The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-01-13
TAX COMMISSIONER WALLACE
ON PENDING AMENDMENT

Mlnot, N. D.. Jan. 13.-The North
Dakota Tax association is holding its
annual conference here. m of the
feature addresses this forenoon was
a talk by Geo. e. Wallace of the state
tax commission Mr.. Wallace spoke
on a Pending Amendment to the Con-
stitution Permitting Classification of
property for Taxation Purposes.
Nr. Wallace said in part:
The North Dakota constitution pro-
Vides that laws shall be passed tax
ing by uniform rule all property &C
cording to it's true value in money"
This idea was borrowed from Min
nesota which state took the provision
from the constitution Of Ohio which
was enacted in 1851. Ohio's constitu-
ton was an innovation which was fol-
lowed by several states Of the union.
Such provisions are known as the
general property tax system. At the
time the constitution Of Ohio vas ad-
opted, the main kinds of property
were real property and visible tangi-
BILE personal property all Of which
were taxed at a very low rate. In
1860 the average tax rate in all of
the states was Is cents on 500, in
1870, it was $1.9S and in 1902. it was
$2.05. In 1850 there was w and a
quarter billions of personal property
assessed and three and three-quarters
billions of real estate. In 1902 per-
sonalty amounted to a little less chan
$4,000, 600, 900 while real estate was
assessed at more than $26, 000, 900, 600.
At the latter time there was a vast
volume of i~ntangibleS, such as moneys
Inc credits. Yet, notwithstanding the
great growth Of such personal prop
erty, the relative values between real
and personal estates greatly widened.
The evidence points to he conclusion
that it was mainly the increase in tax
rates which caused the disintegration
of the general property tax n the
falling Off in values Of personal
property.
When the constitution Of Ohio was
adopted and prior to that time, the
general property tax system was
assessing all property at it's true value
was far from ar unWise provision.
But within the last generation, new
forms of property have been created
which were not. and perhaps could
not have been contemplated earlier.
There is now as never before, invisi-
BILE personal property Of immense
value which cannot be successfully
reached by the general property tax
ing system. Realizing this more
more readily than America, Europe,
with the exception of Holland and
Switzerland. long ago discarded abso-
lutely this method Of taxation.
1t is admitted that no system Of
taxation al be enacted which is con
sidered exact. Human experience
teaches us that a system at one period
useful, may be outgroWn by an ad-
Vancing people and rendered i'm
practicable if not positively injuri-
GUS. .
Today such intangible property is
represented by a vast volume of
moneys, credits, bonds, mortgages, and
franchises. How could a. franchise,
for instance. be taxed at a uniform
rule according to it's true value in
money? How is it possible to COM
pute the value of a franchise? Surely
not by inspection. Rules have been
devised for finding franchise values
and such property is now more or
less taxed. Moneys and credits have
a fixed value. Is 1t wise to tax such
property at a uniform rule according
to it's true value in money? If we follow
the mandate of the North Dakota
constitution 1t must be done. Many
cities in this state lave a tax rate
of 7 per cent. Suppose a. resident of
a. city leVying such a rate, should list
the $1,000 he has in the bank bear
ing a. per cent on -timeedeposit. His
interest would amount to $40; his tax
would be $40. Or, If he has $1,000 in
the bank subject to check on April I,
and the assessor found it out, he
would receive no interest to-, offset
our outgrown constitution would be
obvious. By the succeeding of April
1 there would be q general with
drawal Of funds from all of, the hanks