8

because of delays and delinquencies,' disregard of letters of instruction,' uncertainty of receipts,3 failure to furnish the Auditor of State with the certified statements, informality and insufficiency of bonds, indifference of prosecuting attorneys, and the omission of taxable lands from the lists 7 These evils, however, must not be attributed entirely to the dishonesty of officials and the absence of a central control. The period from 1819 to 1824 was one of tribulation for the people of Indiana. Fevers were very prevalent and quite fatal. Purchasers of land suffered from the collapse of speculative "booms." The prices of farm products fell to one-third or one-fourth of their former values. The failure of the Bank of Vincennes entailed a loss on many people. With all of these disadvantages, it is not strange that land-holders could not pay their taxes, and that sheriffs could not force their collection even by distress. A perfect tax administrative system would have failed under such conditions. Efforts were, however, made to improve the system. Acts enjoining the prosecution of sheriffs and their securities for failure to collect moneys due the State were passed.9 Clerks and their sureties were made liable, in case of failure to forward the certified statements, for the

1 Report of Auditor, 1823, in Spec. Acts, 1823-4, app. 122. "Not one in ten of the collectors settled their accounts at the treasury within the prescribed time." Ibid., 1831, House Journ., 1831, app. A, p. 8.

1 Report of Auditor, 1820, House Journ., 1820–1, p. 34.

House Journ., 1822–3, p. 34.

'Rep't of Aud., 1821, in Laws, 1822–3, App., p. 158; Message of Governor in House Fourn., 1823-4, pp. 15-17.

House Fourn., 1823-4, pp. 15-17.

Rep't Aud., 1824, in House Journ., 1823-4, pp. 276–7.

'Laws, 1825, p. 63.

"Indiana Gazetteer," 1850, pp. 117–121.

• Laws, 1816–7, pp. 153-4; 1819–20, pp. 78, 80; 1820-1, p. 9; Spec. Laws 1823-4, p. 115.

whole amount of the tax.' Penalties for neglect of duty by officers were increased. In order to prevent the omission of taxable lands from the lists, the Auditor of State was instructed to procure from the United States land offices a complete register and description of all lands sold within the State. Clerks of the several counties were furnished copies of the register of lands lying within their respective counties.3 The powers and duties of the prosecuting attorney were enlarged, and his interest was stimulated by allowing him 20 per cent. of all sums recovered.* Clerks were authorized to publish lists of delinquent tax-payers. With these stricter regulations and with renewed prosperity, came a readier payment of the taxes and a prompter compliance with the laws; so that we find the Auditor rejoicing that "there was but one delinquent out of sixty-three collectors for the year 1830." Henceforth, complaints on these scores grew less frequent and less serious."

2. THE EQUALIZATION Of tax assessMENTS.

Up to 1830 the chief aim of those favoring modifications of the tax law had been to prevent the loss of revenue through the delinquency of tax-payers or the defalcation of officers. During the next two decades the prime object was to correct the flagrant injustice to the tax-payers which was inherent in the imperfect method of assessing land. From 1799, the listers or assessors had been instructed to tabulate the land in three classes, according to quality and advantages of situation. The law specified the rate of taxation

1 Rev. Stat., 1824, p. 349.

Laws, 1825, 63-4.

Ibid, 1825-6, p. 68.

Ibid., 338-355.

Ibid., pp. 70-1.

Rep't of Auditor for 1831, House Fourn., 1831-2, App. A, p. 7.

'Rep't of Treas. for 1832, in Laws, 1832–3, p. 252; Ibid., 1835, Sen. Journ., 1835–6. p. 56; Ibid., 1839, Doc. Journ., House Rep'ts, p. 49.

on each 100 acres in each class. This method of assessment by local officers without any revision by a central authority, proved defective, unequal and expensive. Governor Noble, in 1833, made an earnest appeal for a modification of the system. He called attention to the unequal and disproportionate listing of lands in the several counties, to the continual variation in the quality of lands returned, and to the diminution of the first-rate land, notwithstanding the annual increase of the aggregate taxable lands. He urged as the sole remedy for these defects that a new listing and rating of land should be made every five years by commissioners appointed for that purpose,' presumably by the Governor or Legislature.

A "Limited Ad Valorem" Tax. For several years the Legislature had been considering the advisability of abandoning the specific tax on land and of substituting in its place "either a general or limited ad valorem" tax. This change was effected by laws passed in 1835 and 1836. The new tax was not a general property tax. All real property (with specific exemptions) and certain kinds of personal property enumerated in the act, were made subject to taxation at a "fair and true valuation." The rate for State revenue was fixed by the General Assembly; that for county revenue, by the county board. Few changes were made in the administrative machinery. The assessors were required to call upon every person liable for the tax, in order to obtain a list of his property and an estimate of its value. Such lists were delivered to the county clerks, who transmitted to the Auditor of State schedules of the valuation of property in their respective counties. The Auditor presented a tab1 Message, House Journ., 1833-4, pp. 14, 15.

'House Fourn., 1827–8, pp. 279–283; 1832-3, pp. 222–4.

'Laws, 1834-5, pp. 12–14, 17, 18, 20, 22; 1835–6, pp. 25, 31, 33.

'One or more for each county, appointed by the county board.

ulation of these statements to the General Assembly. The forms of the assessment rolls, affidavits and returns, were prescribed in the act. The county boards, in addition to their power to hear personal complaints relative to the listing or valuation of any property and to correct errors, had also the authority to equalize the valuation of the lands between the townships of their respective counties.'

This last provision helped to remedy the inequalities in the assessment of lands within the county; but no method was provided for correcting the inequalities among the counties. It was, therefore, quickly discerned that the easiest way for the people of any county to escape the burden of State taxes was to place a low valuation upon their property. In the second year, under the operation of the law, the Treasurer of State deplored "the imperfect character of our revenue laws in reference to assessments," and "the great carelessness and neglect" of the assessors. He estimated "the amount of revenue lost to the Treasury annually by these partial and imperfect assessments," at one-tenth of the whole amount of the actual assessments. He suggested a thorough triennial assessment "by a principal and two assistant assessors' " for the entire State. In the same year the Governor regretted the multiplication of deficiencies and declared that the errors were so manifest in the last report as to show a deficit of from two to three hundred thousand acres. He ascribed this to the mode of assessment and to the appointment of unfaithful assessors who did their duty negligently.3 The Auditor of State in 1838 pronounced the system "radically defective," and asserted

1 Laws, 1834-5, pp. 12-14, 17, 18, 20, 22. Since 1792 taxpayers had had the right of appeal from the action of the listers or assessors to some local board of review. See pages 247, 248, 250, above.

'Rep't of Treas., 1837, Sen. Journ., 1837–8, p. 44.

'Message of Governor Noble, Sen. Journ., 1837–8, pp. 28–30.

that unless remodeled, it would "ultimately beggar the Treasury." He affirmed that out of 8,337,122 acres of taxable lands there had been omitted from the tax lists in that year, 1,265,914 acres, having a value of $12,659,140.1

At the ensuing session of the Legislature, a committee of the House reported that a great inequality in the assessment value of land existed; that the committee feared there had been a wanton dereliction of duty on the part of assessors; and that there was suspicion of injustice or collusion in the assessment of lands. They recommended an inquiry into the expediency of organizing a State board of assessors, or district boards with authority and power to equalize taxation in the several counties according to the true intent and meaning of the "ad valorem" system. The only action taken was to reorganize the local boards of equalization by adding to their membership3 the county auditor and assessor, and to denounce heavier penalties upon the members of the county board for failure or neglect to discharge their duties.* Notwithstanding these changes, Governor Wallace, in 1840, asserted that the assessment of land was 2,235,906 acres less than the true amount, according to the report of the Commissioner of the General Land Office.5

Revision of the Tax Law. These repeated condemnations of the tax system at last produced some effect. Upon request of the House of Representatives the Auditor in 1840 submitted a report containing drafts of several laws designed to secure a more equitable and cheaper mode of assessing

1

1 Rep't of Auditor, 1838, Doc. Journ., 1838–9, pp. 173-4 and 187. In the following year, the quantity of land which escaped taxation was 1,446,802 acres. Rep't of Auditor, in Laws, 1839-40, App., pp. 94-5.

House Journ., 1838–9, pp. 268–270.

'See page 257, above.

Laws, 1838-9, pp. 26–28.

6 Message, Doc. Journ., 1840–1, House Rep't, p. 105.