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to $10,000, a difference of $1,048,105.25. While the taxable money of these banks was $18,991,771.67, the money listed by all banks of Chicago, exclusive of National banks, was only $13,925.

Illustrations of similar discrepancies might be shown with reference to the assessment of other moneys and credits.

It is said that much greater discriminations in the assessment of personalty, especially that of an intangible character, are made in Cook County than throughout the rest of the State.

A commission of prominent real estate experts appointed by Mayor Swift, made a report published in the Chicago Economist, April 25, 1896, relative to all the real estate in the business district bounded on the east by the lake, on the north and west by the Chicago River, and on the south by Twelfth street. Exclusive of railroad property and land exempt from taxation, the value of the land was found to be $337,342,880 and the assessment 7.33 per cent of this. In the suburbs the rate is found to be somewhat higher, while in the rest of the State the rate of assessment is from 25 per cent to 35 per cent of the true value.

In the winter of 1897 a special session of the Illinois general assembly was held for the purpose of passing a new revenue law, which was intended to remedy many of the defects in assessment complained of in Chicago, but the new law does not seem to have reached the root of the evil, as the total assessed valuation of Cook County was less by $17,623,946 in 1898 than in 1897.

The defects and inconsistencies in the assessment of capital stock and tangible property of corporations are shown by reports to be equally glaring.

For instance, Chicago street railways are shown to have been assessed in 1896 at 4.70 per cent of the par value of their outstanding obligations and at about 3.23 per cent of their market value.

A voluminous report on taxation was issued by the bureau of labor statistics of Illinois in 1894 and 1896, containing a great mass of statistical information upon the subject which forms the basis of many radical and questionable conclusions, and is filled with somewhat extravagant and emotional disquisitions of the author upon nearly every conceivable economic subject. While the contents of this report must be taken with some degree of allowance, and would hardly rank as authority in taxation literature, in it is shown by statistics laboriously gathered from various sources the utter failure of the Illinois system to attain anything like equal and just taxation of either individual or corporate property. The report is declared by the author to furnish “mach evidence of criminal discrimination in the operation of the present revenue system, resulting in some cases in practical confiscation and in others in virtual exemption from the burdens of government,” and he adds that “whatever may be the variation in degree the iniquities of the taxation system of this State are common to all other States and countries of the civilized world."

Among the principal remedies proposed in the report is that State and local taxation be completely divorced by confining the source of State revenues to franchises.


The following is a statement of the equalized value of capital stock over and above the equalized value of tangible property of corporations other than railway companies for 1899: Amount of capital stock paid up as reported by companies

$202, 470, 405 Full value of capital stock as fixed by State board of equalization .. 132,575, 625 Assessed value of capital stock as fixed by State board of equalization (one-fifth).

26,515, 125 Equalized value of tangible property assessed by local assessors 24, 166, 922

Net assessment of capital stock, being excess of equalized value
of capital stock over tangible property, assessed by local

2,848, 203 In 1898 the value of tangible property assessed was only $12,260,575, while the capital stock in excess of that sum was only $2,433,425.

From this statement it seems clear that the greater portion of the vast amount of corporate property, tangible and intangible, does not appear on the rolls at all.

The amount of paid-up capital stock of corporations, other than railroad companies, is exceedingly small for such a wealthy industrial State as Illinois compared with that obtained through methods of valuation adopted in other States, while the full value of such capital stock as fixed by the State board of equalization is only about two-thirds of the capital stock value as reported by the compa


nies. The assessed valuation is one-fifth of the full value as fixed by the board, while more than nine-tenths of the assessed valuation represents real estate and tangible property, and less than one-tenth represents the equalized valuation of all capital stock in excess of the tangible property assessed by local assessors who see it.

This system would therefore appear to be entirely inadequate for the just and equal taxation of corporate property, and fails to impose upon such property a due proportion of the burdens of government.

The tangible property of corporations is practically the sole basis of their taxation and this is taxed under the same methods applied to other property, which, even though all such property were reached and assessed at its cash value, can hardly be regarded as an adequate measurement of the ability of corporations to pay.


Statement of property assessed for the year 1899 in the several counties as returned

to the auditor's office. Horses

$10, 127,085 Cattle.

11, 350, 995 Mules and asses

957, 769 Sheep

453, 729 Hogs

2, 285, 546 Steam engines and boilers

1,345, 255 Fire and burglar proof safes

181, 199 Billiard, etc., tables..

40,546 Carriages and wagons

2,791, 614 Watches and clocks

594,872 Sewing and knitting machines.

583, 966 Pianos

1, 206, 235 Melodeons and organs

396, 306 Franchises

51,569 Annuities and royalties

9,994 Patent rights.

45, 394 Steamboats, sailing vessels, etc

248, 332 Merchandise

35, 494, 478 Material and manufactured articles.

4, 248, 483 Manufacturers' tools and implements and machinery

3, 895, 314 Agricultural tools and implements and machinery

2,644, 515 Gold and silver plate and plated ware..

127, 860 Diamonds and jewelry..

367, 418 Moneys of bankers, brokers, etc..

3,758, 946 Credits of banks, bankers, brokers, etc

3, 474, 848 Moneys of other than bankers, etc

17,742, 210 Credits of other than bankers, etc...

26,511, 451 Bonds and stocks...

4,469, 734 Shares of capital stock of companies not of this State

1,607, 690 Pawnbrokers' property

53, 944 Property of corporations not enumerated

3, 625, 081 Bridge property

275, 374 Property of saloons and eating houses.

319, 190 Household and office furniture..

11,533, 445 Investments in real estate and improvements

427, 174 Grain of all kinds

6,894, 768 Shares of stock of State and national banks

10, 330, 797 All other property -

13, 133,831 Total value of personal property ----

183,526,987 We make this statement to illustrate the detailed classification provided for the purpose of reaching personal property and bringing it upon the rolls. Aggregato equalized assessed value of lands in 1899 in the several counties.

$314, 509, 322 Equalized assessed value of town and city lots

373, 742, 282 Assessed value of personal property..

183, 526, 987 Total property valuation, 1899

871,778, 591

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The total assessed valuation of property in 1886 was $793,563,498.

It is a matter of common knowledge that the actual value of even real estate and tangible property in such a growing State as Illinois has greatly increased since 1886, while intangible property has been enormously augmented during that period.

Manifestly, this general property-tax system is in effect a tax upon real estate and tangible property, while intangible forms of property, in which a large portion of the wealth of the State undoubtedly consists, apparently largely escape direct taxation under the methods employed. Where large inasses of property escape, in consequence other large classes of property must be excessively taxed.

The assessed valuation of tangible property and capital stock of corporations of the State except railroads is only about one-third of the assessed valuation of all the personal property of the State, which clearly indicates that such property is greatly undervalued as compared with the assessed valuation of other personal property. It must be remembered that this is a flourishing and industrial State full of large and growing cities, and, like other States of its class, a large portion of the business is conducted by corporations.

The whole system, so far as shown by the reports, clearly illustrates the grave inconsistencies, inequalities, and injustice which almost inevitably result from the ineffectual attempt to raise the income of the State by a tax assessed at a uniform rate on all the manifold species of property existing to-day; a system productive of great injustice unless substantially all property, personal and real, tangible and intangible, is brought upon the tax rolls.

The practical results of such a system as this are characterized by the Supreme Court of the United States in the case of the Pacific Express Company v. Seibert, 142 U. S., 351, as follows: “ This court has repeatedly laid down the doctrine that diversity of taxation, both in reference to the amount imposed and the various species of property selected, either for bearing its burdens or from being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in the proper sense of these terms; and that a system that imposes the same tax upon every species of property, irrespective of its nature or condition, or class, will be destructive of the principle of uniformity and equality of taxation, and of a just adaptation of property to its burdens."

Some interesting observations may be drawn from the foregoing schedule of personal property assessed. It is largely made up of assessments of different classes of tangible property. The amount of “moneys of banks, bankers, brokers,” etc., assessed is no larger than the assessed valuation of the “hogs, sheep, and mules” of the State; while the assessed valuation of both moneys and credits of banks, bankers, brokers, etc., is not equal to that of either "horses,” “ cattle," or " household goods” of the State. It may be conclusively assumed that all of these divisions of property are greatly undervalued in asse sment, but it is altogether probable that horses, cattle, and hogs and similar forms of tangible property are more fully valued and that a much greater portion of such property is assessed.

Many other inconsistencies are apparent in this schedule. The value of shares of stock in State and national banks is about equal to the value of horses, while the value of all moneys, credits, bonds, and stocks is ridiculously low, even allowing for the method provided by statute of assessing at one-fifth actual valuation.

The total assessed value of personal property for 1899 was $183,526,987, about one-third greater than that of 1896 and 1897, while the valuation of real estate in 1899 was $688,251,604, more than three and two-thirds times that of personal property. In Cook County, including the city of Chicago, the following values appear: Total assessed value of Personal property, 1899.

$73, 611, 662 Lands...

17,164,987 Town and city lots

285,717,467 Total property, 1899.


Among the divisions in the schedule of assessed personal property for Cook
County appear the following:

$3,127 Annuities and royalties.

000 Merchandise

24, 234, 073 Moneys of bankers, brokers, etc

652, 426 Credits of bankers, brokers, etc..

1,919, 433 Moneys of others than bankers, brokers, etc..

4, 203, 385 Credits of others than bankers, brokers, etc.

7,875, 889 Bonds and stocks..

2,685, 699 Household and office furniture.

4,387, 139 Shares of stock in State and National banks

5, 719, 183 From these statements it is difficult to escape the conclusion that personalty is greatly undervalued or escapes taxation as compared with real property, and that corporate property is even more glaringly undervalued or omitted than personal property in general.

From the statement of Cook County, it appears that the personal property is • only about one-fifth of the whole property and about one-fourth of the value of the real estate of that county.

It is shown that the general property tax system of the State as applied to all species of property is in effect a tax upon real estate and a portion of the tangible personal property, while the intangible forms of property, in which a large part, sometimes estimated at one-half, of the wealth consists, successfully evade taxation of a direct character.

The aggregate amount of taxes charged on the tax books in the year 1897 was: State taxes

$5, 316, 764.08 Local taxes

41, 820, 326.87 Total..

47,137,090.95 The average rate of taxation in the several counties, compiled by the State auditor from the returns received from the various county clerks, was, for 1896, $4.20 on the $100, and in 1897, $4.41.

Dr. Ely refers to an essay of Dr. Simon N. Patten on the finances of the States and cities, published in Jena, Germany, in 1878, which deals chiefly with taxation in Illinois, and which he says reveals a state of things in that Commonwealth precisely like that described in other States. The assessed valuation of Illinois in 1875 was as follows: Cattle..

$80,000,000 Railroads

60,000,000 Real estate

780,000,000 All other property.

165,000,000 Total......

1,085,000,000 Real estate and railroads paid 78 per cent of the taxes, cattle 7 per cent, leaving only 15 per cent for all other property, which is, of course, absurd.

Attention is called to the fact that assessors and collectors of taxes are elected for 1 year only, by a system of rotation, and that they are devoid of that experience which is an indispensable condition of a faithful performance of duty. The fact that one has enjoyed office for a year is regarded as a good reason why some one else should have a chance. Voters good-naturedly consider a special misfortune which has befallen one of their number, or any special need, as a sufficient reason why he should be elected, and from motives of pity weak and inefficient men are elected. This appears, as far as the author's observation has extended, to be common everywhere in the United States.

Dr. Patten draws the justifiable conclusion that the failure of the system of taxation in Illinois is accounted for by the nature of the system itself, and that there must be a change to produce any considerable improvement. The practice of confining one's self to the one direct tax on the assessed value of property must, he thinks, be abandoned.

The statements of valuation and taxation we have given from the reports of public officials indicate that there is little or no improvement in the taxing system in Illinois since the examination by Dr. Patten.


In 1886 a tax commission was appointed by Governor Oglesby, which made a very careful examination of the revenue laws of Illinois, and in 1886 filed its report recommending some radical changes. The report was written by Milton Hay, an eminent lawyer of that State, and is entitled to high rank in the literature of the taxation of American States.

Some of the defects set forth and changes recommended are of especial interest to all interested in the subject of State taxation:

“First. The gross inequality in the assessments of different pieces of property of the same kind, owned by different individuals in the same community, and of different kinds of property regardless of ownership; as, for instance, real estate and personalty, a large proportion of the personalty escaping taxation.".

It is alleged that realty of different individuals is assessed from two-thirds or even the whole of its actual value down to one twenty-fifth of its value, the owner of one piece paying 5 or 6 per cent of the whole capital invested, while the owner of another pays one-fourth or one-fifth of 1 per cent, distinctions too invidious to be meekly borne.

Equally glaring and unjust discriminations are shown as between personal property and realty in favor of the former, amounting in some species of that class to almost total escape from taxation.

The system of equalization dealing with the aggregate assessment of different classes of property, raising or lowering each class in equal proportion by a fixed and arbitrary percentage, further discriminates against the higher assessments and in favor of the lower.

The liability to inequitable assessments is further increased by a system of undervalution or low-rate assessments. Inequalities that would be so suggestive as to be almost self-corrective as between full values escape change when fractional value obtains, and the low rating virtually acts as an estoppel of complaint on the part of the property owner, though rated higher than his neighbor.

It is said that no remedy for this improper valuation seems possible unless some method be devised for divorcing the collection of State and local revenues.

“Without such a divorcement, no provisions of the law, however stringent, and no penalties which would be possible or desirable as sanctions of the law, would produce the desired result.”

Hence the revenue system constructed and proposed by the commission is based upon the separation of State and local taxes.

Another defect pointed out is in the methods employed under the present system in the assessment of corporate and intangible forms of property.

It is suggested in substance that there are now vast aggregations of capital of such a nature that their value can hardly be measured by methods applicable to other kinds of property. That corporate property can not be estimated in like manner as farm acres, cattle, or a stock of goods. That the separation in such cases of tangible property from intangible, and the assessment in parts by different assessors or boards, can not be rationally or successfully made. “ The two elements of value belong together. If torn apart the township assessor deals with a dead body and the State board with a departed spirit.”

Railroad, telegraph, telephone, express, and insurance companies should be treated for taxation as units, and estimated or valued by some method consistent with their nature and the extent and complexity of their affairs.

Another defect in the existing system is the want of a competent body having a general oversight of the entire business of assessment and the collection of $30,000,000 of annual revenue of the State.

The commission recommends the abolition of the office of township assessor and the substitution of county assessors, elected for 4 years and to be ineligible for reelection, with sufficient pay to command the services of competent and reliable men, who shall be provided with offices at county seats and accessible there throughout the year, and who, with deputies throughout the county appointed by them, shall assess the property of their respective counties.

Also, that better instrumentalities for ascertaining the value of property be provided, and to that end that each county be divided into small assessment districts, and detailed maps, plats, and assessments be kept open for inspection by taxpayers, so that they can see their own and other assessments.

That adequate means be provided for the correction of any injustice or inequal. ity that may arise in assessment, and that a competent board of review be provided in each county.

The commission adheres to the existing system of assessment of corporations local in character, such as manufacturing, agricultural, or publishing companies,

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