ATTACKS UPON PRIVATE PROPERTY THROUGH THE

lance, is class power and class legislation. Discriminating legislation for the benefit of the rich against the poor, or in favor of the poor against the rich, is equally wrong and dangerous. Class legislation of all and every kind is anti-republican and must be repressed. If universal suffrage shall be guilty of such short-sighted folly as to seek in the guise of tax laws to deprive the owner of his property with a view to distribute it among the com

EXERCISE OF THE POWER OF TAXATION. Socialistic organizations in all their forms, being hostile to private property or its full enjoyment, their attacks upon it assume various shapes. I have no time to notice these at length. The most insidious, specious and, therefore, dangerous, are those that are threatened, attempted or made in the professed exercise of the State's power of taxation. Forasmuch as the power to tax is supposed to in-munity, or shall frame our tax laws, whether imposvolve the power to destroy, it is boldly avowed by many socialistic reformers, and it is implied in the schemes of others, that the power of taxation is an available and rightful means to be used for the express purpose of correcting the unequal distribution of wealth, and that this may be done without a violation of the essential or constitutional rights of property. Such taxes, may be, amongst others, in the shape of a progressive income or progressive property tax, or both; or a tax on the transfer or devolution of property, limited in amount only by the legislative will, that is to say, not limited at all, so that if the heir or successor gets any thing, it is by legislative grace, and not of right.

Taxation in any of these forms, reasonable and proportional in its character, imposed as a bona fide means of raising revenues to help defray the public charges, may doubtless be levied, and under these limitations, presents merely questions of political expediency. But when taxes, so-called, are imposed, not as mere revenue measures, but for the real purpose of reaching the accumulated fruits of industry, and are not equal and reasonable, but designed as a forced contribution from the rich for the benefit of the poor, and as a means of distributing the rich man's property among the rest of the communitythis is class legislation of the most pronounced and vicious type; is, in a word, confiscation and not taxation. Such schemes of pillage are indefensible on any sound principle of political policy, violative of the constitutional rights of the property owner, subversive of the existing social polity, and essentially revolutionary. Let us consider this for a

moment.

The State is a commonweal. It exists for the general good, for rich and poor alike. It knows or ought to know no classes. Universal suffrage is grounded upon this idea. All vote because all have an interest in the State, and especially because the personal rights of individuals as distinguished from their property rights, are matters of universal concern. The blessings and benefits of the State are intended to diffuse themselves over all. Political duties should ever go hand in hand with political rights, and it is a serious and even dangerous mistake to permit them to become separated. The duty to support the State rests upon all; and, therefore, the exemption of any class from this duty while he enjoys the privileges of citizenship, and especially the elective franchise, may produce, at all events tends to produce, grave consequences. The one thing to be feared in our democratic republic, and therefore to be guarded against with sleepless vigi

ing direct or indirect taxation, in such manner as
to exempt any class from bearing a proportional and
just share of the public burdens, and distribute and
impose those burdens, either wholly or dispropor-
tionately, upon the rich, the results of such injustice
will react upon the whole community. Such a
course would excite class antagonism, and would
also tend to arrest the accumulation of property or
cause its flight to other States and countries; it
would in these and other ways injuriously affect the
general welfare, and the real interests of the labor-
ing and non-taxpaying class of the community.
THE STATE'S TRUE FUNCTION - PATERNALISM

ILLEGAL COMBINATIONS, POOLS AND TRUSTS.
The essential end of government is the common
good of all the people who compose it. The State
exists, not for the special benefit of any one or more
classes less than the whole, but for the commonweal
of all. Its benefits must not be denied to any class
or to any person of any class; all who compose the
State, the rich and the poor, the plutocrat and the
proletariat, all who share in the associated life, are
each and equally entitled to the protection, support
and care of the State, whose blessings, like the air,
the dew, the rain and the sunlight, should fall upon
all without discrimination.or preference. The State
is founded primarily upon the necessity of the in-
dividual that his just rights shall be protected from
invasion by others, but the complex organization
of social or associated life which we call the State,
exists for the higher end of the common benefit by
enabling each member to enjoy, not only life and
liberty, but to pursue happiness, that is, by aid of
the State, whatever its form, to develop and perfect
his individual and social life and well being.
scope or limit of the legitimate function of the State
in the attainment of the ends or aims of its exist-
ence, cannot be conclusively defined or unalterably
marked out in advance. All of the many attempts
of this character have failed, and from the nature
of the case will ever fail. One class of thinkers,
extreme individualists, hold that nothing is more
pernicious than over activity on the part of the
State, which is paternalism, or tending toward it;
and hence they maintain that the State's function
should be narrowly confined, being principally
limited to protection and security of the acknowl-
edged legal rights of individuals; any extension be-
yond this being regarded as an unwarranted en-
croachment upon individual liberty. Others, such
as extreme nationalists, favor the largest extension
of the State's functions, holding that the State
should assume the ownership and control of trans-

The

portation, of capital, and all of the means of productive industry, becoming the general or universal father or guardian of the people in their social or economic relations. Between these extremes are many shades or degrees of opinion as to the true limits of the State's function. I cannot but regard all such a priori speculations as of doubtful utility. If the true end, purpose and justification of the existence of the State is the highest development and happiness of the individual and the common good of all, it must be left to experience to determine, from time to time, on the special exigencies and circumstances of the situation, the character and extent of the State's regulation or positive intervention to promote the common and permanent good of society.

REMEDY FOR HARMFUL TRUSTS AND COMBINATIONS. These principles are applicable and should be applied in dealing with the modern form of combinations known by the name of "trusts."

Industrial problems are constantly assuming new shapes. Transportation and production are largely carried on by corporate aggregations of capital. This cheapens cost and prices and to this extent enures to the public advantage. Competition, sometimes destructive (being often the death as well as the life of trade), is met by combinations which assume the forms of pools or trusts so-called. These combinations are professedly intended to maintain | and steady reasonable prices and to prevent the evils of ruinous competition. When limited to this end, such combinations are not necessarily injurious, and may be beneficial. But they are capable of being used to destroy, not merely to regulate, competition, and to increase, for a time at least, prices beyond those necessary to yield a fair return. In these and other ways the injuries to the public may far outweigh the advantages, in which case the question is, What is the remedy? The socialistic theorist says, let the State intervene and assume the ownership of our transportation systems and of the leading productive industries. This is obviously the substitution of social industrialism for the existing order, and implies the surrender to the State of individual's liberty of action.

of a socialistic Grand Mogul and the resulting encroachment on the rights and liberties of the citizen, lacks the support of any legal or actual necessity. The State's plain duty is to see that the just interests of the public are protected and secured so far as the law can do this consistently with the rights of others. The real test of the usefulness or hurtfulness of combinations like pools and trusts is experience. It may be the best policy to regulate them, or it may be the best policy to destroy them. The principle on which the State may intervene is plain. If, and in so far as, such combinations shall be found tending to create monopolies, to destroy legitimate and useful competition, thus interfering with the free industry of the people; to yield undue profits at the expense of the consumer, thereby facilitating the creation of enormous private fortunes and the production of inequality of wealth-if such shall be seen or found to be their effect, the State has the power to correct the evil, and it would be its duty to call that power into vigorous activity. NEEDED REVISION OF OUR LAWS RELATING TO INHERITANCE AND POWER OF TESTAMENTARY DISPOSITION-AMERICAN AND FRENCH SYSTEMS

COMPARED.

I come now to consider a phase of the subject of property in its relations to the State and to our social system, which I regard as of the first importance. It is one which has heretofore received among us, I am persuaded, far less attention than it deserves. I regret that the time at my disposal will not enable me to present it with the requisite fullness. I refer to the laws of this country relating to the descent and distribution of property on the death of the owner, and to those relating to the owner's power of disposition during his life and by last will and testament. They are essentially founded, with some modifications, on the feudal and aristocratic notions on these subjects which we derived from England. I regret that the subject which I proceed to consider failed to receive attention in the recent Constitutional Convention in this State.

From the standpoint of political economy and of provident political polity, the existence of enormous private fortunes is of evil tendency, in that it is injurious in its effect upon the owners, inducing idleness and luxury in them and their children, and injurious in its consequences to the community in accumulating in a few hands so large a portion of the property and wealth, which ought to be more generally distributed—thus tending to divide society into classes and to separate by an impassable chasm the rich and the poor. Moreover, the power of the owner of a colossal fortune is so great as to be capable, in bad hands, of much abuse. A wise and provident policy, therefore, dictates that the statesmen and legislators of the present should, by

But no such drastic or heroic remedy-a remedy immeasurably worse than the disease-is at all needful to secure the public welfare. The dominion of the State over the actions of its corporations is supreme within the limits of their constitutional rights, which are mainly rights of property. The State may, with strong hand, suppress every form of combination, whether corporate or individual, which proves to be hurtful to the general good. The State can bridle its corporate agencies, and keep them at all times under effective and salutary control; it can forbid all persons, whether corporate or natural, from courses of action harmful to the pub-constitutional and legislative provisions, so far as lic welfare; and thus it is seen that the visionary scheme of social industrialism looking to the State's assumption of private property and of the means of production, and the consequent creation

may be consistent with individual liberty and the just rights of property, so shape our policy as to secure, by its continuous and silent operation, as wide a distribution of property as is practicable, thereby

sion of the State, are very marked characteristics in our laws concerning the descent and devolution of property; and they have not escaped searching criticism as being unjust to the children of the owner and contrary to public policy, since they tend to the concentration of wealth in the heir, and particularly in the favored devisee or legatee.

And it is precisely at this point that property, or the right to transmit or receive it on the owner's death, is made the subject of socialistic attack. It is argued that there is no such thing as a natural right of inheritance, or natural right to dispose of

preventing the concentration of vast fortunes in a few hands, especially the division and crystalization of society into classes of which property or wealth is the dividing line, and above all into caste-classes, in which the condition of the poor is permanent, and without prospect of improvement. Such a condition is, of all others, the most efficient cause of socialistic movements. Heretofore in this country land has been so abundant and population so sparse as to obscure the importance of this subject. But our available public land is now almost exhausted, population is already pressing upon the means of subsistence, suffrage is universal, the non-property by will, since each of these rights rests, it property-owner is becoming relatively a much larger part of the community. These are considerations which make the subject of our laws relating to property, and especially real property, as respects its descent, and the power of the owner to fetter it by trusts or dispose of it by deed or will, as he sees fit, one of practical moment. It is very clear that existing laws do not prevent the concentration of wealth. Mainly upon the data supplied by the last census, Mr. George K. Holmes concludes that 4,047 millionaires in the United States own "about onefifth of the nation's wealth," and " possess about seven-tenths as much as do 11,593,887 families." After giving the details he thus sums up the result: "Twenty per cent of the wealth of the United States is owned by three-hundredths of one per cent of the families; fifty-one per cent by nine per cent of the families (not including millionaires); seventy-one per cent by nine per cent of the families (including millionaires), and twenty-nine per cent by ninety-one per cent of the families." 10

is said, alone upon statute or positive law. It must be admitted that many writers and some courts have so declared. For example, in sustaining the constitutional validity of a Collateral Inheritance Tax Act, the judge who delivered the opinion of the Court of Appeals of Virginia broadly declared: "The right to take property by devise or descent is the creature of the law and secured and protected by its authority. The Legislature might, if it saw proper, restrict the succession to a decedent's estate, either by devise or descent, to a particular class of his kindred, say to his lineal descendants and ascendants; it might impose terms and conditions upon which collateral relations may be permitted to take it; or it may, to-morrow, if it please, absolutely repeal the statute of wills and that of descents and distributions and declare that upon the death of a party, his property shall be applied to the payment of his debts, and the residue appropriated to public Possessing this sweeping power over the whole subject, it is difficult to see upon what ground its right to appropriate a modicum of the estate, call it a tax or what you will, as the condition upon which those who take the estate shall be permitted to enjoy it, can be successfully questioned."11

uses.

So, in a case in Massachusetts, Chief Justice Gray, said: "The power to dispose of property by will is neither a natural nor a constitutional right, but depends wholly on statute, and may be conferred, taken away, or limited and regulated in whole or in part by the Legislature," and the court held that it was competent for a homestead statute making provision for the widow to limit to that extent the owner's power of testamentary disposition.12

The right of the owner of property to transmit the same on his death by descent or will, as well as the corresponding right of the heir or devisee to take the same, pursuant to the provisions of the statute regulating the subject of inheritance and of testamentary disposition, has been universally recognized in our laws. By these laws, if the owner dies intestate, his property goes, subject, in general, to dower, curtesy, the homestead right and a few similar provisions, in equal proportions, to his nearest relatives. But by these laws also the owner is given the absolute power to dispose of his property by will as he pleases. The scope of the power is such that the parent may, at his pleasure, with or without cause, disinherit his children entirely, or give his property to them in unequal shares. He may tie it up by deed or will in private trusts to be used and enjoyed as he may direct, for long periods of time after his death, the only restriction being that he shall not infringe the law of perpetuities; and for charitable uses without limitation as to time. This almost unlimited power of the owner of property to control its disposition as his whim or pride or passion may dictate, to the ex-gifts, deeds or donations which contravened it. I tent of disinheriting his children without cause, and this right of the nearest relative however remote to take the whole estate however great, to the exclu

10 Pol. Sci. Quar., vol. 8, p. 593, Dec. 1893.

It is obvious, if the language of the writers and judges referred to be taken without restriction, that as against the legislative power of the State the right of the owner of property, though held in fee or absolute ownership, would be little if any thing more than an estate or right for life, since the State by denying the right of the owner to transmit, could appropriate the property to its own use, thereby constituting itself the universal successor, and could make this policy effectual by prohibiting

may be permitted to doubt, however, if the question shall ever arise for solemn judgment under our

"Eyre v. Jacob, 14 Grat. (Va.) Rep. 1858.
12 Brettum v. Fox, 100 Mass. 234.

name, and were prejudicial in these and many other ment is the direct and foreseen consequence of the ways to the public and general good.

*

13

partible succession enforced by the Code Napoleon.
With some rare exceptions all of the great properties
have been gradually broken up.
* * * It is a
significant fact that neither under the first empire,
nor under the restored dynasty of the Bourbons,
nor under the Orleanist monarchy, nor under the
new Republic has any serious attempt been made to
repeal this law bequeathed to France by the authors
of the Revolution. It is a guaranty for the respect
of property: it conduces to industry and thrift." 16
The world knows that the wealth and prosperity
of France to-day are simply amazing.
Aware that the French law on the subject of prop-

All the great commentators on the French Code recognize that the law of November 14, 1792, which abolished substitutions and trust estates in France, was based on political reasons as well as on motives of sound political economy. Thus, Laurent says: "Substitutions were the most solid foundation of the aristocracy, and the nobility was inseparable from the throne. * ** Being closely allied to the aristocratic Constitution of the old regime, they had necessarily to fall with the old monarchy. The law of November 14, 1792, prohibited all substitutions; they were incompatible with the democratic regime established in 1789; the nobility being abol-erty had been adopted in Louisiana and had been ished, it was necessary to destroy the power which in effect there for nearly a century, I inquired of a it drew from its immense possessions; and for this distinguished lawyer of New Orleans, Mr. Charles reason the law of 1792 was given a retroactive ef- Howard Farrar, concerning its practical operation fect. When Napoleon, unfaithful to the spirit of in that State. He commends the law in unqualified 1789, re-established the monarchy, he desired, also, | terms. He says: "Under this system no great in imitation of the old regime, to re-establish sub-estates have grown up in Louisiana.” stitutions. Hence the majorats (landed estates descending with a title) created by the Senate decree of August 14, 1800. The new edition of the Civil Code, published under the empire, sanctioned this return to the past. Vain effort! The tide of events cannot be turned backward. In Belgium the majorats fell with the empire. In France the restoration also tried to bring back the old regime, with its nobility and its substitutions. The law of May 17, 1826, was as powerless for this purpose as the Imperial Act of 1806. The future belongs to the democracy. Whether one rejoices or deplores this fact, it is a providential fact, against which all the efforts of the men of the past have been broken in shipwreck. All these reactionary laws have been repealed, and the democratic wave rolls on increasing. Room must be made for it in society or it will overflow and destroy every thing."

.14

Marcade says: "There is not much legislation which has undergone so many changes as that relative to fidei commissa substitutions, and the cause of it is that there is no other subject than this more closely allied to governmental forms, and holding a more intrinsic relation to political systems." Demolombe says:15 66 Among all the subjects of private law, substitutions are most closely attached to public law, and therefore they must inevitably receive the shock of the revolutions which take place in the form of the government and the political system of the country. Hence the history of substitutions in the last half century is nothing more than the history itself of our changes of Constitutions."

These laws having been in operation in France for 100 years, their effect is a matter not of speculation but of demonstration. It is thus stated by Brodrick: "Of some 7,500,000 proprietors, about 5,000,000 are estimated to average six acres each, while only 50,000 average 600 acres. This morcelle

13 Vol. 14, § 389. 14 Vol. 3, § 456. 15 Vol. 18, § 62.

They

He adds these forcible observations: "Apply these rules to the great estates in New York and elsewhere, where the common law prevails-estates whose portentous dimensions increase with each generation and hang like a shadow over the welfare and prosperity of the republic-and see what would become of them in two or three generations. would be dissipated so as to be unnoticeable. This then appears to me to be the remedy for the much complained of accumulation of wealth in a few hands. No people on earth suffered in this regard more than the French people. They found the remedy through a baptism of blood and a carnival of horrors. Will the American people be wise enough to profit by their experience, and wipe out by peaceful legislation the pernicious doctrines of omnipotent power in the testator and of uses and trusts, which persist, like some voracious saurian, from a feudal and aristocratic into a democratic era, devouring the many to exalt the one; or must the red flag of anarchy storm their strongholds before they learn the wisdom of history."

I now leave this important subject. I commend it to your study, examination and reflection. A lawyer who consents to address the bar of the great State of New York, which has left such a deep impress upon the laws and jurisprudence of this country, ought to feel that he has something to say. If this address has any value, it is to be found in the lessons which it is possible to draw from the considerations which I have so imperfectly presented. I do not say that we can or ought to adopt the French law en bloc. I only mean to say that, in my judgment, it is possible to introduce into our laws such amendments and changes as will tend, without interference with the just rights of property, to make those laws more simple, to insure more effectually the free circulation of property, to prevent the concentration of vast estates in the hands of single owners. Stupidity and selfishness may shut their eyes and fold their arms until red-handed 16 English Land and Landlords, chap. iii.