1

are supported partially by fees and fines. Under these circumstances, officials bend their activity to the conviction of offenders, not to the prevention of crime and the reform of the criminal; they frequently set traps for persons who are likely to break the law, creating the temptation and the opportunity in order that they may increase their emoluments. In Wisconsin, sheriffs were for many years paid so much per head for the tramps whom they fed and lodged. The system, as has been said, placed a "direct premium upon vagrancy." During the existence of this system in Wisconsin, tramps were "often furnished with liquor, tobacco, and newspapers, to induce them to return." Finally, the fee system has been a constant and shameful corrupter of justice as dispensed by justices of the peace in "the people's courts." In most states there are several justice's courts open to the plaintiff who desires to bring suit. In consequence, a disgraceful competition springs up, each justice endeavoring to swell his business and multiply his fees by constantly finding for the plaintiff, with the result that our judicial system is thoroughly vicious at the point where perhaps it comes in closest contact with the masses of the people.

The remedy is in the substitution, wherever possible, of regular salaries for fee stipends, and in the institution of methods of accounting which will hold public officials to strict accountability for every fee collected. Fortunately, the movement of legislation, while slow and obstinately fought by some politicians, is in the right direction; and in almost every state public officials are being required to turn their fees into the general treasury and accept instead a fixed compensation.

Special Assessments. Where the operations of the government confer a special benefit upon some restricted group of individuals, those individuals are often led to exercise undue influence upon the governmen to secure that service, if the latter om the general funds. Jobbery

is supported by appropr and graft are encourage the group of individuals

1T. K. Urdahl, The Fee System cited in this section are taken from

of the common funds, the government or legislature often delays the expenditure unduly for fear of criticism or because of unwise parsimony. Thus in cities where the method of special assessment is not used, it often happens that the opening of a street is delayed long after the time when it would be desirable for the citizens most interested, although perhaps the latter would be willing to defray the cost from their own pockets, were this permitted.

A recognition of these facts has led in recent years to a striking development, in the United States, of the benefit principle as exemplified in the method of special assessments. The special assessment has been used sporadically in many countries for several centuries, but it was first regularly used on a wide scale in the United States; in the latter half of the nineteenth century. Its place and importance among the revenues is shown in the table on page 695, from which it appears that special assessments aggregating over $113,000,000 were collected in 1902. This amount constituted a little more than 4 per cent of the revenue receipts; but as the national and state governments (except Massachusetts) make practically no use of the special assessment, its real importance appears more clearly from an examination of its place among municipal revenues. In the incorporated places having 2500 inhabitants or over in 1913, special assessments yielded nearly 9 per cent of the revenues and more than one eighth as much revenue as all kinds of taxes.

The special assessment has been approved by the American courts because it places at least a part of the cost of the service upon the beneficiaries of the service, a rule which can sometimes, but not often, be violated without subjecting the government to excessive and corrupting private influence. The special assessment has appealed to the people, however, because it permits public improvements to go ahead at a pace which would be impossible if taxation were the only fund for defraying the cost of the improvements. Needless to say, the special assessment has occasio ly stimulated extravagance and premature developmentus, in New Jersey, in the last quarter of the nineteenth eral large cities were practically thrown into bank

ruptcy by undertaking ambitious public works, in which the special assessment played an important part. And in New York, under the Tweed régime, the system of special assessments furnished an excuse for undertaking public works in which corruption flourished, and which probably would never have been undertaken, had it been known in the beginning that their cost would have to be partially defrayed by taxation. "The works had been carried on upon a scale of audacious extravagance, and in portions of the city where they were not at the time justified. Great avenues were laid out and improved largely for the purpose of giving fat jobs to favorite contractors, and to provide fine drives for the pleasure and convenience of others than the abutting property owners."

On the whole, however, the special assessment has been an unusual success as a fiscal expedient, and has proved an important, if not an indispensable, factor in the development of American cities. Where its use has been followed by extravagance, speculation, or jobbery, these evils are to be attributed almost wholly to political corruption of the government, and only in a very small measure to the special assessment itself. Most of the evils, moreover, have arisen where the city government, or some department of the city government like that of public works, has been given the power to order the improvements against the will of the property owners involved or where, as was the case in the example cited above, assessments upon particular lots were permitted to exceed the value of the property. Special assessments should not be levied against the will of a majority of the property holders subject to assessment, except by a two thirds or three fourths vote of the city council, and in no case should the assessment a small fraction of the value of the property against the assess Where these rules are observed, likely to lead either to premat upon the property holder.

B. NON-REVENUE RECEIPTS

9.798,856 132,674,439

20,145 349 13,429,982

28,519,067

425,331.927

75,322,250

taxation are the most important with which the public financier has to deal. These problems are of two varieties; those dealing with the nature of taxation in general, and those dealing with specific taxes. The remainder of this chapter will be devoted to the general questions. The following chapter will be given over to the more specific problems of American taxation. Justice in Taxation. By far the most important lesson which the student of fiscal questions has to learn is the supreme necessity for tolerance and breadth of view. The factors which condition justice or make for equity in taxation are exceedingly numerous; and the mistake most commonly made by superficial thinkers is to seize upon some one element of justice, build a philosophy upon that alone, and vigorously condemn everything that does not harmonize with their petty and bigoted little system. No rule less sweeping than that of the general welfare can serve as a safe guide in public finance.

1. Some writers go so far as wholly to deny the right of the State to take private property by taxation. These writers forget that there is no such thing as absolutely private property. As the State determines what shall be private property, so also it determines the conditions of its existence, and the most fundamental condition of private property is the obligation to contribute to the support of the State. The rights of private individuals have always been of a more or less limited nature, and among the rights reserved by the people in their organic capacity will be found, in every civilized state, the right to take a portion of the wealth produced for such purposes as the lawmaking power may deem fit.

2. However, the State must exercise this power over private property in an equitable manner, or as this maxim is ordinarily expressed in the terminology of constitutional law, taxation must be equal and uniform. Thus, for example, the constitution of West Virginia provides that: "Taxation shall be equal and uniform throughout this state, and property, real and personal, shall be taxed

tained as directed by la which these requirements