boundary dispute in Wisconsin for years. In 1843 the territorial legislature passed resolutions declaring that the United States had infringed on the boundaries of the fifth state of the Old Northwest Territory, but that Wisconsin would make no further protest if Congress would carry out the following internal improvements:

1. The construction of a railroad between Lake Michigan and the Mississippi river.

2. The improvement of the Fox and Wisconsin rivers, so as to make a national waterway between the Great Lakes and the Mississippi.

3. A canal between the Fox and Rock rivers.

4.

Harbors on the west shore of Lake Michigan, at Southport (Kenosha), Racine, Milwaukee, Sauk Harbor, Sheboygan, and Manitowoc.

The attitude of the territorial legislature was very belligerent. It was declared that if Congress did not accede to the terms offered or did not admit Wisconsin to the Union with her ancient boundaries, Wisconsin "would be a state out of the Union, and possess, exercise and enjoy all the rights, privileges and powers of the sovereign, independent State of Wisconsin, and if difficulties must ensue, we could appeal with confidence to the Great Umpire of Nations to adjust them." It was declared in unequivocal terms that Wisconsin would maintain the integrity of its borders and if peaceful means failed, every other means within its power, whatever might be the sacrifice, would be resorted to.

Congress paid no attention to this threat of secession. The southern boundary was not changed, nor were the improvements asked for granted until long afterward.4

This affair is interesting and suggestive. Viewed in the light of the many northern threats of secession, the term rebel applied to the South is devoid of stigma. Loyalty to the Union was just as characteristic of the South as of the North. Each was loyal just as long as the federal government did not infringe on state rights nor impair state interests.

4 Thwaites, R. G., The Story of Wisconsin. (Boston 1890), 217, 218, 219.

Wisconsin certainly had a legal right to her boundaries as defined by the Ordinance of 1787, but in the opinion of the writer there is grave doubt as to her moral right to them. On the whole the boundaries of 1787 were rather artificial and not altogether sensible. Ohio certainly has more natural right than Michigan to the Toledo strip, and there is no reason why Illinois should have been left without a lake front when there was an opportunity to give her one. Furthermore, Wisconsin with her ancient boundaries would be three times as large as she now is.5

Vide maps in Thwaites' Boundaries.

CHAPTER II

FINANCES AND THE CONSTITUTION

I. FINANCES IN THE CONSTITUTIONAL CONVENTION

The Constitution of the state of Wisconsin was framed and adopted at a time when the disasters of wild-cat banking and of unwise and corruptly managed internal improvements by the states were still fresh in the minds of the American people. Eleven years before, in 1837, Michigan, infected with the speculative fever of the time, had entered the Union. The people of Wisconsin had seen their neighbor state become saddled with a heavy public debt, as a result of entering upon great systems of internal improvements far too extended for the state's needs and requiring expenditures far beyond its means. In Illinois, also close at hand, state banking and state improvements had both resulted in failure and disaster. That the disasters of the era of speculative public improvements that closed with the panic of 1837 were still fresh in the minds of the men who in 1848 drafted the constitution for the state of Wisconsin is evident from the debates of the Constitutional Convention and from the provisions of the Constitution relating to public debt and internal improvements. It is very clear that Wisconsin profited by the lessons to be learned from the disastrous experiences of her older sisters in the Union.

The framers of the Constitution for the Badger State were not seers; they did not create a constitution that will answer all needs and purposes until the millennium arrives, but they did frame a constitution that at least in so far as its financial provisions are concerned was a wise one and a fairly adequate one. They made no provision for a tax on incomes, but could they have been expected to foresee the necessity for such a tax?

They were perhaps overcautious in limiting the amount of state debt as they did, but the disastrous experiences of local governments in Wisconsin in the matter of public debt and the vile corruption that has at times marked the administration of state affairs in Wisconsin lead one to the conclusion that the restriction was on the whole a wise one. One grave criticism must, however, be passed upon the original constitution. It did not restrict sufficiently municipal indebtedness. This defect has, however, as will be shown later, been remedied.

The financial provisions of the constitution of the state of Wisconsin fall into four categories,-taxation, public debt, internal improvements, and school lands. The committee on finances reported with respect to taxation the following, "All taxes levied in this state shall be as nearly equal as may be." The committee was evidently striving for a rule of equality and uniformity, but the indefiniteness and ambiguity of its recommendation were so great as to justify the objection of one member who declared that he wanted a constitution that the common people could understand and not one that no one but a lawyer could interpret. The first amendment adopted changed the committee's recommendation so as to read, "All taxes levied in this state shall be as nearly equal as is practicable, and shall be levied upon such property as the legislature shall prescribe." Next it was decided to substitute for "All taxes levied in this state shall be as nearly equal as is practicable," the words, "The rule of taxation shall be uniform throughout this state.” The form finally adopted is, "The rule of taxation shall be uniform and taxes shall be levied upon such property as the legislature shall prescribe." The following amendment was proposed and lost, "All taxes levied in this state shall be uniform and equal; and shall be levied upon a just valuation of real and personal property. There was considerable struggle over the exemption of property from taxation. The finance committee of the convention favored an exemption provision and reported the following, "The property of the state and counties,

1 Journal of Constitutional Convention of 1847-48, 113.

2 Constitution of Wisconsin, Sec. 1, Art. VIII.

both real and personal, and such property as the legislature shall deem proper, belonging to educational, charitable or religious institutions, or set apart for such purposes, shall be exempted from taxation." The convention decided, however, that the matter of exemption should be left without restriction to the legislature.

So we see that the Constitution of the state of Wisconsin provides first, that the rule of taxation shall be uniform and secondly, that taxes shall be levied upon property, prescribed by the legislature. Like many other states, Wisconsin has long since discovered that a property tax is not sufficient, that it does not meet all the requirements of justice and equality. In 1903 a joint resolution was adopted by the legislature to add to the taxation clause the following provision, "The legislature may provide for a graduated income tax. Because of the failure of the secretary of state to have the proposed amendment published three months before the election of the legislature of 1905, this resolution came to naught. Perhaps, however, it is well that it did, for the legislature of 1905 proposed a better amendment as follows, "Taxes may also be imposed on incomes, privileges and occupations, which taxes may be graduated and progressive, and reasonable exemptions may be provided." If this amendment is properly advertised and is sanctioned by the legislature of 1907, it will come before the people for adoption or rejection. In the Assembly the vote on the amendment proposed in 1905 was 80 to 10; in the Senate the vote was 18 to 12.*

The Constitution is very explicit in its provisions against a permanent or a large state debt or the exploitation of the state or its treasury. The credit of the state shall never be given or loaned in aid of any individual, association or corporation. No money shall be paid out of the treasury except in pursuance of an appropriation by the legislature, and by an amendment adopted November 6, 1877, no appropriation shall be made for the payment of any claim against the state unless the claim

Laws of 1903, 776.

* Laws of 1905, 992.

* This proposed amendment was ratified by the legislature of 1907.