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a considerable increase, as does the cost of the executive department. A great increase is shown in the cost of the school system and of the maintenance of humane institutions, partly, no doubt, due to the shifting of a part of that burden from the local political units to the State Government. The largest increase (162%) is shown in the cost of furthering agricultural interests, which, as is known, have been particularly fostered during recent years; and an increase of 308% in the item "various State commissions," the cost of which was the third largest item in the figures for 1896. The increase in these last two items is most instructive, when one bears in mind the make-up of our State Legislatures, and the ease with which mutually satisfactory appropriation bills are passed by the members. The support of the prisons and reformatories does not seem to lie within the range of such measures. In this connection it is noticeable that the increase of expenditure has kept pace in closely allied lines of expenditure. So, for instance, prisons and reformatories; the State Capitol and the Capitol grounds; the expenses for the executive and for the judicial departments; the cost of maintaining the legislature and of printing the public documents; in all these pairs of items the rates of increase have been more or less the same.

In general, the increase of expenditure has a threefold explanation: the ample revenue of the State, derived largely from taxing corporations, and hence not felt as a burden by the average citizen; the ease of appropriating public money at the behest of various discordant interests represented in the Legislature, agreeing, however, in their policy of extending the government's activity and depleting the treasury; and, to some extent, the assumption by the State government of functions heretofore peculiar to the local governments.

It should be said in extenuation of these facts that the figures for the next fiscal years will presumably show a falling-off in some items of expenditure. We incline to the belief that this will be but a temporary set-back.

A State Tax on Rentals is proposed by the Massachusetts Tax Commission, whose report has recently been made public. The majority report departs in a striking way from the lines usually followed by the similar reports of tax commissions, which, heretofore, have in most cases concerned themselves chiefly with recommending a variety of inquisitorial methods aimed at compelling

the taxpayer to divulge and the tax assessor to find and properly assess all taxable property, especially personal property. These methods of reforming our State and local tax system, familiar to us since Colonial times, are advocated in the minority report of the Massachusetts Commission, and need not be further referred to. The majority of the commission distinguishes itself by cutting loose entirely from antiquated notions on the tax problem, the outgrowth of earlier and far different industrial conditions, and squarely faces the problem as it presents itself to-day in its industrial and political aspects. Its leading recommendations have in view an increase of the State's expenses due to the proposed assumption of county expenses by the State government, and a decrease of the State's receipts owing to a proposed exemption from taxation of personal property of residents representing investments outside of the State, if taxed elsewhere. The balance between receipts and expenses is to be restored by the imposition of two new kinds of taxes: a 5% inheritance tax on estates above $10,000, with an abatement allowed in the case of estates valued at from $10,000 to $25,000, is proposed, in keeping with the policy adopted in so many States during the past twenty-five years. A 10% tax on rentals in excess of $400 is also proposed. Such a tax, though well known and widely prevalent in Europe, for instance in England and Germany, would be a surprising innovation to the American taxpayer. Much would be in its favor. It would be well adapted to the local revenue system, as is, for instance, the case with the Berlin tax on rentals; in our country the rapid growth of cities and the general fluidity of capital would tend to make such a tax a direct one, in the sense that its burden would tend to fall on the tenant class, the consumers of houses; the disparity between the class of taxpayers and that of voters, which is now so apparent, would be in part remedied; the assessment of the tax would, no doubt, be easier and fairer than that of our present property tax; and the collection of the tax would be as easy, and its evasion as difficult as in the case of the present real property tax. However great the advantages of such a tax on rentals would be, its adoption in Massachusetts, as in every other State, is quite unlikely, owing to the opposition of the urban voters to any such scheme of apparently adding to their burdens, while the rural voter will not feel any incentive to put the plan into effect.

It is interesting to note that the majority of the commission also recommend retaining the State tax on property, as it is now levied

in most States as an adjunct to the local taxes, while also retaining the independent sources of State revenue. The reason given is that by preserving the State tax on property as a direct burden upon the people, "a sobering sense of responsibility in the expenditure of the public revenues (will arise) with the need of a levy of immediate taxes,” which is, as we have seen above, borne out by the experience of Connecticut during the past decade.

In many ways the report of the Massachusetts Tax Commission is a notable document, and will, we do not doubt, contribute much to the discussion, if not to the solution, of the State and local tax problem.

The Consumer's League. Dr. John Graham Brooks has issued a pamphlet describing the aims and methods of the Consumer's League. This league is a good practical illustration of the connection between economics and ethics. It at least shows how ethical considerations may be made to influence economic practice. It aims to better the condition of those who work, by buying preferably products which are made under good sanitary and economic conditions. It is especially opposed to the sweating system, and by means of its white list it gives to its members a ready means of discriminating between those stores which show a proper consideration for the welfare of their employees and those which do not. The sphere of activity of such a league is obviously limited. When our goods pass through so many hands before reaching the consumer, it is often impossible to make one's demand felt upon the person originally responsible for the conditions under which they are produced, but it will serve a useful purpose, if it does no more than call the attention of people to the responsibility of the consumer, a fact too often neglected in theoretical economics, and yet a fact of the very greatest practical importance.

Social Comptabilism. Monsieur Solvay has issued in several languages* a new statement of his theory of the measure of transactional value which was reviewed in this periodical in Nov. 1894, but he does not make it any more clear, how he is going to make a measure of value out of a thing which has no value.

* Ernest Solvay : Principe et Raison d'être du comptabilisme social ; Social Comptabilism ; Gesellschaft; licher Comptabilismus. Brussels, 1897.

His argument is that, if we can use a commodity as a common denominator we can use the denominator without the commodity. "This common denominator," he says, "does not of necessity remain invariably tied to the thing, money, or more generally to any sort of material support which has served to define it at a moment. Once fixed it may be considered independently of this support; becoming thus a permanent quantity in time and space." (p. 5.) This seems to us as reasonable as to assert that, because an elevated railroad can carry heavy trains of cars on spans 200 feet long, when once the road is established it would still continue to do its work, if we were to knock away the columns which now support it. The excellent account by Professor Hector Denis of the check and clearing service in the Austrian postal savings bank which is appended to Monsieur Solvay's essay on Social Comptabilism does not do anything towards making his plan more reasonable. This Austrian system is a remarkable example of the possibilities of credit, for according to it comparatively small payments made by persons in one part of the empire to persons in other parts are rendered extremely easy by a simple method of transfers. But, as he himself states, this bank requires a fixed monetary deposit of 100 florins before any transactions can be effected (p. 22), and these are either silver or gold or a promise to pay silver or gold. It is perfectly true that it would be conceivable that people might make deposits of other forms of merchandise, grain, pig iron, etc., and might obtain credits against those, but unless their credits were expressed in terms of metallic money there is no doubt that credits based on gold or silver would very soon become so much more popular than those based on any other merchandise that the very process of evolution which has set apart those metals as the money metals, of the world would soon restore them to their old rank and quietly supercede Mr. Solvay's ingenious plan.

Is the middle class being crushed out? The address delivered last June by Prof. Schmoller before the Protestant Social Congress in Leipzig is significant for more reasons than one. Prof. Schmoller was one of the most brilliant of the group of men who established, a quarter of a century ago, the Verein für Socialpolitik, and who were nicknamed by their opponents Kathedersocialisten, or, as it is sometimes translated, professorial socialists. They were all economists of more or less radical tendencies who

saw very clearly the evils of the modern industrial system, especially its tendency to crush through extreme competition the small producer and the wage receiver, and who are to a large extent responsible for inspiring much of the semi-socialistic legislation of Germany since the close of the war with France.

One would naturally expect, therefore, that in choosing for his subject "Has the Middle Class Increased or Diminished during the 19th Century?” Prof. Schmoller would be inclined to take a pessimistic view of the situation and to hold that the middle class had diminished. He is, however, above all things, honest. He does not hesitate in the least to say very plainly that the middle class has on the whole held its own during the past few decades. He is frank enough to say that the views which he now expresses differ from those which he publicly expressed in the '70's. “Twenty five years ago,” he says, “as a result of the statistical material which was then available and of the economic and social conditions then in existence, partly also in consequence of my more limited studies, I saw only one movement, the increasing differentiation of society, a dangerous menace of the middle class. Between 1850 and 1875 the German peasantry did undoubtedly lose ground. To-day I see a very complicated development. By the side of the still existing and increasing differentiation, I see the rising of all the strong and energetic elements of the lower classes and of the middle class, and I say it is a question of fact which predominates."

This general thesis is proved by Prof. Schmoller in a painstaking and careful statistical study of the various elements which go to make up what is called the middle class in Germany. The peasantry, the smaller independent tradesmen are carefully examined, and the same surprising result is reached that on the whole they have held their own. From 1700 to 1850 it seems to be evident that the peasants and mechanics increased in Germany and improved their condition; that from 1850 to 1897 the middle class in agriculture did not decrease. In industry and trade the number of independent business men did not, it is true, increase in proportion to the population, and did in some cases diminish, and the number of dependents increased very much indeed; but if we take into account the higher positions in the staff, the superintendents, the highly paid workmen, and the liberal professions, the weakening of the middle class does not seem material; indeed it may have already been overcome, and there are tendencies towards the formation of a new middle class. These results are very important as

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