ment) for a less amount of personal property than had been assessed in his former place of residence. But this applies only to the first year, - after that the assessors are free; and even in the first year it is not certain that the law is always followed. The truth is that the present system offers great temptations. A rich man, coming into a small town and building a handsome house there, adds in any case so much to its taxable resources. The assessors have everything to gain and nothing to lose by attracting such men as residents. Bargains are doubtless very rare; but, what with ignorance as to the amount of property which is taxable, unfamiliarity with the standards of metropolitan wealth, desire to attract new residents, and the competition of other places, it results that assessments for personal property sometimes are not made at all, and very commonly are made at figures much less than moderate.

This situation again has its effect on the assessors in the cities and in other places where the tax rate is high, and where some attempt is made in general to tax according to the letter of the law. A heavy assessment may be met by a change of residence to another town. The larger number of attractive places within easy reach of the cities, and especially of Boston, makes such a change a comparatively simple matter. Where the assessors, rightly or wrongly, push a taxpayer hard, he can give notice that he proposes to take up his domicile elsewhere; and the assessors are helpless. His object may not be to evade his just share of the public burden. It may be simply to avoid such a full disclosure of his affairs as results from the detailed sworn statement which alone the assessors may accept; it may be that he believes and in good part is justified in believing, as we shall presently explain that taxation as now prescribed by law works injustice. In any case, the larger a man's means, the easier it is to make a change of residence. Persons of small means, or those tied to any place by business or profession, cannot bring such pressure on the assessors. Hence here again we have a cause of embarrassment for the tax officials, of inequality in assessments, of irritation among the citizens.

*

The taxation of personal property in the form of securities and investments is thus a failure. It is incomplete, uncertain,

not proportional to means as between individuals, grossly unequal in its effects on different parts of the state. The experience of Massachusetts in this regard is the same as that of the other states of the Union. Everywhere, without exception, the testimony is that this part of the system of the general property tax is unequal, unsuccessful, often demoralizing to tax officials, always irritating to taxpayers.

The experience of Massachusetts is the more striking, because here the difficulty does not lie mainly in the administration of the tax laws. The assessors are usually honest, competent, zealous. We have heard much of grave abuses, of almost corrupt laxity, in other states. But in this commonwealth, notwithstanding occasional defections (some of which we have just referred to), the standard of public duty continues to be high, and the cause of failure is not to be found mainly in official dereliction. It lies in the system itself.

42. The General Property Tax in North Carolina. - New York, Massachusetts, and, to a less extent, Maryland are states in which industrial and commercial development is more advanced than it is in many of the states of the South and West. Recent studies of taxation in some of the less advanced states have shown that care should be exercised in applying to purely agricultural communities conclusions drawn from the experience of communities with more diversified economic conditions. As Professor Hollander, the editor of the work in question, has remarked: 1 "It is upon the fiscal conditions of the more advanced commonwealths, where abuses are greatest, both in kind and in degree, that the attention of writers upon American public finance has hitherto been centered. The more careful investigators have been explicit in stating that whatever conclusions might be reached were applicable only to similarly circumstanced societies. But the caution has not always been respected, and the science of finance, like the science of eco

1 Studies in State Taxation, edited by J. H. Hollander. Johns Hopkins University Studies in Historical and Political Science, Series XVIII (Baltimore, 1900).

nomics, is exposed to the danger of mischief-making, as the result of rule-of-thumb application of qualified theory. Detailed acquaintance with the fiscal experience of a group of less highly developed states, where corporate organization is limited and intangible wealth a minor element, cannot fail to prove serviceable in this connection."

From the studies edited by Professor Hollander, the account which Professor G. E. Barnett gives of the working of the property tax in North Carolina is reproduced here:1

Contrary to the tendency in many states, taxation of property has been of increasing importance in the financial system of North Carolina, from its inception to the present time. Up to 1850, the poll tax rivaled it in productiveness; but when, in that year, what had been a real property tax became practically a general property tax, its return to the state treasury soon outstripped the yield of the poll tax. Since the war, the poll tax has not been paid to the state treasury, and the general property tax has been the mainstay of North Carolina's fiscal system. The increasing importance of this tax is shown by the rise in its rate from time to time. From 1819 to 1855 the rate on property remained stationary at six cents on the hundred dollars. In 1855 this was raised to twelve cents, and in 1856 to fifteen cents. An increase in the kinds of taxable property has accompanied the increase of rate.

The present rate is forty-three cents, apportioned to various funds as follows:

The present constitution of North Carolina provides that "Laws shall be passed taxing by a uniform rule all moneys, credits, investments in bonds, joint-stock companies or otherwise, and also in all real and personal property according to its

1 With the consent of the editor, author, and publisher.

2 As has been said above, the tax for public schools, while levied by the General Assembly, is a county tax in collection and distribution.

true value in money." Prior to the adoption of the present constitution in 1868, there had been no constitutional principles governing the property tax. The amendments of 1835 had enunciated certain rules with regard to the capitation tax, but had left the General Assembly free to levy other taxes as it might see fit. The clause of the present constitution providing for the exemption of certain forms of property is as follows:

'Property belonging to the state, or municipal corporations, shall be exempt from taxation. The General Assembly may exempt cemeteries and property held for educational, scientific, literary, charitable, or religious purposes; also, wearing apparel, arms for muster, household and kitchen furniture, the mechanical and agricultural implements of mechanics and farmers; libraries and scientific instruments, or any other personal property, to a value not exceeding $300."

Over two thirds of the total amount raised by taxation for state purposes in North Carolina is from the general property

tax.

More than one half of the school revenue and the larger part of county and municipal revenue is from the same source.

Assessment and Collection. — The system of assessment used in North Carolina is that popularly known as the "listing system." Every fourth year, the board of commissioners of each county appoints "three discreet freeholders" in each township who "ascertain the true value in money of every tract or parcel of land or other real estate with the improvements thereon and personal property." This board of three assessors is empowered to administer oaths. The assessment thus made continues in force for four years unless structures of the value of $100 are erected or destroyed on the lands thus assessed. In such case, the assessment is to be changed. The assessors must advertise at five places in the township and must attend at two or more places for the purpose of receiving lists and assessing property. The property owner must appear before them and list his property, which they shall value. The assessment made by this board must be returned to the county commissioners, who with the chairmen of the township boards form a "board of equalization," with power to raise or lower any valuation put on any piece of real or personal property by the township board.

In years other than assessment years, the county commis

sioners appoint one list-taker for each township. All lands in the township are listed by him at the valuation previously assessed on the same by the board of assessors. Personalty, however, is listed anew each year, and its valuation may be changed.

Each property owner must appear before the list takers and assessors and file a list of his property. This list includes the following items :

1. Quantity of land owned in township.

2. Horses, mules, jacks, jennies, goats, cattle, hogs, and sheep, separately, with the true value thereof.

3. Farming utensils, tools of mechanics, furniture, firearms, provisions, libraries, and scientific instruments, separately, with the value thereof.

4. Money on hand, including all funds invested within thirty days before in United States bonds or other non-taxable property.

5. The amount of credits, including interest, whether in or out of the state. Bank deposits and property in the hands of commission merchants are deemed credits. If any credit be not regarded as entirely solvent, it is given in at the market or current rate. The party may deduct from the amount of credits owing to him the amount of collectible debts owed by him as principal debtor.

6. Building and loan association stock.

7. Money investments, stocks and bonds of whatever nature except bonds of the United States and of North Carolina, and such other bonds as may have been expressly exempted from taxation by law in this state.

8. All other personal property whatever.

9. The gross income of the party the twelve months preceding, not derived from property already taxed, and also income beyond $1000 derived from salaries or fees or both.

The law further provides that the taxpayer must swear that the list handed in by him contains all the property which he is required to list and that the value fixed thereon is a true valuation. It is a misdemeanor punishable with fine or imprisonment or both for a taxable person to refuse to list, or to refuse to answer any questions respecting his property. The board of