ed to be increased by the addition of those credits, property taxation based thereon is not only merely fanciful, but necessarily an additional tax on a portion of the property already once taxed. Suppose the entire tax-rolls exhibited nothing but such indebtedness. Taxation under such circumstances would, of course, be wholly fanciful, as having no actual basis for its exercise."

If, therefore, property, and not persons, are to be taxed, it becomes logically necessary to define "property," for the purposes of taxation, to be things, not rights in things nor representatives of things, and the claim of the Government for taxes is a claim in rem, resulting from its right of eminent domain, and not in personam.

or 50 per cent. more than the whole value of the real and personal property in existence. Is not this double taxation of things, if not of persons?

Now, the assessment of tangible, visible things is all that is within the powers of the average assessor (who is not gifted with second sight); for all actual, material property shows for itself, and a claim in rem for taxes compels whoever owns it to pay the tax or lose his property by tax sale. If it were possible to force every citizen to exhibit his exact accounts to the assessors on a given day, showing the things owned by him, the result would be precisely the same as if the outside assessment of things only were

It is evident, on a moment's reflection, that the aggregate property of the State must be the aggregate value of the visible, tangible things, or, in other words, the actual realized wealth, owned no matter by whom, but situated within its limits that is, the aggregate value of lands, buildings, animals, products, vehicles, ships, furniture, railroads, rolling stock, machinery, goods, etc. It matters not to the State who owns these things-whether there be one or a dozen titles to them; whether they are paid for or not; or whether the owners reside beyond its jurisdic-made at the same value without noticing rights tion or not. The thing itself is what it is, or should be, liable to taxation, under a system of property tax, and it should be taxed but once.

Now, the relation of debtor and creditor between the tax-payers has nothing whatever to do with the aggregate value of their property; for, as by each individual's private books, what he owes is exactly balanced by the credit extended to him on his creditors' books, so the aggregate of all debts must exactly balance all credits, and therefore they neutralize each other. The plus quantities equal the minus quantities, so that their difference is nothing. For example: Suppose ten men each own a house and lot worth $10,000. The aggregate value is $100,000. Now let each man borrow $5,000 of his neighbor. The aggregate debt thus created is $50,000. But a corresponding credit of $50,000 is also created. Will our granger friends claim that the ten men are now worth any more than they were before? Equals from equals and nothing remains; so that, whether there be debts between the parties or not, the original $100,000 is the aggregated net value of the whole property for taxation or for any other purpose.

So as to stocks and bonds. Suppose a corporation to have $1,000,000 capital, and its stock to be quoted at 50 cents. It has real and personal property assessed at say $250,000. Deducting this from the market value of the stock, the lat

in things. Why, then, not confine the labors of the assessors to the listing of things only, instead of requiring from them impossibilities, at the cost of equality and truth, and of the demoralization caused by the present system? Let the Constitution command double taxation of property as it will, so great is the opposition of the people to it that the Legislature and courts will not enforce it, the assessors dare not impose it, and the citizens will not pay it. The only results will be what they already are, viz., the destruction of that confidence without which capital withdraws or declines investment, leaving labor unemployed and our great resources undeveloped; the discouragement of immigration; and contempt of the supreme law of the land, thus crumbling into sand that cement of respect for law which alone holds the masonry of free institutions together.

The problem to be now solved is how to get our State out of the inconsistency in which it has been involved by the ambiguity of the language of the Constitution.

There are several ways in which this can be done, though all of them require amendment of the Constitution.

(1.) If the traditional public opinion of our State is yet too strongly set in favor of taxing both real and personal property to justify any attempt to change it, then the question of double taxation can be wholly eliminated by

substituting for the present definition of "prop- | nicipal license taxes on those occupations only erty" the following: that tend to public demoralization.

besides the profit on which he lives. This proposition is self-evident.

It is also self-evident that whether the assessment list be large or small, the government must be supported, and will raise the sum necessary to its support, indifferently by a small tax on a large assessment, or by a large tax on a small assessment; by a tax on one interest or on all interests.

ones, would still be the largest tax-payers in the State, though they paid no direct tax to the treasury; and we may depend upon it that all of the enormous taxation now attempted to be assessed upon railroads and railroad owners will be added to their fares and freights and thus exacted from the people, despite all the merely nominal regulations of fares and freights likely to be exerted by our boasted institution of Railroad Commissioners.*

The idea of confining taxation to land only is not new. It has been advocated by economists during many years. More than a century ago, Adam Smith wrote:+ "The quantity and value of the land which any man possesses can never be a secret, and can always be ascertained with great exactness. But the whole amount of the capital stock which he possesses is almost always a secret, and can scarce ever be ascertained with tolerable exactness. It is liable to almost continual variations. . . . . An inquisition into every man's private circumstances

So that nothing is gained as to the amount of money raised, whether the assessment includes "everything capable of private ownership," or only one thing. Neither is anything gained by the people as to the amount of tax they pay, whether each man pays his tax directly to the Government, or whether one set of men advance the whole tax and the rest refund it. Therefore, if it be possible to select some one species of property whose nature is such that it cannot be concealed or removed, that a claim in rem against it would be always good, whose value can be ascertained by the assessors without the necessity of tempting the.... would be a source of such continual and owner to take a false oath, whose use is a necessity to all mankind and must be paid for by all who use it, then shall we have found the solution of nearly all the difficulties that surround this most intricate question.

There are only two such species of property -land and buildings—including railroads and other structures fixed to the soil.

The taxes levied on rented land are refunded in the rent, which again is recouped by the produce of the soil which everybody consumes. If not rented, but cultivated by the owner, the produce directly refunds the tax with the other costs of production. If not used for any purpose, it ought to be taxed anyhow, for the holding of land on speculation has been long recognized as an evil in our State, and present sound legislation tends to its discouragement. Again, taxes on buildings are replaced by the rent. The tenant of a dwelling is the consumer who ultimately pays the tax, as does the owner who inhabits his own house. But the premises let for business uses carry the tax in the rent, which is an item in the expense of the business, and added to the cost of the product of the business. The customers of such tenants, if themselves merchants or shopmen, repeat the process with their patrons, until the tax has distributed itself infinitesimally among all who live on the land, or inhabit buildings, or consume any articles whatever. In this view, the baby in his cradle is a tax-payer, in the proportion that his consumption bears to that of the whole community.

In this view, the railroad people, who consume many millions per annum in merely operating their lines, to say nothing of building new

endless vexation as no people could support. Land is a subject which cannot be removed, whereas stock easily may. The proprietor of land is necessarily a citizen of the country in which his estate lies. The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon a country in which he was exposed to a vexatious inquisition in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could either carry on his business or enjoy his fortune more at his ease." (How prophetic of what is going on in California to-day!) "By removing his stock he would put an end to all the industry which it had maintained in the country which he left," etc.

If, now, it be admitted that taxation on land alone would yield all necessary revenue, cannot be evaded, is more easily and cheaply assessed, is more equal, and diffuses itself thoroughly among the community by the laws of trade; that it would tend to discourage land speculation, and to encourage the most profitable use of the land; and if, on the other hand, the farmers can be made to see that the taxes on business they were smart enough to shirk for themselves are as irksome to all other branches of industry as to their own; that all industries

are alike valuable to the community in proportion to their relative magnitude; that, above all, manufactures are useful to the farmer, as creating on the spot a market for raw materials, and largely increasing local consumption of all the products of the soil, and therefore should be preeminently encouraged;* if they can be made to see that the relation between city and country is that of the belly to the members, and that their present attitude of oppression toward the city is slow poison to themselves—then why | will they not be willing that the State should adopt the measure proposed?

Let us see how it would work:

The Controller's estimate of the expenses of the State for the fiscal years 1881-83 is $6,560,246, or $3,280,123 per annum. To meet this a tax of 64 cents has been levied on the total assessment of all kinds of property, amounting to $666,202,674. If the personal property portion of this assessment were all "good," as in the nature of things it cannot be, then it is evident that a tax of 50 cents would pay all the State expenses. The State Board of Equaliza- | tion have, however, for this reason, as required by Sec. 3696 of the Political Code, levied a tax of 64 cents, or 14 cents more than would be needed if there were to be no delinquent list.

Now, the items of real estate and improvements amount to $460,694,217, out of the $666,202,674. A tax of 714 cents on this lesser sum would, therefore, pay the expenses of the State; that is, the additional tax of only 74 cents put on real estate and improvements would be all the difference resulting to the debit side of the proposed change, so far as State taxes are concerned.

is now assessed on both real and personal property, would find the relief on the one tax balance the increase on the other.

(2.) Rents would be advanced to cover the tax, or more. At the least, all leases would thereafter oblige the tenant to pay the specific amount of the tax in addition to the old rate of rent, and by the process of diffusion already explained the landlord would be recouped and the consumer pay the tax. Nevertheless, real estate would be unfavorably affected for a while. But by and by—

(3.) All other taxes being removed, there being no longer any apprehension of interference of the tax-collector with business in any way or manner, capital would flow into the city, new enterprises would be inaugurated, population would increase, rents would go up, and real estate would recover from its temporary depression and soon reach much higher prices than before.

(4.) As new enterprises, especially manufactures, were developed, the accumulation of wealth would soon flow out into the country, where the demand for new and more remunerative products than wheat would gradually cause a change in the present destructive agricultural policy of our State. Small farms of irrigated land would produce $50 to $500 per acre from crops that can best be raised on a small scale, and for which there is now no demand, yet for whose production our soil and climate are particularly designed by nature. This paper is already too long to more than allude to what might be done with jute, hemp, ramie, sugar, cotton, tobacco, silk, madder, teasels, grapes, olives, and the whole list of fruits that can now be dried and preserved so as to become permanent articles of commerce. No taxes on money, on debts, mortgages, on business, stocks, shipping, banks, or corporations as such, capital would be attracted, and invested in a greater variety of channels than ever. Immigration would follow, especially to those regions heretofore motax-nopolized by land speculators, whose burden of

In the city, the tax this year, on a total assessment of $253,606,345, is 1.57 per cent., or $3,981,620, for city purposes. If this were confined to real estate and improvements, the rate would be advanced to 2.41. Add State tax, and the owners of real estate and improvements would be taxed this year 3.124 per cent. What, then, would be the results to the payer?

(1.) The abolition of personal taxes, licenses, etc., would of course be in exact proportion to the increase of the tax on land and buildings in both city and country, so that in the aggregate the tax-payers would pay no more taxes than they now do. Furthermore, the aggregate of the tax would be reduced by the amount now wasted in the cost of assessing and collecting the revenue from so many sources. It would often be the case, too, that each tax-payer, who

* Vermont exempts wholly from taxation all manufactories for five years from their inception.

taxation would make them anxious to let go at a great reduction of former prices. I look forward with hope and confidence to the dawning of the manufacturing and industrial day, now apparently sure to succeed our long night of mere speculation. I hope to live long enough to see the State dotted over with manufactories, its lands generally irrigated, cut up into small holdings, and furnishing support to thousands of substantial resident yeomanry, where now there are but tens, the bulk of whom are employed only a few months in the year. How is all this to be accomplished when our vicious system of taxation strangles in the birth all ef

fort toward improvement? How can we thrive under a cast-iron Constitution, molded in the heat of class antagonisms, intended to affect present public interests as they appeared to the inflamed eyes of men laboring under mere temporary excitement, and formulated in contempt alike of the universal experience of mankind in the past, and of the changes in our requirements that will of course develop themselves in the future?

I have said enough thus far to enlist the attention of thoughtful, earnest, and patriotic men, enough to stimulate study of this most complicated of all the questions of statecraft, and enough to excite the attacks of that unfortunately large class in every new community

who exhaust themselves in the effort to prove
in their own persons that "a little knowledge is
a dangerous thing" Much more might be said
in anticipation of the objections which are sure
to be made to any proposition to change the
new Constitution by those whose pride of con-
sistency would lead them to sink the State
rather than acknowledge an error under any
circumstances. It is hoped that this paper may
prove the entering wedge of a discussion on the
merits of this most important subject, and that
such debate may be conducted with that free-
dom from passion and prejudice which is es-
sential to the development of "the truth, the
whole truth, and nothing but the truth."
C. T. HOPKINS.

NOTE.-Since the above was put in type, the report of the State Board of Equalization has been issued. It is full of suggestive facts in accord with the tenor of the above article. It shows that the maladministration of the business of assessment, especially in the country, has reduced the whole thing almost to the level of a scandal! After showing (p. 29) that, deducting the assessments of franchises, solvent debts, and shares of capital stock from the total value of personal property, the assessed value of the personal property this year is only $1,716,718 over the assessment of 1878, and is $6,749.996 less than that of 1877." It says, "We feel sure that many, millions of dollars' worth escape assessment. We believe that if it were possible to secure for once a full and correct assessment of the State, the assessment roll would aggregate $1,000,000,000. The report gives ample evidence of the utter incapacity, if not deliberate fraud, of a large portion of the county assessors-all at the expense of the city; e. g., the average valuation of 1,389,550 acres of land in Kern County at $1.48 per acre, and 900,454 acres (376,930 less than in 1879) in San Diego County at 99 cents! But San Francisco's farming lands, 6,862 acres, though mostly sand-dunes or rough hills, are quoted at $168.32 per acre. The report deserves careful criticism by all classes of the community, and it is hoped the press will give it careful and discriminating attention.-C. T. H.