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The Commoner.
JANUARY 24, 1913
13
thought of Mr. "Wilson in this matter
and that cabinet slates built up out
of lists of campaign workers aro the
work of idle pastime.
Mr. Bryan's habitual care in ex
pressing himself Is noted in what we
have taken from his article. It does
not intimate whether ho intends to
seek an elective or to accept an ap
pointive position, but makes it plain
that if he does so it will be on the
ground that he can serve the people
in the position so sought or accepted
and not that he has done so. This
is the position of an eminently self
respecting man. Knoxvillo (Tenn.)
Sentinel.
THE CABINET
That cabinet positions ought not to
bo used for tho payment of political
debts or in requital of personal ser
vices, but should be made for the
good of the country and the party as
a whole, is the view taken of the
task in which the president-elect is
engaged by Mr. Bryan. This is set
forth in the current number of The
Commoner, and may be regarded as
Mr. Bryan's way of letting it be
known that his own case has not yet
been disposed of.
That he is not quite clear as to the
desirability of being placed at the
president's council board, is indicated
by the remark that "an individual, if
he had proper motive for working,
finds sufficient compensation in the
triumph of ideas, principles and poli
cies." This seems to mean that
there are some gentlemen embarrass
ing the president-elect by their so
called claims, and that he, Bryan, is
not one of them. None the less, it
is true that a great majority of demo
crats would like to see Mr. Bryan
made secretary of state. Brooklyn
Citizen.
SUBSTITUTES FOR THE PERSON
AL PROPERTY TAX
(Continued from Page 5.)
tangible property is discriminated
against in the way the assessment is"
made. The assessor must perforce
"estimate" the value of lands, live
stock, or household goods, and every
body knows how generally his esti
mates fall short of the true value.
Not so of mortgages or money on
hand or on deposit. There is no
room for estimate. A dollar Is a
dollar here, and so it goes on tho
schedule. And the result is that
while it might easily be shown that
such property, entirely aside from
the question of double taxation, be
cause of its less stable character be
taxed at a lower rate than land, it
is as a matter of fact, taxed at an
excessively higher rate when listed!
Tho matter of evasion by under
valuation is so vital that it may be
well to consider it for a moment.
After the 1903 revision of our rev
enue law the assessors were re
quired to list property at its true
value, one-fifth of which became the
assessed valuation. In 1904 the
broom was new and it ought to have
swept clean; and yet an investiga
tion made by Mr. T. A. Polleys of the
C. St. P., M. & O. R. R. Co., showed
that the "true value" returned on
lands other than lots, was 85 per
cent of the value as disclosed by the
transfers and by bankers' estimates.
Further investigation in 1907
showed that the returned value was
only 75 per cent of the true value.
One would expect for various reasons
that the undervaluation has since
become more marked; and the cen
sus figures of 1910 indicate that this
has actually taken place. Tho
census gave a value to lands and
buildings (exclusive of town lots and
the improvements on them) of $1,
811,557,000. The assessed valua
tion of thiB property that year was
$203,346,658, which multiplied by
five for the full value found, would
be $1,016,733,000, or about 50 per
cent of tho value ascribed by the
census. The average assessed valua
tion of horses in the state is $16.46,
which means a true value of $82.30.
A syndicate could probably bo
formed to take them all at an ad
vance on that.
These cases of undervaluation are
cited to show how the difficulty, al
ready great enough whore all prop
erty is assessed at its full value, is
greatly increased, when tho tax offi
cers try to reach intangible property.
The higher rate made necessary by
undervaluation makes a heavy tax
on property assessed at its full
value. Some of my students have
figured out that a resident of Lin
coln under last year's tax-rato would
have to pay 27 per cent of his in
come from a 6 per cent mortgago in
taxes, and 40 per cent of tho Income
from a deposit in a savings bank
drawing 4 per cent. Now an English
man is pretty well inured to the bur
den of paying taxes: but ha (Win
that his load is grievous when his in
come tax reaches a shilling in tho
pound, and that is only a 5 per cent
tax. The highest rate imposed by
our civil war Income tax was 10 per
cent on tho largest incomes; and
that was regarded as confiscatory
and led to much evasion. It Is
little wonder that a 27 per cent or
a 40 per cent tax drives nronortv that
can be concealed into hiding.
For dealing with this situation
three proposals have been put for
ward: 1. Strengthen the law, making
the penalties for evasion more se
vere, and above all improving the
administrative side. Such proposals
usually take the form of a tax-inquisitor,
or ferret, law such as Ohio'
has had for a number of years. This
plan is proposed with much less as
surance than it formerly was for
the simple reason that it doesn't
work as expected. It works in
"spots," those who are ferreted
yield up; but the ninety and nine
who aro not ferretod do not. I can
not discuss all phases of such laws
but will put it to the test that must
always be applied to a revenue law
that of getting the revenue. The
statistics for Ohio show that the law
has failed to uncover the property.
In 1881 the assessors listed 150.3
millions of money credits, and se
curities; in 1893 they found 162.5
millions; by 1906 the amount de
clined to 148 millions, and by 1909
to 137.4 millions.
2. The second proposal Is to
exempt such property and make up
the deficiency by an Increase of taxes
where they can not be evaded. This
Is the plan that has been adopted in
the state of Washington. Some
would push the increased burden
upon land; others upon business in
one form or another, especially in
the form of corporation taxes; others
still would derive more revenue from
inheritances. It is beyond the pur
pose of this paper to discuss these
proposals; but this much may be
said: with rapidly growing expendi
tures, bound to continue in the fu
ture, these sources of revenue are
sure to be needed, and those charged
with the duty of providing revenue
are naturally reluctant to abandon
the tax even though fraught with in
justice. In this state it would mean,
according to the 1910 assessment,
the surrender of a valuation of about
20 millions. The largest item, how
ever, was mortgages ($7,249,134.)
no doubt largely secured in tho
state and hence soon to be practi
cally exempt.
3. The third plan of dealing with
intangible personalty is to subject it
to a lower rate than is applied to
other property. The plan is some
times called "classified property
tax." It may be opposed by the
advocates of exemption on the
ground that any tax is unjust; it
may be opposed by tho advocates
of the- general property tax on the
ground that all property should be
treated alike; it may be objected to
by both that It rests on no principle
oxcopt that of expediency. It must
bo admitted that tho plan contains
no fundamental reform; that it alms
at making tolerable a situation that
is now Intolerable; that It Ib the
practical next-stop toward a more
equitablo apportionment of the tax
burden. It does not compel a search
for a new source of revenue. By
adjusting tho rate on intangibles
by charging only "what tho traffic
will bear" moro property will bo
listed and an equivalent or Increased
revenuo will bo secured.
This has been tho experience
whero the plan has been tried. In
1905 New York adopted a now
mothod of taxing mortgages. They
had previously been taxed as por
Bonal property. Tho law substituted
an annual five-mill tax, uniform
throughout the state. Tho next
year this was changed to a record
ing tax of the same rate (50 cents
per $100) paid at time of registra
tion and thus freeing tho mortgage
from future taxation. The revenuo
is divided equally between the stato
and the country. Tho following table
shows the amount paid into tho
state treasury since the law has been
in effect.
Year Stato
(ending June 30) Revenue
1906 $ 431,323.17
1907 2,442,249.73
1908 1,666,527.51
1909 1,844,821.45
In 1907 Minnesota enacted a
registry law similar to that of New
York. According to the report of
the state tax commission it has re
sulted in "greater revenuo and
greater equality In the taxation of
mortgage securities."
Pennsylvania was a pioneer in
the separate treatment of in
tangibles. A uniform tax of 4 mills
Ib levied on intangible property
throughout the state, including
mortgages, money at interest, judg
ments and notes and also stocks and
bonds except otherwise taxed by the
state. It is assessed and collected
by local officers and one-fourth of
tho not proceeds goes into the state
treasury. Tho result of the low
rate has been to bring out a largo
amount of this form of property. In
1885 the assessors found but 145
millions of intangible property. A
stricter assessment law enabled
them to find in 1888 $429,800.00;
and while In most states little or
no growth in this form of wealth is
shown by tho assessment rolls, in
Pennsylvania there has been a large
and constant increase, as Bhown by
tho following:
Amount of intangible property
locally assessed in Pennsylvania:
1885, $145,300,000; 1888, $429,
800,000; 1891, $575,300,000; 1894,
$613,900,000; 1897, $673,700,000;
1900, $722,900,000; 1903, $847,
100,000; 1906, $932,900,000; 1907,
$1,014,000,000; 1909, $1,140,000,
000. These figures ore in striking con
trast to those quoted above for Ohio
showing since 1893 a decrease from
162.5 millions to 137.4 millions in
1909.
In 1911 New York extended-the
principle of her recording tax on
mortgages to those secured outside
the state, and stocks and bonds not
otherwise taxed by tho state. No
assessment has yet been made to
show the effect on uncovering prop
erty subject to tho new tax, but it
is safe to predict that tho amount
will be very large. Last year the
Minnesota legislature passed a law
exempting money and credits from
the general property tax and sub
jecting them to a uniform rate of
three mills for the state. Though
the act went into effect only a few
days before the 1911 assessments
began and was poorly understood by
taxpayers and assessors alike., there
was listed $115,500,000 of this class
of property against less than 14 mil-
n
$W a Wtk ami Sfe Srits a Ytir AT COST
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'MtiDMt raqnlrad.
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wmk. wilhaeluuuMtawnrlE tin 1a dantita (Ml
eommlMton bull at tha awl f thraa month. UpoalhUra
masiubla) tart wul 2ttJ txrm roca latatedUU!.
Prices Cut $4 t$S
Eyrtry rnim you moot will Imj yonr
t tMtnor h will Jump at Oia ehanea U
hvr mada-to-mfaamra iraltmuiUtai
alrUlnireHr fuMon, with Ant ullarirur
In thf world at from M to If lata than ht
could buy rdy-n4a aull at (lore.
Ezjftnlw Territory Tm MTtrUttof
o anDOiDt only onn mmi
f urnlah truo a1?
tnl'a tiara, also
nravra for him a
prlaUd In oor a rent'
'lrtlalnr
k writ to
Droapocliroctutoravra for hua ardthua
and hurxtrada to hl honut or ofllca to
nia atmpiaa aa puua utatroaiMTa.
W maka bla aoeeaaa erUln.
Your Personal Suits
at Coat
Wo want our tnnn to drew rlfllit
Dp to tha rolnnta In at) la and qiialilr aod
wra botonlr aJMrw rou U) tf fur all yonr
ownclolnta oat f wireifnl,-jrjt hat
m ptUn IbatnlJ you at actual cnjtlnot
pvra than tlx tutu year) o you can
b lha txtarPMd laenjn town.
Horn! no money. Junt trrlto at
nocajf ton want Inla aplrrxlld petition
wo offer lull ataxn to 200 caw niaa.
Rollabla Tallsrlnnr Comnnnv
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i,-irjgn, iinfifna
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pujm
h3ap'bHb9
RiFT I Pa C).aKH
aVm.'fJLjaVEaMaT
The Best Paying Farms
itro In
Southside, Virginia
"Where lands are level n.H the prairie;
climate ho mild rosos bloom in Decem
ber. Rainfall abundant. A natural
truck Kurd en and corn belt. The com
ing alfalfa region of America, giving
annual net pro lit of double the cost of
the land.
Low rateH by water and rail to 30
million conmuncrH in a day's Hhlpment.
Where IncreaHe of money and comfort
go hand In hand.
Write toay for Ileal Kstatc Herald
No. 20, with map and full account, and
PYLE & CO.. Inc., Dept. C.
PctcrHburg, Va.
DROPSY TIIKATJ5I). unmlly Rive quick
U rcljefnnd won rnmovei nil mwIHiii;
and uliort brontli. Trial treatment will Free.
Dr. H. H. Greens Sens, Box N, Atlanta, 6a,
Investigate the Single Tax,
Thtt.umUi'T: What It li."-tforpr. f
"iliA bin yla 'lax. wnnl It will Aecotnpll.il.' OrrtwU. I
'Tha bliitf W Tax and tha Karmar.' -Hhiarman. I
lltha I
Iwlj
Tha t)WU Tax and tha Karmar.' rKharman.
All thra booklets aod Tb Public, th hixt with '
Slngln Tux ilnt nf view. 13 wnks for 2S cnta
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4i
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