Taxation in the United States.

From The "Contemporary Review."

There is probably no country in the world in which the people pay their taxes more easily and more cheerfully than they do in the United States. This is as true now as it was before the war. There seems to be a general impression that since this is a free country, in which the people tax themselves, everything must be for the best. Individuals grumble sometimes, and certain cities have acquired a bad reputation, but in general the people give comparatively little attention to the subject. There are men who have made it a study, but they have not yet acquired any great influence in the country. We need a Gladstone here to make it popular. The subject is made difficult and complicated by the fact that separate taxes are assessed by the Nation, the State, the county, the town, and sometimes the district. Some of these are direct, others indirect. In some towns the taxes are very small, in others they are enormous. Then again there is no general principle of valuation, and in some places personal property is not taxed at all. The common mind cannot grasp the subject in all its bearings. But few men know how much they do pay, and since the war extravagant expenditure seems to have excited little attention. I can remember when economy in the administration of the government was one of the most common party watchwords, but it seems to have gone out of fashion. The nation is proud of the reduction of the National Debt, and of the financial administration at Washington. It is proud of the abounding prosperity of the country, which makes it possible to treat the subject of taxation with indifference. It looks with pity upon the over-taxed people of Europe, and fancies that because it does not waste its substance on royalty and standing armies it can afford to be careless of other things. The time is at hand when it will be roused to look the question of taxation in the face; but it is not the purpose of this article to discuss the possibilities of the future, or to instruct Americans as to their true interests. I propose to do nothing more than to give as clear an idea as possible to English readers of the system of taxation and public expenditure in the United States.

To avoid confusion, and to bring the article within reasonable limits, I shall confine my statement in regard to State, county, and town taxation to the single State of Massachusetts.

As this is a popular rather than a scientific review of this subject, I may be excused for calling attention at the outset to some elementary principles. A comparison is often made of the taxation in different countries by dividing the total revenue of each country by the number of its inhabitants. In this way Fuad Pacha, in the first Budget of the Turkisk Empire, issued under the patronage of Sir Henry Bulwer, represented the taxation as very light and capable of indefinite increase, as it amounted to only six shillings a head, while in fact it was far more difficult for the people to pay this sum than it was for the English nation to pay fifty shillings. The power of a people to pay taxes depends not upon number but upon wealth and income. Turkey has been ruined by its system of taxation, notwithstanding the small amount per head reported by Fuad Pacha. The great principle of the right of the people to tax themselves is too well understood to need illustration, but in writing of taxation in America we cannot avoid recalling the fact that it was the attempt to tax the Colonies without their consent which led to the rebellion against George III. and the independence of the United States. "No taxation without representation" was the first war-cry of America.

The right of a State to tax its citizens rests upon its sovereign power to control, within constitutional limits, all persons and things within its territory. This right must be exercised for the common good, and nothing more be taken from the people than their good demands. Frugality is as essential for a State as for an individual, and extravagant public expenditure is sure to demoralise the people, discourage industry, and diminish the wealth of the country. On the other hand, so far as public expenditure tends to encourage the industry, promote the wealth, and develop the intelligence of the people, it is a blessing, and taxation to this extent a necessity.

The system of taxation may be unjust and even ruinous when the amount is not excessive. In regard to this, the most important part of the subject, Americans seem to be both careless and ignorant. I looked through a large public library in the city of Boston to-day without finding a single book by an American author devoted to this subject. Yet here is the true field of social science and genuine statesmanship. I venture to specify a few important principles under this head.

The system should be permanent. Constant changes are fatal to prosperity. This has long been one of the most serious difficulties in the United States, especially in regard to indirect taxation. No one can tell what absurdities a new Congress may bring forth, and our House of Representatives is renewed every two years. Business is constantly disturbed by the fear of new interpretations of existing laws.

Another fundamental principle is equality in the distribution of taxation. It should reach all classes of people and all kinds of pro- page 3 perty alike, without unjust discrimination in favor of any. The application of this principle involves many of the most difficult of social problems. We may even question as to what equality means. For example, it may be said that it is easier for a man with an income of a thousand pounds to pay a tax of 10 per cent, than for a man with an income of a hundred pounds to pay a tax of 5 per cent.; that equality demands this difference. On the other hand, if this idea were accepted we might go still farther, and exempt all except the rich from taxation. The same question comes up in regard to revenue derived from import duties. Shall we tax only those articles used by the rich? The application of the principle of equality is difficult, but the neglect of it is subversive of civil liberty. Unequal taxation has always been characteristic of despotic and barbarous governments. It is the curse of the East, where the burden of taxation is borne chiefly by the agriculturist, and where the rich generally escape. In the United States the tendency is in the other direction—to favor the poor at the expense of the rich. Certain kinds of property are also exempted from all taxation. In some places all personal property is exempt. All property in Government bonds is exempt. Generally churches, schools, and benevolent institutions are not taxed. On the other hand, excessive taxes are levied on banks and corporations generally.

Another fundamental principle is publicity. This is the greatest safeguard against inequality and injustice. Too great publicity cannot be given to the amount of tax assessed upon each individual in the community. In this respect there is nothing more to be desired in the United States, and this is the one thing which has compensated to a considerable extent for the general ignorance of other important prin-ciples. Everything in regard to the taxes is made public. Every man can compare his own position with that of his neighbor, and if he can show any inequality he has public opinion on his side in demanding redress. The same publicity is given to every item of public expenditure, so that if there is extravagance it is the fault of the people themselves.

Still another principle is that the taxes should be assessed in such a way as to interfere as little as possible with the industry of the country. Labour is the only source of wealth, and of course labor must in some form or other pay all the taxes. It is also true, within certain limits, that taxes, however they may be levied, tend to diffuse themselves; but notwithstanding these facts, it is a matter of experience that some forms of taxation are ruinous. Some distress and demoralize the people, while others turn industry from its natural course. We have here the question of direct or indirect taxes—of taxing labour or capital, and of taxing the luxuries or the necessaries of life. The question of free trade or protection may also come under this head. The national taxes in the United States are either indirect or upon luxuries, and are based upon the theory of protection to home industry. The other taxes are generally direct and upon capital, although there is a small poll-tax in most of the States.

One more important principle should be mentioned. Economy in collection. Under the old system of "farming the taxes," which still prevails in the East, the cost of collection was enormous. It is estimated that in Turkey, at the present time, not more than 50 per cent, of the taxes paid by the people reaches the Imperial Treasury. During the war, taxes were imposed in the United States which could only be collected at a cost of more than 50 per cent.; and there are many such taxes in Europe. There are also certain forms of taxation which encourage fraud and oppression on the part of the collectors, and subject the people to serious loss. It is said, for example, that at least half the last harvest in Bulgaria was lost by the delay of tithe-collectors to examine and estimate the value of the crops. This often happens in Turkey, and is a source of universal plunder. The peasant must bribe the officer heavily before he will visit his fields, and then bribe him again to make a fair estimate of the value of the tithe. Such a system is ruinous, and under any system the cost of collection is a dead loss to the country whenever it exceeds a possible minimum. The cost of assessing and collecting the State, county, and town taxes in Massachusetts is estimated at only 2½ per cent. Loss by fraud or defalcation is extremely rare.

In regard to public expenditure it is generally said that it should be as small as possible, but this cannot be accepted as a true principle. It may be very large, and still be for the advantage of the people. Frugality, whether in an individual or State, does not necessarily imply small expenditure. It is opposed to useless and unproductive expenditure. The expenses of a State should be within the means of the people, so as not to interfere with the accumulation of capital by individuals. The expenditure should be in itself productive and for the general good. The application of these principles involves many practical questions, and affords scope for the highest statesmanship. Considering how little serious attention has been given to this subject by American statesmen, we no doubt have reason to congratulate ourselves that we have so little to complain of in regard to either taxation or expenditure, but it will be seen in the course of this article that we are somewhat in the condition of a spendthrift who has fallen heir to a rich estate and fancies that it will last for ever. He leaves everything to his agents, and does not trouble himself to inquire into the wisdom of their administration so long as they furnish him with money. The commercial distress of the last few years has done more to call attention to this subject than all our writers on Political Economy. It will no doubt soon take a prominent place in our party politics. There are many who fear that as it becomes prominent the inclination of the non-property-holding majority to vote away the money of the rich will be still more developed, that party leaders will be more inclined to win favour with the masses by encouraging extravagant expenditure than by teaching them the principles of Political Economy. The principle of Universal Suffrage is certainly on its trial. It cannot be denied that there is danger in the direction indicated. The experience of the City of New York is too startling to page 5 be forgotten by any one in the country, and there are other cities which have suffered almost as much. There is a city in New Jersey whose public debt is greater than the total valuation of property within its limits. Even in the State of Massachusetts about one-fourth of the voters pay nothing but a poll-tax, and it is not difficult to pack a town meeting with these men, who always favour high taxes and large debts. So far as property-holders are concerned, taxation by Universal Suffrage may be taxation without representation, as much as taxation by a single despotic sovereign. It remains to be seen how far it can be controlled by general education, and by a diffusion of knowledge in regard to the special principles which relate to this subject. It would be a great triumph for the advocates of free education, if it should be found that the people can be convinced that the interests of the poor and the rich are identical in the matter of taxation and public expenditure. They hope for this result.

But I have already dwelt too long on these preliminary matters. I do not propose to discuss the subject of taxation in this article, but simply to state the facts in regard to taxation in the United States, confining myself, as I have already said, to the State, county, and town taxes in Massachusetts. These facts cannot be understood without a full explanation of the separate taxes and the system as a whole.

This system was examined and reported upon by a committee appointed by the Legislature in 1875, and their report, which is now out of print, and which the Government has refused to have reprinted, is the only serious discussion of the subject that I am acquainted with. Similar reports, however, have been made in other States. This committee base the right to tax upon the following grounds—

"The individual person has no inalienable rights except that to his own righteousness. His property, his labour, his liberty, his life are not inalienbly his. He may forfeit them by his own act or the State may require them for its own needs, in which cases the individual yields them justly to the State. The State may demand everything which belongs to a man, except his manhood and his moral integrity, which he has no right ever to surrender." The theory of "social contract" is then expressly repudiated. "From this it follows that proportional and reasonable assessments should be imposed and levied upon all the inhabitants of, and persons resident and estates lying within, the Common wealth."

The report then goes on to discuss the different forms of taxation and to recommend certain changes. Some of these have since been adopted. The taxes now assessed by the State are the following :—

1.	A direct tax, which varies in amount from year to year. This is assessed on polls up to a maximum of one dollar a head. Any balance is assessed on property. The State also assesses a tax for county expenses, which is assessed on polls also to the same amount.
2.	A tax of three-quarters of one per cent, on all deposits in savings' banks, assessed on the banks.
3.	A tax on all premiums collected by insurance companies (except life companies), varying from one to four per cent., and discriminating page 6 in favour of companies incorporated in the State against foreign companies doing business here.
4.	A tax of one-half of one per cent, on the nett present value of all policies held by residents in life assurance companies, assessed on the companies.
5.	A tax on the shares in the national banks at the rate of taxation in the towns where they are situated, assessed on the banks. The proceeds of this tax are distributed to the towns where the shareholders reside, and the balance, derived from shares held by persons not residing in the State, goes into the State Treasury. About twenty-five per cent, of the shares are held by non-residents.
6.	A tax on the shares of all joint-stock companies at the average rate of taxation on property in the whole State. The proceeds are distributed as in the case of the bank tax. This tax is assessed on the corporations. It does not include the value of real estate and machinery, which is taxed separately by the towns.
7.	A small sum is collected by the State for license to pedlars and liquor-dealers, and also fees in different departments.

In addition to those taxes assessed by the State, the towns and cities assess a tax on all real estate within their limits, except churches, educational, literary, and benevolent institutions; on all personal property, except that mentioned above as taxed by the State and United States' bonds; on all incomes exceeding two thousand dollars per annum. The rate of taxation on property and income is the same, and it varies in different towns from less than one-half of one per cent, to three and a half per cent. These taxes are assessed and collected by persons chosen for that purpose every year by the people of the town at the annual town meeting.

The total taxation of the State, including everything but national taxes, for 1879, was 24,755,927 dols., for a population of 1,651,652, and a total valuation of property of 1,584,756,802 dols. Deducting the poll-tax of 898,503 dols., we have a balance of tax on property of 23,857,524 dols. The valuation of property varies in different towns from 50 to 120 per cent, of a fair cash value, but it is believed that, taking the State as a whole, the valuation is not far from correct. This gives an average tax on property of about one-and-a-half per cent., and an average tax per head for each individual of about 15 dols., more than three pounds sterling. The taxation of the National Government is to be added to this.

The debts of the State and of the towns amount in all to about 90,000,000 dols.

There are some things in the system of taxation in Massachusetts which merit special notice. The first is the fact that, under the law taxing banks and corporations, the State taxes non-residents who pay another tax on the same property in the States where they reside. The injustice of this double taxation is apparent. The second is that depositors in savings banks pay only half as much as the average tax of the State, and still another advantage is secured to them by a provision that National Bank stock held by savings banks is exempt from taxation. The importance of this will be seen in the fact that deposits in savings banks amount to about fourteen per cent, of the total valuation of the State. Another important fact has already been noticed. The poll-tax is limited by a State law, while the amount of the tax on property in the towns is determined by popular vote. There are towns, including Boston, where those paying only a poll-tax are in the majority, and they can vote to raise the taxes to any extent without increasing their own taxes at all. I see no reason why they might not vote a tax of a hundred per cent., and thus confiscate all the property. How would such a law work in Ireland? The income tax is another source of complaint. The amount exempted is too large, and the whole method of assessment is a discrimination against the rich. There is no uniformity in its construction or enforcement, and in many towns it is ignored altogether. It is everywhere unpopular. Assessed as it is on the income of the preceding year, it is a tax on money already expended, and in many cases is nothing more than a double tax on property. There is also much complaint in regard to the taxation of mortgages, bonds, and other certificates of indebtedness. Some of the best men in the State insist on the principle of taxing nothing but tangible things, exempting all personal property, but there is no probability of any such change being made at present. The propriety of exempting church property from taxation is fully discussed in the report to which I have referred. The majority favour the present law, and the minority oppose all exemption, whether of church or other property. The amount of church property exempted is more than 30,000,000 dols., and of schools and other institutions at least an equal amount. I think the tendency of public opinion in the State is towards the views of the minority report, although there is probably no immediate change in the laws to be expected. Other things of interest might be mentioned, such as the additional taxes, which are often assessed under the name of "betterments," in country towns as well as in cities, and certain district taxes, which are sometimes very heavy, but are irregular. They amount sometimes to half of one per cent, on the property of the district.

To ascertain the total taxation we must add to the taxes already enumerated the taxation by the National Government. This is collected directly by the officers of the general Government, and is in every way entirely distinct from State and town taxation. These taxes are fixed by Congress, and are all expended for national purposes.

The amount received for Customs results from an average duty of 45 per cent, on the value of nearly two-thirds of all the foreign goods imported into the country. Something more than one-third of the imports are admitted free of duty. This sum therefore constitutes an indirect tax on consumers of dutiable imports. The cost of collecting this tax is about four per cent.

It is not easy to estimate the distribution of this taxation between the different States, but the amount paid by the State of Massachusetts must be much greater than her numerical proportion on the basis of population. This would be about 13,000,000 dols. The Southern and Western States pay more than their proportion of the tax on spirits, liquors, and tobacco, but they consume comparatively few dutiable imports, and have but a small banking capital. The consumption of imported goods is chiefly in the cities, and Massachusetts is a State of cities. One of the principal importers in Boston estimates the amount paid in the State at 25,000,000 dols., an amount equal to the whole direct taxation of the State, but divided among the people in a very different way. This would make the total taxation of this State about 50,000,000 dols. The population and valuation have been given above.

It will be seen at once from this Table that the working classes consume very few manufactured goods. These are almost all of American make. Provisions are all American. Groceries are partially imported, but some of the most important, as tea and coffee, are free. Others pay a small duty. It is not probable that a labouring man without property pays an indirect tax of more than ten dollars a year. Nor can it be shown that his expenses are much increased by the indirect results of a protective tariff. Most of the things which he cousumes are not affected directly or indirectly by protection of American manufactures. He probably gains by the increased demand for labor and by the taxes paid by manufacturing companies more than he loses. His total tax amounts to only twelve dollars, which the lowest class of labourers can pay by ten days' work, the average wages of this class in this State being 1.25dol. a day. The cost of living is such that we constantly see men of this class laying up money enough in a few years to buy land and build a house. In these cases, however, the wife generally works also in a mill or as a charwoman. This class is certainly not oppressed by taxation.

Let us now go a step higher and take a man who has property to the amount of 5000dols., and an income from labour of 1,200dols. a year. He pays a poll-tax of two dollars, a property tax of 75dols., and an indirect tax to the National Government which may be estimated at 75dols, Total, 152dols. This represents about thirty-eight page 10 days' labor. This estimate is based on the same principle as the last, but in view of the fact that a man with an income of 1,200dols. not only buys more imported goods, but a much larger proportion of what he uses is imported, it is evident that he is taxed much more heavily than the common laborer. His income from labor and property is about 1,400dols. This tax is nearly 11 per cent, of his income, while the other man pays only 4 per cent.

Let us now take the case of a man with real and personal property worth 100,000dols., who lives upon his income from this—say 4,000dols. a year. He pays a poll tax of 2dols., a property and income tax of 1,530dols., and an indirect tax to the National Government which we may estimate 200dols. Total, l,732dols. This is 43 per cent, of his income. There are many holders of real estate whose whole income is not sufficient to pay their taxes, and in the cases I have mentioned I have made no allowance for extra taxes for betterments, district expenses, and others which are only too common. Whatever may be said in favour of this system it certainly does not illustrate the principle of equality.

The national taxation is much more equally divided than that of the State. The laborer with 300dols. income pays 3 1/3 per cent., with an income of l,400dols., 5½ per cent., and the capitalist with an income of 4,000dols. pays 5 per cent, on this to the National Government. It is also true, contrary to what is often said, that the taxation resulting from a protection tariff falls chiefly on those who are benefited by it. Imported goods and those American manufactures whose price is raised by the tariff, are consumed chiefly in the manufacturing States. Any other form of taxation would fall much more heavily upon the West and South. It is true that there are certain indirect results of protection, such as the increased cost of railways, through the duty on iron, which need to be taken into consideration; but the railways of the country have generally been constructed by Eastern capital, and the charges for the transportation of passengers and freight are less than in any country in the world. The present tariff is undoubtedly a bad one. It needs revision in many particulars, and it will be revised by the next Congress. It is to be hoped that the changes made will be the result of the wise application of general principles, and not the result of what we call "log-rolling," or a combination of interests based upon the agreement, "You support my interest and I will support yours." It will be, and it ought to be, a protective tariff as well as a source of revenue or a form of taxation, but there is unwise and destructive as well as wise and productive protection. We have had too much of the former, and unless we can get the latter there will be a reaction in favor of free trade. As to the principle of indirect taxation involved in the tariff question, it is generally criticised on the ground that in a free country the people should know exactly what taxes they pay, as they do not in case of indirect taxes; but we have seen that these taxes are more equally distributed than the direct taxes, and it is a singular fact that the greatest extravagance in public expenditure is not at Washington, page 11 where it is removed from the eyes of the people and is the result of indirect taxation, but it is in the towns where direct taxes are imposed upon property by the popular vote, or in the cities where they are voted by the direct representatives of the non-tax-paying voters. Here taxation sometimes becomes confiscation.

Having examined the system of taxation in the United States as it is seen in the State of Massachusetts, we naturally inquire whether the amount collected is unreasonably large. Can the people afford to pay such taxes? Is the expenditure of the Government productive, and essential to the welfare of the State? It is with the State as with the individual. It may be a good thing for a man to reclaim the waste land on his farm, and put up new buildings; but he may do these things in such a way as to ruin himself. He has to wait until he can spare the money for these improvements. So public expenditure may be for things in themselves good, but if it consumes the working capital of the people, it is ruinous. A town may be ruined by its public improvements. It is claimed that as the valuation of the State of Massachusetts has doubled within twenty years, the taxes cannot be considered as beyond the means of the people; but this increase has been principally in the cities, and arises to a considerable extent from the increased value of the land, and the increase of population. It is said again that the taxes are paid easily, and without complaint. There is truth in this; but it is a question whether this is not a result of ignorance and carelessness—whether the people ought not to complain. It is said that wages are high and profits large; but the interest on capital is not more than 4 per cent, at the present time. The taxes tend, to increase rather than diminish. The valuation in this State has increased 100 per cent, in twenty years, but in the same time the taxes have increased 350 per cent., not including the national taxes, which have increased still more. The valuation is less now than it was eight years ago, but the taxes have increased 10 per cent, in this time. On the whole, it can hardly be denied that the taxes are greater than the people can afford to pay. It is not a wise and economical disposition of the wealth of the country to expend so much for public purposes.

But aside from this question, we have to inquire whether the money raised by taxation is expended economically and for the public good. The most important item of expenditure in this State is for public schools. The amount expended in 1879 under this general head was 5,182,487dols. In 1860 the total taxation of the State was only 7,600,000dols. It is now a generally accepted principle that schools should be maintained by the State; but it is a fair question whether the enormously increased expense of education in this State is justified by a corresponding improvement in the education given, and also whether the State has a right to assess taxes to support free High schools. As to the first question, there has been a great change in what we may call the machinery of education. Great sums have been expended on school buildings, and this expense is still going on page 12 at the rate of about 600,000dols. a year; and more money than formerly is expended upon furniture and apparatus. There is more talk about system and scientific methods, and more is expended upon superintendence. More attention is given to the grading of the schools, and the teachers are better paid, and changed less frequently; but on the whole there has been no great advance in the character of the education given in the schools. Perhaps the best thing that can be said is, that there is a fuller appreciation of the essential deficiencies in our system. There is a feeling prevalent in the United States, as well as in England, that money will buy anything, and it has been taken for granted that the schools must be twice as good if they cost twice as much money. This is the general feeling now, and it seems to be carefully fostered by the Board of Education. It publishes tables every year to show the amount of money expended by each town, and the "banner town" of the State is not that which has the best schools, but the one that taxes property most heavily for school purposes. This is the simple explanation of the increased expenditure in the State. But there are men, and their number is increasing, who realize the necessity of a radical change of system. The defects of the system are now a subject of public discussion. They are such as these :—Want of enlightened superintendence, lack of uniformity in the schools, neglect of elementary branches, unscientific methods of instruction, failure to educate and develop the thinking powers of the children, lack of interest on the part of parents, the unpractical character of much of the instruction given, too great use of text-books to the exclusion of oral instruction, and failure to teach good behaviour. All of these are mentioned in a single report of the Secretary of the Board of Education. The same report illustrates the condition of the schools, by giving the result of an examination of the primary and grammar schools in Norfolk county. In the primary schools the average age was 9-8 years; the examinations were marked on a scale of 100. The average of the county in arithmetic was 73; in penmanship 49; in spelling 58; in reading 62; in letter-writing 52. In the grammar schools the average age was 13-10 years; the average marks were—in arithmetic 48; in penmanship 52; in spelling 62; in reading 70; in narrative writing 56. The word "whose" was spelled in written exercises in 108 different ways, "which" in 58 ways; and "scholar" in 231 ways! The schools in Norfolk county are probably equal to any in the State.

The same report discusses at some length the second question which we have suggested, and claims that it is the right and duty of the State to give a free secondary education. There are 216 of these High schools in the State, with 600 teachers and 20,000 scholars. The establishment of these schools is the only important change which has been made in our system since 1860. There is a growing difference of opinion as to the right of the State to maintain such schools at the public expense. Those opposed to these schools claim that the principle on which they are founded is false, and that the education page 13 given is superficial, and adapted to raise up a multitude of conceited, half-educated demagogues too proud to work, and feeling that the community which has educated them is bound to find places for them. The Board of Education takes the extreme view that it is the duty of the State to furnish as much education as is needed for the preparation of the community for all the duties and occupations of life. It appeals again and again to the popular favour on the ground that these schools have a levelling influence, and tend to break down all social distinctions. It claims that they are essential to the maintenance of Republican institutions. The opponents of the system do not deny that education is a good thing, nor that it is essential to the maintenance of free government, especially to one resting upon universal suffrage. But they claim that free education should be limited to the eommon schools; that the State has no right to tax property to give a higher education to the poor; that the "general good" does not demand any such expenditure. They claim that, on the contrary, the history of this country furnishes abundant evidence that under the old system those who were capable of appreciating a higher education had no difficulty in securing it; that the very struggle which was necessary to attain it was itself the highest education. They claim that the principle that the poor have a right to live on the rich, the lazy and improvident upon the industrious and frugal, is more dangerous to republican institutions than any other. It is a curious fact that within these twenty years, marked by the establishment of free High schools, the cost of university or collegiate education has doubled. A complete professional education costs far more now than it did before 1860. If the principle laid down by the Board of Education is correct, this also ought to be made free, and it is difficult to see where the expenditure of the State should stop. One step seems to follow the other logically until we reach pure Communism. The question is no doubt a difficult one, and wise men differ in regard to it. Perhaps the present system may be regarded as a compromise between extreme opinions. A very ably conducted Review has just been founded in Boston for the discussion of educational questions.

The next important item of expenditure is for charitable institutions, the support of the poor, and pensions and aid to soldiers of the Civil War and their families. The same extravagance and the same want of system is seen here. The most costly buildings in the State, outside of Boston, are the charitable institutions erected and maintained at the public expense. The State Government expended 455,261dols. in 1879 for the maintenance of these institutions and for alien paupers. But the expenditure of the towns for their poor is still more open to criticism. There is no rule nor system about it. Each town is practically a law to itself. The helpless poor are generally supported in alms-houses, and outside aid is given very freely and often to persons who have no proper claim upon the public money.

(To be concluded.)