first incidence, there is a problem likely to come at no distant day before tax legislators, which up to the present time they have hardly thought of, and which is certain under a free government to be solved by human nature rather than by statute.[1]
The scope and methods of raising revenue for the support of a State are also some of the greatest, if not the very greatest, determining factors of the morality of a people. "I insist," said an eminent lawyer and member of the Constitutional Convention of the State of New York in 1868, "that a people can not prosper whose officers work and tell lies. There is not an assessment roll now made out in this State that does not both tell and work lies." And no member of the convention, or any representative of the press, either then or subsequently, has challenged the assertion. The extent also to which the existing system of taxation in the United States has obliterated the sense of honesty in its people in their individual dealings with the Government, removed all repugnance to the act of perjury, and caused each one to justify himself to his conscience for making a false return in the matter of taxes, by the supposition that every one is doing the same, is also strikingly illustrated by the circumstance, that a high court in one of the States of the Federal Union has recently decided that "perjury in connection with a man's tax lists does not affect his general credibility under oath."
The idea that the proper relation of a State to its people is essentially of a paternal nature finds much of popular approval, and is without doubt popularly desired. Accepting this idea as correct, let us exemplify it in its application to the State. Suppose a father in dealing with his family, placed, so far as his children are concerned, a premium on lying and concealment, and vested with a heavy penalty all truthfulness and straightfor-
- ↑ M. Léon Say, the distinguished French economist, in a recent discussion of the income tax, asserts that the public and private financial history of France has been one of incessant abolition of private and state debts, and in substantiation of such a conclusion he shows that if a capital of 8,330 francs had been invested in national debt obligations of France in 1522 and allowed to remain subject to the various changes in respect to capital and interest which the financial policy of the state has necessitated and required under its successive governments, the present value of the investment to the legitimate heirs of the first investor would be but 83 francs.
The reduction of annual income to the holders of the national debts of Europe, contingent on the refunding of the same during the year 1894, is estimated at $24,000,000, requiring an addition of $960,000,000, with an earning capacity of two and a half per cent per annum, to the total of what is called capital, to make up for the subtraction of income from the individual holders of such securities in the previous year. In the United States the shrinkage in the amount of annual dividends paid on the capital stock of its railroads between the years 1892 and 1894 is reported as in excess of $14,000,000, and in the annual interest on bonds during the same period at $13,000,000, or a total greater than the losses contingent on the whole refunding operations of the states of Europe during 1894.
