President Benjamin Harrison on the obligations of wealth (1898)
General Harrison addresses a large gathering at Chicago
The Union League Club’s celebration in honor of Washington
The ex-president emphasizes the need of reforms in our tax laws, suggesting that men of wealth and the managers of great corporations should come forward and take the lead in these reforms
Chicago Feb. 22  — Ex-President Benjamin Harrison spoke today at the Auditorium at the central meeting of the annual celebration of the Union League Club in honor of Washington. All the historical and civic societies of the city were fully represented. Among the distinguished guests of the Union League Club present at the meeting were Dr John H Finlay, President of Knox College; General John A Palmer, Major-General John R. Brooke, former Governor Richard J Oglesby and Charles W Smith of Philadelphia. The Apollo Club of 400 voices furnished the music.
President Benjamin Harrison: The obligations of wealth
Ex-President Harrison’s subject was “Obligations of Wealth.” He said:
“Monuments and birthday anniversaries should be commemorative of the virtues that are still imitable. Scientists have reproduced some of the gigantic animals and reptiles of the world’s early history. We look at them with fear and wonder, and congratulate ourselves that they are extinct types. We have no needs that they could supply. They could not live in our environments nor we in theirs. So there have been among men monsters of power and violence. We cannot forget them, but we are glad they lived in another epoch. The almanac maker notes their birthdays, but there are no assemblages of the people. If monuments have been built to them, they are liable to be overturned when the dynasty changes or the commune supplants the State.
“But there are men who have so won our hearts that we would recall them if we could. We feel the need of them. No change of dynasties, no outbreak of the mob, threatens their monuments. One can hardly conceive of any civil revolution or any riotous outbreak in our country that would not respect the monuments of Washington and of Lincoln.
“While they lived, they were at times hated by men and by communities, but when the full stories of their lives were unfolded, when motives and purposes were explored, when the universal beneficence of their public services was seen, in the establishment by one and the rescue by the other of free constitutional government, all their countrymen rendered them homage.
President Benjamin Harrison’s tribute to Washington
“We assemble on this anniversary of the birth of Washington not so much, if at all, to bring tribute to him, as to learn at his feet the lessons of a conscientious citizenship. The imitable qualities of Washington’s character and life, those that did not exhaust themselves on a locality or a period; that are instructive not only to military commanders and chief magistrates, but to the unofficial citizen; the lessons that he taught, not for the march and battle, but for quiet days when no drum beat calls to duty — these are the qualities and lessons that should engage our thought today.
“In choosing for my theme ‘The Obligations of Wealth,’ I am not wresting this anniversary from its legitimate use. We do not need to forget — indeed, we cannot forget Washington, when we reflect upon our obligations to the State. His life teaches no lesson more strongly than that the citizen is under obligation to serve the State; never to shirk his full share of burden and labor and sacrifice, but rather to do more.
“The word ‘wealth’ in its modern use has suffered a limitation if not a perversion. Originally and strictly it means weal or welfare, external happiness. When Paul admonished the Corinthian Christians ‘Let no man seek his own, but every man another’s wealth,’ he was not anticipating the modern law of the wheat pit and the stock exchange.
“Wealth is a comparative term, and my address is not for that very limited body of multi-millionaires, called by the Populist orators ‘plutocrats.’ A smaller audience chamber would have sufficed for them, and perhaps the orator should have been of the guild. I want to speak of the obligations of the ‘well-to-do’ people, the forehanded, prosperous men and women of our communities, whether their estates are reckoned by thousands or by millions.
“We live in a time of great agitation, of a war of clashing thoughts and interests. Men, no longer satisfied with what appears above ground, are uncovering roots. There is a feeling that some men are handicapped, that the race is sold, that the old and much-vaunted equality of opportunity and of right has been submerged. More bitter and threatening things are being said and written against accumulated property and corporate power than ever before. It seems to many that, more and more, small men, small stores, and small factories are being thrown upon the shore as financial drift or wreckage; that the pursuit of cheapness has reached a stage where only enormous combinations of capital, doing an enormous business, are sure of returns.
“The seams which mar the face of the social landscapes seem to be widening chasms, and if these gulfs are to be filled we must establish dumps on both sides of them. It will aid the work if those on either side use the bridges to get a view of it from the other side.
“Wealth should neither be the object of our enmity nor the basis of our consideration. The indiscriminate denunciation of the rich is mischievous. It perverts the mind, poisons the heart and furnishes an excuse for crime.
“No poor man was ever made richer or happier by it. It is quite as illogical to despise a man because he is rich as because he is poor. Not what a man has, but what he is, settles his class. In the discussion of all these social questions good temper is essential. Men must get together and use facts, not rhetoric.
“The special purpose of my address today is to press home this thought upon the prosperous, well-to-do people of our community, and, especially, of our great cities; that one of the conditions of the security of wealth is a proportionate and full contribution to the expenses of the State and local governments. It is not only wrong, but it is unsafe, to make a show in our homes and on the street that is not made in the tax returns.
President Benjamin Harrison: Equality is the golden thread
“Equality is the golden thread that runs all through the fabric of our civil institutions — the dominating note in the swelling symphony of liberty. Equality, not of conditions, not of natural endowment, but of rights, is the foundation stone of our Governmental structure. And as a corollary, necessary and imperative, to this doctrine of an equality of right, is the doctrine of a proportionate and ratable contribution to the cost of administering the government. The duty of the State to protect life, liberty and property is conditioned upon a fair contribution to the cost of government. A full and conscientious discharge of that duty by the citizen is one of the tests of good citizenship. To evade that duty is a moral delinquency, an unpatriotic act.
“If we do not hold by this rule of proportion, which I think is an essential part of the definition of taxes, then everything becomes subject to the whim of the Legislature. The whole revenue of a State may be derived from contributions exacted from a very small minority of its population, the majority going free. To allow such a system is not only to rob the minority thus unduly burdened, but is to rob the State of that which is essential to its healthy existence, and, indeed, to the life of republican institutions. Honesty and carefulness in public expenditure will have no effective watchers. The watch of the minority will be ineffectual, and the majority will be careless as to the use of funds, to the accumulation of which it has not contributed.
“For very many years an opinion has been prevalent that the great bulk of the personal property of the States, especially of the class denominated ‘securities,’ including stocks, bonds, notes, mortgages, and such like, has escaped taxation. With a very few exceptions, the great fortunes in this country are invested in such securities. The delinquency appears to be located largely in our great cities. Recent investigations of students of political science, and recent tables prepared by State officials, have disclosed an appalling condition of things. The evil seems to have been progressing until, in some of our great centers of population and wealth, these forms of personal property seem to have almost eliminated from the tax list.
“In New York State, the proportion of personal property assessed for taxation is only about 1 percent of the total amount of property taxed. Yet Controller Roberts of that State expresses the opinion that the taxable personal property owned in the State is at least equal to the amount of real estate. Illinois and many other States present the same conditions, differing only in degree.
“It is easy to see how this offense against patriotism has grown to such proportions. The very sense that inequality is injustice has promoted it. One man sees that his neighbor is not making a conscientious tax return, and that if he returns his property honestly he will pay disproportionately. The result is that his conscience finds a salve in the saying ‘everybody does it.’
“It is probably also true that under the tax laws of many of our States double taxation results, and taxpayers take it upon themselves to remedy this defect in the law, not by the methods prescribed in the Constitution, but by leaving off from their tax returns such stocks and securities as they suppose to be taxed in other States.
“Taxes are a debt of the highest obligation, and no casuist can draw a sound moral distinction between the man who hides his property or makes a false return in order to escape the payment of his debt to the State, and the man who conceals his property from his private creditors. Nor should it be more difficult to follow the defaulter in the one case than in the other. If our taxes were farmed out to an individual or to a corporation they would be collected as fully as private debts are now collected. There would be a vigilant and unrelenting pursuit. The Civil and criminal proceses of the law would be invoked with effect, just as they were against fraudulent debtors under the bankrupt law.
“When to this enormous and crying evil is added the corruption which it is alleged has characterized the appraisements of real estate, we have a condition of things with which we dare not palter. We must inaugurate, and at once, a system that shall equalize tax burdens. The men of wealth in our great communities should lead the movement. This great club, organized as a rallying center for loyalty and patriotic citizenship, should hear a call as loud and imperative as that which came to it during the years of the Civil War.
President Benjamin Harrison on a sense of inequity
“Mr. Lincoln’s startling declaration that this country could not continue to exist half slave and half free may be paraphrased today by saying that this country cannot continue to exist half taxed and half free.
“This sense of inequality breathes a fierce and unmeasuring anger — creates classes, intensifies social differences, and makes men willing to pay their debts in half dollars. The just sacredness of these money obligations, the right of the holders to be paid in money of full value, will be clearer to these angry men if they see that these securities are paying fully their lawful taxes.
“There is the moral distinction between the act of putting one hand in his neighbor’s pocket and clandestinely abstracting his pocketbook, and the fraudulently shifting of a debt that I owe to another?
“If there is not enough public virtue left in our communities to make tax brands discreditable; if there is not virility enough left in our laws and in the administration of justice in our courts to bring to punishment those who defraud the State and their neighbors; if crimes of fraud may stalk unrebuked and unpunished in our streets, how long will it be until crimes of violence make insecure the fortunes that have refused to contribute ratably to the cost of maintaining social order?
“The failures which have accompanied, in an increased ratio, the attempt to collect the personal property tax, have led many tax reformers to favor its total abolition, and the substitution of other forms of taxation. The failure of the wealthy holders of these intangible securities to pay their just proportion of the cost of government has stimulated a demand for special forms of taxation and for progressive taxation, with a view in some measure to recoup to the community the losses which are inflicted by evasive or fraudulent tax returns. These efforts should serve as a warning. The people will not consent that this state of things shall be accented as a permanent condition. If we are to leave no taxes save such as in their nature necessarily exclude concealment and bribery, what tax will remain? If we admit the disgraceful conclusion that the state of public and private morals has become, such in our country that the wealthy may not be brought under the law and compelled to yield it reverence and obedience, have we not confessed the failure of republican institutions?
“Before the adoption of the Constitution, when each State made its own tariff laws, the power to levy imposts was practically nullified by the competitions between the States. They underbid each other in the competition between their ports. The solution was found in confiding the tax upon imports wholly to the National Government. In a measure the same embarrassment is now being felt in the framing and administration of the tax laws of the several States. Real or simulated changes of residence are made from one State to another, with a view of finding the most favorable tax condition or the most pliable Assessors.
“It is not easy, however, to see how a federal control of these questions can be established. The States are not likely to surrender such important powers to the National Government. It is more than questionable whether New Jersey and Connecticut, for instance, could be induced to forgo the inducements which their tax laws, or the administration of them, may offer to wealthy New Yorkers.
“Yet I think it would be quite well to assemble a convention of Tax Commissioners from all the States to discuss this intricate and exigent problem. Possibly some general principles might be agreed upon that would remedy the just complaints of double taxation, especially in the case of corporate properties and securities.
“I do not believe that it is impossible so to stir the consciences of our people, so to stimulate the independence and courage of our Assessors, and of our courts and prosecutors as to secure a fairly general enforcement of the personal property tax. I know that men hesitate to call a neighbor to judgment in this matter. We have too much treated the matter of a man’s tax return as a personal matter. We have put his transactions with the State on much the same level with his transactions with his bank, but that is not the true basis. Each citizen has a personal interest, a pecuniary interest, in the tax return of his neighbor. We are members of a great partnership, and it is the right of each to know what every other member is contributing to the partnership, and what he is taking from it. It is not a private affair; it is a public concern of the first importance.
“Perhaps there should be a general proclamation of amnesty, and a fresh start. We should discard these old notions, and, wiping the slate off, proclaim a tax renaissance. Every agency that deals with public and social questions should lend its help. The Grand Jury should be charged to investigate and to indict the delinquents. Returns and assessments must be honest. If there are inequalities in the law, they must be remedied by legislation, and not by the usurpation of the individual.
“I think we must assume that there are very few, if any, of our States prepared to consent to the abolition of our personal property tax. As a supplemental tax, levied within the requirements of equality and uniformity, a succession or inheritance tax may be well enough, if the State Constitution permits it; but the principle of progression, a higher rate for large estates, seems to me to be inconsistent with that rule of proportion and equality which should characterize all taxation. The practical question, the one our people must solve, and solve speedily, is the enforcement of the personal property tax and the equalization of real estate assessments. Perhaps the State might declare and maintain an estoppel against the claim of any man or his heirs to property, the ownership of which had been disclaimed in the tax returns.
“It is not within the purpose of this address to propose in detail the needed reforms in our tax laws, but rather to emphasize the need and to suggest that our men of wealth and managers of our great corporations should themselves come forward and take the lead in these reforms; that they should not only show a willingness, but a zeal, to bear their full proportionate share of all public burdens. If they do not, the sense of injury is so strong that ways will be found to exact more than is equal. To do justice is the best safeguard against injustice.”
Image below of General Benjamin Harrison, “Come on boys!” — Battle of Resaca, May 13-16 1864