whole population, and the impetus given to material development, has been all but universally acknowledged. In France, also, where the number of owners of real estate, in proportion to population, is greater than in any other country, the essential features of the concentrated system recommended by the commissioners prevails, for local, and to a limited extent, for general taxation. And in the case of the United States, it is to be further noted, that the national government, except under the exigencies of a great war, has always recognized in her tax laws the desirability of simplicity and concentration; and that now, although the present diffused system does not tax directly the onefiftieth part of the property of the country, all parties are agreed that a further limitation of the sources of national revenue is most desirable.

But it is curious to note, that while no sensible person entertains the idea that the taxes levied by the national government on spirits, fermented liquors, or tobacco, or upon any imported articles, are paid by the producer or importer, except so far as he is a consumer of the same, the exactly opposite doctrine appears to prevail in the United States in respect to the incidence of local taxation; and the principle which has constituted the basis of most of the State legislation on this subject seems to have been, "that whatever is not taxed directly is necessarily exempt.'

WHAT CONSTITUTES AN EXEMPTION?

But an exemption is "freedom from a burden or service to which others are subject or liable;" and if there is no primary taxation on

*As a most honorable exception to this experience, and as affording some evidence of a gratifying progress of enlightened views respecting the influence and distribution of taxes, we ask attention to the following extract of the report of the law committee of the common council of Philadelphia, presented February, 1871:

"All taxes imposed upon property, real or personal, will, if possible, be reimposed by the tax-payer upon the consumer of the article taxed, and, if practicable, a profit will be added to it. It is cheaper for consumers to pay the tax upon one than upon six articles. In cities, every person, either as tenant, owner or boarder, must contribute his or her portion in the taxation of real estate, and whilst absolute equality can never be obtained, in rating it according to value, the occupant of a dwelling valued at $60,000 pays sixty times the tax that is received from a $1,000 house, and business contributes directly by the occupancy of stores, warehouses and factory buildings."

"Money withdrawn from active circulation in the business or improvement of a city, induced by taxation or any other cause, is an injury to the inhabitants of all conditions in life, whether they be employer or employed, not only depressing existing operations, but in causing a limitation of their extension and advancement.

"Those of our citizens who possess capital not invested in business enterprise, and do not seek foreign investment, can easily escape taxation within your own boundaries, by the purchase of United States bonds, Pennsylvania State loan and Philadelphia city loan (untaxable), or reimpose the tax on real estate owners by investment in bonds and mortgages and ground rents, with agreements and covenants that the borrower or covenantor shall pay all taxes levied and assessed upon the principal, interest or rent."

"It is fair to presume that most of the capital at interest, held by citizens not engaged in active business, will, under the pressure of taxation, seek compensation by flight or investment in the securities above indicated, and that the weight of the levy would fall, in this city, on capital in business,

personal property, then there can be no exemption of it. We do not consider that putting a given article into the free list, under the tariff, is an exemption to any particular individual; but if we make the rule higher on one tax-payer or on one importer of the same article than on another tax-payer or importer, we grant an exemption. If all personal property is in State taxation upon the free list, it is nevertheless taxed through the real estate it occupies, or other agencies. It is not subject to primary taxation in England, and yet no one there doubts that it pays its proportionate burden in the form of reflected taxes or by "repercussion." We use the word "exemption," therefore, imperfectly, when we speak of "the exemption of all personal property;" for if the removal of the burden operates uniformly on all personal property, then there can be no primary exemption, but all such property becomes subject to uniform secondary taxation.

Adam Smith may be considered to have established, beyond all controversy, the principle that taxes, with a degree of infallibility, diffuse themselves when they are levied uniformly on the same article, and hence arises his deduction, that the average profits of one investment are always equal to the average profts of other investments, risk and skill in management, in each, being taken into consideration.* This is the great principle which pervades his great work "Wealth of Nations;" and he even goes so far as to admit, that a tax upon labor if it could be uniformly levied and collected would be diffused, and that the laborer would be the mere conduit through which the tax would pass to the public treasury. Thus, he says: "While the demand for labor and the price of provisions, therefore, remain the same, a direct tax upon wages can have no other effect than to raise them somewhat higher than the tax." +

* As applied to the wages of labor, the truth of this principle is equally incontestible." The sewing girl performing her toilsome work by the needle at one dollar a day, the street sweeper working the mud with his broom at a dollar and a half, the skilled laborer at two and three dollars, the professor at five, the editor at five or ten, the artist and the songstress at ten or five hundred dollars a day are all members of the working classes, though working at different rates. And it is only the difference in their effectiveness that causes the difference in their earnings. Bring them all to the same point of efficiency, and their earnings also will be the same."-W. Jungst, Cincinnati.

+ John Locke, in his treatise on the standard of value," treats of taxation, and shows conclusively, that if all lands were nominally free from taxation, that the owners of lands would proportionally pay more taxes than now, because the same amount of money must continue to be collected in some form, and the average profits of lands would only be equal to the average profits of other investments; and further, that the expense and annoyance (another form of expense) would be increased if the tax were exclusively levied in the first instance upon personal property; and hence the land owner would be burdened with his proportion of the unnecessary expense and annoyance. He also shows that you may change the form of a uniform tax, but that you cannot change the burden; and that the change will increase the burden, if the new system is more expensive and annoying than the old. Locke wrote nearly a century before Adam Smith published his "Wealth of Nations; " and it would seem probable that Smith acquired his ideas relative to the average profits of investments from Locke.

And, pursuing the subject further, he continues: "No tax can ever reduce, for any considerable time, the rate of profit in any particular trade, which must always keep its level with other trades in the neighborhood; " and in the following language he solves the very question now at issue between the advocates of the existing system of local taxation in New York and the advocates of the new system: "In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expense, it does not seem necessary that every single article of that expense should be taxed."

In the city of New York, with its population approximating a million, it is believed that not four per cent of the inhabitants are subject to primary taxation; but if the theory that taxes do not diffuse themselves is the correct one, then certainly the non-taxpayer can have no interest in an honest and economical administration of the city government, or in the reduction of city taxes; but on the other hand, we should be warranted in concluding, that he must be benefited by exorbitant taxes on other person's property; and in a distribution of the money collected, even if stolen by corruptionists, but spent with a lavish hand in giving him bread and employment. Taxation furthermore, under the non-diffusion theory, becomes in reality a contest between classes; one class of real estate against another; one class of personal property against other classes; the classes possessed of no property against those who do possess it. The doctrine of the old philosopher Hobbes, "that war or conflict is the natural state of mankind," becomes also, by this supposition, embodied in taxation; the Greek brigand must be regarded as an equitable assessor; and the whole system of raising revenue for the State is reduced to a simple question of the exercise of arbitrary power.

THE RATIONAL PRINCIPLE OF TAXATION.

A more cheerful view of human nature would, however, lead us to believe that there is no natural antagonism of classes or interest among mankind, that capital is accumulated labor, and joint tenant

* As some evidence of the ratio that prevails elsewhere than in New York between the number of persons directly assessed for taxes on property and the aggregate of population, the following statistics of the city of Boston are worthy of attention: By the laws of Massachusetts a poll tax (usually two dollars) is assessed on every male inhabitant of the State, above the age of twenty, whether a citizen or an alien; and the payment of this tax is made a prerequisite to the exercise of suffrage. In 1869 the whole number of polls returned in the city of Boston was 54,242; of which number 43,587 were legal voters. But of the whole number of legal voters but 15,177 were assessed for property or for taxes, other than the poll or capitation tax. If we suppose that one-half the excess of polls over legal voters were assessed for property (an excessive estimate), then the whole number of persons who paid taxes in 1869 on property in the city of Boston would be 20,504 out of a total population in 1870 of 250,526, or 8.1 per cent.

with it, that whatever promotes the true interests of the one, is advantageous to the other, and that we are all jointly interested in low assessments, economical administration, equal protection to property and labor; and that whatever may be our position, high or low, rich or poor, we must by an irrevocable law, bear our part of the public burdens.

We may establish laws that will act as a prohibition of certain forms of investment or occupations; we may give special bounties to certain interest and occupations, and the effect of all our legislation, for benefit or injury, will finally be diffused on the entire community, if the systems engrafted into our laws are made permanent. The conviction of Galileo did not prevent the world from revolving; and so, no sophistry, no cunningly devised system of laws, no appeal to prejudice or class interest, can prevent taxes, imposed under permanent laws, from being diffused as the inevitable doom of man, or abrogate that invariable law of political economy, that the average profits of one class of investments must, in the long run, be the average profits of all other investments, risk and skill in management, being taken into consideration. These simple principles are a key to an equitable, uniform and economical system of assessment. The base of taxation must, however, be sufficiently broad to act as a tax, and not as a prohibition; and the tax should be levied by means of evidence admissible in courts that are instituted for the protection of life and property. Individuals imbued with freedom and self-respect, flee from everything that is arbitrary, and capital abhors it, and seeks shelter in other lands. When the assessor or other administrators are clothed with arbitrary and despotic power, the citizen tends to become a sycophant, and will often submit to fraud, corruption and plunder, rather than attempt an unequal contest with despotic authority.

It is fortunate, furthermore, for the human race that the enlightened governments of the world have not attempted as a rule, the primary taxation of every atom of personal property, or the atomic system of taxation, for man has some other and better duties to perform in this sphere of labor and toil, besides attempting to artificially tax everything.

WHY NOT CONFINE TAXATION TO MONEY CAPITAL?

The question may be asked, if all taxes imposed under uniform laws diffuse themselves, why not tax only money at interest? The answer to this, however, would be, first, that such an assessment would pro

bably act as a prohibition, and would produce no revenue; and second, that such a tax could not be levied with sufficient accuracy to divest it of the character of an arbitrary exaction, or of a species of partial confiscation of one man's property and the practical exemption of another person, through non-residence, indebtedness, etc., on the same class of investments.

MONEY PROPERTY.

But, after all, says some objector, "notwithstanding your many and plausible arguments; your statement that all the world. except the United States have done away with the old, atomic, inquisitorial system of taxation, and your demonstration that Pennsylvania and Philadelphia by pursuing a more liberal fiscal policy are advancing in wealth and population far more rapidly than New York, I do not like your proposed reforms, and for the reason mainly, that they exempt 'money property!" It is most important, therefore, to inquire what is "money property," and also its relations to local taxation.

All capital or property is accumulated labor, labor being the source of all property. Hence any attempt to excite prejudice against capital or property, or to attack either, is an attack upon labor itself.

"Moneyed property" is generally understood to mean evidences of debt, which are not in a strict sense property; but rights to property, or assignments of property, according to the amount of interest of the creditor.

What is a mortgage?-Thus, a mortgage is a species of conveyance, and is no more property than a deed; and neither is property except to the extent of the value of the paper and the labor of writing or printing it, and still both are very valuable as conveying rights to property. The property is the real estate conveyed, or mortgaged, and a tax on the land, and another tax on the deed, or a tax on the land, and another tax on the mortgage, which covers the land, will, in effect, be a double tax on the land. This tax may be made a quadruple tax: first on the land, then on the deed of the land, then on the mortgage, which is on the land, and then on the lease which the landlord may grant to the tenant. The present laws of New York impose a tax on landlords who lease lands in fee, or for more than twenty-one years, on a principal which at seven per cent, will produce the amount of the stipulated rent. It is true, that landlords refuse to make long leases, and thus evade the tax; but a law might be made to require the payment of the tax on short leases, or on annual rentings. These