IMAGE EVALUATION TEST TARGET (MT-3) ::» '^"»'--j*^ '^;-:'' LETTERS ON MUNICIPAL TAXATION, 1 ■< .^. BT THOMAS FYSHE. HALIFAX, N. S. A. Ac W. IVIAOIv lNr.A.V. • 1880. 26 CENTS. '^ " .2 !) -t JE^ >: y ' - / v.. '. vA./ A v" '.I \ 1 >l LETTERS ON MUNICIPAL TAXATION, BT THOMAS FYSHE. y\ HALIFAX, N. S. A. 4c "W. MACK INLAY. 1880. *• .» v.. J, fc-. A, fi i i i / / f -. ..J '. I.! ' 'A . .i . " i7 ^H$^ PEEFATORY NOTE. These letters on Municipal Taxation were written at difrereiit times to the "Morning Chronicle" of Halifax, and published iu tliat newspaper. They were written with the view of directiuj; the attention of the ratepayers of the city to the gross defects of their assessment law, and in the endeavour to discover a better vsysteni by a discussion of the principles on which taxation should be levied. AVhether or not I have been successful remains to be seen. J Jut the great importance of the subject, and the general dissatis- faction, frequently expressed, with regard to nearly all the local assessment laws on this side of the Atlantic, justify me in thinking that at any rate the time has come for a more caieful study of the problem of local taxation than it appears to have ever received, either in this country or in the United States. As a small contribution cowards that end these letters are now re-published. In advocating a land tax for municii)al purposes I am not blind to the consideration that the reasoning by which it is supported would be equally valid in support of a land tax for state or national pur- poses; although in the wider area the principle would be more •litticult of application. I do not see that any Government has the right to take higher ground on the question of taxation than this, namely, that each citizen shall contribute towards the general expeuvses of the community he lives in only in proportion to what is done for him, in a material .sense, by the community. That would be perfect equality of taxation, and it can be reached only by making unim- proved land the basis of assessment. T. F. Halifax, 12th February, 1S80. -W il I 1'! Jl ,i -»T .>^.. -::...»- V! " LETTER I. THE CITY'S DIFFICULTIES MAINLY DUE TO THE ASSESSMENT LAW. If one is to judge by the number of letters appearing in the newspapers from day to day discussing our city affairs, that subject is at last forcing itself upon the attention of the people. On this side of the Atlantic we are apt to take but a languid interest in the conduct of our municipal business. There is no ambition on the part of men of culture and wealth to serve their fellow-citizens as aldermen or City Councillors, the natural result being that those offices are usually filled by people who have a comparatively small stake in the community, and ' "ho, to say the least of it, are more interested in the spending of taxes than in the raising of them. But if we are to find special fault with any class of the community, it should rather be with those who shirk their duty to the public t^an with those who, at any rate, make some effort to perform it — rf ler with the co).temptuous indifference of the men who should govern, than with £he shortcomings and rough and ready methods of those who do. It may be readily granted that our present city government is grossly defective, but it should also be admitted that we are all more or less responsible for it. We have a chronic and constantly growing deficiency in the revenue, a steady growth in the rate of assessment, and great inequality in the incidence of taxation. But none of these things are to be wondered at, for our assessment law is crude enough to have been the work of either the most ignorant or the most self- interested of legislators. Justice, even in a very moderate degree, is not attainable under it, and good civic management is equally out of the question. ' , . It 18 almost idle to talk of petty economies in the civic administra- tion when the great source of our difficulties is in the law itself. What good can be expected of a cheese-paring economy on the one hand, shewing itself in petty savings from policemen's wages and the salaries of the minor city officials, when, on the other, tens of thousands of dollars of the city's revenue remain uncollected and >iucollectable 1 V ];!i i ,; li! ( li :ii ; 'I I do not mean to say that there is no room for economy — that the revenues of the city are spent to the best advantage. On the contrary, it is only too obvious that such is not the case, and tliat a great deal may be done towards making the wliole administration of the city more effective and less costly. But even with tin? best possible management and the utmo.*t economy, the greater evils from which we are sulfering would scarcely be touched. Those evils, as I })ropose to show, are inherent in the assessment law, and until that law is brought into consonance witii reason and common sense, there can be little real progress made towards a better to of things. Let u., Hrst clearly understand the nature of our difficulties and we shall then be better able to speak of the measures required to remove them. . "With regard to the chroni deficiency in the revenue, the City Auditor, in a letter to the Mayor on this subject, of date 9th ])ecemberlast, after discussing the matter at length, says : — " There is no escaping from the fact that the city is going behind at the rate of 85,000 or $6,000 every year, and that if the downward progress be not arrested, it will be necessary in a very short time to negotiate a new loan for deficiencies." Ijut this .$5,000 or $6,000 of annual deficit, of which he s))eaks, docs not by any means represent the total loss to the city from uncol- lected taxes. It has been customary to set aside in the estimates a certain sum every year to provide for those losses, but that has proved altogether inadeijuate, as the following figures too clearly show : — Uncoird as .„,, , Year '•'°*"^ »""'■ '-''*y Keserved „xolu8ivt of assessm't. books — for losses. ■..- p . Ist May, 187;). " ' ^'*^'^*- 1873-4 S187,274 S 4,4fi5 8.3,500 $ 7,96.'. 1874-5 207.448 6,(i4() 3,500 10,14(; 1875-G 224,587 7.133 4,(K)0 ' 11,123 1870 7 2251,351 11.978 4,500 16,478 1877-8 233,181 2.M47 4,500 1878 9 233,079 ' 54,456 5,000 To these figures must be added the loss on water rates, which are collected separately. Total Uncollected Year. AesesBiiient. 1st Sept. 1879. 1874-5 §58.757 8 4.607 1875-6 50,301 6,8.30 1876-7 62.200 9.577 1877-8 62..570 12.415 18789 64,121 22,944 . . Unfortunately I have not the figures for the water rates for the year 1873-4. lUit for the succeeding three years, namely, 1874, '75 and '70, the returns may be taken tt) be all in, auJ nothing more \ y, al St y li Is (t (> V !i s f t collectable. For those three years the city and water rates combineJ show the following result : Per cent of Year. Total. Uncollected. loss to assessm't. being total loss. total asessm't. 1874-5 $26«.205 $14,843 $5.57 1875-6 283,978 17.9(52 33 1876 7 291,551 20,055 8.93 It is just possible that some of the rates for 1876 may still be collected, nevertheless these figures show uumistakeably that the annual loss to the city from uncollected taxes is enormous and that that loss is increasing rapidly year by year. As to the prospects for the future the Auditor holds out no hope of improvement. He says : " I think it would be hardly possible under cTur present system of assessment to realize from our annual estimates more than has been realized in the past. In fact it cannot be doubted that considerable portions of the taxes annually levied are bad from the beginning — from the moment they are placed on the Assessors' books." Surel}"" no further proof is required to show that the assessment law is chiefly responsible for our ever growing deficit. By assessing the tenants of real estate, a great many poor i)eople are assessed from whom it is quite impossible to collect anything. The proper remedy is to assess the owners, who are a very much smaller and wealthier body, who would give the city officials much less trouble in collecting, and who could easily reimburse themselves by adding the tax to the rent and collecting both together. With regard to the cause of the steady and remarkable growth in the rate of assessment, I have again to refer to the Auditor, who, in his report for 1878, says : — " The truth is, the advance in the rate of late years has been caused, not so much by increased expenditure as by diminished returns from the Assessors'," and here again the figures have an unmistakeable meaning. The following statement shows the annual valuation for the last twelve years of city property — real and personal — iov the purpose of municipal taxation, and the rate per cent, of the assessment : Keal Personal Rate of Year. estate. pioperty. Total. ass't. 1867 8 8,001,800 $ 7,905,000 $10,020,800 $0.79 1868 9,245,944 7,431.753 10.677,697 0.87 1869 9,799,330 7,131,222 16,933,ii.52 0.92 1870 11,507,872 7,210,000 18,75.3,872 1.05 1871 10,432.0!K) 6,846,300 17,278,;{96 1.00 1872 9,476,300 8.785.495 18,261.795 1.03 1873 11,458,791 ' 7,958,055 19.410,840 1.01 1874 11,881,091 8,0.50,7.59 19,938,450 1.05 1875 11,921,1.35 7.800.105 19,781,240 1.15 1876 11,902,017 0,.571.781 18,.533,798 1,25 1877 11,943,832 5,751,9(52 17,095,794 1.33 1878 11,929,480 5,.320,7()7 17,250,247 1.30 1879 11,222,494 . 3,841,084 15,063,578 1.53 8 li^ ; X III From these figures, which are conclusive as to t^*-^ truth of the Auditor's remarks in so far as they relate to the last five years, it would appear that the aggregate personal property of the citizens of Halifax is now very much less than at any time since 1867 ; that it has fallen during that time from $7,965,000 to $3,841,000 and that since 1875 the reduction has been at the rate of a million dollars per annum. An astonishing state of things, truly 1 But the astonishment is not lessened when we find that the valuation of real estate between the same dates— 1867-9— h^^s risen from $8,061,800 to $11,222,000, and that it has varied comparatively little during the last seven years. After making every reasonable allowance for hard times and low prices, when stocks of merchandize may be expected to be at their lowest, both in quantity and value, the above valuations of personal property still remain inexplicable on any other hypothesis than that the law is capable of the most wholesale evasion, and is, in fact, as regards personal property, impracticable and absurd. The remedy for this state of things I propose to discuss later on. As to the third great evil from which we are suffering, viz., the gross inequality of our city taxation, it is no less easy to find its source in the assessment law, which provides six different sets of amateur assessors for the six different Avards of the city, each set no doubt with a standard of its own and with its own notions of how the law should be carried out. With a professional assessor, who should make it his first and only duty to assess all citizens according to the same standard and by one rule, the inequality in the valuations of real estate would, no doubt, disappear. But the difficulties in the way of an equitable assessment of personal property are altogether insuperable. A West India merchant may escape altogether if he should happen to have shipped off all his fish, and his inward cargoes have not arrived, or have just been sold when the assessors come round ; while goods in transit which have come into the city for shipment abroad, are liable to be pounced upon by the assessors and forced to pay tribute, '^ne dry goods merchant pays on about half the value of his stock, whde his wealthier competitor in the next ward, with a larger stock and finer store, pays only on a third or a quarter of his. And there is no possibility of bringing about equali*^y by an appeal, for both are under-taxed. Then again there is no effort made to reach personal property other than household furnicure, merchandize and ships. Indeed there is no possibility of doing so in most cases except by putting the parties under oath and making them declare what investments they hold. Yet it is well known that hundreds of our well-to-do citizens have large amounts of money in the banks on deposit receipt, or hold invest- ments of various kinds which are subject to assessment But even if it were possible to carry out to the letter the provisions of the law, the results would probably be more disastrous than now follow from its being to a great extent ignored. The Act affects great show of 9 justice by providing that the assessment " shall be rated by an equal pound rate upon the value of the real and personal estate within the city." It afterwards defines personal property tr nean household furniture, monies unemployed or invested in public or private securities, goods, chattels, wares or merchandize, ships and vessels, water, gas, or insurance stocks, bank stocks, and money deposited in banks, Ac., &c. A little investigation will show us how this " equal pound rate " works in practice. We shall suppose that a mercliant pays the tax on 75 per cent, of his stock of $100,000, which he turns over three times a year, making a total profit, including i:/:;erest on his capital, of 15 percent.net. His income would be $15,000, and he has paid say 1^ percent, tax on $75,000, or $1,125, the proportion of the tax to his income would be 7^ per cent. The retired merchant, whose capital to the same amount is loaned out at 7 per cent, would have to pay the city out of his income 21 1 per cent. The owner of 6 per cent, bonds, other than provincial or city, would pay 25 per cent. Banks, whose profits are capitalized at 6 per cent, would also have to pay out of all profits derived from city business 25 per cent. And the still more unfortunate owners of money on deposit with the banks at 4 per cent, interest would have to pay out of their income to the city no less than 37^ per cent. So much for the equality aimed at by the Act. Bad as the practice is of evasion and shift, and demoralizing as it must be to the community, it can hardly fail to arrive at a greater degree of equality than the law even contemplates. Another cause of inequality is the provision in the Act that the occupants of real estate, being yearly tenants, must be assessed on ten times their annual rental, which in the majority of cases is very nearly the market value. Whereas the rich owners of large properties occu- pied by themselves, are, as is well known, assessed according to the fancy or caprice of the particular set of amateurs deputed for the occasion ; but almost always on a very low estimate of the value of the property. As the great body of the poorer citizens have to rent their shops or dwellings, the injustice of this distinction is very apparent. And in view of it, the conviction is forced upon one that the owners of real estate had more to do with the fashioning of this preciout assessment law than was good for the rest of their fellow-citizens. 10 LETTER II. PROPOSED AMENDMENTS. 11 w nil Having phown, as I think, pretty conclusively that the defects and growing difficulties of our city government are rr.ostly due to the assessment law, I now propose to consider how that la\v may be amended so as to secure to the city an ample and easily collected revenue, and to the citizens perfect equality of taxation and a steady rate of assessment. I must begin by setting aside all personal property as utterly unfit to form a basis for any equitable system. If more proofs of its unfit- ness are required than have already been presented, they may be found in the experience of every community which has tried it. Biu, indeed, tl:e objections to it are so numerous and so obviously fatal that one wonders how it ever could have been fi.ved upon for such a purpose. Lest it may be thought, however, that I am overstating the case, take the following from the experience of the State of New York. I quote from the New York "Nation" of 27th March last: — *' The annual report of the New York State Assessors, submitted to the Senate last month, contains a great mass of facts bearing on the system of taxation in this State, which show that the glaring inequalities and injustices, so frequently exposed before, continue unchanged. The valuations of each county are determined by the local authorities, some of them (particularly in the large towns) putting them at their market value, or nearly that, others putting them at any figure that may strike their fancy. Personal (iropevty, nominally always taxed at its full value, in a large majority of cases escapes altogether. Some of the results of the system are quite amusing. In Rochester and in Utica with a population of 100,000 tiie assess- ment of personal property to individuals was, in 1872, not equal to the assessment of two widows in Batavia, and the whole assessment was §521,000 less than the bank capital. In Utica again, in 1877, while the increase in assessed value of real estate from 1872 to 1877 was over $15,000,000, the personal property liad increased only $1,473,55J — a state of facts which would go far to show that those investigators of economic phenomena, who hold that real estate goes on steadily holding its own amid the general wreck and shrinkage of all other forms of wealth are riglit after all. Another peculiar thing, however, about Utica in 1877 was the fact that thare were only G7 persons assessed for i)ersonal property in the entire town. Some towns show the most surprising and gratifying growth in wealth in times of i)ro- found depression, for instance New Hartford (population •i,;507). In 1872 this little town had only f?32.800 personal property. In 1876 it could boast $700,000 notwith- standing that Verona with a larger population, in 1877 had only $12,850. "The State Assessors recommend, as everybody who has investigated the sub- ject for the last ten years has agreed in recommending, a total change of system — the abandonment of the personal property tax." The same incqualiLies are complained of wherever personal pro- perty ia assessed, and nothing would be easier than to pile up evidence on this point. It is clear, therefore, that the first stop towards a rational system must be to abolish the assessment of personal property. Some people will immediately say, let us substitute income for personal property. This proposal has, I believe, many influential 11 supporters, cliiofly on the ground, as the City Auditor puts it, that " taxation should be in proportion to the ability to pay." But the history of the income tax wherever it has been imposed has not been such as to render its introduction among us desirable. Like the tax on personal property it would bo productive of the most glaring injustice. Those only would be fully t^axed whose incomes were fixed and known. Those whose incomes were at all uncertain would make largo allowances in their own favor ; many would not stop short of false returns, and so the honest trader would be handicapped and a premium put upon fraud. As a means of demoralizing a community blunting the moral perceptions, and in fact training men to, be dis- honest, there is probably none more potent than such a tax. J'or the gross inequalities which it could not fail to produce would lend an air of justice to attempts to evade the law on the part of those who might think themselves overtaxed. In a report of the English Commissioners of Inland Revenue (year 1870) they say with regard to the incame tax : — '* We therefore think that we may venture to generalize upon the facts which the most recent occasion of compensation cases has furnished. Those facts are that 40 per cent, of the persons assessed had underrated their incomes to such an extent that a true return would give an addition of 130 per cent." And in this connection they speak of the " demoralizing influence, so destructive to the character of a people, of the habitual and suc- cessful evasion of law, whether fiscal or otherwise." An Encrlish writer of eminence, Professor J. E. Thorold Rogers, in a recent article in the ** Contemporary Review," describes the income tax as the worst tax which has ever been invented or imposed. It is unjust, inimoml, delusive, and has done more to degrade the historical integrity of Englishmen than any other fiscal expedient whatever, not excepting lotteries." But in truth even the principle of such a tax for municipal pur- poses is inadmissible. If it were possible to assess such a tax equally, it would have the effect of driving away from the city all the wealthy peoj)le not directly engaged in business. A person, for instance, in receipt of $20,000 a year from investments, Avho carries on no busi- ness in the city, owns no real estate, but simply rents the house he lives in, would under such a mode of assessment, have a most exhor- bitant tax to pay. If the rate were equal to 1 per cent, on his- capitalized income (our present rate is 1.53) his tax would be .$3,333 per annum ; and ho .vould be very differently constituted from the rest of mankind, if such an imposition did not cause him to look elsewhere for a residence. The present law operates strongly enough in this direction, but indeed the present law is only an income tax in another shape, graduated so as to fall most heavily on capital not engaged in trade or invested in real estate. I cannot do better than quote here the words of ex-Mayor Richey in an address to the City Council in May, 1877, — an address con- IHI 12 1* i I (i taining many valuable suggestions which no one seems to have heeded. He said : — " We aim lo definitely at the rich man beoauie be is rich, without regard to the qualifying oircumstance of proportionately redounding benefit to hira of his resid- ence here, ttat we are apt to compel men of affluence and leisure to remove from among us, when otherwise their associations might induce them to remain. I will inake no comment here upon the score of i>riroiple, but would simply ask on tho grouud of expediency, whether it is altogether 'well thut we sli^nld, mere than other cities, treat the presence and expenditura of moneyed men rather as buidens than as benefits, or that in endeavouring to seize the shadow we should let go the sub- stance V* Adam Smith has observed in regard to the evil effects of a bad national tax : — "The capitalist is properly a citizen of the world, and is not necessarily attached to auy particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition in order to be assessed to a burden- some tax, and would remove his capital to some other country, where he could either carry on his business or enjoy his fortune more at his ease. By removing his capital he would put an end to all the Lidustry which it had maiatained in the country which he left." The argument is much stronger against a burdensome or unequal municipal tax ; in that it is usnally so much more easy lor tlie capi- talist to remove from one town to another in the same country than to giv«» up one country for another. The imposition of an income tax for local purposes has been tried, in England but is now completely abandoned ; so also has the per- sonal property lax, which has shared the same fate. Both taxes work disastrously in practice, because they are wholly unjust in principle. The one infers that it is just and equitable that the citizen should contribute in proportion to his income, and the other that it is equally so in proportion to possessions. In both, the claims of the city on the taxpayer are carefully considered, but in neither is any account taken of the proportionate benefit which each taxpayer is supposed to derive from his citizenship, and for which aloi o he is will- ing to pay taxes. Now this is an all important factor in the problem. People are not willing to pay a certain sum in taxes for particular services or advantages if they do not get value for their money, or if they know, or have reason to suspect that others receive the same or greater advantages for a much smaller sum. The standard of perfection in municipal taxation I take to be this, namely, that every citizen should be taxed in proportion to the value of the advantages which are derivable by him from living or doing business or owning property within the city. By advantages I mean all the benefits accruing to the citizen from the city government from the maintenance of order, the making, repairing and cleaning of streets and sewers, the supply of water, etc., and above all that chief advantage which comes from the L,are presence of a large population, giving variety of industry, easy intercourse, a large market and faci- lities of co-operation for personal profit or public benefit, in a word, the total advantages cf what kind soever derivable from city life. I 18 If this principle were carrried out no one could have any reason to complain on the score of inequality of taxation, for each would pay at the same rate .just for what he received and lor nothing more. Ho one probably will deny the abstract justice of such a principle. But the question immediately arises — is it practicable? I say it is eminently practicable ; that no principle caii be more easily put in practice ; that in short its tuperiority over every other principle of municipal taxation is shown, not more in its theoivticAl equity than in the faci- lity with which practical justice can be attained by it. This I shall eudeavour to show in my next letter. LE'i TER III. LAND THE PROPER BASIS OF ASSESSMENT. There is one kind of property which may be said to reflect in its value the exact sum total of all the different advantages to which I have already referred as pertaining to city life. That property, it is, perhaps, needless to say, is not goods, wares or merchandize, house- hold furniture, ships or vessels, debentures or deposit receipts ; it is not stock of joint stock companies, banks or insurance companies, all of which our assessment law so greedily seize upon ; it is not even shops, warehouses or dwellings, but it is the land which is pecessary to all of these. The area of land within the city limits reflects in its value all the advantages which are usually derived from living or doing business within those limits. Not only so, but each particular lot of ground or water front reflects in its value — in its selling price — the average net advantage derivable by the individual who occupies or owns it. The advantages usually derivable from city life arise from two different sources. The greater portion of them come, as I have already said, from the mere presence of a large population, brought together, no doubt, by the natural resources of the locality. Others are the result of city government — in the preservation of order, and in the other services it renders to the community. The latter class of advant- ages are obtained at considerable cost. The former are what may be called necessary advantages, that is to say, they arise from the neces- sity of the case, and by no one's forethought or provision, and are supposed to cost nothing. What we really do pay, however, for this class of advantages, is partly shown in the increased value of real estate over its value for agricultural purposes. It will be found that this increased value amounts to a tax on the general community quite commensurate to the benefits received, although it is a tax paid, not to the city, but to the owners or former owners of the real estate. 14 Ml i !j i 11* ! It !l il The direct effect of city government and city improvement is to still further euliance the value of roal esto,te, for the beueficiil effectis which flow from these, like the city's advantages of whatever kind, can be enjoyed only thruu^'h real estate. • Every citizen, by the mere fact of his being one, must occupy a portion or fraction ot a poition of the city's area. The price he is willing to pay, in public competition, for that area is the correct in«asure of the average advantages or benefits derivable from its occupation ; and therefore it is also the correct measure of the tax he should pay to the city for its contribution to those advantages. The same thing cannot bo said of any other city property, for the simple reason that there is no other property limited in amount and yet necessary to all, as being the only means by which city life with its advantages are attainable. Its price, therefore, always represents the equation of supply and demand, and nothing else. The price of all other property depends in the long run, which is generally a very short 'in, on the cost of production, and in most cases is cheaper in a large town than in a country village. For the purposes of taxation, therefore, such property is no criterion of anything. It follows then that if real estate, apart from buildings, were made the basis of assessment, perfect equality of taxation could be arrived at with ease. All that would be required would be one good " professional " assessor, (not half a dozen sets of ill-informed amateurs, as at present.) whose sole business it should be to arrive at the market value of every lot in the city — not as determined by the annual rent alone, but by whatever trustworthy evidence could be had. • As we have seen, the advantages derivable bj' any citizen from living or doing business within the city are only to be measured by the extent and value of the city's area which he may own or occupy. That is all, or the measure of all, he takes from the city, and therefore it is all lie should pay for. It is true that one person may own a house and five acres of ground attached to it right in the centre of the city. He may live in the house and leave the five acres of ground unused; and the advantage to hinf in any way will not be greater than if he only owned ami occupied the house. But the fault is his own. If he lias not capital or knowledge or enterprise enough to utilize his waste ground, he should sell it to some one who has. And this leads me to the consideration of one of the greatest evils connected with the present mode of assessment, which has not yet been touched upon, namely, the large extent of land scattered through- cut the city, used only as pasturage for cattle, or left entirely waste, and from which the city derives little or no revenue. Most of it is owned by well-to-do citizens, who are holding it until they can get a price for it which they deem satisfactory. Much of it, no doubt, was bought at greatly higher prices than it would now bring, but the city has nothing to do with that. What it ] 15 has tc consider is tlii-j, that those waste lotn cause the city's expendi- ture to be much higher than it needs bo, its revenue to be lower, and consequently the taxes of the citizens in general to be heavier, all to facilitate the real estate epeculations of a few. Streets have to be made, lighted, cleaned and kept in repair alongside of those waste lots just as if they were lined with warehouses and dwellings ; water pipes and sewers have to be taken past them, and the policeman's beat has to be lengthened on their account. The whole area of the city is by this means extended beyond what would otherwise be ample. Citizens living at the outskirts ot the town are further removed from their places of business than 'they need be ; many items of their expendi- ture are larger on that account, while the taxes of the whole body of the citizens are greater by the amount necessary to extend the city's advantages to land held on speculation. It is surely high time that such a palpable abuse as this should be removed. It can be no injus- tice to the owners of such waste ground to bo taxed on its market value, and this would be a simple and effective remedy. The city is really in the position of being joint owner of its own area, to the extent of having the power of taxation over it. Every individual who occupies any part of that area must pay, as it were, two rents for it — one to the registered owner for its use, and the other to the corporation for necessary work done, in order to make it more convenient and habitable. If any part of the city's area is loft vacant by the registered owner, the joint owner — the corporation— should not suffer for it. If the registered owner, in the exercise of what he conceives to be his absolute right, chooses to demolish half the city, which happens to be built on his land, and turn it into a pasture, under the present assessment law the corporation would at once lose half its revenue and be virtually ruined. But the registered owner ought to have no such absolute right. His land derives almost its entire value from the mere fact of a large population living on or near it, and not from any effort of his own, in addition to which large sums have been directly expended on its account by the corporation, who have no means of re-imbursing themselves, and at the same time doing justice to the rest of the citizens, but by taxing the property to its full market value whether it is covered with warehouses or left waste. !:■ • " ,"■ , '■ :• '■ " '•'■• " '< ;•■' -i ■ " • ■ » " Having discussed to some extent the principles which should govern municipal taxation, I would now suggest that the following should be the main provisions of any new assessment law : — 1. Real estate, apart from buildings, should be the sole basis of assessment, and it should be assessed as near as possible to its market value. ,.; v.i;s.-,... . . -., '. > .., ■'..•,.>,; ,L:.., ;.VfH.,...'i 2. Owners and not occupiers should be assessed, and taxes should be a first lien on the property. .,, i. .. . . , 3. There should be no exemptions whatevef, excepit of property occupied by the Imperial authorities, but the cost of that exemption 16 to the city should be refunded by the Dominion Government, inasmuch as the services of the Imperial troops are for the benefit of the whole Dominion — not for Halifax alone. 4. There should be but one assessor, and he a " professional." A better man could not probably be had ti>an the present Inspector of Assessments, and he should be allowed what bubordinate assistance he would consider necessary Nothing could be more simple than such an asspssment law, and nothing more equitable. If it were put in foi:ce I venture to say that the evils from which we are now suffering would almost immediately disappear. Instead of losing from $16,000 to $20,000 a year from uncollected taxes, we should not lose a dollar. This item alone would represent a saving to each tax-payer of from 5 to 7 per cent, of his taxes. The cost of collection to the city, both in labor and expense, would be greatly lightened, because the number of tax-payers to collect from would be reduced probably three-fourths or more, and the bulk of them would pay on demand. The variations in the rate of assess- ment would be reduced to a minimum, and would depend more on changes in the city's estimates than on fluctations in the value of :asse8Bable property. By means of such a law absolute equality of taxation, in so far as auch a thing is possible, would be secured. Any inequality that could possibly .exist would arise from the unequal assessment of property visible to everyone, and no glaring errors could be made without attract- ing attention and calling for instant correction. Moreover, the assessor's charaater and position would depend on the soundness of his judgment and tus strict impartiality. There would not be one standard for the owiner and another for the tenant, as at present, which practically means «ne law for the rich and another for the poor. It will, doubtless^ be «fcjected by the owners of unproductive real estate that it would not be fair to them to levy the whole city taxes on ground lots, because their property was acquired under a different system which, they had reasoti to believe, would continue. On the other hand it is obviously unjust to levy the taxes on buildings according to their market value, foe, as already explained, the value of buildings, like all other property not a monopoly, depends on the cost of producing them ; and, apart from the land, that value is no criterion of the city's advantages for which alone we should be taxed. A minor objection to taxing buildings as at present is this, that the public- Bpirited citizen who erects a cut stone warehouse of tasteful design and beautiful finish is taxed more heavily than his competitor in business who cares nothing for the credit or appearance of the city, nothing for public taste or for anything but his own dollars, and who does his business in the meanest-looking warehouse ot wood or brick, while perhaps using more ground and enjoying more of the city's advantages than his more cultivated and public-spirited neighbor. 17 Tho cry of "vestetl rights" is always raised on the slightest provocation, and is often very difBcult to satisfy. In this case I believe there would be no good ground for it. The owners of unpr(xluctive real estate have so long evaded their fair share of the city's ttxes that they would have no reason to complain if they were now called upon to contribute according to a scale which can be so conclusively shown to be equitable, even if they had to pay a little more than they had calculated on when purchasing the property. For any other class of citizens there would be, literally, no grievance left, connected with the levying of the city taxes. And, if the Assessor did his duty, it would not be in the power of any individual citizen to say, with reason, that he was unjustly taxed. LETTER IV. THE THEORY OF EQUAL TAXATION OF ALL VISlBIiE PROPERTY WITHIN THE CITY. In previous letters I took occasion to show that in common experience a tax on personal property was found to be unworkable with any regard to equity. Such a tax was at one time in partial use in England, as may be seen from some of tho precedents cited in the case of Kenny versus tho City of Halifax, decided by the Supreme Court of the Province some months ago. English experience showed that in those districts where personal property was taxed whole trades died out or rather removed to other parts of the country where the tax was not in force. And this notwithstanding that, apart from the tax, greater facilities for the growth of the trades in question existed in the localities they had left than in those to which they were driven. In a recent work on the local taxation of Great Britain and Ireland, a prize essay of the Statistical Society of London, by R. H. Inglis Palgrave, the author says : — " The original intention of the Statute 4.3rd of Elizabeth, the baaia of English legislature on tlie subject, has been construed to include stock in trado (personal property). The impolicy of the practice, the anomalies which it wiuld involve, the difficulties which were experienced in carrying it into effect, have caused the plan to fall into desuetude. The report on local taxation of 1843 put the matter in the clearest li^ht. But, as it may be held that, were the custom universal in the United Kingdom, such migration of an industry from one district to another (as appears to have been the result of the partial infliction of the impost therein described) would be impossible, it is sufficient to reply that the migration of an inilustry and its attendant capital from Great Britain to a colony or to some foreign country, is scarcely attended with more difficulties now, than a migration from one district of England to another a hundred years ago.' In a former letter I gave evidence to show that the working of this tax in the S*^ate of New York was looked upon as hopelessly bad, and that the State assessors had I'ecommcnded its abandonment I i % j 1 1 i 1 . 1 III' 1 1 If In our own city no man will bo bold enough to any that even any approach to accuracy or equity is niiide in the assessment of personal property. The fact that its aggregate valuation has fallen four million dollars during the same time that real estate has risen upwards of three millions, is sufhciently convincing on this point. All this proves with sufficient certainty that it i» a virtnal impos- sibility to make a personal property tax work eqnitably, or to prevent it doing very ^eat mischief. It would seem, however, that there are still some who think that we can afford to ignore the general experience of other communities, and that it is of no account to us whether a personal property tax ever worked satisfactorily in any other part of the world. They say that such a tax is just in principle, on the ground that all property within the limits of the city is equally benefitted by city government, and should therefore contribute equally towards the ex[)ense of that government, and that whatever failures may have occurred in the past, we must still keep on trying to devise some means of carrying into successful practice a thing which is so obviously unassailable in theory. I therefore propose to consider whether, after all, a tax which has invariably worked so badly, and even disastrously, is as sound in theory as its advocates usually take for granted. The various services attended to by our city government, and the cost of each to the citizens may be taken as follows. The figures are compiled from the estimates for the year 1877 8 : I. Police, Prisons— less Cit; Court, City Marshal's k Judgment Fees, &o. $29,860 II. Public Works, city property, streets, lighting, cleaning, sewerage ko, 94,897 III. Water 62,609 IV. Fire Department 9,388 V. Education 71,234 VI. Poors' Asylum. Hospital, &c 18,174 VU. Park and Gardens 5,125 1291,287 The cost of administration has been proportionately divided among the different services. . Now, the expenditure of this large sum of money on such a diversity of objects — ranging as they do from police and prisons to education, charity, and the beautifying of public places, is supposed to benefit equally all property within the municipality. But the question is, how is it done ? How does the dry goods merchant and the grocer, the jeweller or the banker, reap the benefit of this expendi- ture 1 Does it raise the price of dry goods, or groceries, or jewellery, or money ; or does it increase the profits arising from the traffic in these commodities? It could hardly bo considered a public benefit if it raised the price of these articles, the immediate effect of which would be to drive customers to better markets, and so lessen the business and importance of the place. No community would care to become incorporated with such an end in view. But in truth Id such a result is impossible unlesB city government hccomes wretched niis-f»overnment. On the contrary, as is well known, all inven- tions or improvements of what kind soever connected with the pro- duction or distribution of a commodity, tend directly to reduce its price. If city goveriiment is an improvement on what went before it — if it is the means of estiibliahing better order, greater security to life and property, and greater convenience and comiort to the people, at a not dispioportionate expense, the direct effect of all these will be a general, though no doubt unequal, reduction in the price of commodities sold within the city. That is to say the risk and inconvenience of holding valuable stocks having been largely reduced or removed, the item of expense, which these entail, ceases to have to be provided for, and the merchant can sell his goods at a corresponding reduction without diminishing his profits. But, if efficient city government could not possibly increase the price of commodities, neither could it raise the rate of profits to the dealer in them. That individual, finding his expenses reduced, might be disposed for a time to maintain the old prices wiih the view ^f adding to his profits. But even if his neighbors were of the same opinion, outside capiud would speedily bo attracted and the rate of profits reduced to the general level. This is the evidence of universal experience. Inventions and improvements are multiplied without end, but profits instead of rising lend lower and lower us capital increases. In so far, therefore, as the improve- ments or advantages, which ai-e the product of city government, aifect personal property — goods, wares, and merchandize, and floating capital generally, as well as houses — they cause a reduction in the price of such property. The gain to the community lies in this very fact^ It is a gain to the consumers who are the whole body of the people — not to one ciass at the expense of another. Every member of the community, and every outside consumer of its goods, gains just in proportion to the extent to which he is a consumer, and nothing more. The merchant and banker, equally with the laborer and mecha: ic, benefit only as consumers. But the movement does not end here. With the reduction in the price of commodities in general, a residence in the city is rendered more attractive, and additional population is drawn towards it. This last tendency is quickened by the fact that a large proportion of the city's expenditure is laid out, not on behalf of the security of personal property, or the convenience of handling it, and not, therefore, likely to lessen, to any appreciable extent, the cost to the consumer ; but yet is nevertheless calculated to make the city more attractive, and, there- fore, more populous. I refer to the expenditure for Education, for the Poors' Asylum and Hospital, and for Parks and Gardens, which amounts to about one-third of the "whole. But in addition to the money spent directly on those objects, a large proport u of the other expenditure of the city ministers directly to the comfort and health of the citizens, and affects only very slightly and remotely the prices of 20 i! i i'! n : II < commodities. Such, for instance, is the expense incurred in building sewers and maintaining them, and part of the expenditure on water •works. By those two causes combined, which inchide all the benefits of city government — namely, cheaper living and greater attractions and comforts — the demand for additional space within the city will probably be such that the direct gain to consumers, already spoken of, will be more than counterbalanced by the increased price which the whole population will thenceforward have to pay for city lots, or the rent of them. The results of good city government will thus appear. as follows : — I. The profits of merchants, traders, &c., and the wages of employes will remain as before. II. The cost of living to the citizens will be lessened by a reduc- tion in the price of commodities, but that gain will be more than counterbalanced by the higher rents which will then have to bo paid — not caused by greater cost of buildings which are subject to the same conditions as what is called personal property, but by greater demand for ground space. IIL The owners of land within the city will share with other consumers the benefits arising from the reduced price of commodities while at the same time their incomes, being derived from rents, will have greatly increased ; so that while other citizens have to submit to their share of the benefits of city government being fully offset by higher rents, the owners of land will have gained all round. On the other hand, suppose that our city government were so inefficient, extravagant, or corrupt, that the benefits it conferred upon the citizens were of little value as compared with their cost, the tax would be a heavy item to be provided for by the merchant or capitiilist. He would not pay them out of profits unless-he was forced to do so ; and he would not be forced to do so unless he found that outside capitalists could get no better return than he, after he had paid the excessive tax. He would reimburse himself, therefore, by adding to the price of his commodities. The consumers would suffer business would leave the city, and population and capital with it. The price of real estate would fall, and the owners of land would lose doubly — first, in the increased cost of living, and, secondly, in reduced incomes arising from the fall in rents. We thus see that personal property is not enhanced in value to tho owner thereof by the improvements of city government, whereas real estate is. Personal property is reduced in cost by those improvements, and the benefit is reaped by the purchasers of it ; and these purchasers may be citizens, or they may not. But although the general effect on the two different classes of property will be as has been stated, yet all the property of each class will not be equally affected. Pig iron or coals, for instance, are hardly likely to be affected to the same extent as 21 jewellery or diamonds, silks or laces. Moreover, there is no possibility of ascertaining or measuring directly the benefit to consumers arising from the effect of city improvements on the various kinds ot personal, property. "We can only reason that the general tendency must be towards a reduction of their price. Real estate also will bo unequally affected by city improvements. The erection of fine public buildings, the laying out of parks and gardens, the building of a new sewer, the opening of a new street, will all benefit lots in the immediate neighborhood of such improve- ments to a very much greater extent than lots at a greater distance .from them, although the general tendency will be towards an increase in the valu"" of all city lots. In the case of real estate, however, the benefit which it derives from the improvements of city government, together with the advantage due to location — in being enriched by the labors of others than its owners — are accurately measured by its market price. Seeing that the improvements produced by city government can thus be shown to have such widely different effects on the various kinds ot visible property, it is obvious that the theory that all property should be equally taxed because it is equally benefitted, is quite untenable. LETTER V. WHY IT IS FOR THE INTEREST OF THE CITY AND OF REAL ESTATE OWNERS NOT TO TAX- PERSONAL PROPERTY. I have shown that all property is not equally benefited by city government ; that personal property cannot be said to be benefited at all. The owners of it are benefited in common with the rest of the population, not because they are owners, but because they are consumers of commodities. The benefit to them, however, is fully paid for in the increased rent of real estate. On the other hand the owners of real estate gain all round without having to pay for it. All the beneficial or prejudicial effects of city government are speedily reflected in the enhanced or diminished value of land subject to the city's influence. It matters not whether the direct object of the city's solicitude be the health and comfort of the people, the maintenance of order or the development of natural resources. Land not only gains by what is specially done for it, but by what is specially done for everything else, and whether it is done by the ' city authorities, or, in the prosecution of their own interests, by pri- i I ' J Hit; ' I . ill I i i i I ' lit I >i < 1 i; I ll M J-t J 22 vate individuals. It^is subject to influences fi^om all quarters, and there are hardly any limits to its possible fluctuations. Every citizen added to the community or taken from it, every improvement inaugu- rated or abuse tolerated, every dollar made or lost, ca'jses a vibration in the value of real estate. The grand fact in this problem is that everything must be done on the land. The citizens must live and ■work on it ; die and be buried on it ; and all that the city govern- ment's labors amount to is to make the location — the land — more comfortable and attractive for people to live and work thereon. The city may be imagined to say to each citizen : " Here is .t piece of land equipped in every way requisite to enable you to live comfortably and work effectively. It is well drained, well lighted, with a good street running past it ; a plentiful supply of pure water ; a policeman to guard you ; a school in the neighbourhood to educate your children, and a public garden near by for your pleasure and recreation, come and occupy it." Having done, this it leaves the rest to the individual 'exertions of the citizen, who forthwith builds himself a house and takes advantage of all the good things held out to him. If he is able and enterprising he will accumulate wealth ; if he is weak and idle he will remain poor. The question of taxation lies just here. Is he to be taxed in proportion to what the city has given him, or on what he has done for himself? ^ Let us suppose the ci\se of two individuals accepting the above invitation extended to them by the city. They settle on lots of equal value alongside of each other, and each builds himself a house and store. One of them, by thrift, industry and ability, succeeds in the ■ course of years in amassing a fortune which is principally invested in joint stock companies in the city, banks, insurance companies, shoe factories, iron works, sugar refineries, or is loaned out in promissory notes, but none of it is in real estate except his original lot. His neighbour, by inattention to business, extravagance or weakness, never succeeds in doing more than earning a bare livelihood, and perhaps only that by compromising with his creditors every few years. Each took the same amount and value of land from the city, and by doing so obtained the means of enjoying the advantages of the city to an equal extent. The unsuccessful man, as well as the successful one, occupies a certain portion of the city's taxable area, to the exclu- sion of any other tenant, and it is through that area alone that the city derives its revenue. It is precisely as if they had rented from the city houses of equal value. The fact that one tenant grow rich while occupying a certain house or store, while his neigiibor remained poor in an exactly similar one, would be held to be a very poor rea- son why their rents should be different. The conclusion is therefore irresistible that they should be taxed alike. Each should be taxed in proportion to what the city has given him, not on what he has done for himself. By the system of taxing real and personal property equally the successful man would find his taxes incretising yearly while his neigh- and hour's remained the same. But what does this mean? It means tliat although the city does the same for (or supplies the means of obtaining the same advantages to) each, it demands more taxes — more rent — from the one than from the other. But it means much more than that. The successful citizen, as we have seen, has his wealth invested in joint stock companies in the city or loaned out to other citizens, who are presumably making good use of it to their own and the city's advantage. In adding from year to year to his savings, and investing them as he has done, he has been adding to the business and prosperity of the city, and greatly enhancing the value of all the city's real estate. For all this benefit, conferred by him directly on the city and its real estate owners, ho is forced to pay additional taxes, while his neighbour, who is little benefit to any one, and to get rid of whom, in exchange for a more thrifty citizen, would be an advantage to the community, gets off for comparatively nothing. But in the long run capital will take care of itself. There is nothing in this world more sensitive ; and if it is harshly treated in one place it speedily takes itself olf to another, where more consideration is shown to it, and where it is recognized to be the benefactor that it is. We have recently seen how much capital and enterprise are valued, in relation to the city's prosperity, in the agitation and public dis- cussion which preceded the organization of the Halifax Sugar Refinery. The benefits we are to derive from this one company have been pictured by sober citizens in the most glowing colors ; and the most sanguine hopes are almost universally entertained of it. It is expected that this work alone will materially increase the value of large blocks of real estate in the city, if it does not appreciably do so over its whole area. In other words, the creation of such an enterprise is expected to add to the incomes of many, if not all, of the real estate owners in the city, and also to add considerably to the city's revenue. Yet we all know what efforts were required to get the necessary capital subscribed, notwithstanding the enormous duty on foreign refined sugars and the great local inducements held out to it. The city has shown, by its efforts to induce the formation of such companies within its borders, that it can afford to relieve them from taxes for twenty years, and offer other inducements besides — such as giving the sugar refinery free water for ten years — and still be largely benefited by them. And this belief is not confined to Halifax, for nothing is more common than to hear of ambitious towns and cities not only foregoing taxes for a longer or shorter period, but in many cases ottering a cash bonus for the establishment of industries among them. If the prosperity of any particular locality were alone to be con- sidered this might be a very wise policy, provided that all industries were placed on the same footing. But one fails to see what sense there is in subsidizing one set of capitalists to build up the city, while ruin- ously taxing another set so that they are driven away. It must be a funny notion of justice which actuates our city fathers when they 4 I ' w I I 'i! ! i ' i I h ! il« 11 ill! li (if I li' i m in [ 24 offer such bonuses to sugar refiners and others, while at the same time they claim to tax ships which never saw the port ; to take 37| per cent, of all the interest earned on money deposited in the city banks ; 25 per cent, of the earnings of those- banks, and 1| per cent, of every article of commerce in the city^ including unused capital. But, leaving the justice of tl latter aside — for, as I have said before, capital soon takes care i )lf — what must we think of the wisdom of our legislators in beli^ . ..ig that such a policy as this is likely to have any but a most prejudicial effect on the growth and prosperity of the city 1 If one sugar refinery is going to do so much good to the city, would not twenty other companies do much more 1 And would not the benefit to the city be much greater if, instead of strangling existing industries while bidding for new ones, the old ones could be extended as well as new ones brought in 1 If that end is desired let all capitalists be put on the same footing. They are all equally instru- mental, to the extent of their capital, if it is carefully employed, in building up and maintaining the city's prosperity. If it be a wise thing to attract capital, as it undoubtedly is, do not tax it for imagin- ary benefits. All that it wants, and all it receives is convenient standing room ; tax it for that only. It is Avilling to pay for what it gets, while at the same time it cannot be employed without adding to the value of real estate gratuitously. By taxing personal property, or capital, which is the same thing, the city is doing its best to kill the goose that lays the golden egg. For the grand engine by which busi- ness is carried on, population employed, and the city built up and rendered prosperous is capital invested in what is called personal property, in which I include houses. Eeal estate owes nine-tenths of its value to it, and yet seems anxious to quarrel with it about the taxes and drive it away. If it be considered a good thing, therefore, that the city should grow and flourish, and, to that end, that thrift and enterprise should be encouraged to the utmost, then it must be a bad law which would tax personal property. ! f J i I i^' ime time 37^ per banks ; of every il. Bat, . before, wisdom ikely to I'osperity »d to the d would rangling jould be sired let y instru- oyed, in ) a wise imagin- ivenient what it dding to perty, or kill the ich bnsi- up and personal enths of )out the should should H would n LETTER VI. For the sake of clearness, I shall now briefly recapituHte the propositions endeavoured to be established in the foregoing letteis and the reasons given in support of them. /. Personal Property sliould not he taxed : 1st. Because it cannot be reached. • 2nd. Because it could not be equitably assessed if it were reached. 3rd. Because it is not increased in value ))y the city's expenditure, and is no criterion of the benefits or advantages darivable by its owner from living or doing business within the city. 4th. To tax personal property tends to drive capital away from the city, and so to retard, if not to stop, its growth. 5th, W'o have unlimited evidence to show that the experience of many communities has proved the folly of such a tax, and none to show that it has ever worked well anywhere: //. Income should not he taxed : 1st. Because it cannot in most cases, be ascertained. 2nd. Because such a tax tends to develop fraud and to demoralize the community — a result for which no money value can be an equi- valent. 3rd. Because income is not increased in amount by the city's expenditure, and is no criterion of the benefits or advantages derivable by its recipient from living or doing business or owning property within the city, unless it is wholly derived from the rent of land. 4th. Because such a tax would tend to drive away from the city all wealthy people not directly engaged in business, and all capitalists who could carry their means and industry to as good a market else- where and escape the tax. 5th. The income tax, both in the United States and England, is a national tax, adopted in state emergencies and never meant to be permanent ; and is strongly condemned in both countries. ///. Houses should not he taxed : 1st. Because they are not increased in value by the city's expendi- ture, and, apart from the value of the land on which they stand, are no criterion of the benefits or advantages which are derivable by their owners from living or doing business o* owning property within tho city 26 :i I' I : I I.: ' i I 2nd. Because to tax houses in proportion to their value would tend to discourage the building of any but the plainest and cheapest structures, which would be to discourage architectural taste and public spirit. 3rd. A tax on houses will frequently discourage the owne of unoccupied lots from building thereon. The holding of such lota on speculation will be thus stimulated, while the city will suflfer by being built up in a straggling and irregular manner, covering far more space than is necessary, to the inconvenience and increased expense of the corporation and the citizens 'alike. IV. The nnhj species of property which should he assessed for municipal purposes is land : 1st. Because the net result of all the advantages and disadvantages connected with the city and the city's expenditure is exactly reflected in the price of land. 2nd. Because its market value is an exact criterion of the average benefits or advantages derivable by its owner from living, or doing business, or owning property, within the city. 3rd. Because, although the whole tax would be paid to the city by the owners of land, it would be distributed by means of rent; among the citizens, with the most perfect equality — each paying onh for what he received, but for that fully. 4th. Such a tax could not possibly be evaded by any landowner or by any citizen ; for the land is visible to every one, and every citizen must own or rent part of it. 6th. The cost of collection of this would bo less than of any other tax, if it were made, as it should be, a first lien on the property. 6th. Such a mode of taxation could not fail to keep and attract capital and enterprise, without great regard for which civic prosperity or growth is not apt to be great. 7th. It would check, if it did not entirely stop, all speculation in unoccupied lots or waste ground, and so cause the city to be built up in a compact and regular manner — probably to its architectural improvement, and certainly to the general economy and convenience. If there were only one land owner in the city, instead of, perhaps, a thousand, it would probably be much easier than it noT appears to convince people of the truth of the above propo"* -ions. Let us suppose that Acts of Incorporation were unknown, and that the whole area of the city were owned by one individual, who rented it in lots for building and other purposes, in leases of say 20 years, as is the custom with agricaltural lands in some countries. If he were a wise landlord he would see it to be in his own pecuniary interest to make the site and belongings of the town as attractive as possible to le would clieapest iid public t)wne of h lotb on • by being ore space so of the sessed for dvantages r reflected le average or doing » the city 8 of rent yi" onh lowner or ;ry citizen any other 3rty. tid attract prosperity alation in } built up ihitectural ivenience. ', perhaps, ippears to , and that ho rented ) years, as he were a interest to )ossible to 27 capitalists of all kinds, so that varied industries and a large population might be induced to settle on his land. He would keep the roads and streets in good order; would have perfect drainage and ample water sup;^iy. He would be careful of the public health, and would provide meai;s of healthful recreation for the people. In short, the greater part of the services secured to the community by incorporation would be voluntarily rendered by the land-owner, acting in his own pecuniary interest. Under such circumstances it would hardly occur to any one that the landlord was paying out of his own pocket what should be contributed by his tenants. It would be too obvious that the increase of his rent rod would more than compensate hira for his outlay. The cas<^ appears very different where the area of the city is owned by an army of small proprietors, in lots ol all degrees of size and value. Each proprietor cannot do for his little patch what one woidd volun- tarily undertake if he owned the whole. Hence the necesssity for incorporation, by which also some things can be obtained — such as a liberal provision for education and other matters, which, though they undoubtedly add to the value of real estate, would not probably be attended to even by the one great landlord. There is no real differ- ence, however, between the two cases. The army of small projirietors united can have only the same rights possessed by the one great land- lord, and public improvements and public services which add to the value of the land should be paid for by the owners thereof, whether they are many or one. There is no injustice in this to those individ- uals, for the tax is made up to them in their rents. The correctness of the principle is already recognised in the case of what are called *' special " or " local " improvements— improvements which are carried out by the corporation, but which appear to be more for the benefit of the owners ot the property to be improved than for that of the general public. Sucli improvsments, however, tend to raise the value of all city real estate, and the general expenditure of the city has the same effect. It is right that the owners of specially improved property should pay the greater part of the cost thereof. If the improvement is real, the cost will be returned to tliem jn rent. In like manner the cost of city government, which may be called a " general improvement," should be borne by the land-owners in general, and to them also it will bo returned in the shape of rent. As we have seen, land is benefitted or injured by what is done for everything else as well as by what is done for itself. And however a tax may be laid on, the tendency is to shift it from shoulder to shoulder until at last it rests on the land and remains there. The great gain which would be secured by a municipal land tax would be simply this : that it would place the public burdens at once in the most equitable and economical manner, whither they are always inevitably gravitating, attended as they are at present by so much mischief, injustice and general demoralization. And the greatest gainers by the substitution of such a tax for the present system would be the owners of land.