Brooklyn have two votes each; and the three other borough presidents one vote each.

When the board of estimate has reached a determination, it reports its findings to the board of aldermen. This body may approve the report of the board of estimate or may, with the exception that the general school fund must be left at least at the required minimum sum, reduce the allotment. The aldermen have no power to increase an allowance. Any reduction in the budget by the aldermen is subject to the veto of the mayor, but may be be passed over this veto by a three-fourths vote. If the veto be not over-ridden, the amounts allowed by the board of estimate stand. The board of aldermen is required to act on the budget within a specific number of days. In default of such action within the specified time, twenty days, the budget is deemed legally adopted.

BOND ISSUES

All money for the purchase of property and the erection and equipment of new school buildings, as has been pointed out, comes from the sale of city bonds, which are not to be confused with the short-term emergency revenue bonds. The city bonds are the long-term interest-bearing municipal stock. The conditions under which this is done are as follows:

In the first place, no bonds may be issued in excess of 10 per cent. of the city's total tax valuation. This 10 per cent. maximum is called also the debt limit; the city is powerless to increase obligations beyond such a point. If the debt limit be reached the board of education of course would find it useless to ask for bond issues.

If, however, the city has not reached its debt-incurring limit, the board of education's request for bonds would go thru a regular course. It would be transmitted first to the board of estimate and this body has power of itself to issue in one year not more than $3,500,000 for schoolhouses. If, however, more than $3,500,000 are required in one year, the board of estimate considers the request in excess of that sum just as it acted upon the budget. Its determination is then forwarded to the board of aldermen. This body must act within six weeks on a bond issue. If the board of aldermen fail to act within that time, the issue is considered passed and goes to the mayor for his approval or veto. The mayor's veto is subject to review by the board of aldermen. It is interesting to note that, under this system, the city officers allowed for school property in 1902, $8,000,000, and in 1903, $9,788,430. These bonds. are redeemed like the stock of any other municipality.

It will be seen after a careful consideration of these several methods of providing money for the maintenance and extension of the school system, that a series of checks through the action of several different bodies on each allowance is interposed between the asking and the levying of school taxes. In general the board of estimate and the board of aldermen, the people's elected representatives, determine this matter. There is, however, one exception that is in the raising of moneys for the payment of educational salaries.

For this purpose the law prescribes certain minima which guarantee the payment of not less than certain salaries and provide for certain definite increases in salary each year up to the final maxima. These salaries, changing city administrations are powerless to upset. As a result the teachers' salary question has been taken out of politics and this, in connection with an effective civil-service method of appointment, means that the teachers themselves are free from the degradation of having to look to the politician for their salaries or their promotions. It is small wonder that the teachers speak of this measure as their "Magna Charta."

TAXATION FOR SCHOOL PURPOSES

BY NATHAN C. SCHAEFFER, STATE SUPERINTENDENT OF PUBLIC INSTRUCTION, HARRISBURG, PA.

In discussing the problem of taxation for school purposes, it is of supreme importance to select the best method of approaching the subject, and to choose points of view from which school officers and taxpayers may see the full import and value of the vast sums now taken from the purses of property owners for the establishment and maintenance of free schools.

The statistics compiled by the United States Bureau of Education furnish a very interesting study. They serve to show the magnitude of the interests. involved in our systems of public instruction and the enormous expenditure of public money that is necessary to keep the schools in operation. According to the report of 1903, the total number of pupils in the public schools was 15,925,887. These pupils were under the care of 439,596 teachers. The total amount raised by taxation for school purposes was $209,110,175, and the total value of school property had reached the princely sum of $601,571,307. Vast as these totals are, they do not interest the average citizen half so much as the burdens of taxation which he himself must bear. How each man's tax compares with that of his neighbor, upon what basis the taxes are levied, and what is done with the money collected by the taxgatherer, these are questions of surprising interest to everybody.

Mr. Robert Luce, in his prize essay, claims that the average American citizen works one month out of the year for the sake of being governed. He says:

In other words, taxation takes one-twelfth of his earnings. This average American is the head of a family of five persons, earning $1,000 per year. He pays $30 of this into the national treasury, $30 into state, county, city or town treasuries, and at a moderate estimate $23 more for the indirect cost of methods of collection. The total, equal to one month's earnings does not affect the equitable distribution of the burden, but emphatically shows the importance of this question.

DANGER SIGNALS FROM ABROAD

The average man in America has not seriously felt the burdens of direct and indirect taxation, because our national debt is not so great as that of other countries. According to the bulletin issued by the Department of Commerce

and Labor, the debt of the United States at the present time is $925,011,627. This looks like a large sum, but it is modest when compared with what some other countries owe. Of all the great powers, the German Empire has the least indebtedness, only $698,849,400, but the Empire is hardly a generation old, and has had no time to pile up a national debt. The individual German states owe considerably more than $2,000,000,000 which runs the total of the Empire and the several states to nearly three billion dollars. Italy owes $2,583,000,000, a burden her people are ill able to bear. Spain, now shorn of nearly all her foreign possessions, has a debt of $1,727,000,000, and finds its taxes almost more than her citizens can pay. Austria-Hungary is another debt-laden country. The debt of the dual monarchy is $1,555,000,000 while each of the two countries has a seperate debt of $1,600,000,000. Is it any wonder that Austria's subjects are leaving by hundreds of thousands to escape heavy taxation? Russia, which has now no free schools for the children of the peasants, owes $3,333,938,388, or more than three times the debt of the United States'. Her expenditures exceed her income every year and she must borrow largely from other countries. Great Britain owes about four times as much as the United States. One-fourth of this sum was contracted during the war against the Boers. Lastly comes France with an indebtedness of $5,856,312,892. Although a rich country, her people can scarcely bear the burden which was increased so largely through the ambitious folly of Napoleon III. If the reckless expenditures of the American people continue we may some day, find it difficult to raise enough money for school purposes. The per capita debt of the United States is $11.51, that of Great Britain $92.59, and that of France $150.31. The fact that an average American works one month each year for the privilege of being governed, and the sad experiences of European countries should wake up the citizens to the danger signals ahead. If this report should succeed in making school officials more careful how they spend the public money, it will do great service. If, however, its effect should be to make school boards stingy in their expenditures for schools, it will do great harm. One should make strenuous effort to avoid this result in all discussions of taxation for school purposes. And it should be always emphasized that the deterioration of the teaching force which results from lowering salaries of teachers, defeats the very end for which schools are established and maintained.

THE BASIS OF TAXATION

Taxes may be imposed upon what a man earns, upon what he has, or upon what he spends; that is, upon his income, his property, or his expenditure. Our federal government taxes every man's consumption, while the local taxation is based upon a man's property, and to some extent upon his occupation or income.

The plan of taxing a man's consumption tends to tax the poor man out This was before the outbreak of the war with Japan.

of all proportion to his ability to pay as compared with the rich man. Hence the so-called luxuries are taxed more heavily than the necessaries of life in every rational scheme of indirect taxation. Indirect taxation for school purposes is an important factor in our insular possessions, because nearly all the money required for school maintenance is derived from the duties paid at the customhouses.

In the states the larger portion of the money needed for school purposes is raised by taxing property and incomes. Where the same rate of tax is levied upon real estate and personal property, there is a tendency to assess real estate below its actual value, because money loaned at interest is apt to be concealed from the assessor. The property of widows and orphans is never concealed; hence they pay an undue share of tax.

A concrete example will suffice to show the iniquity which may creep into the system. A widow received $8,000 life insurance upon the death of her husband. Not knowing how to invest the money, she deposited it in a savings bank which paid 3 per cent. on deposits. The borough levy was 4 per cent., hence all real estate was assessed far below its market value. Hence, the widow was obliged to pay 4 per cent. tax on money for which she received only 3 per cent. interest. In her experienc taxation meant confiscation of a part of the principal, of her loan. In other instances real estate, by being assessed for local purposes only, has been taxed out of all just proportion as compared with money at interest, which in some of the states is taxed for state purposes only.

Some taxing systems are so irrational that they deserve to be swept from the statute books in order to make room for more equitable methods. One writer who is a specialist on taxation claims that the more some systems of taxation are improved, the worse they become.

No tax should be levied unless the money raised thereby can be better employed by the government than by individuals. This was the idea of the revolutionary patriots, and sets the true limit to taxes. The idea is well expressed in the constitution of Pennsylvania of 1776 (sec. 41), which provides that no public tax, custom, or contribution shall be imposed upon, or paid by the people of this state except by a law for that purpose; and before any law be made for raising it, the purpose for which any tax is to be raised ought to appear clearly to the legislature to be of more service to the community than the money would be, if not collected: which being well observed, taxes cannot be burdens. The Vermont constitution of 1777 has the same provision.

In discussing the duty of every citizen to contribute toward the support of the public schools, something can be said in favor of a poll tax which assumes that every citizen, no matter how humble his station, should pay annually at least one dollar toward the support of free schools. It is never wise to give people everything for nothing. Everybody should feel an interest in the school, and we always take more or less interest in the things that

take money out of our pockets. In this connection it is well to say a word about the "incidence of taxation"-a term under which experts discuss the differences between the tax-bearer and the taxpayer. Every man is willing to let the other fellow pay the taxes. The person upon whom the tax is imposed may shift it to some one else so that the person who originally pays the tax is not the person by whom it is ultimately borne. Thus the owner of a farm may by contract oblige the tenant to pay the school tax, because the school toward the maintenance of which the said tax is collected is for the children of the tenant and not the owner, whose children probably attend a school in the city or away from home. Nor should tax-shifting be confounded with tax-dodging. Where a person contributes to the campaign funds of the party in power with the understanding that the amount thus paid shall be more than made up to him by lowering his assessment, it becomes a case of the most reprehensible type. Tax-dodging has developed into a fine art that is very injurious to our civil institutions, whilst tax-shifting may be justifiable, as when banks pay the tax on their stock, thus saving the expense that would be incurred by collecting the said tax from each stockholder, some of whom might be tempted to conceal their stock from the

assessor.

In the same connection it should also be emphasized that good schools are expensive. "The best is not too good for my children," said a local politician; and the ward boss will seldom tolerate any trifling with the particular school to which his own children are assigned. It can not be emphasized too strongly that good schools cost money, and that the best education for any community can never be made cheap. People are ever willing to get something for nothing, and they are perpetually fooled by schemes to secure good schools without paying for them. Thus it was thought at one time that by the monitorial system of Andrew Bell and Joseph Lancaster education could be made cheap. The scheme received the commendation of Governor De Witt Clinton of New York, and Governor Heister of Pennsylvania. It was introduced in Pennsylvania into the schools of Philadelphia, Lancaster, Pittsburg, Erie, New Castle, Greencastle, Milton, and perhaps other places. It was claimed by Joseph Lancaster that by the aid of monitors one master can teach a thousand boys. "Give me four and twenty children today and I will supply you with as many teachers tomorrow," was the promise of Andrew Bell. Thomas Dunlap gives the following account of what he found upon entering the board of directors of Philadelphia 1824:*

Seven schoolhouses contained fourteen schools, in each of which about two thousand children were to be educated. . . . . Schools where the young idea was to be developed in penmanship by scratching with sticks in the sand-bath, developed into arithmetic by a doleful simultaneous chant of the multiplication table, in which neither the school, monitor, nor master could detect one intelligible sound, developed into poetry and morals by howling in horrid groans certain doggerel ballads of Lancaster himself. Schools where the baby of five was the all sufficient teacher of the baby of four, save that the latter, if *See p. 23, Vol. III, Pennsylvania Colonial and Federal.