there the adventurous whites who have left the small, scattered deposits, which are large the waning gold fevers to risk the swamp in the aggregate. It is a "poor man's propofevers have been failures as miners. Third in sition" where the miner must know how to rank as a producer of platinum is the United deal with and save by-products. But the States, and here again platinum has taken Western people deal with the main chance. refuge in an unsettled country. The west They are nowhere educated to the doccoast of northern California, Oregon, and trine of by-products. The gold miner knows Washington has a fringe of settlements of less of platinum than the hog raiser does fisher folk at the water's edge, and behind of pepsin. this the testimony of the elk, panther, and Of the two industries, the outlook for platbear shows that the country is still wild and inum is better than for nickel. Never in our likely to remain so. But here is a heritage, history has a mineral want gone begging. heeded by no one, yet sufficient in all prob- The material is always supplied. In this case ability to give a good livelihood to a large the easy solution lies in the application of the population; to develop good roads and a de- beneficent paternalism with which the United mand for vegetables, grain, cattle, and espe- States Department of Agriculture has helped cially fruits, which grow well in one of the the farmer, until this feature is a recognized best and most agreeable climates in the essential part of national economy. The country. Then why not? Why does not same spirit has made itself evident in the platinum mining develop by the almost auto- creation of a Bureau of Mines. The oppormatic processes of industry? The answer is tunities for benefiting the mining fraternity simple. The platinum market is in the hands are few compared to those in agriculture, for of three or four concerns who have alternately the private mining engineer serves his clientcombined and competed for the already de- age well. But the platinum mine is too small veloped supply of Russia. Their overtures for the mining engineer, and one small mining to the simple people of the Oregon coast have experiment station on the Oregon coast will left the greater profit in the hands of the big do for platinum what agricultural experiment concerns so the Oregonians think-and it stations have done for the culture of alfalfa, costs too much to overcome their suspicions. dates, tobacco, and hemp; and the result will A trust would have difficulty in monopolizing be more generally appreciated.

AT

TAX REFORM IN CALIFORNIA

BY CARL C. PLEHN

(Professor of Finance, University of California, and Secretary of the State Commission on Revenues and Taxation)

T the general State election, held on November 8, 1910, the people of California adopted an amendment to the constitution of the State establishing a new system of taxation.

In his work on "The American Commonwealth" James Bryce refers to the constitution of California, adopted in 1879, as "that surprising instrument by which California is now governed." In the later editions Mr. Bryce prints extracts from this instrument with an apology for "being unable to find space for the whole document." That constitution was "surprising" not alone on account of its length, nor the radical principles embodied in it, but also on account of the freedom with which it admitted both the views and the grammar of the people to the "fundamental law" of the land. It is more

a code of law than a constitution, and leaves but little latitude for the legislator. However, despite the gloomy forecasts of the conservatives and of panic-stricken capitalists this folk-made constitution has not worked badly during its thirty years of life. But because of its many prohibitions, rather than its radical grants of power, it has required a steady stream of new folk-made law in the form of "constitutional amendments" to keep the ship of state moving.

The article on "revenue and taxation" in this instrument prescribed rigidly, for all departments of government, the old general property tax. In this tax was embodied a novel device intended to compel the mortgagee to pay taxes on the mortgage,-advice which soon became a dead letter and has just been entirely repealed. The same article

authorized an income tax on "any one or were run in all the papers of the State, and more" "persons or corporations, innumerable posters, "stickers," and handjoint-stock associations, or companies." Yet bills called attention to its merits and deno railway magnate, no "octopus" corpora- merits. tion, no labor leader, nor any one else has ever been taxed under this provision by name or by class or otherwise.

The farmers and real estate men used for the most part the direct and simple appeal:

The State outgrew the old general property tax twenty years ago. For ten years "the people" suffered in silence. Sometimes the suffering farmers growled, but then-they also growled about the weather, with just as must effect. Slowly the dissatisfaction spread. For the past ten years the farmers in their "Grange" meetings, the county assessors in their annual conventions, and other bodies have been "whereasing" and "resolving" on tax reform with somewhat more concrete purposes in mind. In 1899 a special committee of the Senate reported that: "From Maine to Texas and from Florida to California there is but one opinion as to the workings of the present system of taxation. That is, that it is inequitable, unfair, and positively unjust." The forces against the amendment were, Six years ago a definite campaign for tax naturally, those corporations whose taxes will reform began, which has just been crowned be raised. For the most part they worked with success. This campaign had none of in the dark, because it is generally believed the picturesque, riotous features of the move- that the voters of California have "corporament which gave birth to the constitution. tion-phobia" and will vote against anything It was a sober, serious upheaval, an orderly, the "interests" are known to favor. But legal revolution. The army of tax reform was some of the national bankers came more or manned by the over-taxed farmers and real less into the open and through the large disestate owners, led and officered by two suc- play advertisements above mentioned adcessive Governors-George C. Pardee and vanced certain "reasons" against the amendJames N. Gillett-and by the most experi- ment and certain alleged statistics, both withenced tax officials of the State. The measure out strict regard to the truth. Their main eventually adopted was carefully prepared by endeavor was to "throw a scare" into the a commission composed of the Governor, mercantile and financial interests by claiming members of the legislature, and the Pro- that such "excessive" taxation would drive fessor of Finance in the State University, away capital, and they even went so far as which had been created by one legislature; it to claim that the new system of taxation was debated and unanimously proposed to would jeopardize the school system and the the people by a second legislature; it was State University. The special cause of the freely discussed and voted down by the opposition of these bankers appears to have people; then it was revised again to meet the been the action of the legislature, at the last specific objections raised, and again formally moment, in restoring the tax on bank capital proposed by a third legislature, and eventu- to one per cent as recommended by the comally approved by the people by a majority of mission, although it had been at one time 40,000 out of a total of 160,000 votes cast. fixed at six-tenths of one per cent. But they At the very eve of the last election a special had stultified themselves by favoring the session of the legislature was called to make amendment when the rate was low. certain minor corrections, and at that same special session certain features, to which popular objection had been made, were amended. It was discussed at length and in detail by all the leading papers of the State, and every voter received by mail lengthy printed arguments pro and con. Large display advertisements, mostly in opposition,

The evils that were complained of were much the same as those that are felt in all other States which continue the general property tax as a means for raising revenue for the support of all the different divisions of government, central and local. They are: (1) the over-taxation of real estate and especially of agricultural real estate; (2) grave in

equalities between localities due largely to is left for local taxation would be on the averthe effort of each county (in California the age about one per cent. of the full cash value, county is the local assessment district) to evade the State tax by under valuation of its taxable property; (3) inequalities and unfairness in the apportionment, under the "where located" rule, of the revenues derived from enterprises of a general character, like the railroads; and (4) the evasion of taxation by the banks and public service corporations.

The remedies provided in the amendment are: (1) the abolition of the State tax on property in general, which was held to be the main cause of the inequalities between localities; (2) the taxation of public service corporations, whose property is of a general character by, and for the support of, the State alone, and that on the basis of gross receipts; also (3) the taxation of the banks by and for the State but on the basis of the book value of the stock. In short, it is the plan of "separation" that has been so largely agitated as the first necessary step in tax reform.

if the State tax could be removed. It was, therefore, sought to establish such rates on the gross receipts of the different classes of corporations as would equal, as nearly as might be, one per cent. of the true value of the property used by the different classes of corporations. The rates finally decided upon were: 4 per cent. for railroads of all classes, and for the light, heat, and power companies; 32 per cent. for telephone and telegraph companies; 3 per cent. for car companies; and 2 per cent. for express companies.

Banks have been very inadequately taxed in the past. National banks especially have almost entirely escaped taxation, because the State attempted to tax them by one method and other banks by another, and the federal courts were afraid that the difference in method might involve discrimination against the national banks. The solution offered is to tax all banks alike on the basis of the book value of the stock. In connection with the banks one of the controversies arose. The commission, logically, recommended that the banks should pay one per cent., the same rate

the bankers made a plea to the legislature that one per cent. was an "excessive" tax and persuaded that body at its regular session to reduce the rate to six-tenths of one per cent. This aroused such popular outcry that on the very eve of the election, the legislature, in special session, restored the rate to one per cent., the same as on all other property.

The problem of "separation" is more difficult in California than in many other States because of the larger relative amount of the State's expenditures. The State spends liberally for the support of the school system, as other taxpayers are required to pay; but endeavoring to equalize the school facilities throughout the commonwealth, and it relieves the localities of many other expenses which in other States are left for the towns and cities to bear. The State has heretofore gone but a little way in the direction of separation, having out of some $12,000,000 of net income only about $4,000,000 from sources other than the property tax. Hence, it was necessary to All of the rates may be changed by the take over for State taxation all the railroads, legislature at any time by a two-thirds vote. steam and electric, all light, heat, and power It is estimated that the new system will incompanies, all telegraph and telephone com- crease the taxes of the corporations to be panies, all car companies, and express com- taxed for State purposes by some $3,500,000 panies, and the banks. Incidentally, the annually. It would have been more, had it taxation of insurance companies is equalized under the new system and the vexed question of the taxation of franchises has been settled by passing that into the hands of the State. Under the old system each franchise, or "the corporate excess," was taxable where the "head office" of the company was located. But the location of the "head office" was merely technical and by shifting it to some out-of-the-way place where the assessor could be counted on to be complaisant, the tax could be evaded entirely.

Much interest attaches to the method of determining the rates of taxation on the basis of the gross receipts. In the first place it was established that the average rate of taxation on real estate and on the other property that

not been that the six years of agitation led to the partial correction of some of the underassessments. Correspondingly, the burden on real estate can be reduced by so much.

It is estimated that the taxes reserved for the State will be sufficient to meet all its requirements. If that proves to be the case, no equalization between counties will be necessary. The counties will enjoy a considerable degree of "home rule" in matters of taxation. Furthermore, the corrupting influence of politics in relation to taxation will be removed, at least so far as the great "interests" are concerned, for their taxes will be determined by a mathematical rule that obviates the necessity for any discretionary judgments by assessors or other officials.

A GLANCE AT THE WORLD'S PERIODICALS A BROAD, general, rapid survey of the to which our political capacity has sunk withperiodical literature published in the in the memory of living man." He is pervarious languages of the civilized world dur- suaded that the country recognizes the jusing the present season indicates that, while tice of the Liberal point of view, but he deprenational and local topics of interest come in cates the methods employed by the present for the largest share of attention, certain sub- government. Mr. J. L. Garvin, editor of the jects of world concern are presented and dis- London Observer, whose trenchant editorials cussed in the reviews and magazines brought have figured as one of the most important out in many different languages and at widely influences in the last two general elections in separated points of the globe. Such topics Great Britain, announces his defection from of general human concern as the constantly the government. The supreme duty of the increasing cost of living, the relations of labor hour, says Mr. Garvin, is to "break both the and capital, the adjustment and readjustment Liberal party and Mr. Redmond in order to of tariffs, the ever-mounting budgets of the save the crown from humiliation and the realm nations, relief of the unemployed, interna- from ruin." tional peace and the reduction of armament, Mr. L. J. Maxse, editor of the National various aspects of the woman suffrage ques- Review (London), has, in his issue for Decemtion, sócialism, general party politics and ber, his usual quota of vigorously worded aërial navigation-these occupy a good deal paragraphs on the situation from the antiof space in the current periodicals of Europe, Liberal, anti-German, anti-Home Rule standof the United States and Canada and of the Latin-American countries.

point. Blackwood's (December) editorially rejoices at what it calls the progress made In addition to thoroughly presenting all by Unionist sentiment. Two articles in the phases of these general subjects, the reviews Nineteenth Century present opposing views. of continental Europe are largely concerned Mr. J. A. R. Marriott berates the Unionists with the questions of emigration, of the rela- in view of the Osborne judgment. Where, he tions between Church and State, and of the asks, has British conservatism gone? Sir extension of the franchise. British period- Henry Seton-Karr unsparingly criticises icals continue to debate with more or less Chancellor Lloyd-George, and Mr. W. S. acerbity international and imperial relations, Lilly purports to find, in the philosophy of Home Rule for Ireland and the seemingly Aristotle and John Stuart Mill, a real reason endless struggle between the two houses of for the existence of a conservative Upper Parliament.

THE BRITISH REVIEWS AND THE

ELECTIONS

Chamber. Home Rule for Ireland, in the opinion of a writer in the Fortnightly who GENERAL signs himself "Outsider," is the livest issue before the British people to-day. Canon Sheehan, writing on William O'Brien and the The more serious quarterlies and monthlies Irish Center party (in the same number of the all have "leaders" on the general political Fortnightly), maintains that the Irish are situation in Great Britain. In the Contempo- beginning to discover that they must unite, rary Review (December) Mr. Harold Spender because "the best way to turn an enemy into very lucidly states the issue of the general a friend is to trust him." election campaign just closed. Will Britons consent much longer to the powers and privileges of the few over the life and labor of the many? This, says Mr. Spender, is the A noteworthy article on social conditions question Englishmen are asked to decide. in England appears in Blackwood's under the The Fortnightly (December) prints four arti- title "The Chancellor of the Exchequer and cles on the political situation. Mr. Sydney the Idle Rich, by One of Them"-referring Brooks characterizes the breakdown of the to a recent speech of Mr. Lloyd-George. The recent conference between the two houses of writer describes the work he does as a landParliament as registering "the lowest point owner and apparently makes good his claim

WHAT ENGLISHMEN ARE READING ABOUT

that a country gentleman is not necessarily Mondes continues to give us elaborate, exan idler. cellently written historical and reminiscent There are the usual number of articles on articles. Recent numbers have been made topics concerned with the emancipation of particularly interesting by a series of articles woman. Particularly noteworthy is Mr. Jo- from the pen of the well-known French writer seph Strauss' study of "Woman's Position on political economy, M. Paul Leroy-Beauin Jewry." "In ancient and modern Jewry lieu. He discusses French labor problems the position of woman is such as to command with particular reference to what he calls the the approval and admiration even of our syndicalist revolution, which he believes is modern suffragettes." Good supplementary imminent in France. That staid French reading to this article is the suggestion, inter- periodical, Documents du Progrès, semiestingly set forth in a paper by R.F.Cholmeley, on "A School for Fathers," in The Englishwoman, that ably edited review of the progress of feminine emancipation published in London, which has, during the past year, printed a good deal of scholarly, well-thought out material on the position of woman in modern society.

INTERNATIONAL TOPICS

official organ of the Foreign Office, contains an elaborate analysis (by R. Broda) on the idea of "insurance against unemployment." In the same magazine R. Simon describes the results of "collective bargaining and the conditions of labor in continental Europe." The Grande Revue thinks that "the legal minimum wage in France is too low."

Army and navy matters are discussed at length in the French reviews. General Francfort, writing in the Correspondant, maintains that the Republic needs more army officers; L. Marin (in the Nouvelle Revue) severely criticises the executive management

The English reviews are, of course, greatly concerned with international politics. Dr. E. J. Dillon, in his stimulating and comprehensive review of foreign affairs which ap- of the French navy, and Commander Davin pears each month in the Contemporary, con- (in Questions Diplomatiqués) gives an admirsiders, in that periodical for December, "The able history of the Russian navy. Colonel Chief Hindrance to a European War"-the Marchand pays his respects to British admincheck being, in his opinion, a preponderating istration in Egypt in an article in the Nouvelle British navy. In the Westminster, Mr. H. J. Revue, and, in Questions Diplomatiqués, scores Darnton-Fraser, in his article "The Danger "Turkish Pretensions in Africa," while in the Point in the Near East," joins Mr. Maxse, last-named review M. Sovue congratulates editor of the National Review, in his anti- England on the consummation of the South German preachments. "Tay Pay" O'Con- African union. An anonymous article in the nor, in his own Magazine, pleads with the Revue de Paris "booms" Brest as a transcivilized world to arouse itself on the question atlantic port. La Revue, in many respects of "Finland's Struggle for Freedom." A the most ably and vigorously edited of the strong article on "German Views of an Anglo- French reviews, has an appreciation of German Understanding," by Sir H. H. John- Tolstoy, and a long, eloquent description of ston, in the Nineteenth Century, is noticed Latin civilization by Señor Manuel Ugarte, more extensively on another page. Mr. the well-known Argentine political writer. Lovat Fraser, in the National Review, at- The editor of La Revue also, M. Jean Finot, tempts to justify the sharp tone of the has, in two recent numbers, an article on British note to Persia, made public in the emancipation of woman (he entitles it October, on the subject of anarchy in the "The Death of the Eternal Feminine”) in southern provinces of that country. The which he speaks hopefully of the woman of whole question of the Near East, as summed to-morrow, who "will have acquired virtues up in the career and personality of the unknown to us to-day, and who will show us ex-Turkish Sultan, Abdul Hamid, is graph- a new femininity which will not be a new ically and shudderingly set forth in the masculinity." Fortnightly, by two Greek writers, C. Chryssaphides and R. Lara

ESSAYS IN THE FRENCH REVIEWS

The French reviews always pay a good deal of attention to literary and historical topics. The staid and solid old Revue des Deux

STUDIES BY GERMANY'S WISE MEN

The German reviews are even more scholarly and detached from the pressing problems of the day than are the French. The heavier reviews, like the Deutsche and the Rundschau, present philosophical studies, opinions of