USA > Rhode Island > Providence County > Providence > State of Rhode Island and Providence Plantations at the end of the century : a history, Volume 3 > Part 25
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1The state was credited with all advances made by it to the Union and all disbursements made by it for general defence. It was charged with all ad- vances made by the Union to it and with the $200,000 of its debts assumed by the United States. The sum allowed to the credit of Rhode Island was $3,782,974.46. The state was charged with $1,977,608.46, leaving a balance due of $1,805,366. The same principle was followed with the other states and the total balances due all the states was found to be $77,666,678. This balance was then apportioned among the states and charged back to them in propor- tion to their population. The amount charged back to Rhode Island was $1,505,755, leaving the balance above stated.
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debt. By its issue of certificates payable by itself to the bearer, and various other like acts from 1795 to 1803, by an act of 1797 paying interest on the certificates and by the issue of interest certificates re- ceivable in payment of taxes, the state seemed to recognize its legal obligation to pay the Revolutionary debt. On the contrary the state never seems to have specifically and fully assumed the principal of the debt, and claims were made that the certificates were issued because the legislature expected that the United States would make provision for assuming the debts of the states which had been left unpaid in 1791-especially as the federal constitution gave to congress the sole and exclusive power over commerce, and thus deprived the state of its revenues which had been expressly devoted to debt payment. Many of the claims were doubtless spurious, and subsequently many of them got into the hands of speculators. From time to time between 1803 and 1820 the state purchased the certificates at from 75 cents to 57 1-2 cents on the dollar, thus paying $66,053.46 for a face value of $94,753 .- 21. After a controversy lasting until 1847 the remaining sum of $43,971.19 was repudiated. Thus this portion of the state debt was practically repudiated twice-in 1787 and in 1847. It is interesting to note that when, in 1787, the paper money party was considering the state debt and the disposal of it, the report of the committee in March was printed and sent to the towns with a request that they send their deputies instructed to act with regard to it. A hundred years had passed since the referendum had been applied to a tax levy and this was the last use of it in Rhode Island. It is unpleasant to record that the result of it seems to have been at least a tacit approval of a scheme of repudiation.
Turning now to some minor forms of income, we find that the taxes on trade and commerce, consisting of taxes on traders, peddlers and auctioneers, and tonnage duties, imposts and excise, attained a greater degree of definiteness during this period, and the latter classes also became from 1783 to 1790 a source of considerable income. The tax on peddlers originating, as we have seen, in a tax on merchants and traders in 1699, was modified so as to prohibit peddlers from doing business in the state in 1713, and after various changes, beginning in 1728, became in 1750 an act taxing non-resident persons doing business in the towns the same as residents. Auctioneers had been subject to a license of two and one-half per cent. on their sales since 1719. This tax inured to the towns and during this period must have been a large source of revenue. For a few years of the Revolutionary period vendues were prohibited ; but the law was repealed in 1780.
During the period from 1713 to 1744 tonnage duties, which were primarily levied for the benefit of the fort and lighthouse, seem to have been almost if not entirely abandoned as a source of income. In May, 1744, a tonnage duty of 6d. per ton was imposed on foreign going
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vessels and 3d. per ton on coasters, the procceds to be used in maintain- ing Fort George. Immediately after the treaty of Aix a lighthouse at Beaver Tail was built at a cost of £5,213 11s. 6d. and the tonnage duties, then called lighthouse money, were appropriated to pay part of its cost and the subsequent cost of maintaining it, but they fell far short of the amount required.1
With the impost duties previous to 1783 financial history has little to do. England took the regulation of colonial trade in hand by means of acts of commerce early, but those chiefly affecting Rhode Island were the Sugar act of 1733, imposing a duty of 6d. per gallon on molasses and its renewal in 1764 with the duty reduced onc-half. Duties were levied also on other foreign goods, but the proceeds went to England.2
It appeared, however, from a protest against the revival of the sugar act in 1764, that about 11,500 hogsheads of molasses were imported annually from the French West Indies. The proposed duty at 3 pence per gallon would have yielded over £9,056 sterling. Recalling the fact that the duties of the act of 1733 were 6d. per gallon, we need not wonder at the prevalence of smuggling nor at the official connivance of it. As molasses was quoted at 12d. a gallon, such rates were a heavy burden.
The first impost act of the State of Rhode Island was passed in Feb- ruary, 1783, for the purpose of paying the interest on its public securi- ties. It provided for duties on all sorts of imported articles, some specific and some ad valorem, but mostly the latter at a rate of two and
1The duties were collected by the naval officer. The rates of duty were increased as paper money depreciated, reaching in old tenor 8s. per ton for foreign vessels, and 60s. each for coasters. Some estimate of the importance of the colony's trade can be gleaned from the reports of "lighthouse money". In the two years from August 13, 1751, to July 20, 1753, 18,914 tons of vessels trading to foreign ports and 442 coasters were entered and cleared. The duties collected amounted to f1,639 11s. In the two years from May, 1763, to May, 1765, the tonnage of foreign going vessels was 12,352 and the number of coasters was 598. The duties amounted to £5,292 11s. 8d. old tenor. The cost of maintaining the lighthouse in the same period was £6,355 5s. 8d., thus showing a large deficit, which indeed was usually the case. For the year from May 7, 1772, to May 4, 1773, 9,711 tons of foreign traders and 460 coast- ers passed into the harbor, and the income in lawful money was £176 5s. 9d. In the year from July, 1784, to July, 1785, the receipts at the four seaport towns, Providence, Bristol, East Greenwich and Newport, seem to have been about f475, and as the rates of tonnage were slightly more than two and a half times as large as those of 1772, being 8d. per ton instead of 3d. on foreign bottoms, we may conclude that the state's commerce had increased but slight- ly, if at all.
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2The point of contest between the colony and the mother country lay in the insistence by the former on its right to fix the fees of the collectors of customs appointed by England's authority, on the ground that the colony had full powers to regulate the salaries of all local crown officers. The colony had taken special pains since the first appointment of a collector in the previous century to modify his fees as often as possible, in order that its rights in the premises might not seem to lapse by a failure to exercise them.
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one-half per cent. It was an excise law as well, and levied a tax on the manufacture of cider and an annual tax on billiard tables, car- riages and dogs. The act, however, was too complex. It was repealed in June, and a law imposing a duty of two per cent. on all goods, with a provision for drawbacks on goods in transshipment, was substituted. Collectors, called intendants of trade after 1784, were elected for each county by the general assembly. They had two and one-half per cent. commission for collecting, and though required to render quarterly accounts, seem to have made reports about once in every two years. The law was amended in June, 1784, and the rate of duty increased to two and one-half per cent., and in February, 1785, some specific duties were imposed on liquors, sugar, coffee and cocoa, while the ad valorem rate on other goods was again increased, this time to five per cent. The duties seem to have been evaded and a penalty of £25 was imposed on all vessels breaking bulk or not entering their cargoes within twenty- four hours after arrival, and a discriminating and additional duty of seven and one-half per cent. was imposed on goods imported in British vessels. Although most of the increases in duties were levied for the purpose of increasing revenue-and indeed had that effect, as the amount of impost collected in the year ending May, 1785, was more than double that collected during the previous year-the evident purpose of the discriminating duty against goods brought in British vessels was more fully embodied in a law passed in the following month, entitled an act for imposing additional duties on imported goods "for encouraging the manufacture thereof in this state". This was distinctly a protective tariff and its schedules were complete. The rates on metals, goods, tools, paper, cards, hats and leather goods were 20 per cent. ad valorem, with a few very high rates on coarse grade iron products, such as 1s. each on axes. Cordage paid five per cent .; tobacco ten per cent .; ready-made garments, toys, and in general articles of luxury as well as the more easily manufactured articles, were subject to a tax of 25 per cent. Some of the rates were scarcely above a revenue standard, but when considered in connection with the cost and time of transportation they were much more protective than similar rates would now be. Various evasions of the heavy duties were attempted by importers, and among others it was a favorite device of foreign vessels to carry two sets of papers, one showing their true ownership, the other showing ownership by American citizens.
No excise law was in force subsequent to the repeal of the law of February, 1783, in June of the same year, until the act of March, 1786, the action of which was suspended at the first session of the general assembly held by the paper money party in May. But another excise act was soon passed. It levied annual taxes on liquors, teas, coffee, cocoa, sugar and lemons. Retailers were required to make semi- annual returns in May and November of the amounts of such goods
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sold and to pay the excise on them. Colleetors of excise werc vested with the same plenary powers as tax collectors. The annual taxes on carriages varied from £4 to 7s. 6d., on horses over two years old, 3s., on dogs 3s., and on billiard tables £6. Ministers, instructors in colleges, and masters of grammar schools were exempt from the cxcise on chaises and horses. These taxes were additional to the impost duties and were appropriated to paying interest on the state debt. In Deeember clocks and watehes were added to the list of annually taxable articles. At the same time the proteetive tariff act of 1785 was repealed and duties of five per cent. were imposed on all imports. Under this act for the first time the proceeds of the duties were not devoted to the payment of interest on the public debt, but were merged into the general state funds to be disposed of by the general assembly. In May, 1789, Rhode Island, commercially ostra- cized by the United States, adopted a retaliatory tariff, providing that sueh duties should be charged on the imports from other states as they charge on imports from Rhode Island, and in September a tariff act was adopted praetieally in conformity to the United States aet of 1789.
The intendants of trade, whose dutics included those previously exercised by the naval offieer and collector, were, as we have seen, first elected by the general assembly, but in 1787 the governor was vested with their powers and given power to appoint deputies to perform the actual duties of the office in the various counties and towns. It is worthy of note that the naval offieers and the deputy intendant of trade seem to have been almost if not quite the only officials appointed solely by the governor during the colonial period.
The duties eolleeted under these various aets ean only be given in the aggregate for eertain periods, as the reports do not diseriminate between imposts and excise and are otherwise not complete; a typieal year will suffice to illustrate them.1 The gross amount of duties eol- lected in the whole state from October 1, 1789, to September 30, 1790, was $20,890.84. The cost of collection was $1,150.96, and the dis- counts or drawbacks allowed were $2,064.58, leaving a net of $17,- 675.29. Assuming the state debt to have been about $700,000, the impost, if it had all been appropriated to interest payments, would have discharged about two-fifthis of the interest accruing at a rate of 6 per cent.
1From the beginning of the impost act in July, 1783, to November, 1785, the duties received at Providence amounted to £7,828, while those of Newport, from July, 1783, to September, 1785, amounted to £5,709. During the whole period from 1783 to May, 1789, the duties received at Newport and Providence respectively were £15,073 and £17,067. From some subsequent reports of delayed payments it would seem that a large portion of such duties were refunded under the drawback clause covering goods imported for use in manufactures for export. There were duties and excise collected in Bristol, Kent county, and Washington county. The amounts varied from £50 to £500 annually, averaging about £250 for all combined.
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General property taxes were levied, as we have seen, from 1744 somewhat intermittently. It is quite impossible to make an accurate estimate of the relative importance of local, state and continental taxes during the Revolution, because, in spite of the recommendations of congress to the contrary, they were ncarly always levied and col- lected at the same time, and as the tax officials were the same for all kinds of taxes, and were legally responsible for them, the arrears of a local or state tax were frequently paid from the sums collected on a subsequent state or continental tax. The state to a large extent paid the expense of its own troops, and when its funds were depleted, ap- propriated for state purposes taxes levied for continental purposes- though always with the intention of repaying the same later. The town and Island of Newport were occupied by the British forces from December, 1776, to October, 1779. The valuation of the island was about one-fifth that of the whole state and it contained about one-third of the most fertile land of the state. It was impossible to collect taxes in this district. Between 1774 and 1782 the population of the whole state decreased over 12 per cent. In 1780 taxes had become so burden- some that Governor Greene requested congress to allow the state to contribute its quotas in products raised in the state, and that its money taxes be expended as far as possible in the state in order to preserve a currency medium. Morris refused the request, as the collection and disbursement of such taxes was peculiarly subject to losses. Neverthe- less taxes were levied in products at times. In 1778 an assessment of 3,000 pairs of woolen stockings was levied and they were valued at $14 a pair. In 1781 a tax of £1,200 gold or silver was levied, payable in good merchantable ox beef fit for slaughter, to be delivered at the house of Israel Bowen in Coventry, at 40 shillings per hundred weight. Mr. Bowen received 39 cattle weighing 28,780 pounds-not quite one- half of the tax. The economic condition of the people was an insuper- able obstacle to the collection of the taxes. It is doubtful if the col- lections during this period amounted to over one-half the sums levied, and it is not improbable that during the years 1778-1781 the collec- tions did not exceed one-third the assessment. Between 1777 and 1781 £3,260,000 of paper money taxes were assessed. They were approxi- mately worth in gold £145,000 and constituted a per capita annual specie tax of about 13 shillings. In January, 1781, continental bills had depreciated to about 75 for 1 and soon after reached 200 for 1. Public accounts began to be kept in terms of coin in 1781 and taxes were therefore levied in gold and silver. During the five years, 1781- 1785, the taxes levied amounted to a little more than £144,000, or about an annual per capita assessment of 10s. 6d. The average annual tax during the war was about 60 to 80 per cent. greater than during the period of the Seven Years' War, and the economic condi-
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tion of the people during the former period was far better, the years 1760-1770 being the most prosperous decade of Rhode Island com- merec.
The system of taxation between the years 1744-1800 underwent some administrative changes, more legal changes, but most of all changes in the objects of assessment, methods of valuation and methods of state apportionment. Inseparably connected with all of them as funda- mental causes were certain phases of the political and constitutional contest between centralized government and localism typical of all Rhode Island history.
With regard to administration, it was noted in the earlier period that the change in the character of a tax from a voluntary to a com- pulsory contribution was attended by the selection of assessors, some- times by the state and sometimes by the town ; sometimes the assistants, who were state officers serving in that capacity, and sometimes other strictly local officials; sometimes receiving pay out of the tax and so from the state, and sometimes receiving pay from the town, until 1704, when three assessors, elected and paid by the locality, became regular officials. Much earlier also we saw that the constable became the regular collector, and also that though elected by the local political body, his duties were far greater as preserver of the state's peace than as pre- server of the local peace, and hence, as his pay consisted of fees and commissions, his association with, and responsibility to, the central government was close and direct. He had therefore dual responsi- bility. The differentiation of administrative methods during the present period concerns the collectors and collection of taxes rather than the assessors.
The tax laws from 1744 specifically imposed the cost of assessment and collection on the localities. By a law of 1748 the towns were au- thorized to appoint collectors of colony rates with powers accountable to the colony, "as constables have been heretofore", and in 1754 the law was amended and became mandatory instead of permissive. The importance of the change thus made, whereby the collection as well as the assessment of taxes was vested in locally clected, locally paid offi- cials, and therefore, though in theory unaccountable to the state, yet in fact wholly subject to local sentiments and having only local responsibility, was perhaps not understood at the time. It was closely associated, however, with two other important changes in the laws and methods of taxation.
We have noted that an attempt was made to remedy the inequality of the apportionment of the state taxes by "guess work" in the earlier period, through a system of taxing individuals directly, and that the attempt was a failure. The complexity of objects of taxation led to a request in 1707 to the local assessors to send their valuation lists to the
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general assembly, so that it might apportion "each town's rate in equality". Local assessors' valuations were the basis of state appor- tionments until 1762. The valuation adopted in that year was made by two local assessors, aided by two assessors appointed by the assem- bly for each town, and their returns were subjected to revision by a committee of the general assembly. Strictly speaking, this was the first state valuation ever made.
In 1748 also the towns had been vested with power to levy taxes on estates or polls or both for defraying the annual charges and paying their debts.
These three changes occurring in close sequence had important legal effects. They mark the time of the complete severance of local and state taxation. The whole field of local taxation was left solely to the towns. On the other hand, the state, which, during the earlier period, had so signally failed to evolve a system of equitable taxation, now solved the problem by practically abandoning direct taxation of indi- viduals and relying wholly on taxation of the towns as political units, by a system of apportionment made by a state board of valuation. If the state thus lost something of the always desirable close association of the governing with the governed, it gained much in simplicity of sys- tem, and though its sovereign power of taxation was much less obtru- sive to the individual, it was much more practical. These changes were normal results of a system of state taxation, which in deference to a spirit of localism had sacrificed nearly every evidence of its sover- eign origin to administrative efficiency.
The clearer definition of the scope of state activity in matters of taxation left the scope of town activity likewise much more definite. The town now stood between the individual and the state in fiscal mat- ters. The fiscal and corporate entity of the town was much more clear- ly recognized. In the earlier period the state had had, and had at times exercised, its rights of legal process against local assessors and collectors when the towns were delinquent. Such methods were now also abandoned and the town treasurer, as the legal representative of the financial corporation, became the official against whom the state proceeded when the town officials failed to assess a tax or the town failed to pay its assessment. This method of procedure was embodied in the tax law of 1777. The spirit of localism was thus emphasized in another way. Such emphasis was an important matter when, instead of an individual complaint of over taxation, a whole town felt itself aggrieved and appointed itself judge of the justice of its cause.
The discussion of taxation, therefore, shifts to methods of valuation and apportionment, and for a proper understanding of this phase of the question the reader must keep in mind the peculiar force of the landed franchise as an expression at once of primogeniture and of the
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persistence of the power of the landholder in government, and espc- cially the contest between Governors Ward and Hopkins for political supremacy, then at its height-a contest the more intense because it concerned not principles but persons. Mr. Hopkins's home was origi- nally in Scituate and later in Providence. Mr. Ward belonged in East Greenwich. In the state valuation of 1761, adopted in 1762 when Hopkins was governor, woodland was assessed at one-third its value, improved real estate at twelve years' rental, livestock and negroes at full value, trading stock and moncy at one-half value, and vessels and cargoes at sca at one-third value. Aside from the much greater diffi- culty of assessing trading stock and money than in assessing livestock and negroes, and the consequent evasion of the former, there was evi- dent injustice in the scheme which taxed the floating capital of farmers, consisting of livestock, at full value, while taxing the floating capital of merchants consisting of trading stock and money at one-half value.1 The country towns protested against the bill, but it was passed. Mr. Ward was elected governor at the ensuing election. In 1763 and 1764 taxes were levied in accordance with this valuation, but in 1765 and 1766 some changes were made whereby heavier propor- tional taxes were laid on some towns in Providence county, the home of Mr. Hopkins, than before. The towns refused to assess the taxes, claiming that they were neither lawful nor just. The state began suit against Scituate, but offered to settle on payment of the taxes and costs and make a new apportionment and valuation; if the town then ap- peared to have been overrated the excess was to be refunded with interest; if it appeared to have been underrated the town was to pay the excess with interest. Scituate refused to accept those terms and the state was powerless to coerce it. At the next election Mr. Hopkins and his party returned to power, and although twenty-seven members of thic legislature protested and declared that "the general assembly are the only supreme judges of taxation in this colony", and that other towns led by this example may "refuse to pay obedience to the acts of the general assembly", it was voted that Providence, Cumberland and Scituate proceed to levy and assess the last two taxes according to the apportionment of 1762. The amounts gained by the three towns in the two taxes were £235 and £112, respectively. These sums were assessed on the other towns of the state with legal interest added.
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