samples of American goods kept there for inspection. And American trade journals are usually kept on file by the consul for the use of foreign buyers. Further, each consul is required to furnish commercial information for official publication in America. Daily and monthly bulletins, issued free with Uncle Sam's usual communistic generosity, keep manufacturers informed of the opening for their goods abroad. Each consul, is, in effect, a trade drummer, maintained by the community for community advantage. It is his duty to bring to the attention of home manufacturers any opportunity to supply machinery, electric power-plant equipment, motor boats, automobiles, etc. Only recently he has been instructed to furnish systematized lists of the merchants in his district who handle or might be induced to handle American goods. This information is indexed, and filed and, when complete, will constitute a business directory covering the world in every line of industry. Such a work could only be consummated through a strong Government bureau. For this work, the nation co-operatively provides, because the nation collectively benefits. In respect to the outright government ownership of public utilities, it is the municipality rather than the state or nation which has been most active. Municipal socialism is growing apace. From 1800 to 1900, public waterworks in the United States developed in round numbers from 6 per cent. to 60 per cent. of the whole number. Of the fifty largest cities in the United States, only nine are now dependent on private companies for their water supply. Some of the belated nine appear to be on the point of changing to municipal ownership, and in practically all of them an agitation for such a change is in progress. Of the thirty-eight cities with a population of more than 100,000 only eight have private ownership. Of these, New Orleans will soon take over its waterworks, Omaha is hesitating only over the question of price. Of the thirteen largest cities, only San Francisco, which ranked ninth before the earthquake, has a private supply. The municipal ownership of gas has not been tried on quite so considerable a scale. Still, the growth has recently been rapid. Whereas in 1890 there were only nine municipal gas plants in the United States, there are now twenty-five, not to mention eighty-four small places selling acetylene, gasoline, and natural gas. The largest municipal plants are at Holyoke, Duluth, Richmond, and Wheeling. Thirty smaller cities in the United States and Canada possess municipal gas works. Even more remarkable has been the recent development of municipal electric light plants. Of the plants that were started prior to 1899, only 11.4 per cent. were municipal, while 27.8 per cent. of the stations opened from 1896 to 1902 were of this kind. Seven large cities-Chicago, Detroit, Allegheny, Columbus, Seattle, Grand Rapids, Nashville-have municipal electric light plants. In the smaller cities, where the profits of over-capitalization have been less tempting to financiers, municipal ownership is most extensive. Altogether, no less than 1,055 places in the United States practice this bit of municipal socialism. In all these cases, on the word of the Commission of the National Civic Federation, the municipal plants for providing water, gas, and electricity, have done far better for the taxpayer and consumer than the private plants in anything like the same situation. Prices have been lowered and the plants paid for largely out of the earnings. ADDITIONAL READINGS 1—The Essential Functions of the State, Willoughby, W. W., The Nature of the State, 310-16. 2-Judge Made Law, Taylor, H., Green Bag, XVII, 563-5. 3 The Enforcement of the Law, Folk, J. W., Green Bag, XVII, 405-10. CHAPTER XVIII PROBLEMS OF TAXATION 78. DEFECTS IN THE GENERAL PROPERTY TAX. One of the main sources of revenue to the States has always been the general property tax. In fact, this form of taxation has been called "more thoroughly American" than any other. Nevertheless it has never been entirely satisfactory, and especially of late years it has been the object of many bitter and determined protests. In the following selection Professor E. R. Seligman points out its most salient defects: 1 [1890]. The defects of the general property tax may be discussed under five heads. 1. Lack of uniformity, or inequality of assessment. The property tax with us is an apportioned, not a percentage tax. According to the latter method the tax would be levied on the individual taxpayer by means of a fixed rate or percentage of all property. According to the actual method the total amount to be raised by the state is first ascertained, and is then apportioned to the various subdivisions according to the appraised valuation in each. The final rate of taxation is obtained by adding the local tax to the state tax. The rate of taxation ought therefore to vary only with the local needs, and would indeed so vary if property were everywhere assessed uniformly. As an actual fact, however, this is far from being the case. In most of the commonwealths the tax laws provide for the assessment of property at its "fair cash value." And in all the states it is expected that the valuation shall everywhere be made at a uniform rate. Yet it is a 1 Selections 78 and 80 are reprinted from Seligman, Essays in Taxation, by special permission of MacMillan and Company. notorious fact that in scarcely any two contiguous counties is the property-even the real estate-appraised in the same manner or at the same rate. In regard to the manner, it frequently happens that corporation property, e. g., the roadbed of a railway, is assessed in one county at an immense sum per mile and is treated in the adjacent county like a piece of grazing land. In regard to the rate, the assessors follow the practice sanctioned by local usage or decide by mere caprice. The official reports abound with complaints or open confessions that property is assessed all the way from par to one twenty-fifth of the actual value. In one county the property is listed at its full worth; in the next county the assessment does not exceed a tithe of its value. That this is a glaring infraction of the fundamental rule of equality in taxation is apparent. As between counties it leads to undervaluations which give an entirely fallacious view of the public resources. As between individuals it results in gross injustice. A tax rate of a given amount on one may be double, quintuple or decuple the nominally equivalent tax on another. The first constitutional injunction-that of uniformity of taxation-is flagrantly violated. Assessors are compelled openly to disregard their oath, or to incur certain defeat at the next election. There is no pretence of complying with the law. An escape from these evils has been sought in the creation of boards of equalization. A large number of commonwealths have attempted to correct the undervaluation of the county officials by giving a state board power to raise or lower the valuations (or in some cases the rate) in the hope of securing a substantial uniformity. But the effort has been very imperfectly successful. The composition of the boards is such as to render any comprehensive scrutiny of the county returns almost impossible. Even were the boards to be constituted in an ideal manner, the local jealousies and bickerings would still continue to prevent any just distribution of the burdens. The boards themselves confess that such distribution is impossible under our present system. Boards of equalization are thus at best a mere makeshift, a clumsy and' cumbrous attempt to accomplish the impossible. In the drastic phrase of Mr. Townsend: "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 tell and work lies." As long as this is true, boards of equalization are of little avail. 2. Lack of universality, or failure to reach personal property. This is a defect which, although the most flagrant, perhaps requires the least commentary; for it is so patent that it has become a mere byword throughout the land. Personal property nowhere bears its just proportion of the burdens. And it is precisely in those localities where its extent and importance are the greatest that its assessment is the least. The taxation of personal property is in inverse ratio to its quantity. The more it increases, the less it pays. The reason is plain. So far as it is intangible, personal property escapes the scrutiny of the most vigilant assessor; so far as it is tangible, it is exempted in its chief form, as stock in trade, by every intelligent official. In the mad race for wealth it would be suicidal for the local assessors in large cities to assess the merchant's capital, with the sole result of driving it away to localities more favored by their financial officers. It is scarcely necessary to give figures to substantiate these statements. The tenth census of the United States asserts that from 1860 to 1880 the assessed valuation of real estate increased from $6,973,006 to $13,036,767, while that of personal property decreased from $5,111,554 to $3,866,227. In California personal property was assessed in 1872 at 220 millions of dollars, in 1880 at 174 millions, and in 1887 at 164 millions-a net decrease in fifteen years of 56 millions. Real estate increased during the same period from 417 millions to 791 millions. Personal property paid 17.31 per cent., real estate 82.69 per cent. of the taxes. In Illinois the figures for 1888 are 20.18 per cent. and 79.82 per cent. respectively. In Cook county (Chicago), out of a total valuation of 210 millions, personal property paid only 14 per cent. In New York the figures are as follows: |