In Australia the same thing prevails, and all this for municipal purposes. But in order that I may not take up too much time, and at the same time state what I think is most important in connection with this, I ask the privilege of reading to you the system that prevails in what I consider, and I think any student of municipal government will agree with me, the best governed city in the world-the City of Glasgow-which is in itself almost an exact copy in every particular of the municipal taxation that prevails throughout Great Britain, and not only throughout Great Britain, but almost entirely throughout every British colony except Canada. The statement that I am to make is an official one signed by the Assessment Commissioner of the City of Glasgow, whose acquaintance I have had the honour to have for a number of years past and who has very largely interested me in the unfair manner in which we in this country have been assessed when compared with the more equitable mode that has prevailed there. Their system entirely removes what has been objected to by every gentleman who has spoken, that is, the inquisitorial feature, and proceeds upon what I maintain is the correct system of local taxation-a tax based upon the service rendered by the municipality to the person taxed. I may say that the reputation of Mr. Henry, the Assessment Commissioner of Glasgow, is so great in Great Britain that the Committees of the House of Commons all take his valuation without any question upon any subject of the kind.

(Mr. ALLAN then read the documents in APPENDIX A, No. 4.)

Mr. ALLAN: That, gentlemen, is the system that obtains not only in Great Britain but throughout the British colonies the wide world over except Ontario; and are we to remain in that condition here? Now, how fairly this has been done, I can prove to you by the statement made by Mr. Henry when I was in Glasgow not long since, in which he says that the number of annual schedules sent out-of which I have a copy here showing how simple they are- was about 200,000. Upon these annual assessment is made, one being sent to the tenant and the other to the owner. These must agree or else there would be evidence that something was wrong; bat of 200,000 sent out in the City of Glasgow with the assessment fixed by the As-essor in the first instance there were only 125 appeals, and of that 125, 50 were settled to the satisfaction of the appellants by a personal conference with the Assessor, so that of the total number of 200,000 only 75 went before the Sessions to be adjudicated upon-which is a pretty positive proof that the system that prevails there is considered reasonably fair. Then in addition to that it gets rid entirely of the inquisitorial system that is felt to be productive of such bad results, as already quoted to you regarding the United States and in a milder form regarding our neighbouring City of Hamilton. You can see that the result of such a system upon the morals of our people is totally subversive of all that is good and true. In addition to that, as has been pointed out by Mr. Brock, how is the trade of any city to thrive under conditions hampering them to the extent it has been shown that we are hampered when compared with our competing cities of Montreal and Winnipeg? Another point that I do not think has been brought out is this: it has been assumed by each speaker that the amount of taxes one pays is simply the amount that is shown by the tax paper that is presented. I maintain that Mr. Brock as a large employer of labour pays more taxes than he has quoted, because in addition to what he pays directly, the employment that he gives to several hundred people, certainly a proportion of that goes into the taxes of the city; so that being placed at such a disadvantage, it should be reconized that such men are really a benefit, and should be encouraged accordingly by having their tax rate placed upon a more equitable basis.

The CHAIRMAN: Is there anyone else representing the Toronto Board of Trade? Mr. KEMP: Mr. Elias Rogers was in the room but he told me he wanted to go to his office. He wanted to say he quite endorsed all that had been said by the other representatives of the Board of Trade, and moreover his views are briefly before you in the document which I handed to you. There are representatives of the Board of Trade herr, though, who feel that the ground has been covered and they would not desire to take up the time unnecessarily.

The CHAIRMAN: I would like to ask you if you had any suggestion to make as to the precise improvement of the law or the change of the law which you think would ment the difficulties which you have laid before us, because that is one part of our duty, to suggest amendments to the law.

Mr. KEMP: If it is thought necessary by the civic officials to substitute for the personalty tax another form of personalty tax, the Board of Trade, representing the indus trial and mercantile interests in the city, would be willing to have a tax based on rental values similar to that which existed in Montreal.

The CHAIRMAN: To be regarded as a business tax?

Mr. KEMP: To be regarded as a business tax, not to interfere in any way with the real estate or property taxation.

The CHAIRMAN: It would be similar to that in Glasgow and Montreal. stand that that is the kind of tax that is applied in Montreal and Winnipeg?

Do I under

Mr. KEMP: Winnipeg is very similar to that in Montreal. The difference between Winnipeg and Montreal is that the wholesale merchant is taxed on the floor space of his warehouse, three cents a square foot. The manufacturer pays 10 per cent. on the rental value of the premises occupied. The retail merchant pays 8 per cent. of the rental. The retailer in Montreal pays 7 per cent. of the rental value.

The CHAIRMAN: Has your board considered that as one method that would be satisfactory?

Mr KEMP: Yes, the question has been discussed by them, and they took the ground that if it is necessary to have a tax to take the place of the personalty tax, but they are willing to take the Montreal system.

The CHAIRMAN: The Montreal system, which is different from that of Winnipeg? Mr. KEMP: A little. The Winnipeg system is a little complicated because it distinguishes between retail and wholesale and manufacturers.

The CHAIRMAN: And perhaps has not been in existence long enough to determine exactly its working?

Mr. KEMP: No, but I think complications will ultimately arise out of that system in Winnipeg.

The CHAIRMAN: The Montreal system has been in existence for considerable time? Mr. KEMP: I think a hundred years.

The CHAIRMAN: The Commission may take it that the Montreal system is satisfactory?

Mr. KEMP 7 per cent. of the rental value as adjusted here would meet the views of those whom we represent here to-day, and would do away with all those vexatious questions that we speak of.

Mr. WILKIE: You refer only to municipal taxation as regards cities. That same system would not apply to country places, I suppose, and farm property.

Mr. KEMP: No, we are referring to municipalities; we never considered the farm. Mr. R J. FLEMING, Assessment Commissioner for Toronto: Municipalities have the power now to adopt that law.

Mr. CALDECOTT: I understand that 3% of the present business would represent more than the present system on personalty, but we say up to 71% if need be.

Mr. FLEMING: Municipalities have the right to adopt that tax if they feel disposed.
Mr. WILKIE: In lieu of the other?

Mr. FLEMING: Yes, sir.

Mr. KEMP: There is a member of our Board of Trade here who resides in Brantford, Mr. Cockshutt, if you would like to hear him.

Mr. W. F. COCKSHUTT (Brantford): Gentlemen of the Commission, I will not occupy your time more than a few moments with anything that I have to say.

The CHAIRMAN: We shall not hurry you, take all the time you desire.

Mr. COCKSHUTT: The ground has been very well covered by my colleagues of the Toronto Board of Trade. Of course, representing a town smaller than Toronto, the conditions are somewhat different; and though Mr. Caldecott endeavoured to show to a large extent, that addition were made in one direction, I have known of them in smaller places being made also in another direction. I have known a man returning too great an assessment. I wonder that some wholesale gentlemen who are giving credit on a considerable scale to the retailers have not discovered that point. I have known of merchants that have kept up their tax until they were in the hands of the bailiff. They have been paying taxes sometimes on 10 or 12 thousand dollars when actually if their debts were paid they were worth less than nothing. This was done in order that the trade records might show that they have a pretty good standing, and that our wholesale concerns in Toronto

"

and Montreal and other large centres should not shut down upon them. So it shows the law may be evaded in both ways, but it has been evaded much more largely in the direction Mr. Caldecott stated. I think that the basis which our President, Mr. Kemp, has laid down would be a fair and equitable basis, that is rental value. How much that should be will be a matter to be calculated. In a city such as this, it might vary from the smaller towns and cities and the country districts; but an equitable system would appear to be the rental value. Where the proprietor owns the premises he is in and it is not rented, a fair rental value could be calculated on the capital invested in the building and the ground. That would be, I think, a fair and equitable way. But it must present itself, I think, to the minds of every gentleman of the Commission that the present system is totally unjust and quite inequitable in its workings. Now, we could wish as business men that we could look our assessors in the face and tell them exactly what we are worth and what we should be assessed for; but we know a man doing business on his own capital, say he has $20,000 put into goods, the proper amount he would pay on that whole $20,000 would be $400 taxation. His neighbour may be doing an equal business with an equal stock but when the assessor comes in he says, "This is the property of the merchants from whom I buy, I am not worth anything;' so one man pays $400 and the other man pays nothing or next to nothing; but that is the way the present Act works and it does not allow them to state that exactly the way we should. As Mr. Brock stated, no merchant wishes to misrepresent, and we do not wish to send it out to the world that merchants are practically deceiving the assessor or anyone else at the present time; they are desiring to pay a fair and equitable assessment, we do not wish to avoid pay. ment; that is not the wish of the citizens of Toronto as represented by the Board of Trade; it is not the wish of Brantford nor any other town, I think, to avoid a fair and equitable assessment We know they are necessary but what we wish is that they may be levied in such a way that they cannot be successfully evaded to any great extent and that each man should pay in proportion to the value received. I think that is a fair way. Now, another thing that a merchant may do: He may have $20,000 employed in his business which may bring him a net revenue of $2,000 per annum, but under the present law if he returns his whole $20,000 and is assessed $400 his neighbor, a lawyer or a physician—and I know lawyers and physicians are honourable men—makes his $2,000 but he has nothing in sight except his books and his small office, and nothing in sight taxable, but he pays 2% on an income which would be $40, while the merchant with exactly the same income pays 2% on bis principal, so that if he has made $2,000 in his business, when he gets his taxes paid he has $1,600 left for himself and family to spend, while the lawyer or physician, making exactly the same income, when he has his taxes paid he has some $1,960 for the benefit of himself and family. Therefore we say it is inequitable, and if a further tax were necessary I think after the rental value had been passed then the income tax having regard to what has been received is also a fair basis; but I think, as has been shown by Mr. Caldecott, that a tax on rental value would be quite sufficient. I believe every merchant would be quite ready and willing to show his books and everything would be satisfactory, but no man knows exactly what he is worth; he has certain book debts and certain debts outstanding, and many a merchant has been deceived into believing that he is worth much more than he is, or others may undervalue him. Now if it was on rental values or on incomes that would be definitely understood and no evasion could take place and I believe it would put a premium not on dishonesty but honesty, and I think that would be a fair and equitable way of regulating the matter so far as mercantile interests are concerned.

(Commission adjourned from one o'clock till 2 o'clock.)

The CHAIRMAN: I notice there are some other gentlemen wishing to address the Commission.

Mr. CHARLES E. STONE (Toronto): I was waited upon last week by some members of the Single Tax Association, to ask me if I would come here to address you upon the subject to day.

The CHAIRMAN: On the subject of single tax?

Mr. STONE: No, sir, upon the subject that is before the Assessment Commission to-day -the most equitable method of assessing stock in trade and other property. I am connected as accountant with Michie & Co., one of the oldest established firms here, and I am desired to say that in so far as the firm is concerned, I endorse practically all that

has been said by the other members of the Board of Trade who addressed you this morning. For the rest, however, I merely desire to represent myself as a student of economic principles. It would appear to me that it is absolutely impossible to find an equitable method of assessing stock in trade in firms, and further, that there is no foundation in equity for assessing it at all, or taxing them as merchants, and also that it is absolutely impossible to assess fairly. In that respect I looked up the decisions and reports of quite a number of commissions that have been held in the United States. As those reports are the opinions of gentlemen who have sat on commissions, and particularly in the case of the Ohio Commission, those gentlemen were in favour of the personal property tax before they entered upon the commission, and who finally emerged from it absolutely condemning it, these reports are important, and add to the testimony of those who have been before you to day presenting local reasons and their own personal views why this tax is unjust and iniquitous. Justice Manstru, in the case of the Hibernia Savings and Loan Company vs. The Assessors, states as follows:

"If it were practicable to assess all the property in the state at the same moment of time, it would be very clear to every man that the assessment of a credit was an attempt to transfer to it a value elsewhere possessed. If a debtor were found to be the owner of $1,000 and is assessed for that sum, and bis creditor be the owner of his note for $1,000 and is assessed for a like sum, and if the day after the visit of the assessor to the creditor the debtor would pay his note, it is clear that the same value has been twice taxed since the debtor bas parted with his money and received only that which is certainly not taxable property in his hands, and which can never afterwards be assessed. When the debtor pays his debt he does not abstract or destroy any portion of the taxable property of the state. The aggregate of values remains the same.' Chief Justice Wallace, in the same case, says: Suppose, were such a thing possible, that the entire tax roll exhibited nothing but indebtedness, taxing under such circumstances would be, of course, wholly fanciful as having no actual basis for its exercise."

Mr. W. R. CAVELL (Solicitor, Toronto): The Retail Merchants' Association would like to state their views on the question that is before you to day. The merchants, not only of Toronto, but of Ontario, have what is called the Retail Merchants' Association. It has branch offices or agencies in all the counties of Ontario, and has a membership in Toronto fairly representing the mercantile community, I think between 800 and 900, so that I think it may fairly be said in introducing the members who are representing it here to day that they fairly represent the retail part of the mercantile community in the Province. They have suffered, I think, more possibly than any branch of the mercantile trade from what has been felt, the unjustness and unfairness of the present working of the assessment system. They have been agitating it for some years past, and I think it is possibly through their instrumentality that you gentlemen are meeting here to day, largely so, as it was given in answer to the last measure that was brought before the Legislature. I would ask the President, Mr. W. B. Rogers, to represent the Association before you.

Mr. W. B. ROGERS: Mr. Chairman and Gentlemen of the Commission, in the few remarks which I shall place before you to dry, I shall deal principally with the question of taxation as regards the retail section of the community. I desire, however, to say that I agree very largely with what has been said by the President of the Board of Trade, Mr. K mp, and I think it would be a misfortune if the recommendation were made to the Government on the lines of the gentlemen who have appeared before you this morning from Hamilton, recommending the course which they have, and I think it would place the whole sale and manufacturing houses not only of Toronto, but of Ontario, at a very serious disadvantage with this and other Provinces. We go further, however, and say that there may ari e local conditions which require other treatment, and I have placed the views of the Association in the memorandum here which with your permission I will read.

[Mr ROGERS then read the following memorandum showing the position of the Retail Merchants' Association on municipal taxation of mercantile firms and corporations.] "The Retail Merchants' Association, in placing their views before the commission, desire to express he opinion that in formulating a plan of business taxation as part of the general system of municipal taxation any principle adopted to be equitable must be

based on the ability of the merchant to pay taxes, or to put it in a different form according to the benefits which the mercantile classes derive from the municipality."

"They recognize also that in dealing with such an intricate question as that of munici pal taxation no one plan will suit all the various interests involved, as for instance corporations operating under municipal franchises, stocks of banks, insurance and loan companies, incomes of professional and other citizens, business stocks, etc. And while advocating the plan for mercantile firms and corporations which they do, they may be accused of seeking class legislation, they desire to point out that any system which distinguishes between the various ways in which wealth is invested and applies different methods of assessment to them is just as open to the charge of class legislation as a distinction made between different classes in the mercantile community."

"They believe also that while the present system may have seemed to be most equitable at the time it was adopted, no assessment law can be framed to meet the requirements for all time, but that as changes take place in the economic conditions of the people so the laws governing taxation must be readjusted from time to time to meet new conditions, and because of this municipalities should have the option of putting in force such special legislation as may be necessary to meet the circumstances."

"In discussing the question of personalty taxation as now applied to stocks in trade of mercantile firms or corporations, the association were of one mind that the law as it now operates is decidedly unfair. That it places the honest merchant at a disadvantage, that it enables wealthy firms or corporations to so manipulate matters that they can escape a very large part of their personalty taxation, while the smaller merchant has to bear more than his share of the burden. As an illustration take the case of a large departmental store recently before the Court of Revision. The company own a very large amount of real estate and on the credit of this they borrow largely from the banks, and taking advantage of the exemption clause in the Act, they claim that out of an admitted stock of about $800,000, they are liable to assessment on less than $80,000, or less than one tenth of the amount of the stock they carry. The smaller merchant renting premises cannot safely carry stock to more than twice the amount of his capital and therefore pays five times as much proportionately as his large and wealthy neighbor, while on his realty (premises occupied) he pays equally as much relatively."

"The present law fails to reach one class of the mercantile community, that is agents of manufacturing concerns or wholesale houses. Some of these do a large trade in the municipality and frequently come into direct competition with the retail trade, and to this class a special tax should be applied."

"Looking, therefore, at the question from the standpoint of retail merchants who derive their trade very largely from the municipality in which they do business and who probably, therefore, owe to the municipality more than any other class of mercantile men, the association has come to the following conclusion. They believe:

1st. That a general principle should form the basis of all mercantile taxation except in the case of agents of manufacturers or wholesale houses, and

2nd. That as the retail trade is drawn largely from the municipality in which the merchants do business, and as from necessity these merchants occupy the most expensive property in the municipality and, therefore, pay a very large share of the revenue from taxation, the law should make provision making it optional with the corporation to place special taxes on this class of business as the conditions of trade may demand."

"As regards the first, the association believes that the present system of taxing stocks in trade should be repealed, and in lieu thereof a business tax based on the rental value of the premises should be levied and that such tax should not exceed five per cent. of the rental value. The association realizes that the effect of this would be to decrease materially the taxation of wholesale houses and increase that on retailers if the law were to rest there, but they believe that if provision is made for a special tax which is set out fully further on, an equitable tax will be arrived at commensurate to each as to the benefits they derive from the community. As regards agents of wholesale or manufacturing houses a business tax would not reach them satisfactorily and they are of the opinion that a license graduated according to the number of lines handled would best meet the circumstances."

"How to meet the present conditions in retail trade and maintain the interests of the single line merchant as against those who are endeavouring to concentrate around them