by local assessors, on the same basis and in the same manner that individuals are taxed, and also recommends that the capital-stock tax be limited to corporations of a quasi-public character, and that of such corporations those local in character, such as street railways, gas companies, etc., be assessed by the county assessors instead of by a State board.

In regard to the assessment of personal property of individuals, the commissioners recommend that schedules be required and a substantial penalty be imposed for false schedules, but that the requirement of the oath to such schedules be abandoned. They believe such requirement to be "debauching to the conscience and subversive of the public morals."

To railroad property, they say, the ordinary rules of valuation have little application, the true criterion of value and the best basis of taxation being found in their receipts.

After a careful study of railroad statistics and much attention to the subject of the average proportion between gross receipts, expenditures, and the capitalized value of railroads, they deduce the conclusion that a rate of taxation equal to the average rate throughout the State of Illinois, imposed upon five times the amount of the gross receipts of a railroad in that State or upon the Illinois portion of the gross receipts of an interstate road, would be just and more flexible than an arbitrary percentage, provided that such rate of taxation should not exceed 5 per cent of such gross receipts.

It is proposed to determine the average rate of taxation in the State by adding together all the taxes levied in the State and dividing the amount of the tax by the total assessed value of all the property in the State.

It is suggested that this rule would be fair and just if all the property in the State were assessed at its full cash value, as the law requires, but that if in any portion the assessment should fall below the full value (a result quite possible in Illinois) the average rate would be increased in proportion, and railroads would be held to the same rate on full valuation that other property pays on partial valuation; to guard against which injustice the limitation of 5 per cent of gross receipts is proposed.

In reviewing this proposed method for the taxation of railroads, the suggestion occurs that in all cases of divorcement of incompatible or irreconcilable elements or systems it is always advisable to make the separation complete and avoid any lingering conflict or misery.

The proposition for the taxation of other quasi-public corporations is as follows: Telegraph, $2 on each instrument.

Express, 24 per cent of the gross receipts.

Public warehousemen, one third of 1 cent for every bushel of capacity of each elevator or granary.

The commissioners also recommend certain limitations upon the various classes of taxes for the protection of "taxpayers from the rapacity of unprincipled tax consumers."

They finally recommend the appointment by the governor of a State board of tax commissioners for general supervision of the taxation system of the State.

It is apparent that this commission was more or less influenced and felt somewhat handicapped by the desirability of retaining, so far as practicable, the machinery of existing laws for taxation so as to avoid friction in bringing about changes, and to propose only such changes as would not involve changes in the organic law of the State.

Unfortunately for the State, the legislature as yet has not adopted the changes recommended by the commission, and any substantial change in the existing system appears to be difficult to bring about because of political and sectional considerations, although public opinion seems to be favorably affected by the work and agitation of such men as composed this commission.

I C-VOL XI-37

WISCONSIN.

The primary method which obtains in this State for raising the greater portion of public revenue is the general property tax upon assessed valuations; the greater portion of the property in the State, real and personal, including general corporate property, being subject to such direct tax through local assessment.

Few important changes or modifications in the general property-tax system have been made. There has been no systematic effort to make the system "worse" by "improving it," as Professor Ely might say.

The other distinctive method of taxation is a system of license fees, so called, in lieu of taxes by the valuation method. The interests coming within this method are chiefly corporations of the class commonly designated as public service or quasi-public corporations, and include railroad, street-railway, telegraph, telephone, electric light and power, sleeping-car, boom, trust, and guaranty companies, and life, fire, and navigation insurance corporations, which will be considered separately.

Certain constitutional restrictions are imposed upon the legislature with reference to the subject of taxation, the principal ones being that it is prohibited from enacting any but general laws for the assessment or collection of taxes, and that such laws shall be uniform in their operation throughout the State; and that "the rule of taxation shall be uniform, and taxes shall be levied upon such property as the legislature shall prescribe."

Under these constitutional limitations it has been held that the legislature can not authorize the valuation for taxation of one class of property on a different basis or ratio to true valuation from that applied to other property in the same taxing district. But it has also been held that the constitutional requirement of uniformity is not violated by the taxation of a particular class or kind of property by a different method from that employed in taxing other property, provided the law is uniform in its operation throughout the State.

Thus the existing method for the taxation of the property and franchises of railroads and other corporations, by a fixed percentage of gross earnings paid wholly to the State in lieu of all other taxes, is constitutional.

GENERAL PROPERTY TAX.

Under the general property-tax system, State taxes, except those raised by other methods, hereinafter set forth, are levied by legislative enactments, and apportioned to the several counties according to the value of taxable property therein, as fixed by the State board of equalization; and these taxes, together with taxes for county, township, city, and village purposes, are based upon assessments on real and personal property, in the several local taxing districts, by local assessors who are elected except when otherwise provided in special city or village charters, the township or ward constituting, as a rule, a single assessment district. In the general property-tax system, here as elsewhere, the assessment is the foundation for the entire structure.

PROPERTY LIABLE TO ASSESSMENT.

All property in the State not specially exempt by statute is liable to assessment for taxation, real and personal property being for that purpose specifically and comprehensively defined, the latter including all debts due or to become due from solvent debtors, however evidenced or secured, and "all goods, wares, merchandise, chattels, or effects of any nature or description having any real or marketable value."

There are the usual exemptions of public property, the taxation of which would serve no useful purpose; exemptions in aid of religious, benevolent, industrial, and other institutions deemed to be beneficial to society; special exemptions designed to promote certain industries, which include property devoted to the manufacture of beet sugar for a limited period, property invested in the manufacture of oxide of zinc or metallic zinc from native ores, for limited periods,

investments in mutual savings funds or building and loan associations, etc.; exemptions of personal effects regarded as necessities, and exemptions of property taxed by some method other than directly by property valuation.

ASSESSMENT.

In general, real and personal property are taxed separately in the usual manner. For the purposes of local taxation a corporation is deemed to be a resident in the district in which it has its office or place of business.

Shares of stock in banking associations or corporations organized under State or Federal laws are assessed to the owners at local rates in the district where the bank is located.

To enable the assessors to assess bank stock to the proper persons, bank officers are required to furnish them with a statement showing name and residence of each shareholder and the amount of stock held by him.

As a rule, assessments of real and personal property are made by estimate of the local assessors, some general statutory provisions being made for the assistance of the assessors.

It is provided that "the articles of personal property shall as far as practicable be valued by the assessor upon actual view at their true cash value." The assessor is not confined to such property as he may discover, but if he has reason to believe that any taxable has other property liable to taxation, he may increase the assessment as in his judgment appears to be just and equitable. He has authority to examine the property owner under oath as to the items and value of all his personal property liable to taxation, other than money, notes, bonds, mortgages, and other securities.

In case of his refusal to testify, or in case the assessor should desire further evidence, sworn evidence from others having knowledge of the matter may be taken. To enable the assessor to determine the amount of money, notes, mortgages, or other credits or securities for which any person should be assessed, and the amount of indebtedness to be deducted therefrom, he is required to make a statement under oath of the average amount of such money, etc., and the average amount of indebtedness which he may be entitled to deduct for each month of the year ending May 1, and the net average thus ascertained is assessable for taxation.

No penalties are provided for failure or refusal to perform these duties except that the assessor is liable to a fine if he accepts the statements as to moneys, credits, etc., without its being signed and sworn to, and a property owner who intentionally makes a false statement is liable to a forfeit of $10 for each $100 worth of taxable property thereby withheld from the knowledge of the assessor.

Valuation of real and personal property, 1898.

Total town, city, village, and county taxes levied for 1897
State taxes apportioned to counties .

600,000,000

$14,818, 899. 23 2,241, 427.55

Statement of assessed valuations in Wisconsin from 1854 to 1898.

An analysis of this statement will disclose the character of the work of assessment and equalization of property in this State coming within the general propertytax laws. The exceedingly low valuation of all real and personal property in this large and wealthy State, being but $600,000,000, and the ratio of real to personal property reveal at a glance the inefficiency and inequality of assessment. A Wisconsin assessment roll has been described as a "patchwork of arbitrary undervaluation."

As illustrations of the gross inequalities in the assessment of personalty, it is stated by the tax commission of 1898 that 13 counties in the State failed in 1897 to make any return under the head of average amount of moneys in possession and on deposit, while the official reports show that there was on deposit in the banks in those counties the sum of $5,663,861.99.

The total amount assessed under this head in the State that year was $7,163,444, while the reports of the national, State, and private banks showed the amounts of deposits to have been $74,678,795.55.

There were 21 counties that did not return any notes, bonds, or mortgages.

LIQUOR-LICENSE FEES.

Separate provision is made for the granting of licenses for the sale of intoxicating liquors by town and village boards and by the common councils of cities. The fee which may be charged is in towns ordinarily $100, and in villages and cities $200 per year, which amounts may be increased to not inore than $400 in towns and not more than $500 in cities and villages by vote of the electors, under certain conditions and restrictions.

The funds derived from such license fees are directed to be used primarily for the support of the poor, but in practical working the moneys so derived virtually go into the general fund of the town, city, or village in which the license is granted. The following is an incomplete statement of the amounts so raised: Amount collected in 546 towns and villages in 1897.... Amount collected in 100 cities in 1897..

Total-...

$584, 748.70

979, 162.02

1,563, 910.72

POLL TAX.

Another source of revenue is a poll tax upon male residents between 21 and 50 years of age, with certain exemptions, amounting to $1.50 per poll each year. This law is not enforced in all parts of the State, and its repeal is advocated. In 1897, out of 1,137 towns and villages in the State, only 493 made any attempt to collect poll taxes, and the total amount they collected was $95,871.75. Of the 111 cities only 39 reported any poll tax raised in 1897, and the total amount obtained was the sum of $12,578.37.

In that year there was not one county in which all the taxpaying districts raised a poll tax, and there were 8 counties in which there was not a dollar of such tax collected.

DEFECTS IN THE PROPERTY-VALUATION SYSTEM.

Some valuable lessons may be drawn as to the practical working of the general property-tax system by reference to defects in that system in operation in Wisconsin, pointed out by the Wisconsin tax commission in its able and valuable report of 1898, from which much of the information herein contained is derived. Under that system the amount of tax which each person is to pay is apportioned upon the basis of the taxable property which he owns. The assessment is at the foundation of this taxing system. It is shown that property under local assessment is valued upon widely different bases, but that vast amounts are annually left off the assessment rolls entirely.

For the purpose of testing the efficacy of assessment laws in this regard, comparison is made between the United States census reports of 1890 and the State census of 1895.

Total true valuation of all property, 1890.

From which was deducted value of railways, telegraphs, telephones, etc

Leaving estimated true value of taxable property....

$1,833, 308, 523

333, 308, 523 1,500,000,000

Showing the discrepancy between the true valuation as thereby stated and the assessed valuation of property assessed locally in 1890 to be substantially $1,000,000,000.