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three per cent on money, and by the laws of the State, not exceeding ten per cent interest can be charged ; three per cent from ten leaves

United States bonds pay six per cent annually in gold, which is fully equal to seven per cent currency, and taken into consideration that they can be realized on at any time, they are far more desirable than money loaned at seven per cent currency.

The result is that there are millions of dollars in the city of Nashville invested in bonds which pay no tax whatever, which (money), if there was no tax sought to be put upon it would be turned loose, and enter the industry, trade, and development of the resources of the State.”

“A further result of the tax at three per cent is, that it offers inducement to banks to carry on business with a small capital, and rely upon deposits for capital ; in other words, to undertake to do banking business without capital. The result is, that in Nashville now there is only about one million dollars banking capital, when before the war there was nearly or quite five millions. If you will give her five millions of banking capital now (and she would surely get it but for the tax on money), and not impose the high and oppressive taxes on her trade, it is an absolute certainty that her population, trade, manufactures, and general industry would increase one hundred per cent in the next ten years, and perhaps in the next five or seven years.

If you double her population, trade, etc., which must be accompanied by general thrift and go-ahead, you will quadruple the value of real estate or immovable property, thereby add largely to the wealth of the State, and enable the State, less oppressively to the citizens throughout the State, to pay her interest and debt.”

“ If you will levy and collect the tax that is sought to be collected in Memphis to-day, on the money, trade, etc. of New York, and charge no tax in Boston, Philadelphia, or Baltimore, I will guarantee to transfer, in a short time, hundreds of millions of the trade, money, etc. of New York to those cities, and if (New York) will continue it five or ten years, I will guarantee to show you, in either of these cities, more trade, more money, and more people than in New York. I will guarantee to depopulate her more effectually and more permanently than a plague ever did a city, and impoverish her more effectually than war ever did. Yes, I will hurt her infinitely worse than a fire, and I will make it entirely safe for women and children to cross Broadway at City Park without the protection of policemen. And who would be the injured party in New York by the enforcement of such a law? Would it be the merchants who, for aught I know, rent their houses from the great real estate owners ? or would it be the great real-estate owners? In other words, would it be the movable

property-man, - with his goods, money, etc. who can take it and go elsewhere, or would it be the immovable property or real-estate man who has to stay where he is, and pay his city and county debt, without tenants or rentals from his property ? Hence I say, that of all the men who should object to oppressive, and to follow the principle, I will add, any taxation at all on money, merchandise, or trade, manufactories, etc., it is the man who owns the real estate or immovable property. His position should be this: He should say to the thousands of men with money in their pockets, looking out a favorable locality to go to banking, merchandising, manufacturing, or farming, Come, locate on me; I will not oppress you. Come to me, for I can't go to you, and we must come together, or I am worth , nothing; and, knowing this, I will not tax and oppress you. Other localities make you pay a tax ; I will not, and consequently I offer that advantage over other localities. Heretofore, it has been the merchant who has done the complaining about the tax levied on him. He is not the one to do it. It is the real estate man, and the writer being one of these men, owning real estate almost entirely, and not owning a dollar's worth of merchandise of any kind for sale, and not being a lender of money, but on the contrary a borrower, and not being the owner of machinery, except a steam saw-mill and a steam cotton-gin, but being a plain farmer or planter by profession, thinking he sees his interest in the system he is advocating, consequently therein is to be found the moving cause of this letter.”

“I contend that this system will lighten the burdens of taxation on real estate, and after a short time the rate of taxation will be really less. A short time ago, a prominent real-estate owner of Memphis said to me: Do you say, that a merchant or banker shall make from ten to sixteen per cent on their capital, and pay no tax, and I make only six or eight per cent on the houses they are occupying, and

pay all the tax ? Yes, said I; you seek to tax them, and that is the reason you get no larger per cent on your property. Says I, if they make one hundred per cent per annum on their capital, you should not want them to pay a copper of tax. Why? because if they made it, you would have forty applicants for the house they are doing business in, and if you should, you would certainly get a full rent for it, more than the extra tax, as only one of the forty could get it, and the other thirty-nine would be unaccommodated ; and if your tenants should be making this large per cent, it is reasonable to presume that they would be making something near it all over town. But as only the present tenants, or their number, could be accommodated with houses, the result would be that you would not only

get exorbitant rents for all the houses in town, but you would have demand for the hundreds of thousands of vacant lots throughout the city to build store-houses on ; they would buy them, or offer you such enormous rents as would induce you to build them houses on lots that you have been paying taxes on for years, and received no rental from. Soon there would be houses going up all over the city, block after block. The brick-maker, the lumberman, the carpenter, bricklayer, and all descriptions of mechanics and laborers would have more than they could do, so that the builders would have to send elsewhere for mechanics. All these new-comers in turn would want residences, and thus you would bring into demand and make pay rental thousands of lots that have never paid anything, give active employment to all the mechanics you have, and besides bring thousands from other places.”

“Let us go a little further, and see how it (this policy) affects all and everybody in the city. These new-comers get their houses, and then they want furniture, and they patronize the furniture-man ; they want a carriage or wagon for family use, and they patronize your carriage-man; and then horses, and patronize the horse-man; and then the blacksmith, to shoe them; and then the retail dry-goods houses, mantua-makers, milliners, grocery-men, butchers, and in short every kind of retail establishment throughout the city, thereby giving vigor, life, and thrift to all; and thus it would go on, until before you are aware of it, you would have a city of thousands of people, and be worth and pay a rental on hundreds of millions of dollars. Then where would be your city and county debt, and a necessity for a high rate of taxation ? and where would be the oppression, when you have got four times as much to pay with? In a few years, when the legislature came to fix the rate of taxation for the State, it would discover that a spot of ground down here in West Tennessee, called Memphis, which heretofore has been worth and paid a tax on only $ 25,000,000, is now worth, and can pay a tax on $ 100,000,000, just as easily as it did some years ago pay on $ 25,000,000. Consequently, the tax to pay current expenses, interest on the State debt, etc., need not throughout the State be put so high."

“Of course, no general trade would pay one hundred per cent per annum, but I have adopted it (this rate) to illustrate the principle, which is the same.”

All this, as before intimated, is sound, clear, homely talk; hut it is safe to predicate that it will make no material impression on the public opinion of the section to which it is specially

addressed, or much anywhere. Nations and communities, as well as individuals, learn economic wisdom almost exclusively in the hard and costly school of experience.

To round out and complete Mr. Ensley's picture of American taxation as it might be, and its results, he should have further added and illustrated, that by the adoption of a system of taxation based mainly on realty and rentals, the latter to be assessed directly against the occupier, a much larger number of citizens than now can probably be induced to take an active interest in municipal politics, and watch all proceedings involving municipal expenditures; for under such a system nearly every citizen would pay a direct tax, proportioned to the scale of his residence. Under the existing popular systems of taxation on the contrary, the taxes on realty are assessed against and collected of the real estate owners, who in turn collect it of their tenants, not in the form of taxes, but of rents. The tenant, however, rarely if ever discriminates in such matters, and so becomes generally indifferent to municipal politics, and not unfrequently through a feeling that increased taxation cannot affect his interests, advocates the largest expenditures. In the English cities, and in London more especially, where taxation falls mainly on rentals and occupiers, this watchfulness of the individual citizen and rate-payer over the proceedings of their municipal authorities in all matters of expenditure has been particularly observed and its beneficial influence recorded.

Finally, while we are discussing what we shall tax, and how we shall tax, and speculating on what future courts and legislatures are likely to do in settling these questions, it should not be overlooked that there is another element all the time working for reform, which puts courts and legislatures in a great degree at defiance; and that is, the quiet, unorganized, never-ceasing, but in the end all-powerful and all-subduing spirit of popular resistance which, especially in all free and highly intelligent communities, always puts itself in opposition to the effectual carrying out of bad laws. The smuggler has been called “the knight-errant of civilization," because in disregard of law, and sustained in a high degree by popular opinion, he compels the letting down of barriers by which a false political economy seeks to isolate nation from nation, and re

strict commerce. When every member of the House of Commons had a silk handkerchief of French manufacture in his pocket, the importation of which was forbidden under heavy penalties, the law establishing such a prohibition, although unrepealed on the statute-book, was dead, and only waited for burial. And so in respect to that feature of the generally accepted American tax system which relates to personal property. The law says, that all such property shall be taxed at its full and true value. Individual, if not public, sentiment says it shall not. How stands the conflict? In New York city, out of a population of over one million, only 8,920 names, or less than one per cent of the population had, in 1875, any “household furniture, money, goods, chattels, debts due from solvent debtors, whether on account of contract, note, bond, or mortgage, public stocks, and stocks in moneyed corporations,” or in general any personal property of which the assessors could take cognizance for taxation ; although at the same time the assessors estimate that of the property defined and described by law to be personal property, there is in New York city an amount approximating $ 2,000,000,000 in value.* In the State of New York, the State assessors for 1873 report that, of the personal property of the State, “ less than 15 per cent liable to taxation finds a place on the rolls of the assessors," + while in Ohio, under laws similar to those existing in New York, not one person in ten has any visible property which can be made subject to assessment. In New York and Ohio, the basis of taxation has therefore practically got down to a real estate basis, because the people, acting individually, will not have any other; and yet, acting collectively, through their representatives in “ legislature assembled,” these same people decide that the law, under which these proceedings can be possible, shall not be taken from the statute-book, and decently buried. They prefer to build churches, establish schools, and at the same time keep up a system which neutralizes in great part the very work for which the churches and schools are established. And eren in Massachusetts, which claims a better record, it would probably be found, if the facts could be ascertained, that under the

Report of the Tax Commissioners of New York City, 1875. † Report of the State Assessors of New York for the year 1873.

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