Kitchener." If Africa for the Africanders includes this, well and good. But there is a great danger of new-settled countries closing themselves to immigration. They will not submit, they say, to be dumping-grounds for the pauper labour of Europe. On the other hand, Australia, with her slow growth of population, her aggregation into great cities, her jealous labour policy, cannot be said to be in a satisfactory position. The best hope of her awaking to the responsibilities and perils of a vast and scantily populated continent lies in the awakening effect of new nationhood. The elevating influence of this conception has already shown itself in South Africa. Botha, defeated by Sir Percy Fitzpatrick at the polls in Pretoria (September, 1910), appeals to his compatriots not to let this be an excuse for revival of racial animosities. Hertzog, if he does insist on English children learning Dutch, at any rate assigns educational grounds for the rule.

It will probably seem to an American observer that there will be a lion in the path of the new constitution. How is real selfgovernment in South Africa compatible with the ultimate sovereignty exercised by Great Britain? But it is unlikely that this will be a real practical danger. After all, even Englishmen can sometimes be made to learn their lessons, and the teaching of the years between the battle of Lexington and the surrender at Yorktown has tended till lately to excess rather than defect of the let-alone principle in the management of colonies. It was evident from the debates in the British Parliament that there is a great desire to give the new experiment full scope. There is perhaps the chance of too little rather than too much control or interference by the home government, as is shown by the recent history of the imperial tie in Canada and in Australia.

In the interval between the union of the Dominion in Canada and the union of the Commonwealth in Australia, it was often asked whether these federal unions would prove a step toward imperial federation or a substitute for it. The latter seemed perhaps the likeliest at that time, but not now. federal union has itself to a large extent been the product of the imperial idea. The Boer ex-generals were themselves proud to

This most recent

form part of the British Empire. No one can mistake the rapid growth of a similar sentiment in Canada and now even in Australia. If a practical and stable federation of the British Empire does come about, it will be the greatest achievement in history, transcending even the establishment of the pax Romana under the Cæsars. For it will be the achievement of that which is the greatest problem of political science, a federal union strong yet elastic, natural in growth yet a product of conscious art. And it will be a step toward that great aim of a general worldpeace which is to be won, not by sheathing the sword, but by showing a front too strongly armed and too ready for action to make aggression possible. This presupposes a similar development of naval and military strength for defensive purposes on the part of the United States of America, and a similar concentration on the ideal of peace. Does this appear so much of a dream as it would have appeared even a few years ago? Already the United States' conscience finds itself called upon to act policeman over the bear-garden of the Central American states. Some day the same government will have to assume an arbitral function in South America. For the Monroe doctrine cannot confine itself to a negative principle; those who say "hands off" cannot forever refuse to touch the burden with a finger themselves. The Panama canal already gives promise of being no way inferior to the Suez canal as a creator of new international responsibilities.

Some sidelights are thrown on the prospects of the new Union by the elections just completed. The Parliament of 121 is made up of seventy-one "Nationalists," including with them the four Labour members, thirty-seven "Unionists," and thirteen "Independents" from Natal. This means that Botha's government will have that valuable corrective, a strong opposition, the fifty under Jameson. Indeed, on a proportional representation, the Unionists would have won many more seats. The result, however, will not mean a domination of Dutch over British. Rather, the elections have been "a protest in favour of the non-partisan government by all the best men" which Botha at first attempted to secure. On such fundamental issues as land, immigration, and education, he stands much nearer to Jameson than to his

own extremists, Hertzog and Fischer, and it was Hertzogism which lost him so many seats and a still greater proportion of votes. It is encouraging to hear that "every Unionist candidate was successful who combined brains with democratic sentiments." New lines of cleavage, therefore, are evidently superseding mere racialism; this is what appears to some of the hotter partisans as meaning that "there is no more difference between the two parties than between Tweedledum and Tweedledee.' What is it that has in so short a time obliterated the deep dividing lines of the war, or at least pushed them into the background? Nothing less could have done it than the intense spirit generated by the new union, the glowing consciousness of a new era, a new nation come to the birth. There is not even what was feared would constitute the differentia of parties, the sharp distinction of urban against rural interests. Nor are the mining magnates at all over-represented, rather the reverse, and they are found about equally on either side of the new house. Nor again is it an arraying of social classes against each other, but an intermingling of farmers, lawyers, mine-owners, traders, labour men, and experienced administrators. Not even the traditional isolation of Natal is to continue; they had talked of holding the balance, like the Irish members in the British Parliament, but the government will have a clear majority of thirteen over all the rest combined, while it can also count on Jameson's expressed desire to "help it to coerce" its own backveldt and Orange State division. It will need all possible strength. The problems

before it are critical.

Balliol College, Oxford.

A. L. SMITH.

TAXATION OF CORPORATE FRANCHISES IN

MASSACHUSETTS.

CONTENTS.

General Theory of the Franchise Tax Law, P. 357; Provisions of the Constitution as to Taxation, p. 358; Taxation of "Intangible Personalty,' P. 358; Constitutionality of the Law; upheld as being an "Excise Tax," p. 361; Taxation of Foreign Corporations, p. 363; Amendments of 1903, p. 365; Amount of revenue produced, p. 368; Distribution of the Tax, p. 368; Application of the Statute, with examples, p. 368.

BY legislation passed in 1864 and 1865, Massachusetts estab

lished a system for the taxation of corporations which was then new to this country. This system, with some changes, has continued in force without interruption and has been rightly regarded as Massachusetts' distinctive contribution to the practice of taxation in the United States. By this system all corporations organized with capital stock under the general or special laws of the State for the purpose of profit in manufacturing or mercantile business, or of conducting a trust company, or the insurance business, and all corporations, wherever organized and operating in Massachusetts, in the business of railroads, street railways, gas and electric light or power companies, and water companies,1 are taxed by the Commonwealth upon their "corporate excess." This "corporate excess" is the margin of value residing in the shares of stock of each corporation respectively, after deducting therefrom the value of the property of the corporation taxed by the municipalities where such property is situated. There are variations in the application of this general rule to specific kinds of corporations, but in general the underlying principle of the system is as herein stated. This method of taxation

'Not all of these classes of corporations were included within the original acts, but the general method has from time to time been applied. See Acts of 1864, Chap. 208; Acts of 1865, Chap. 283; Acts of 1885, Chap. 238; Acts Acts of 1888, Chap. 413; Acts of 1898, Chaps. 417 and

of 1886, Chap. 270;

does not apply to savings banks and mutual insurance companies. For these classes of corporations other forms of taxation by the Commonwealth have been devised.

Since colonial times Massachusetts has been wedded to the so-called general property tax. The only provision of the Constitution relating to taxation states that the legislature shall have power "To impose and levy proportional and reasonable assessments, rates, and taxes, upon all the inhabitants of, and persons resident, and estates lying within the said Commonwealth; and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities, whatsoever, brought into, produced, manufactured, or being within the same." In the first of these two provisions proportional and reasonable taxation of property is authorized. The laws2 of the Commonwealth now and for many years upon the books provide that "all property real and personal situated within the commonwealth, and all personal property of the inhabitants of the commonwealth wherever situated, unless expressly exempted by law, shall be subject to taxation." Real property is, for the purpose of taxation, land and "buildings or other things erected on or affixed to the same." The principal items of personal property enumerated as being subject to taxation are:

I.

2.

Goods, chattels, money, and effects.

Money at interest and other debts due the person in excess of that for which he is indebted or pays interest.

3. Public stocks and securities, bonds of railroads and street railways, and stocks in moneyed corporations.

4. The income from an annuity and the excess above two thousand dollars of the annual income from a profession, trade or employment.

With the exemption statutes which affect in some degree all or nearly all of these classes of property we are not now concerned.

The chief difficulty in the equitable enforcement of the general property tax arises from the impossibility of discovering and assessing fairly that class of property commonly called "intangible personalty,"-money, net credits, and securities. Previous 'Acts of 1909, Chap. 490, Part I, Secs. 2, 3 and 4.