hundred and ninety-six, and until the election and qualification of their successors. The Governor and Lieutenant-Governor elected in eighteen hundred and ninety-one shall hold their offices until the sixth Tuesday after the first Monday in November, eighteen hundred and ninety-five, and until their successors are elected and qualified. The Governor and Treasurer elected in eighteen hundred and ninetyone shall be ineligible to the succeeding term. The Governor elected in eighteen hundred and ninetyone may appoint a Secretary of State and a Commissioner of Agriculture, Labor and Statistics, as now provided, who shall hold their offices until their successors are elected and qualified, unless sooner removed by the Governor. The official bond of the present Treasurer shall be renewed at the expiration of two years from the time of his qualification.

Fifth All officers who may be in office at the adoption of this Constitution, or who may be elected before the election of their successors, as provided in this Constitution, shall hold their respective offices until their successors are elected or appointed and qualified as provided in this Constitution.

Sixth: The quarterly courts created by this Constitution shall be the successors of the present statutory Quarterly Courts in the several counties of this State; and all suits, proceedings, prosecutions, records and judgments now pending or being in said last named courts shall, after the adoption of this Constitution, be transferred to the Quarterly Courts created by this Constitution, and shall proceed as though the same had been therein instituted.

ORDINANCE.

We, the representatives of the people of Kentucky, in Convention assembled, in their name and by their authority and in virtue of the power vested in us as Delegates from the counties and districts respectively affixed to our names, do ordain and proclaim the foregoing to be the Constitution of the Commonwealth of Kentucky from and after this

date.

Done at Frankfort this twenty-eighth day of September, in the year of our Lord one thousand eight hundred and ninety-one, and in the one hundredth year of the Commonwealth.

The new Constitution of Kentucky given in the preceding chapter has proven, in the main, acceptable to the people, but there is an exception which has been the subject of much discussion-the system of taxation which has been characterized by high authority as "one of the crudest and most defective systems" in all the States. The system under which Kentucky labors known as the "general property tax" or "uniform advalorem tax" provides that every species of property visible or invisible, real or personal, must pay an annual tax at the same rate to the state, to the county, and to the city, based on its cash value. This is without regard to the income which it produces, or to the benefits which it derives from public improvements made out of the revenue raised by taxation and without deduction for debts owed upon any property or for any personal indebtedness of the taxpayer. It is, in brief, a tax on the gross assets and not on what the taxpayer actually owns in his own right. The result is that it paralyzes effort and is doubly hard on the poor man whose property, as a rule, is in such form that it cannot escape taxation, whereas the invisible and intangible property of the richer man does escape taxation.

The system is inequitable and unfair. So high an authority as the supreme court of the United States has condemned the system as "destructive of the principle of uniformity and equality in taxation," stating with emphasis: "This court has repeatedly laid down this doctrine."

A State State Revenue Revision committee through its chairman, Judge Cammack, in 1896, made this report: "After gathering together the revenue laws of nearly every state and territory we were astonished to learn that Kentucky possessed one of the crudest and most defective revenue systems of them all. Our laws relating to the assessment of property and the collection of taxes are abominable." The Taxation Revision committee, in 1909, pointed out, with great clearness and force, the injury the system is working to the commonwealth, and the absolute need of a change, indicating the method by which it could be effected. The report of the commission was approved by the governor, the lieutenant governor, the attorney general, the president of the State Farmer's Institute, by the leading business men of the state, and by the most prominent lawyers, one of whom had been a member of the constitutional convention which had inaugurated the system. The state senate acted upon the suggestions of the commission and, by a unanimous vote, adopted an amendment to the 171st section of the constitution, with a view to changing the system. of taxation to one which should give equal and exact justice to the taxpayers, rich and poor alike. The senate also adopted a resolution providing for the appointment of a tax commission of eleven members, six from the house and five from the senate, with the president of the latter body and the speaker of the house, as ex officio members, whose duty it

should be to thoroughly investigate the system of taxation and report the result of their investigation.

For some inexplicable and indefensible reason, the house of representatives refused to concur in the action of the senate. By a vote of fifty-three in the negative, to twenty-five in the affirmative, the house declined to submit to the people, who are popularly supposed to be supreme, the amendment adopted by the senate. Twenty-two members of the house, through absence or otherwise, were not recorded as voting upon the proposed amendment, the most important subject, then and now, upon which the general assembly is called upon to vote. For this failure to safeguard the interests of their constituents, the people themselves are equally to blame with their representatives. Until better men, more representative men, are elected as members of the general assembly, better laws will not be enacted. So long as the best men of each of the parties remain away from the primaries or conventions, leaving the choice of their representatives to the professional politician, so long will mediocrity rule in the legislature. There are honorable exceptions in a few counties, but these send not enough leaven to leaven the whole loaf.

Comparison of the Kentucky system with that under which other states prosper, is proof conclusive of the need for a revision of the tax laws of the state. From the Lexington Herald, the following statistics are obtained: "Taking Fayette county as an illustration, the tax on each hundred dollars' worth of property is fifty cents for the state tax, fifty cents for the county tax, and one dollar and seventyfive cents for the city tax, a total of two dollars and seventy-five cents, irrespective of the tax-producing quality of the property assessed.

"In all the counties of the state the state tax is fifty cents, the average county tax from thirty to fifty cents, and the average tax in

the cities is from one dollar and fifty cents to one dollar and ninety cents, a total of from two dollars and a half to three dollars on the property of those who reside in cities, and from eighty cents to a dollar or more on those who live in the country. All the property in Fayette county which is assessed pays taxes at the rate of one per cent. All the property in the city of Lexington pays taxes at the rate of two dollars and seventy-five cents."

For comparison it may be stated that in Pennsylvania there is no state tax whatever. In Allegheny county, in which is situated the city of Pittsburg, the county tax is twentyseven cents on the hundred dollars. In Pittsburg the city tax is one dollar and twenty-five cents, and there is no state or county tax upon the property within the city limits. In Maryland the state tax is sixteen cents on the hundred dollars on real property. In Lexington, Kentucky, the state, county and city tax on manufactories is two dollars and seventy-five cents on the hundred dollars. In Pennsylvania there is no tax upon factory business, but a local tax on the real estate only as on all other real estate. The result is that in a decade Pennsylvania increased the output of her factories five hundred million dollars per year, and is now producing two thousand million dollars per annum, figures so startling as to be almost beyond belief. The total output of all factories in Kentucky, according to the last available report, is about $160,000,000 per year, about one-half of which is produced by factories in the county of Jefferson. Yet there are men biennially elected to the legislature of Kentucky who cannot see that the taxing system is a bad one, or that it is their duty to take steps for its improvement. Kentucky should be a great furniture, automobile and carriage manufacturing state, yet the timber cut from her yet-remaining great forests goes to Michigan, Indiana, Ohio and other more distant states, to be manufactured, and then shipped back here to be bought by the

people who formerly owned the timber and by those who would themselves be manufacturers did the laws of the state offer them encouragement. Under which system would the state receive the longer revenues-the system such as prevails in Pennsylvania or such a system as that which retards advancement in Kentucky? Pittsburg alone pays local taxes on $500,000,000 in round numbers, which almost equals the value of the property assessed for taxation in the entire state of Kentucky.

Merchants in Kentucky cities are required to pay taxes aggregating from two and onehalf to three per cent of their gross assets. In Pennsylvania there is a license tax to the state, only requiring a wholesale merchant to pay fifty cents on each thousand dollars of sales. The result is that an immense jobbing and wholesale business has been built up in every section of Pennsylvania, many cities in that state doing as much wholesale business as is done by all the wholesale merchants of Kentucky outside the city of Louisville. In St. Louis, merchants and manufacturers pay a city license tax of one dollar per thousand dollars of sales per annum. It is universally recognized by those who are capable of giving the matter any thought at all, that a tax based on the volume of business transacted, is the fairest, because it is not only accurate but is paid.

In Kentucky capital in banks, savings institutions and all free capital on deposit, whether bearing interest and thereby producing income, or not, pays taxes amounting to two and one-half to three per cent per hundred dollars. In Pennsylvania, it pays forty cents on the hundred dollars to the state only. As a result a recent report of the state auditor of Pennsylvania, shows that the revenue to the state from banks, trust companies, etc., was $1,631,615, an increase in one year of $280,000. The revenue from other personalty at forty cents on the hundred dollars was

nearly six million dollars and one can readily understand why, in closing his report, the auditor should say: "The revenues of the state appear to be ample. I deem it hardly necessary to suggest anything new to produce revenue." Kentucky could do as well under a like system but would, of course, collect a far smaller sum than Pennsylvania, for a less sum would be needed.

In Maryland the specific tax on interestbearing securities is for city or county purposes, thirty cents on the hundred dollars; for the state, sixteen cents on the hundred dollars and this produced for the state, $460,000 in a single year. In Kentucky cities, with a tax rate of from two and one-half to three dollars on the hundred dollars, much of the tax is not collected, the inevitable result of such burden being that property is either put into non-taxable securities or is hidden. In Kentucky it is difficult for administrators, executors and trustees to make investments in securities which will meet the requirements of the courts and produce any reasonable income for the benefit of their trusts. It is impossible for them to do so, if the securities in which they invest are required to pay the onerous tax levied under existing law. The result is that widows and orphans whose assets are in the hands of trustees, who must make annual settlements with the courts, revealing the securities in which those assets are invested, pay an unreasonable proportion of the taxes. Under the laws of Kentucky mortgages on real estate are taxed at the same rate as the property mortgaged, which is double taxation of the most unjust and burdensome kind.

The west has been built up and made rich and powerful by eastern capital borrowed on mortgages for the improvement of farms and public development, and in those states only the land or the mortgage is taxed, never both, as in this state. The state of Louisiana, by recent amendment of its constitution, imposes no tax whatever upon mortgages on property