A STATE OFFICIAL ON EXCESSIVE TAXATION.
By FRANKLIN SMITH.
It is not to government reports that a student of social science looks for warnings against the perils lurking in the enormous expenditures and the extraordinary enlargement of the duties of the state. Officials are usually so deeply impressed with the importance of their positions and so anxious to magnify the worth of their labors that they are prone to take the rosiest view of any part of the great clanking machine intrusted to their care. With the keenest pride they point to their achievements in furthering the work of human welfare. If modesty does not restrain them, they are certain to paint, with an artless faith in their own abilities, the still greater work that could be done with a slight increase of funds and a little more assistance. Not all officials, however, permit themselves to indulge in the natural vanity of bureaucrats. They refuse either to be blinded to the perpetual failure of state-made civilization, or to deceive the impoverished victims of the same costly system of modern magic. Of the very few of this class Mr. James H. Roberts, for five years Comptroller of the State of New York,[A] is perhaps the most conspicuous. Astray as he is on the question of a graded inheritance tax, and trustful as he is in the virtue of State supervision, he puts himself beyond criticism in his opposition to the policy of State socialism, now the rage at home and abroad. Indeed, no one could hold it up to graver reproach.
[A] He was in office from January 1, 1894, to January 1, 1899.
Whenever an observer of the signs of the times in the United States ventures to say that they offer little food for hope, he is branded as pessimistic or unpatriotic. He is told that if he had the confidence in democratic institutions of a man with a good digestion and a fair intelligence, he would know that they possess a vitality, a power of rejuvenation, that does not belong to an autocracy nor an aristocracy. If he is particularly despondent, and seeks to justify himself with fact and argument, he is denounced as a dangerous agitator, or, what is a shade more odious, as an absurd doctrinaire. But Mr. Roberts has not been consigned to any such depths of contempt. He is known as a “hard-headed business man,” a title of honor that always frees the most ridiculous optimist from any suspicion of the theorist or sentimentalist. Yet, as the supervisor of the finances of a great State, he was brought in contact with a mass of phenomena that forced upon him the conviction that something is wrong, and that if it is not righted it will bring disaster. Indeed, I do not recall a pessimist, however dyspeptic, nor a doctrinaire, however visionary, that has struck a more melancholy note than he. In all his reports much will be found that indicates anything but a belief that a democracy that plunders and enslaves a people is any better than any other despotism guilty of the same offense, or that the practice in the one case will be productive of greater prosperity and happiness than in the other.
It is, however, in the report for 1897 that Mr. Roberts gives the fullest expression to his apprehensions. “This country,” he says in an elaborate argument for a graded inheritance tax, which he believed would bring some relief to the poor and discontented, “has just passed through the most threatening political campaign in its history. The portents in 1896 were vastly more dangerous than those of 1860, when peace and internecine war hung in the balance. Issues were advanced last year, and vigorously supported by a large element of the American electorate, which, if adopted, would have undermined the very foundations of American institutions. These issues were largely the outgrowth of discontent among the people. The farmer, as a class, the work people, and the small trade folk were in distress.... Hundreds of thousands of industrious people were out of employment, the best efforts of the farmer had been attended with poor results, and the small tradesman and business man were worse off than if they had been doing nothing.” In the report for the following year he spoke again of the “public discontent and dissatisfaction with existing conditions in this State.” Instead of joining the comfortable and contented in a denunciation of them as a delusion, born of envy or criminal instincts, he expressed the opinion that they had a very substantial basis. “My four years of close official study of the State finances,” he says, “compels me to say there is serious ground for complaint.” After giving an impressive summary in another place of the enormous increase of public expenditures within recent years he is moved to ask, “Whither are we drifting?”
The answer commonly given to this question is one quite flattering to American vanity. It is that we are drifting away from “parochial” things and taking our proper place as a great “world power.” Having solved all the petty problems that have absorbed our thoughts and energies for a hundred years, we have gone forth to “take up the white man’s burden,” and to solve the greater problems that a discriminating Providence has so wisely confided to our ability and philanthropy. At the same time we are going to have our say as to how the affairs of the world outside of our narrow and cramping borders shall be managed. Mr. Roberts, however, does not appear to take any such pleasant view of the future. He has none of the blood of Don Quixote flowing in his veins. The bestowal of the blessings of a Christian civilization with machine guns upon breech-clouted savages has no attractions for him. He sees that we have made such a disgraceful failure of the management of the contemptible things in which we have been so ignobly absorbed that we are threatened with national decadence! “While the contests against unjust and oppressive taxation,” he says in his report for 1899, “have been the contests of freedom and civil and religious liberty in the world, it must not be forgotten that unjust and burdensome taxation has been in all ages the most prolific cause of national decadence as well. There are nations in Europe, once great and prosperous,” he adds, thus recalling the warnings of Lord Salisbury’s famous speech on the same subject, “which to-day seem dying of dry rot because, to meet their immense expenses and to pay interest on their great bonded debts, taxation has been increased beyond the safe limit, and the very sources of national prosperity have been taxed so that they run dry, or send down a rill where it should be a river. Few national diseases are more dangerous or harder to cure than burdensome taxation. Can any one charged with the responsibility of making tax laws,” he asks, profoundly stirred by the startling facts that have come under his observation, “afford to ignore the undoubted lessons of history or the manifest tendency of the times in the matter of revenue raising and expending?”
Obvious as is the fitting answer to this question, it is one that few people stop to give. Both the lessons of history and the tendency of the times are willfully and incessantly ignored. Not only are they ignored by demagogues, who thrive most when public distress is greatest, and by misguided philanthropists, who seek to relieve it in ways that only intensify it. Even publicists, whose studies in history ought to make them more familiar with the signs of social decadence than a man of affairs with vision less extended, ignore them also. They seem to be as insensible to the real significance of what is going on before their eyes as the wooden totems of a burning tepee. But to minds more alert and penetrating, even if less congested with musty lore and fine intentions, the flight of the farming population to the cities is something besides “a great natural movement toward urban life that accompanies an advance in civilization”—it is a desperate but futile attempt to escape conditions that have become too hard to be borne. The swarms of impoverished and degraded humanity that crowd the slums to suffocation are not altogether the product of willful sloth and incapacity; they are due, in a measure, to the growing taxation that has wiped out the narrow margin that separates independence from dependence—self-support and self-respect from destitution and pauperism. The hatred of the rich, the denunciation of capital, the contempt for the Church, the bloody insurrections of labor, the general feeling of rancor, accompanied by an increase of the tyranny of trades unions and government regulations, are not the inevitable manifestations of envy, ignorance, and criminal instincts; they are the inevitable fruits of the perpetual aggressions in a thousand forms that spring from politics and war. But instead of acting upon this natural interpretation of the signs of the times and seeking to solve the social problem in the only way that it can be solved, the “new” reformers tormenting the world are engaged in the invention of schemes that add to the public burdens and hasten the nation’s decay.
The reckless expenditure of public money in the United States has not been confined to any particular political division nor to any particular geographical section. The national, State, and municipal governments have seemed to vie with one another in the plunder of the taxpayer. From the North, the South, the East, and the West have come the same complaints of excessive burdens.[B] But figures are needed to give these statements the vividness of reality. Beginning with national expenditures, Mr. Roberts says that during the decade from 1820 to 1830 they were $1.07 per capita; from 1851 to 1861, they were $2.06; and for the year 1894, $6.08. “In a word,” he adds, “the per capita expense of the national Government in 1894 was nearly six times as great as it was in 1820, and nearly three times as great as it was in the decade before our great civil war.” The per capita expenditures of the State of New York in 1830 were $1.30, thirty years later they were $1.89, in 1890 they were $2.15, and “in 1897 the estimated per capita expenditure reached the alarming amount of $4.95.” That is to say, the combined expenditures of the State and national governments gave a rate as high as that prevailing in France before the outbreak of the Revolution. “The tendency to increase,” says Mr. Roberts, commenting on these figures, “is a persistent one. In 1881 the amount expended by the State was $9,878,214.59; in 1884, $10,479,517.31; in 1887, $14,301,102.48; in 1890, $13,076,881.86; in 1893, $17,367,335.98; and in 1896, $20,020,022.47.” Coming to municipal expenditures, where the hand of the prodigal has been most lavish, Mr. Roberts says that “between 1860 and 1880 the municipal debts of our Union increased from $100,000,000 to $682,000,000, and in fifteen cities, believed to represent the average, the increase in taxation was 362.2 per cent, while the increase in taxable valuation was but 156.9 per cent, and of population but 70 per cent. In the year 1860 the direct taxes for State, county, town, and city purposes in New York were $4.90 per capita, in 1880 it was $8.20, and in 1896 it had reached $10.43, an increase in thirty-six years of 213 per cent.” It should be added that the bonded debt—State, county, city, town, village, and school district—in the State is estimated by Mr. Roberts to be $450,000,000. Is it any wonder that people so mercilessly plundered feel that the times are out of joint? Is it any wonder, either, that in 1896 Mr. Roberts was moved to say that, without the discovery of new sources of revenue, “a low tax rate would never again be enjoyed in this State”? Is it any wonder, finally, that he declared again that if “we have not yet passed the danger limit of taxation,” we have reached “a point where there is a deep feeling of unrest and dissatisfaction, and where a halt should be called or there will be danger”?
[B] From the mass of proofs of this statement in my possession I will select only one. In a call for a convention at Portland, Me., on the 10th of June last, of all persons “interested in the revision of the present system of State taxation and a more economical management of the State affairs,” it is stated that “the expenses of the State have increased fifty per cent in ten years, while the wealth and population of the State have steadily declined.” The object of the convention was “to protest against the course of extravagance that is rapidly bringing reproach upon the government of the State and reducing the farmers and taxpayers to automatons to grind out revenue to be absorbed by a rapacious and ever-multiplying horde of office-holders, who devour the people’s substance as fast as they produce it.” After showing how “once prosperous farming towns and townships have been reduced to but little better than a howling wilderness,” the call says in conclusion: “These once prosperous farming communities were redeemed from the native wilderness by men who were no more temperate, industrious, or economical than the farmers of to-day, and the prices they received for their products were as low as, and in some instances lower than, to-day, but the fruits of their honest toil were not drawn from them as fast as acquired by national, State, county, and, in many instances, by municipal extravagance, as it is to-day.” The plundered peasantry of Spain, Italy, or Russia, army ridden as they are, could not have made a more just complaint.
The stock explanation of this growth of expenditure is that with the advance of civilization the cost of government must increase in like degree; there must be more regulation and supervision of the activities becoming more numerous and complex. But this means, if it means anything, that the more enlightened and humane people are, the more difficult it is to maintain order and enforce justice, the more inclined are they to attack and plunder one another—in a word, the more barbarous they are. Preposterous as this theory of civilization is, it is precisely the one upon which the American people are acting with unparalleled energy. While we should naturally think them moving toward a point where they could get along without government, they are moving toward a point where they will have nothing but government. Referring to the increase of expenditures already mentioned, Mr. Roberts says it “corresponds almost exactly with the increase of the number of commissions and departments.... These departments and commissions,” he continues, “are largely for the purpose of extending social supervision and regulation over many things which, in the earlier days of our Commonwealth, were left to the localities or to self-regulation.” Again he says: “The amount of State inspection has become very great, reaching out constantly over new fields, and employing in the aggregate an army of inspectors.... The system of laissez faire, which was the rallying cry of democracy and free government at the beginning of the century, has yielded gradually to a system of supervision and control which monarchies never attempted.... What our State has done in this line can not probably be undone,” he says in a repetition of his warning, “but this tendency to expand and multiply and differentiate and segregate State supervision and regulation must cease, or the burden will soon become too grievous to be borne.”