equal to such proportion of the following percentage of gross receipts as the length of track operated in any city or town bears to the total length of track operated in public ways, viz:

In case gross receipts are $4,000 or less per mile, 1 per cent of the total annual gross receipts; in case of gross receipts exceeding $4,000 per mile and less than $7,000, 2 per cent; in case of gross receipts exceeding $7,000 and under $14,000 per mile, 24 per cent; in case of gross receipts exceeding $14,000 and less than $21,000 per mile, 2 per cent; in cases where gross receipts exceed $21,000 and are less than $28,000 per mile, 24 per cent; and in cases where gross receipts exceed $28,000 per mile, 3 per cent. This excise tax is in addition to the other taxes provided by law.

BANKS.

The method of taxing banks is in general similar to that of the general corporation tax described, differing somewhat in detail to secure conformity to the provisions of the Federal laws governing national banks.

The taxes assessed are paid by the banks directly, shareholders having no direct connection with assessment or payment, and the taxes collected from banks are apportioned among the cities and towns according to residence of owners of shares within the State, the remainder being retained in the State treasury, as in the case of general corporations.

The shares are taxed to their owners by the local assessors at their fair cash value, less the value of the real estate owned by the bank, which is assessed directly to the bank in like manner as other real property is assessed to the

owners.

The taxes so assessed upon shares are paid by the bank on behalf of shareholders at the local rate for State, county, and town taxes, and the shareholders are then relieved from further taxation upon their shares.

The city or town in which the bank is located is entitled to so much of the tax as is represented by local real estate owned by the bank and by shares which its inhabitants own; other towns or cities are entitled to such proportion of the tax as the ownership of shares by their inhabitants represents, while such part of the tax as is represented by shares owned outside of the State accrues to the State treasury.

Yield of the bank tax in 1896.

Whole amount of tax on shares...

$1,543, 535.11

Retained by towns where bank is located

$547, 238.37

Certified to other cities and towns on account of shares

Whole amount of tax on bank shares..

Of which there was retained by towns on account of shares owned by residents

Amount paid into State treasury

Of this amount $412.890.38 accrued to the Commonwealth.

SAVINGS BANKS.

Savings banks and institutions for savings form a class by themselves. They are regarded as in the nature of trust institutions for the benefit of depositors and are not taxable under the general corporation or bank law.

They pay to the State a special tax of one-half of 1 per cent annually on the amount of their deposits, subject to certain deductions.

They are required to make semiannual returns to the State treasurer, showing the amount of deposits on the first days of May and November, and the average amount of deposits for the six months next preceding each of those days. From these returns the tax commissioner assesses the tax upon the various banks in proportion to the average amounts of their deposits during each period at the rate fixed by law, one-fourth per cent for each six months, or one-half per cent per year. Certain deductions, however, are made for the amounts invested in real estate used for banking purposes taxed locally, in loans secured by mortgage on taxable real estate, and in shares of banks taxed by the State.

The proceeds of the savings-bank tax accrue entirely to the State treasury.

1896. 1898.

Yield of the savings-bank tax.

$1,291, 256.47 1,335,750.55

The valuation for the latter year was $276,150,455.

TRUST COMPANIES.

These companies form a separate class for taxation; they are taxed on their capital stock under the general corporation tax law like other corporations, and are also subject to a separate tax on trust funds and deposits.

The tax on trust funds and deposits is levied in two distinct parts, upon personal property held in trust and upon deposits. Annual sworn returns to the tax commissioner are required of all personal property held on the first day of May, which is taxable on the aggregate amount owned by residents outside the State. The tax commissioner, guided by the return, makes a valuation of the property, and assesses a tax upon the full value of the property at the rate determined under the general tax law, being the average rate of taxation, so called, in the State. Annual sworn returns are also required of sums deposited, with residences of depositors and aggregate amounts held for depositors in each place. Upon the total value of these deposits the tax commissioner assesses a tax of threequarters of the average rate of taxation of the State. These taxes are paid directly to the State treasurer, and distributed among the cities and towns of the State, so far as the funds and deposits are owned by residents. Taxes assessed on property held for persons outside the State accrue to the State treasury.

Insurance companies organized under the laws of Massachusetts, having capital stock, are taxable on the market value of shares under the general corporation tax law.

Separate taxes are, however, imposed on certain kinds of insurance companies. Mutual life insurance companies organized under the laws of the State, and foreign life insurance companies of all kinds doing business in the State, are subject to a tax of one-fourth of 1 per cent on the net value of all policies in force held by residents of the State in the year preceding the assessment.

Mutual, fire, marine, and other insurance companies organized under the laws of the State, except life companies and those taxed under the general corporation tax, are required to pay a tax of 1 per cent on their receipts for all premiums and assessments, subject to deduction for premiums received in some other State and taxed in similar manner there. Companies of a similar character, organized under the laws of other States or countries, pay a tax of 2 per cent on all premiums received for the insurance of property or received by agents within the State.

All taxes on insurance companies, except on those taxed on their corporate franchise, pass to the treasury of the State without distribution.

INHERITANCE TAX.

A State tax is levied on all property passing to collateral heirs in any manner, after the death of the grantor, except that passing to or for the use of charitable, educational, or religious institutions, the property of which is exempt by law from taxation, and except in cases where the estate does not exceed $10,000 after the payment of all debts, and excepting legacies or distributive shares of $500 or less. Property passing to direct descendants and near relatives of deceased persons is not subject to this tax. These taxes pass to the State treasury. The rate is 5 per cent on the market value of all property thus passing.

Taxes are imposed upon the privilege of selling liquors within the State, divided into several different classes with graded rates, and apportioned between the city or town in which the license is granted and the State, the former receiving threefourths and the latter one-fourth of the tax.

The amount of this tax to the Commonwealth, being one-fourth of the whole, was: 1895...

1896.

1898.

$682,099.36 669, 602.17 769, 834.25

The principal sources of taxation for the Commonwealth of Massachusetts may be summarized as follows:

Valuation and taxation of real and personal property in Massachusetts, 1896 and 1898.

Valuation and taxation of real and personal property in Massachusetts, 1896 and 1898-Continued.

NATURE OF PERSONAL PROPERTY TAXED.

The total amount of personal property assessed is easily obtainable from the official publications of the State, but information as to the different kinds of personalty taxed is not obtainable from those sources, and is obtained with difficulty. By particular inquiry the tax commission of 1897 acquired much valuable information upon this subject.

The total assessed property in the State in 1896 was $2,622,520,278, of which $2,040,200,644 was real estate, and but $582,319,634 personal property, the proportion being, roughly speaking, 4 to 1.

There is a remarkable variation in the ratio of personalty to the total assessed valuation among the different cities and towns and in the State at large. Manufacturing cities, from the valuation of machinery, show a large percentage of personalty; other cities a smaller percentage, according to the information obtained by the commission. In 4 towns the personalty assessed is less than 5 per cent of the total valuation; in a few more it is less than 10 per cent, and in a considerable number less than 15 per cent of the total, while in 16 towns the personal property assessed by local assessors is 40 per cent of the total valuation.

An attempt was also made by the commission referred to to ascertain the various kinds of personalty assessed, dividing it into 2 classes, tangible and intangible, and classifying each.

In the cities (except Boston and Somerville), the assessed personalty was classified as follows in 1896:

In these cities the tangible personal property was in the ratio of 2 to 1 of the intangible.

The classification of tangible personalty is somewhat accurate and reliable, but that of intangible property evidently signifies nothing. Personalty of this character is assessed almost entirely by estimate or "doomage" in a lump sum and designated as "cash assets," "securities," "investments," etc., the separation of various kinds being nominal. In Boston and Somerville no accurate data were obtainable. From estimate and inference the commission concludes that the excess of tangible assessed property over intangible is less marked in those cities than in other cities of the State.

In the towns of the State, with the exception of a few where the conditions are peculiar in that respect, the proportion of tangible to intangible personalty is also about 2 to 1. In the few exceptional towns referred to, where intangible personalty crowds, the intangible personalty exceeds the tangible in the familiar ratio of 16 to 1.

In practice the assessment of the various kinds of tangible personalty, such as live stock, vessels, stock in trade, and machinery, is made by estimate rather than return, upon the discretion and judgment of the local assessors and upon varying standards and methods, resulting in the usual inequality.

In the country there is a more general and uniform assessment and valuation of this class of property than in the towns and cities, and it is fairly satisfactory in its working. Indeed, the commission says all authorities agreed that the general property tax, which was first put into effect in the country under industrial conditions very similar to those which are now found in a farming town, works well under these conditions, but becomes more and more difficult of satisfactory application as property becomes larger in quantity and more complex in character; hence in the farger towns and cities of diversified industries in actual practice the taxation of these forms of personalty is difficult, and varies as between different places, the difficulties and divergences being part of the general difficulty of applying any general property tax.

The taxation of stock in trade in towns and cities by estimate, with the opportunity for correction by formal sworn return and informal conference, while entirely unreliable, diversified, and incomplete, is regarded by the commission as working better and resulting in less injustice than would a system of rigidly enforced returns.

No deduction from the assessed stock in trade is allowed for debts, which is commended as avoiding fraud and evasion. It is related as a striking fact that in the investigations of commissions and evidence brought before committees of the general court no complaint is made by business men as to the working of this part of the tax system. Wi.ether complaint is made by other classes, who have different kinds of property subject to taxation, is not stated.

The taxation of machinery is made in the same manner and with the same general results. Because of the dependence of Massachusetts upon its manufacturing industries, the doubtful value of machinery, its rapid depreciation, sudden changes in value from improvements and new inventions, the commission concludes that it would be advisable to exempt it from taxation entirely, and recommends that it be done as soon as convenient substitutes can be found for the revenue now derived therefrom.

It is clear that tangible personalty upon the whole is but partially and unequally taxed. The taxation of intangible personal property, such as notes, stocks, bonds etc., in which the State is particularly rich, is most unsatisfactory.

While the law permits sworn statements of taxables, and a limited number are made, in practice these taxes are usually assessed by estimates or "doomage." Sworn statements when made are often false, and perjury is committed for the sake of evading or reducing taxation. Hence in a complicated society, with a mass of varied investments ramifying in all directions, the taxation of intangible personalty is in a high degree uncertain, irregular, and unsatisfactory. It rests mainly upon guesswork, and is demoralizing alike to taxpayers and tax officials. The commission says that the fact that the great bulk of intangible property taxable by law is not reached is admitted on all hands, and that ineffectual as the taxation of securities is, its weight is nevertheless felt both as an actual burden and as an imminent possibility; that the taxation of personal property in the form of securities and investments is a failure, incomplete and uncertain, not proportional to means as between individuals, and grossly unequal in its effects in different parts of the State; that the experience of Massachusetts in this regard is the same as that of the other States of the Union; that everywhere, without exception, the testimony is that this part of the system of the general property tax is unequal, unsuccessful, often demoralizing to tax officials, always irritating to taxpayers.