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QUESTIONS OF THE DA V. No. XXXIX. 
 
 FEDERAL TAXES AND 
 STATE EXPENSES 
 
 THE PUBLIC GOOD, AS DISTINCT FROM THE GENERAL WELFARE 
 OF THE UNITED STATES 
 
 By WILLIAM HITER JONES, A.M., B.L. 
 
 And now I will unclasp a secret book, 
 And to your quick-conceivings discontents 
 I '11 read you matter deep ana dangerous ; 
 As full of peril and advent'rous spirit. 
 As to o'erwalk a current, roaring loud. 
 On the unsteadfast footing of a spear. 
 
 O ! the blood more stirs. 
 To rouse a lion than to start a hare. 
 
 —First part of KING HENRY IV., 
 
 Act I., Sc. Ill, 
 
 SECOND EDITION, REVISED 
 
 NEW YORK & LONDON 
 
 G. P. PUTNAM'S SONS 
 
 rNIVERSITY 
 
r^b'^ 
 
 ,i\i 
 
 COPYRIGHT BY 
 
 G. P. PUTNAM'S SONS 
 1890 
 
 TTbc Iknicfeerbocfter pvees, Hew II?ort 
 
 ^lectrotyped and Printed by 
 G. P. Putnam's Sons 
 
Department of Justice, 
 Washington, July 29, 1887. 
 
 Wm. H. Jones, Esq., 
 Fort Wayne, Ind. 
 
 Dear Sir : 
 
 I thank you very much for your little work, Federal Taxes 
 and State Expenses, just received on yesterday. I have read 
 it carefully and with great interest. It presents the questions 
 in strong, cogent, and apt style, and if circulated, must serve 
 to awaken thought and stimulate inquiry on subjects not less 
 important to the country, than any that can be discussed ; and 
 you have done good work in this presentation of them. 
 
 Very truly Yours, 
 
 A. H. Garland. 
 
 From The American, Phila., Oct. 13, 1887. 
 
 Whether Mr. Jones is a Republican or a Democrat, a Free- 
 Trader or a Protectionist, we are glad to say does not appear 
 in his book. It has the important merit of discussing this 
 problem of finance entirely apart from the current questions 
 of our party problems. What brings him to the subject is the 
 patent fact of the financial needs of the States under the 
 present system of taxation. 
 
INSCRIBED 
 
 TO THE 
 
 Honorable AUGUSTUS H. GARLAND 
 
 LATE ATTORNEY-GENERAL OF THE UNITED STATES 
 
 IN GRATEFUL ACKNOWLEDGMENT OF HIS GENEROUS ENCOURAGEMENT TO 
 THE AUTHOR TO UNDERTAKE THIS WORK 
 
PREFACE TO THE SECOND EDITION. 
 
 If explanation be needed for publishing a 
 second edition of " Federal Taxes and 
 State Expenses," it may suffice to say, that 
 the distinction between " The Public Good,'' 
 and the " general welfare of the United States," 
 now for the first time attempted to be supplied, 
 is deemed by the author a sufficient one. From 
 whatever cause the existing lack of distinction 
 between these seemingly like, but essentially 
 different subjects may have arisen, it cfannot 
 be denied, that the difference between them 
 has not hitherto been marked with the clearness 
 necessary to its being readily understood. The 
 line of separation between them has been so 
 obscure, and the two essentially different sub- 
 jects so generally confounded, that the author 
 has thought the attempt to mark and separate 
 them, at least to the approval of the Lawyer, 
 the Statesman, and the Legislator, if not to the 
 popular apprehension, was at least worth the 
 attempt ; however faulty the attempt may 
 prove. Even positive failure may produce the 
 
viii Preface to the Second Edition, 
 
 effect to challenge some one else to try for 
 more successful results. 
 
 Besides this attempt to distinguish "" The 
 Public Good " from the '* general welfare of the 
 United States," the author has also essayed the 
 more difificult task of giving exact definition to 
 the latter term, as the same is employed in the 
 Constitution to define both the nature and 
 extent of the federal power of taxation in 
 regard to it. 
 
 To such as have found fault with the first 
 edition, from misconception of the subject of 
 it, as stated in the title-page, the author takes 
 this occasion to say, that what are commonly 
 called " the principles of taxation T are outside, 
 and apart from the subject of the book. It is 
 only with the subjects of taxation, and the con- 
 stitutional and politic exercise of the power of 
 taxation over them as implied in the title, that 
 the author has undertaken to deal. These 
 topics are paramount over all others, and 
 '* the principles of taxation " (whatever these 
 may be) are wholly subordinated to them 
 throughout ; and whenever referred to, the 
 reference to them is always incidental, and is 
 never essential. In fact, while the author has 
 heard or read much of both declamation and 
 dissertation, about '* the principles of taxation^' 
 he has not been able to learn from it all, any 
 more than the declaimers and dissertators 
 
Preface to the Second Edition. ix 
 
 themselves seem to know about them : and, (be 
 it said without intent to offend,) that is very 
 Httle. It seems never to have occurred to any 
 of them, that during our hundred years of 
 national existence, nothing in the nature of 
 distinctive " principles of taxation," derived 
 from our own experience, and adapted to the 
 needs of the system of Federal government, as 
 distinguished from the monarchial systems of 
 both mediaeval and more modern Europe, has 
 been developed and so systematized as to guide 
 us. All " the new wine " of this large ex- 
 perience has been continually put into " the 
 old bottles," " brought over " by the Cavalier to 
 Jamestown, the Pilgrim to Plymouth Rock, the 
 Roman Catholic to Maryland, the Quaker to 
 Pennsylvania, and the Salzberger to Georgia: 
 thus named with no other significance than the 
 order of their coming; for where all is either 
 defective or unsuitable, it were invidious to 
 assign pre-eminence. 
 
 The principles of taxation under federal insti- 
 tutions is a subject in and of itself; and too 
 great to be properly treated in the narrow 
 compass of a little volume such as this; and 
 the subject of " Federal Taxes and State Ex- 
 penses^'' is but as a patch on the surface of the 
 broad domain of Public Law pertaining to 
 federal institutions. For there is a Public Law 
 pertaining to federal institutions, as there is an 
 
X Preface to the Second Edition, 
 
 essentially different one pertaining to mon- 
 archies ; but failing to systematize and apply 
 our own, we have gone on continuously for a 
 hundred years, practising '' the principles of 
 taxation " derived from European monarchies, 
 however unfitted to federal forms, or illy 
 adapted to the needs of the national existence. 
 Though highly inventive in other fields of dis- 
 covery, our genius for invention seems to have 
 wholly failed us in this one — perhaps the most 
 important of them all. 
 
 When the researches and investigations of 
 Copernicus had announced, and those of Galileo 
 with his telescope subsequently demonstrated, 
 the movement of the planets round the sun, a 
 great advance was made in the science of 
 astronomy, over what it had been as known 
 and practised by the mere fortune-telling 
 astronomers of their time. But great as was 
 this advance, it was not until the laws govern- 
 ing the exact movements of the planetary 
 bodies had been discovered and announced by 
 Kepler, that the system first announced by 
 Copernicus, and afterwards demonstrated by 
 Galileo, attained its full completeness and ex- 
 cellence. In like manner the establishment of 
 the Federal Constitution, like the first discovery 
 of the Copernican system of astronomy, though 
 in itself a mighty, if not a marvellous advance 
 on pre-existing systems of government, yet 
 
Preface to the Second Edition. xi 
 
 needs some such discovery and application of 
 the laws governing its movements and opera- 
 tions, as was supplied to the science of astron- 
 omy by what has since retained the name of 
 " Kepler's laws " ; which demonstrate that the 
 movements of the planets round the sun de- 
 scribe an Ellipse, instead of the Circle supposed 
 by both Copernicus and Galileo. And as with- 
 out knowledge of the laws discovered by 
 Kepler, it were impossible to account for the 
 alternations of heat and cold and the vicissitude 
 of the seasons in the solar system, so it is im- 
 possible to properly adjust the alternations of 
 benefit and burden and the ever constant 
 vicissitude of prosperity and adversity in the 
 wide extent of the Federal jurisdiction, without 
 corresponding knowledge of the laws which 
 produce and govern them. 
 
 It is to the task of discovery and application 
 of these laws, that the author's aims have been 
 directed ; with what measure of success or 
 of failure, is now submitted to the impartial 
 judgment of his readers, by 
 
 The Author. 
 
 September 4, 1889. 
 
PREFACE. 
 
 When the investigations which have resulted 
 in the little volume now submitted to the pub- 
 lic were begun by the author in 1882, he had 
 no idea of reaching as their result the con- 
 clusions stated in the twelfth chapter. Hav- 
 ing been mainly influenced in the beginning 
 of his work by the high rate of State taxes 
 on property valuations for State and local- ex- 
 penses of the civil administration, his efforts 
 were long directed to the vain attempt to 
 secure a remedy for the difficulty by harmo- 
 nizing State and Federal cooperation over the 
 subjects of State taxation. This course at first 
 seemed the only one that could afford ground 
 for hope of lessening State taxes on property 
 valuations, under existing theories of the Fed- 
 eral Constitution and the long-established prac- 
 tice in all the several States concerning these 
 theories ; and traces of these views will be found 
 
xiv Preface. 
 
 in some parts of the volume, where they have 
 been purposely left as marking the course of 
 investigation rather than as expressing con- 
 clusions. When, however, the author had 
 more fully realized the difficulties in the way 
 of concurrent exercise of State and Federal 
 powers of excise taxation over subjects to 
 which each had equal constitutional right, 
 he was constrained to make the distinction 
 between the subjects^ and purposes for which 
 the power of taxation is to be exercised ; and 
 to make for the first time (as he believes) the 
 distinction that while the power of excise taxa- 
 tion is concurrent in the Federal and State gov- 
 ernments over all subjects of it, the exercise of 
 this power is as separate and exclusive in the 
 one or the other as to the purposes it is to be 
 exercised for ^ as any other power with which 
 either is invested under the Federal Constitu- 
 tion, In brief, the power of excise may be 
 stated as concurrent as to subjects, but separate 
 and exclusive as ^.o purposes. 
 
 William H. Jones. 
 Fort Wayne, Indiana, 
 January 27, 1887. 
 
CONTENTS. 
 
 CHAPTER I. 
 
 PAGE 
 
 Introductory Chapter . . . . . . i 
 
 Use of Federal Excise Taxes on Spirits and Tobacco for 
 Expenses of the General Civil Administrations in 
 the Several States — The Case Stated • • • 5 
 
 CHAPTER II. 
 
 Present Physical and Political Conditions of the United 
 States Compared with Those of 1789 — Former Easy 
 Enforcement of State Excise Taxes — Obstacles in 
 the Way of it Now — Limited Scale of State Expenses 
 in 1789 — Mr. Hamilton's Forecast of Aggregate An- 
 nual State Expenses Now Exceeded by Those of 
 Many Single Cities — Co-equal and Concurrent Powers 
 of Federal and State Taxation — Nos. XXXII., 
 XXXV. of the Federalist on These Concurrent Powers 
 — Difference between Federal and Single Autono- 
 
 ^ mous States, in Respect to Excise Taxes . . .25 
 
 CHAPTER III. 
 
 The General Civil Administration as Related to ' ' The 
 General Welfare of the United States " — Tendency 
 towards Heavier State Taxes to Support It — Preser- 
 vation of the State Governments as Necessary "In- 
 strumentalities" of "The General Welfare of the 
 United States "—What is the General Welfare of the 
 United States? — Two Distinct Phases of It in the 
 Preamble and Subsequent Provisions — Parallel be- 
 
xvi Contents, 
 
 PAGE 
 
 tween the Riddle of ' ' The General "Welfare " and 
 that of the Sphinx in the Greek Mythology — The 
 Difference between "Promoting" and "Providing 
 for " the General Welfare — The Despotism of Classes 
 under It— The " King Bolt " Which Holds the Fede- 
 ral Construction Together ..... 40 
 
 CHAPTER IV. 
 
 History of the Exercise of Concurrent Federal and State 
 Powers of Excise Taxation — Lost Equilibrium be- 
 tween Them — Chief-Justice Marshall's Ruling in 
 1819 and Subsequent Act of Congress Limit the State 
 Power of Excise — Summary of Federal Resources for 
 Revenue Contrasted with the Meagre Ones of the 
 States — The Hands of the Federal Authority Tied 
 from Interfering with Subjects of Exclusive State 
 Jurisdiction ........ 64 
 
 CHAPTER V. 
 
 Excise Taxes as Related to Periodical Depressions in 
 Business — Aggregate Annual State Expenses — The 
 Spirits and Tobacco Taxes Sufficient to Defray Them 
 — Monarchy Cheaper than * ' Republican Simplicity " 
 in Taxes on Property Valuations . . . .73 
 
 CHAPTER VI. 
 
 Constitutional Compensations for Loss of State Power of 
 Excise — The State Governments as * ' Instrumentali- 
 ties" in Respect of the General Welfare of the 
 United States — Groundless Assumption of Antago- 
 nism between the States and the Federal Autonomy — 
 Effect of State Taxes on Property Valuations on "the 
 Labor Class " in Cities — Groundless Complacency of 
 Americans in Respect to Taxes on Property Being 
 Less in the United States than Elsewhere — Why 
 These Are Greater Here than Anywhere Else . . 84 
 
Contents, xvii 
 
 CHAPTER VII. 
 
 PAGE 
 
 State Expenses and Distributive Shares of the Spirits 
 and Tobacco Taxes — Absurdity of Separate State 
 Taxes for Purposes of the General Welfare, and Free 
 Interstate Intercourse for Purposes of the Federal 
 Autonomy — The " Rock and Vulture " . . . io6 
 
 CHAPTER VIII. 
 
 The " Blair Bill" for Education of the Illiterate— Relief 
 of the Lettered Poor from Unnecessary State Taxes 
 as Essential to the General Welfare as Education of 
 the Illiterate — Better Founded in Public Policy — And 
 Not Obnoxious to the Charge of Class Legislation . ii8 
 
 CHAPTER IX. 
 
 Aggregate State and Local Public Indebtedness — Its 
 Relation to the General Welfare — State Debts Not 
 Materially Lessened during the Period When the 
 Federal Debt Was Being Practically "Wiped Out " — 
 This Public Indebtedness a Subordinate National 
 Debt of the United States — And its Creation the Re- 
 sult of Wrong Interpretation of the Federal Power 
 of Taxation ....... 
 
 125 
 
 CHAPTER X. 
 
 Analysis of a County Tax-List — No Trace of Excise Taxes 
 Found on It — Three Classes of Tax- Payers — Reasons 
 for Their Classification — Why State Taxes on Valua- 
 tions are Necessarily Unequal — Difference in Numeri- 
 cal Percentage of the Several Classes — Unequal Rates 
 of Taxation as Shown in One Township, Illustrate 
 Like Inequalities in All the Others — Penalties and 
 Delinquencies as Related to the Rate of Tax — No 
 Penalty or Delinquency in the System of Excise 
 Taxes, and No Revenue from Direct Taxes without 
 Them — Proposal to Withhold Protection pf the Law 
 from Personal Property Not Listed for Taxation . 133 
 
xviii Contents. 
 
 CHAPTER XI. 
 
 PAGB 
 
 Poll Taxes— Trifling Amount of These Paid by the Class 
 of Large Property Owners — As Peculiar to the Class 
 of Small Property Owners as Penalties and Delin- 
 quencies ......... 162 
 
 CHAPTER XII. 
 
 Conclusion upon the Case Stated in Chapter I. — Classi- , 
 
 fication of Subjects and Objects of Taxation . . i6g 
 
tJNlVEBSITl 
 
 FEDERAL TAXES AND 
 STATE EXPENSES. 
 
 INTRODUCTORY CHAPTER. 
 
 ' ' Our remedies oft within ourselves do lie, 
 Which we ascribe to Heaven : the fated sky 
 Gives us free scope ; only, do backward pull. 
 Our slow designs when we ourselves are dull." 
 
 Alls well that ends well. — Shakespeare. 
 
 Under Federal institutions, the terms " Po- 
 lice," "Social Order," and ''Right of Eminent 
 Domain," taken together, may be correctly 
 defined to include all that has been meant to 
 be expressed by the absurd and misleading 
 terms, " State Sovereignty," " Sovereignty of the 
 States," *' Reserved Rights of the States," etc. 
 
 This statement may startle some, and awaken 
 a feeling of antagonism in others, who have 
 not scrutinized the purport of the terms and 
 subjects named. As to the police power in 
 government, no pretence of its existence in the 
 federal authority can be deduced from the pro- 
 visions of the Constitution of the United 
 States. As to social order, the absence of the 
 
2 Federal Taxes and State Expenses, 
 
 necessary police power to enforce and main- 
 tain it, is no less conclusive of its non-existence 
 as one of the subjects, or one of the attributes, 
 of federal authority ; while the term " Right 
 of Eminent Domain," though commonly em- 
 ployed only in the restricted sense of separate 
 State power to devote private property to 
 public uses on making just compensation for 
 it, may be correctly, as well as more largely, 
 defined to include every right and subject of 
 legislation not otherwise provided for in the 
 Constitution of the United States. For the 
 recognized right and powder in each State of 
 the Federal body, to devote private property to 
 public uses, may well be made to include the 
 subordinate one to regulate and control the 
 terms and conditions of its acquisition, posses- 
 sion, and transfer among its citizens. For 
 example : Purchase, Inheritance, Descent and 
 Distribution of Estates; Execution, Delivery, 
 and Effect of Deeds and 'Conveyances ; Making 
 and Probate of Last Wills and Testaments ; 
 Regulation and Enforcement of Contracts and 
 Obligations ; Creation and Control of Corpora- 
 tions, both Public and Private ; Police, and 
 Social Order ; Construction and Maintenance of 
 Highways and Bridges, Public Buildings for 
 
Federal Taxes and State Expenses, 3 
 
 Legislative, Executive, and Judicial Purposes ; 
 for Public Charities, as well as for Punitive 
 and Reformatory Purposes Essential to the 
 Stability of Social Order — and, in short, all 
 the varied subjects of legislation ordinarily 
 treated in the several State legislatures. The 
 number of them is too great for special naming 
 here ; but a correct idea of it may be gained 
 by count of all the " Acts of Assembly^'' or of 
 State legislatures, of all the States, and elimina- 
 ting repetitions therefrom ; or, (which will 
 amount to the same thing), from the total con- 
 ception of all the possible subjects and rights of 
 legislation whatsoever in a sovereign state, de- 
 duct those named in the Vlllth Section of the 
 First Article of the Federal Constitution, and 
 the balance left after this deduction may be 
 accepted as the total sum of the subjects of 
 THE PUBLIC GOOD, for which the several States 
 are to provide by legislation,"^ in the due course 
 of the civil administration, each for itself 
 within its territorial limits, under the suggested 
 
 * While the several States are thus to provide for the Public 
 good by legislation, the Federal authority is to provide for the 
 "general welfare of the United States " by taxation, and by 
 taxation only. When the student of federal institutions shall 
 have mastered these two propositions, so as to fully compre- 
 hend them, he may feel himself as already well informed 
 concerning the subject of his studies. 
 
4 federal Taxes and State Expenses. 
 
 Right of Eminent Domain (or Dominion), as a 
 substitute for the less logical, and more per- 
 plexing and confusing terms, which in one 
 foi^m or another have hitherto affected the 
 quality of ''sovereignty," in virtually depen- 
 dent and subject States. 
 
 This form of stating an old case, though 
 obnoxious to the charge of novelty, may claim 
 the merit of freeing the discussion of its sub- 
 jects from the embarrassing use of terms which, 
 besides obscuring discussion, tend to excite 
 prejudices rather than to enlighten the judg- 
 ment. Under its influence, when once estab- 
 lished among terms and definitions in our 
 political nomenclature, it may reasonably be 
 expected that the substantial difference be- 
 tween the PUBLIC GOOD OF THE PEOPLE, and 
 the General Welfare of the United States shall 
 become more familiar to popular apprehension, 
 than, (be it said without offence,) it has ever 
 been to statesmen and legislators. Hitherto 
 failing to become popularly known under the 
 shadowy disguise of " State Sovereignty," this 
 distinction between The Public Good, and The 
 General Welfare has yet a possible chance for 
 both existence and recognition under these 
 new and more favorable conditions. 
 
CHAPTER I. 
 
 Use of Federal Excise Taxes on Spirits and Tobacco for 
 Expenses of the General Civil Administrations in the 
 Several States — The Case Stated. 
 
 The proposal to distribute the net proceeds 
 of the Federal tax on production of all sorts of 
 spirits and manufactured tobacco among the 
 several States, in proportion to their census 
 population, for defraying the expenses of the 
 general civil administration under the several 
 State governments, accords with the principles 
 of construction and interpretation of the Federal 
 Constitution established by the Tenth Amend- 
 ment of it. 
 
 The particular provisions of the Federal Con- 
 stitution relied on for support of this statement 
 are here cited for convenient reference from 
 subsequent chapters, though the logical con- 
 5 
 
6 Federal Taxes and State Expenses. 
 
 nection of these with other provisions not here 
 cited will be found an important though sub- 
 ordinate factor in the discussion of the above 
 proposal, viz. : 
 
 First. The Preamble : " We, the people of 
 the United States, in order to form a more 
 perfect Union, establish justice, insure domestic 
 tranquillity, provide for the common defence, 
 promote the general welfare, and secure the 
 blessings of liberty to ourselves and our pos- 
 terity, do ordain and establish this Constitution 
 for the United States of America." 
 
 Second. Par. i of Sec. 8 of Art. L : "The 
 Congress shall have power to lay and collect 
 taxes, duties, imposts, and excises, to pay the 
 debts and provide for the common defence and 
 general welfare of the United States ; but all 
 duties, imposts, and excises shall be uniform 
 throughout the United States." 
 
 Third. Sec. 2 of Art. IV. : " The citizens of 
 each State shall be entitled to all privileges 
 and immunities of citizens of the several 
 States." 
 
 Fourth. The Tenth Amendment : " The 
 powers not delegated to the United States by 
 the Constitution, nor prohibited by it to the 
 
Federal Taxes and Slate Expenses. y 
 
 States, are reserved to the States respectively 
 or to the people." 
 
 The logic of these several provisions is that 
 while the Tenth Amendment ascertains and 
 perpetuates the general civil administration 
 (legislative, executive, and judicial) in the 
 several States exclusively of each other and of 
 the Federal authority, Section 2 of Article IV. 
 so far hinders the power of State taxation for 
 support of it as to restrict it in practice to 
 polls and property valuations, while both pro- 
 duction and consumption of luxuries, such as 
 spirits and manufactured tobacco, are practically 
 exempt from any share in the burden of State 
 taxes necessary to support it ; and that exercise 
 of the concurrent Federal power of taxation 
 over these subjects, under Paragraph i of Sec- 
 tion 8 of Article 1. is the compensation pro- 
 vided for this loss of State power of excise 
 taxation. Such seems the more reasonable con- 
 struction of these two provisions, than that the 
 several States should be charged with the obli- 
 .gation of the general civil administration by the 
 Tenth Amendment, and be limited at the same 
 time by Section 2 of Article IV. to taxes on 
 polls and property valuations for defraying the 
 
8 Federal Taxes and State Expenses, 
 
 expenses of such administration, while produc- 
 tion and consumption of the luxuries named 
 shall be practically exempt from any share in the 
 taxation ; for the Tenth Amendment, besides 
 establishing the rule for interpreting other pro- 
 visions of the Federal Constitution, ascertains 
 and perpetuates the general civil administration 
 in the several States. This general civil admin- 
 istration has not been " delegated to the United 
 States by the Constitution, nor prohibited by it 
 to the States " ; and it is upon the maintenance 
 of it by taxes as little burdensome, and yet as 
 effective as possible, that " the general welfare 
 of the United States " depends. That this is 
 so, is shown by the fact that independently of 
 the laws of the several States there are none 
 for protection of life and property, or for pun- 
 ishment of offences against either, or for main- 
 taining social order, nor can be. Without this 
 general civil administration by the several 
 States, there would be anarchy in the United 
 States ; and " the general welfare of the United 
 States '* would be a practically impossible and 
 unattainable condition in the national exist- 
 ence. " The general welfare of the United 
 States," so far as it has any connection with, 
 
Federal Taxes and State Expenses, 9 
 
 or dependence upon, the rights of person or 
 property, and social order (and it is hard, if not 
 impossible, to have any notion of it apart from 
 these), has been so far committed to the exclu- 
 sive jurisdiction of the several State govern- 
 ments, as that the Federal authority may not 
 touch one of these primary and essential ele- 
 ments of it. These are all subjects of exclusive 
 and separate State jurisdiction, and the Federal 
 authority can exercise no other rightful power 
 concerning them than ** to provide for " the 
 expense of maintaining them, by exercise of its 
 powers of taxation. 
 
 As the problem of Federal taxes " to provide 
 for the general welfare of the United States," 
 is the main one to be considered in the pro- 
 posal to use the Federal taxes on production 
 of all sorts of spirits and manufactured tobacco 
 for expenses of the several State governments, 
 it seems deserving of notice that the term 
 " general welfare " occurs but twice in the 
 Federal Constitution, viz., once in the Pream- 
 ble, as an object to be promoted by establish- 
 ment of the Federal Constitution ; and again 
 in Paragraph i of Section 8 of Article I. as an 
 object to be provided for by Federal taxation 
 
lo Federal Taxes and State Expenses, 
 
 under it. These two phases of an identical 
 national object are as distinct as the means 
 provided for them in the Preamble and in sub- 
 sequent provisions of the Federal Constitution ; 
 and there can be no constitutional warrant to 
 lay and collect taxes " to promote the general 
 welfare" of the United States under the para- 
 graph and section of Article I., which does not 
 apply with equal force to any other of the five 
 distinct national objects recited in the Pream- 
 ble ; for instance, ** to form a more perfect 
 union," etc. This plain distinction between 
 the means " to promote," and the means " to 
 provide for," the general welfare of the United 
 States, has, however, been so far constantly 
 neglected and turned topsy-turvy in Federal 
 legislation, as that the power of taxation vested 
 in Congress by Paragraph i of Section 8 of 
 Article I. of the Constitution "to provide for" 
 the general welfare of the United States, has 
 been hitherto exclusively exercised "to pro- 
 mote " it, while establishment of the Constitu- 
 tion, independently of the concurrent exercise 
 of the power of taxation under it, seems to 
 have been deemed sufBcient " to provide for " 
 that welfare. That there should have been 
 
Federal Taxes aud Stale Expenses. 1 1 
 
 this persistent exercise of the Federal power of 
 taxation for an object for which the power 
 " has not been delegated to the United States 
 by the Constitution " (see Tenth Amendment), 
 and the like persistent neglect to exercise the 
 power for an object for which it has been so 
 "delegated," is an anomaly under Federal in- 
 stitutions which is hard to be accounted for 
 upon any recognized principle of constitutional 
 interpretation. The fact, however, is indisputa- 
 ble, whatever the causes which have led to it, 
 that while the several States have been stripped 
 of productive and little burdensome sources of 
 revenue by the provisions of the Federal Con- 
 stitution, as well as by the changed conditions 
 and circumstances of the country since the 
 Constitution was established in 1789, they have 
 also been yet further restricted in available 
 subjects of taxation by the operation of causes 
 wholly beyond separate State control, until 
 polls and property valuations alone remain to 
 them without some check or hindrance. 
 
 With the single exception of duties on im- 
 ports, the right of taxation is coequal and con- 
 current in the Federal and State governments ; 
 but from the operation of causes which will be 
 
1 2 Federal Taxes and State Expenses, 
 
 pointed out in the ensuing chapters, the equi- 
 librium between these coequal and concurrent 
 rights of Federal and State taxation has been 
 so far lost or destroyed, as that the Federal 
 power to execute it has become overwhelmingly 
 great as compared with that of the several 
 States. Co-operation in exercise of concurrent 
 powers of taxation in the Federal and State 
 governments, to provide for that general wel- 
 fare of the United States, in which each has 
 mutual and reciprocal interest, is consistent 
 with, and not repugnant to, the relations of the 
 Federal and State systems under the Federal 
 Constitution. 
 
 By co-operation in exercise of concurrent 
 Federal and State powers of taxation, is meant 
 that the one shall collect, and the other apply 
 the proceeds of the tax. Instances of such co- 
 operation, in which the States collected the 
 taxes for use of the Federal government, have 
 been frequent. And as to such collection by 
 the Federal government for purposes of the 
 general welfare, see page 90 post. 
 
 Though the present purpose concern only 
 the application of the foregoing principles 
 to our own Federal Union, yet is is deemed 
 
Federal Taxes and State Expenses. 1 3 
 
 pertinent to submit the following sugges- 
 tions, to be kept constantly in view — (to be 
 " read between the lines ") — in perusal of the 
 ensuing chapters, viz., that under all federal 
 constitutions having the equivalents of Section 
 2 of Article IV., and Paragraph I of Section 8 of 
 Article I. of our own, direct taxes on polls and 
 property valuations, with exemption from taxes 
 on production and consumption of luxuries 
 especially, and from excise taxes generally, 
 constitute the rule for State taxes for support 
 of the civil administration, unless the Paragraph 
 I of Section 8 of Article I. be understood to 
 authorize intervention of the Federal authority 
 to co-operate with that of the States in lessen- 
 ing the burden of State taxes on polls and 
 property valuations, by resort to excise taxes 
 on production and consumption of luxuries and 
 on incomes, and distributing the net proceeds 
 of such taxes among the several States accord- 
 ing to census population. The absurdity of 
 giving such construction to the provisions of 
 the Federal Constitution concerning the power 
 of taxation as will practically restrict that of 
 the States to the narrow limits of polls and 
 property valuations, will be strikingly apparent 
 
14 Federal Taxes and State Expenses, 
 
 when we come to the analysis of a county tax- 
 list in a subsequent chapter. 
 
 So far, since establishment of the Federal 
 Constitution, we have combined the principles 
 of autonomous State taxes for expenses of the 
 general civil administration, with interchangea- 
 ble and unrestricted rights of intercourse and citi- 
 zenship for purposes of the Federal autonomy ; 
 and while we have thus made the last-named 
 the strongest possible for all purposes both of 
 offensive and defensive war, we have also made 
 it the most burdensome in taxes on property 
 for all other essential elements of the general 
 welfare in time of peace ; and the result has 
 been to keep the States on the constant footing 
 of Wcir taxes for purposes of the general civil 
 administration in them, while the Federal au- 
 tonomy, with overwhelming preponderance of 
 revenues, has only to pay the debts and provide 
 for the common defence of the United States 
 in time of peace. 
 
 This is so obviously the result of the States 
 undertaking to perform too many functions 
 with limited revenues, and the Federal govern- 
 ment performing too few necessary ones with 
 very abundant revenues, that some review of 
 
Federal Taxes and State Expenses, 1 5 
 
 the long train of circumstances, and successive 
 changes in the material conditions of the 
 national existence (see Chap. II. post.), seems 
 necessary to account for it. 
 
 The source of the absurdity is to be found 
 in the condition and circumstances of the 
 several States, and their political relations to 
 each other, under the Articles of Confederation 
 in 1789. Their '* common defence" was then 
 the paramount object to be secured ; and as 
 the possible need of revenue for this object was 
 without limit, so the national resources for 
 providing it were left without limit also. The 
 " common defence " being thus provided for, 
 and due provision for all else that could pertain 
 to all the States in common in time of peace, 
 being no less essential to the prosperity of a 
 well ordered Federal State, than its "common 
 defence " in time of war or public danger, the 
 term " general welfare of the United States " 
 (a term then for the first time introduced into 
 political nomenclature) was resorted to for ex- 
 pressing something essentially distinct from the 
 Public Goody all subjects of which were reserved 
 for separate State jurisdiction ; and the same 
 power of taxation (but no other power), was 
 
 UNIVERSITY 
 
1 6 Federal Taxes and State Expenses. 
 
 therefore vested in Congress to provide for it. 
 The invention and use of this term as repre- 
 senting a poHtical force in the government, was 
 essential to CREATE the federal system ; as, 
 without it, the new system must draw to it- 
 self jurisdiction of all subjects of the public 
 good intended to be reserved for the exclusive 
 and local State jurisdictions, and thereby de- 
 stroy the federal character of the new govern- 
 ment. Failure or neglect by the States to 
 make such provision by taxation, for what was 
 left of the subjects of original State jurisdic- 
 tion, on renouncing their right to both import 
 and export duties, and binding themselves, in 
 addition, to share concurrently with the Federal 
 head all other sources of revenue left to them, 
 could hardly have been less senseless or ab- 
 surd, than needlessly to forego the advantages 
 of such provision after having made it. And 
 yet during the hundred years since this pro- 
 vision was made, while the sources of separate 
 State revenue for purposes of the public good 
 have steadily grown less, and those of the 
 Federal power have proportionately grown 
 larger, the several States have been compelled 
 to take on themselves the additional burden of 
 
Federal Taxes dnd State Ey^penses. 1 7 
 
 the " general welfare of the United States/' in 
 so far as the same is dependent upon, or in- 
 volved in, the system of the general civil 
 administration common to all the States. So 
 complete has been this failure or neglect of the 
 federal authority during this long period, that 
 the records of Federal legislation do not show- 
 any act of Congress to lay and collect a tax, 
 duty, impost, or excise, objectively to provide 
 for the *' general welfare of the United States." 
 That exercise of the power of taxation has 
 so far been exclusively for other purposes than 
 those of the " general welfare of the United 
 States," has further grown out of the need for 
 revenue for paying the public debt, and for 
 purposes of " the common defence," at the be- 
 ginning of the Federal system, while need of it 
 for those of the general welfare was both remote 
 and contingent. The several States had been 
 accustomed, both in their colonial existence and 
 under the Articles of Confederation, to provide, 
 each for itself and in its own way, for what 
 had become under the Constitution, and thence- 
 forth has continued to be, the essential element 
 of the " general welfare of the United States," 
 (viz., the system of the civil administration). 
 
1 8 Federal Taxes and State Expenses, 
 
 Their separate legislative, executive, and judi- 
 cial agencies were then, as now, in being ; and 
 as the whole field of concurrent internal taxes 
 of all sorts was open to them, and then both 
 ample and unrestricted, instead of being, as 
 now, practically limited to polls and valua- 
 tions, no serious inconvenience could be felt in 
 continuing to lay and collect separate State 
 taxes for expenses of the several State systems 
 of the civil administration, instead of resorting 
 at once to the new method of the Constitution. 
 The fresh Federal obligation to serve these ends 
 could, and under the circumstances had per- 
 haps better, He perdu until these separate 
 State agencies should be found inadequate or 
 defective ; and until the new Federal machinery 
 had got to working smoothly in all its compli- 
 cated parts, and had paid the public debt 
 which was clamoring for all the money the 
 new government could spare beyond what was 
 needed for necessary living expenses. And so 
 both individual citizens and separate States 
 hoped on — (neither of them perhaps yet re- 
 alizing the nature and extent of the Federal 
 obligation to provide for the " general welfare 
 of the United States ** ; or, in fact, what this 
 
Federal Taxes and State Expenses, 1 9 
 
 new term in their political institutions stood 
 for) — and struggled on under constantly in- 
 creasing difficulties and debts, occasioned by- 
 Indian wars and annuities, the whiskey insur- 
 rection, French spoliations, the suppression of 
 Algerine piracy, Louisiana and Florida pur- 
 chases, the war of 18 12, and the numberless 
 other constant demands on the Federal treas- 
 ury ; until finally — (in Jackson's administration) 
 — the last dollar of public indebtedness was 
 paid, and no financial excuse was left for 
 longer delay by Congress, to enter on the dis- 
 charge of its constitutional obligations to pro- 
 vide for the " general welfare of the United 
 States." 
 
 By this time, however, there had arisen, as 
 it were, " a new king over Egypt which knew 
 not Joseph." The long-continued practice of 
 separate State provision for both the public 
 good AND ** the general welfare," originating, 
 as we have seen, in the financial needs of the 
 Federal power in the beginning of its existence, 
 (and possibly supplemented by lack of experi- 
 ence as to the nature and extent of the Federal 
 obligation to provide for the " general welfare 
 of the United States"), and continued from 
 
20 Federal Taxes and State Expenses, 
 
 supposed rather than solid reasons of public 
 necessity, had now acquired the force of con- 
 stitutional habit. Both popular sentiment and 
 political party opinion had concurred to pro- 
 duce the conviction that the then existing 
 condition of things should be permanent. It 
 was generally thought no less than " treason to 
 sovereign State rights " for Congress to make' 
 any provision by taxation, (the only lawful 
 means in its power,) to provide for the " gen- 
 eral welfare of the United States " — as if any 
 other means existed, or could exist, by which 
 the rights of the several States and the public 
 good of their people could be preserved and 
 perpetuated in equal safety and prosperity in 
 all of them. These rights of the States, and 
 this public good of their people, cannot be 
 either safe or equally prosperous in all the 
 States, under constantly increasing burdens of 
 necessary State taxes, and constantly diminish- 
 ing sources of separate State revenue, without 
 the intervention of Federal taxes to equalize 
 them. Nothing else could be needed to secure 
 this equilibrium of safety and prosperity in 
 all the States ; and accordingly nothing else 
 but the power to produce it by taxation is 
 
Federal Taxes and State Expenses, 2 1 
 
 vested in the Federal authority by the Constitu- 
 tion. The refusal of this constitutional obli- 
 gation, under these conditions, was equivalent 
 to denial of its existence. Like the twelve 
 half-baptized " brethren," whom St. Paul found 
 at Ephesus, public men, both of that day and 
 continually since, seem not to " have so much 
 as heard whether there be any . . ." (such pro- 
 vision). There were then no debts of the 
 United States, though many and crushing ones 
 in some of the States, all of them incurred 
 mainly for proper purposes of " the general 
 welfare of the United States," in addition to 
 such as were compelled, under the " sovereign '* 
 State obligation to provide for the public good 
 within respective State limits, in the course of 
 separate State administration. Little or noth- 
 ing was needed for purposes of " the common 
 defence " ; for we had grown out of the weak- 
 ness of infancy into the sturdy strength of 
 manhood, and were at peace among ourselves 
 and with the rest of the world. The Federal 
 revenues were overflowing the treasury ; but 
 the " new king over Egypt," having forgotten 
 or ignored his obligation to Joseph, could think 
 of nothing better to be done with " the sur- 
 
2 2 Federal Taxes and State Expenses, 
 
 plus" than to 'distribute" it — yes, these are 
 the terms — among the Egyptians, instead of 
 avoiding its accumulation by making due pro- 
 vision for the necessary living expenses of 
 Joseph's children. And so it has continued 
 to this day ; with only the deplorable difference 
 that both the surplus and the distributions 
 have steadily grown larger — Joseph's children 
 meanwhile starving and in bondage, while the 
 Egyptians are eating their fill out of the flesh- 
 pots from which the children have been 
 excluded. 
 
 The term " general welfare of the United 
 States " was a stranger in political nomencla- 
 ture at the time of its introduction and use in 
 the Constitution. It had, perhaps, a vague 
 popular meaning, as implying something benefi- 
 cent in connection with exercise of unlimited 
 power of taxation (for it is only in connection 
 with exercise of this power by Congress that 
 the " general welfare of the United States " is 
 mentioned in the Constitution) ; but this was 
 all that could then be understood to be ex- 
 pressed by use of the term. It had no legal 
 meaning beyond this vague signification ; for 
 under the antecedent separate State care of all 
 
Federal Taxes and State Expenses, 23 
 
 subjects of the public good, there had been 
 neither need nor occasion for exact legal or 
 technical definition of the term. In this respect 
 the term presents an exception to the precision 
 and accuracy everywhere else prevalent in the 
 terms and phraseology of the Federal Con- 
 stitution. For example, such terms as '' habeas 
 corpus," " bill of attainder," *' letters of marque 
 and reprisal," ** suits in law and equity," etc., 
 indicating subjects of either positive or nega- 
 tive jurisdiction, had, each of them, a definite 
 legal import. So, too, terms indicating qualities 
 as distinct from subjects of jurisdiction, such, 
 for example, as " law impairing the obligation 
 of contracts," " ex post facto law," etc. ; these, 
 and every other term used in the Constitution, 
 either to denote a subject or a quality of juris- 
 diction, except this one, had an antecedent and 
 technical legal meanings and are deemed to 
 have the same incorporated with themselves. 
 This is, as it were, novus homo — the new man — 
 supposed to have been born of the people, but 
 known to have been born of the exigencies of the 
 times as well ; but, however born, there had 
 not hitherto been either name or place for him 
 in either Constitution or laws. On account of 
 
24 Federal Taxes and State Expenses, 
 
 close kin it would not do to call him by the old 
 patrician name of ** public good," for only the 
 sum of all subjects^ both of Federal and separate 
 State jurisdiction, could be properly so called ; 
 and " general welfare," though of close kin with 
 public good, is neither identical, equivalent, nor 
 synonymous with it. Further than this, it can 
 only be affirmed with certainty that this new 
 factor in government was to be a beneficent one, 
 as in compensation for the unlimited power of 
 taxation severally and equally relinquished by 
 the States, and as therefore affecting them all 
 equally and alike, both in its burdens and in its 
 blessings, and its characteristic and appropriate 
 legend is JUSTICE TO ALL, FAVORS TO NONE. 
 To all which the general civil administration, 
 under separate and exclusive State authority 
 over all subjects of it, more exactly and more 
 closely than any thing else, corresponds. 
 
CHAPTER II. 
 
 Present Physical and Political Conditions of the United States 
 Compared with Those of 1789 — Former Easy Enforcement 
 of State Excise Taxes — Obstacles in the Way of it Now — 
 Limited Scale of State Expenses in 1789 — Mr. Hamilton's 
 Forecast of Aggregate Annual State Expenses Now Ex- 
 ceeded by Those of Many Single Cities — Co-equal and 
 Concurrent Powers of Federal and State Taxation — Nos. 
 XXXII., XXXV. of the Federalist on these Concurrent 
 Powers — Difference between Federal and Single Autono- 
 mous States, in Respect to Excise Taxes. 
 
 The reader is reminded that when the Con- 
 stitution was estabhshed in 1789, the United 
 States comprised but a trifling extent of terri- 
 tory as compared with that embraced within 
 present Hmits. Their extent was but as a fringe 
 along the Atlantic coast from New Hampshire 
 to Georgia inclusive, nowhere more than three 
 hundred miles wide between the sea-coast and 
 the Alleghany Mountains. Even between the 
 States nearest each other in this narrow com- 
 pass, intercourse of all sorts, and especially that 
 for trade and interchange of products, was both 
 tedious and hazardous, and was almost wholly 
 25 
 
26 Federal Taxes and State Expenses, 
 
 made by sea-voyages. There was neither 
 steamboat, nor canal, nor railroad, nor tele- 
 graph in existence ; and, with hardly an excep- 
 tion, river navigation did not extend beyond 
 the limits of a single State. Lands and polls 
 were the principal subjects of taxation for State 
 purposes, and the highly productive and little 
 burdensome subjects of excise taxation, which 
 make the chief sources of revenue for expenses 
 of the civil administration the world over to- 
 day, had not then been developed. Such per- 
 sonal property as then existed was, for the most 
 part, as plainly visible and as easily found and 
 listed for taxation under State tax laws, as 
 lands and polls. There were no public funds in 
 which good investments could be made, and in 
 fact there was little or no money for such in- 
 vestment if opportunity for making it had ex- 
 isted. Investments of money in government 
 securities, even in Europe, was then of but re- 
 cent existence, and was practically unknown in 
 the United States. There were no such public 
 funds as our national, State, and municipal 
 bonded debts, or securities of private corpora- 
 tions, in which capital accumulated in one State 
 could find investment in another and avoid taxa- 
 
Federal Taxes and State Expenses, 27 
 
 tion at home. There were no railroad, insur- 
 ance, manufacturing, mining, telegraph, and the 
 like incorporated stock companies, to absorb 
 the capital produced by the common industry 
 of the several States, and shelter it from taxes 
 for State and local purposes. In fact, such 
 taxes as were laid on personal property were, 
 as a rule, specific rather than depending on 
 valuation ; as so much per head on horses 
 and cattle on the farms, or on carriages, or 
 on licenses for designated occupations. There 
 were no manufactures in the sense in which 
 this term is used to-day ; and the business of 
 the country was carried on by single individu- 
 als, or by partnerships composed of these. 
 There were no general laws of incorporation, 
 and special charters were to be obtained from 
 some State legislature before associations of 
 men and capital, with special franchises in desig- 
 nated business pursuits, could be formed ; and 
 it was therefore impossible for hundreds of mil- 
 lions of dollars in personal property to be accu- 
 mulated in single hands through the agency of 
 private corporations, as at present. The legal 
 fiction that "corporations have no souls and 
 never die " had not then so far usurped control 
 
28 Federal Taxes and State Expenses, 
 
 of the public conscience, or that of individuals, 
 as to induce general belief that it was com- 
 mendable business sagacity to evade payment 
 of State and local taxes by investments in the 
 stock and securities of private corporations out- 
 side the State jurisdiction. It has been reserved 
 for more recent times to witness the success of 
 schemes of this sort. Such a thing as share 
 capital in private corporations created by the 
 laws of one State, and owned by citizens of an- 
 other State, and carrying on business in yet an- 
 other, or in most, if not in all the other States, 
 was wholly unknown. These forms now repre- 
 sent the larger share of the aggregate personal 
 property in the several States. As a rule, 
 everybody knew about what property his neigh- 
 bor owned, and could tell pretty nearly how 
 much he ought to pay taxes on ; and the dif- 
 ferent species of property were so few as com- 
 pared with the almost infinite variety of them 
 at present, that there was little difficulty in 
 finding out what personal property any single 
 individual owned, and in listing it for taxation. 
 Under these conditions, whoever might be 
 tempted to conceal part of his taxable property, 
 in order to avoid being taxed on it, was in dan- 
 
Federal Taxes and State Expenses, 29 
 
 ger of losing caste with his neighbors if he 
 yielded to the temptation, and this was some 
 safeguard against such evasion. 
 
 Added to all this, the scale of expenses for 
 State and local purposes was extremely limited 
 as compared with that everywhere prevailing 
 to-day. The average citizen of 1789 knew 
 nothing of either the needs or of the facilities 
 which now exist for State and local indebted- 
 ness beyond the means for immediate payment. 
 When the question of establishing the Federal 
 Constitution was being considered by the peo- 
 ple of the several States, and objection was 
 made to the great preponderance of the Federal 
 power of taxation under it over that of the 
 States, the objection was answered by Alex- 
 ander Hamilton to the effect that the neces- 
 sary aggregate expenses of all the State gov- 
 ernments could not, " for many years to come," 
 exceed a million dollars a year for all purposes. 
 This was doubtless a reasonable conjecture for 
 the time it was made for, as well as for the 
 modest scale of State expenses then in vogue ; 
 but we know that for the year 1880 the census 
 report shows a total aggregate tax on property 
 valuations alone for all State and local pur- 
 
30 Federal Taxes and State Expenses, 
 
 poses, of $313,000,000 in round numbers, exclu- 
 sive of poll, specific, and other forms of taxa- 
 tion under State tax laws. The expenses of 
 many single cities now exceed Mr. Hamilton's 
 estimate for the whole country. Those of New 
 York exceed it thirty times over every year. 
 
 But it is beyond the present purpose to at- 
 tempt a complete detail of the causes which 
 have led to the wide difference in results be- 
 tween the well-grounded conjecture of the most 
 sagacious of American statesmen in 1789 and 
 the actual condition of things to-day in the 
 United States, in respect to the working of the 
 system of co-equal and concurrent Federal and 
 State powers of taxation, then for the first 
 time introduced in practice, either in the 
 United States or elsewhere in the world. The 
 immense additions of territory which have 
 since extended the United States of 1789 from 
 ocean to ocean, though the most obvious, have 
 not been the most influential cause which has 
 produced the marvellous change in the condition 
 and circumstances of the several States, as well 
 as of their people, since Mr. Hamilton's con- 
 jecture of annual aggregate State expenses was 
 made. 
 
Federal Taxes and State Expenses, 3 1 
 
 Since 1789 the fabric of civil society has been 
 so far gradually modified as that but little of 
 what was then regarded as the maximum of 
 comfort in the living of the people and of con- 
 venience in the public and civil administration 
 remains so to-day. The systems of business 
 and the arts of life have given way to new ones. 
 Forms and elements of property, unknown in 
 1789, constitute the great mass of wealth in 
 many of the States to-day, while in others but 
 little change in this respect is noticeable in the 
 census statistics. It seems probable that this 
 disproportion in relative progress in wealth of 
 different States, having identical guaranties of 
 personal liberty and of religious freedom under 
 the Federal Constitution, is the result of un- 
 equal Federal taxation on account of " the 
 general welfare of the United States." That 
 the States in which exercise of this power has 
 been directly felt have advanced more rapidly 
 than those in which such exercise has been 
 only incidentally felt, would seem to mark it as 
 the cause of the difference between them in 
 material prosperity. 
 
 If we take historical facts rather than " tra- 
 ditional intentions " of the framers of the Fed- 
 
32 Federal Taxes and State Expenses. 
 
 eral Constitution for our guide in interpreting 
 its provisions concerning the power of taxation, 
 there seems to be no ground for reasonable 
 doubt that these provisions were framed on the 
 theory that, inasmuch as the power to lay and 
 collect duties on imports was exclusive in the 
 Federal government, and withal peculiarly 
 fitted for exercise of its national functions, this 
 source would be the primary one of that gov- 
 ernment both from choice and convenience; 
 while the whole field of internal taxation, both 
 direct and excise, which seemed equally adapted 
 for exercise of the reserved powers and func- 
 tions of the several State governments, would 
 always be open to these for State and local 
 expenses of the general civil administration in 
 them, subject to no other restriction or inter- 
 vention than that of the concurrent right of the 
 Federal authority to enter it at any time for 
 supplying deficiencies in its duties from imports, 
 from such subjects or sources of revenue as had 
 not been appropriated by the States for State and 
 local uses. For this reason, it was at one time 
 proposed to limit the Federal power of taxa- 
 tion to duties on imports, and to make the 
 power of taxation otherwise exclusive in the 
 
Federal Taxes a7id State Expenses. 33 
 
 several State governments ; but for the reasons 
 stated in Nos. XXXII. and XXXV. of the 
 Federalist, the power of taxation was made 
 concurrent in the Federal and State govern- 
 ments, except as to duties on imports, which 
 was made exclusive in the former. But we 
 have learned, from nearly a hundred years of 
 costly experience, that the most productive, as 
 also the least burdensome, sources of public 
 revenue, which were supposed to be perpetual 
 subjects of these concurrent powers of Federal 
 and separate State taxation, have become as 
 practically exclusive in the Federal govern- 
 ment as if made so by constitutional provision ; 
 and that the production of all sorts of spirits 
 and manufactured tobacco is among the num- 
 ber of them. 
 
 These subjects as they exist to-day were 
 practically unknown a hundred years ago. 
 There was but the germ of present production 
 of either then in existence, and difficult and 
 costly means of transportation so effectually 
 limited production to the local demands for 
 consumption, as that State excise taxes on pro- 
 duction of them might then be made a source 
 of revenue for expenses of the civil adminis- 
 
34 Federal Taxes and Slate Expenses, 
 
 tration under separate State authority. The 
 restraint put upon such State excise on produc- 
 tion by Section 2 of Article IV. of the Federal 
 Constitution could not then be felt ; and the dif- 
 ficulties in the way of transportation of the 
 products named made them readily subject to 
 State excise tax laws. But this condition of 
 things has been so far changed by increased 
 facilities for transportation of commodities, by 
 improved processes of manufacture, as well as 
 by the multiplied means of instantaneous com- 
 munication between most widely separated 
 points of production and consumption, facili- 
 tated as these are by the provisions of Section 2 
 of Article IV., that consumption of the luxuries 
 named is no longer restricted to the neighbor- 
 hood of production, but is as widespread as the 
 limits of the United States, and more cheaply 
 supplied from any given point of production to 
 its most widely separated parts, than was possible 
 in contiguous States at the time the Constitu- 
 tion was established. Instead of transportation 
 being now, as it was in 1789, the main item 
 affecting the cost of consumption of these prod- 
 ucts, that of their constituent elements has 
 come to be the main one ; and the place of 
 
Federal Taxes and State Expenses, 35 
 
 production is governed accordingly. Instead 
 of many small establishments in each of the 
 several States, capable of supplying the local 
 demands of its people for consumption, each of 
 them easily subjected to a State excise tax on 
 its production, as was the state of things then 
 in vogue, these small establishments have been 
 replaced by a smaller number of large ones in a 
 few States, in which the agricultural products 
 needed as constituent elements can be procured 
 in greatest abundance and at least cost. The 
 product of these few large establishments, 
 while sufficient for the demand for consumption 
 in all the States, is governed by the price for 
 which it may be sold at home, or in other 
 States, or abroad, when not ruled both as to 
 price and amount of production by combina- 
 tions among the producers, and is entitled to 
 be sold in any State, under the provisions of Sec- 
 tion 2 of Article IV. of the Federal Constitu- 
 tion, upon the same conditions as to State taxes, 
 as if produced in that State. Either argument 
 or discussion seems out of place to show that 
 under such conditions a State tax on produc- 
 tion of the luxuries named could produce 
 revenue only in the States in which the busi- 
 
36 Federal Taxes and State Expenses, 
 
 ness of making them is carried on, and in 
 these only so long as some other State either 
 imposed no tax or a less one on production. 
 
 If it be urged that the difficulty in the way 
 of separate State revenue from the products of 
 distilleries, breweries, and tobacco factories in 
 the several States, may be obviated by laying 
 the tax on consumption rather than on produc- 
 tion, the answer is that while collection of the 
 tax on production is relatively inexpensive and 
 easy of enforcement, the tax on sales has been 
 shown by experience to be so difficult and bur- 
 densome as not to justify the expenses of col- 
 lection. It has been owing perhaps as much to 
 these causes, as to the impediments put in the 
 way by Section 2 of Article IV. of the Federal 
 Constitution, that State excise taxes generally 
 have fallen into desuetude. The enforcement of 
 such a tax on consumption of spirits and manu- 
 factured tobacco, in many of the States, would 
 require in each a number of tax collectors as 
 great perhaps as that now employed to collect 
 the Federal internal-revenue taxes on produc- 
 tion of these articles. It has therefore been 
 thought more eligible and effective, as well as 
 more conducive to " the general welfare of the 
 
Federal Taxes and State Expenses, 3 7 
 
 United States," that the Federal authority shall 
 exercise its concurrent power of taxation over 
 production of the articles named, in co-opera- 
 tion with that of the several States, for lessen- 
 ing existing burdens of State taxes on polls and 
 property valuations for support of the general 
 civil administration under separate State au- 
 thority, subject only to such exigencies in 
 other affairs as shall compel recourse to all its 
 available resources for revenue. 
 
 If political problems were susceptible of dem- 
 onstration like mathematical ones, according to 
 the measure of abstract truth they contain, it 
 might be demonstrated that concurrent powers 
 of taxation in the Federal and State govern- 
 ments have given to the former practically ex- 
 clusive control of taxes on incomes as well as 
 of taxes on spirits and manufactured-tobacco 
 production, and that these three subjects of ex- 
 cise taxes are of greater value, as sources of 
 revenue, than all others taken together which 
 have been left to the States for expenses of the 
 general civil administration. Certain it is that 
 added to the exclusive right to collect duties on 
 imports, they give to the Federal authority such 
 overwhelming preponderance in practical taxa- 
 
38 Federal Taxes and State Expenses, 
 
 tion as must have been anticipated and pro- 
 vided for by limiting its exercise to the three 
 objects specified in Paragraph i of Section 8, of 
 Article I. of the Federal Constitution, viz. : " to 
 pay the debts and provide for the common de- 
 fence and general welfare of the United States." 
 These terms do not limit exercise of the Federal 
 power to such as it possesses concurrently with 
 the States ; and the only question which can 
 properly arise out of them in respect to the pro- 
 posed exercise of it, is as to whether the main- 
 tenance of the civil administration under the 
 several State governments, by taxes least bur- 
 densome to the people of the several States, be 
 involved in " the general welfare of the United 
 States? " Nor should it be overlooked, in the 
 answer to this question, that while the Tenth 
 Amendment perpetuates the exclusive jurisdic- 
 tion of the several States over the subjects of 
 the general civil administration in each, these 
 terms lay the Federal authority under obligation 
 to provide for the expenses of it, by taxes of 
 some sort, to the extent of its connection with 
 " the general welfare of the United States." 
 
 It may be pertinent to remark in closing this 
 chapter, that under autonomous or non-federal 
 
Federal Taxes and Slate Expenses, 39 
 
 governments, where the whole power of taxa- 
 tion is exercised by a single legislative body, 
 as in England or France, the expenses of the 
 civil administration which corresponds with 
 that of the several State governments under 
 our Federal system, are paid out of taxes on 
 production, or else out of government monop- 
 oly of the production of spirits and manufac- 
 tured tobacco, while license fees for retail traffic 
 in these products largely suffice for the expen- 
 ses of cities and incorporated towns. The rev- 
 enues from these productions in England, and 
 from the government monopoly of tobacco in 
 France, more than suffice for expenses of the 
 civil administration which corresponds with 
 that of our own several State expenses : and 
 this, notwithstanding the expenses of the civil 
 administration in each of the countries named 
 are modelled after the tastes of royal extrava- 
 gance, while our greater expenses are profess- 
 edly based on those of " republican simplicity." 
 
CHAPTER III. 
 
 The General Civil Administration as Related to ' ' The Gen- 
 eral Welfare of the United States" — Tendency towards 
 Heavier State Taxes to Support It— Preservation of the 
 State Governments as Necessary "Instrumentalities" of 
 " The General Welfare of the United States " — What is 
 the General Welfare of the United States? — Two Distinct 
 Phases of It in the Preamble and Subsequent Provisions — 
 Parallel between the Riddle of " The General Welfare " 
 and that of The Sphinx in the Greek Mythology — The 
 Difference between "Promoting" and "Providing for" 
 the General Welfare — The Despotism of Classes under 
 It— The "King Bolt" Which Holds the Federal Con- 
 struction Together. 
 
 The Federal and State governments have mu- 
 tual and reciprocal interests in " the general wel- 
 fare of the United States," under the Federal 
 Constitution : the first-named, while having ex- 
 clusive authority, under Paragraph i, of Section 
 8 of Article I., and the Tenth Amendment, taken 
 together, to collect taxes, duties, imposts, and 
 excises " to provide for the general welfare 
 of the United States," is prohibited by the last- 
 named of these provisions from otherwise in- 
 terfering with any subject of it ; and the sev- 
 40 
 
Federal Taxes and State Expenses. 41 
 
 eral States, while having exclusive jurisdiction 
 of all such subjects of " the general welfare of 
 the United States " not prohibited to them by 
 the Federal Constitution, are prohibited by the 
 Tenth Amendment from laying and collecting 
 taxes of any kind to provide for it. For, jurisdic- 
 tion of the subjects of " the general welfare of 
 the United States," not having been delegated 
 to the United States by the Constitution, nor 
 prohibited by it to the States, remains in the 
 latter, by virtue of the Tenth Amendment ; 
 and among the subjects of "the general wel- 
 fare of the United States " which are thus 
 made exclusive ones of State jurisdiction, the 
 rights of person and property, the regulation of 
 the domestic relations, and the maintenance of 
 social order may be named as both conspicu- 
 ous and essential elements of the general wel- 
 fare of the United States, as also of exclusive 
 State jurisdiction ; and if these subjects be in 
 any way part of, or identified with, " the gen- 
 eral welfare of the United States," then is the 
 power to lay and collect taxes to provide for 
 the due administration of them in the general 
 civil administration, an exclusive one in the 
 Federal autonomy ; and the States are concur- 
 
42 Federal Taxes and State Expenses, 
 
 rently restricted to the levy and collection of 
 taxes only for such purposes as are local and 
 peculiar to each of the States. 
 
 But this concurrent right of taxation in the 
 Federal and State governments is so far 
 checked by the provisions of Section 2, of Arti- 
 cle IV., as that no State may discriminate in 
 taxes for local and peculiar purposes, between its 
 own citizens or their property, and the citizens of 
 other States and their property within its juris- 
 diction ; and we need only recur to the uni- 
 form current of decisions of the Supreme Court 
 of the United States, in cases affecting the right 
 of State taxation since 18 19, to show that the 
 field of State excise taxes has been steadily 
 restricted, until the subjects of it have disap- 
 peared from the tax lists of most of the States, 
 and taxes for support of the general civil ad- 
 ministration under separate State authority, 
 may be said to be practically limited to polls 
 and property valuations. While this restraint 
 upon the State power of excise is wholly con- 
 sistent with the obligation of the Federal au- 
 tonomy to provide for expenses of the general 
 civil administration as essential to the " general 
 welfare of the United States," it means also 
 
federal Taxes and State Expenses, 43 
 
 heaviest taxes, both as to polls and property 
 valuations, on those least able to pay them, so 
 long as the States shall persist in taxing them 
 for purposes of the general civil administration, 
 instead of demanding of the Federal autonomy 
 the performance of its constitutional obliga- 
 tions in this respect, as essential to " the gen- 
 eral welfare of the United States." While the 
 resources of the Several states for revenue to 
 provide for that part of the general welfare of 
 the United States which is inseparable from 
 separate State administration, have thus 
 steadily grown less, the need for larger State 
 expenses becomes more and more imperative, 
 on account of the troubles which from time to 
 time menace the stability of social order and 
 the safety of both persons and property.' It is 
 thus for lack of effective exercise of the power 
 of excise taxation by the Federal autonomy 
 alone, that " the general welfare of the United 
 States " is seriously menaced, and the means 
 for maintaining it through instrumentality of 
 the several State governments lessened in pro- 
 portion to the steadily growing need for them. 
 Until within a few years there had been no 
 serious need for increased State taxes on polls 
 
 JL^, Of THE ^r 
 I^NIVERSITY 
 
44 Federal Taxes and State Expenses. 
 
 and property valuations in any of the States, to 
 meet increased expenses for maintaining social 
 order, as well as to compensate owners for loss 
 or damage to property by mob violence. The 
 riots in Pittsburgh and Alleghany, some ten 
 years ago, may be said to have inaugurated a 
 new era in this respect. Property to the value 
 of many million dollars having been destroyed 
 by the mob, the compensation for it was to be 
 made by increased taxes on what was left ; and 
 in this, as in all cases of direct taxes on polls 
 and property valuations, the increased tax fell 
 on those innocent of participation in the out- 
 rage, as well as those least able to bear it, in the 
 proportion of about seventy-three to twenty- 
 seven. This statement of the relative ratio in 
 taxes paid for damages done by the mob in the 
 case referred to, is based upon the assumption 
 that the same ratio between small and large 
 property owners exists in Pittsburgh and Alle- 
 ghany as is shown in the analysis of a tax list 
 to exist in one of the counties in the State of 
 Indiana (see/^j/.. Chapter X.) Since the riot 
 in Pittsburgh and Alleghany, like cases have 
 been multiplied in other cities in Ohio, Indiana, 
 Illinois, Missouri, Wisconsin, and Texas, which 
 
Federal Taxes and State Expenses, 45 
 
 are yet fresh in recollection, and which must 
 call for repetition of the same unequal ratio of 
 taxes between small and large property owners, 
 to make compensation for loss of property, or 
 the expenses of State militia. These cases are 
 referred to in this place, to show the increased 
 necessity for additional sources for State reve- 
 nues, if the State governments are to maintain 
 their original sphere of usefulness under Federal 
 institutions, as the sole conservators of the 
 rights of person and property and of social 
 order. 
 
 The tendency towards heavier State taxes 
 on polls and property valuations for support 
 of the civil administration in the several States, 
 may be said to be the most serious menace 
 against the usefulness of the State govern- 
 ments under the Federal system. The con- 
 stantly recurring agitations and disturbances 
 which from time to time require the armed 
 intervention of State authority, must inevitably 
 lead to the armed intervention of the Federal 
 authority as a substitute for it, on account of 
 the high rate of State taxes necessary to pay 
 military expenses, as well as damages from 
 mob violence. If we would preserve the use- 
 
46 Federal Taxes and State Expenses, 
 
 fulness of the State governments as instrumen- 
 talities of the general civil administration, some 
 way must be found by which they shall have 
 access to sources and subjects of revenue not 
 now available to them under concurrent pow- 
 ers of Federal and State taxation. Federal 
 taxation of the production of spirits and manu- 
 factured tobacco, and per capita distribution 
 of the nett proceeds of the tax among State 
 populations, according to census population, 
 seems to promise the requisite safeguard to 
 the usefulness and perpetuity of the State 
 governments. If such tax be inadequate to 
 the necessary end, the like tax on incomes, 
 and like distribution of its proceeds, could 
 not fail to accomplish such results, and at the 
 same time do away with existing needs for 
 State taxes on polls and property valuations. 
 What then is " the general welfare of the 
 United States " ? The author has sought but 
 has not been able to find a satisfactory defini- 
 tion of this term in any of the books of writers 
 on constitutional or public law, in the opinions 
 of judges of courts either Federal or State, or in 
 the speeches or public addresses of statesmen 
 and learned professors, or in the compilations of 
 
Federal Taxes and State Expenses, 47 
 
 lexicographers. And yet if such a thing exist, 
 there must be in it some quaUty by which it 
 may be distinguished from every thing else. If 
 the framers of the Federal Constitution knew 
 what '* the general welfare of the United States" 
 was or is made up of, or consisted in, they did 
 not tell us, but seem to have left it undetermined, 
 as a sort of variable quantity which was to 
 be ascertained from time to time by successive 
 generations, according to the changed conditions 
 and circumstances in which they should find 
 themselves. By this they left the way open 
 to all the benefits and advantages to be gained 
 from the lessons of political experience, in- 
 stead baring it, as under the Chinese constitu- 
 tion, and thus arresting progress in civilization 
 by their posterity, who dare not go beyond the 
 experience of their ancestors. Instead of this, 
 they seem to have purposely left the constituent 
 elements of " the general welfare of the United 
 States," for which Congress was to provide by 
 taxation, to be determined from time to time 
 by those most deeply interested in them ; tak- 
 ing care only to establish the formula by which 
 these were to be provided for by taxation. They 
 as little foresaw the impending physical and 
 
48 Federal Taxes and State Expenses, 
 
 political changes in the conditions of the na- 
 tional existence, which in the course of a hun- 
 dred years was to destroy the State power of 
 excise taxation, as the barons of England fore- 
 saw that the principles of the great charter ex- 
 torted by them from an unwilling king, would 
 in progress of time subject their own posterity 
 to the dominion of the popular will. There is 
 in the provisions of the Federal Constitution 
 respecting taxation " to provide for the general 
 welfare of the United States," the same quality 
 of adaptation to changed conditions and cir- 
 cumstances of the people which has made "the 
 great charter" of our forefathers the ever varia- 
 ble quality in government that makes it conform 
 to the general welfare of the people under the 
 changing conditions of a progressive civilization. 
 The riddle of " the general welfare " as pro- 
 pounded in the Preamble and provisions of the 
 Federal Constitution, seems to afford a parallel 
 to that of the Sphinx in the Greek mythology. 
 This classic fable is generally accepted as repre- 
 senting some evil in government, for which the 
 only hope of remedy is to be found in profiting 
 from experience of its bad results. The sphinx 
 in the fable is represented as a monster both 
 
Federal Taxes aud State Expenses. 49 
 
 wise and cruel, enabled by her wisdom to pro- 
 pound deep mysteries, and prompted by her 
 cruelty to devour such as suffered from them 
 but were unable to explain the cause of their 
 sufferings, until eventually one of these found 
 out and exposed the trick of the fable, and 
 thenceforth the trouble was over. 
 
 Now, if some one of our statesmen will take 
 on him the task to distinguish the two general 
 welfares respectively named in the Preamble to 
 the Federal Constitution, and subsequent pro- 
 visions of it, by setting such mark on each as 
 that neither shall thenceforth be liable to be 
 confounded with or mistaken for the other, he 
 may probably, by so doing, render as great ser- 
 vice to the mass of his countrymen, as was ren- 
 dered to the Greeks by the man who solved the 
 riddle of the sphinx, and thereby freed his 
 country from her hurtful presence. The author 
 does not take this task on himself ; for being 
 neither statesman nor politician, his work on the 
 task, though never so well done, would hardly 
 be accepted as satisfactory until some one else, 
 with juster claims to public confidence as an 
 expert in constitutional interpretation, should 
 approve it. And as this constitutional expert, 
 
50 Federal Taxes and State Expenses, 
 
 according to the usage in such case, is to have 
 the credit of the performance, it seems but fair 
 that he shall do at least part of the work it re- 
 quires. However, while thus modestly declin- 
 ing the whole task, the following suggestions 
 are volunteered, viz. : 
 
 First. The term " general welfare " in the 
 Preamble to the Federal Constitution is dis- 
 tinguishable from that in Paragraph i of Sec- 
 tion 8 of Article I., as an object to be pro- 
 moted by establishment of the Constitution, 
 whereas that used in the paragraph and section 
 named is an object to be provided for by taxes 
 under it. 
 
 Second. There is no power granted to the 
 United States in the Constitution to lay and 
 collect taxes of any sort to promote any things 
 either " the general welfare," or " the general wel- 
 fare of the United States" ; but only to provide 
 for the three national objects set out in Para- 
 graph I of Section 8 of Article I., viz. : " to 
 pay the debts and provide for the common de- 
 fence and general welfare of the United States." 
 
 Third. " To promote the general welfare " 
 is one of the purposes accomplished by perpetual 
 establishment of the Federal Constitution, while 
 
Federal Taxes and State Expenses, 5 1 
 
 " to provide for the general welfare of the 
 United States " is one of the three specified 
 national objects for which '' taxes, duties, im- 
 posts, and excises " may be laid and collected 
 under its provisions. 
 
 Fourth. Only that which is common alike 
 to all the States is to be '* provided for " by 
 Federal taxation ; while that which is not thus 
 common to all the States, but is local and pe- 
 culiar to some of them, may be ** promoted," or 
 "provided for," by separate State authority, at 
 discretion ; and to this end the several States 
 have coequal and concurrent rights and powers 
 of taxation with the Federal authority under 
 the Constitution, except as to duties on imports. 
 
 These suggestions of essential elements seem 
 to justify the following definition of the term, 
 viz. : 
 
 The " general welfare of the United States," 
 is the state or condition of safety and prosper- 
 ity, in which citizens of the United States have 
 and enjoy their rights of person and property, 
 and the stability of social order, in the civil 
 administration common to all the States, under 
 separate and exclusive State jurisdiction over 
 all the subjects of it. 
 
52 Federal Taxes and State Expenses, 
 
 This definition is intended to include in the 
 civil administration of the several States, every 
 subject and power, which is original and in- 
 herent in " free, sovereign, and independent 
 States " — (see the Declaration of Independence, 
 and the subsequent treaty of acknowledg- 
 ment of this Declaration by Great Britain in 
 1783, as to what these subjects and powers 
 are — ) ; except as is otherwise provided in the 
 Constitution of the United States. It will 
 enable the reader to mark the material dif- 
 ference between the '* general welfare of the 
 United States " which Congress is '^ to provide 
 for " by laying and collecting '* taxes, duties, 
 imposts, and excises," and THE PUBLIC GOOD ; 
 (identical with the pro bono publico of the 
 Romans ; from whom the term has been de- 
 rived, to modern governments having but a 
 single legislative body ; ) which is to be cared 
 for by the several States, each for itself 
 within its own territorial limits. The States 
 separately care for and guard all subjects of the 
 Public good, by exercise of inherent " sovereign " 
 powers ; while the Federal authority is to 
 provide for the general welfare, by exercise 
 of the single, delegated, and derived power of 
 
Federal Taxes and State Expenses, 53 
 
 taxation only. Beyond this the latter has no 
 right to go in respect of the general welfare ; 
 for though its rights and powers in this, as in 
 all other respects, be, like its laws, supreme, 
 they are not " sovereign ** in the technical 
 sense in which the rights and powers of the 
 several States are so. In this technical sense 
 what are called " sovereign " rights of the 
 several States, are original and inherent ; not 
 secondary and derived ; while the rights and 
 powers of the Federal authority in respect of 
 the general welfare, are wholly secondary and 
 derived ; and though its acts therein be " su- 
 preme," they are not " sovereign " in the sense 
 in which the rights and powers of the States 
 are so. 
 
 The supremacy of Federal laws is limited to 
 the subjects enumerated in the Federal Con- 
 stitution : such, for example, as the right to 
 coin money ; fix the standard of weights 
 and measures ; declare war and make treaties, 
 etc. ; while the right of eminent domain re- 
 mains in the several States. 
 
 And yet the several States are not " sovereign 
 States," either in their relations to the Federal 
 government, or to each other, or to other 
 
54 Federal Taxes and State Expenses, 
 
 governments. For what a travesty both upon 
 the idea of sovereignty and of common sense, 
 would be the suggestion of a " sovereign 
 State," without either capacity or power to 
 declare war, to make treaties, to form alliances, 
 to raise armies and provide fleets, or to coin 
 money, or lay and collect duties upon the 
 foreign commerce entering its own ports, to 
 pay for all these things ? The chief of a bar- 
 barous tribe, in his paint and feathers, may 
 claim all these things, and have his claim 
 allowed ; but not so one of the States united 
 under the Federal Constitution, may claim any 
 one of these things, and have its claim allowed. 
 The inherency of sovte of the rights of 
 sovereignty, viz. the inherent right to guard 
 and provide by legislation for all subjects of 
 the Public good within its territorial limits is 
 the true and more creditable characterization 
 of what is intended to be expressed in the 
 term ** State sovereignty," or ''sovereignty of 
 the States " ; and because these last-named 
 terms have proved misleading, and are sub- 
 versive of the idea intended to be expressed by 
 them, it were better that they be henceforth 
 allowed to fall into disuse. 
 
Federal Taxes and State Expenses, 55 
 
 The subjects of the Public good differ so 
 much in widely separated States, that to have 
 invested the Federal authority with power to 
 provide for them in any direct way, must in the 
 end have led to exercise of " sovereign " power 
 over all the subjects of it. It was to avoid this 
 hazard that only that which is common to all the 
 States^ is intrusted by the Constitution to be 
 provided for by Federal taxation. For ex- 
 ample : the civil administration common to all 
 the States, and embracing all the varied sub- 
 jects of the Public good, may be thus provided 
 for, as being both essential and indispensable to 
 the "general welfare of the United States"; 
 while all the subjects of this civil administra- 
 tion are exclusive ones of separate State power. 
 It is THE SYSTEM of this civil administration as 
 distinct from the subjects of it, that is to be 
 provided for by the special, but unlimited 
 power of Federal taxation. The very nature 
 of this special power of Federal taxation fixes 
 both the purpose and the character of it. 
 
 Exercise of federal power over the subjects 
 of the Public good, is incompatible with the 
 nature of federal institutions. The two can- 
 not perpetually co-exist ; but the special power 
 
56 Federal Taxes and State Expenses, 
 
 of federal taxation to provide for the general 
 welfare under them, through agency of the 
 several State systems of the civil administra- 
 tion, exercising '* sovereign " powers over all 
 the subjects of the Public good, IS THE ESSEN- 
 TIAL CONDITION OF THEIR PERPETUITY. 
 
 From the establishment of the Federal Con- 
 stitution to the present time, the provisions of 
 it for legislation concerning '^ the general wel- 
 fare of the United States " seem to have been 
 more in the nature of hindrances in the way of 
 action on the subject, than helps and guides to 
 it. Apparently confounding " the general wel- 
 fare " named in the Preamble as an object to be 
 promoted by establishment of the Constitution, 
 with that " general welfare of the United 
 States " named in Paragraph i of Section 8 of 
 Article I., as an object to be provided for by 
 taxes, duties, imposts, and excises, political par- 
 ties have been formed on the basis of particular 
 classes whose immediate interests have been 
 substituted for " the general welfare of the 
 United States," under the pretence (perhaps we 
 should say under the delusion) that this general 
 welfare could be best " promoted " by such 
 
Federal Taxes and State Expenses, 5 7 
 
 exercise of the Federal power of taxation as 
 would so place these classes in the sphere of its 
 operation, as that direct benefits and profits 
 should enure to them, whatever else might en- 
 ure to all others. Aside from the fact that this 
 class system of Federal taxes is plainly selfish, 
 as contrasted with that which would provide 
 for the common good of all the national in- 
 terests without distinction among them, it is 
 not true that Congress is authorized to lay and 
 collect taxes " to promote " any class interest 
 whatever. Such encouragement of class or 
 local interests falls within the exclusive tax 
 jurisdiction of the several States ; thus making 
 ** the tariff a local question "; though in a sense 
 especially different from that expressed both 
 by Mr. Greeley and General Hancock when can- 
 didates for the Presidency. 
 
 All that Congress may rightfully do by 
 exercise of its powers of taxation is " to pro- 
 vide for" the three specified objects named in 
 Paragraph i of Section 8 of Article I. of the 
 Constitution. It may pass votes of commenda- 
 tion and like encouragements of particular or 
 even of personal interest, and in this way " pro- 
 
58 Federal Taxes and State Expenses. 
 
 mote " or " encourage " them to the extent of 
 congressional influence when exerted in such 
 form ; but there is no warrant to be found in 
 the Constitution for it to vote either taxes or 
 money for such purpose. Anybody may " pro- 
 mote " or " encourage " the welfare of another 
 by the like acts of kindness and good-will ; but 
 nothing short of money or its equivalent can 
 " provide for " that welfare. A citizen may 
 promote the general welfare of his family by 
 good example and by civility in his intercourse 
 with others, but he cannot " provide for " that 
 welfare by these means only. The folly which 
 seeks " to provide for " the general welfare of 
 everybody by favors to particular individuals is 
 practised only in Federal legislation, and is, in 
 practical politics, as if the reflected light of the 
 moon were substituted for the direct light and 
 warmth of the sun in the natural world. 
 
 It is this Federal legislation, which reverses 
 the constitutional rule of taxation and aims " to 
 provide for " the welfare of the whole by laying 
 taxes to promote the interests of particular 
 classes, that has practically secured exemption 
 from State and local taxes of a larger share of 
 the national wealth than is left subject to such 
 
Federal Taxes and State Expenses. 59 
 
 taxes, while the small properties of toiling mil- 
 lions have become the mainstay and resource 
 for support both of the general civil adminis- 
 tration under the several State governments, 
 and of the most essential elements in " the gen- 
 eral welfare of the United States." The placing 
 of property in the public debt of the United 
 States beyond the reach of State taxation for 
 any purpose whatever, and the exemption of 
 incomes from State taxes on account of the in- 
 ability of the State power of taxation to reach 
 them, plainly show this; while State tax-lists 
 in all the States, so far as opportunity exists for 
 examination of their details, concur in showing 
 that it is the aggregate direct taxes on property 
 valuations of less than $5,000 each, that yield 
 three fourths of the aggregate revenue paid for 
 support of the several State governments. Such 
 is the result, attested by uniform experience, of 
 the despotism of classes under Federal forms, 
 so shaping Federal legislation through combina- 
 tions of particular interests, that these rather 
 than " the general welfare of the United States " 
 shall receive the immediate care and favor of 
 legislation, while the great mass of the national 
 interests, not represented or having any share 
 
6o Federal Taxes and State Expenses, 
 
 in the combination, is left to such incidental 
 or reflected hurt or benefit as may chance to 
 fall to it. It is in this way that while political 
 parties have been mainly occupied in groundless 
 wrangles as to whether this or that form of 
 duties on imports would promote or hinder 
 " the general welfare of the United States," the 
 question of how best " to provide for " this 
 welfare has scarcely received attention, except 
 to be left as the foot-ball of party games, in 
 which the spoils of office are the prize, and per- 
 petual vassalage of the great body of tax-payers 
 the object, of class combinations, which enjoy 
 the substantial fruits of party successes, no mat- 
 ter which party triumphs. 
 
 The term, " despotism of classes " under Fed- 
 eral forms, has not been lightly or inconsider- 
 ately used, but with reference to its true mean- 
 ing as applied to the civil affairs of government. 
 Despotism means government without regard 
 to constitutional obligations, and may be prac- 
 tised by one or by many less than the whole 
 number in a State towards the others, but it 
 can never be practised by the majority upon 
 themselves; and herein is the strong bulwark 
 both of popular liberty and of the general wel- 
 
Federal Taxes and State Expenses. 6 1 
 
 fare of the people under Federal forms, when — 
 (but only when) — each and every class interest 
 shall be subordinated to the general welfare of 
 the whole people, by all interests being placed 
 alike on the footing of equality before the law. 
 Without this there can be neither stability for 
 free institutions nor assurance of equal and just 
 taxation under Federal forms. 
 
 As in the English language it is the little words, 
 serving the use of conjunctions and preposi- 
 tions, which tie the several parts of a sentence 
 together and impart strength and harmony to 
 its several parts, so in the Federal Constitution, 
 it is the short and seemingly insignificant Sec- 
 tion 2, of Article IV. which serves to tie all 
 parts of the Federal system together. This is 
 the bond of union between the several States 
 without which there could be no union worth 
 having. Speaking as a mechanic, it is "the 
 king bolt," which holds the Federal construc- 
 tion together as a whole ; and it was to pre- 
 serve this indispensable bond of the Federal 
 union of the several States, rather than to put 
 down slavery, that the war against secession 
 was prosecuted to a successful issue by the 
 Federal authority. This short section of but 
 
6 2 Federal Taxes and State Expenses. 
 
 three lines surrenders to the Federal autonomy 
 the sovereign State right of discriminating be- 
 tween its own citizens and those of other 
 States, and secures to those of any State in 
 all the others, not only the hospitality due to 
 friends and favorites, but that equality of rights 
 in trade and privileges of citizenship which is 
 esteemed the most cherished mark of power in a 
 State to grant or to deny : and in doing this, it 
 broke down the State power of excise taxation 
 in all its essentials, except that of bare right. 
 And as if to insure the complete dependence of 
 the States on the Federal power to provide for 
 *' the common defence and general welfare " of 
 all the States, the latter are prohibited by an- 
 other provision of the Constitution from laying 
 export duties without consent of Congress. 
 It has been at this great price that the existing 
 freedom of intercourse among citizens of the 
 several States of the Union has been bought. 
 But for this short section in the Federal Con- 
 stitution, there would be to-day State custom- 
 house and passport systems similar to those 
 which annoy and obstruct freedom of inter- 
 course among the several states of Continental 
 Europe; and as compensation for which the 
 
Federal Taxes and State Expejises. 63 
 
 Federal authority has incurred the obligation 
 ** to lay and collect taxes, duties, imposts, and 
 excises, to pay the debts and provide for the 
 common defence and general welfare of the 
 United States," subject to no other condition 
 or restriction, than that taxes on lands and 
 polls shall be laid according to representation 
 in the House of Representatives, and that 
 duties, imposts, and excises shall be laid by 
 the rule of uniformity, without regard to local- 
 ity of production or place of consumption. 
 
CHAPTER IV. 
 
 History of the Exercise of Concurrent Federal and State 
 Powers of Excise Taxation — Lost Equilibrium between 
 Them — Chief-Justice Marshall's Ruling in 1819 and 
 Subsequent Act of Congress Limit the State Power of Ex- 
 cise — Summary of Federal Resources for Revenue Con- 
 trasted with the Meagre Ones of the States — The Hands 
 of the Federal Authority Tied from Interfering with Sub- 
 jects of Exclusive State Jurisdiction. 
 
 If we trace the history of the exercise of con- 
 current powers of taxation in the Federal and 
 State governments from its beginning to pres- 
 ent results, we shall find : 
 
 First. That besides destroying the State 
 power to lay and collect excise taxes on pro- 
 duction and consumption of such luxuries as 
 spirits and manufactured tobacco, it has so 
 crippled that of taxing incomes, as to greatly 
 impair its value as a source of revenue for State 
 and local purposes, while an act of Congress 
 has exempted property in the public debt of 
 the United States from taxes for any State or 
 local purposes whatever ; and 
 64 
 
Federal Taxes and State Expenses, 65 
 
 Second. That other State excise taxation 
 has been impaired, except on the impracticable 
 condition of uniform State excise tax-laws. 
 
 This decay of separate State excise taxation, 
 though gradual, has become so nearly complete 
 that while this source of revenue has entirely 
 disappeared from the tax lists of most of the 
 States, the few in which it yet lingers find its 
 enforcement attended with so much difficulty 
 as hardly to be worth longer retention. Though 
 in theory co-equal as well as concurrent in the 
 beginning of the Federal system, the character 
 of co-equality in constitutional right has been 
 lost for lack of co-equal power to assert itself. 
 From an assumed antagonism between the 
 Federal and State governments, (an assump- 
 tion not only not warranted by historical facts, 
 but in palpable contradiction both of these, and 
 of the theory of co-equal and concurrent con- 
 stitutional rights of taxation,) which would 
 avail itself both of pretext and of opportunity 
 on the part of the several States, to destroy the 
 Federal autonomy, the Supreme Court of the 
 United States in the time of Chief-Justice Mar- 
 shall (18 19) gave judgment (in the case of 
 McCuUoch vs, Maryland, 4th Wheaton) to 
 
66 Federal Taxes and State Expenses, 
 
 the effect that the States might not tax the 
 " instrumentaHties " which the Federal govern- 
 ment deemed proper to estabUsh for carrying 
 out its purposes ; lest if allowed to tax them 
 at all, they might tax them out of existence. 
 The particular " instrumentality " involved in 
 the case before the court in which this judg- 
 ment was given, was the Bank of the United 
 States, in which the United States was a stock- 
 holder, and which claimed and obtained by this 
 " act of judicial legislation," entire exemption 
 and immunity from all State taxes ; and from 
 the date of this judgment, all property in the 
 public debt of the United States has been held 
 exempt from State taxes, either by virtue of 
 the principles on which the judgment rests, or 
 else by subsequent act of Congress to the same 
 effect. This intrusion by both the judicial and 
 the legislative departments of the Federal au- 
 tonomy upon the co-equal right of the several 
 States to lay and collect taxes on property in 
 the national debt owned by their own citizens, 
 is an anomaly which exists nowhere else ; and 
 the Federal government of the United States 
 is the only one in the world under which prop- 
 erty in the public debt, owned by its citizens, is 
 
Federal Taxes and State Expenses, 67 
 
 wholly exempt from taxes for support of the 
 general civil administration. 
 
 This important limitation upon the State 
 power of excise taxation, both by the judg- 
 ment of the Supreme Court and by act of Con- 
 gress, is referred to in this connection for the 
 purpose of showing the necessity created by it 
 for intervention of the Federal authority to 
 supply the deficiency in State revenues occa- 
 sioned by it. It is not the present purpose to 
 question the validity of the judgment, or the 
 correctness of the principles on which the 
 judgment rests. Since that judgment was pro- 
 nounced, it is to be accepted as part of '* the 
 supreme law of the land," and the principles 
 on which it rests as practically part of the Fed- 
 eral Constitution, as if made so by formal 
 amendment of it for limiting the State power 
 of excise taxation. 
 
 Such exemption of a particular class of prop- 
 erty owners from State taxes to which all others 
 are subject, while the exempted class possesses, 
 relatively with all others, a greater share of 
 wealth, and are therefore better able than 
 many others to pay taxes for support of the 
 civil administration, is peculiar to the American 
 
68 Federal Taxes and State Expenses. 
 
 system of taxation for support of the general 
 civil administration under Federal forms. Ex- 
 emption from State taxes by judicial construc- 
 tion on the one hand, and by Federal legis- 
 lative misapprehension of constitutional provi- 
 sions on the other, have together placed more 
 personal property beyond the reach of separate 
 State power of taxation, than remains subject 
 to it. Under no other form of government is 
 property in the national bank and in the pub- 
 lic debt, owned by its own citizens, exempted 
 from taxes for support of the general civil ad- 
 ministration ; and that such exemption exists 
 in the United States, is the result of changes in 
 constitutional provisions by judicial interpreta- 
 tion, and the want of regard for constitutional 
 compensations, in Federal legislation. 
 
 With exclusive right to lay and collect duties 
 on imports, joined to practical monopoly of 
 internal excise taxes on production and con- 
 sumption of luxuries and on incomes, and hav- 
 ing all its " instrumentalities," and property in 
 the public debt, representing at one time sev- 
 eral billions of dollars, exempted from State 
 taxes, and sharing co-equal right with the sev- 
 eral States to tax every thing else, the Fed- 
 
Federal Taxes and State Expenses. 69 
 
 eral autonomy possesses resources for revenue 
 almost inconceivably great, while the slender 
 resources of the States, shared as these are 
 with the Federal autonomy, seem relatively of 
 but trifling value — mere dregs and riffraff of 
 the national wealth, — made up for the most 
 part of taxes on little property valuations of 
 less than $5,000 each. And yet, out of these 
 meagre resources, the several States are obHged 
 to defray the whole expenses of the general 
 civil administration which upholds the political 
 fabric of civil society, compared with which 
 the corresponding necessary expenses of the 
 Federal government for like purposes in time 
 of peace, are but as " a drop in the bucket." 
 And when we consider that in addition to the 
 cost of the civil administration, the aggregate 
 and collective State, county, township, city, 
 and other form of municipal debts (*' instru- 
 mentalities ? ") in the several States, exceeds 
 in total amount that of the national debt, the 
 contrast between the two becomes more "strik- 
 ing still. Such contrast between the practical 
 resources for accomplishing the equally neces- 
 sary and indispensable functions of the Fed- 
 eral and State governments respectively, is 
 
JO Federal Taxes and State Expenses, 
 
 only paralleled by that between the colossal ac- 
 cumulations of personal property by single in- 
 dividuals and private corporations on the one 
 hand, and the relative poverty of 97 out of 
 every 100 tax-payers disclosed by the tax list 
 of a single county in Indiana, and inferentially 
 corroborated by tax lists of other counties 
 throughout the United States, on the other 
 hand. Both these classes — the very rich and 
 the relatively poor — have been produced under 
 the same unequal and oppressive system of 
 taxation, and fairly represent its work in the 
 opposite directions of making the rich richer, 
 and the poor poorer. Tabular statements from 
 this tax list will be found in a subsequent chap- 
 ter, verifying the statement already made, that 
 97 numerical per cent, of tax-payers, assessed 
 less than $5,000 each, pay in the aggregate 73 
 per cent, of the taxes, while the other 3 numer- 
 ical per cent, assessed $5,000 each and over, 
 pay the other 27 per cent. Is it too much to 
 say that for gross inequality and injustice, this 
 system of taxation is without parallel elsewhere 
 in the world ? That of the Turk may equal, 
 but does not surpass it in these characteristics. 
 In fact, injustice is done the Turk by the com- 
 
Federal Taxes and State Expenses, 7 1 
 
 parison, without the explanation that, paying 
 no attention to such formalities as Tax lists or 
 assessments, he goes into a district to collect a 
 specific sum, and makes short work of it by 
 falling at will on those from whom he can get 
 the required sum with least trouble to himself. 
 And the just reproach of it is that the system 
 is neither the logical result of constitutional 
 provisions, nor the natural outgrowth of Dem- 
 ocratic and Republican institutions under Fed- 
 eral forms, but has grown up in spite of both 
 these, under the despotism of classes created 
 by unwarranted exercise of the Federal power 
 of taxation '' to promote'' particular interests, 
 instead of *' to provide for the general welfare 
 of the United States.'' For the Constitution, 
 foreseeing the inevitable tendency which would 
 load the Federal autonomy with overwhelming 
 preponderance over both the methods and the 
 subjects of taxation, while securely tying its 
 hands from interference with the subjects of 
 the several State administrations, has benefi- 
 cently provided that its powers of taxation 
 shall be exercised " to provide for the common 
 defence and general welfare of the United 
 States." These primary elements of the na- 
 
72 Federal Taxes and State Expenses, 
 
 tional existence, " common defence " and " gen- 
 eral welfare," have been inseparably blended 
 in the constitutional provisions concerning 
 them, and like " liberty and union " in the 
 Preamble, have been made ** one and insepa- 
 rable " in the body of the Constitution ; and 
 what has been thus joined together may not 
 be separated with impunity. The 97 numer- 
 ical per cent, of tax-payers who pay 73 per 
 cent, of State taxes " to provide for" that part 
 of " the general welfare of the United States " 
 which is inseparable from the several State ad- 
 ministrations, will not always patiently bear the 
 burdens put upon them by the other 3 numer- 
 ical per cent, who own the larger share of the 
 property and pay only a paltry fragment of the 
 taxes. 
 
CHAPTER V. 
 
 Excise Taxes as Related to Periodical Depressions in Busi- 
 ness — Aggregate Annual State Expenses — The Spirits 
 and Tobacco Taxes Sufficient to Defray Them — Mon- 
 archy Cheaper than "Republican Simplicity" in Taxes 
 on Property Valuations. 
 
 As will be shown in the course of the pres- 
 ent chapter, the aggregate annual expenses of 
 the several State governments amount to ^yy,- 
 ocX),ooo in round numbers, and those for coun- 
 ties and townships or other form of county- 
 subdivision, exclusive of cities and incorpo- 
 rated towns, to about as much more, the total 
 aggregating $i54,cxx>,ooo, which is annually- 
 taken out of the value of property and wages 
 paid for labor, for the State and the local ex- 
 penses named. Is there just ground for won- 
 der that there are periodical depressions in all 
 branches of business in the face of these facts ? 
 — that money is scarce — that wages" are low 
 and employment uncertain, and *' hard times " 
 complained of at almost every turn? $154,- 
 
 73 
 
74 Federal Taxes and State Expenses, 
 
 000,000 a year needlessly taken out of what is 
 necessary for carrying on the business of the 
 country, for the purely incidental purpose of 
 paying State, county, and township or other 
 form of county subdivision expenses (to say 
 nothing of the perhaps equal amount for mu- 
 nicipal expenses of cities and incorporated 
 towns, which probably amount to as much 
 more), is too large a sum to be thus annually 
 withdrawn without being missed. The money 
 withdrawn from business, for payment of these 
 taxes, never gets back into the same hands 
 which paid it out. True, its gradual return 
 into the channels of trade from the State and 
 local disbursements of it, tends to lessen the 
 force of the shock which would be felt if the 
 withdrawal were permanent ; but these suc- 
 cessive annual withdrawals culminate, in the 
 course of every seven or eight years, in a shock 
 to business quite as violent as if each annual 
 withdrawal of money for taxes were perma- 
 nent. We are just now (in the first half of 
 1886) recovering from one of these periodical 
 depressions in business, and men differ in opin- 
 ion as to the causes which occasioned this 
 depression. Some think it was caused by 
 
Federal Taxes and State Expenses, 75 
 
 " over-production " for supply of the limited 
 markets, both at home and abroad, brought 
 about by a restrictive tariff system ; others 
 think it is because there are too many green- 
 backs, while some think it is because there 
 are too few ; and others yet, mainly among 
 those who labor in mechanical employments, 
 think all the trouble comes from labor being 
 badly organized, poorly paid, and not duly ap- 
 preciated ; while Democrats generally charge 
 it to the Republican party having been so long 
 in power. But these should remember that 
 the condition of things was as bad, if not 
 worse, at the close of the eight years' adminis- 
 tration of that greatest of all the apostles of 
 American democracy — Andrew Jackson, in 
 1837 ; and that there was no improvement in 
 the succeeding four years of like Democratic 
 administration under Mr. Van Buren, whose 
 chief claim to the confidence of his party was 
 his promise " to follow in the footsteps of my 
 illustrious predecessor " — a promise which he 
 faithfully kept. We had no tariff worth speak- 
 ing of then, and as to greenbacks, these had 
 not been thought of, though the germ out of 
 which these have since grown was then sue- 
 
76 Federal Taxes and State Expenses, 
 
 cessfully grafted into the national system of 
 finance as a distinctively Democratic party 
 measure, in the form of " The Independent 
 Sub-Treasury Act," which remains to this day 
 without substantial change, as perhaps the 
 most valuable boon that has been conferred 
 upon the country in the form of a purely parti- 
 san measure, by any administration that has 
 shaped the policy or controlled the destiny of 
 the republic. But if the Sub-Treasury act of 
 that day gave us no greenbacks, we had from 
 other sources an unlimited supply of bank 
 notes, which served all the purpose of swelling 
 the volume of the currency ; and as to labor 
 being now badly organized, poorly paid, and 
 not duly appreciated, it is better off now in all 
 these respects than it was then ; and yet all 
 these seem to have made no impression, or to 
 have imposed any check on the periodical re- 
 currence of these business depressions. And 
 yet while all this is so, the Federal government 
 is annually deriving revenue from its tax on 
 production of spirits and manufactured to- 
 bacco, to the amount of $133,000,000 for the 
 year 1882, for which it has no other need than 
 for relief of the people from payment of State 
 
Federal Taxes and State Expenses. 77 
 
 and county taxes, which seem to He at the bot- 
 tom of all the trouble ; and at the time of the 
 reduction of the tax on manufactured tobacco 
 from 16 to 8 cents per pound in March, 1883, 
 the rate of receipts from the spirits and to- 
 bacco taxes was aggregating $144,000,000 a 
 year, and may be expected to reach that rate 
 again if the tobacco tax be restored; or if both 
 the spirits and tobacco taxes be properly ad- 
 justed, to produce the whole $154,000,000 
 needed for payment of the yearly taxes on 
 property valuations for State and township or 
 other form of county subdivision taxes through- 
 out the United States. 
 
 It may be stated as indisputable fact that the 
 Federal government has no longer need for 
 these spirits and tobacco taxes, except to ap- 
 ply them, under its constitutional obligations 
 " to provide for the general welfare of the 
 United States," to the payment of the expenses 
 of the general civil administration under sepa- 
 rate State authority, for State, county, and 
 township or other form of county subdivision 
 purposes, to which the States are unable to 
 subject them ; and that the Federal govern- 
 ment would be better off without them for any 
 
78 Federal Taxes and State Expenses. 
 
 other purpose. So general is the impression 
 that the Federal government has no other use 
 for these taxes, that it may be said to amount 
 to popular conviction, and it has even been 
 suggested in influential quarters to repeal the 
 internal revenue act under which these taxes 
 are collected, simply because the government 
 has no further use for them. Instead of thus 
 throwing them away, why not use them in the 
 way of doing the most good that can be done 
 with them, viz., to relieve existing burdensome 
 State taxes on property valuations and busi- 
 ness enterprise ? Every person who pays a 
 tax under State tax laws, whether farmer, mer- 
 chant, laboring man, railroad or railroad man, 
 capitalist or non-capitalist, bank or banker, or 
 any and everybody else, has a direct pecuniary 
 interest in this question which may be meas- 
 ured by the amount of State and county taxes 
 he has to pay. Some few, very few, indeed, of 
 all these, have a deep interest in maintaining 
 the present hard system of State taxes ; but 
 these are too small in number and too trifling 
 as elements in the social or national existence, 
 to be allowed to hinder so great a good to the 
 whole. 
 
Federal Taxes and State Expenses, 79 
 
 Under the Federal system the burden of the 
 general civil administration in the creation, 
 regulation, and modification of the rights of 
 property, the protection of life and person, and 
 the punishment of offences against all these ; the 
 maintenance of social order ; the providing for 
 the general public needs and conveniences in 
 the construction of highways and bridges, pub- 
 lic buildings for the State legislative, judicial, 
 and executive departments, salaries of public 
 officers, asylums, and other public charities ; 
 support of common schools, and all else of ex- 
 clusive State jurisdiction, which is interwoven 
 with and inseparable from " the general wel- 
 fare of the United States," as distinguished 
 from that of particular classes of the popula- 
 tion, — all these rest primarily upon the several 
 State governments, and is mainly borne by 
 direct State taxes on property valuations, ex- 
 cept in the small number of cases otherwise 
 provided for in the Federal Constitution. The 
 enormous cost of this general civil administra- 
 tion is defrayed to the extent of $313,000,000 
 annually, by direct State tax on property val- 
 uations, according to the census report of 1880 ; 
 but how much is to be added to this from 
 
 UNIVER8ITT 
 
8o Federal Taxes and State Expenses, 
 
 polls and other specific taxes, not governed by 
 valuation, the census report does not show. 
 This enormous taxation, almost exclusively on 
 account of what is inseparable from ** the gen- 
 eral welfare of the United States," is paid out 
 of taxes on property valuations, under conflict- 
 ing State tax laws, which are powerless to tax 
 effectually either production or consumption of 
 such luxuries as spirits and manufactured to- 
 bacco, or incomes from colossal accumulations 
 of personal property. Such is the condition of 
 things under Federal forms, without co-opera- 
 tion in the exercise of concurrent Federal 
 and State powers of taxation " to provide for " 
 the general welfare, in which both these powers 
 have mutual and reciprocal interest. 
 
 Man-afraid-of-his-horses ! Those who are 
 afraid of exercise of concurrent powers of Fed- 
 eral and State taxation over production of 
 spirits and manufactured tobacco, for lessening 
 the burdens of State taxes on property valua- 
 tions, seem as the counterpart of the noted 
 Sioux chief of this name. There is no doubt 
 of the horse — and a good one — equal to the 
 task required of him — and not fit for any other 
 — and yet afraid of him for the only thing he is 
 
Federal Taxes and State Expenses, 8 1 
 
 fit for — they might as well have no horse. 
 What is the use of concurrent Federal and 
 State power of taxation, if the one has no need 
 of it, and the other is not able to use it alone, 
 and yet afraid to use it in conjunction with the 
 other? Concurrent rights to tax a subject over 
 which one of them has otherwise exclusive 
 jurisdiction, gives to the other no right to do 
 any thing else with it ! 
 
 In single autonomies or non-Federal govern- 
 ments, whether a monarchy as in England or a 
 republic as in France, where the whole power 
 of taxation is vested in a single legislative 
 body, tax on production and consumption of 
 spirits and manufactured tobacco, and on in- 
 comes from whatever source, whether from 
 property in the public debt or other source, 
 has been found more advantageous to the gov- 
 ernment and less burdensome to the people 
 than taxes on property valuations for support 
 of the general civil administration in them, 
 which corresponds with that of the several 
 States in our Federal system. The practice 
 of the British, and of most Continental gov- 
 ernments, in taxing the production of spirits 
 and manufactured tobacco, may be worth the 
 study of our own ; the tax on the products of 
 
82 Federal Taxes and State Expenses, 
 
 breweries and distilleries in England, and the 
 government monopoly of tobacco factories in 
 France, not only sufficing to defray the ex- 
 penses of the civil administration correspond- 
 ing to that of the several State governments 
 with us, but to supply a revenue to the 
 national treasury besides. 
 
 Before establishment of the Federal Consti- 
 tution, the several States were as complete 
 national autonomies as either of the countries 
 named, and each of them could tax the pro- 
 ductions of all the others when brought into 
 it, without regard to whether such products 
 were taxed if made by its own citizens. Sec. 
 2 of Art. IV. of the Federal Constitution has 
 stripped the several States of this autonomous 
 right of discrimination, and substituted for it 
 interchangeable and reciprocal rights of trade 
 and privileges of citizenship among citizens of 
 the several States (and it may be added here 
 that the provisions of Sec. 2 of Art. IV. consti- 
 tute the dividing line and mark the distinction 
 between autonomous and Federal governments 
 in respect to taxation), and the result of this 
 stripping the several States of autonomous 
 rights and substituting others in place of 
 them, is such that the effect of a State tax on 
 
Federal Taxes and State Expenses. 83 
 
 production of the luxuries named, is to sup- 
 press production instead of obtaining revenue 
 from it, by driving the industry out of the 
 State into some other in which no tax, or a 
 less one on production exists. In this way 
 the several States have lost these sources of 
 revenue, and while left without other substi- 
 tute for them than taxes on polls and prop- 
 erty valuations, or other check on their ac- 
 knowledged evils than is to be found in 
 specific taxes on licenses for retail traffic in 
 them, the Federal government has acquired a 
 monopoly of taxing them without other limit 
 than its own discretion. There are few, if any, 
 of the States which derive any revenue from 
 either spirits or manufactured tobacco applica- 
 ble to the general expenses of the State gov- 
 ernment. None of them get a revenue from 
 tobacco for any purpose, while that derived 
 from spirits seems, as a rule, to be considered 
 too trifling to be reckoned among the reliable 
 sources of State revenue for general purposes, 
 and is put on the same footing as that derived 
 from fines and penalties for misdemeanors, and 
 is applied solely to special uses. In Indiana it 
 goes to the school fund, and is not found on 
 the tax Hst in any of the counties. 
 
CHAPTER VI. 
 
 Constitutional Compensations for Loss of State Power of 
 Excise — The State Governments as "Instrumentalities" 
 in Respect of the General Welfare of the United States 
 — Groundless Assumption of Antagonism between the 
 States and the Federal Autonomy — Effect of State Taxes 
 on Property Valuations on " the Labor Class " in Cities — 
 Groundless Complacency of Americans in Respect to 
 Taxes on Property Being Less in the United States than 
 Elsewhere — Why These Are Greater Here than Anywhere 
 Else. 
 
 That the several States should have relin- 
 quished to the Federal autonomy the sources of 
 revenue detailed in the preceding chapter, and 
 at the same time retained full responsibihties 
 for maintaining the essential elements of " the 
 general welfare of the United States/' as the 
 same are involved in the general civil adminis- 
 tration under the several State governments, 
 could have been done only on one or the other 
 of the two following grounds, viz. : 
 
 First. Because the effect of Sec. 2 of Art. 
 IV. was not foreseen ; or 
 
 Second. Because, as seems the more logical 
 84 
 
Federal Taxes and State Expenses, 85 
 
 reason, it was done on the faith of the con- 
 current and collateral undertaking on the part 
 of the Federal authority, ** to provide for the 
 common defence and general welfare of the 
 United States." 
 
 These words, " common defence " and " gen- 
 eral welfare," seem obviously to stand by way 
 of substitution and antithesis for that separate 
 defence and separate welfare of each which, 
 before establishment of the Federal Constitu- 
 tion, each State had been obliged to provide 
 for itself. On any other interpretation of them 
 (see Par. i. Sec. 8, Art. I.), the several States 
 must be deemed to have alienated their best re- 
 sources for both separate defence and separate 
 welfare, and to share equally with the Federal 
 authority all others which were left to them, 
 without receiving any equivalent for them in 
 respect to these primary elements of State 
 existence. This would be absurd, if not shock- 
 ing to the moral sense. If the general welfare 
 of the people of all the several States in equal 
 degree be not meant by the provisions of this 
 paragraph, then their common defence cannot 
 be meant by them ; for both these primary 
 and essential elements of the national existence 
 
86 Federal Taxes a7id State Expenses. 
 
 stand on the same footing in them. There 
 would be, too, this further anomaly, viz. : that 
 the people of the several States would be under 
 Federal government without constitutional ob- 
 ligation to provide for that general welfare 
 which pertains to all of them in common, and at 
 the same time without other resources for that 
 which is distinct and peculiar to each, than 
 resort to taxes on polls and property valua- 
 tions, under separate State tax laws, to secure 
 it. And such is their condition to-day, and 
 this condition must be perpetual, unless it be 
 changed by such interpretation of the provi- 
 sions of Par. I of Sec. 8 of Art. I., as shall 
 authorize Congress to make the proposed dis- 
 tribution (or some equivalent one) of the pro- 
 ceeds of the Federal tax on production of 
 spirits and manufactured tobacco. 
 
 If either of the causes above referred to, or 
 both in conjunction with others, have con- 
 curred to produce the result of giving to the 
 Federal authority exclusive control of concur- 
 rent powers of taxation over subjects peculiarly 
 fitted for State and local control, and least 
 adapted to those of a Federal character, the 
 obvious way to restore this lost equilibrium in 
 
Federal Taxes aiid State Expenses, 8 7 
 
 concurrent powers of taxation, would seem to 
 be modification or amendment of the act of 
 Congress under which such monopoly of con- 
 current powers is exercised. A change in the 
 internal revenue act of Congress, directing the 
 Secretary of the Treasury to distribute the 
 nett proceeds of these taxes, at stated periods, 
 to the several State treasurers, in proportion 
 to the State populations, would effect this 
 result, and practically restore to the States the 
 fruits of their lost power of excise taxation. 
 
 Nor can there be any reasonable ground of 
 objection to the Federal government using 
 the several State governments, or their fiscal 
 systems or officers, as instruments for carrying 
 its constitutional purposes into effect, though 
 there can be none but economical reasons for 
 limiting the exercise of its powers to use of 
 State systems or officers in this case. The 
 practice has been too long established, and is 
 too strongly fortified, both by precedent and by 
 experience of its advantages, to be now ob- 
 jected to. The direct taxes levied by Con- 
 gress for carrying on the last war with Great 
 Britain, were collected under State systems of 
 tax collection in some of the States. The dis- 
 
88 Federal Taxes and State Expenses, 
 
 tribution of surplus revenue among the several 
 States under the act of Congress approved 
 June 26, 1836, was made through State instru- 
 mentahties, and daily examples of the use of 
 State systems and State instrumentalities by 
 the Federal authority in carrying out its pur- 
 poses may be found in the use by the Federal 
 courts of the rules of practice and proceeding 
 established by State laws. So nearly the whole 
 machinery for taking the Federal census statis- 
 ics is solely of State provision, that if dispensed 
 with, the Federal share of it would hardly 
 be worth retaining, except as to enumeration 
 of population. In short, the use of State 
 systems, and even of State officers, has 
 been so often resorted to by the Federal 
 government for effecting its purposes in deal- 
 ing with the several States, that it is matter of 
 surprise that an assumed antagonism between 
 the Federal and State authorities should have 
 been made the ground and occasion for strip- 
 ping the latter of an important share in con- 
 current power of taxation, which has been 
 already referred to. The numberless instances 
 of mutual and concurrent good-will between 
 the Federal and State authorities in the close 
 
Federal Taxes and State Expenses, 89 
 
 political inter-dependence between them, 
 broken by but a single resort to arms, and 
 that probably caused more by groundless ju- 
 dicial assumption of its absence than by any 
 thing else, sufficiently attest its survival over 
 all attempts to destroy it, and that the whole 
 country would welcome resort to it for effect- 
 ing the proposed exercise of concurrent Federal 
 and State powers of taxation by Congress in 
 using the several State governments as instru- 
 ments for distributing the Federal taxes from 
 production of spirits and manufactured to- 
 bacco. If some of the States should refuse to 
 accept their distributive shares of these taxes, 
 as was done in the case of the surplus revenue 
 distribution during Jackson's administration 
 (Act of June 26, 1836), a provision to the effect 
 that such renounced distributive shares should 
 be treated as lapsed, and for that be added to 
 the total of some future distribution, might 
 strongly dissuade from such renunciation, as 
 well as avoid all occasion for claiming the 
 amount at a later period, as was the case with 
 some of the States under the Act of June 26, 
 1836. 
 But we are not left to logical inferences, or 
 
90 Federal Taxes and State Expenses, 
 
 to precedents alone on the right of the Federal 
 authority to make use of State instrumentalities 
 to effect its purpose under the Federal Con- 
 stitution ; for the right of the Federal govern- 
 ment to use them in respect both to direct 
 taxes on polls and lands and to excise taxes 
 on consumption, was urged as an argument in 
 favor of ratifying the Federal Constitution by 
 the requisite number of States. See Federalist, 
 No. XXXVL, pp. 5, 6, and 7. 
 
 The following paragraphs are copied from 
 the number referred to, viz» : 
 
 " But there is a simple point of view in which 
 this matter may be placed,, that must be alto- 
 gether satisfactory. The national legislature 
 can make use of the system of each state within 
 that state. The method of laying and collecting 
 this species of taxes in each state, can, in all 
 its parts, be adopted and employed by the 
 Federal government. 
 
 " It has been very properly observed by dif- 
 ferent speakers and writers on the side of the 
 Constitution, that if the exercise of the power 
 of internal taxation by the Union, should be 
 judged beforehand upon mature consideration, 
 
Federal Taxes and State Expenses, 9 1 
 
 or should be discovered on experiment, to be 
 really inconvenient, the federal government 
 may forbear to use it, and have recourse to 
 requisitions in its stead. By way of answer to 
 this, it has been triumphantly asked, why not 
 in the first instance omit that ambiguous power, 
 and rely upon the latter resource ? Two solid 
 answers may be given : the first is, that the 
 actual exercise of the power may be found both 
 convenient and necessary ; for it is impossible to 
 prove in theory, or otherwise than by the ex- 
 periment, that it cannot be advantageously ex- 
 ercised. The contrary, indeed, appears most 
 probable. The second answer is, that the exist- 
 ence of such a power in the Constitution will 
 have a strong influence in giving efficacy to 
 requisitions. When the States know that the 
 Union can supply itself without their agency, 
 it will be a powerful motive for exertion on 
 their part." 
 
 This authority ought to settle the question 
 of co-operation between the Federal and State 
 systems, both in collecting and in applying inter- 
 nal taxes of all sorts. If State systems may be 
 used in collecting Federal taxes for general pur- 
 
92 Federal Taxes and State Expensee, 
 
 poses, there can be no ground for objection to 
 their being used for applying them to a common 
 purpose in which both systems have mutual 
 and reciprocal interests. 
 
 In the estimates for aggregate annual State, 
 county, and township or other form of county 
 subdivision expenses throughout the United 
 States, those for cities and incorporated towns 
 will be excluded, because these ought not, for 
 obvious reasons, to be included in the proposed 
 distribution as distinct from the counties or 
 townships of which they form part. The 
 direct relief to State, county, and township 
 tax-payers in these communities will, however, 
 be as sensibly felt as in the others ; for besides 
 relief from direct taxes on property valuations 
 for State, county, and township or other form 
 of county subdivision purposes, these cities 
 and incorporated towns may succeed to the 
 right of taxing licenses for retail traffic of all 
 sorts now monopolized to greater or less ex- 
 tent for State and other local uses ; and as the 
 retail traffic in spirits and manufactured to- 
 bacco is mainly, and in most States exclusively, 
 carried on in cities and incorporated towns, 
 
Federal Taxes and State Expenses, 93 
 
 the revenue from licenses for carrying it on 
 may be expected to supply no inconsiderable 
 sums to such as shall elect to resort to it in- 
 stead of abolishing it altogether. 
 
 But though the city and incorporated town 
 expenses will not be included in the estimates, 
 the fact that the amount of these has been 
 limited to two per cent, per annum of assessed 
 valuation of taxable property, by constitu- 
 tional amendment in many, if not in most, of 
 the States, seems to indicate that the two per 
 cent, per annum rate of tax on property has 
 been as generally reached for city and incor- 
 porated town purposes, as for State, county, 
 and township purposes ; thus making the an- 
 nual rate of tax on valuation for all purposes, 
 four per cent, per annum for that larger num- 
 ber of tax-payers, who live in cities and incor- 
 porated towns, as compared with the number 
 who live outside of them, and all of it direct. 
 And when we come to consider that the whole 
 " labor class," technically so called in all dis- 
 cussions of the relations of capital to labor, em- 
 ployed in manufacturing and other business 
 enterprises, live in cities and incorporated 
 towns, and have to pay these four per cent. 
 
94 Federal Taxes and State Expenses, 
 
 taxes on their homes and Httle property valua- 
 tions out of their wages, we may obtain from it 
 the clew to much that has not been hitherto 
 accounted for in the attempts made to explain 
 the causes of what is commonly styled " labor 
 troubles." Of course, the force of what is now 
 stated will depend on the completeness with 
 which it shall be shown, in subsequent chapters, 
 that the rate of tax on valuations for State, 
 county, and township or other form of county 
 subdivision purposes, does reach the two per 
 cent, per annum stated, which for the present 
 is assumed without proof. To this end, tabu- 
 lated statements of a county tax-list will be 
 submitted to show the rate of tax on valuation; 
 and the reader will be left to the guidance of 
 his own judgment as to how far this may reflect 
 the condition of things appearing on the face 
 of the tax lists of other counties, throughout 
 the United States. 
 
 It is anticipated that close scrutiny of the 
 statistics of direct taxes on valuations, through- 
 out the United States, will show, if ever made, 
 that the annual rate of State taxes exceeds, 
 rather than falls short of, two per cent, per 
 annum. And when we take into account the 
 
Federal Taxes and State Expenses, 95 
 
 unwarranted exemption of property in the pub- 
 lic debt by act of Congress, and the practical 
 exemption of the production and consumption 
 of luxuries, together with incomes of individu- 
 als and private corporations, from any share in 
 the burden of State and local taxes, the result 
 seems more monstrous still. I say '' unwar- 
 ranted exemption of property in the public 
 debt by act of Congress," because while Con- 
 gress has the right, in its discretion, to exempt 
 this subject from taxes for all purposes of ex- 
 clusive Federal jurisdiction, it has no right to 
 exempt it in terms, from the concurrent tax 
 jurisdiction of the several States, or to refuse 
 its co-operation to subject the others named to 
 taxation for such local purposes of the general 
 civil administration as are not identified with 
 " the general welfare of the United States." 
 And in this connection it seems pertinent to 
 repeat, that under constitutional governments 
 elsewhere, whether autonomous or Federal, ex- 
 emption of property in the public debt from 
 taxes for support of the general civil adminis- 
 tration, does not exist ; but this sort of prop- 
 erty is put on a footing of equality with others 
 in respect to such taxes. 
 
96 Federal Taxes and State Expenses. 
 
 Americans are acccustomed to talk compla- 
 cently among themselves about the vast sums 
 of money paid every year for support of roy- 
 alty, and the large salaries to chief officers of 
 state under the British and other Continental 
 monarchies, and the relatively small ones paid 
 to chief magistrates and other public officers 
 under our republican forms, without apparent 
 consciousness that the wide difference between 
 our own and foreign countries in these respects, 
 grows out of American exemption from taxes 
 of the subjects and sources from which the 
 larger expenses of other governments are de- 
 rived. It would be simply impossible fo^ these 
 to maintain their more costly forms of the 
 civil administration, if the means for defraying 
 the expense of them were derived, as with us, 
 from direct taxes on polls and property valua- 
 tions, and from v/hich both production and 
 consumption of spirits and manufactured to- 
 bacco, together with all incomes and property 
 in the public debt, are exempt. 
 
 At the annual meeting of the American Bar 
 Association, held at Chicago in August, 1879, 
 the President is reported to have said in the 
 course of his address : 
 
Federal Taxes and State Expenses, 97 
 
 "We are a boastful people ; we make no end 
 of saying what great things we have done and 
 are doing; and yet behind these brilliant shows 
 there stands a spectre of halting justice, such as 
 is to be seen in no other part of Christendom. 
 So far as I am aware, there is no other country 
 calling itself civilized where it takes so long to 
 punish a criminal and so many years to get a final 
 decision between man and man. Truly, we 
 may say that justice passes through the land on 
 leaden slippers. One of our most trustworthy 
 journalists asserts that more murderers are 
 hanged every year by mobs than are executed 
 in the course of law." And in the same con- 
 nection the eminent and distinguished lawyer is 
 further reported to say, that the ratio of num- 
 ber of lawyers to total population in the United 
 States is as I to 909 ; while in France the ratio 
 is but as I to 4,762, and in Germany i to 6,423. 
 Putting these two things together — viz. : the 
 very slow progress of American courts in the 
 dispatch of business, and the great number of 
 lawyers to aid and assist them — the intended 
 inference seems to be that the great preponder- 
 ance in ratio of lawyers to population has some-, 
 thing to do with bringing about the deplorable 
 state of things depicted. 
 
98 Federal Taxes and State Expenses. 
 
 With the very greatest deference and respect 
 for the high authority of the President of the 
 Bar Association (and this declaration is sincere 
 rather than formal) we cannot concur with him 
 in his inferences ; and this because his ratio is 
 based on number of lawyers and population, 
 instead of on number of lawyers and number of 
 distinct jurisdictions. Under our Federal sys- 
 tem these distinct jurisdictions correspond in 
 number with that of States, Territories, and the 
 District of Columbia — forty-eight in all, — each 
 of them having both original and final jurisdic- 
 tion in matters of life, liberty, and property, 
 while there is but a single like jurisdiction in 
 either France or Germany. If ratio in numbers 
 rather than fact and form of government and 
 institutions is to determine this grave and puz- 
 zling question, we shall have to take some one 
 of these forty-eight distinct jurisdictions, instead 
 of the whole number, for comparison with 
 France and Germany, — a process the distin- 
 guished President of the National Bar Associa- 
 tion will hardly feel disposed to go through 
 with in view of any practical value likely to be 
 found in its results. No : neither the shame 
 nor the injustice so graphically portrayed grows 
 
Federal Taxes and State Expenses, 99 
 
 out of our having too many lawyers ; but both 
 of them come of our having too few courts. 
 And the reason of our having too few courts to 
 keep up with the demands upon them is in our 
 not being able to pay the cost of additional 
 ones out of the meagre resources for revenue 
 from polls and property valuations. Possibly 
 the number of Federal courts might even be 
 lessened without serious inconvenience. If we 
 could avail ourselves of the immense and little 
 burdensome internal excises on production of 
 spirits and manufactures of tobacco, and on in- 
 comes, for expenses of the civil administration, 
 as is done in both France and Germany, we 
 might double both the number and the 
 efficiency of our courts, and at the same time 
 dispense with taxes on polls and valuation for 
 any thing but local and peculiar purposes, 
 without at all increasing the number of lawyers. 
 And the courts might then be able, " in the 
 course of law," to do all the hanging now done 
 by the mob without any regard to it. It seems 
 hardly too much to say, that not one of 
 the European monarchies could survive the 
 principle of American taxation for its support 
 for a single year. In not one of them is the 
 
lOO Federal Taxes and State Expejises, 
 
 rate of tax on valuation, for support of the civil 
 administration, so high as in the United States; 
 and it is thus that we throw away the advan- 
 tage of simpHcity in republican forms under 
 Federal institutions, by engrafting upon them 
 the most burdensome and unequal system of 
 taxation as yet extant among civilized nations. 
 The qualifying term '^ per capita,'' used in 
 connection with the rate of tax on valuations 
 in the above paragraph of the first edition, has 
 been eliminated from it in this one, as being 
 immaterial for the practical use intended by 
 the author, as well as because, except to the 
 close student, it is misleading. It was " bor- 
 rowed " from tax statistics generally accepted 
 and in vogue, purporting to give the relative 
 rate of taxes in the United States and in foreign 
 countries, and is now returned with small 
 thanks for the loan of it. The author has no 
 further use for it in the connection in which he 
 used it. Not that he regards that use as hav- 
 ing been proved to be wrong by those who 
 have devoted themselves to that task ; (for he 
 does not ; ) but that he regards its retention as 
 tending to weaken the proper statement of the 
 case. 
 
Federal Taxes and State Expenses, loi 
 
 The rate of tax on valuations has no neces- 
 sary connection with extent of territory, or 
 nambers, or sparseness, or denseness of the 
 population which has to pay the tax. The 
 usual 2 per cent, rate of tax on valuations in 
 a State or county having 5,000,000 population 
 and $100,000,000 valuation, will yield the same 
 gross amount of annual revenue, as in a State 
 or county having the same valuation, but double 
 the number of population. Both the rate of 
 the tax, and the gross amount of it, will be the 
 same in each case ; but if the term " per cap- 
 ita " be introduced to juggle with, the relative 
 rate of the tax in the two cases, may be made 
 to appear, to the uninitiated, to be double in 
 the five million population what it is in the 
 ten million one. Or if legitimate use, and not 
 juggling, be the purpose of its introduction, 
 the only use it can be made to serve, is the 
 purely speculative one, of showing the relative 
 denseness or sparseness, or increase or decrease 
 of population within definite periods, or the 
 ratio of wealth to population, rather than the 
 relative rate of tax on valuation. Its use for 
 any other purpose connected with the rate of 
 tax on valuation, is as putting the cart before 
 
I02 Federal Taxes and State Expenses, 
 
 the horse ; and even for the purely speculative 
 purposes named, at least as good, if not better 
 and more serviceable means may be readily 
 found {guessing, for instance). And as use of 
 this term for expressing either the national, or 
 the international rate of the Hotchpotch of 
 taxes of all sorts among those who have to 
 pay them, as distinguished from that of the 
 single tax on valuations, can serve no other 
 practical end or purpose than to ensnare or 
 beguile the unwary, or to mislead and entrap 
 even the professional expert and grave politi- 
 cal doctor,^ it would seem that it should not be 
 longer suffered to " lag superfluous on the 
 stage," but be consigned to the congenial limbo 
 of exploded humbugs and stale speculative 
 theories, and the like other useless and worn- 
 out things. 
 
 * An example of this may be found in the following extract 
 from a somewhat extended criticism of the first edition, in the 
 New York Commercial Advertiser of Dec. 2, 1887 — a journal 
 supposed to be candid, and known to be influential in the dis- 
 cussion of public questions. The preliminary part of this 
 criticism, in which about every offence known as against 
 " good form," as well as the graver ones of ignorance of the 
 subject, and personal dishonesty in the treatment of it, are 
 freely imputed to the author, is omitted, as not being material 
 to the force of the example ; viz. : 
 
 " In the discussion of such subjects a man has no right to 
 
Federal Taxes and State Expenses. 103 
 
 make a misstatement. For example he " (the author,) " remarks 
 that our taxation is wholly anomalous under governments else- 
 where in the world." 
 
 If the author made this statement, (which he doubts,) he 
 deserved to be criticised for making it without adding next after 
 " anomalous," the words as compared with that. The merest 
 dunce ought to know that " our taxation " could find no foot- 
 ing " under governments elsewhere in the world." That our 
 critic failed to see this while searching as with a microscope 
 for defects of both form and substance, shows him incapable 
 of properly doing the duties of his office : but he proceeds to 
 say : 
 
 " And on page 75, [first edition], goes so far as to 
 say, ' in not one of the European monarchies is the per capita 
 tax on valuations for the support of the civil-service adminis- 
 tration so high as in the United States.' " 
 
 All which is to be taken subject to two material exceptions 
 to the accuracy of quotation, viz.: that the definite article 
 "the" has been interpolated by the critic next before "sup- 
 port," and that the term "civil-service administration" can- 
 not be found on page seventy-five, nor as the author believes, 
 on any other page of the book. So the critic's severe rule 
 about making " a misstatement," seems to go for nothing, un- 
 less for others. He evidently does not respect it himself ; but 
 proceeds to say further : " The fact is that, while owing to the 
 vastness of our territory and comparative sparseness of our 
 population, this ought to be true, the reverse is true." 
 
 This short sentence, of twenty-seven words, in nearly a col- 
 umn of irrelevant matter, contains all this critic has to say 
 about the relative rate of tax on valuation for support of the 
 civil administration in the United States and in European 
 monarchies ; and if the author were disposed, (as he is not,) to 
 accept the challenge which the critic's imputation of dishon- 
 esty offers, he might retort the charge of falsehood, as well as 
 that of "misstatement." But as such recrimination is not 
 helpful for eliciting truth, the author is content to say, that 
 the critic has mistaken the meaning of the statistics which he 
 quotes as authority. There are no statistics of taxation extant^ 
 
I04 Federal Taxes and State Expenses. 
 
 to support the Advertiser^ s statement in the premises ; for it 
 is incredible upon any showing of human testimony, short of 
 the completeness of mathematical demonstration, that if from 
 the total tax ott valuation in any one, or in all the European 
 monarchies, the national expenses for war, army, navy, foreign 
 intercourse, church establishment, pensions, etc., be deducted, 
 the balance left for expenses of the civil administration corre- 
 sponding to our own separate State administration, shall show 
 a higher rate of tax on valuation, than is shown in any, or in 
 all the several States with us, for like purposes. If this be 
 true, what use is made of the immense total of import duties, 
 excise, and other taxes not governed by valuation, collected in 
 these monarchies ? And yet the Advertiser says all this is 
 true ; and when mildly remonstrated with by the author as to 
 the extravagance of his statement, has seriously, but evasively 
 attempted to reaffirm it, by crafty and evasive use of the fol- 
 lowing words in the issue of Dec. lo, 1887, viz.: " We under- 
 stood Mr. Jones perfectly well not to include army and navy 
 expenses ; he distinctly says ' civil administration.' We de- 
 ducted the naval and military expenses from taxation in all 
 instances," etc. 
 
 But from what sort of "taxation"? The contention is as 
 to tax on valuation for expenses of the civil administration ; 
 (the parallel of our State taxation ; ) and the author's words of 
 remonstrance were "gross taxes on valuation," for this pur- 
 pose. This weak attempt to evade the vital issue virtually 
 surrenders the Advertiser' s case : and thereupon it is iterated 
 and confidently reaffirmed, that " /;« not one of the European 
 monarchies is the rate of tax on valuation for support of the 
 civil administration so high as in the United States." 
 
 And from the showing of the analysis of a county tax-list, 
 given on pages 140 and 141 of this edition, this seems to 
 indicate that 73 per cent, of the total taxes on valuation paid 
 in the United States, for expenses of the civil administration, 
 is paid by property owners assessed less than $5,000 each ; 
 while the great and overwhelming bulk of national wealth in 
 the hands of individual possessors of it in assessments of $5,000 
 each and upwards, pay but the fragmentary balance of 27 per 
 
Federal Taxes and State Expenses. 105 
 
 cent. This is not guess-work. Its verification rests upon 
 facts disclosed by the only examination that has ever been 
 made of the subject : and the only ground left for discussion 
 about it, is as to whether the examination made in one place, 
 affords a fair indication of the probable result of like ex- 
 aminations when made in other places. 
 
 This departure from established usage, in noticing for refu- 
 tation the adverse criticism of one of the most able and influ- 
 ential of the daily press, is deemed to be warranted by the 
 circumstances of the case. For if the book is wrong on the 
 point of the Advertiser" s criticism, it may be set down as 
 practically worthless on others also. But if right on this one, 
 the fact of its being so gives additional force to others no less 
 novel in themselves. The author knows too well, and holds 
 too highly the value of press criticism in the premises, to be 
 either offended or discouraged by them. On the contrary he 
 both invites and challenges them. For, as in the economy of 
 life, it is only after the bare grain has been ground between 
 the upper and the lower mill-stones and afterwards * ' bolted 
 and sifted " that the staff of life can be obtained from it, so 
 the book which cannot go through the ordeal of candid, or 
 even of uncandid, criticism, neither can nor ought to live. 
 
CHAPTER VII. 
 
 State Expenses and Distributive Shares of the Spirits and To- 
 bacco Taxes — Absurdity of Separate State Taxes for 
 Purposes of the General Welfare, and Free Interstate 
 Intercourse for Purposes of the Federal Autonomy — The 
 ** Rock and Vulture." 
 
 The following tabulated statement has been 
 prepared for the purpose of showing the 
 expenses of the several State governments for 
 the year 1882, exclusive of those for counties, 
 townships, or other form of county subdivision, 
 cities, and incorporated tdwns, and also to 
 show the distributive shares of the several States 
 in the proposed distribution of the Federal 
 tax on production of spirits and manufactured 
 tobacco, on the basis of census population and 
 estimated total annual receipts of $144,000,000. 
 This estimated total coincides with the annual 
 rate of receipts from these two subjects at the 
 time the tax on tobacco was reduced from 
 i6c. to 8c. a pound in March, 1883, and which 
 can hardly fail to be realized again if that tax 
 106 
 
Federal Taxes and State Expenses, 107 
 
 be restored ; and the State expenses for 1882 
 have been taken, because that year corre- 
 sponds more nearly in point of time with 
 the period of highest development of this 
 taxation. 
 
 The territories and the District of Columbia 
 have not been included in this statement, for 
 the reason that the expenses of the general 
 civil administration in them are paid, in part at 
 least, from the national treasury, instead of 
 from taxes on polls and property valuations, as 
 in the several States. For this reason State 
 populations only have been used in ascertain- 
 ing the several distributive State shares, and 
 the fractional parts of a dollar have been dis- 
 regarded. The total State population by the 
 census of 1880, is 49,379,340, and the/^r capita 
 rate of distribution very nearly $2.92, but dis- 
 regarding the large fraction, that of $2.91 has 
 been used. The sums in the column for State 
 expenses have been taken from the " American 
 Almanac " for 1883, ^"<i the author acknowl- 
 edges with satisfaction, that to this invaluable 
 collection of yearly statistics, he is indebted 
 for the first hint or suggestion which has led to 
 the preparation of these pages. 
 
id^ Federal Taxes and &ate Expenses, 
 
 States Expenses for 1882 Distributive shares 
 
 Alabama $918,589 $3,763,889 
 
 Arkansas 1,331,130 2,335,347 
 
 California 4,418,362 2,516,259 
 
 Colorado 279,565 565,491 
 
 Connecticut 1,646,432 1,812,057 
 
 Delaware 94,259 426,629 
 
 Florida 361,201 784,224 
 
 Georgia i,7i3,5o7 4,4^7,743 
 
 Illinois 3,167,121 8,956,604 
 
 Indiana 3,766,603 5,756,855 
 
 Iowa 1,257,131 4,727,629 
 
 Kansas 814,907 2,898,638 
 
 Kentucky 1,946,747 4,797,687 
 
 Louisiana i,75o,555 2,735,242 
 
 Maine 1,435,460 1,888,408 
 
 Maryland 1,757,469 2,720,684 
 
 Massachusetts 8,113,860 5,188,777 
 
 Michigan 2,951,513 4,765,286 
 
 Minnesota 1,015,861 2,272,049 
 
 Mississippi 848,165 3,292,947 
 
 Missouri 1,430,869 6,309,895 
 
 Nebraska 533,757 1,316,489 
 
 Nevada 321,078 181,019 
 
 New Hampshire 461,101 1,009,743 
 
 New Jersey 1,104,308 3,291,572 
 
 New York 13,896,198 14,791,154 
 
 North Carolina 496,720 4,073,272 
 
 Ohio 4,977,189 9,306,360 
 
 Oregon 272,598 408,574 
 
 Pennsylvania 5,024,766 12,463,212 
 
 Rhode Island 794,685 804,705 
 
 South Carolina 745,129 2,867,129 
 
 Tennessee 631,651 4,488,264 
 
 Texas 1,769,879 4,631,989 
 
 Vermont 582,053 1,641,989 
 
 Virginia. 2,816,859 4,401,564 
 
 West Virginia 797,612 1,789,704 
 
 Wisconsin 1,186,307 3,828,096 
 
Federal Taxes and State Expenses, 109 
 
 The census report for 1880 shows that the 
 total aggregate taxes on property valuations, 
 under State tax laws, for all purposes, viz. : for 
 State, county, township, or other form of 
 county subdivision purposes, including cities 
 and incorporated towns, amounted to $313,- 
 000,000, in round numbers, for that year. It 
 is to be regretted that in this official total ag- 
 gregate of State taxes on taxable property val- 
 uations, throughout the United States, those 
 for township or other form of county subdi- 
 vision have been " lumped," or included in 
 those for cities and incorporated towns, so that 
 it is impracticable to ascertain from the census 
 report how much of this total aggregate is 
 peculiar to each. Assuming, however, that 
 one half of the total aggregate of $313,000,000, 
 viz. $156,000,000, to be on account of cities and 
 incorporated towns, — (and this assumption is 
 warranted by statistics derived from other 
 sources) — and the other $156,000,000 to have 
 been paid on account of State, county, and 
 township, or other form of county subdivision 
 expenses, the Federal excise taxes on produc- 
 tion of spirits and manufactured tobacco alone 
 would suffice, or at least could be made to suf- 
 
I lO Federal Taxes and State Expenses, 
 
 fice, for payment of these last-named State and 
 local expenses throughout the United States ; 
 and this without State taxes on any thing what- 
 ever for such purposes, whether polls, property 
 valuations, or any thing else, or checking agri- 
 cultural production of the constituent elements 
 of the taxed productions. 
 
 In concluding this branch of the subject, it 
 is deemed pertinent to remind the reader, that 
 this yearly aggregate State tax of $313,000,000 
 on property valuations, reported in the census 
 of 1880, is for support of the general civil ad- 
 ministration under exclusive State jurisdictions 
 which are inseparable from *' the general wel- 
 fare of the United States," and is exclusive 
 both of poll and other specific taxes not gov- 
 erned by valuation, laid and collected by sep- 
 arate State authority, and applicable to the 
 same general purpose ; as also exclusive of the 
 taxes laid and collected for other purposes by 
 the Federal authority. If all these be added 
 to the $313,000,000 aggregate State taxes on 
 property valuations, the grand total would 
 stagger belief. The reader is further reminded 
 that this aggregate $313,000,000 direct State 
 tax on property valuations, has not been laid 
 
Federal Taxes and State Expenses, 1 1 1 
 
 and collected equally from the whole property 
 in the several States, but only from so much of 
 it as could be found and assessed for taxation, 
 or as has not been exempted from taxes for 
 State and local purposes by judicial action or 
 by act of Congress. It represents the State 
 and local taxes paid on only seventeen billion 
 dollars money value that could be found and 
 assessed, as against probably treble that 
 amount, which could not be reached by State 
 tax laws under the provisions of Section 2, of 
 Article IV., of the Federal Constitution, or has 
 been exempted from State taxes by act of Con- 
 gress. While probably not a farm and its im- 
 plements, nor a workshop and its fixtures and 
 machinery, nor a stock of goods, nor thousands 
 of other equally visible but little remunera- 
 tive subjects of value to their toiling owners, 
 have been able to avoid this taxation, it 
 IS impossible to know how much, in other 
 and invisible forms of wealth, owned for the 
 most part by those best able to bear the 
 burdens of State taxes, escapes paying 
 taxes for any purpose. How much, nobody 
 can tell. We only know that while it is im- 
 possible for small property owners to escape 
 
1 1 2 Federal Taxes and State Expenses, 
 
 the vigilance of the State tax assessors, there 
 is ample opportunity for large classes of wealth 
 to escape them ; and from the wide discrepancy 
 in amounts between the seventeen billions of 
 taxable property values that are found on the 
 tax lists and reported in the census, and the 
 reputed forty-eight or fifty billions which make, 
 up the aggregate national wealth in all the 
 States, we know that some, and probably most 
 of those who can avoid paying taxes, have 
 been making the most of their opportunities 
 to do so. And in this connection it seems 
 pertinent to add, that the only possible ground 
 for hope of putting large and small property 
 owners on an equal footing of taxes on prop- 
 erty valuations for State and local purposes, is 
 to be found in not taxing the property of 
 either. While the census statistics of State 
 taxes on valuations show that little of the 
 aggregate wealth of the different States is 
 reached under the system of State taxes on 
 valuations, statistics derived from other sources 
 show, with no less certainty, that of the little 
 that is reached by it, the valuations pertaining 
 to property owners of less than $5,000 each, 
 exceed many times over in aggregate amount 
 
Federal Taxes and State Expenses, 1 1 3 
 
 that of those of this amount and over. This 
 general statement will be sustained by scrutiny 
 of the tax list, to be considered in a sub- 
 sequent chapter. 
 
 Three hundred and thirteen million dollars 
 of taxes on valuations, exclusively for purposes 
 of the general civil administration in the sev- 
 eral States, is probably the most enormous 
 direct tax practised under any form of govern- 
 ment in the world for like purposes, and is 
 mainly the result of our having retained the 
 worst while discarding the best features of tax- 
 ation under autonomous forms, whether mon- 
 archical or republican, coupled with that indis- 
 pensable Section 2 of Article IV. not having 
 been more closely associated with its counterpart 
 in Paragraph i of Section 8 of Article I. in Fed- 
 eral legislation. These two constitutional pro- 
 visions afford the essential marks which distin- 
 guish Federal from autonomous constitutions 
 in respect to taxation, as well as in respect to 
 rights of trade and citizenship among Federal 
 States. Thus far, however, in the history of 
 Federal legislation under these allied provisions 
 of the Constitution, either of which is but the 
 equivalent given for the other, while no atten- 
 
I T 4 Federal Taxes and State Expenses. 
 
 tion has been paid to the one respecting the 
 power of taxation, the other has been rigidly 
 enforced in respect to interchangeable rights of 
 trade and citizenship among citizens of the 
 several States. It is this neglect of the one 
 and this rigid enforcement of the other of these 
 provisions that has destroyed the State power 
 of excise taxation, and loaded most of the 
 States with burdens of direct taxes on prop- 
 erty valuations which they are unable to bear; 
 and in the amendment of this error lies the 
 only hope for materially lessening these bur- 
 dens, and thereby perpetuating the general 
 civil administration under exclusive State 
 jurisdiction over the subjects of it. 
 
 Neither tariffs for protection, nor tariffs for 
 revenue, nor any compromise between these 
 two ; nor more or less silver or gold or green- 
 backs ; nor labor reforms, nor reforms in the 
 relations of labor and capital to each other ; 
 nor reforms in office-holding, nor in office- 
 getting ; nor reforms in methods of administra- 
 tion ; nor changes from one party to another ; 
 nor any other scheme yet devised or suggested, 
 can touch the malady. They may palliate — 
 perhaps aggravate — but they cannot cure it : 
 
Federal Taxes and State Expenses. 1 1 5 
 
 and so long as we persist in applying the prin- 
 ciples of autonomous State taxation under Fed- 
 eral forms, and Federal principles of trade and 
 intercourse for purposes of the Federal auton- 
 omy, the malady will stick to the patient. If 
 all the remedies suggested, or any selection 
 from them, were put in practice to-day, the 
 evils of direct State taxes on property valua- 
 tions, and existing exemptions from taxes 
 allowed on production and consumption of 
 luxuries and on incomes, would still exist and 
 flourish in full vigor, though other essential 
 interests languish and die. The experiment 
 could but repeat past experiences, and prove 
 as profitless as the fabled pouring of water into 
 the sieve, or the labor of Sisyphus rolling the 
 stone, and leave us at the end of it, but as the 
 victim bound to the rock, with the vulture 
 tearing his vitals, or as Tantalus, dying of 
 thirst and hunger, with water at his lips and 
 food just out of reach. Nothing but popular 
 conviction of the need for change, both in the 
 methods and in the subjects of taxation for 
 support of the general civil administration 
 under separate State authority, can secure for 
 the people of all the States, the full measure of 
 
1 1 6 Federal Taxes and State Expenses, 
 
 relief provided by the Federal Constitution 
 against unequal taxation. These provisions 
 for the general welfare of the whole people, 
 without distinction in interests among them, 
 have hitherto been wrested to that of classes 
 of them only, through vicious systems of taxa- 
 tion ; and it will be the fault of the great 
 majority both of interests and of individual 
 tax-payers, who have been thus wronged under 
 the forms of law, if from want of concert among 
 themselves, these systems and methods of tax- 
 ation shall become perpetual. This mingling 
 of autonomous State taxes and Federal princi- 
 ples of free interstate trade and citizenship for 
 purposes of the Federal autonomy, is contrary 
 both to the letter and spirit of the Federal 
 Constitution. 
 
 It may be as well to state in this connection 
 as elsewhere, that with the meagre resources of 
 the States for defraying current expenses under 
 this mongrel system of taxation, the aggregate 
 total bonded indebtedness of all sorts in the 
 several States, for State and local purposes of 
 the civil administration in them, as stated in 
 the census of 1880, was $1,056,406,208, while 
 the Federal public debt at the same time was 
 
Federal Taxes and State Expenses. 1 1 7 
 
 $2,120,415,370, and that in the five years next 
 following, while the Federal debt had been 
 reduced more than one billion dollars in 
 amount, the above total State indebtedness re- 
 mained substantially unchanged. This ratio 
 of indebtedness between the two, and the con- 
 trast in reduction, shows that if the State in- 
 debtedness shall ever be materially reduced, 
 such reduction can only be from increased 
 revenues, which shall not add increased State 
 taxes on polls and property valuations. 
 
CHAPTER VIII. 
 
 The "Blair bill" for Education of the Illiterate— Relief of 
 the Lettered Poor from Unnecessary State Taxes as Essen- 
 tial to the General Welfare as Education of the Illiterate — 
 Better Founded in Public Policy — And Not Obnoxious 
 to the Charge of Class Legislation. 
 
 The following copy of a letter from the 
 author to a newspaper for publication, and 
 published about the time of its date, is repro- 
 duced here as well to point the foregoing state- 
 ment of State debts and distributive shares as 
 to emphasize the proneness of Federal legisla- 
 tion to run in the narrow ruts of class interests 
 rather than in the broad channel marked out 
 by the Federal Constitution for the general 
 and equal good of all interests, without dis- 
 tinction of class or condition : 
 
 To the Editor of the Richmond Dispatch. 
 
 Dear Sir : — Some time in January my attention 
 was attracted to your discussion of the *' Blair 
 Bill," which proposes the distribution by Congress 
 of some seventy million dollars from the Federal 
 spirits and tobacco taxes in the next seven years 
 ii8 
 
Federal Taxes and State Expenses, i t 9 
 
 among the several States, on the basis of illiteracy, 
 to be used by the States only for educational pur- 
 poses. It seemed to me that if such appropriation 
 could be made by Congress on the basis of illit- 
 eracy, and for the designated benefit of a particular 
 class, other occasions for such class legislation 
 might, with equal propriety, be found, and so a 
 pernicious principle in Federal legislation, which 
 has been constant and uniform from its beginning, 
 could now be made perpetual To avoid this ob- 
 jection, my letter to you proposed that Congress, 
 instead of appropriating the meagre seventy million 
 dollars by annual instalments through a period of 
 ten years for education of the illiterate, should 
 exercise its concurrent authority with the several 
 States, to tax the production of all sorts of spirits 
 and manufactured tobacco, and distribute the net 
 proceeds of the whole tax among the several States, 
 on the basis of census population, rather than on 
 the basis of illiteracy, to be used for the general 
 purposes of the State governments. Instead of 
 $70,000,000 in seven years, this last proposal 
 would provide a yearly aggregate of not less than 
 $150,000,000 for general purposes of the States, in 
 perpetuity, instead of for a single purpose for a 
 very short time, and each State might then meet 
 claims on it for education as well as for other 
 purposes, without resort to existing burdensome 
 rates of taxation on property valuations. Your ob- 
 jection to this last-named proposal, as stated at 
 the time in your columns, was to the effect that 
 the proposal was in substance the same as that 
 
1 20 Federal Taxes and State Expenses, 
 
 which had been proposed by Mr. Blaine,* and 
 abandoned by him and his party without a word in 
 its favor from either, in the course of the presiden- 
 tial campaign which followed ; and it is mainly to 
 correct your misapprehension of my proposal thus 
 stated by you that I now trouble you with this letter. 
 The essential difference between the proposal 
 
 * The date 1882 in the third line of the preface to the first 
 edition, and that of November 28, 1883, on page 121 following, 
 were intended by the author as a cypher, the key to which it 
 was thought would be readily found by earnest inquirers after 
 the fact of authorship. As this cypher has, however, proved 
 too obscure for the intended use, the author now deems it 
 proper to disclose both the cypher and its key ; and also to add 
 that he now has in his possession the original petition to Con- 
 gress, signed by seventeen petitioners, of whom thirteen are 
 Democrats, and bearing date November 27, 1882, praying 
 Congress to distribute the spirits and tobacco taxes among the 
 several States for expenses of the State civil administrations, 
 distinctively upon the ground of constitutional obligation on 
 the part of Congress. The petition referred to, however, was 
 not submitted for the action of Congress, but was afterwards 
 returned to the author by the member of the House of Repre- 
 sentatives having charge of it, with the explanation that upon 
 conference with other members of the House, it was thought 
 best not to offer the petition on account of its novelty at that 
 time. Mr. Blaine's subsequent brief advocacy of such use of 
 the spirit taxas a way to get rid of the then existing "surplus," 
 seems to have led to the identifying of his name with the pro- 
 posal of the petition — which is radically different in principle, 
 viz. : that of the petition proposing definite and permanent 
 provision for support of the civil administration, while that 
 distinguished by association of Mr. Blaine's name and advocacy 
 for only a brief period proposed only such aid to the civil ad- 
 ministration as might result from disbursement of a temporary 
 surplus in the Federal treasury. 
 
Federal Taxes and State Expenses, 121 
 
 contained in my letter to you and that of Mr. 
 Blaine, as stated in his letter to the Philadelphia 
 Press under date of November 28, 1883, is, that 
 my proposal includes the Federal tax on produc- 
 tion of both spirits and tobacco, while Mr. Blaine's 
 proposal includes the tax on spirits only. I believe 
 you are right in saying that neither Mr. Blaine nor 
 any of his party had any thing to say in favor of his 
 proposal during the presidential campaign that 
 followed the publication of it. I do not, however, 
 concur with you in ascribing this silence to a con- 
 viction on the part of either that his proposal was 
 thought to be untenable. Just why Mr. Blaine, 
 after publishing his proposal and fortifying it by 
 an argument which, to my apprehension, has not 
 been successfully controverted, chose to abandon 
 it without further word in its favor, can, in my 
 judgment, be explained only on the theory that 
 his proposal was found, on further inquiry, to be 
 hostile to the interests and policies of the party 
 which he came to represent as a candidate for the 
 presidency. That party has uniformly sought " to 
 promote the general welfare," by adjustment of 
 tariff duties and congressional legislation in the 
 interest of particular classes ; and the probability 
 seems to be, (for none can speak positively of 
 another's motives,) that when Mr. Blaine realized 
 that his proposal to distribute the tax on spirits 
 among the several States for their necessary ex- 
 penses, would defeat his party's established policy 
 of class legislation, by stripping the Federal treas- 
 ury of the funds necessary to its execution, he 
 
 UNlVBRsiTY 
 
1 2 2 Federal Taxes and State Expenses, 
 
 concluded that the best way out of the blunder of 
 having proposed such a thing, would be to say- 
 nothing more about it, in the hope that Democratic 
 aversion to Congress doing any thing under '' the 
 general welfare " clause of the Constitution, would 
 keep them, too, from disturbing the old order of 
 things. 
 
 As to the " Blair Bill," it may be said that if not 
 in agreement with constitutional provisions, it is at 
 least in harmony with long-established practice 
 under them ; and if this practice is to be perpetual, 
 the States having the largest percentage of illiteracy 
 would be warranted in profiting to the full extent 
 of its provisions in their favor. We, here in In- 
 diana, would be no indifferent beneficiaries under 
 its provisions if it shall become a law ; though 
 I confess to a feeling of reluctance to accept the 
 State's quota under it in full acquittance of a 
 juster claim for many times the amount of it on 
 essentially different grounds. 
 
 Very truly and respectfully, 
 
 Wm. H. Jones. 
 
 Fort Wayne, February 6, 1885. 
 
 To the brief suggestions of the last paragraph 
 of the above letter it may be added that the 
 percentage of those in the several State popu- 
 lations who are classed as "literate," but need 
 the aid and co-operation of the Federal author- 
 ity to relieve them from hard and unnecessary 
 State taxes, is much larger than that of the 
 
Federal Taxes and State Expenses, 123 
 
 "illiterate," and their relief in the matter of 
 these taxes more essential to " the general 
 welfare of the United States" than partial 
 education of the " illiterate " can be. Are not 
 the poor and overtaxed small property owners 
 in the several States, whether lettered or 
 illiterate, as deserving beneficiaries of govern- 
 ment appropriations or />er caj>zta distributions 
 from the Federal treasury, as the "illiterate"? 
 The obligation of the Federal government 
 to these two classes of small property own- 
 ers on one hand, and to the "illiterate" on 
 the other, is one of justice to the first, while 
 only one of public policy towards the other — a 
 bringing of "tithes of mint, anise, and cum- 
 min " — as compared with the weightier mat- 
 ters of law. "This ought ye ^o do, and not to 
 leave the other undone." 
 
 The percentage of overtaxed lettered people 
 is greatest where the percentage of illiterate is 
 least, and is by far the greater of the two. 
 Analysis of county tax-lists throughout the 
 United States will doubtless show this, if ever 
 made. Why then single out one class for gov- 
 ernment aid on the basis of /fer capita distribu- 
 tion among its numbers, and at the same time 
 
124 Federal Taxes and State Expenses. 
 
 leave a yet larger class uncared for, and whose 
 relief from needless taxes is quite as essential 
 to " the general welfare of the United States," 
 as education of the illiterate can be ? Besides, 
 if the provisions of the Federal Constitution in 
 respect to taxation '' to provide for the general 
 welfare of the United States," so often referred 
 to in these pages, were complied with towards 
 all the people of all the States, could not each 
 State then provide for the education of its own 
 "illiterate," in accordance with that social 
 order which is made perpetual in it by the 
 Xth Amendment ? The States which may not 
 need additional educational facilities, on ac- 
 count of having already provided ample ones 
 by taxing their people, are none the less en- 
 titled to th^ir per capita share in suchper capita 
 distributions from the Federal treasury, in 
 order to lessen State and local taxes for other 
 public objects, not less important or necessary 
 to them, than education of the illiterate in 
 other States. 
 
CHAPTER IX. 
 
 Aggregate State and Local Public Indebtedness — Its Relation 
 to the General Welfare — State Debts Not Materially 
 Lessened during the Period When the Federal Debt was 
 being Practically " Wiped Out "—This Public Indebted- 
 ness a Subordinate National Debt of the United States 
 — And its Creation the Result of Wrong Intrepretation of 
 the Federal Power of Taxation. 
 
 It has been stated at the close of Chapter 
 VII., that according to the census report of 
 1880, the pubHc debt of the United States in 
 1880 was $2,120,415,370, and that the aggre- 
 gate State, county, and municipal debt of all 
 sorts was $1,056,406,208 at the same time. 
 While there is no ground to suppose that this 
 last form of public indebtedness has been re- 
 duced in amount, during the interval since 
 1880, the annual report of the Secretary of the 
 Treasury, for December, 1885, shows that on 
 the first day of November preceding, the pub- 
 lic debt of the United States had been so far 
 reduced in amount, as that the interest-bear- 
 ing part of it which would remain after being 
 125 
 
126 Federal Taxes and Slate Expenses, 
 
 credited with assets applicable to that pur- 
 pose, would be many million dollars less in 
 amount, than the above aggregate of State and 
 local indebtedness. The secretary's report for 
 the subsequent December, 1886, shows a still 
 further and material reduction in the amount 
 of the public debt of the United States, and 
 invokes the serious attention of Congress to 
 the reduction of the Federal revenues. These 
 official statements show that it is the aggre- 
 gate public indebtedness of the several States 
 which has now come to be the paramount sub- 
 ject for consideration in connection with the 
 national finances. The fact that this aggre- 
 gate State, county, and municipal indebted- 
 ness has not been reduced in the same ratio as 
 that of the public debt of the United States, 
 but, on the contrary, has remained substantially 
 unchanged during the interval since 1880, can 
 be owing to nothing else than to a lack of cor- 
 responding resources for paying it. The plain 
 inference from there having been so large reduc- 
 tion in amount of the public debt of the United 
 States during the five years from 1880 to 1886, 
 while there has been none at all in that of the 
 aggregate public indebtedness of the several 
 
Federal Taxes and State Expenses, 1 2 7 
 
 States, would seem to indicate a redundancy 
 of revenues for the first, and a corresponding 
 deficiency of revenues for payment of this sec- 
 ond class of indebtedness. 
 
 What shall be done with this aggregate State 
 and local indebtedness, has thus become an 
 important if not a vital question in respect to 
 "the general welfare of the United States." 
 The fact that this indebtedness has been cre- 
 ated for objects of public utility, inseparable 
 from the general civil administration under the 
 several States, and therefore identified with 
 ''the general welfare of the United States," 
 would seem to entitle it to such co-operation 
 on the part of the Federal authority, in the 
 exercise of concurrent powers of taxation with 
 the several States, as will enable the States to 
 apply to its gradual extinguishment revenues 
 to which they are entitled by virtue of concur- 
 rent constitutional right, but which can only 
 be made effective for this, or any other pur- 
 pose, by exercise of the Federal authority. 
 
 This form of public indebtedness is the 
 necessary result of erroneous interpretation of 
 the Federal power of taxation, and withholding 
 its co-operation with that of the several States to 
 
1 2 8 Federal Taxes and State Expenses, 
 
 provide for essential objects of public utility, 
 by the easy methods of excise taxation. Had 
 such co-operation between Federal and State 
 powers of excise taxation been resorted to, 
 there could have been no occasion to create 
 this class of public indebtedness ; but the fail- 
 ure to exercise the power of Federal taxation 
 concurrently with that of the several States, 
 has subjected the States to the triple alterna- 
 tive of going without objects of public utility, 
 or of going in debt for the means to provide 
 them, or else of resort to burdensome rates of 
 taxation on property valuations to provide for 
 them : and this vast total of State indebtedness 
 is the result — a result which is wholly anoma- 
 lous under civil government elsewhere in the 
 world, and for which there can be no hope for 
 ultimate payment, except from that co-opera- 
 tion in the exercise of Federal and State 
 powers of excise taxation, which would have 
 avoided the necessity for its creation. The 
 States, counties, and cities have been obliged 
 to create debts for public expenses, instead of 
 paying cash for them out of current revenues 
 supplied by the easy methods of excise taxes on 
 production and consumption of luxuries, and 
 
Federal Taxes and State Expenses, i 29 
 
 en incomes. Co-operation by the Federal and 
 State authorities in excise taxation of the pro- 
 duction and consumption of spirits and manu- 
 factured tobacco alone, without resort to any 
 other form of internal excise taxes, would pro- 
 vide for indispensable objects of the general 
 welfare of the United States which have hither- 
 to been exclusively supplied by direct State 
 taxes on property valuations, for support of 
 the general civil administration, under exclu- 
 sive State jurisdiction over the subjects of it. 
 Such co-operation seems not only necessary to 
 the ultimate payment of existing State, county, 
 and municipal public indebtedness, with the 
 same ease and rapidity with which the public 
 debt of the United States has been extin- 
 guished, but will remove all just occasion for 
 the creation of new public indebtedness of like 
 character in future ; or if it shall not wholly re- 
 move the occasion for creating new debts for 
 like purposes, it will at least subject the crea- 
 tion of them to the local control of tax-payers, 
 both as to the amount and purpose of them. 
 
 If it be asked whether these suggestions are 
 intended to convey the idea that it would be 
 competent for the Federal authority to co-op- 
 
1 30 Federal Taxes and State Expenses. 
 
 erate with the several States In measures of 
 excise taxation for direct payment of city or 
 other municipal debts, it is answered no ; but 
 that the co-operation of the Federal and State 
 authorities in excise taxes for payment of State 
 and other local expenses of the State adminis- 
 trations, would so far lessen taxes fo'r these pur- 
 poses, that those for cities and incorporated 
 towns would be correspondingly lighter ; and 
 that if cities and incorporated towns were 
 relieved from taxes for State and county pur- 
 poses, the ultimate payment of existing city 
 debts might be assured without hardship or 
 possible sacrifice of the interest of property 
 owners. The general rate of tax on property 
 for both State and county purposes In cities, is 
 little if any less than two per cent, per annum 
 on property valuations in them, and that for 
 city purposes hardly less than two per cent, 
 additional. 
 
 If we consider the close relation of this sec- 
 ondary form of national indebtedness, to the 
 general welfare of the United States, and the 
 impracticability of paying It from State taxes 
 without large Increase In the rate of tax on 
 yalwations, the inducements to exercise of 
 
Federal Taxes and State Expenses, 1 3 1 
 
 concurrent powers of Federal and State excise 
 taxes seem sufficient to compel resort to it, in 
 order to avoid the alternative of increased taxes 
 on property, or repudiation. The fact that dur- 
 ing the twenty years between 1862 and 1883 the 
 Federal excise taxes on spirits and manufac- 
 tured tobacco yielded the enormous aggregate 
 of $1,796,000,000 (which was paid with less 
 hardship or difficulty than any other tax. Fed- 
 eral or State), and that the Federal government 
 no longer needs the taxes collected from these 
 two sources for any other purpose than to pro- 
 vide for the general welfare of the United 
 States, ought to be decisive of the proposal 
 to apply them to that purpose. During the 
 twenty years referred to, the national produc- 
 tion of gold and silver was $1,298,763,792, or 
 about a third less than the aggregate spirits 
 and tobacco taxes during the same period ; and 
 while the collection of the latter cost less than 
 three and a half to four per cent, of their total 
 amount, the gold and silver cost, in other forms 
 of value, dollar for dollar of all that was pro- 
 duced. 
 
 The proposed distribution of the internal 
 revenue taxes from spirits and manufactured 
 
1 3 2 Federal Taxes and State Expenses. 
 
 tobacco, Avould produce the effect of capitaliz- 
 ing taxable property valuations throughout the 
 United States, at existing rates of State taxes 
 on them, by letting the amount of yearly taxes 
 on them remain in the pockets of owners, in- 
 stead of being taken out of them for State and 
 county expenses. The abstention from use of 
 these abundant resources for paying State ex- 
 penses of the general civil administration, from 
 a fear of theoretical tendency towards " cen- 
 tralization " which their use would seem to im- 
 ply, is suggestive of the boiling of the kid in 
 the mother's milk provided for its sustenance, 
 and affords a parallel to the case of the Bourbon 
 who died of starvation from fear of being 
 poisoned if he should eat the food prepared for 
 him in his own household ; or that of the man 
 who, accustomed to the method of getting 
 maple syrup, tapped his apple trees for cider 
 instead of expressing it from the apples that 
 grew in abundance and were going to waste on 
 the limbs of the trees. 
 
CHAPTER X. 
 
 Analysis of a County Tax- List — No Trace of Excise Taxes 
 Found on It — Three Classes of Tax-Payers — Reasons for 
 Their Classification — "Why State Taxes on Valuations are 
 Necessarily Unequal — Difference in Numerical Percen- 
 tage of the Several Classes — Unequal Rates of Taxation 
 as Shown in One Township, Illustrate Like Inequalities 
 in All the Others — Penalties and Delinquencies as Related 
 to the Rate of Tax — No Penalty or Delinquency in the 
 System of Excise Taxes, and No Revenue from Direct 
 Taxes without Them — Proposal to Withhold Protection 
 of the Law from Personal Property Not Listed for Taxa- 
 ation. 
 
 [Note to Second Edition.— The author 
 never turns to this chapter, but the familiar 
 story of '' The Missionary and the King of 
 Siam " recurs to him. Though truer than 
 most preaching, the chapter sounds so Hke 
 exaggeration in the unaccustomed ears of 
 some, who, like the king, having always lived, 
 as it were, in a hot climate where water never 
 freezes, and can therefore form no conception 
 of the quality of ice, at once fall into "the 
 shivers " at the touch of the cold facts of this 
 "analysis of a county tax-list." Unable to 
 133 
 
134 Federal Taxes and State Expenses, 
 
 account for these facts otherwise, and afraid to 
 deny, or openly attempt to contradict them by 
 proofs, the weak resort of ridicule and scoffing 
 seems to be the only resource left them. A 
 noted case of this sort of " the shivers," is in 
 the mind's eye at this instant ; and the wild 
 capers cut by the subject of it at the bare 
 touch of the missionary's ice, are ludicrous in 
 the extreme. 
 
 Though,- like the king, this man could 
 listen with patience and apparent belief to 
 stories on other subjects no less preposter- 
 ous than that of '* Jonah swallowing the 
 whale," he broke down and fell at once into 
 "the shivers," on reading in this chapter about 
 the class of small property owners having to 
 pay two thirds more taxes on their property 
 valuations, than the class of large property 
 owners have to pay on theirs. This story 
 proved too much for his limited faculty of 
 belief; and he therefore did not hesitate to 
 assert — as it was his privilege to assert if he 
 believed not — that the book which contained it 
 was a disgrace to the man who wrote and pub- 
 lished it. 
 
Federal Taxes and State Expenses, 135 
 
 Now the author himself admits that it is 
 hard of belief — in fact a thing incredible un- 
 less amply supported by proofs — that such a 
 state of things as is set forth in this chapter, 
 should exist anywhere in the world. But when 
 the proof is brought — the only sort of proof the 
 subject is susceptible of — such proof as that 
 by which the naturalist safely and infallibly an- 
 nounces the existence, and fixes the character- 
 istics of species, on examination of a fragmen- 
 tary specimen of it, — the standing out against 
 the truth thus established, is like the refusal of 
 the king of Siam to believe the missionary's 
 story, because it belied his own limited and 
 personal experiences in respect of rivers freezing 
 over with ice strong enough to bear the weight 
 of a big elephant. Like instances of incre- 
 dulity have never failed to make themselves both 
 known and felt, as obstacles in the way of a 
 great truth on its first announcement. The 
 familiar case of Lord Bacon still refusing to 
 accept the true theory of the movements of 
 the planets in space, after it had been demon- 
 strated by aid of the telescope, may be used 
 for illustration. But earnest inquirers after 
 
136 Federal Taxes and State Expenses. 
 
 truth, who had provided themselves with 
 telescopes, did not straightway discard or throw 
 them away because " the greatest, wisest, and 
 meanest of mankind," ridiculed and scoffed at 
 their use. Perhaps, as he was " meanest," 
 though " wisest," " his eyes were holden," that 
 he should not, while others nobler but less wise, 
 should see this new glory of the Heavens. And 
 so, after their example, the author stands by 
 this analysis, though all Lord Bacons, and the 
 like of him, if there be such, shall scoff at and 
 revile it.] 
 
 The following tabulated analysis of a county 
 tax-list has been made for the purpose of 
 showing the need for Federal excise taxes on 
 production and consumption of spirits and 
 manufactured tobacco, to lessen, if not remove, 
 existing unequal and insufficient taxes on polls 
 and property valuations for State and local 
 uses. The tax list examined has not been 
 selected with reference to any advantage or 
 disadvantage, real or supposed, which it may 
 bear relatively to other counties in the State, 
 in respect to rate of tax on valuation, or aggre- 
 
Analysis of a County Tax-List 137 
 
 gate tax in proportion to population, or any- 
 other element, which does not apply as well to 
 any other county in the State. Though in ter- 
 ritorial extent this county is somewhat larger 
 than any other in Indiana, and contains the 
 third city of the State in point of population, 
 and is the second in manufacturing industries, 
 yet in other respects, and particularly as re- 
 spects agricultural and farming products, it 
 may be accepted as affording a fair average 
 among the counties of the State, of the ex- 
 isting system of taxation for State, county, and 
 township, or other form of county subdivision 
 purposes. Serving as well for this use as any 
 other of the ninety-two counties of the State, 
 its tax list has been used for the purpose of 
 analysis only because of greater convenience 
 as the home of the author. Of course the 
 showing of a single county is too narrow a basis 
 for the claim to national revolution both in 
 method and subjects of taxes for support of the 
 general civil administration in all the States, 
 and all that is claimed for it is the seemingly 
 reasonable inference, that if in one county of 
 the State direct taxes on polls and property 
 valuations for State, county, and township ex- 
 
13^ Analysis of a County Tax- List, 
 
 penses from which both production and con- 
 sumption of spirits and manufactured tobacco 
 are exempt, have been needlessly heavy, un- 
 equal, and burdensome, the same condition of 
 things may be supposed to exist in the other 
 counties of the State under the same system of 
 taxation ; and if in one State, then by like in- 
 ference, in other States also. 
 
 So far as is known to the author, the present 
 is the first attempt to analyze the State tax-list 
 of a county, with a view to showing the prac- 
 tical working of the existing State systems of 
 direct taxes on polls and property valuations 
 on different classes of property owners, and the 
 inequalities and individual hardships insepara- 
 ble from the general system. That this is the 
 first attempt of its kind is stated, as well to give 
 some idea of the difficulty in the way of making 
 it, as to invite fair and intelligent criticism of 
 its statements and conclusions on that account. 
 
 If the reader shall ask what warrant exists 
 for dividing tax-payers into the three distinct 
 classes of railroads, large property owners, and 
 small property owners, the answer is, that there 
 is no other warrant for this classification than 
 the common thought of the people that these 
 
Analysis of a County Tax- List 139 
 
 classes do exist as distinct classes among tax- 
 payers. As to that of railroads, there is no dif- 
 ficulty in distinguishing it from either or both 
 the others, as its existence is recent, and pecul- 
 iar to the period since establishment of the 
 Federal constitution. As to the second and 
 third classes, however, of large and small prop- 
 erty owners, there is difficulty of like clear dis- 
 tinction of one from the other, growing out of 
 the important question where the line between 
 them shall be drawn. In any event, this divid- 
 ing line, like that drawn by the statute of limi- 
 tations, or that in the statute of exemptions 
 from sales under sheriff's executions on judg- 
 ments founded on contracts, and numbers of 
 like cases in both civil and in criminal proced- 
 ure, the line of distinction must be purely arbi- 
 trary ; and unless it be supported by common 
 assent as being just in itself, will serve to ob- 
 scure and confuse the subject, rather than to 
 make it plainer. In the present case this divid- 
 ing line between the two classes of large prop- 
 erty owners and small property owners, is drawn 
 on the valuation of $5,000 ; those taxed on 
 valuations of this sum and over being set down 
 as large property owners, while those taxed on 
 
140 Analysis of a County Tax- List, 
 
 valuations less than $5,000 are set down as 
 small property owners. These two classes are 
 thus distinguished from each other, because 
 this distinction seems to respond more nearly 
 than any other to the general thought of peo- 
 ple, that while a tax-payer who is worth $5,000 
 or more can hardly be reckoned a poor man, 
 so on the other hand one who is worth less 
 than $5,000 can hardly be called a rich one. 
 The analysis is therefore made on this basis, 
 and if the basis shall be accepted as reasonably 
 satisfactory for the purpose it is made to serve, 
 there must be corresponding satisfaction in the 
 use made of it. At any rate it can serve the 
 purpose of distinction until some other basis of 
 classification shall be suggested, having better 
 grounds to justify it. But whether the classifi- 
 cation used be the best and most equal that 
 may possibly be devised, can be no valid ground 
 for objection to the present one ; for the reason 
 that none other that may be suggested could 
 change or modify the evils disclosed by this 
 one ; and a single good point is sufficient on 
 general demurrer. It is hoped this preface will 
 sufficiently explain the principles and the ob- 
 ject of the following tabulated statement, viz. ; 
 
Scipio Township. 
 
 Eel River Township. 
 
 Lake Township. 
 
 Cedar Creek Township, 
 
 La Fayette Township. 
 
 Jefferson Township. 
 
 Jackson Township. 
 
 Adams Township. 
 
 Aboile Township. 
 
 Wayne Township. 
 
 City of Fort Wayne. 
 
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 Milan Township. 
 
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 Marion Township. 
 
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 Maumee Township. 
 
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 Madison Township. 
 
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 Monroe Township. 
 
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 Analysis of the Tax List 
 
 of Allen County, Indiana, 
 
 for the Year 1883. 
 
 Whole No. of Tax-payers .... 
 
 Total valuation 
 
 Total tax paid or delinquent .... 
 
 No. railroad valuations 
 
 Aggregate railroad valuations . . . 
 
 Aggregate railroad taxes 
 
 No. of others taxed $5,000 and over . 
 ■Aggregate valuation of these .... 
 Aggregate tax paid by them .... 
 No. taxed on valuations less than $5,000. 
 Aggregate valuation of these .... 
 Aggregate taxes paid by them . . . 
 Delinquent taxes, penalties, etc. . . 
 
 Whole No. of polls 
 
 Amount of pol taxes 
 
Analysis of a County Tax- List 143 
 
 The most noticeable features of the foregoing 
 tabulated statement of a county tax-list, are 
 the absence from it of excise taxes of any kind, 
 and the very large, or rather the overwhelming 
 preponderance, in numerical percentage, of 
 those who pay taxes on valuations of less than 
 $5,000 each, as compared with that of those 
 who pay taxes on valuations of this amount 
 and over. Out of the whole number of 20,446 
 tax-payers on the list, only 566 pay on valua- 
 tions of $5,000 and over, while 19,880 pay on 
 valuations less than $5,000. If there existed 
 ground for belief that the property of the 
 566 had been included in the assessment as 
 completely as that of the 19,880, there would 
 be less ground for complaint of inequality in 
 the taxation. 
 
 But has the assessment been equally exact 
 and complete in respect to each of these two 
 classes ? While there is ground for belief that 
 it has not been equally exact and complete, 
 still there is no direct and explicit proof to the 
 contrary, nor, in the nature of the case, can 
 there be. In the absence of direct and ex- 
 plicit proof, however, to show that all the prop- 
 erty of the 566 has been as completely found 
 
1 44 Analysis of a County Tax- List. 
 
 and assessed for taxation as that of the 19,880, 
 the chain of circumstantial evidence tending to 
 show that it has not been so found and assessed, 
 is hardly less convincing than direct and ex- 
 plicit proof of the fact would be. As to lands 
 and tangible personal property, there is no more 
 ground for suspicion of failure to assess the 
 property of the one class, than that of the 
 other. The difficulty lies in finding out what 
 is not visible to the assessor, and which on this 
 account is left to such voluntary disclosure as 
 the owner of it may choose to make. Its 
 amount is an unknown quantity in the problem 
 of direct State taxes, and which may be con- 
 jectured to fill the wide gap between the ascer- 
 tained total valuations of taxable property 
 reported in the census of 1880, as being seven- 
 teen billions of dollars in round numbers, and 
 that other perhaps equally reliable but unof- 
 ficial statement, which reckons the aggregate 
 wealth of all the States at the same date at 
 forty-eight billions of dollars. This difference 
 of thirty-one billions of money value between 
 the property that is taxed, and that which is 
 not taxed, — in itself nearly double the former, — 
 demonstrates the inequality of the system of 
 
Analysis of a County Tax- List. 145 
 
 taxation under which it is perpetuated. Tak- 
 ing the seventeen and the forty-eight billions of 
 dollars as representing the relative ratio of ex- 
 emption from State taxes enjoyed by the 566 
 and the 19,880, some proximate idea may be 
 formed of the disparity and inequality between 
 these two classes of tax-payers, under existing 
 systems of State taxation, for support of the 
 general civil administration in the United 
 States. It means simply heaviest burdens of 
 taxes upon those least able to bear them, and 
 largest exemptions from taxes to those who 
 stand least in need of any exemption at all 
 from taxes. This idea will be further illustrated 
 when we come to consider the relative percent- 
 age of taxes paid by the three classes of tax- 
 payers, as shown in the tabulated statement of 
 the county tax-list. Let it suffice for the pres- 
 ent to say, that if the valuations of the 566 
 should be increased by the ratio of the thirty- 
 one billions, and those of the 19,880 corre- 
 spondingly lessened, these two classes of tax- 
 payers would stand more nearly on the footing 
 of equality in respect to taxes for support of 
 the general civil administration throughout the 
 United States, than they now do. 
 
1 46 Analysis of a County Tax- List. 
 
 The difference in the numerical percentages 
 of these classes is hardly less noticeable than 
 the ratio of their respective aggregate valua- 
 tions to the total amount of taxes ; that of the 
 less than $5,000 class being so nearly the whole 
 number of tax-payers that both the others put 
 together make but an insignificant fraction in 
 the 100 as compared with it — the one being 
 97tV ^^ ^Y^Q- for both the others, while recourse 
 must be had to decirhals of the unit to indicate 
 the percentage of one of these two; and this the 
 one most influential in shaping general legisla- 
 tion, both in Congress and in the State legisla- 
 tures, and occupying a larger share of the time 
 and attention of the courts than both the 
 others put together. If this class should pay 
 taxes in proportion to the share of both legisla- 
 tive and judicial provision which it occasions, 
 there would be little ground for just complaint 
 by either of the others on account of high rate 
 of taxes on valuations. And if we turn from 
 this relative numerical percentage of the three 
 classes to that of total taxes assessed in each, 
 that of this otherwise most influential class, 
 though relatively greater than its numbers 
 W.ould seem to indicate, is yet but trifling in 
 
Analysis of a County Tax- List, 147 
 
 comparison with either of the other two : the 
 percentage of aggregate railroad taxes being 
 but 6^ per cent, of the whole, while that of the 
 other two classes is ig-i^ and 72iT^ respectively, 
 the largest percentage of aggregate taxes as- 
 sessed being that of the class least able to 
 pay it. 
 
 Passing from these general features of the 
 tabulated statement of the county tax-list to 
 particular ones among townships and individual 
 assessments, we find that the delinquent taxes 
 pertain exclusively to the class of tax-payers 
 assessed less than $5,000 each in some of the 
 townships, and that if the rate of the tax be 
 computed on the amount of valuation and of 
 the amount of delinquency annexed to it, the 
 rate of tax will exceed the nominal rate of 
 taxes on valuation by the others. Taking 
 Jackson township for illustration, we find the 
 total valuation of the township $156,285, and 
 the whole tax, including delinquencies and 
 penalties for previous years, $3,531. There is 
 but one railroad in the township, and but one 
 other tax-payer in it assessed $5,000 and over. 
 Neither of these two has any delinquent tax or 
 penalty, and we know from the tabulated state- 
 
148 Analysis of a County Tax- List. 
 
 ment that the aggregate valuation of these two 
 is $44,490, and their aggregate tax $823, which 
 is at the rate of $1.86 tax on the $100 valua- 
 tion. Deducting the valuations and taxes of 
 these two tax-payers from the aggregate valu- 
 ations and taxes for the township, there re- 
 mains $111,795 of valuation, and $2,704 of 
 taxes and delinquencies for the other 212 tax- 
 payers in the township to pay, which is at the 
 rate of $2.42.1 tax on the $100 valuation, as 
 against the $1.86 rate for each of the other two 
 classes of tax-payers. 
 
 If it be said that to add delinquencies and 
 penalties to the rate of tax on valuation is un- 
 fair, because these are occasioned by the fault 
 or inability of the delinquent to pay, rather 
 than by any intended purpose of the tax law to 
 discriminate harshly or unjustly among indi- 
 viduals or classes of them, the answer is that 
 property owners do not willingly, or purposely, 
 or wantonly incur these penalties or delin- 
 quencies ; and that these preponderate so heav- 
 ily among the class of property owners least 
 able to bear them as to make them peculiar to 
 this class, shows beyond any reasonable ground 
 for doubt that the system of taxes under which 
 
Analysis of a County Tax- List, 149 
 
 they are incurred is unreasonable, unjust, and 
 oppressive, and to be tolerated only from im- 
 perious necessity. The feature of penalties and 
 forfeitures for non-payment of taxes is peculiar 
 to the system of direct taxes on property valu- 
 ations. It can find no place in the system of 
 excise taxes on production and consumption of 
 luxuries, or on incomes. Not only is the small 
 property owner obliged to submit to increased 
 rate of tax on valuation by reason of the non- 
 assessment of part at least, if not of the greater 
 part of that of large property owners, but he 
 is liable at the same time to have his little 
 property sold to satisfy the relatively larger 
 tax than he ought in justice to be liable for. As 
 we have shown by reference to the census and 
 to other equally trustworthy, though unofficial, 
 statements of the aggregate wealth in all the 
 States, not more than one third of this aggre- 
 gate wealth can be found and assessed for tax- 
 ation under State tax laws ; and that the other 
 two thirds which is thus exempted pertains for 
 the most part to the two classes most able to 
 pay taxes on it, and therefore least entitled to 
 the exemption from taxes enjoyed by them. If 
 this exempted two thirds could be found and 
 
150 Analysis of a County Tax- List. 
 
 subjected to taxes, the rate of tax would con- 
 sequently be proportionately less for all classes 
 of property owners. It would make a differ- 
 ence of 63I cents in the dollar to the class of 
 small property owners, who now pay this much 
 in excess of what they would have to pay if the 
 whole property were equally taxed. This ter- 
 rible injustice of obliging the class of small 
 property owners to pay two thirds more taxes 
 than is paid by others, or else submit to have 
 their little properties sold for default of such 
 payment, is inseparable from the system of di- 
 rect taxes on property valuations, and is essen- 
 tial to its efficiency. Without this feature the 
 tax list could be no more effective to provide 
 the necessary revenue for support of the sev- 
 eral State administrations, than an official rec- 
 ommendation to all citizens to make such vol- 
 untary contributions for that purpose as each 
 might think he ought to make. Placed on this 
 footing of voluntary contributions, the State 
 could get but little revenue, or if any, not more 
 than may be found in the box of the mission- 
 ary society after the most earnest and pathetic 
 appeals. Contrariwise, from the spur of legal 
 obligation, as well as that of natural appetite 
 
Analysis of a County Tax- List, 151 
 
 under the system of excise taxes, which has 
 neither penalty nor forfeiture for non-payment 
 of taxes, while the tax-payer is his own asses- 
 sor of the amount of taxes he has to pay, and 
 also fixes the number and periods of the instal- 
 ments in which they are to be paid, so as to 
 suit himself, the treasury is kept constantly 
 filled, and no man's home or little property has 
 ever yet been sold to satisfy an unpaid excise 
 tax. The pretence, therefore, that it is unfair 
 to include delinquencies and penalties in the 
 rate of taxes on valuation is groundless. So 
 far from being unfair to hold the system of 
 taxes on valuations responsible for the relent- 
 less and remorseless penalties and forfeitures 
 which it inflicts, it is but just to say of it that 
 this merciless rigor is the essential condition of 
 its existence. 
 
 Even upon the impossible condition that all 
 property in the several States in excess of the 
 seventeen billions ascertained and reported in 
 the census of 1880 could be found and assessed 
 in like manner as the seventeen billions, the 
 system of direct taxes on valuations would still 
 be unequal, as well because no uniform and just 
 rate for ascertaining equal valuation is possible, 
 
152 Analysis of a County Tax-List, 
 
 as also because under no possible conditions 
 could equal ability be established among tax- 
 payers to pay the equal taxes assessed. The 
 inequality and injustice of penalties and for- 
 feitures for involuntary deHnquency would still 
 remain. 
 
 The system of taxation which can accept no 
 excuse for non-payment of taxes but that of 
 penalty and forfeiture is barbarous, because it 
 is unnecessary. There is less excuse for it 
 than for imprisonment for debt under execu- 
 tion on a judgment founded on contract. In 
 the case of the involuntary delinquent tax- 
 payer the ground of the penalty and forfeiture 
 is but an implied contract on his part to pay his 
 equal rate of tax with all other property owners 
 in the State, and until the State has compelled 
 such complete assessment of all the property 
 within her jurisdiction she has no moral right 
 to enforce penalty or forfeiture against delin- 
 quent tax-payers ; for if all the property were 
 assessed the delinquent's rate of tax would be 
 less, and the penalty and forfeiture the more 
 easily avoided ; and it is shocking to the moral 
 sense to impose penalty and forfeiture for non- 
 payment of more than the due share. The 
 
Analysis of a County Tax- List, 153 
 
 State may, if she will, compel the listing and 
 assessment of all the personal property within 
 her jurisdiction, so far at least as to acquit her- 
 self for all responsibility for what is not listed 
 for taxation, by withdrawing the protection of 
 her laws to such as may not be found on the 
 tax list, and until she does this, or something 
 equivalent to it, there can be no just ground 
 for enforcing penalties and forfeitures for non- 
 payment of taxes on such as is listed for taxa- 
 tion. Such provision in the tax laws of the 
 several States would perhaps unearth more per- 
 sonal property of the invisible and intangible 
 sort that is carefully hid out of sight of the tax 
 assessors than now appears on the tax -lists 
 throughout the United States, even though it 
 should fail to wholly fill up the wide gap be- 
 tween the census and the reputed statements 
 of aggregate wealth. Though such provision 
 in the State tax laws would not probably se- 
 cure the listing for taxation of all the intan- 
 gible property which now escapes taxation in 
 the several States, it would doubtless double 
 existing valuations of this species of property 
 in the several States, and in this way tend to 
 lessen existing inequality in taxes ; and if the 
 
154 Analysis of a County Tax- List, 
 
 system of direct taxes on property valuations is 
 to be perpetual, instead of the easier and abso- 
 lutely equal system of excise taxes on produc- 
 tion and consumption of such luxuries as spirits 
 and manufactured tobacco being substituted 
 for it, nothing less than the incorporation of 
 such provisions in the tax laws of the several 
 States can tend to put large and small property 
 owners on a footing of equality in respect to 
 State taxes, or excuse the exaction of penalties 
 and forfeitures for non-payment of them. 
 
 The author is not prepared to urge the in- 
 corporation of such provisions in the several 
 State tax laws, except as a secondary means of 
 relief for the class of tax-payers in all the States 
 represented by the 19,880 in the tabulated 
 analysis of the Allen County tax-list above 
 given. This class would probably be somewhat 
 lessened in number, and that of the 532 be 
 more than correspondingly increased under the 
 operation of such provisions. A powerful, if 
 not unanswerable argument in favor of such 
 provision in State tax laws would be that such 
 provision would justify penalties and forfeitures 
 for non-payment of taxes, so far as justification 
 can be found for them, by putting all property 
 
Analysis of a County Tax- List, 155 
 
 owners on as nearly equal footing before the 
 law as it is possible for the State to put them 
 on, as respects the rate of tax on valuation. 
 Nor would such provision in State tax laws be 
 different in principle from that of registry laws 
 respecting the right to vote at State elections. 
 If it be competent for a State to provide that 
 unless a citizen register his name and place of 
 residence as a qualification for exercising the 
 right of suffrage, it must be equally competent 
 for the State to provide by law, that unless he 
 list his personal property for taxation he shall 
 not be entitled to that protection for it under 
 the law, which is provided by taxing the prop- 
 erty of others. The principle of no tax on 
 property, no protection for property under the 
 law, would be perhaps as well founded in pub- 
 lic policy under popular institution, as that 
 which restricts the right of suffrage to regis- 
 tered voters ;• at all events, it would justify 
 penalties and forfeitures for non-payment of 
 taxes, so far as justification can be found, by 
 putting all property owners on the footing of 
 equality before the law, as nearly as it is possi- 
 ble to put them, as respects the rate of taxa- 
 tion. Such provision in State tax laws would 
 
156 Analysis of a County Tax- List, 
 
 probably do more to solve the problem of " the 
 general welfare of the United States," by de- 
 veloping both the strong and the weak points 
 of it, than any other that could be applied to 
 its solution, besides also providing more reve- 
 nue for State and county purposes of the gen- 
 eral civil administration, and from sources and 
 subjects better able to pay it than even the 
 subjects of the Federal taxes, which it is pro- 
 posed to use for these purposes. Nor does it 
 seem extravagant to expect that the 97 in the 
 100 who now pay three fourths of the taxes 
 while owning less than a third of the property 
 of the country, will ultimately insist on the 
 application of this principle, unless the system 
 of excise taxes on production and consumption 
 of spirits and manufactured tobacco shall be 
 substituted for the existing system of partial, 
 unequal, and direct taxes on property valua- 
 tions. 
 
 In the column of totals in the tabulated 
 statement, it will be seen that out of the aggre- 
 gate $418,043 taxes of all sorts paid or delin- 
 quent for the year 1883, the rate of tax on 
 aggregate, valuation of $9,060,556 paid by the 
 railroads and 532 others assessed $5,000 each 
 
Analysis of a County Tax- List, 157 
 
 and over, is a fraction less than $1.20 on the 
 $100, while the rate of tax paid by the 19,880 
 tax-payers of the county assessed less than 
 $5,000 each on their aggregate valuation of 
 $14,576,454 is a fraction more than $2.12 on the 
 $100 of their aggregate valuation. These fig- 
 ures demonstrate the gross inequality of the 
 system, and show that while the railroads and 
 the 532 are taxed at a rate which, relatively 
 with the 19,880, they scarcely feel, these last- 
 named are taxed at a rate which they are unable 
 to bear, as the $47,465 delinquency and penalty 
 list, peculiar to this class of tax-payers, shows. 
 And when we consider that while the property 
 and effects of this class of poor or small proper- 
 ty owners is such that it cannot escape the vigi- 
 lance of the tax assessors, it is impossible to know 
 how much more of that of the other two classes 
 escapes this vigilance than is found and listed 
 by it, the enormity of the discrimination in 
 favor of the rich, and against the poor, grows 
 more startling and apalling still ! Surely this 
 shocking oppression cannot be longer hid, and 
 now that it has been brought into the glare of 
 light, there must be a cry from the multitude 
 of over-taxed poor, potent as a voice from 
 
158 Analysis of a County Tax- List, 
 
 heaven, demanding that the system under 
 which it has been practised, under the delusion 
 of its being the most just and equal that the 
 wisdom of man could devise, shall be denounced 
 and abandoned, as the most unjust and unequal 
 that malignant ingenuity could invent. It is 
 with difficulty that strong nerves and habitual 
 self-control shall maintain their equanimity and 
 self-possession in the presence of facts so well 
 calculated to arouse indignation. There is but 
 the semblance of apology open to those who 
 may seek to palliate or excuse the shocking 
 picture which the figures in this case present. 
 But as it will be found both too narrow and too 
 trifling in its sum and substance, consideration 
 of it may be deferred until it shall be brought 
 into discussion by its friends. 
 
 It seems to have become habitual with some, 
 who have no faith in partial reform of existing 
 methods of injurious taxation, to decry such 
 partial agitation. The agitation of what is 
 called the *' single tax on land," with entire ex- 
 emption of personal property from taxes, of 
 which Mr. George may be said to stand as the 
 representative, comes in for a large share of this 
 habitual denunciation. While the author no 
 
Analysis of a County Tax- List, 159 
 
 more believes in such special remedies in poli- 
 tics than in nostrums and specifics in medicine, 
 he is yet of opinion that the constant agitation 
 of such partial schemes is, upon the whole, pro- 
 ductive of good. It serves to attract attention 
 and thought which would not otherwise be 
 given to the subject. When there is such gen- 
 eral complaint of overtax on property values, 
 that men get to forming societies to counteract 
 it by throwing the whole burden of taxes upon 
 a particular class of property owners, it may be 
 accepted as indicating the need of radical re- 
 form in the taxes. When whole communities 
 are affected with like symptoms of physical ail- 
 ment, we do not doubt there being something 
 wrong in the material conditions of their exist- 
 ence. It is so in politics, and especially in the 
 matter of taxes. Instead, therefore, of railing 
 against resort to the use of these " specifics," 
 the true method is to hunt for the prevalent 
 cause of the general ailment, and to remove it. 
 It will do no good to tell a community afflicted 
 with prevalent malarial fever that every mem- 
 ber of it has all the rights of civil and religious 
 liberty, and that he ought therefore to feel 
 happy, when he knows he is not. There is no 
 
i6o Analysis of a County Tax- List 
 
 use in decrying the use of " quack medicines " 
 when nothing else is proffered in place of 
 them. 
 
 It is for similar reasons that the author, in- 
 stead of finding fault with any of these schemes 
 of partial remedy, feels disposed to encourage 
 rather than to check them. But only so far as 
 it may tend to ultimate adjustment of all taxa- 
 tion upon the just principle that the aggregate 
 wealth of the country (whether it be in lands. 
 public securities, or other form of personal 
 property), rather than the aggregate average of 
 its poverty^ shall bear the brunt of the taxes, 
 No adjustment of taxes which does not recog- 
 nize this for its basis, can be other than partial, 
 and therefore do no lasting good. Ability to 
 pay the tax assessed^ rather than moral or other 
 obligation to pay it, is the true ground for 
 taxation ; for obligation to pay is proportioned 
 to the protection afforded. Hitherto we have 
 begun to tax from the bottom, with a uniform 
 rate upwards. Instead of this we should begin 
 on top, and tax downwards, lessening the rate 
 of tax as we go down. The result will proba- 
 bly be that, when the line of $5,000 assess- 
 ments, which now pays three fourths of the 
 
Analysis of a County Tax- List, 1 6 1 
 
 taxes on values, is reached, there will be no 
 need of going any lower, except for the pecul- 
 iar purposes of cities and incorporated towns ; 
 and as the tax-payers have direct control of 
 these, none but themselves can be to blame if 
 the tax be not just what the majority of them 
 want. 
 
CHAPTER XL 
 
 Poll Taxes— Trifling Amount of These Paid by the Class of 
 Large Property Owners — As Peculiar to the Class of Small 
 Property Owners as Penalties and Delinquencies. 
 
 The total of $22,860 for poll taxes in the 
 tabulated statement of the Allen County tax- 
 list, is another feature in the system of direct 
 taxes in no way less shocking to the moral 
 sense than the pretence of equality of tax on 
 valuations which has been unmasked in the case 
 of Jackson township in the preceding chapter. 
 Though these poll taxes are not laid under any 
 pretence of equality in point of ability to pay 
 them, and are confessedly arbitrary in principle, 
 yet when we come to compare the percentage 
 in number of polls with that of amount of 
 taxes paid by large and by small property own- 
 ers respectively, we find that the disparity be- 
 tween these two classes of tax-payers, though 
 somewhat less than in the taxes paid by them 
 on valuations, is yet liable to the charge of put- 
 ting the heavier burden on shoulders least able 
 162 
 
Analysis of a County Tax- List. 163 
 
 to beai* it, while another class of tax-payers is 
 wholly exempt from poll taxes. Of the total 
 of $22,860 poll taxes, only $192 is laid on 79 
 taxed $5,000 and over ; thus showing that in 
 the matter of polls, as well as in that of tax 
 on valuation of property, it is those least able 
 to pay who bear the heaviest burden of taxes. 
 The share of the 79 is but a fraction of one per 
 cent, of the whole tax, while that of the 9,307 
 others charged with this tax is more than 99 per 
 cent, of the whole. If it be said in mitigation of 
 this inequality, that but little of the amount 
 laid upon polls is ever paid, the answer is that 
 the plea of non-payment is but proof of ina- 
 bility to pay, and establishes the charge that in 
 the greater number of poll taxes the tax is 
 greater than the subjects of it are able to pay. 
 This poll tax is confessedly arbitrary at best, 
 and as it is productive only in what it extorts 
 from the poor, while it gets practically nothing 
 from the rich, is obnoxious to the charge of being 
 so purposely framed as that while no poor per- 
 son can escape its meshes, the rich pass through 
 them in shoals. And when we take into the 
 account that more than 99 per cent, of the 
 amount collected from it is, as a rule, paid by 
 
164 Analysis of a County Tax- List, 
 
 those burdened with the charge of rearing fam- 
 ilies in which every dollar may be said to be of 
 the essence of life, its hardship seems the more 
 monstrous still. Surely something which is not 
 essential to the comfort of the poor might be 
 made the subject of a specific tax neither de- 
 pending on valuation nor yet liable to be af- 
 fected by Section 2 of Article IV. of the Federal 
 Constitution, may be found to take the place of 
 this odious poll tax, now almost solely paid by 
 the poor, when paid at all. Or better still, if 
 the system of defraying the expense of the 
 civil administration by taxes on polls and prop- 
 erty valuations is to be perpetual, why not ex- 
 tend to the poor tax-payer the same exemption 
 which is extended to poor debtors by the stat- 
 ute of exemption from sheriffs' sales under exe- 
 cution on judgments founded on contracts ? 
 What moral right has the State to compel a 
 judgment creditor to be more forbearing 
 towards a debtor worth less than $600, than 
 herself towards her poor tax debtors? The 
 execution creditor of a debtor worth less than 
 $600 may be as poor or poorer than his debtor, 
 but this circumstance is of no significance as 
 between individuals. 
 
Analysis of a County Tax- List, 1 65 
 
 It is true that the exemption from taxes 
 of all polls and property valuations of $600 
 and less, might sensibly lessen the aggregate 
 yearly State revenues without corresponding in- 
 crease in the rate of tax on valuations over that 
 amount ; but in lieu of this, the deficiency 
 might be made up from tax on such incomes as 
 could be reached by State tax on them, or by 
 some specific tax that could be enforced with- 
 out the general hardship now felt by a very 
 large class in paying poll taxes and other taxes 
 on valuations which do not reach $6cx) each. 
 Though a graduated State tax on incomes could 
 not, for the reasons stated in a previous chapter, 
 be expected to operate with entire success, it 
 may at least be as equal and effective, and 
 certainly far less oppressive than the existing 
 poll tax and taxes on property valuations under 
 $600, and whatever of inequality may be found 
 in its operation would at least be limited to a 
 class of tax-payers better able to bear it. What- 
 ever inequality might be found in such State tax 
 on incomes, would be no more so than is inher- 
 ent in existing taxation of property valuations, 
 Specific taxes on known lucrative employments 
 and occupations, which now pay no tax for 
 
1 66 Analysis of a County Tax- List. 
 
 State and local purposes, might be eligible sub- 
 stitutes for poll and other taxes which bear 
 so heavily on the poor and small property 
 owners. 
 
 But better than any modification or amend- 
 ment of an inherently bad system of taxes, 
 would be the substitution of some other in place 
 of it, in which the vain attempt to equalize 
 taxes on partial and imperfect valuations, and 
 arbitrary taxes on polls, shall be replaced by 
 excise taxes on production and consumption of 
 luxuries, such as spirits and manufactured tobac- 
 co in the first place, and graduated taxes on in- 
 comes made next in order to supply deficiencies. 
 It is the just reproach of the existing system of 
 State taxes on polls and property valuations for 
 support of the general civil administration, that 
 the poll tax is as distinctively pecuHar to the 
 class of small property owners who are assessed 
 less than $5,000 each, as is the delinquent tax 
 and penalty on these valuations ; so that the 
 result seems to be practically the same, whether 
 the great multitude of 97 out of every 100 
 tax-payers be taxed as to polls on confessedly 
 arbitrary principles, or under the pretence of 
 equality in respect to valuation. Such uniform 
 
Analysts of a County Tax- List, 167 
 
 results under the existing system of State taxes 
 for essential purposes of " the general welfare 
 of the United States," in throwing the heaviest 
 burdens on shoulders least able to bear them, 
 cannot be because there is no practical differ- 
 ence between right and wrong in public policy 
 — between equality and inequality, — but because 
 instead of there being either right or equality, 
 there is but the pretence of these qualities, in 
 that part of the system professedly based on 
 them. Taxes on valuations can, in the nature 
 of things, only be equal among tax-payers when 
 all the taxable property of all classes and con- 
 ditions in the State is listed, valued by uniform 
 and inflexible standards of valuation, and taxed 
 at like uniform and inflexible rates. The 
 absence of any part of it from the tax list, 
 necessarily makes the rate of tax on that which 
 is listed relatively higher than if all were listed ; 
 and even if all should be listed, the impossibility 
 of uniform judgment as to value among the 
 multitude of assessors necessary to perform l:he 
 task of valuation, would still make equality of 
 assessment impossible. And since long experi- 
 ence under the system of direct State taxes on 
 polls and property valuations has shown that 
 
1 68 Analysis of a County Tax- List. 
 
 all the property in the State neither has been, 
 nor can be thus listed for taxation, the alterna- 
 tive seems to be the abandonment of the system 
 and substitution of some other in place of it on 
 the one hand, or else the abandonment of the 
 pretence of equal taxes on the other. 
 
CHAPTER XII. 
 
 Conclusion upon the Case Stated in Chapter I. — Classification 
 of Subjects and Objects of Taxation. 
 
 The conclusions to be drawn from the pre- 
 ceding chapters seem to be these, viz. : that as 
 there can be no complete definition of " the 
 general welfare of the United States," as stated 
 in Paragraph i of Section 8 of Article I., unless 
 the definition include in its terms the general 
 civil administration under separate and exclusive 
 State authority, the primary power of taxation, 
 to provide for necessary expenses of this civil ad- 
 ministration, must be deemed to be vested by 
 the Constitution in the Federal autonomy, and 
 to be as exclusive of the like power in the sev- 
 eral States, as that " to pay the debts," or " to 
 provide for the common defence " of the United 
 States ; and that as to the subjects of the civil 
 administration under separate and exclusive 
 State authority, which are not general and 
 common to all the States alike, but are local 
 or peculiar, the several States have a concur- 
 
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