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Bradley laid down the rule as follows :* “The provision. was not intended to prevent a State from adjusting its system of taxation in all proper and reasonable ways. It may, if it chooses, exempt certain classes of property from taxation at all, such as churches, libraries, and the property of charitable institutions. It may impose different specific taxes upon different trades and professions, and may vary the rates of excise upon various products; it may tax real estate and personal property in a different manner; it may tax visible property only, and not tax securities for pay. ment of money ; it may allow deductions for indebtedness, or not allow them.
We think that we are safe in saying, that the Fourteenth Amendment was not intended to compel the State to adopt an iron rule of equal taxation.” In the words of Mr. Justice Field,+ " the amendment does not prevent the classification of property for taxation." Mr. Chief Justice Fuller, in the opinion already quoted, stated the rule in the following words:"Nor in respect of taxation was the amendment intended to compel the State to adopt an iron rule of equality ; to prevent the classification of property for taxation at different rates; or to prohibit legislation in that regard, special either in the extent to which it operates or the objects sought to be obtained by it. It is enough that there is no discrimination in favor of one as against another of the same class." Finally, Mr. Justice Lamar summed up the situation by declaring, I"This Court has repeatedly laid down the doctrine that diversity of taxation, both with respect to the amount imposed and the various species of property selected either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in the proper sense of those terms; and that a system which 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 in taxation and of a just adaptation of property to its burdens."
Progressive taxation, moreover, is no new thing to the national governo ment; on the contrary, it bas the force of precedent on its side. The federal house-tax of 1798 was progressive, ranging from two to ten mills on the dollar. Again, the income tax of the Civil War period was levied at progressive rates from 1862 till 1867; and this progressive tax was in operation at the very time when the Fourteenth Amendment was proposed by Congress. Under these circumstances, if there had been the slightest intention of prohibiting progressive taxation it would have come out in the debates. Altogether, there seems very little likelihood that the Supreme Court will find progressive taxation unconstitutional.
The importance of the case now pending can scarcely be overestimated, In the extent and permanence of its results it is of vastly more importance, for example, than Governor Black's adnotated pocket veto of a similar progressive tax law in New York, which recently attracted so much attention. An adverse decision would mean the prohibition of progressive taxation throughout the United States, and hence would annul not only the Illipois tax, but the inheritance tax of Missouri, the income tax of North Carolina, and the railroad taxes of several States; and it would put a quietus upon any thorough-going reform of State taxation. On the other hand, a favorable decision will doubtless prove a powerful stimulus to the
* Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S., 232.
Home Insurance Co. v. New York, 134 U. S., 594.
development of progressive taxaticn throughout the country. After such a decision by the highest court no State court will be likely to annul a similar act unless the State constitution very plainly requires all taxation to be proportional; a vague generality in the bill of rights will not be considered sufficient.
HOW TO REFORM OUR FINANCIAL SYSTEM.
A CONVENTION was held in Indiana recently to discuss the question, how the United States could have a financial system which would secure the bill holder and furnish an adequate volume of currency for the needs of commerce, and it was resolved to ask Congress to appoint a commission to investigate it, and President McKinley at the last session of Congress asked that this commission might be appointed. A law for that purpose passed one branch of Congress, but failed in the other. This action is possibly in the right direction, although by a great many people the problem is considered simple. I do not think a commission necessary to find out whether we need a financial system, and whether the bank notes shall be secured or not, or whether it shall be adequate in volume. It goes without saying that we do need such a system. If any class of people are to be inquired of as to what that system shall be, it seems to me it should be the bankers of the country.
In asking an editor of a Texas paper not long since about this subject, and what he would do in relation to finances, he replied by asking the following questions : "If you want a man to manage a newspaper, would you ask a man who had never been in a newspaper office to manage it?" "If you want to know about matrimony, would you ask a man who had never been married to tell you about it?” “If you wanted to know about the financial question, would you ask a man who never had a dollar and did not know how to make one ?"
Make it easy for the banks to lend money and their rates of interest will be low. If they can be permitted to use their securities, State and municipal bonds, in addition to their United States bonds, as collateral security for their circulating notes, it will be to their interest to do this, and it will enable them to lend money at a lower rate.
The government can neither create nor lend money, but it has occasion frequently to borrow. During the last administration of Mr. Cleveland, the Treasury required large sums of money above the revenues collected, and it had to go upon the market to borrow it, and it was borrowed of the banks.
Our National Bank Act with four amendments will supply a uniform circulating medium absolutely secured and of adequate volume for the needs of commerce.
First: Let the national banks issue their circulating notes up to the par value of the government bonds which are deposited in the Treasury to secure them, and relieve them of all federal taxation, except just enough to pay for the printing of their notes and the expenses of the Comptroller's office.
Second: Let the government fund its floating debt (including greenbacks, treasury notes, and silver certificates), and refund its bonded debt into three per cent. one hundred year bonds.
Third: Should the time ever come when the United States bonds are in
sufficient in amount to furnish security for the needs of the national bank. ing institutions as security for their circulating notes, tben autborize a com: mittee, consisting of the Secretary of the Treasury, the Comptroller of the Currency and the Treasurer of the United States to receive State and municipal bonds at a price which they shall fix as security for any additional amount of national bank notes wbich the banking institutions may apply for. This proposition may be objected to, bnt when it is known that Mr. Gage, the present Secretary of the Treasury and late President of the First National Bank of Chicago, and all other bankers, will lend money to any extent upon Chicago city or New York city, or any State, bonds, why cannot the bill holder be just as well secured by these bonds as he can be by United States bonds? This amendment will secure any additional amount of cir. culation which the business of the country may require.
Fourth: Repeal the Sub-Treasury Act and let the revenues of the nation be deposited in the national banks (which the government has created and supervises) where collected. This will relieve the government from doing business upon the safety deposit plan, and will keep all the money of the country in substantial circulation.
Our National Bank Act thus amended will give the nation a financial system second to none in the world. These amendments are not suggested for the benefit of the national banks, but on the contrary for the benefit of commerce and of the people who borrow.
C. B. FARWELL.
ADVANTAGES OF HAWAIIAN ANNEXATION. A LITTLE over a year ago the writer had the opportunity of visiting the Hawaiian Islands, and of spending some time in studying some of the ques. tions connected with this truly remarkable little Republic. The numerous articles wbich have lately appeared in opposition to the proposed annex. ation have led me to think that the impressions thus formed might be of interest. In presenting these I have tried to view the question purely from the standpoint of a citizen of the United States, with no other thought than the attainment of the greatest good for our own country.
Before my visit to the islands I was strongly opposed to the annexation of Hawaii or any other country. As a matter of principle, I am of the opinion that we have enough territory of our own to look after; but the Hawaiian Islands seem to be in a class by themselves, and I came away from there an ardent annexationist. I have yet to meet anyone who has visited the islands and studied the people who has come to a different conclusion.
The first impression received on landing in Honolulu is that one is in a New England city, far more "American,” in fact, than many of our Western cities. The men who are now the governing class are the descendants of the missionaries and early settlers, reinforced by a strong body of Eng: lish and Scotch, who have formed a government as clean as any in the world. These Islands, thus governed, are offered us as a gift. Why should we desire them ?
The Hawaiian group consists of eight inhabited and a few uninhabited islands lying within the tropics at a distance from San Francisco of about two thousand miles. In the aggregate their area is nearly equal to that of Massachusetts. Agriculturally they have not begun to be developed. They
are situated in the most fertile part of the world, with a climate simply perfect, and are capable of producing all the sugar and coffee which this country can consume, to say nothing of rice and all kinds of tropical fruits. They would provide us with three excellent barbors for commerce and coaling stations, and would control the cable communication of the Western Ocean, besides aiding our shipping by giving the carrying trade to American vessels.
A second reason why we should desire these islands is their relationship to the protection of our Pacific coast. In case of war with Japan, or any Eastern country, Hawaii would be the key to our western coast in the same way that Bermuda would be the key to our eastern coast in case of war with England. Holding Hawaii, which can easily be fortified, our western coast would be safe against attack from any country, with the possible exception of Great Britain, and in the unfortunate event of war with her the advantages of a detached coaling and supply station are apparent. It is admitted, I believe, even by the opponents of annexation, that the United States should never allow a foreign power to obtain possession of the islands, and if this is true it would always be necessary for us to be in a position to defend them in case of war, without being in a position to fortify them or reap any of the advantages of ownership in time of peace.
Another reason why we should desire these islands is the fact that they have been christianized and civilized by Americans. It was American mis sionaries who won the people from the debasing rites of a religion which sacrificed human beings to cruel and repulsive deities, and to-day the men who represent the higher life of the islands are thoroughly American.
What are the objections to annexation? The articles in Harper's Weekly, by Mr. Schurz, present, I think, all the arguments against annexation as strongly as they can be put. To take them up in order. Mr. Schurz says: “Annexation will be a radical departure from the traditional policy of this republic, etc.” Is this true? Did we not annex Alaska, Louisiana, New Mexico, Texas, California, and other States, whose value at the time of their annexation was less apparent than is the value of Hawaii ? Is not Alaska much farther away and less accessible than Honolulu ?
Again he asks: " Have the natives been consulted ?" No, but were the American Indians consulted in the early days here, or the natives of Alaska in later times? The natives have proved themselves to be incapable of governing and unfitted for the condition of civilization, as is shown by their rapid decline in numbers and their inability to adapt themselves to changed conditions; and the importance of their supposed opinions on annexation has been greatly exaggerated. Numbering 500,000 in the time of Captain Cook, they are now reduced to about 30,000, and occupy much the same relation to the white population as our Indians do here. Indolent and easygoing, they are perfectly content with any form of government which allows them to sun themselves, bedecked with flowers. This view is borne out by the failure of the recent mass meeting in Honolulu organized solely for the purpose of proving that the native Hawaiians are actively opposed to annexation. It is natural that the white man should become the governing power; and, in the exercise of this power it is equally natural that he should wish to turn over bis territory to a strong civilized nation for protection and advancement; since, if they rely solely on their ability to defend themselves, it is impossible for the islands to maintain their independence for any length of time. Indeed, the question of deepest concern is
not annexation-for this is inevitable-but to what country shall Hawaii be annexed ? Shall it be Japan or England or the United States ?
It must, however, be conceded to the opponents of annexation that the mixed character of the population is a real drawback; but the difficulties it creates are not insuperable, as our laws already cover the question of Asiatics.
The Chinese are not yet dangerous. Their numbers are large; but they are a peaceable people, without cohesion, and would give no more trouble than the same race does in our Western States, where the battle has been fought and the question is now practically settled. If annexed, they would be readily amenable to our laws.
The Japanese element is by far the most serious difficulty. Since the war with China these people have become exceedingly arrogant and selfassertive, and the spirit of national aggrandizement extends from the Mikado to the lowest coolie. From the standpoint of the Japanese this spirit may be most commendable, but it will have to be firmly met by the United States when our own interests are at stake.
The Portuguese are a harmless element. I can see no reason why we should not expect people of the Anglo-Saxon or German race to become dominant, not only in power, but also in numbers, as soon as the question of goveroment is finally settled. Certainly, few Anglo-Saxons or Germans would care to become the subjects of a dusky queen under a constitution like the one which caused the revolution of '93.
The question of statehood has not been raised, and is not more imminent than is the statehood of Alaska. The annexation of Hawaii would not "launch us on a course of indiscriminate aggrandizement," would violate no precedent, and would leave every other case of annexation to be decided on its merits as the former cases have been.
Another argument of those opposed to annexation is that, if it is wise to annex Hawaii, it is equally wise to annex Cuba, and all of the West Indian Islands. It would, no doubt, be of immense advantage to this country to possess Cuba or some of the other West Indian Islands, if the conditions were the same as in Hawaii. If Cuba were populated by the native Caribs, and virtually owned and governed by our own people, there would be no question as to its desirability, but it is thickly settled by a mixture of the negro with the scum of a decayed Latin race. The same conditions exist, to a greater or lesser extent, in all the West Indian Islands, with the possible exception of St. Thomas.
There are many other facts which make the annexation of one or all of the West Indies a question of an altogether different nature. Hawaii is comparatively limited in area, and is entirely isolated so that its possession would not involve us in further acquisition. But if we should annex one of the Islands in the West Indies, the geographical position of the group would necessitate our assuming control over all in order to protect ourselves. The establishment of such a policy would be the signal for many European complicatiuns.
Hawaii holds the same relation to the Pacific coast that Bermuda holds to the Atlantic; and I think there would be no opposition here should Eng. land offer to make us a present of that valuable colony.
ARTHUR CURTISS JAMES.