafter
but before the time came for the 1881 assessments, the law
was repealed and annual assessments once more estab'
Manner of Listing.
The assessment books are prepared by the county
clerk every fourth year and contain descriptions of all tax-
*L. 1871-72, p. 68.
2 See supra p. 138. Interstate bridges are specifically designated as
real estate by an act of 1873. Rev. Stat. 1874, P- 98- A leasehold interest
in exempted lands was similarly classified by a clause in the original act.
L. 1871-72, p. 18.
Government and school lands are taxable as soon as entered or sold,
Illinois and Michigan Canal lands when paid for in full, Illinois Central
lands when the last payment becomes due and swamp lands when the
county conveys the title. L. 1871-72, p. 18.
3 L. 1898, p. 36.
*L. 1871-72, p. 17; L. 1879, p. 241; L. 1881, p. 133.
167] THE ASSESSMENT OF REAL ESTATE 167
able real estate together with the names of the owners. 5
To enable the county clerk to prepare these books properly,
it is required that when a tract of land has been divided
into parcels in such a way that description is difficult, the
owner shall have it plotted into lots which can be simply
described. 6 Moreover the county clerks are informed by
the state auditor of lands in their counties which become
taxable, the auditor being instructed to secure this infor-
mation from the proper officials of the United States, of
the Illinois and Michigan Canal, of the Illinois Central
Railroad and of the counties containing swamp lands. 7 In
counties under township organization the books are made
up by townships ; in those under the county form of organ-
ization, by congressional townships. Special books may
be prepared for assessments in cities. 8 In those years
when a general assesment of real estate is not made, the
county clerk prepares a supplementary list of lands which
have become taxable in the preceding year. 9
Assessment books must be ready by the first day of
the assessment period when the assessors are directed to
call for them and to proceed to view and determine the
value of each parcel of real estate. 10 If the assessor dis-
covers property which has been omitted, improvements
which have been made, or depreciation which has come
about in the real estate, he revises the assessment lists so
as to make them as complete and correct as possible. 11
All through the period under discussion undervalua-
tion of real estate is patent upon the face of the returns.
5 L. 1871-72, p. 19; L. 1873-74, P- 5i; L. 1879, p. 241; L. 1881, p. 133;
L. 1885, p. 23.
6 L. 1871-72, p. 18; L. 1879, p. 255.
T L. 1871-72, p. 64.
8 1 bid., p. 19.
L. 1898, p. 36; L. 1903, p. 297; L. 1905, p. 360.
10 L. 1871-72, pp. 19, 20, 21 ;L. 1879, p. 243; L. 1881, pp. 133, 134; L.
1898, p. 36.
"L. 1871-72, p. 20; L. 1885, p. 234; L. 1895, p. 36; L. 1905, p. 360.
168 HISTORY OP TAXATION IN ILLINOIS [168
Thus, according to the assessment figures the value of the
real estate in the state actually decreased in the twenty
years following 1873 from $897,615,195 to $613,093,407. 12
Yet during this period over four hundred million dollars
worth of buildings had been erected in Chicago alone, 13
and actual land values had increased enormously.
The assessment figures for 1873, however, are unusu-
ally high, this being the year when the new revenue law
went into effect. But there is evidence which seems to
indicate serious undervaluation even in the 1873 figures.
The evidence comes from Cook County. Before 1875 Chi-
cago had two annual assessments of property the town-
ship assessors making one estimate for county and state
purposes and the city assessors making a distinct assess-
ment for city purposes. When these two assessments for
1873 are compared it appears that the city assessors found
the real property in the North, South, and West Divisions
of the city to be worth one hundred millions more than the
value placed upon it by the township assessors for state
In 1896 Mayor Swift's commission found the value of
the taxable real estate in the district investigated in Chi-
cago to be $438,447,180, while the assessed value of the
property was only $40,668,720. 15 In his report to the tax
commission of 1910 Professor J. A. Fairlie points out that
in 1890 the real estate assessments were less than one-fifth
of the census estimates of the full value of taxable real
It will be recalled that in 1898 the legal rate of under-
assessment was placed at this figure, twenty per cent, but
the statistics of 1900 and of 1904 indicate that the assess-
ment had fallen still lower and stood then at but one-
seventh of the true value. 17 Complaints received by the
"Fairlie, Report on Taxation and Revenue System of Illinois, p. 203.
Rept. Bu. Lab. Stat., 1894, p. 68.
14 $262,969,820 as compared with $162,739,712. Ibid., p. 67.
"Ibid., 1896, p. 124.
19 Fairlie, op. cit. p. 26.
169] THE ASSESSMENT OF REAL ESTATE 169
tax commission indicated that in 1910 the amount settled
upon by the assessors as the full value of the real estate
was "only from fifty to seventy-five per cent of the actual
value of the property assessed."
Specific cases of undervaluation are perhaps less val-
uable, but are certainly more striking evidence of the prac-
tice. The Report of the Bureau of Labor Statistics for
1894 cites the example of a piece of property whose actual
value in 1873 was $9,300 but which was valued by the as-
sessors at but $330. Another house and lot sold in 1893
for $45,000; the same year the assessor estimated its fair
cash value at $270. 18 In 1912 there was a residence in
Champaign County which competent judges valued at $30,-
000; it appeared on the assessment books at $2,200. A
resident of the same county recently purchased a piece of
real estate for $10,000. Its valuation for taxation purposes
was placed at $1,800. The legal valuation at this time was
Yet undervaluation would be of comparatively little
moment if it were uniform, that is, if there were no in-
equalities in the rate of the undervaluation among indi-
viduals or localities. But if there is undervaluation, there
is almost necessarily inequality. The difficulty is well em-
phasized in the report of the revenue commission of 1886. 19
"The a.sjCflm^-Jiaymg forsaken the standard of the
law," the report reads, "is without guide or restraint, ex-
cept his own varying judgment, and subject to the pressure
of importunate tax-payers, who pull steadily downward."
That inequalities h.-tvr resulted in Illinois, no one can deny.
All tnrougn the period they have been the cause of discus-
sion and condemnation. Every writer who has looked into
the situation has found much to criticise. In 1886 the
revenue commission reported that "the realty of one man is
assessed at one-third, one-half, two-thirds or even full
18 P. 58.
19 P. iv.
170 HISTORY OF TAXATION IN ILLINOIS [170
measure of its actual value; while that of his neighbor is
assessed at one-sixth, one-tenth, one-twentieth, or as was
shown in one instance of considerable magnitude, one
twenty-fifth of its actual value." "Such distinctions," con-
tinues the report, "are too invidious to be meekly borne."
The Report of the Bureau of Labor Statistics in 189-t
was especially bitter in its attack upon the inequalities of
the real estate assessments. In the case of thirty pieces of
high class residence property in Chicago, worth $20,000
and above, the assessments in 1893 were found to vary
from four to about twelve per cent of the real value of the
property. 20 On the other hand the assessments of less
choice property approached more nearly the true value.
Among eighty pieces of property, each of which sold for
less than $4,000, the assessments varied from twelve to
forty per cent of the actual market value. 21 The evils of
throwing a disproportionate share of the tax burden upon
the small property owners are, of course, only too appar-
The investigation made for the tax commission of 1910
failed to reveal "any large variation in the relative degree
of undervaluation" between rural and urban real prop-
erty, 22 but it was pointed out that the degree of underval-
uation varied greatly between the counties. On the basis
of the census data it was shown that in 1900 the assessed
value varied in the different counties from about eleven to
nineteen per cent; and in 1904 from about thirteen to
twenty per cent. Compared with data furnished by the
new census (1910), the quadrennial assessment of 1911
shows a truly startling variation in undervaluation, rang-
ing from about fourteen per cent in Kankakee County to
about forty-three per cent in Alexander County. 23
2 P. 88.
2l lbid., pp. 92-94.
22 Fairlie, op. of., p. 26.
-^Thirteenth Census, VI, 426, 430; Proc. St. Bd. Equal., 1911, pp.
171] THE ASSESSMENT OF REAL ESTATE 171
To increase the efficiency of the real estate assessments
the tax commission of 1886 recommended not only the sub-
stitution of county for township assessors, 24 but also the
establishment of a small state board of tax commissioners
and the segregation of the sources of the state and local
revenues. 25 This last suggestion is here found, according
to Professor Seligman, "for the first time in the history of
official commissions." 26 The report of this commission
was considered timely enough in 1902 to justify a reprint
by the state. But its suggestions have found no response
in legislative action.
The special tax commission of 1910 reiterated the rec-
ommendation contained in the report of 1886 in regard to
the appointment of a permanent tax commission and it sug-
gested further the advisability of constitutional changes
permitting the different treatment of various kinds of
property for taxation purposes. 27 Moreover in Professor
Fairlie's report it was suggested that "to secure the largest
results, it would seem necessary to change radically the
method of selecting local assessors so as to eliminate polit-
ical and local influences, by making such officers appoint-
ive for longer terms and for larger districts." 28 One of
the members of the commission, H. B. Riley, made an inde-
pendent report in favor of assessors appointed under civil
service regulations. But thus far, all the recommenda-
tions and suggestions of this commission have had no more
effect upon the legislature than those of the earlier com-
Thus the testimony of all commissions which have in-
vestigated unites to convict the general property tax in Illi-
2 *C/. infra, p. 135.
2s Rept. Rev. Com., 1886, pp. iv, vi, viii, ix, xiii.
28 E. R. A. Seligman, Essays in Taxation, (seventh edition, N. Y.,
1911) p. 401.
27 S. /., 47 G. A., i Sess., p. 184 et seq.
28 Fairlie, op. cit., pp. 27-28.
*'S. J., 47 G. A., i Sess., pp. 187-188.
172 HISTORY OP TAXATION IN ILLINOIS [172
nois of inefficiency in the taxation of real estate. Time
and time again undervaluation and discrimination have
been shown to exist. Unlike personal property, real estate
does not in any case escape taxation entirely. One comes
to suspect that this is so only because it is almost phys-
ically impossible. But all suggested changes to remove
the temptation to undervaluation or to institute adminis-
trative supervision which would go far to check abuses
have found no favor in the eyes of the Illinois legislators.
In the case of personal property there seems to be a rea-
sonable doubt whether the law is enforceable. There is no
such doubt in the case of real estate. New York is able,
in assessing her real estate, so approximate so closely its
market value that real estate dealers find the tax returns
a valuable guide in fixing prices. A similar condition
should obtain in Chicago.
KEVIEW, EQUALIZATION, EXTENSION AND COLLECTION
REVIEW AND EQUALIZATION.
The system of review and equalization was evolved, it
will be recalled, in an attempt to abate the abuses which
had arisen from the undervaluation of property in one
locality as compared with another. The theory of this
plan is that the figures arrived at by the assessors working
in the field shall be checked up, corrected and compared
with the values arrived at by other assessors, and any dis-
crepancies, mistakes or undervaluations corrected.
When the county clerk receives the assessment books
from the assessor, he corrects all the errors he can discern. 1
Formerly, in counties which had townships, there was a
township board of review, composed of the assessor, clerk
and supervisor of the town, which met annually to hear
complaints and make adjustments; but this was done
away with in 1898. 2
County Board of Review.
In all counties during the entire period there has been
a revision by a county board of review, but the composition
of this board has varied. Before 1898 the board of super-
visors or the board of county commissioners acted as the
revising board for the counties. 3 Since 1898 the assess-
ments in the counties not under township organization
have continued to be reviewed by the board of county com-
missioners. 4 In the township counties, on the other hand,
the board of review has been differently constituted. At
present it is made up of the chairman of the board of super-
1 L. 1871-72, p. 24.
2 lbid., p. 22; L. 1879, p. 243; L. 1881, p. 134; L. 1891, p. 187; L. 1898,
p. 36 et seq.; L. 1907, p. 495.
3 L. 1871-72, pp. 24, 25.
*L. 1898, p. 36.
174 HISTORY OP TAXATION IN ILLINOIS [174
visors and two citizens of the county, one from each of the
leading political parties, appointed by the county judge. 5
An exception is made in the case of counties having a popu-
lation of over 125,000 (Cook County). Here, after a pre-
liminary revision by the board of assessors, the lists go
before an elected board of review. The three members of
this board are chosen for terms of six years, one member
being elected every two years. 6
Little is to be expected under the system in force in
counties under township organization, where two of the
members are appointed annually. The investigation made
for the revenue commission of 1910 showed that there was
criticism of this feature on the ground that it promoted
frequent changes of membership and prevented "the board
from becoming to any important degree an expert body.*' 7
The situation must often work out as it has in one partic-
ular county recently investigated, where the chairman of
the board of supervisors was assisted by a boiler-maker
and bar-tender, the appointed members, both of whom were,
as the chairman confided, almost utterly ignorant of the
revenue law and devoid of the desire and the intelligence
necessary to learn. Their function was to act as clerks
to the supervisor who changed assessments as he chose,
often without going through the formality of asking the
approval of the other members.
The Cook County board of review has not in recent
years been subject to criticism because of lack of intelli-
gence. The more serious charge that the members of the
board have made use of their office to aid their private
business has been made by the Illinois Tax Reform Asso-
ciation. It has been urged, to prevent such abuses, that
none of the board be permitted to engage in business during
his term of office. 8
6 L. 1901, p. 267 ; L. 1907, p. 497. This arrangement has held since
1901. For three years preceding this date the board was made up of the
clerk of the county court, the chairman of the county board and one
citizen appointed by the county judge. L. 1898, p. 36.
*Ibid., p. 36 et seq.
7 Fairlie, Report on Taxation, p. 13.
^Report of the Illinois Tax Reform Association, 1908, pp. 6, 7.
175] REVIEW, EQUALIZATION AND COLLECTION 175
The act of 1898 sought to increase the efficiency of the
county equalization machinery by the addition of two
special oaths. Each member of the board of review was
to take the following oath before entering upon the duties
of his office : 9
I do most solemnly swear (or affirm) that I will, as a member of the
board of review of assessments, faithfully perform all the duties of said
office as required by law ; that I will fairly and impartially review the
assessment of all property as made, that I will correct any and all assess-
ments which should be corrected; that I will raise said assessment or
lower the same as justice may require; that I will do and perform all
acts necessary to produce a full, fair, and impartial assessment of all
property of every kind, nature and description.
Further, upon the completion of the revision the mem-
bers of the board were required to make affidavit, accord-
ing to a set form, that they had properly completed the
work to which they had pledged themselves. 10
The fiTn<yhi<HML. Q_ th<> i^ATminr T)Of>T*(l of review mav be
^MM**' ' <J
briefly outlined as follows. First, it may add property
which has escaped assessment. 11 Second, it may correct
individual assessments, in such manner "as shall appear
to be just". The corrections may be made upon complaint
of the person assessed or, under the act of 1898, upon the
initiative of the board itself. 12 In case it is proposed to
raise the assessment, the property owner and the assessor
must be notified and given an opportunity to be heard.
Third, tne county board of review may increase or reduce
the entire assessment of either real or personal property so
as to equalize the assessment between sections of the county
or between the classes of property. 13 Under the law of
1872 the board could neither reduce the assessment below
the aggregate valuation as made by the assessors nor in-
crease it more than was "actually necessary." 14 But the
old law contained a provision under which the board could
set aside the entire assessment and order a new one made
in accordance with its instructions. Finally, the board
L. 1898, p. 36.
10 Ibid.; L. 1907, p. 495.
11 L. 1871-72, pp. 24-5; L. 1898, p. 36 et seq.; L. 1905, p. 360.
12 L. 1898, p. 36 et seq.; L. 1905, p. 360; L. 1907, p. 495.
13 L. 1898, p. 36 et seq.; L. 1905, p. 360.
14 L. 1871-72, p. 24.
176 HISTORY OF TAXATION IN ILLINOIS [176
may bear and determine the application for relief of any
person who is assessed on property claimed to be exempt
from taxation. 15
To aid in its task as sketched above, the board is
armed with power "to summon any assessor or any deputy
or other person to appear" before it to be examined under
oath as to the correctness of the valuations returned or
the methods used in ascertaining them. 16
After the review is completed, a set of the assessment
data, with the corrections entered, is returned to the
county clerk, to serve when equalized as the basis for the
levy of the rates. 17
State Board of Equalization.
After the review by the county boards the assessment
is equalized by the state board of equalization. The
origin of this board in the late sixties has already been
discussed. Its powers were redefined by the act of 1872.
Much trouble was apprehended from the extent of the au-
thority granted to this body but little has been actually
experienced, both because the powers granted have proved
not to be so broad as expected and because the board has
shown little disposition to exercise what powers it has. 18
The state board of equalization is composed of one
member elected from each congressional district for a
term of four years and the auditor of public accounts. At
present it consists of twenty-six members. 19 The pay
of the board has been recently changed from a per diem
to a salary basis. Instead of five dollars per day, the
members now receive one thousand dollars per annum. 20
15 Ibid., pp. 24-25; L. 1898, p. 36; L. 1905, p. 360*
16 L. 1898, p. 36 et seq.
17 Ibid.; L. 1905, p. 360.
18 This is the board which was characterized by one writer as "the
grand inquisitorial and confiscatory office, clothed with powers and func-
tions which, if enforced, would have produced a revolution in Austria or
Turkey!" C. J. Bullock, Readings in Public Finance (Boston, 1906),
19 L. 1871-72, pp. 26, 27; Proceedings, 1912, p. xcii.
20 L. 1871-72, p. 30; L. 1907, p. 494-
177] REVIEW, EQUALIZATION AND COLLECTION 177
The board is organized by selecting one of its members
as chairman and by appointing a secretary. The
secretary compiles the assessment statistics for the use of
the board and prepares their report for the press. The
board meets annually on the first Tuesday after the tenth
of August and is required to adjourn finally by November
The board has power to increase or decrease the ag-
gregate amounts of the county valuations so as to make
the assessment in one county bear a just relation to the
assessments in other counties of the state.. Since 1898 the
total amount of increase or decrease by the board may not
exceed ten per cent of the total assessed value of property
in the state; before 1898, the limit except for railroad
property was one per cent. 22 It is required that the board
consider separately the following classes of property and
calculate equalization percentages for them : personal prop-
erty, railroad and telegraph property, lands and town and
city lots. Individual assessments are, of course, not taken
up, the county aggregates for the various classes only being
considered. To form a basis for the equalization of per-
sonal property the board is required to calculate the state
average value of each item enumerated on the schedule,
to compare the county average, and to use the result in
calculating a percentage to be added to or deducted from
the county assessment of all personal property. 23
After the board has determined the rates of addition
or subtraction it certifies its action to the auditor and he
forwards the equalization data to the various county
No one seems to find anything worthy of praise in the
state board of equalization except its direct beneficiaries,
the members of the board themselves; and even they are
often far from unanimous in their estimate of the value
of the machinery of which they form .a part. A particu-
21 Ibid., p. 495.
2 -L. 1871-72, p. 27; L. 1898, p. 36.
23 L. 1871-72, p. 28.
2 *Ibid., pp. 29, 30.
178 HISTORY OF TAXATION IN ILLINOIS [178
larly virulent attack was made by a member of the present
board late in 1913 after it had completed its work for the
year. He charged that the committees to which the work
of equalization was referred met seldom and performed
their work in a hasty and perfunctory manner. "Political
motives entirely control the actions of these committees"
is his testimony. Not only are they influenced "through
fear of the voting tax-payers to make no changes", but, he
charges, they are also disposed to discriminate deliberately
by raising the assessment in the district of a particular
member "for purposes of political revenge, to teach the
member a lesson that he will be less active in public
agitation for the reform of our iniquitous taxing system."
"The custom has been to never raise the assessments in a
county unless the member from that district gives his
consent." In view of this statement, there is no cause
for wonder why so few changes are made by the board.
The meeting of the committees of the board were charac-
terized as "an absolute farce" and "a perfect burlesque." 25
On the whole the tempered, calculated statements of
the official commissions seem to sustain to a large degree
the seemingly rash and hasty charges of the pamphleteers
against the efficiency of the system. The revenue commis-
sion of 1886 characterized as "arbitrary and unjust" the
equalization between counties by the state board. 28 The
plan of adding percentages to the county aggregates was
attacked as unfair to the scrupulous property owner who
lists his property at its full value. "Thus upon pieces of
property already assessed at a large fraction of their value"
the report says, "frequently an increase of valuation is
made, which carries them above their market value." 27
This commission saw no escape from the evils of equaliza-
tion except by segregating the sources of state and local
revenue. The commission of 1910 was less radical and
recommended that the equalization of assessments between
25 H. T. Nightingale in letters to The Evanston Press, December 6,
1913, and to The Chicago Record-Herald, November 25, 1913.
^Report, pp. ii, 12, 13.
21 'Ibid., p. iii.
179] REVIEW, EQUALIZATION AND COLLECTION 179
the counties be made a function of a permanent tax com-
mission. 28 The present board was styled by Professor
Fairlie "a clumsy and ineffective body." 29 Indeed such a
conclusion was inevitable in face of the evidence of the
need of equalization and of the inactivity of the board.
Here is part of the indictment. "Since 1900, the state
board has made no changes in the local assessments for
personal property (except one county in 1907) ; and in
1907, 1908 and 1909 no changes in the local valuations
for lots .Finally in 1909 and 1910, the state board
has not made a single change in the local assessments of
any class of property." In 1911, again, the board made
no changes in personal property assessments ; and in 1912
the sole change was a ten per cent reduction in the assessed
value of the lots in one county.
The fact that the board is a representative body is of
itself almost enough to unfit it for its purpose. The theory
seems to be that each member is elected to protect his own
district. In 1895 Governor Altgeld charged that the activ-
ity of the board was "simply an effort by one or more
sections of the state to throw the burden onto some other
portion of the state" and the annual struggle of the mem-
bers for a low classification of their counties seems to bear
out the governor's charge. 30 To one who sees no force in
the political arguments for the retention of the state board
of equalization in its present form, it seems incompre-
hensible that the board should continue to exist. Almost,
if not quite as expensive as a small, highly skilled, perma-
nent commission, obviously inefficient in the work which
it is expected to do, assailed by the testimony of its own
members, convicted by the verdicts of both of the expert
commissions to which the legislature has appealed for ad-
vice, the board still is able to retain its place as a part of
the tax system.
2S S. J ., 47 G. A., i Sess., p. 184 et seq.
29 Fairlie, Report on Taxation, p. 66.
S. /., 39 G. A., i Sess., p. 23.
180 HISTORY OP TAXATION IN ILLINOIS [180
EXTENSION OF TAXES.
When the state board has finished its work of equaliz-
ing the county assessments, the base of the tax is at last
prepared for the extension of the rate. In Tllinnia f.he rate
actually levied is a combination of state, county, city or
village, road and bridge, school and various other rates,
the amount of each being determined by the proper au-
thority and certified to the county clerk who combines the
rates and calculates the tax which each property owner
must pay. The various taxing bodies are usually restricted
in the rates they may levy by constitutional or legislative
regulations; and the county clerk, when calculating the
rate, is subject to the limitations of the Juul law. 31
The State Tax.
The tax for state purposes forms a relatively insignifi-
cant part of the total rate. Thus in 1911 when the average
rates of taxation of all the counties in the state was $4.12
on each one hundred dollars valuation, the state tax was
only thirty-five cents, 32 and while all the taxes in the state
amounted to $95,808,578.84, the tax for state purposes was
but $8,305,799.73. During the period under consideration
the state rate has fallen as low as twenty-seven cents on
the one hundred dollars (1879), and has risen as high as
sixty-six cents ( 1897 ) and seventy cents ( 1913 ) ; but these
figures mean little unless taken in conjunction with the
degree of undervaluation present in those years. In 1913
the rate was levied upon a legal valuation of 33 1-3% of
the cash value of property ; actually the valuation was con-
siderably lower than 33 1-3%. The high rate in 1913 is
exceptional, the rate in 1911 having been but thirty-five
cents and in 1912 but thirty-eight cents. It was due in
part to increased appropriations and in part to a failure
to levy a sufficiently high rate in 1912. A newspaper dis-
pute has arisen between ex-Governor Deneen and Governor
Dunne over the question of the responsibility for the in-
31 /n/ra, p. 190 et seq.
S2 Aud. Rep., 1911-12, pp. 199, 531.
181] REVIEW, EQUALIZATION AND COLLECTION 181
adequacy of the revenue produced by the 1912 rate. It ap-
pears that only enough money was raised to meet expenses
through June 30, 1913, making it necessary to resort to
emergency methods to get funds to support the govern-
ment until the collections on the assessment of 1913 should
become available, in the spring of 1914. This necessity
and the inordinately high tax rate have served to embarrass
somewhat the new administration. 33
During most of the period the state tax has been
strictly an apportioned one. In the early history of the
state most of the rates were specified ; that is, certain rates
for state purposes were fixed by statute, the proceeds from
which formed the sums available to meet state expenses.
Under this system the expenses tended to be accommodated
to the income rather than the reverse. But since 1867
the state legislature has first made its appropriations and
then directed that the sum necessary to meet the appropria-
tions be apportioned among the counties, so that each
county pays a pro rata share according to the value of its
taxable property. The governor, auditor, and treasurer
are designated in the revenue law as a committee to calcu-
late the state rate annually on the completion of the assess-
ment and equalization of property. 34 In fact, however,
during most of the period the work seems to have been done
by the governor and auditor alone, the act passed by the
succeeding legislature specifying that these two officials
calculate the rate required. 35
It might be supposed that without a constitutional
tax limit the legislature would appropriate unduly large
sums. But as the scheme has worked out, instead of the
appropriations being made without reference to the income
expected, they have been very strictly controlled with a
view to keeping down the state tax rate. The responsi-
Chicago Tribune and The Chicago Record-Herald, November 21,
34 L. 1871-72, pp. 30, 31.
35 From 1871 to 1903 the governor and auditor were the only officials
designated. Since 1903 the treasurer has been included with the governor
182 HISTORY OF TAXATION IN ILLINOIS [182
bility for the rate of taxation has come to rest very largely
upon the shoulders of the governor and it has become one
of his functions so to prune the appropriations as to make
the state rate a political argument in favor of the efficiency
of his administration. It is a question whether under
this system the best interests of the state have not some-
times been sacrificed to political necessity.
As its formal authorization of the calculation of the
total state rate, the legislature passes at each session "An
act to provide the necessary revenue for state purposes."
In the first place this act specifies that a sum which has
varied from f 1,500,000 in 1872 to $10,600,000 in 1913 38 be
raised for general state purposes to be designated the
"Revenue Fund." All through the period this part of the
state rate has been an apportioned tax. Next, the act
directs a second sum to be raised, called the "State School
Fund," the amount of which has varied from $700,000 in
1879 37 to $3,000,000 in 1913. 38 This part of the tax has
been apportioned since 1875, a lump sum being substituted
at that time in lieu of the two mill tax formerly levied for
school purposes. 39 The act for raising revenue passed in
1872 included a provision for raising $200,000 annually
for the Interest Fund, but the necessity for this soon dis-
appeared and after 1874 no levy was made to replenish it.
In 1911 the legislature took a step away from the appor-
tionment plan by passing an act authorizing the levy of a
fixed rate of one mill on every dollar of assessed valuation,
to be paid to the treasury and set apart until appropriated
to the use of the University of Illinois. 40 Although this
plan reduces the flexibility of the state financial adminis-
tration, it makes somewhat more certain a uniformity of
support for the university, which is an end greatly to be
desired. At times, special state taxes are levied, as in
1871 and 1872 when a levy of one and a half mills was
36 L. 1871-72, p. 670; L. 1913, p. 512.
7 L. 1879, p. 254.
88 L. 1913, p. 512.
88 L. 1871-72, pp. 31, 732.
L. 1911, p. 484.
183] REVIEW, EQUALIZATION AND COLLECTION 183
authorized for the "Canal Redemption Fund." 41 When a
total rate has been calculated which will produce the
amounts authorized to be levied for state purposes, the
auditor certifies it to the county clerks who extend it upon
the assessments for their counties as revised by the state
board of equalization.
Theamo"Tit ftf t^ pni TP f y fjlY 1>g determined each year
by the county board. 42 It will be recalled that the rate
must be kept within the constitutional limit of seventy-five
cents on the hundred dollars. The counties may go above
this limit, however, by special vote of the people or for the
payment of indebtedness contracted before 1870. 43
An investigation made in 1913 by Professor Fairlie
shows that the constitutional limit is not always ob-
served. 44 He states that:
in 1911 the rate in 34 counties was less than 45 cents, the minimum being
17 cents in Ogle County. In 18 counties the rate was the full 45 cents,
provided under the Juul law. In 38 counties the county rate was more
than 45 cents but less than the constitutional limit of 75 cents. In 12
counties the constitutional limit had been reached; and in two counties
this was exceeded.
The authorities of "towns, townships, districts, and
incorporated cities, towns, and villages" are required to
certify to the clerks of their counties the amounts which
they require to be raised by taxation each year. 45 To
analyze all the acts delegating the taxing power to these
local bodies would be too great a task. In 1870 part of
the municipalities of the state were organized under spe-
cial charters and part under the general incorporation act.
Consequently there was a great variety in the objects for
41 L. 1871-72, p. 170.
* 2 Ibid., p. 31 ; L. 1909, p. 325.
* 3 Ibid. Also L. 1873-74, P- 74; Rev. Stat. 1874, P- 37. Thus by an
act of 1907 a county tax of one mill in addition to the constitutional limit
was authorized for the establishment of detention homes. An appeal to
the voters of the county was necessary for the levy, however.
**Report Prepared for the Joint Committee of the Forty-Seventh
General Assembly on County and Township Organization, Roads, High-
ways and Bridges, II, 103.
45 L. 1871-72, p. 31 ; L. 1873-74, P- 52.
184 HISTORY OF TAXATION IN ILLINOIS [184
which taxes could be levied, and this variety still obtains
to a greater or less degree. Acts extending the functions
of municipalities and permitting the levy of taxes to meet
the expenses have been very frequent all through the
period. Authorizations of taxes for water-works, sewage
disposal plants, libraries, public hospitals, parks and
boulevards, tuberculosis sanitariums, bridges, music in
parks, etc. etc., are found in every volume of session laws.
In many cases the laws only become operative upon vote
of the citizens, so any calculation of the rates permitted
would be a useless undertaking.
In the early years of the period there was considerable
misunderstanding as to whether the revenue act of 1872
superseded the financial provisions of the various special
municipal charters. A number of cities and towns, in-
cluding Chicago, made their assessment for 1872 under
the system provided in their special charters, and acts
passed in 1873 legalized such assessments. 46 But soon this
plan was declared invalid and since 1877 "all cities, vil-
lages, and incorporated towns, in this state, organized
under general or special charters" have been required to
assess and collect their taxes under the provisions of the
act of 1872. 47
The rate of taxation in cities and villages is subject to
several checks. Aside from the debt limit of five per cent
imposed by the constitution upon all local bodies, which
is of course an indirect restriction on the tax rate, 48 the
municipalities are required by an act of 1909 to keep their
tax rate for all purposes except the payment of debt or
interest within 1.2% on the equalized assessment for the
current year. 49 In certain municipalities the rate for pur-
poses other than schools or debt payment was to be sixty
cents on the one hundred dollars of the equalized assess-
**Ibid., p. 45; Rev. Stat. 1874, p. 254.
47 The People ex rel. v. Cooper et al., 83 III. 585 (1876) ; L. 1877, pp.
48 Supra, p. 128.
49 L. 1909, p. 141. The act excludes municipalities organized under
special charters which permit a higher rate.
185] REVIEW, EQUALIZATION AND COLLECTION 185
ment of the preceding year. 50 There had been no specific
tax limit before 1879 but at this time an act was passed
which imposed a limitation of two per cent for all purposes
except debt payment. Another act in 1881 made the limit
one per cent for purposes other than debt payment and the
support of schools. 51
Of the independent boards endowed with power to-
levy taxes, those in charge of the roads and the schools are
the most important. In 1911, the district and city school
taxes charged on the tax books amounted to nearly seven-
teen million dollars, and the road and bridge tax to almost
six million. 52
The complication which has been so long present in
the road taxes due to the two ways in which the local com-
munities may be organized, viz., as township or county,
has been largely eliminated by a new code passed in 1913. 53
Under the old system there were two distinct codes r
one for each form of organization. Counties organized by
townships had the option of a labor or a cash system.
This was not true of the other counties; they could only
use the cash system. 54 If a township chose the cash sys-
tem, the maximum levy was thirty-six cents. 55 On the
other hand if the township chose the labor system, two-
taxes were levied; the road tax, payable in labor if desired,
and the road and bridge tax, payable only in cash. It
became necessary to make this arrangement in 1873 in
order that a certain portion of the tax should be available
in cash to meet the expenses of salaries, material etc. The
maximum levy for each tax was twenty-five cents on each
one hundred dollars of valuation. 56 Labor on the roads
B0 /6t<f., p. 142.
51 L. 1879, p. 66; L. 1881, p. 59.
B2 School taxes $16,783,744.88; road and bridge taxes $5,732,019.97.
Aud. Kept., 1912, p. 193.
63 L. 1913, p. 520 et seq.
54 This statement does not take the poll tax into consideration.
"Formerly this rate was sixty cents. L. 1883, p. 136; L. 1909, p. 333.
"Formerly this rate was forty cents. L. 1883, p. 156; L. 1903, p. 304;
L. 1909, P- 335-
186 HISTORY OF TAXATION IN ILLINOIS [186
was until 1913 valued at $1.25 per day; from 1873 to
1877 it was $1.50 per day. The rates given were not ab-
solute limits; an additional rate might be levied by spe-
cial arrangement when deemed necessary. 57 Moreover, if
money was still needed for the particular purpose of pay-
ing damages, another twenty cents might be collected. A
poll tax might also be used to obtain revenue. This re-
source has been constantly available except for the two
Counties which had not adopted the township form
of organization could levy a road tax, payable only in
cash, up to thirty cents per one hundred dollars of valua-
tion. 58 From 1887 to 1889 the limit was one dollar and
from 1889 to 1909, fifty cents. 59 But as in the case of the
townships, this limit was not rigid.
Aside from all other road taxes, there might be levied
in counties of both classes a special tax of one dol-
lar on each one hundred dollars assessed valuation for
the construction of macadam and gravel roads. But such
a tax had to receive the sanction of a majority vote of the
people. 60 Similarly, a tax of one-half of one per cent could
be lievied in counties not under township organization to
build roads upon lands subject to overflow. 61
The new general codification act passed in 1913 62
sweeps away the illogical and confusing distinctions be-
tween counties organized by townships and those with
merely the county form of organization. Provision is
made for the appointment of county superintendents of
highways in all counties. For all road and bridge pur-
poses, road districts in counties not under township
organization were made coordinate with townships in other
counties. In the country districts, except where the voters
declare against it, a poll tax of from one to three dollars
"L. 1903, pp. 303, 304; L. 1909, pp. 333, 335.
68 Ibid., p. 331.
B9 L. 1889, p. 230.
60 L. 1883, p. 132; L. 1905, p. 369; L. 1907, p. 503; L. 1909, p. 327.
91 L. 1899, p. 340.
2 L. 1913, p. 520 et seq.
187] REVIEW,, EQUALIZATION AND COLLECTION 187
is levied, payable only in cash. The general tax levy for
road and bridge purposes is restricted to 61 cents on each
one hundred dollars of taxable property. An additional
levy of twenty cents may be made to pay damages for lay-
ing out roads etc. and the hard roads law of 1909 is re-
The importance of the labor element, as might be ex-
pected, became rapidly insignificant. In 1905 the money
value of the labor tax was only about one-tenth of the total
.amount spent on road that year. 64 In 1913 this type of
payment was eliminated.
The taxing power of the board of school directors 65
was modified by the law of 1872, 66 the school tax for ordi-
nary expenses being limited to two per cent of the assessed
valuation. Another three per cent was available for build-
ing purposes, upon vote of the people. In 1887 the state
superintendent of public instruction, under the direction
of the legislature, revised the school laws in order to
eliminate their "many redundancies, inconsistencies, con-
tradictions, and incongruities." 67 But the new general
<?ode adopted in 1889 preserved the former tax limits of
two per cent for ordinary expenses and three per cent for
buildings. 08 These limitations were extended to cities
with special charters in 1891. 69
In 1898 and 1899 the tax limits for ordinary expenses
and for building purposes were changed to two and one-
half per cent each, 70 and by a law passed in 1909, to one and
one-half per cent, 71 at which figure they now stand. Cer-
tain cities are permitted by an act of 1913 to levy a two
Supra, p. 1 86.
64 Report of the Illinois Highway Commission, 1906, p. 15.
65 Supra, p. 120.
66 L. 1871-72, p. 718.
r L. 1887, p. 324.
68 L. 1889, p. 288.
69 L. 1891, p. 197.
7 L. 1898, p. 36; L. 1899, P. 350.
71 L. 1909, p. 394.
188 HISTORY OP TAXATION IN ILLINOIS [188
per cent rate for educational purposes if the voters agree. 72
Taxes for township high-schools are determined by town-
ship boards of education provided by an act of 1889. 73
Most of the parks in Illinois are located in Chicago.
Before 1872 they were controlled by special acts of the
legislature but after the adoption of the constitution of
1870 the form of the park laws necessarily became general.
But in spite of their general form most of the acts are
still special in application. Almost every bill is drawn
with some particular case in view and the ingenuity of
the drafters is exercised so to shape their form as to bring
them within the constitutional requirements. Conse-
quently the park laws are a maze. Unless one is very fa-
miliar with local conditions it is often impossible to tell
from the evidence in the statue itself what they mean,
and to whom they are intended to apply.
Corporate authorities in municipalities have long been
vested with power to maintain parks, but a general law
providing for the formation of park districts and the elec-
tion of a park commission with general powers of taxation
seems not to have been passed until 1893. 74 In 1885 boards
of park commissioners existing by virtue of various special
acts were empowered to levy a light tax on property to
meet certain expenses. 75 But park districts organized
under the act of 1893 were to be supported primarily by the
general property tax. No tax limit was fixed in the original
statue ; and no restriction was placed upon the debt which
might be contracted until 1895, when it was placed at two
and one-half per cent of the equalized value of the taxable
property. 76 Another general park law passed in 1895 per-
mitted taxation at the rate of four mills on the dollar. 77
In 1907 the so-called township park act was passed which
provides for a one mill tax on property. 78
L. 1913, p. 585-
73 L. 1889, p. 277.
"L. 1893, P. 153-
L. 1885, p. 226.
L. 1895, P- 268.
77 Ibid., p. 272.
"L. 1907, p. 437-
189] REVIEW, EQUALIZATION AND COLLECTION 189
After the adoption of the constitution of 1870, drain-
age legislation also assumed a general form. Numerous
laws were passed regulating taxation for this purpose.
Some of the money is raised by the general property tax, 79
the law in force at present permitting a two per cent levy
and an additional three per cent under special circum-
stances. But much more important is the share raised
by the system of special assessments. It is usual for
drainage projects to be initiated by a petition of property
holders and after the assent of the voters of a district has
been secured, to be supported by a levy upon the property
benefited, sometimes according to the benefit received,
sometimes according to the value of the property.
The latest addition to the ranks of special boards ex-
ercising taxing powers is made by acts passed in 1905 and
1909 which authorize the creation of forest preserve dis-
tricts. 80 The present law permits a tax of one mill on the
dollar and makes the debt limit one per cent of the assessed
The Juul Law.
When at length the county clerk is in possession of
the necessary information, he proceeds to assemble the
rates of taxation for his county. He has already entered
into the collectors' books the lists of the taxable property
as received and equalized. 81 The state rate comes to him
in the form of a percentage which is to be levied on the
assessment as equalized by the state board. 82 The county
rate is also already calculated when it reaches the clerk
but it is to be extended upon the assessment as it stands
after the county review only. 83
The officials of the "towns, townships, districts, and
incorporated cities, towns and villages" send to the county
79 L. 1889, p. 125. Also an act of 1907, entitled "an act to create san-
itary districts in certain districts subject to overflow." L. 1907, p. 289.
80 L. 1905, p. 279. L. 1909, p. 245.
81 L. 1871-72, p. 32.
82 L. 1901, p. 271.
190 HISTORY OF TAXATION IN ILLINOIS [190
clerk merely the amount of money they require for the
ensuing year, and it is part of his task to calculate the
rate upon the taxable property lying within their respec-
tive jurisdictions. Here also, the assessment as reviewed
by the county board of review forms the base. 84
The dangers of the system as instituted in the law of
1872, by which there was no coordination or control of the
amounts levied by the various taxing authorities, were
pointed out by the revenue commission of 1886. 83 The
property owner was exposed to the possibility of being
taxed at the rate of eight per cent or more. No discre-
tionary power was placed in the hands of the county clerk.
His function consisted merely of the mechanical task of
calculating and extending the rates. There was no one
person responsible for a high or low rate of taxation. To
prevent taxes from becoming unreasonable a provision w r as
included in act of 1898 86 which vested the county clerk
with power so to cut down the amounts asked by the va-
rious local taxing bodies as to bring the aggregate within
reasonable bounds. As the result of amendments made
in 1901, 1905, 1909 and 1913, the section designed to ac-
complish this purpose has reached a state of complexity
which can be appreciated only by reading the text itself.
This is the so-called Juul law :
The county clerk in each county shall ascertain the rates per cent
required to be extended upon the assessed valuation of the taxable prop-
84 Both state and county taxes were at first levied on the assessment
as equalized by the state board. L. 1871-72, p. 33. In 1879 "all taxes
levied by the proper authorities" were to be upon this base. L. 1879, p.
246. In 1881 a change was made back to the old arrangement, L. 1881,
p. 136, and it was not until 1901 that the present form was adopted under
which only the state taxes are levied on the state equalized assessment
and all other taxes upon the assessment as it stands after the county
review. L. 1901, p. 271.
85 Rcport, p. v.
86 The section passed in 1898 applied only to Cook County. L. 1898,
p. 36 et seq. The aggregate of taxes was to be not more than five per
cent, except for state and for school building purposes. A debt limit of
two and one-half per cent was also imposed. This section was held to be
unconstitutional on the ground that it singled out Cook County and was
therefore a special law. Knopf v. People, 185 III. 20 (1900). The section
was reenacted in general terms in 1901.
191] REVIEW, EQUALIZATION AND COLLECTION 191
erty in the respective towns, townships, districts, incorporated cities and
villages in his county, as equalized by the State Board of Equalization
for the current year, to produce the several amounts certified for exten-
sion by the taxing authorities in said county (as the same shall have been
reduced as hereinbefore provided in all cases where the original amounts
exceed the amount authorized by law) : Provided, however, that if the
aggregate of all the taxes (exclusive of state taxes, village taxes, levee
taxes, school building taxes, high school taxes, district school taxes and
all other school taxes in school districts having not more than 100,000
inhabitants, road and bridge taxes, and for a period of three (3) years
beginning with the year 1913 taxes levied for the payment of the principal
of and the interest on bonded indebtedness of cities, and exclusive of
taxes levied pursuant to the mandate or judgment of any court of record 1
on any bonded indebtedness), certified to be extended against any prop-
erty in any part of any taxing district or municipality, shall exceed three
per cent of the assessed valuation thereof upon which the taxes are re-
quired to be extended, the rate per cent of the tax levy of such taxing
district or municipality shall be reduced as follows : The county clerk
shall reduce the rate per cent of the tax levy of such taxing district or
municipality in the same proportion in which it would be necessary to
reduce the highest aggregate per cent of all the tax levies (exclusive of
state taxes, village taxes, levee taxes, school building taxes, high school
taxes, district school taxes and all other school taxes in school districts
having not more than 100,000 inhabitants, road and bridge taxes, and for
a period of three (3) years beginning with the year 1913 taxes levied for
the payment of the principal of and the interest on bonded indebtedness of
cities, and exclusive of taxes levied pursuant to the mandate or judgment
of any court of record on any bonded indebtedness), certified for exten-
sion upon any of the taxable property in said taxing district or munici-
pality, to bring the same down to three per cent of the assessed value of
said taxable property upon which said taxes are required by law to be
extended : Provided, further, that in reducing tax levies hereunder the
rate per cent of the tax levy for county purposes in counties having a
population of over 300,000 shall not be reduced below a rate of forty cents
on each one hundred dollars assessed value, and in counties having a
population of less than 300,000 the rate of the tax levy for county pur-
poses shall not be reduced below a rate of forty-five cents on each one
hundred dollars assessed value, and the rate per cent of the tax levy for
city or village purposes (exclusive of library, school and park purposes
and for a period of three (3) years beginning with the year 1913 ex-
clusive of the taxes levied for the payment of the principal of and the
interest on bonded indebtedness) in cities and villages having a popula-
tion of over 150,000 shall not be reduced below a rate of one dollar and
ten cents on each one hundred dollars assessed value, and the rate per
cent of the school tax for educational purposes shall not be reduced
192 HISTORY OP TAXATION IN ILLINOIS [192
below a rate of one dollar and five cents on each one hundred dollars
assessed value, and the rate per cent of the tax levy for city or village
purposes (exclusive of library, school and park purposes, and exclusive
of the taxes levied for the payment of the principal of and the interest
on bonded indebtedness) in cities and villages having a population of less
than 150,000 shall not be reduced below a rate of one dollar and twenty
cents on each one hundred dollars assessed value, and the rate per cent
of the school tax levy for educational purposes shall not be reduced below
a rate of one dollar and fifty cents on each one hundred dollars assessed
value, but the other taxes which are subject to reduction under this sec-
tion shall be subject only to such reduction respectively, as would be
thade therein under this section if this proviso were not inserted herein :
And, provided, further, in reducing tax levies hereunder all school taxes
levied in cities exceeding 150,000 inhabitants, with the exception of the
levy for school building purposes, shall be included in the taxes to be
The rate per cent of the tax levy of every county, city, village, town,
township, park district, sanitary district, road district, and other public
authorities (except the state), shall be ascertained and determined (and
reduced when necessary as above provided), in the manner hereinbefore
specified, and shall then be extended by the county clerk upon the
assessed value of the property subject thereto (being one-third of the
full value thereof) as equalized according to law. In reducing the rate
per cent of any tax levy, as hereinbefore provided, the rates per cent of
all tax levies certified to the county clerk for extension as originally
ascertained and determined under section one of this act, shall be used
in ascertaining the aggregate of all taxes certified to be extended with-
out regard to any reductions made therein under this section : Pro-
vided, that no reduction of any tax levy made hereunder shall diminish
any amount appropriated by corporate or taxing authorities for the pay-
ment of the principal or interest on bonded debt, or levied pursuant to
the mandate or judgment of any court of record. And to that end every
such taxing body shall certify to the county clerk with its tax levy, the
amount thereof required for any such purposes.
In case of a reduction hereunder any taxing body whose levy is
affected thereby and whose appropriations are required by law to be
itemized, may, after the same have been ascertained, distribute the
amount of such reduction among the items of its appropriations, with
the exceptions aforesaid, as it may elect. If no such election be made
within three months after the extension of such tax, all such items,
except as above specified, shall be deemed to be reduced pro rata. 81
, 87 The law as it stood in 1909 differed from the present law in that
''district school taxes and all other school taxes," etc. were not included
in, the excluded rates and that the taxes for bonded indebtedness in the
excluded group were more strictly defined. L. 1913, p. 517; L. 1909, p.
193] REVIEW, EQUALIZATION AND COLLECTION 193
In the report prepared for the tax commission of 1910
the Juul law is criticized because it is so "highly compli-
cated." 88 That this criticism is well grounded will be con-
ceded upon reading the law. Even the officials who ad-
minister it often fail to understand it. This at least seems
to be the best explanation for the illegal rates extended
so frequently in Illinois. Kates above the limits prescribed
by law are levied annually in almost every county of the
state, and railways and other large tax payers find it to
their advantage to employ attorneys to investigate the
rates levied and secure abatements. Mr. John N. Wheatley,
who has for years been employed by a number of rail-
roads to protect their interests in this direction, states
that on the average about five per cent of the total taxes
assessed in Illinois are illegal and excessive and that a
deduction of this amount is annually obtained by the
railroads. 89 Surely this a strong argument in favor of the
323. Moreover the amendment of 1909 made few changes in the law as
it stood after the revision of 1905. L. 1905, p. 365. District school taxes,
which had been included among the taxes excluded from reduction, were
now omitted. The precentages were so changed as to accommodate them
to the new assessment basis of one-third. The bonded indebtedness limit
was made six per cent in place of ten per cent; the tax limit three per
cent instead of five per cent. The distinction in rates between counties
and cities on the basis of their population was new. The limit of reduc-
tion for counties was made forty-five cents and forty cents ; under the old
law it was sixty-five cents. The limit for cities was reduced from
$1.80 to $1.20 and $1.10. The law as it stood after the amendment of 1905
differed from the 1901 law only in that it contained the proviso protecting
the city and county rates from too great a reduction. L. 1901, p. 272. More-
over, the law of 1901 made it the duty of the county clerk to scrutinize
the taxes certified to him by the various authorities to ascertain whether
they exceeded the limits provided in the statutes. In any case where the
limits had not been respected the clerk was authorized to disregard the
excess and treat the residue as the amount certified for extension. L.
1901, p. 272. The Juul law has received the approval of the state supreme
court. The People v. The Chicago and Western Indiana Railroad Co.,
256 III. 388 (1912).
88 Fairlie, Report on Taxation, p. 16.
89 This estimate was kindly furnished by Mr. Wheatley in a letter,
dated Oct 28, 1911.
194 HISTORY OP TAXATION IN ILLINOIS [194
creation of a permanent tax commission, which could, as
a part of its duty, at least make sure that the provisions
of the law were understood by the clerks and properly ad-
ministered by them.
After the rate has been determined the clerk enters the
amounts of the taxes due in the collector's book and gives
the collector a warrant to collect the taxes and to pay them
over to the officers entitled to receive them. 90
COLLECTION OF TAXES.
The administrative machinery for the collection of
taxes had been quite well worked out by 1872, and the
revenue law passed at that time has been but slightly
amended since. The most minute details are specified so-
that this portion of the code is disproportionately large
in respect to its importance for the purposes of this study.
The treasurers in counties under township organi-
zation and the sheriff in other counties are the ex-officio
county collectors. 91
Collections are made, in counties with townships, by
township collectors, elected biennially, and in other coun-
ties, by the sheriff. 92
All collectors are bonded, township and district col-
lectors to twice the amount of all taxes to be collected by
them and county collectors to twice the amount of the
state tax levied in their county. 93
The remuneration of the collectors has through the
entire period been on a fee basis ; the fees of county collec-
tors vary from one and one-half to three per cent, accord-
ing to the population of the counties, the highest per-
centage being allowed in the very small counties. In
counties under township organization the collector re-
80 L. 1881, p. 136.
91 L. 1871-72, p. 35; Rev. Stat., 1874, p. 455.
92 L. 1871-72, pp. 38, 39. A law passed in 1883 permitted the combi-
nation of the offices of treasurer and township collector. L. 1883, p. 174.
83 L. 1871-72, pp. 33-38, 59.
195] REVIEW, EQUALIZATION AND COLLECTION 195
ceives a smaller percentage as a commission on the col-
lections of the township collectors. 94 The township col-
lectors receive two per cent of the sums collected by them
as their compensation. 95
Collections and Settlements.
After the collectors have received from the clerks of
their counties the tax books properly filled out, with a war-
rant attached, they proceed to collect the taxes, the town-
ship collectors being required by law to call at least once
at the residence or place of business of the property owner,
and the district collector to advertise through newspaper
and posted notices where and w r hen he will receive taxes. 96
Actually, however, even in the township counties, the col-
lector seldom makes personal calls to collect the taxes,,
relying almost entirely upon newspaper and post card
notices to bring the tax payers into his office.
Each month the township and district collectors pay
to the proper authorities of the local taxing bodies their
collections to date. 97 At the same time they pay over the-
county and state taxes to the county collectors. The
county collectors report monthly to the county treasurers
(the same person in most of the counties) the amount of
county taxes received by them and available for use. 98
At the end of the collection period and after a twenty
day notice, the town and district collectors are required to-
appear before the county collector and make final settle-
ment of the collections which have been delegated to them. 99 '
The balance of the money collected is at this time paid
over and credits are allowed for delinquents. The county
collector is expected immediately to make a preliminary
settlement with the state officials for the state taxes and
9 *Ibid., p. 437; L. 1877, p. 105.
5 L. 1871-72, p. 444.
Ibid., pp. 33, 34, 35, 39; L. 1873-74, p. 52; L. 1879, p. 246; L. 1881,
p. 130; L. 1898, p. 36; L. 1907, p. 500; L. 1911, p. 485.
97 L. 1871-72, p. 41 ; L. 1873-74, P- 5 2 - At first it was every twenty
98 L. 1871-72, p. 67.
Ibid., p. 42. L. 1873, p. 52; L. 1881, p. 131. These amendments va-
ried the date for the final settlement.
196 HISTORY OF TAXATION IN ILLINOIS [190
then to turn his attention to the delinquent list. After
he has collected all the delinquent taxes possible he pro-
ceeds to make his final settlement with the county board, 100
and with the state auditor. 101
Tax Lien and Tax Sales.
The collection of taxes is enforced by a lien upon the
real or personal property assessed. If a person does not
pay his taxes the township or district assessor may sell his
personal property to make good the amount. 102 In case
taxes are still unpaid when the township and district col-
lectors make their final settlement, the taxes are declared
delinquent, interest is charged upon them and application
is made to the county court for judgment against the real
estate of persons with unpaid taxes. 103
The application of the tax lien to real and personal
property is somewhat complicated. Personal property is
liable for taxes levied on real property and vice versa.
But the tax on personal property may not be charged
against real estate except in case of removals or when the
tax can not be made out of the personal property. On the
other hand, a tax levied on real estate may be made out of
personal property at any time after it becomes due. 104
In actual practice, however, the collector seldom sells per-
sonal property to make good a tax on real estate; indeed
it is seldom that he sells personal property even to enforce
the personal property tax itself, contenting himself merely
with reporting all delinquencies to the county collector.
After a five day notice personal property may be sold
for taxes by collectors at public auction. 103 The procedure
for the sale of real estate is more formal and involved. The
county collector must advertise in the newspapers his in-
tention to apply to the county court for judgment against
100 In some instances this is done through the county clerk. L. 1871-72,
""Ibid., p. 57 ; L. 1873-74, P- 56.
102 L. 1871-72, pp. 35, 39, 59J L. 1873-74, P. 52.
103 L. 1871-72, pp. 43, 595 L. 1873, P. 52; L. 1879, P. 253; L. 1881, p.
104 L. 1871-72, p. 59.
105 /&frf., p. 40.
197] REVIEW, EQUALIZATION AND COLLECTION 197
the real estate on which taxes are unpaid or which is owned
by persons whose personal property tax is unpaid. 106 He
must also advertise the date on w r hich he intends to sell
the land. The collector prepares what is known as "the
tax judgment sale, redemption and forfeiture record,"
entering into it a list of the delinquent lands and lots. 107
The court examines this delinquent list and pronounces
judgment, directing the clerk to order the sale of the
property. 108 Any time before the day of the sale the property
owner, by paying his taxes plus the interest and costs
which may have accumulated, may forestall the sale of
his real estate. 109 On the day of the sale the collector and
clerk carefully check up the delinquent list to make sure
that all payments are entered and the clerk then proceeds
formally to order the sale in accordance with the direction
of the court. 110
The collector, assisted by the clerk, then offers the
tracts for sale at the county court house. Under the law
as originally passed the sale was made to the person who,
in return for the amount due in taxes, offered to accept the
least quantity of the tract. 111 In 1895 this was changed so
as to make the successful bidder the man who, for paying
the tax, would agree to exact the least percentage of pen-
alty from the original owner, should he wish to redeem
the property. 1 12 No bid of a penalty exceeding twenty-five
per cent is accepted. In practice, most of the sales are
made at this figure. A record of the sales is entered and a
copy forwarded to the state auditor. 113
pp. 44, 455 L. 1873-74, P- 53-
107 L. 1871-72, p. 46; L. 1879, p. 248.
108 L. 1871-72, p. 47; L. 1873-74, P- 54-
109 L. 1871-72, p. 46; L. 1879, p. 249.
110 L. 1871-72, p. 48; L. 1879, p. 249.
According to the law as passed in 1872 the order for the sale of the
lands was given by the court on the day of judgment. By the amendment
of 1879 the land was not ordered to be sold until the day of the sale.
111 L. 1871-72, p. 49.
112 L. 1895, P. 298.
113 L. 1871-72, p. 50.
198 HISTORY OP TAXATION IN ILLINOIS [198
The document given to a successful bidder at a tax
sale is but an agreement for the transfer of title after the
redemption period of two years has passed. 114 For the
first six months after the sale, the redemption conditions
include only payment of the amount for which the land
was sold, plus the taxes accumulated since the sale, with
interest and the penalty bid by the purchaser. But if
the redemption is deferred, the penalty is doubled from
the sixth to the twelfth month, trebled from the twelfth to
the eighteenth, and quadrupled from the eighteenth month
to the end of the period. The redemption period is ex-
tended in the case of property belonging to minor heirs,
idiots, and insane persons. 115 If at the end of the period
the land has not been redeemed and the prescribed notices
have been served upon the owners and occupiers of the
land, a deed is given to the purchaser. 116 But the deed
must be taken out and recorded within one year after the
redemption period has expired or it can never be taken
out at all. 117 Moreover, unless the holder of the tax deed
takes possession of the property within one year after the
date of his deed, the original owner of the real estate may
repay him his money outlay and receive back his real
Property Forfeited to the State.
If land offered for sale fails to find a purchaser for
lack of bidders, it is forfeited to the state. The following
year, if the taxes are still unpaid, the land is again offered
for sale with the taxes of the new year added with interest
and penalties. In cases where the taxes amount to a sum
114 L. 1895, p. 109.
115 /&id., p. 258. The law of 1872 originally specified twenty-five per
cent as the penalty to be imposed during the first six months, fifty per
<:ent during the second, seventy-five per cent during the third, and one
hundred per cent during the fourth. L. 1871-72, p. 50.
" 8 L. 1879, p. 256.
117 L. 1871-72, p. S3-
118 L. 1909, p. 146.
199] REVIEW, EQUALIZATION AND COLLECTION 199
larger than the value of the land, the land is sold for what
it will bring 119 and the amount received is distributed pro
rata among the taxing authorities. Lands forfeited to the
state may be redeemed by paying the charges against it
plus various fees and penalties. 120
On the whole the machinery for the collection of
taxes seems to work smoothly. Until recently, except for
some agitation for the abolition of the office of township
collector, there has been little manifestation of dissatis-
faction with the system in vogue. 121 During 1913, however,
the delay of collectors in making settlements was the
source of considerable complaint. It has been charged
that county collectors in some cases delay settlements
with the state auditor in order to put out the money at
interest. The auditor should be furnished with means of
forcing prompt settlements. 1 22
119 L. 1881, p. 137.
L. 1871-72, p. 54; L. 1879, P. 254-
121 Fairlie, Report on Taxation, p. 17.
122 Chicago Tribune, November 24, 1913.
THE TAXATION OF CORPORATIONS
There have been evolved in Illinois a number of spe-
cial devices to assist in the assessment of corporations.
The ordinary methods have been at least partly discarded
for some types of business corporations, for banks, for
railroads, and for telegraph and insurance companies.
THE CORPORATE EXCESS PLAN.
A special effort was made under the law of 1872 to
reach the intangible property of ordinary business corpo-
rations. All property which could be listed in the ordinary
manner by the local assessors was to be taxed in that way,
but in addition a special assessment was to be made by
the state board of equalization. The framers of the law
seemed to believe that the value that accrued to corpora-
tions as a result of the fact that the state had granted them
the right to do and to act was a value that could not be
reached by the local assessors using the ordinary methods.
In order to reach it, it was arranged that the value of the
securities of the corporation should be taken as the full
value of the concern and that in case this amount ex-
ceeded the assessed value of the tangible property, the
difference or corporate excess should be added to the as-
sessment roll by the state board of equalization. 1
Corporations subject to State Assessment.
Not all corporations are assessed by the state board
under the corporate excess plan. In 1875, "companies and
associations organized for purely manufacturing purposes
1 For details as to the manner of assessment, see infra, p. 202. The
discussion of the taxation of corporations is made more brief than would
have been done, were it not for the monograph of J. R. Moore recently
published, entitled, The Taxation of Corporations in Illinois since 1872.
University of Illinois Studies in the Social Sciences, Vol. II, No. I.
201] THE TAXATION OF CORPORATIONS 201
or for printing, or for publishing of newspapers, or for the
improving and breeding of stock," were released from as-
sessment by the state board. 2 Companies organized for
the purpose of mining and selling coal were excepted in
1893. 3 These acts did not excuse such corporations from
all assessment on capital stock and franchise values; it
merely took the power of assessing these values out of the
hands of the state board of equalization. But this was
generally construed to mean complete exemption. In 1905,,
however, the legislature went further and specifically ex-
empted the capital stock or corporations organized "for
purely manufacturing and mercantile purposes, etc.," not
only from assessment by the state board of equalization
but from assessment by local assessors as well. 4 This
move of the legislature was promptly blocked by the courts.
in a decision which declared such exemptions were not
authorized by the constitution. 5 The assessment of the
value of the capital stock and franchises of such companies
is thus thrown back upon the local assessors; the capital
stock of the corporations must be assessed locally or not
at all. 6 These local assessors in the past have done even
less than the board of equaliation, to reach these values,
so that by being turned over to them, the corporations have
little to fear.
The local assessor lacks power to compel the corpora*
tion to give information necessary for a proper valuation.
He also has difficulty in many cases in deciding whether
a given corporation falls under his jurisdiction or that of
the board of equalization. The legal test, which is the
2 L. 1875, P. 35-
The law reads that they shall be assessed as individuals. In 1879 (L.
J879, p. 251) the exemption was made more distinct, such companies
being left "to be assessed by the local assessors." The law of 1879 was-
made necessary because of a discussion which had arisen in the board of
equalization. Moore, op. cit., pp. 65-66.
3 L. 1893, p. 172.
*L. 1905, p. 353.
6 Consolidated Coal Co. v. Miller, 236 III. 149 (1908) ; cf. The People
v. The National Box Co., 248 III. 141 (1911).
6 The People v. Federal Security Co., 255 III. 561 (1912).
202 HISTORY OF TAXATION IN ILLINOIS [202
purpose expressed in the corporate charter, is often a very
inaccurate standard of the kind of business a corporation
is actually carrying on. The situation is necessarily pro-
ductive of much friction and is a prolific source of liti-
In addition to the companies named above, homestead
loan associations have been beyond the power of the state
board of equalization since 1891. 7 Moreover, foreign cor-
porations are not, of course, taxed in this manner. 8 These
exemptions leave as the most prominent types of corpora-
tions subject to the board's jurisdiction in this particular,
railroad, telegraph, gas and electric companies and com-
panies organized for loan, insurance (domestic), bridge,
dredging, hotel, storage, laundry, amusement, hardware,
dry goods, provision, restaurant and dairy purposes. 9
The framers of the law of 1872 decided not to tax to
the individual owners the shares of the stock of corpora-
tions which are taxed on their corporate excess. The le-
gality of such an exemption seems to be doubtful. 10
To enable the state board of equalization to estimate
the corporate excess of the concerns falling under its juris-
diction, it is provided that certain information be supplied
by the corporations to the local assessors who give it to
the county clerk to be forwarded to the state auditor for
the use of the board. This statement of information must
include the amount of the capital stock of the corporation
and its market or actual value, the amount of the funded
debt, 11 and the assessed valuation of the property locally
7 L. 1891, p. 89.
8 But a foreign corporation operating a domestic corporation under a
lease must return statements. Moore, op. cit., p. 20; Postal Telegraph
Cable Co. v. Bernard, 37 III. App. 105 (1890).
9 State banks organized under special charter rather than under gen-
eral law were assessed on corporate excess until 1893. L. 1893, p. 172.
10 Moore, op. cit., pp. 103-104.
"More specifically, this consists of the total amount of indebtedness,
except the indebtedness for current expenses, excluding from such ex-
203] THE TAXATION OF CORPORATIONS 203
The board may supplement these statements with in-
formation from other sources. By rules of its own adop-
tion, 12 it estimates the value of the securities of the com-
pany, equalizes this estimate, sets down the total assessed
value and compares it with the equalized assessed value
of the tangible property. If the value of the tangible
property is not so great, the difference is added and taxed
.as capital stock. The amount of this excess is certified to
the county authorities to be added to the assessment lists.
Efficiency of Assessments.
Great difficulty has always been experienced by the
.state board of equalization in securing from the corpo-
rations the prescribed information about their capital
stock, funded debt, and assessed value of their tangible
property. Even when successful in obtaining them, the
reports have very often been defective, being altered in
.penses the amount spent for the purchase or improvement of property.
L. 1871-72, p. ii ; L. 1879, P. 252; L. 1905, p. 353-
12 The rules for determining the value of the capital stock of corpo-
rations have been changed three times since their primary adoption in
1873. In looo radical changes were made but were declared invalid by
the courts in the Teachers' Federation case. Infra, p. 206. The rules in
force at present were adopted in 1909 but differ very slightly from the
ones originally adopted in 1873. They provide that the fair cash value
of the shares of capital stock shall be determined, "consideration being
given, among other things, to the value of the shares of the stock and
the quotations of such shares in the market over such period of time as
may be reasonable, also the books of said corporations and the returns
made to the auditor of public accounts, or such other information as the
board may have or be able to obtain." To this sum shall be added the
amount of indebtedness, except that for current expenses. The board
shall then equalize the amount "so that said companies or associations
shall be assessed as near as practicable upon a uniform basis with other
property throughout the state." From the aggregate amount so deter-
mined shall be deducted the assessed and equalized valuation of the
tangible property of the corporation and one-third of the result, if any,
is taken as "the assessed value of the capital stock of such corporation
or association, including the franchise, over and above the tangible prop-
erty thereof." Fairlie, Report on Taxation, p. 93.
204 HISTORY OF TAXATION IX ILLINOIS [204
many cases with a view to reducing the corporate excess.
For example, when the law first went into effect, many
managers, under the impression that the debt item would
be used to offset the valuation placed on the capital stock,
expanded the amount of their debt. But such doctoring
had an effect exactly opposite from that expected. Instead
of being used as an offset, the bonded debt was added to
the stock to secure the total valuation for the corpora-
tion. 13 Needless to say, as soon as what was being done
became known, doctoring of this particular kind came to a
Neglect or refusal to report still persists. The pen-
alty provided in such cases is light enough to be ignored.
When the report is not furnished by the corporation, the
assessor is supposed to make it; many times he does not.
Sometimes the county clerks do not bother to transmit
such reports as have been gathered by the assessors in
their counties; in 1900 the clerks in more than half the
counties in the state neglected to do so. 14 During the
early years the board held special hearings and sum-
moned before it the officials of corporations concerning
whose affairs information was desired. But before long
it was found that no power rested in the board to compel
the attendance of representatives of corporations; under
these conditions it was found idle to continue the examina-
tions. Nothing has been done in the past thirty years
toward giving the board this power.
Recognizing that undervaluation exists in the assess-
ment of all other kinds of property, the state board of
equalization feels that it is compelled to undervalue the
stocks and bonds reported to it. If uniformity in the as-
sessment, as provided by the constitution, is to be attained,
it is difficult to see what other procedure could be followed.
But it can be followed only by sacrificing the requirement
of the revenue law which calls for a fair cash valuation.
However, the undervaluation of this type of property was,
13 Moore, op. cit., p. 24.
"Pro. St. Bd. Eq., 1900, p. 17.
205] THE TAXATION OF CORPORATIONS 205
in a sense, recognized by the laws of 1898 and 1909 15 which
prescribed that the assessed valuation of all property
should be placed at a fraction of its cash value. Since this
time, as undervaluation has been carried still further, the
board has endeavored to keep on approximately the same
level as the local assessors.
ASSESSMENTS OF CORPORATE EXCESS BY THE STATE BOARD OF EQUALIZATION,
Net Assessed Value of Number of Corporations
Capital Stock Assessed
1873 $20,730,057 206
1874 11,719,216 224
1875 4,802,112 loo
1880 2,179,460 29
1885 3,791,623 114
1890 6,956,909 3U
1895 4,782,509 275
1900 (b) 4,808,630 334
IQOI 21,477,943 749
1902 22,705,627 1988
1903 15,116,104 1520 *
1904 13,032,412 1442
1905 12,942,970 1218
1906 12,665,601 1832
1907 10,608,000 1302
1908 18,683,448 1281
1909 35,394441 1168
1910 30,265,148 2154
I9H 30,568,450 930
1912 27,734,277 780
(a) Compiled from Pro. St. Bd. Equal, and Fairlie, op. cit., p. 224.
(b) Original assessment
The actual work of assessing the corporate excess
falls to one of the committees of the board, the capital stock
committee, and the activity of the board as a whole is lim-
ited in practice to approving the report of this committee.
It is only in the rarest cases that any change is made in
the committee reports. The other members of the board
seldom know what is being done by the capital stock com-
mittee and it is charged that their votes are asked in ap-
15 C/. supra, p. 103.
206 HISTORY OF TAXATION IN ILLINOIS [20(>
proval of the report without adequate time for them to
consider the justice of the assessments recommended. 16
Just criticism may be directed toward the reports of
the board. They vary in the data presented from year to
year and seldom are all the facts presented which are
essential to a judgment of the efficiency of the assess-
Table 18 shows the assessed value of the capital stock
of corporations other than railroads, as assessed by the
state board in the years given, and also the number of cor-
porations found to have a corporate excess.
The large assessment for 1873 has already been partly
explained by the statement that much bonded indebted-
ness was reported under the misapprehension that it
would be used to offset the assessment of the capital
stock. 18 By 1877, in four years, the assessment had shrunk
from |20,730,057 to f 1,605,783 ; but part of the shrinkage-
is accounted for by changes in the interpretation of the
law which exempted certain companies formerly assessed.
Teachers' Federation Case.
The great increase in the assessment of 1901 was due
directly to the interference of the courts as the result of
litigation instituted by the Teachers' Federation of Chi-
cago. In 1899 and 1900 the work of the schools in Chicago
had been somewhat hampered by the lack of funds. 1 *
What was most to the point was the announcement by the
board of education that it would be unable to carry into
effect a new scale of salaries for the teachers which had
been adopted in 1898. Looking about for a means of relief,
the Teachers' Federation investigated revenue conditions
and soon uncovered grave abuses in the assessment of prop-
erty. The assessment of corporate excess by the state
board of equalization was chosen as the most promising
"Moore, op, cit., p. 45 et seq.
"Evidence on this point may be found in Moore, op. cit., p. 45 et seq. f
and Fairlie, op. cit., pp. 61-63.
18 Supra, p. 204.
10 Chicago Tribune, Oct. 14, 1900.
207] THE TAXATION OF CORPORATIONS 207
point of attack. Here a large increase of revenue could be
hoped for without antagonizing the general public by an
increase in the tax rates. The methods of the board
were notoriously lax and the federation found little trou-
ble in finding specific evidence of gross errors in assess-
ment. Twenty-three public-service corporations were cho-
sen for attack in a test case. It was claimed by the teach-
ers that the real value of the securities of these companies;
was $268,108,312. They were taxed on the merest fraction
of this amount by the local assessors and yet most of them
were assessed nothing at all on their corporate excess by
the state board. By resorting to mandamus proceedings
the teachers compelled the assessors to secure the assess-
ment data from the corporations, 20 and to forward them
to the state board of equalization. Then they petitioned
the board to assess the corporations on their corporate ex-
cess according to their own rules, adopted in 1873. 21 The
board, upon receiving legal advice to the effect that, as a
body having judicial power, it was not forced to assess the
companies, ignored the petition. 22 The teachers in turn
began mandamus proceedings against the board. 23 But
while these were yet under way, the board attempted to
circumvent them by adopting a new set of rules for
valuing capital stock which would permit it to give the
companies light assessments. Under these rules the board
assessed seven of the companies about twelve and one-half
million dollars and exempted the remainder. The man-
damus proceedings, however, were not abandoned ; but the
case dragged along in the courts for some months. At
length, in May, 1901, a decision favorable to the teachers
was reached and the board was directed to assess the cor-
porations according to the old rules. The case was ap-
pealed but the supreme court reaffirmed the position of the
lower court and, in November, 1901, issued a writ of man-
20 C/. supra, p. 202.
21 C/. supra, p. 203.
"Chicago Tribune, Oct. 24, 1900.
23 Ibid., Oct. 28, 1900.
208 HISTORY OF TAXATION IN ILLINOIS [208
damus directing the reassessment to be made. 24
Dissatisfaction with the reassessment caused the case
to be carried to the United States courts. Here it was
held that the new assessment had not been made on the
proper basis, 25 because the property of these corporations
had been assessed at its full value while the property of
other corporations had been undervalued.
When matters were finally adjusted the companies
paid taxes on $21,034,000, a substantially larger sum than
that on which they had been assessed at first. 26
24 State Board of Equalization v. People, 191 III. 529 (1901; Chicago
Teachers Federation Bulletin, Nov. 15, 1901.
"Chicago Union Traction Co. v. State Board of Equalization, 112
Fed. Rep. 607.
29 Chi. Teach. Fed. Bull., Nov. 22, 1911; Chicago American, Mar. 31,
1912, quoted in Bulletin; Fairlie, op. cit., pp. 87, 88.
The tax campaign aroused much enthusiasm. Once started in the
fight, the teachers seemed to forget the first cause of the campaign and
they came to feel that they were angels of light engaged in a crusade
against the forces of darkness, the "moneyed corporations." Articles upon
the "moral significance" of the tax litigation appeared in the Federation
Bulletin (see issue of Oct. 7, 1902) and doggerel like the following sample
served to inspire the teachers :
The Tax War.
The Teachers' Federation
When it sought to right a wrong
Was well aware 'twould have to fight
A battle 'gainst the strong.
They spent their money freely,
Although their pay was small,
To compel the equalizers
To do justice unto all.
But that great board, unheeding,
In its duty still is lax,
And the moneyed corporations
Escape still their lawful tax.
Brave hearts, be not discouraged,
For when the fight is done,
The world and you will reap the fruit
Of victories you have won.
Chi. Teach. Fed. Bull., Jan. 31, 1902.
209] THE TAXATION OF CORPORATIONS 209
After a substantial increase in 1909, due to the change
in the legal assessment ratio from one-fifth to one-third,
the assessment of the corporate excess has once more begu a
to decline. Less than half as many corporations were
assessed in 1912 as in 1902. In 1912 only an even dozen
corporations were assessed as much as f 100,000. The great
majority of the assessments were for less than $5,000.
Whatever the cause of the inactivity and inefficiency
of the board may be, whether it is corruption as charged
by the Illinois Tax Reform Association, 27 or its clumsy
size and negligence, as suggested by the special tax com-
mission 28 there seems to be little excuse for retaining the
system. Its work could be done much more efficiently
and probably more economically by a small expert body.
The assessment of railroad property is also divided
among the local assessors and the state board of equal-
ization, the board, in this case, carrying a larger share of
the load. Not only does it assess the corporate excess of
railroad companies but also such types of tangible property
as are difficult for the local officials to assess in a satisfac-
tory manner. The Illinois Central Railroad forms an
exception to the general rule of assessment, being exempted
from ordinary taxes in view of a percentage of gross re-
ceipts which it pays into the state treasury by charter
The sections of the revenue law providing for the
assessment of railroad property have remained unamended
in any particular since they were passed in 1872. They
provide that the proper officials of the railroad shall
keep on record with the county clerk a description of
the property in the county held by the railroad as its
right of way, the length of all main, side, and second
tracks and turnouts lying in the various taxing districts,
and the value of improvements and stations located on
Z7 Report, 1909, p. 10.
2S S. /., 47 G. A., i Sess., p. 184, et seq.
29 Priv. L., 1851, p. 71 ; supra, p. 108 et seq.
210 HISTORY OF TAXATION IN ILLINOIS [210
the right of way. All such property is classed as real
estate and is designated "railroad track." 30 Annually
each railroad must make statements of assessment data
to clerks of the counties through which their roads run
and to the auditor of public accounts. The statement
which goes to the county clerks gives, in the first place,
the value of the "railroad track" in the county, and
second, the value of all the "rolling stock" which is de-
fined as movable property belonging to any railroad. In
addition to the above information, the statement which
goes to the auditor each year contains data on the type of
construction of the road-bed, the character of the improve-
ments on the "railroad track", and a statement of the
securities of the company similar to that furnished by
other corporations taxed by the corporate excess method. 31
The auditor turns over the data to the state board of
equalization which assesses the roads on their "railroad
track", their "rolling stock" and their corporate excess,
and distributes the assessed value among the local com-
munities in the proportion that the main track lying within
the boundaries of the district bears to the total length of
the main track within the state. The only exception to this
apportionment is that side or second tracks, turnouts and
buildings on the right of way are taxed in the district
where they chance to lie. 32 All real estate and personal
property not included in "railroad track" and "rolling
stock" is taxed by the local taxing authorities exactly as
other taxable property, but such property is usually incon-
siderable in amount.
The introduction of this scheme of assessment in
1872 had the effect of increasing five-fold the valuation of
the railroad property in the state, from $25,568,784, in
1872, to $133,520,633, in 1873.
But here also a shrinkage soon appeared which be-
comes evident from an examination of Table 19, which
80 L. 1871-72, p. 13.
31 Suj>ra, p. 202.
82 L. 1871-72, p. 14.
211] THE TAXATION OF CORPORATIONS 211
shows the total equalized assessment of railroads for the
TOTAL EQUALIZED ASSESSMENT OF RAILROADS, 1873-1912. (a)
1905 - 97,728,276
(a) Compiled from the Proceedings of the Illinois State Board of
Equalisation and from Fairlie, Report on Taxation, p. 218.
The low level of $40,461,865 was reached in 1878.
Since this date the assessment has pulled slowly but fairly
steadily upward. The establishment of the one-fifth basis
in 1898 made no perceptible difference, but the change
to the one-third basis explains the rise from $110,397,824
in 1908 to $186,514,540 in 1909.
The year the law of 1872 went into effect the board
found a corporate excess for the railroads amounting to
$64,611,071. But this had dwindled to about ten million
in 1876 and the following year disappeared entirely. For
the succeeding twenty years not a cent was assessed
against the railroads on their capital stock. Since 1901 a
very small amount, varying from approximately one to
three millions, has been assessed each year, almost entirely
a result of the Teachers' Federation campaign. 33
Professor Fairlie in his report to the tax commission
of 1910 commented upon the injustice of the method of ap-
33 Supra, p. 206 e t seq.
212 HISTORY OF TAXATION IN ILLINOIS [212
portioning the assessment according to the length of main
line in the counties. Complaint has been particularly bit-
ter in Cook County where it is contended that the greater
value of the property lying within the county entitles it to
a larger share than it receives under the mileage system.
It was suggested that the railroad taxes afforded a possible
source of state revenue in case it should become desirable
to separate the sources of state and local taxation. 34
Telegraph companies organized under the laws of
Illinois are taxable on their corporate excess. The law
prescribes that statements shall be made annually to the
auditor giving the necessary information for an assess-
ment. The valuation placed upon the companies is ap-
portioned among the counties much as in the case of rail-
roads, the amount assigned to a particular county depend-
ing on the length of line operated in the county compared
with the total in the state. 35 The tangible property of the
companies is locally assessed.
In 1872 an attempt to assess the capital stock of the
Western Union Telegraph Company, a foreign corporation,
was blocked in the courts. 36 Occasionally an Illinois tele-
graph company is assessed a small amount on its capital
Little change has been made in the method of assessing
banks since 1867. 38 State banks organized under general
law were not made taxable under the corporate excess
method; national banks could not be so taxed. State
banks organized under special laws were assessed in this
manner until 1893, when they were exempted. Theoretic-
ally, bank stock is taxed as personal property to the stock-
34 Fairlie, Report on Taxation, pp. 75-76.
35 L. 1871-72, pp. 16, 17, 29.
38 Western Union Telegraph Co. v. Lieb et al., 76 III. 172 (1874).
37 Aud. Rep., 1912, p. 364 et seq.
38 Supra, p. 117.
213] THE TAXATION OF CORPORATIONS 213
holders, but the tax is in reality paid by the banks, a
sufficient amount to meet all taxes being deducted from
earnings before dividends are paid to stock holders. 39 In
1872 a change was made which withdrew the allowance
formerly made in the assessment for real estate owned by
the bank and assessed in the regular way. 40 This, of course,
affected chiefly the state banks, institutions with national
charters being forbidden to hold real estate as a form of
investment. The practice of allowing deductions for real
estate seems to have continued, however ; but in 1903 when
a case was carried to the supreme court, such deductions
were declared illegal. 41 But the state legislature, then
in session, reenacted the provision permitting them, the
very provision against which the decision of the court had
been directed. 42
A feature of the law of 1872 was section thirty-five
which exempted from taxation stock owned by citizens of
Illinois in national banks located in other states. 43 This
was the only way that double taxation could be avoided
if other states collected at the source.
The blundering manner in which the tax legislation
has been drawn is well illustrated by the changes in the
provisions for taxing state banks organized under special
charters. Such banks were for some reason made taxable
on their corporate excess rather than on the shares of
stock. In 1893 the legislature exempted them from tax-
ation on their corporate excess but neglected until 1905
to make the proper changes in the other sections of the
revenue law whereby they could be taxed on their shares.
In the meantime these banks were taxed by neither method.
The undervaluation of shares of bank stock has kept
pace with the undervaluation of other property if the
89 L. 1871-72, pp. 12, 13.
*Ibid., p. 12.
"Illinois National Bank v. Kinsella, 201 III. 31 (1903).
42 L. 1903, p. 294-
The Illinois Tax Reform Association charges graft in connection
with the passage of this measure. See Bulletin 32.
43 L. 1871-72, p. 12.
'214 HISTORY OF TAXATION IN ILLINOIS [214
evidence of the Report of the Bureau of Labor Statistics
is to be given weight. Interesting statistics, which are
probably more trustworthy, appear in the protest of the
Illinois Tax Reform Association to the board of review of
Cook County in 1910. Here it is claimed that the capital
stock of thirty-nine Chicago banks was assessed in 1909
on but forty per cent of a fair legal assessment. 44 It is
also contended that the larger banks escape with a lighter
assessment than the smaller ones. Statistics are presented
which show that the stock of four of the largest banks was
assessed at figures varying from twenty-four per cent to
thirty -five per cent of a legal assessment value, while the
stock of four of the smaller banks was taxed at practically
one hundred per cent. 45
It has been noted 46 that domestic insurance companies
are assessed by the local officials on their property in
general and by the state board of equalization on their
corporate excess. The origin of the tax on the receipts of
foreign insurance companies has also been treated. 47 The
acts under which foreign insurance companies have been
taxed all through the period under discussion and are still
taxed were passed in 1869. Foreign fire, marine, and
inland navigation insurance companies are by this legis-
lation made taxable on their net receipts at the regular
general property tax rates. 48 Net receipts have been de-
fined not as net profits, but as gross receipts less operating
**Bull. 32, III. Tax Ref. Ass., p. I. The statistical methods used in
this document are not always above reproach, as for example the manner
in which general averages are calculated on page 4. But nevertheless the
statements seem to be substantially correct.
4 *Ibid., p. 4. For the assessment of the personal property of bankers
cf. supra, pp. 153 et seq.
48 Supra, pp. 128, 202.
"Supra, pp. 117-118.
48 L. 1869, p. 209; L. 1879, p. 179. The former law had taxed gross
215] THE TAXATION OF CORPORATIONS 215
expenses only. Fire losses are not deducted. 49 In addition
to this tax on their net receipts, foreign fire insurance com-
panies are taxable on their gross receipts up to two per
cent by the local communities for the support of fire de-
partments. 50 Such a tax is open to criticism from the point
of view of justice. It amounts to a special charge upon
the careful man who insures his property to protect from
loss the careless man who carries no insurance.
Foreign life insurance companies were released in
1869 from the tax on receipts and were made subject to a
reciprocal tax, a charge which depends for its amount upon
the attitude in matters of taxation assumed toward Illinois
by other states. 51 Foreign casualty companies w r ere
brought under a reciprocal arrangement somewhat later. 52
Aside from a few fees, the statute places no set charge
upon these companies but prescribes that the auditor shall
ascertain the taxes imposed by the home state of each
insurance company upon Illinois insurance companies
doing business in that state. The amount charged against
the companies by the Illinois auditor is determined by what
is charged by the home state against similar Illinois cor-
porations. The receipts from the various taxes and fees
49 Moore, op cit., p. 84; Republic Fire Insurance Co. v. Pollack, el al.,
75 ///. 292 (1874).
50 L. 1869, p. 228; L. 1871-72, p. 245; L. 1903, p. 221; L. 1895, p. 104;
L. 1909, p. 126. An act passed in 1877 specified that one-fourth of the
receipts from this tax should go to the fund for the relief of disabled
policemen and firemen. L. 1877, p. 62. The fraction was raised to one-
half in cities over 10,000 in 1883. L. 1883, p. 59. One-fourth of these re-
ceipts were go to the pension fund in such cities by a law passed in 1901
(L. 1901, p. 97) and one-half by a law of 1905. L. 1905, p. 100. In 1899 the
state superintendent of insurance was authorized to levy a two per cent
tax on the gross receipts minus the taxes levied by the local authorities
for the support of a fire department. L. 1899, pp. 265, 235. This act was
soon declared unconstitutional. Raymond v. Hartford Insurance Co., 196
III. 329 (1902). Finally by an act passed in 1909, all fire insurance com-
panies were made subject to an additional tax on their gross receipts, the
rate not to exceed one-fourth of one per cent, for the support of the office
of state fire marshal. L. 1909, p. 270.
81 L. 1869, pp. 227, 228.
2 L. 1889, p. 168; L. 1899, p. 237.
216 HISTORY OF TAXATION IN ILLINOIS [216
levied upon insurance companies have grown to consider-
able proportions in late years. In 1895 the total receipts
from this source were but $177,503.73. By 1900 they had
grown to $344,967.75. The receipts in late years have
shown still greater increases, $1,178,695.41 being the
amount for the biennium ending November 1, 1912. 53
In addition to the sources of revenue enumerated
above, the state receives considerable sums from fees and
from the inheritance tax. For the biennium ending No-
vember 1, 1912, the sum of $2,690,787.29 was received into
the state treasury from fees collected by the various state
departments. 54 This comprised about tw r elve per cent of
the total receipts into the Revenue Fund for this period. 55
The tax on inheritances has been imposed since 1895; the
law was revised and the rates increased in 1909. The
biennial receipts during this period have varied from $39,-
179.98 (1896-98) to $3,687,029.97 (1910-12). The yield
for the biennium ending November 1, 1912, is decidedly
unusual; in no other biennium does the return reach one
half so large a figure. The inheritance tax at this time
supplied about one-sixth of the income of the Revenue
Fund. The Illinois Central payments have already been
noted. 56 These are at present the only richly productive
sources of state revenue aside from the general property
63 Reports of the Insurance Superintendent; Auditors' Report, 1912, p.
i, and Fairlie, Report on Taxation, p. in.
"This sum includes the sum received from the insurance department.
6S Aud. Rept., 1912, p. i ; cf. Moore, op. cit., ch. 5.
6 *Supra, pp. 108 et seq., 209.
SUMMARY AND CONCLUSION
From the preceding survey it is difficult indeed to
avoid the conclusion that the general property tax in
Illinois is a very unsatisfactory piece of fiscal machinery.
It is unequal in its application, unjust in its incidence,
and inefficient in its administration. Indeed a complete
list of its defects would include infractions of almost every
commandment in the fiscal decalogue.
To give to the system the modicum of praise due it is
a simple task. An examination of the history of the tax
through the century and a quarter of its existence makes
it evident that its chief claim for glory rests upon the fact
that for the first two-thirds of that period, until about
1860, it was on the whole fairly successful. There were
complaints, of course, but a tax has yet to be devised which
can be applied without pain. "It is impossible to make
omelet without breaking eggs." Undervaluation and in-
equality were present, it is true, but not to an extent which
fatally impaired the efficiency of the system. The state
owes the general property tax a debt of gratitude for its
assistance during these trying years of debt payment.
During the early forties the tax system seemed unable to
bear the strain put upon it; but no system of taxation
could have borne so great a burden. There was available
no basis upon which to levy the heavy taxes demanded by
the fiscal necessities of the state.
The causes for the comparative success of the system
before 1860 are to be found in the conditions present at
that time conditions which have now largely disap-
peared. In the first place, the general property tax was
satisfactory when property in general was tangible and
218 HISTORY OF TAXATION IN ILLINOIS [218
undifferentiated, and when it formed an acceptable crite-
rion of faculty, or ability to pay. So much property is
now intangible and unreachable by the property tax that
the problem is entirely changed. Few would have the
temerity to maintain that present-day tax returns in Illi-
nois form an acceptable criterion of ability to pay. In the
second place, the rates during a large part of the early
period were trifling compared with the present-day rates.
Much property that could be reached when rates were low
can not be reached when rates have become high. So it
appears that the strength of the general property tax lies
in its past, and that its success depends upon conditions
which have long since passed away.
From the number of times the defects in the general
property tax have been pointed out, it would seem super-
fluous to recount them here. But there can be no reform
before the faults of the system are thoroughly appreci-
ated ; and the fact that they have not been fully recognized
and appreciated in the past furnishes the only excuse for
the lack of action thus far toward remedying the situation.
The counts of the indictment are these :
There is gross undervaluation. 1 In the examination
of the entire period it is pot possible to find a time when
the assessment closely approached the real values. This
is, of course, not a vital defect in itself. If a horse is
listed at twenty dollars instead of one hundred, and all
other horses are listed according to the same scale of de-
preciation, the rate will be five instead of one per cent and
the farmer pays a dollar in taxes for his horse just the
same. But the defects which undervaluation drags in its
train are much more important viz. lack of uniformity
There is great lack of uniformity. When one assessor
values a hundred dollar horse at twenty dollars, another
may value an equally valuable animal at ten dollars. The
*Supra, pp. 81-82, 83, 99-100, 112, 124, 133-134, 144, 167, 204, 215.
219] SUMMARY AND CONCLUSION 219
scale of undervaluation varies widely from individual to
individual, and from county to county, so that uniformity
is completely ignored in the practical working out of the
There is also great lack of universality. Of course a
man who is taxed on a lower scale of valuation than his
neighbor is in a sense open to the charge of having evaded
a part of the tax. Thus uniformity is implied in univer-
sality. But what is meant primarily when the term uni-
versality is used, is the degree of completeness of the as-
sessment. Is all property in the state taxed, or does some
escape? Evidence is presented in the foregoing chapters 3
which proves beyond a doubt that property in Illinois es-
capes taxation to an extent nothing short of startling.
Real estate of course does not evade the assessment, but
all kinds of personal property do to a considerable extent
and intangible personal property to an alarming degree.
The administrative organization is defective. The
wretched work of certain parts of the administration is a
matter of common knowledge. 4 Perhaps the most ineffi-
cient part of the whole organization is the state board of
equalization. There is no valid excuse for the further
continuance of this body. There are many administrative
irregularities, such as the widespread, illegal extension of
rates which could be eliminated by a small expert tax com-
mission. The revenue law itself is unnecessarily compli-
cated and obscure and is consequently difficult to admin-
ister. There is considerable complaint about the system
of township assessors and about the lack of promptness in
paying over collections to the proper state officials. 5
The Necessity of Reform.
Such conditions cry aloud for amelioration, but com-
plaints have been raised so long and so continuously that
the legislators have come to consider them normal and
2 Supra, pp. 144, 169, 214,
*Supra, pp. 144, 205.
*Supra, pp. 132-133, 171, 174, 177.
*Supra, pp. 171, 179.
220 HISTORY OF TAXATION IN ILLINOIS [220
necessary. For forty years the General Assembly has been
almost impervious to suggestion. Very extraordinary
measures will probably be necessary to bring reform. In
the late seventies there was a movement for tax reform
whose net result was a joint resolution of the legislature.
The revenue commission of 1886 6 made an able report and
drafted a new revenue law with many admirable features.
But none of their recommendations was adopted. The
attacks of the Bureau of Labor Statistics in 1894 and
1896 7 deserved better results than the superficial and
makeshift legislation of 1898. Finally, the moderate and
well-considered recommendations of the commission of
1910 8 were utterly disregarded by the legislature which
had requested and paid for them.
To one who views the problem from a distance there
is an element of the pathetic as well as of the ludicrous in
the situation. The ludicrous element is found in the atti-
tude of the legislature in ignoring the recommendations
of experts appointed to advise them and in persistently
shutting their eyes to the lessons which the history of their
own state and of other states and countries would teach
them. The pathetic element is that the energies of the
state are crippled by an antiquated and unfair financial
The state has reached an interesting stage in the evo-
lution of her system of taxation. Changes of a more or
less radical nature will soon be made, if the experience of
other states may be taken as an indication of what is to
be expected in Illinois. What has been the history of the
system elsewhere? Professor Seligman, after a wide sur-
vey of the history of the general property tax in many
lands, has generalized somewhat as follows: The system
found its beginnings when economic conditions were prim-
itive and when the needs of the state for revenue were
such as to demand only a light tax rate. The tax usually
took the form of a charge levied upon enumerated arti-
9 Suf>ra, pp. 157, 169, 171, 178, 190.
''Supra, pp. 169, 170, 214.
*Supra, pp. 170, 171, 174, 178-179, 193, 209, 211.
221] SUMMARY AND CONCLUSION 221
cles a tax on things rather than a tax on persons. With
the progress of the community, the amount and variety of
its wealth multiplied; more and more articles were added
to the assessment list until at length it became more sim-
ple to make the tax a personal one to tax everyone ac-
cording to the value of all the property he owned individ-
ually rather than to tax the specific articles themselves.
But soon it became evident that intangible personal prop-
erty played a very insignificant role in the individual's
estimate of the value of his taxable property; the impor-
tance of this class of property annually became smaller
until the attempt to reach it for taxation became a mere
farce. Then the law was so changed as to acknowledge
frankly what was already known to be true, that certain
kinds of personal property were not assessable under the
general property tax system. What was left as the tax
base, after this change was made in the code, was merely
real estate; real estate usually included houses but even
these were gradually eliminated from the assessment lists,
leaving only the land. So, at the end of the series, there
is again an impersonal tax levied on a specific article. The
tax paying ability represented by property other than real
estate must be reached by other methods than the general
property tax. Changes in the system usually come in re-
sponse to changes in fundamental economic conditions.
The escape of personal property from taxation is not a
serious problem in the primitive stages of economic devel-
opment; there is not enough of that kind of property to
matter. But later when economic conditions have changed,
that element in the total wealth of the community has
increased both absolutely and proportionally. At the
same time the temptation to evasion has become stronger;
for at this stage in the process, the need for more revenue
usually makes itself felt and the higher tax rate has a
tendency to frighten away intangible property.
The earlier stages in the life history of the system are
clearly discernible in the history of taxation in Illinois.
In the early years of the nineteenth century, the cycl*
222 HISTORY OF TAXATION IN ILLINOIS [222
opened with a tax on a number of specific articles. From
the beginning, the tax code was a reflex of the economic
conditions; there were at first but few kinds of property
and the simplest way to levy the tax was to enumerate the
items on which the tax was to be made. Gradually more
and more kinds of property were added until at length the
tax changed its character. It is now a personal tax ; every-
one is taxed, theoretically at least, on all he possesses, not
even his household property being exempted. Desperate
attempts have been made to prevent evasion, attempts
which have excited the curious amusement of tax experts
everywhere. But in spite of every effort, personal prop-
erty taxation in Illinois furnishes one of the best examples
extant to-day of how complete can be the failure of the
general property tax.
During the first thirty years of the history of the
state^ frontier conditions prevailed, the property was homo-
geneous, the demands of the government were not large,
and it was found that a crude and primitive form of the
general property tax sufficed to meet the needs. During
the next few decades the necessity arose for securing a
large revenue; but by wise alterations the code was re-
vamped so as to meet, fairly successfully, the new condi-
tions. This was only possible, however, because the prop-
erty, to a large extent, was still tangible, undifferentiated,
and homogeneous. It is only in the last forty years in
Illinois that the system has broken down badly. Under
the stress of constantly increasing demands for revenue
and of constantly increasing difficulty in discovering and
assessing personal property, the situation has grown pro-
gressively worse and in some quarters at least has become
almost intolerable. The canons of universality and uni-
formity, so carefully provided for in the state constitution
and in the theory of the code, are so flagrantly violated in
actual practice that some change is imperative.
It is not very easy to explain why a state which is so
far before its neighbors in general economic development
should in tax matters be so far behind almost all of them.
223] SUMMARY AND CONCLUSION 223
Among the reasons for this backwardness, the first place
should be given to inertia. The legislature has shown a
persistent reluctance to deal with the problem. It was
something to be postponed indefinitely, to be buried in
committees or to be further investigated by commissions,
but not to be taken seriously. Because of its technical
nature the subject lends itself readily to treatment of this
sort. The people at large have not been vitally interested
because the attention of many of the most able and influ-
ential men has been thus far almost exclusively occupied
with other things, problems of production, for the most
part. The enormous economic development of the state
has operated to obscure the importance of the injustices of
the tax system. But the exploitation period is now well
advanced in Illinois and this cause of retardation will
become constantly weaker. But there should also be men-
tioned a more sinister cause, one which is spoken of only
occasionally in a radical paper or pamphlet of a radical
society, and then with bated breath. It is suggested that
the corporations of the state are quite well satisfied with
the present state of affairs. And well they may be. 9
The conflict in the interests of the various sections of
the state also serves to obstruct tax reform. Illinois is a
curious mixture of the primitive and the modern. Always
rich agriculturally, it has of late years developed enormous
commercial and industrial wealth. In the sections of the
state where this newer development has taken place, tax
reform has been the logical step for many years past ; it is
recognized that the degenerate form of the general prop-
erty tax is no fair test of the ability of the merchant, the
manufacturer, and the mine operator to contribute to the
expenses of the government. In the agricultural part of *
the state, on the other hand, the general property tax has
been in the past more satisfactory. Even here, there are
great undervaluations, evasions and inequalities, but com-
paratively speaking the tax has not been so obviously a
failure. To the local officials who administer the law in
9 Supra, p. 203 et seq.
224 HISTORY OF TAXATION IX ILLINOIS [224
the rural districts, the assessment list is a fine joke-book;
but the situation has not been so bad as to be particularly
offensive to the passerby. The crying evils come largely
from the different economic constitution of the various
parts of the state. The sections are not at all alike, and
they demand somewhat varied treatment in matters of
taxation. But all concerned seem to be afraid of the whole
question. The business interests dread any change, for it
is likely to mean an attempt to get nearer to their true
taxable capacity than is done at present, and they feel that
almost any change would be the worse for them. On the
other hand, the agriculturists lift their hands in horror at
the thought of allowing various classes of property to be
assessed differently or taxed at different rates. They still
worship the Lares and Penates of their fathers; all prop-
erty must be taxed according to its value. Exempt mort-
gages and credits? The very suggestion is alarming to
them. It is a trick of the lawyers for the city interests to
make even heavier the load of taxation for the farmer. But
they forget entirely that at present practically no mort-
gages and credits are actually reached in the cities. They
forget also that the proposed constitutional change would
make it possible to shift some of the heavy burden from
real estate to the young and sturdy shoulders of commerce
and manufactures which have developed and grown strong
since the present tax system was formed.
It is clear that something should be done. Tax reform
of some sort must come and come quickly if the state is to
avoid disastrous consequences. There is no escape from
this conclusion. To discuss what form the legislation
should take is not strictly within the province of this
study. It is believed, however, that it has been sufficiently
demonstrated that the general direction of the reform
should be away from the present system. Real estate will,
of course, under any system remain the most important
part of the tax base, whether the state shares in the return
225] SUMMARY AND CONCLUSION 225
from the land tax or hot. But the history of taxation
shows that any attempt to rehabilitate the general prop-
erty tax as a whole is destined to almost certain failure.
No method devised by man can enforce the general prop-
erty tax without a different moral sentiment among the
people than that which now exists. It is possible that, if
such a moral sentiment could be created among the tax
payers, the introduction of a radical administrative reform
would result in the listing of property in general for taxa-
tion. But granted that these impossible conditions could
be met, it is extremely doubtful whether it would be ad-
visable to bring them about. For property under the com-
plicated conditions which exist to-day is coming to be less
and less trustworthy as an index of faculty or ability-to-
pay and income is becoming more and more satisfactory.
Experience elsewhere has revealed better methods of
reaching ability-to-pay. Even if attainable, the ideal of
the general property tax would to-day not be worth
It may serve a useful purpose to enumerate some of
the measures which have recommended themselves to stu-
dents of the problem as desirable steps toward a better
taxing system. They may be arranged in the form of a
series of gradations, each step depending upon the degree
of conservatism of the reformer in question.
(1). Even the "standpatter" could scarcely object to
a proposal to codify and simplify the present revenue code.
Even if no changes were made, the codification would
doubtless result in an increased efficiency in public admin-
istration in general, an end well worth striving for.
(2). The proposal for a permanent tax commission
should arouse no considerable opposition, other than that
of the politicians who would resent the replacement of the
state board of equalization and of the corporations
which might expect less liberal treatment under some new
arrangement. But unfortunately this type of opposition
has a faculty of making itself very effective. Such a com-
mission could be used to great advantage even if the pres-
226 HISTORY OF TAXATION IN ILLINOIS [226
ent system of the general property tax were retained un-
modified to any considerable extent, or could readily be
adapted to the needs of any more fundamental reforms
which it might seem well to adopt. The plan of a small
expert body has everywhere proved more satisfactory for
this particular bit of administrative work than a large,
elective body such as the state board of equalization.
(3). Little can be done in the way of more thorough-
going reform until the hands of the legislature are freed
from the constitutional restrictions. The constitution now
stipulates the general property tax. But the legislature
has thus far shown no great desire for freedom of action
in tax matters. There is slight excuse for denying the
people permission to express themselves upon the question
of the advisability of giving the legislature authority to
devise some new system. Distrust of the legislature may
make it seem desirable to incorporate the tax system into
the organic law of the state. If so, the sooner a constitu-
tional convention is called, or amendments providing for
specific reforms are submitted, the better it will be for the
fiscal health of the community. In the second case the
legislators will merely be relieved of the responsibility
from which some of them seem to shrink. On the whole,
because of the complicated nature of the problem, it would
seem the wisest plan first to create a trustworthy expert
commission, and second to liberate the legislature so that
it could adopt its recommendations.
(4). A reform which has proceeded far enough in
other states to outgrow the stigma which attaches itself
to any new proposal is the separation of the sources of
state and local revenue. As has been seen, 10 this plan is
far from novel in Illinois. During the early years of the
state's history an upside-down system of segregation was
actually in force in the state, the proceeds from land taxes
going to the state and from personal property taxes going
to the localities. The revenue commission of 1886 was the
first official commission in the history of the country to
recommend segregation as an antidote for undervaluation
10 Suf>ra, pp. 44, 178.
227] SUMMARY AND CONCLUSION 227
and the resulting inequality. If the state were to resign
the mass of real and personal property to the localities for
taxation and depend for its revenue upon various "indi-
rect" taxes to be developed, the incentive for undervalua-
tion would be in part removed. It would then be possible
for a single locality, if so minded, to proceed to the work
of assessment reform unhampered by a prospect of in-
creased state taxes imposed as a penalty for its progress-
iveness. The beneficial results achieved in New York City
should be a strong argument to Chicago in favor of the
adoption of such a system. There, real estate valuations
have risen to a very close approximation of cash values.
By a system of tax maps and unit values, inequality is
practically eliminated. There can be no doubt of the good
effect of such a measure upon real estate taxation. But
before such a scheme could be adopted in Illinois a consti-
tutional amendment would be necessary.
(5). If the state were to resign the general property
tax to the localities, the question of the justice of the
tax would still remain unsettled. Separation of sources
holds great promise for better real estate assessments and
perhaps some promise for the assessment of tangible per-
sonalty. But it offers little encouragement to the seeker
for a means of taxing intangible personal property. But
most of this property is not reached under the present
system. 11 There are those who would abandon the tax on
both tangible and intangible personal property. Substi-
tutes which would certainly be more satisfactory than the
present system are not lacking. For the tax on mortgages
and corporate securities a recording and registry tax
might be supplied. No one can deny the superior justice
of a light recording tax on all mortgages over a heavy gen-
eral property tax on the unhappy few who happen to fall
into the assessors' net under the present system. A series
of business taxes might well repace the present levy on
stock in trade. Unproductive tangible personalty, such as
house furnishings etc., and much of the tangible personalty
ll Suf>ra, p. 146 et seq.
228 HISTORY OF TAXATION IN ILLINOIS [228
of the farmers might be exempted without serious conse-
(6). The policy toward the taxation of corporations
would depend so largely upon the disposition made of the
foregoing suggestions that it seems idle to discuss it in
detail here. It may be well to point out, however, that for
the base of the tax upon such corporations as form the
bulk of those now assessed by the state board of equaliza-
tion, the best opinion seems to prefer net income rather
than stocks, bonds, or corporate excess. Any advance at
all in corporation taxation almost inevitably presupposes
the expert assistance of a commission.
Any changes should be made gradually, of course.
Many persons do not appreciate the extent to which taxes
are capitalized; to what fine degrees the various inequal-
ities, evasions, and discriminations are reflected in the
values of the various kinds of property. In a sense things
as they are have a certain right to be simply because they
do exist in their present condition. Much property is
bought and sold whose value would be entirely different
if the tax laws of the state had been and were being en-
forced in a strict and efficient manner; and often both
parties to the transaction buy and sell in entire ignorance
of the fact that the values in which they deal are depend-
ent upon the degree of badness with which a law is en-
forced. Sudden and unheralded changes in the tax code
have the possibility of causing much injustice and suffer-
ing through their very suddenness, even though the
changes, in themselves, be thoroughly desirable. But this
is no reason why bad conditions should always be bad.
For them to remain so suggests cowardice in grappling
with the problem. Many people are coming to believe that
it is high time that changes should be initiated and a start
made toward a more equable and more efficient revenue
code for Illinois. But until the people as a whole reach a
state of mind where they can think of their tax problem
without being incapacitated for action both by fevers of
conscience and chills of apprehension, no reformation can
Auditor of Public Accounts Reports of, 1820-1912.
Bureau of Labor Statistics, Reports of, 1888, 1894, 1896.
Census of the United States (Various volumes).
Comptroller of the Currency of the United States, Reports of (Various
Constitutions of Illinois, 1818, 1848, 18/0.
Constitutional Conventions, Journals of, 1818, 1847, 1862, 1870.
County and Township Organization and those relating to Roads, Highways
and Bridges, A Report of the Joint Legislative Committee of the 47th
General Assembly Appointed to take up the Matter of a General
Revision of the Laws Pertaining to. J. A. Fairlie, Chief Clerk.
Fairlie, J. A., A Report on the Taxation and Revenue System of Illinois,
prepared for the Special Tax Commission. Danville, Illinois, 1910.
Financial Records, Ledgers, etc. (In the vaults of the Auditor of Public
General Assembly, Reports to the, 1836-1897.
Governors' Messages, 1818-1912.
Highway Commission, State, Report of, 1906.
House Journals, 1818-1912.
Illinois State Historical Library,
(1) Publications of,
Number 2, E. J. James, Information relating to the Territorial
Laws of Illinois, Springfield, 1899.
Number 3, , Territorial Records of Illinois, 1809-1818.
(2) Bulletin of,
Volume I, Number 2, C. W. Alvord, Editor, Laws of the Terri-
tory of Illinois, 1809-1811. Springfield, 1906.
(3) Collections of,
Volume II, C. W. Alvord, Editor, Cahokia Records, 1778-1790.
(a) This list is intended to include only official publications and pri-
mary sources. Bibliographical data for the secondary sources are given
in the footnotes, where citations are made. Information in regard to the
form of publication of the various public documents is given in such detail
in Miss Adelaide R. Hasse's Index of Economic Material in the Docu-
ments of the states of the United States, Illinois, 1809-1004 (Published by
the Carnegie Institution of Washington, July, 1909), that it seems unneces-
sary to repeat it here.
230 HISTORY OF TAXATION IN ILLINOIS
Volume IV, E. W. Greene and C. W. Alvord, Editors, Gover-
nors' Letter-Books, 1818-1834. Springfield, 1909.
Volume V, C. W. Alvord, Editor, Kaskaskia Records, 1778-
1790. Springfield, 1909.
Volume VII, E. B. Greene and C. M. Thompson, Editors,
Governor's Letter-Books, 1840-1853. Springfield, 1911.
Illinois Tax Reform Association, Reports and Bulletins of, 1908, 1909, 1910.
Kales, A. M., and Liessman, E. M. Compilation of Tax Laws and Judicial
Decisions in the State of Illinois, 1910.
Laws of the Governor and Judges of the Northwest Territory.
Territorial Laws of Indiana, Governor and Judges.
Session Laws of Indiana, Territdrial Legislature.
Laws of Indiana Territory, Jones and Johnson Compilation, 1807.
Laws of the Territory of Illinois, 1809-1811, Bulletin of Illinois State
Historical Library, supra.
Session Laws of the Territorial Legislature, 1812-1818. Some laws
for this period are unpublished but may be consulted in the
office of the Secretary of State at Springfield.
Laws of the Territory of Illinois Revised and Digested under the
Authority of the Legislature by Nathaniel Pope. Kaskaskia,
Session Laws of the General Assembly, 1818-1913.
Revised Statutes of Illinois (Various editions).
Revenue Laws of the State of Illinois, Auditor's Edition (Various
Moore, J. R., Taxation of Corporations in Illinois, other than Railroads,
since 1872. University of Illinois Studies in the Social Sciences,
vol. II, no. i, 1913.
Revenue Commission Appointed under a Joint Resolution of the 34th
General Assembly to Propose and Frame a Revenue Code, Report of,
Springfield, 1902 Edition.
Senate Journals, 1818-1912.
Special Tax Commission, Report of the (1910). Senate Journal, 47th
General Assembly, First Session, p. 184 et seq.
Supreme Court Reports, 1831-1912.
State Banks, Statements Showing the Condition of, Compiled by the
Auditor of Public Accounts, 1889-1912.
State Board of Equalization, Proceedings of, 1867-1912.
State Treasurer, Reports of, 1820-1912.
Swift's Commission, Report of Mayor, in Report of the Bureau of Labor
Administration, 35, 68-73, 81-82, 83 n., 89, 125: see Assessment and Col-
Alexander County, 170.
Altgeld, Governor, 179.
Apportioned tax rate, 181, 182.
Assessment, methods of, pre-territorial, 15-16, 17, 20, 21-22, 23; 1809-1838,
44-49, 59; 1838-1872, 79, 81, 83, 89-90, 95, 98, 99, 101, 112-115, 121;
1872-1913, 127, 132-137, 141-144, 166-167, 202-203, 209-210; officials, 15,
17, 18, 20, 21, 46, 99, 132-133, 200; period, 142, 167; place of, 142;
efficiency of, 22-23, 72, 81-82, 99-100, 105-106, 112-113, 124, 125, 135,
144-165, 167-172, 203-209, 210-212, 213-214, 217-219; values, 104, 105, 112,
113, 122; data, unsatisfactory, 145-146; quadrennial, 166.
Auditor's warrants, depreciation of, 32, 91.
Banks, state, 25, 31-33, 39, 4O, 41, 42-43, 48-49, 65, 69, 75-76, 77, 87, 90, 99;
taxation of, 117, 141, 153, 212-214; deposits compared with moneys
Birkbeck, Morris, 66-67.
Blind asylum, 104.
Bond, Shadrach, 13, 33.
Bonds, state, 91.
Boundaries, state, 13.
Bridges, 26, 185-187.
Bureau of Labor Statistics, Report on Taxation, 149, 157-158 n., 169, I/O,
Cahokia, 9, ir, 13.
Canal Redemption Fund, 183.
Canal, see Illinois and Michigan Canal.
Capitalization of taxes, 228.
Capitation tax, 17, 21, 128; see Poll tax.
Carlin, Thomas, 83, 85.
Champaign County, 152-153, 161.
Chicago, state payments to, 116; problems of, 126; assessments in, 147-153,
168, 170, 184; see Cook County.
Civil War finances, 111-113, 125.
Clark, George Rogers, n.
Codification of tax laws, proposed, 225.
Coles, Edward, 62, 65, 67.
232 HISTORY OF TAXATION IN ILLINOIS [232
Collection of taxes, machinery for, 16, 17, 22, 49-51, 58, 81, go, 99, 103,
194-199; jefficiency of, 22-23, 72-73, 87, 99, 125, 199.
Commissions, tax, 168-169, 171-172, 178, 220: see, Bureau of Labor Sta-
tistics, Revenue Commission, Swift's Commission and Special Tax
Constitution, of 1818, 38; of 1848, 93-98, 100, 121, 127; of 1870, 127; amend-
ments to, 97, 226.
Constitutional convention of 1818, 38; of 1847, 92, 93.
Cook County, special tax machinery in, 132, 135, 190; board of review,
135. !37 *74; publication of assessments in, 137; assessment efficiency
in, 147-153, 154-165; complaints concerning railway taxation in, 212.
Corporate excess, 132, 200-209, 212, 214.
Corporations, taxation of, 117, 128-129, 132, 200-216, 228.
County organization, 98, 100, 134, 173, 194.
Credits, definition of, 138-139, data concerning, 145-146; assessment of,
Currency disorders, 67, 69, 87.
Debt, state, 74-125; estimates of, 75-77; payment of, 104, 106, 108, no, in,
115-116; sources of revenue for payment of, 109, in; local, limits
Deduction of debts, 43, 101, 140-141, 146, 151.
Defalcations, of sheriffs, 69, 71 ; of state treasurers, 70.
Deneen, Governor, 180.
Drainage taxes, 189.
Duncan, Joseph, 66.
Dunne, Governor, 180.
Economic conditions, 1809-1838, 25-34, 73! 1838-1872, 84-86, 91, 105, 109,
112, 122, 125; 1872-1913, 126, 222.
Edwards, Ninian, 67.
English Period, taxation during, 11.
Evasion, 145, 147-153.
Equalization, county, 98-99, 173-176; state, 103, 112-114, 121, 176-179: see
Review and State Board of Equalization.
Exemptions, 17, 24, 30, 31, 34, 43, 44, 100, 101, 128, 129-131.
Extension of taxes, 180-194.
Fairlie, J. A., 168, 171, 179, 183, 193, 211.
Ford, Thomas, 35, 52-53, 65.
Forest preserve taxes, 189.
French Period, taxation during, 9-10.
French settlements, influence of, 13-14, 24.
Funding of the state debt, 91, 104, 107.
233] INDEX 233
General property tax, in Northwest Territory, 15-19; in Indiana Territory,
20-23; in Illinois, 1809-1838, 35-73; 1838-1872, 74-125; 1872-1913, 126-
Illinois and Michigan Canal, 75, 76, 88-89, 9O, 109, HI; lands of, 167.
Illinois Central Payments, 108-110, 111-112, 115-116, 209, 216; lands, 167.
Illinois, County of, 11-12; Territory of, 14, 32, 35, 36, 37.
Illinois Tax Reform Association, 174, 209, 214
Immigration, 13, 27-28.
Income, taxation of, 16, 17, 24.
Inequality of taxes, 124-125, 169-170.
Indiana, Territory of, 14, 20-23, 35, 36, 37, 46, 57; State of, 38.
Inheritance tax, 216.
Insane Hospital, 92, 104.
Insurance companies, 101, 117-118, 214-216.
Intangible personal property : see Mortgages, Credits and Property subject
Interest Fund, 88, 104 105, 106-107, 109, 182.
Interest payments, 83, 90, 92, 93, 96, 106, 107.
Internal improvements, 75, 76, 82, 94, 108.
Jo Daviess County, 152.
Juul law, 180, 183, 189-194.
Kane County, 161.
Kankakee County, 170.
Kaskaskia, 9, 11, 12.
Kentucky, 17, 38, 67.
Land, taxation of, pre-territorial, 15-24, 36; 1809-1838, 36, 39, 40, 41, 42, 44,
46, 57; fund, no; public, 29; sales, 91: see also Assessments.
Local rates, 183-189.
Merchants, licenses, 15 n. ; tax on, 101.
Military bounty lands, 30, 61-62.
Moneys ,definition of, 140; data concerning, 146; assessment of, 161-165..
Moore, J. R., 200
Mortgages, assessment of, 146-153.
Moses, John, 60, 72.
Municipal taxation, 54-57, 95, 183-189.
Mutual building, loan and homestead associations, taxation of, 131.
New York City, assessment of land in, 172, 227.
Nightingale, H. T., 177-178.
Non-residents, taxation of the property of, 41, 42, 47-48, 49, 61, 62-63, 67.
234 HISTORY OF TAXATION IN ILLINOIS
Normal University, ill.
Northwest Territory, 12-19, 20-
Oaths, 46-47, 102-103, 121, 136, 143-144, 175.
Ogle County, 183.
Oglesby, Governor, 115.
Ohio, 38, 88.
Palmer, Governor, 93.
Peck, J. M., 68.
Penalties, 21, 45, 136, 143-144-
Penitentiary, 26, 27, 34, 115.
Permanent tax commission, 171, 178-179, 193-194, 225-226.
Perry County, assessments in, 160.
Personal property, 39, 44, 57; taxation of, 1872-1913, 138-165; substitutes
for tax on, 227.
Poor, 26; rate, 17.
Poll tax, 52, 92, 94: see Capitation tax.
Property subject to taxation, pre-territorial, 15, 17, 18, 19; 1809-1838, 36-44;
1838-1872, 79-80, 85, 90, 95, 100; 1872-1913, 127-131, 138-141, 20O-2OI,
209-210; forfeited to state, 198, 199.
Publication of assessments, 137.
Railroads, taxation of, 108, 118-119, 121, 132, 209-212: see Illinois Central.
Rates of taxation, pre-territorial, 15, 16, 17, 18, 19, 20, 22, 23; 1809-1838, 37,
40, 41, 43, 44, 57-58, 65, 66-67, 73; 1838-1872, 80-81, 82, 83, 84, 87-88, 90,
91, 92, 94, 96, 104, 106, 109-111, 115, 116, 121, 123-124; 1872-1913, 180-194;
limitations on, 17, 19, 21, 22, 83, 94, 128, 180, 183, 184-193; computation
of, 114-115, 181-182, 183, 189-193; illegal, 193-194.
Real estate, taxation of, 166-172 : see Land, taxation of.
Reciprocal taxes, 215-216.
Redemption, 50-51, 81, 128, 198.
Reform, necessity of, 219-222; plans of, 225-228; prospects for, 223-225, 228.
Repudiation, 86-87, 97-
Revenue Commission of 1886, 169-170, 171, 178, 220.
Revenue Fund, 66, no, in, 116, 182, 216.
Revenues from taxation, 59-66: see various funds.
Review, 16, 17, 98, 103, 137, 173-176; criticism of county boards of, 174.
Reynolds, John, 60, 67, 72.
Riley, H. B., 171.
Roads, 26, 29, 52-53, 119-120, 185-187.
St. Clair, Arthur, 14; County of, 14.
Sale of property for taxes, 50, 51, 67-68, 128, 196-198.
235] INDEX 235
Salt springs, 29, 30.
Schedule of personal property, 138-139.
School Funds, 66, 75, 76, 77, 78, 95, 104, no, 182.
Schools, 29, 30, 53, 120, 185, 187-188.
Seligman, E. R. A., 171, 220.
Separation of sources, 18, 20, 39, 40, 41, 42, 43, 80, 226-227.
Settlements of collections, 195-196.
Special assessments, 128.
Special purposes, taxation for, by counties, 51-54.
Special Tax Commission of 1910, 168-169, 170, 171, 178, 193, 209, 220.
Specific tax rates, 181.
State Board of Equalization, 127, 132, 137, 173-179, 200-212, 214, 225: see
State debt, see Debt.
State Debt Fund, 94, 106-107, 109, no, in.
State House, 76, 77.
State tax rate, 180-183; 189; see Rates.
Summary and conclusion, 217-228.
Supervision, state, 132-133; county, 134.
Surplus Revenue, U. S., 66, 76, 77; Fund, 106, no.
Swift's (Mayor) Commission, 168.
Tangible property, efficiency of assessment of, 160-165.
Teachers' Federation case, 206-209, 211.
Telegraph companies, 212.
Territorial revenues, 18.
Thornton loan, in.
Todd, John, 12.
Townships, 98, 132, 134, 194.
Two mill tax, 94, 96-97, 109.
Undervaluation, 83, 09-100, 112-113, 124-125, 133, 147-153, 167-169, 202-209,
United States government, agreement with, 29-31, 92; direct tax, 112; sur-
plus revenue, 66, 76, 77; war claims, 112.
University of Illinois, one mill tax for, 182.
Valuation, 102, 133-134.
Virginia, 11-12, 14.
Wadsworth, Julius, 97.
Western Union Telegraph Company, case of, 212,
Wheatley, John N., 193.
Wiggins Loan, 33.
Winnebago County, assessments in, 148.
Wright and Company bonds, 76.