These citizens of Milwaukee and also many others protested vigorously against the exemption of church property. So considerable was the sentiment at this time against the exemption of such property that even a church paper, the Christian Statesman, came out against it. In the issue of that paper dated January 8, 1880, its editor, in a vigorous editorial protesting against many exemptions of private property and declaring such exemptions and different rules of taxation for different classes of property to be in contravention of the constitutional rule of uniformity, affirmed that the exemption of church property contravened not only that rule but also Article I, Section 18 of the Wisconsin Declaration of Rights, which section guarantees freedom of worship and freedom from involuntary support of any church or minister. The editor maintained that the exemption of religious property was becoming more and more a cause of irritation and of hostility to religion itself and that "the devout, just and patriotic of every religious faith were no longer willing to enjoy the advantages of their churches and the blessings and consolations of religion at the expense of tax payers.' This editorial was inspired by a narrow conception of the benefit theory of taxation. The writer of it admitted the social service of the church, but his complete lack of the social utility point of view precluded his seeing any difference between exempting churches and exempting all manufactories.

A very unique argument in favor of the exemption of church property is to be found in a letter that appeared in the State: Journal for January 24, 1880.82 The writer took the ground that churches were public property and could therefore be exempted as other public property is. This individual was evidently as far afield as the writer in the Christian Statesman. He contended that to tax church property would amount to an infringement upon "the right of every man to worship Almighty God according to the dictates of his own conscience." The absurdity of such an argument is obvious. It would be just as reasonable to contend that taxation of factories constituted an unwarranted infringement upon industrial freedom. The true

a Wisconsin Miscellaneous Pamphlets, XI.

Ibid.

argument for the exemption of church property is that churches perform a social service and that such exemption encourages an increase and growth of such institutions which even the most skeptical infidel, if he be intelligent, must acknowlege to be a mighty force for law, order and social uplifting.

The argument that the exempting of church property from taxation constitutes a violation of the clause in the Declaration of Rights insuring all persons against compulsory support of a church is obviously invalid. The purpose of the clause is obviously to prevent compulsory support of a particular church, whereas an exemption of church property in general compels the tax payer to contribute, and only indirectly and to a slight extent, to all churches. There is no discrimination between sects or churches. Social utility justifies the exemption of church property, provided that such property is used for church purposes and is necessary to such use. A tax payer might just as reasonably claim exemption from taxation for police purposes, because he has never had anyone arrested, as to contend that he ought not to be forced to contribute to the support of churches, through their exemption, since he never attended services. Whether he attends services or not, the church renders him a service by rendering a service to society, of which he is a member. There is, however, much to be considered in the argument that as many churches are frequented by the wealthy the exemption of church property increases the burdens of the poor. It may be desirable to tax churches above a certain size and value, but the constitutionality of such a tax is extremely doubtful.

The Senate committee to which were referred the memorials to the Legislature asking that church property be taxed reported in favor of a continuation of the church property exemption."3 The committee held first of all that churches benefit society to the full amount of the taxes that would be levied upon them, and that they contribute more to preserving order, enforcing law, and defending right than do police courts and penitentiaries; secondly, the committee contended that church property should not be taxed, because as such it has no exchangeable value,

33 Senate Journal 1880, 287; also Wisconsin Miscellaneous Pamphlets, XIV.

and if it were converted into productive property, the aggregate taxable value of the property in any district would not be increased, since the coming into the competitive field of the church property would lessen by its value the value of all other property in the district. The argument advanced in one of the memorials that many churches were becoming too strong and ought to be curbed by taxation, the committee very correctly declared to be weak, as the effect of a tax would be to destroy the weak churches and consequently to increase the strength and power of the strong, wealthy churches by giving them a monopoly of the field. The argument that many support and few enjoy the churches was met by pointing out that the same is just as true of public libraries. The committee observed that all support hospitals for the insane, yet all are not mad; all support public educational institutions, yet many families educate their children in private schools, while many have no children to be educated. It was acknowledged by the committee that church property not used for strictly church purposes sometimes escapes taxation in other states and possibly sometimes in Wisconsin, but it was sensibly contended that such evasion constitutes no argument against the principle of exemption. The committee very properly viewed the whole matter in the light of social utility, of public expediency.

CHAPTER III

PUBLIC DEBT AND STATE CREDIT

The Constitution of the State of Wisconsin, as has been shown in the chapter on "Finances and the Constitution;" limits the bonded or otherwise secured debt of the state to $100,000, except for purposes of military defense or war. In the very first year of the state's existence, 1848, for the purpose of defraying the expenses of the legislature, an attempt was made to negotiate a loan of $20,000 in gold and silver. The rate was not to exceed twelve per cent and the loan was to be payable in from six to twelve months according to the arrangements that the state treasurer might be able to make with lenders.1 That officer reported, however, that he was entirely unable to float the loan, whereupon a bill was introduced providing for a loan of $10,000 from Alexander Mitchell, the proprietor of the Wisconsin Marine and Fire Insurance Company. This bill, however, met with little favor, presumably because Mitchell, as the Wisconsin Marine and Fire Insurance Company, was conducting a bank of issue contrary to law. After considerable debate the issue of State Warrants drawing twelve per cent was authorized. State orders continued to circulate until 1858, when the legislature by resolution directed that all orders, certificates of appropriations, and secretary of state's warrants on the treasury should be passed directly to the state treasury, and that they should be paid in the order in which they were dated, and only to the persons in whose favor they were drawn. Throughout this period of ten years, from 1848 to 1858, the expenses of the state were always in advance of the receipts, and state orders passed current

1 Milwaukee Sentinel, August 15, 1848.

Ibid., August 23, 1848. 'Ibid., August 25, 1848.

at about eighty per cent. The low condition of the state's credit in the early days was due to two facts; first, to the delay in paying public debts, and second, to the practice of deferring the payment of old bills simply because they were old, and in the very early days to the additional fact that the legislature had failed to provide for a way in which the state might be sued, a matter left by the constitution to the legislature. In 1849, the condition of the state's finances was very low indeed. The legislature, fearing that there was not more than enough in the treasury to pay its members, passed over the Governor's veto the so-called "hog bill" appropriating the money necessary to pay the legislators. At that time the prospects of the state were said to be such that its creditors could not be paid for years. In 1859 the Governor, in his message, observed that, because of overestimates of revenue and underestimates of expenses by the secretary of state, a floating debt had been accumulating gradually, year by year, notwithstanding the constitutional provisions that a deficit in any year must be made up in the year following. In the year ending September 30, 1858, there was a deficit of $70,340. former State Treasurer added $32,258. 1857, the taxes were not paid in 1858, making a total deficit of $181,361. The treasury, however, soon recovered from its sad conditon of 1858. At the end of the next fiscal year there was an apparent balance of $11,205, apparent, because the State Printer had a disputed claim of $38,762 against the state.

7

The defalcation of a Owing to the panic of

Wisconsin's first bonded debt was created in 1852, for the purpose of defraying various extraordinary expenditures, namely, for the unpaid expenses of the legislature of 1852, the appropriations made for furnishing the asylum for the blind, for the printing of the laws and journals of 1852, the debt inherited from the Territory, the keeping of prisoners, and the appropriations that might be made for a state prison. The bonds authorized, $50,000 in the aggregate, were to be of the denom

• Governor's Message 1862, 17.

Wisconsin Argus, March 8 and 20, 1849.

Laws of 1849, ch. 22.

Wisconsin Argus, March 20, 1849.

• Governor's Message, 1859, 1.