CHAPTER IX. Agriculture and Domestic Economy.. IV. The One Mill Tax for Common Schools.. I. Taxation of Telegraph and Telephone 399 II. Taxation of Street Railways and Electric 401 369 370 371 373 399 III. Taxation of Express, Sleeping and Palace CHAPTER XI. Taxation of Banks, Insurance Companies, etc.... 408 414 414 CHAPTER XV. The Milwaukee and Rock River Canal.. CHAPTER XVI. BIBLIOGRAPHY. CHAPTER XIV. The Hawkers' and Peddlers' Tax.... Receipts and Expenditure Classified. Statistics 445 455 460 473 PREFACE In the preparation of this work the writer has had in mind. continually two classes of readers, the one having a general or a personal interest in Wisconsin history, the other having a scientific or professional interest in public finance and its problems. In order to make the production of greater interest to the first class the personal element has been brought in as much as possible; while on the other hand the writer has attempted to present and discuss the history and its problems in a scientific spirit. The striking characteristics of Wisconsin's financial history are many and significant, among which may be mentioned, the careful provisions of the Constitution to guard against a great and burdensome state debt, the great extravagance in local communities, the Constitutional struggle as to the meaning of uniformity in taxation and as to the Constitutional limitations on the taxing power of the legislature, the fraud, waste, and corruption that characterized the sale and management of the state lands and also the administration of the Trust or Education Funds arising from the sale of such lands, the great and steady increase in expenditure for state administration, the great development of corporation taxes, the rapid development and extension of the state administered ad valorem tax on public service corporations, and the recent significant and important developments in the direction of a complete centralization in the assessment and levy of local taxes. Grateful acknowledgements are due to Professor Richard T. Ely, Professor John R. Commons and Professor Thomas S. Adams of the University of Wisconsin for their encouraging interest in this study; to Professor Henry B. Gardner, of Brown University, for valuable direction and stimulating criti cism; to Professor Allyn A. Young, of Stanford University, former editor of the Economic Series of the University of Wisconsin Bulletin, for help and suggestions of various kinds; to many Wisconsin state officers, in particular Dr. Charles McCarthy, legislative librarian, and Mr. L. A. Anderson, of the Wisconsin Tax Commission office, for their many courtesies in giving information and access to documents. Acknowledgement is also made of assistance received from the Carnegie Institution in the preparation of this study. Madison, Wisconsin. THE FINANCIAL HISTORY OF WISCONSIN CHAPTER I AN HISTORICAL SKETCH OF WISCONSIN'S POLITICAL STATUS The history of Wisconsin as a white man's country began in the year 1634, when clad in Oriental robes and discharging two pistols to excite the wonder of the strange Indians whom he was meeting, Jean Nicholet, "agent of the inquiring and politic Champlain," seeking a passage to China, disembarked on Wisconsin soil and took possession of the region in the name of the King of France1. As a result of the French and Indian War Wisconsin passed in 1763 into the hands of the English and became a part of the Province of Quebec. In 1783, at the close of the Revolutionary War Wisconsin became American territory. It was without organization until 1787, when through the famous Ordinance of that year it became a part of Northwest Territory. In the years from 1787 to 1818 it was successively a part of Northwest Territory, of Indiana Territory, and of Illinois Territory. When in 1800 the region afterward called Ohio was organized as the Northwest Territory, the rest of the Old Northwest Territory was named Indiana Territory. In 1816 the State of Indiana was created and the Wisconsin country became a part of the Territory of Illinois. When two years later Illinois was admitted to the Union, Wisconsin became a part of Michigan Territory. The erection in 1836 of the State of 1 Vide Thwaites, French Regime in Wisconsin, in Wisconsin Historical Society Collections, XVI. [7] 190 BULLETIN OF THE UNIVERSITY OF WISCONSIN Michigan made necessary the organization of the Territory of Wisconsin, which became a state in 1848. The Ordinance of 1787 gave to the prospective fifth state of the Old Northwest Territory a much greater area than that possessed by the State of Wisconsin. The upper Michigan Peninsula was taken from Wisconsin and given to Michigan in order to compensate the latter for its loss to Ohio of the Toledo area, which according to the Ordinance of 1787 belonged to Michigan. The Chicago strip, the area bounded by the southern boundary of Wisconsin and a line parallel to that boundary and passing through the southernmost point of Lake Michigan, was given to Illinois in 1818 in order that Illinois might have a lake front. In 1838 the trans-Mississippi area of the Territory of Wisconsin was erected into the Territory of Iowa and in 1846 a part of Wisconsin became the Territory of Minnesota.? As has been observed the Chicago strip was given to Illinois in order that she might have a lake front. The delegate to Congress from Illinois Territory, Nathaniel Pope, in urging the adoption of his amendment to the Illinois Enabling Act, argued that Illinois was the key to the West and that upon her possession of a lake port might depend her fidelity to the Union. Illinois, he said, had practical control of the Ohio, Wabash and Mississippi rivers, all of which flowed south. It was highly desirable that Illinois have a lake coast that would afford it communication with Indiana, Ohio, Pennsylvania and New York. Such a lake front might be essential to the integrity of the union. Judge Pope argued that if Illinois were entirely dependent on southern flowing rivers, "in case of national disruption the interest of the state would be to join a southern and western confederacy." It was important, he argued, that Illinois have a balancing northern commercial connection with the Great Lakes and thence with the eastern states. This argument shows an appreciation of the close relation between political affiliation and economic interest. In consequence of the loss of the Chicago strip, there was a 2 Vide Thwaites, Boundaries of Wisconsin, in Wisconsin Historical Society Collections, XI. 3 Ibid., 495. [8] |