rived by the state has been but $1,881.04. The state needs new legislation on this subject.

In the twelfth legislative assembly a law was passed providing for the creation of a probate code commission. The commission which was appointed in pursuance of the provisions of this law consists of the following members: Judge A. G. Hanson, of Fargo, Chas. S. Ego, of Lisbon, and George E. Wallace, of Wahpeton.

Among the things considered by the probate code commission were the inheritance tax provisions of the existing Probate Code and the desirability of changing the law. The law presented herewith is the law proposed by the Probate Code Commission

The principal changes in the inheritance tax legislation will appear upon examination of the following table of rates. recommendations on page 158 of this report.)

VIEWS OF COMMISSIONER BIRDZELL.

(See

Since the Tax Commission adds its endorsement of the "Proposed Inheritance Tax Law," to that of the Probate Code Commission, I desire to add a word with reference to the rates provided for. The rates in the proposed law are higher than those of any state in the union-the lowest rate being 2 per cent for transfers to lineals progressing to 6 per cent and the highest for strangers and collaterals being 10 per cent progressing to 30 per cent. Our revenue necessities, in my opinion, do not drive us to this extreme, and we are confronted by no social condition justifying a measure that comes dangerously near the retributive point.

The exemptions are also low, but this is not particularly objectionable, except as it adds to the undesirability of the high rates. In my opinion the rates imperil the constitutional validity of the law. It might also be well to consider the effect these rates will have upon the residence of persons of means who have reached the age of retirement.

L. E. BIRDZELL.

TABLE SHOWING RATES AND EXEMPTIONS IN PROPOSED INHERITANCE TAX LAW.

TABLE SHOWING RATES AND EXEMPTIONS IN PRESENT INHERITANCE TAX LAW.

PROPOSED LAW.

INHERITANCE TAX.

Section 1. Tax Transfers; Exceptions. A tax shall be and is hereby imposed upon the transfer of any tangible property within the state, and of intangible property, or any interest therein, or income therefrom, in trust or otherwise, to any person, association, or corporation, except county, town or municipal corporations, or corporations within the state, organized under its laws solely for religious, charitable, or educational purposes, which shall use the property so transferred exclusively for the purposes of their organization within the state, in the following

cases:

1. When the transfer is by will or by the intestate laws of the state, of any intangible property or of tangible property within the state, from any person dying possessed of the property while a resident of the state.

2. When a transfer is by will or intestate law, of tangible property within the state or within its jurisdiction and the decedent was a non-resident of the state at the time of his death.

3. When the transfer is of intangible property, or of tangible property within this state, made by a resident, or of tangible property within this state, made by a non-resident by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.

4. Such tax shall be imposed when any such person or corporation becomes beneficially entitled, in possession or expectancy, to any property or the income thereof, by any such transfer whether made before or after the passage of this act; provided, that the property or estates which have vested in such persons or corporations before this act takes effect, shall not be subject to the tax; and provided further, that contingent interests created by the will of any person who died prior to the passage of this act shall not be taxed.

5. Whenever any person or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee by will; and whenever any person or corporation possessing such a power of appointment so derived, shall omit or fail to exercise the same within the time provided therefor, in whole or in part, a transfer taxable under the provisions of this act shall be deemed to take place to the extent of such omission or failure, in the

same manner as though the persons or corporations thereby becoming entitled to the possession or enjoyment of the property to which such power related, had succeeded thereto by a will of the donee of the power failing to exercise such power, taking ef fect at the time of such omission or failure.

6. The tax so imposed shall be upon the clear market value of such property at the rates hereinafter prescribed and only upon the excess of the exemptions hereinafter granted.

Section 2. Primary Rates, Where Not in Excess of $25,000. When the property or any beneficial interest therein passes by any such transfer where the amount of the property shall exceed in value the exemption hereinafter specified, and shall not exceed in value twenty-five thousand dollars, the tax hereby imposed shall be as follows:

1. Where the person or persons entitled to any beneficial interest in such property shall be the husband, wife, lineal issue, lineal ancestor of the decedent or any child adopted as such in conformity with law, or any child to whom such decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided, however, such relationship began at or before the child's fifteenth birthday, and was continuous for said ten years thereafter, or any lineal issue of such adopted or mutually acknowledged child, at the rate of two per centum of the clear value of such interest in such property.

2. Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister or a descendant of a brother or sister of the decedent, a wife or widow of a son, or the husband of a daughter of the decedent, at the rate of three per centum of the clear value of such interest in such property.

3. Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister of the father or mother or a descendant of a brother or sister of the father or mother of the decedent, at the rate of six per centum of the clear value of such interest in such property.

4. Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister of the grandfather or grandmother or a descendant of the brother or sister of the grandfather or grandmother of the decedent, at the rate. of eight per centum of the clear value of such interest in such property.

5. Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of col

lateral consanguinity than is herein before stated, or shall be a stranger in blood to the decedent, or shall be a body politic or corporate, at the rate of ten per centum of the clear value of such interest in such property.

Section 3. Rates in Excess of $25,000. The foregoing rates in section two are for convenience termed the primary rates. When the amount of the clear value of such property or interest exceeds twenty-five thousand dollars, the rates of tax upon such excess shall be as follows:

1. Upon all in excess of twenty-five thousand dollars and up to fifty thousand dollars, one and one-half the primary rates.

2. Upon all in excess of fifty thousand dollars and up to one hundred thousand dollars, two times the primary rates.

3. Upon all in excess of one hundred thousand dollars and up to five hundred thousand dollars, two and one-half times the primary rates.

4. Upon all in excess of five hundred thousand dollars, three times the primary rates.

Section 4. Exemptions; From First $25,000. The following exemptions from the tax, to be taken out of the first twenty-five thousand dollars, are hereby allowed:

1. Property of the clear value of five thousand dollars transferred to the husband or wife of the decedent, and one thousand dollars transferred to each of the other persons described in the first subdivision of Section 2, shall be exempt.

2. Property of the clear value of two hundred and fifty dollars transferred to each of the persons described in the second subdivision of Section 2, shall be exempt.

3. Property of the clear value of one hundred and twentyfive dollars transferred to each of the persons described in the third subdivision of Section 2, shall be exempt.

4. Property of the clear value of seventy-five dollars transferred to each of the persons described in the fourth subdivision of Section 2, shall be exempt.

5. Property of the clear value of fifty dollars transferred to each of the persons and corporations described in the fifth subdivision of Section 2, shall be exempt.

Section 5. Tax a Perpetual Lien. Every such tax shall be and remain a lien upon the property transferred until paid and