CHAPTER III.

PERSONAL PROPERTY TAX.

The real problem of the general property tax is to be found in personal property assessments. Tax commissions, generally throughout the United States, have struggled in vain with this nightmare of fiscal administration, but, inspite of everything that can be done, there is a general tendency, especially during recent years, for taxable personal property to constantly decline in volume.

EXPERIENCE OF OTHER STATES.

The Wisconsin Tax Commission, one of the ablest in the United States and most successful in attempts to solve tax problems, reports that from 1903 to 1909 there was a falling off in the state of from 56.282 per cent to 48.581 per cent of true value. It is the belief of that commission, "that we are fast drifting away from personal property towards a tax on land only." While the value of the personal property of the state doubles, the local assessors fail to find additional property and place it on the lists. It is the experience of that commission that, the larger amount of property omitted by the local assessor, the heavier is the burden upon that which is placed upon the list.

The commissioners of taxes and assessments of the City of New York say: "It would be a great advantage to the city and the owners of real property if the remnants of the personal property tax were abolished entirely."

Prof. Max West, Secretary of the National Industrial Commission, says: "In at least five-sevenths of the states and territories the rural districts would gain by the exemption of personal property from taxation.”

A special commission on taxation, appointed by the governor of Ohio, in a report made in 1909, arrives at the same conclusion, "That the general property tax bears most unjustly upon the owners of real estate, whether farm lands or city homes, and permits with increasing advantage the escape from taxation of all forms of personal property and particularly of that class of personal property which can be most easily concealed from the tax authorities." That commission further says: "We have found that the general property tax is a failure for purposes either of revenue or equality; that more than one-half of the total wealth of

the state in tangible property alone escapes taxation; that of intangible property, such as monies, stocks, bonds, credits, subject to taxation under existing laws, not ten per cent, perhaps not even five per cent, is listed."

Prof. Daniels, in his work on Public Finance, says: "If Jove laughs at lover's vows, he probably guffaws at taxpayer's oaths. Even the Psalmist's hasty allegation of universal mendacity needs little qualification in this province of finance. Where the taxpayer's conscience is tender, he finds (as one puts it) that virtue is perforce its own reward. This phase of the system is described in one tax report as 'a tax upon ignorance and honesty', and in another report we are told that 'the payment of the tax on personalty is almost as voluntary and is considered in pretty much the same light as donations to the neighborhood church or Sunday school."

THE DRIFT TOWARD A TAX ON LAND.

The drift toward a tax on land and away from a personal property tax is illustrated by a mass of statistics, during the past fifty years, which it is impossible to reproduce here. According to the United States Census, from 1860 to 1888, the real property of the United States on which a tax was levied increased from 6,873 millions to 13,036 millions; while personal property decreased from 5,111 millions to 3,866 millions.

In California in 1872 the taxable personal property amounted to 220 millions, but in 1887 it had shrunk to 172 millions-a decrease of 56 millions. During this same period real property advanced from 417 millions to 791 millions. In 1893 personal property had increased one million, to 173 millions; while real property had increased from 209 millions to 1,000 millions. During this period personal property paid 17.31 per cent and real estate 82.69 per cent of taxation, both state and local.

In Illinois in 1882 personal property paid 22.01 per cent of all the revenue, and in 1894 but 17.26 per cent. In Cook County it paid 14 per cent and in Kankakee County but 11 per cent. In New York in 25 years real estate increased 2,000 millions while personal property decreased 40 millions, until it now. but 9.99 per cent of the state taxation. In the District of Columbia in sixteen years real estate increased 77 millions, while personal property decreased 11 millions. In New Jersey in one township real estate was assessed at $272,232 and all personal property at $591. In another the figures were $2,274,900 and $47,150. In New York, of two cities equal in population and resources, one paid taxes on $700,000 worth of personalty, while the other paid on but $5,000.

In Cincinnati during twenty-six years real estate increased from $66,454,602 to $144,208,810, while personalty decreased from

$67,218,101 to $44,735,670. In Monroe County, New York, including the City of Rochester, real estate was listed at $132,202,478 and personal property at but $8,408,803, In Brooklyn real estate was assessed at $486,497,186 and personal property at $19,123.700. In other words, personal property paid a little more than three per cent of the entire tax. A few years later it fell still lower, to 1.23 per cent.

In North Dakota in 1912 real property was assessed at $199,073,743, while personalty was assessed at but $50,893,545, or onefourth as much. At the same time the bank deposits of the state aggregated more than $70,000,000.

AN AGE OF PERSONALTY.

These statistics appear all the more absurd when it is considered that personal property in the United States greatly exceeds in value all real property. It must be remembered that, during the past two or three decades personal property has increased with unrivalled rapidity and includes not only all movable objects, but money, public obligations, stocks, bonds, mortgages, credits and all. the products of agriculture and manufactures. The tremendous increase of stocks and bonds in the modern business world makes the constant shrinkage of personal property which bears any burden of taxation seem highly ridiculous. It has become an axiom among taxing officials that the greater the wealth in personal property, the less tax it bears.

CONDITIONS IN NORTH DAKOTA.

It is not necessary, however, to go outside of North Dakota to discover the abuses existing under the general property tax. During twenty-two years, or practically since statehood-1890 to 1912-personal property in this state has increased from $23,021,867 to $50,893,545, or 121 per cent; real estate has increased from $55,863,276 to $199,073,743, or 256 per cent, while the population in twenty years, from 1890 to 1910, increased from 182,719 to 577,056, or 216 per cent. While real estate has been multiplied. by three, population by more than two, personal property, in an age of personalty, has only multiplied by a little more than one.

During this same period Pembina County personal property decreased from $1,447,705 to $1,139,780. This is an actual decrease of $307,925, or 21 per cent. During the last two Census periods the population in this county has increased three per cent. During these same periods in Traill County personal property decreased from $1,519,022 to $1,108,476, a decrease of $410,543, or 27 per cent. In Grand Forks County personal property de