assessment. New York, however, by her Legislature and her courts, has held, in accordance with what has seemed to these authorities to be the dictates of justice and common sense, that the visible, tangible property of her citizens, situated beyond her territory, is beyond her jurisdiction, and is, therefore, not liable to State assessinent and taxation; and recognizing further the principle, that an individual should be taxed on what he owns, and not on what he owes, has allowed indebtedness in part to offset or diminish the valuation of assets.

SYSTEMS OF LOCAL TAXATION IN OTHER STATES.

Massachusetts, on the other hand, basing her tax code and practice upon the same assumption as New York, namely, the desirability of taxing all property of her citizens, endeavors to carry its application to a much greater extreme; inasmuch as this State claims the right, and practically exercises the power to assess her citizens for not only so much of their personal property as is specifically within her limits and control, but also for so much as is undeniably beyond her territory, and, therefore, inferentially beyond her sovereignty and jurisdiction. The tax laws of Massachusetts furthermore, do not allow indebtedness to offset or diminish tangible property, consigned goods only excepted.

In Pennsylvania, the system of local taxation is entirely different from that of either New York or Massachusetts, and far more liberal than the system of any of the other States; inasmuch as in that State, personal property is either wholly exempt from taxation, or is taxed to so small an extent, in comparison with New York and Massachusetts, as to practically amount to exemption. We have, therefore, in the three States of New York, Massachusetts, and Pennsylvania, the types, or representatives of the various systems of local taxation as they exist in the United States.

RESULTS OF EXPERIENCE.

The results of the experience of these three systems may be fairly stated as follows: In Massachusetts, under her existing system, the revenue collected by taxation is larger in proportion to her population than in any other State, and larger, probably than in any other country; amounting in 1870 to $14.35 per capita, as compared with $11.50 per capita in New York. The system under which this result is effected is characterized by nearly all the citizens of that State with whom the commissioners have come in contact, as in the highest degree arbitrary, unequal, unjust, and in respect to personal property,

notoriously ineffective. In the city of Boston, where, through the high character of officials and the permanent tenure of office, the laws are executed more efficiently than elsewhere, thirty per cent or more of this latter class of property is acknowledged to escape assessment, while in the remainder of the State the proportion is known to be much greater.

In Pennsylvania, under her existing system of local taxation, less dissatisfaction is probably expressed, and less trouble reported by officials, than in any other State. Real estate is not regarded as unduly burdened; rents in her large cities are comparatively low; while, under the inducements offered by liberal legislation, population and wealth are very rapidly increasing;-the gain in population from 1860 to 1870 having been 21.18 per cent, as compared with 12.94 per cent for New York.

In the case of New York, no one, either officials or citizens, is satisfied with the existing system or its administration; and so apparent, moreover, are its defects, that the necessity of reform is almost universally acknowledged. But the commissioners, who have made the system a matter of special study and inquiry, go further, and unqualifiedly assert that, as it exists to-day, it is more imperfect in theory and defective in administration than almost any system that has ever existed, and that its longer recognition and continuance is alike prejudicial to the material interest of the State and the morality of its people.*

In their previous report the commissioners collected and presented a large amount of evidence illustrative of the actual condition of affairs; but now, with another year's experience, and for the purpose of fully demonstrating the truth of their assertions, they would again briefly ask attention to the subject.

ACTUAL CONDITION OF THE NEW YORK SYSTEM.

The property of New York, made subject to taxation, divides itself into two classes; real and personal.

REAL PROPERTY, embracing, according to the usual acceptation of the term, lands and buildings, being visible and tangible, presents no inherent difficulty in the way of ascertainment, valuation and assessment. The New York system of taxation in respect to these

*If this judgment may seem harsh, reference to the records of the constitutional convention of 1867-8 is only necessary to show that more severe language is made use of in the debates in respect to the system than any now employed by the commissioners; that of one of its leading members, for example, being as follows: "I insist that a people cannot prosper whose officers either work or tell lies. There is not an assessment roll now made out in this State that does not both work and tell lies."

objects might, therefore, be reasonably supposed to work with some degree of uniformity and equality; but so far from this being the case, it would be difficult, nay, probably impossible, to find any two contiguous towns, cities or counties in the State, in which the valuation of such property approximates in any degree to uniformity. So far as the commissioners can ascertain, the average aggregate valuation varies from twenty per cent of actual value as a minimum, to fifty per cent, as a maximum; with a probable total average for the whole State of a rate not in excess of forty per cent. The lowest valuations, furthermore, do not, as might be supposed, occur in the poorest and most sparsely settled counties of the State, but rather in the richest and most densely populated; and i; is also curious to note, that comparing the real estate valuations of the several counties of the State in the years 1860 and 1870, with the census returns of their population at the same periods, it will be found that some counties which have increased their population and railroad facilities, have decreased their valuations, while other counties which have actually diminished in population, have increased their valuations.

The increase in the assessed valuation of the real property of the entire State for the ten years, from 1861 to 1870 inclusive, was fortyseven and a half per cent; but deducting the valuations of New York and Kings counties, the increase was only eight and a half per cent, although the increase in the population of these two sections, during the same period, was not very unequal; the increase in New York and Kings counties having been 269,722; and for the remainder of the State 232,302. Now as the law of the State is clear and explicit, that the valuations shall be uniform, it is evident that the law in this respect has become a dead letter and wholly inoperative.

PERSONAL PROPERTY.

But if such be the inequality and illegality of the methods of taxing real property at present followed in the State of New York, the results which have attended the attempts to tax personal property under the same system are infinitely more farcical and disgraceful. The evidence of this failure is most conclusive, and the reasons why, under the existing system, nothing but failure in respect to the taxing of this description of property can be anticipated, are of a character that admit of being readily understood and verified. Thus the total equalized valuation of all the property of the State of New York for the year 1871-72 is $2,076,454,000, of which but little more than

one-fifth (21.48 per cent), or $445,918,000, was returned under the head of personal property.

In their previous report the commissioners presented evidence tending to show that the aggregate value of the real property of the State and the aggregate value of its personal property closely approximated. They furthermore presented a schedule of property of the class personal within the State, founded on exact data, or careful estimate, whose aggregate amount nearly equaled in value the entire amount of all the property of the State, real and personal, returned for taxation. during the year 1870-71. They would also recall the opinion authoritatively expressed in the constitutional convention of 1868, that thirty citizens of the State could be named whose aggregate wealth (mainly personal) was very considerably in excess of the valuation for that year of all the personal property of the entire State. But without again entering into details, the commissioners would now say, that another year's experience has led them to this general conclusion, that the authorities of the State, under a law (professedly executed) requiring the assessment of all personal property at its full value, do not in fact succeed in assessing a proportion equal to thirty per cent of the recognized low valuation of the real estate; or more than fifteen per cent of the real and true value of all such property immediately located within the State, and as such subject to the State authority. So much in proof of the evidence of the failure of the existing laws relative to local taxation to do what they were designed and purport to do. So much also in evidence that the existing system of local taxation, by its own gravitation and surrounding influences, has, with the exception of incorporated capital, practically come down to a tax upon real estate.

CONDITIONS OF FAILURE INSEPARABLE FROM THE EXISTING SYSTEM.

The reasons why nothing but failure in respect to the valuation and assessment of personal property under the existing system can be anticipated, are in the main as follows:

In the first place, much of the property termed "personal," and which under the system operative in New York, and most of the other States, it is made obligatory on the assessors to value and assess, is incorporeal and invisible, easy of transfer and concealment, not admitting of valuation by comparison with any common standard, and the situs or locality of which for purposes of assessment and taxation, involves some of the oldest, most controverted, and yet unsettled questions of law. Of such a character are all negotiable

instruments, i. e., national, state, municipal, and corporate bonds; written obligations of indebtedness on the part of individuals; book accounts, annuities, money at interest, cash on hand, and the like, the whole constituting by far the largest proportion of the so-called personal property of the country.

It is obvious, therefore, that the law contemplates the doing of an act, namely, the valuing and assessing of that which is invisible and incorporeal, which cannot be done without the fullest coöperation, through communication of information, of the tax-payer himself; and yet for the imparting of which, the two most powerful influences that can control human action, namely, love of gain, and the desire to avoid publicity in respect to one's private affairs, coöperate to oppose.

And in the case also, of much of the so-called "personal property" that is visible and tangible, as furniture, books, works of art, jewelry, musical instruments, and the like, it is clear that its valuation with any approximation to fairness, must be not only the work of time, but must require an amount of experience rarely in the possession of any one individual.

Wherever, therefore, a system contemplating the taxation of personal property, generally, has been projected, its authors have been led as it were by instinct, to the conclusion, that its execution with any degree of effectiveness, must depend upon the employment of extraordinary and arbitrary measures. Thus, the old Romans, who first established the taxation of personal property at the period of the decadence of the empire, and who were not troubled with any restrictions of a constitutional character, or any very nice notions about personal liberty or general morality, clearly perceived this, and accordingly invested their tax officials with the power of administering torture as a means of compelling information and enforcing payment.

The board of officials of Illinois, who last year, under authority, prepared a new tax code for their State, and based their work on the hypothesis, that the only way to make a better system was to enlarge and make more effective the old, also, perceived this; and accordingly prepared a code, which one of the highest authorities in that State characterized in the following language:

"Without exception, it is the most objectionable law that was ever proposed, and we can imagine no act which will become so justly odious and detestable. It provides for the establishment of a distinct branch of the government, which may properly be styled, the grand inquisitorial and confiscatory office, clothed with powers and func