selves the retail trade of the country, is a question that has, within the past few years, agitated the minds of many of the best thinkers on this continent as well as on the continent of Europe." "What the Standard Oil Company is to the small producer of coal oil, or the other great trusts to their smaller competitors, the departmental sore is to the single line merchant in the retail trade." "It is in the general interest of the municipality that the benefits accruing from doing business in the community should be distributed among the various merchants, but the methods of the departmental store make it almost impossible for a single line merchant to make a respectable living and meet their various obligations.' "The secretary of the association will point this out more fully in a memorandum he will present showing the effect of these stores on retail trade and business property." "The association has taken the position that the measure of ability to pay taxes should be the measure of taxation." "In our license law in the case of pedlers, a distinction is drawn between the man who carries a basket, pushes a hand cart, or drives a single or double horse wagon, and the amount of the license he has to pay progresses according to the measure of opportunity these various means give him of increasing his trade." In the assessment of insurance companies, banks, street railways and other corporations the Ontario Legislature in their Revenue Bill recognize the same principle. In its treatment of assessment of realty the city of Glasgow, Scotland, recognizes this principle also, and levies a lower rate on the man who occupies an inexpensive dwelling than on his more wealthy fellow citizen who occupies a better class of dwelling. The Government of France recognizes the same principle and applies it in the form of a special tax for retail trade. In the case of any store employing more than ten persons a per capita tax is charged varying according to the size of the city, and progressing on every tenth employee. In addition to this where a store is used for the sale of different lines of goods, a tax is placed on each department varying from 200 francs to 10,000 francs per department according to the class of goods in the department. In Berlin, Germany, the Prussian Diet has passed a bill the object of which is to adjust trade so that the possibility of concentrating the wealth of the retail trade in the hands of a few will be made as difficult as possible. The bill divides articles of retail trade into four categorier, viz : (1) Groceries, table delicacies, table waters, cigars, cigarettes, pharmaceutical goods, drugs, perfumes, etc. (2) Yarns, twines, threads, passementaric goods, underclothing, stockings and other knitted goods, dry goods, clothing, cloaks, fure, bedding, furniture, carpets, curtains, etc. (3) House and kischen utensils, garden tools, stover, glassware, porcelain, stoneware, furniture, carpet, curtains, etc. (4) Silversmiths and goldsmiths' goods, jewellery, art goods, paper and goods from paper, books, music, arms, cycles, sporting goods, sewing machines, toys, optical, physical and medical instruments, etc, etc. Any merchant handling goods in two or more of these classes must pay the tax, which is graduated and progressive according to the volume of sales. Any house doing a business in these classes whose sales do not reach 400,000 marks annually, is not liable to this tax. Where the sales of such a business house range from 450,000 marks, the tax is 4,000 marks annually. 400,000 to And for every additional sales of 100,000 marks 2,000 marks additional taxes. The Retail Merchants' Association had a bill before the Legislature at the last session founded on somewhat similar lines, but the above measure overcomes the difficulties in the bill the association had had prepared, and they therefore urge it as the most equitable method proposed. Mr. W. B. ROGERS: We think the five per cent. rental value is a maximum that should be chargeable. In Glasgow they have adopted the principle of assessing on realty at two different rates; they assess the poor man at a lower rate than the wealthy man. In the case of merchants doing business in Paris, in France, where a number of lines are handled by one concern, they are chargeable with a tax on each department, graded according to the class of goods they handle in that department, and in addition to that they are also taxed so much per capita on the number of employees they have. Each category referred to in the memorandum embraces a number of lines, and the Prussian bill provides that a man doing business in any one category shall be assessed in the ordinary way, but if he branch's out into the second or the third or the fourth categories, that he shall be taxed according to this bill, which recites that over and above four hundred thousand marks per annum he shall pay four thousand marks up to five hundred thousand marks, and it progresses until when it reaches one million marks the tax is eighteen thousand marks, and after that on every hundred thousand marks additional business a tax of two hundred thousand marks is chargeable against it. The retail merchants, I may say, had a bill before the Legislature at the last session framed somewhat on the same principle, but that bill was open to some objections which we recognized at the time, and on the advice of the Government we withdrew it as this Commission was about to be appointed; but we believe that the bill as framed by the Prussian Diet will meet the circumstances that exist here, and therefore we desire as an association to urge upon our Commission the desirability of taking this into consideration, and if you can see our way to make a recommendation to the Government in favor of it. Mr. E. M. TROWERN, Secretary Retail Merchants' Association: Mr. Chairman and Gentlemen of the Commission: The subject of taxation, which you have just heard explained by our President is one that we are very much interested in-so much so, as has been stated before, that two bills were brought before the House at the last Session, and they resolved them into the Commission; and while we are favourable to the rental tax, which has been outlined by Mr. Rogers, the other feature of it, the development of the retail trade or centralizing of the retail trade would, if that tax alone was applied, without taking cognizance of this new development in trade, the departmental store→ which is practically a combination of retail stores in one-if seven per cent. on the present rental value of the property were applied, it would turn the weight of the tax from the wholesale and manufacturing establishments over on to the retail store, which would be detrimental under the condition of the departmental store being in our midst. We have no objection to having, say, seven per cent. if we can get some provision whereby an extra tax or an extra license, as you may call it, can be applied to this system of departmental stores. I might state that this desire is general, not alone in the city of Toronto but throughout the Province. I will just read a few thoughts that were gathered together so as to concentrate it, and place it in this way. (Mr. TROWERN then read from the document No. 5 in Appendix A the passages relating to taxation of departmental stores.) Mr. TROWERN: The earning power of the retail merchant is his ability to pay. If you take away his earning power by centralizing it at any one house, you may place your tax at seven per cent. or five per cent. or anything else you like on the rental values, but if a man has a store and he does not get the business to pay any taxes you are simply dealing unfair with that man. If you were standing on the corner of King and Yonge streets to day there is only one dry goods store within a block where you could buy a paper of pins. The departmental stores have absorbed the whole dry goods trade of Toronto, and that is one of the reasons why the assessment of the dry goods stocks is so very low in Toronto; there are very few dry goods stores left. If the details of this case could be laid before you they would demonstrate what I have said. I could illustrate a number of cases where goods have been advertised where honest merchants were paying taxes on their stocks in Toronto, especially the jewellry stores, where if a man makes one turn-over in a year he is doing a magnificent business, and where a man's reputation is a large part of his capital, where if his name is Jones and he stamps that on a piece of gold, and you pick it up you say, "That is all right, Jones' name is there." These departmental stores are working entirely against him when they advertise the same class of goods, although they are not the same class of goods which he carries and which he stands personally behind. Then if we look into the work-rooms of these stores we find they are still destroying valuable labour. They are not satisfied with that, but they crush down almost to starvation wages, and we can bring evidence to show that young girls are working in those places now making shirts at 40 cents. a dozen. The departmental stores must not be confused with the ordinary trust, and that is one of the reasons why this subject is better known and better understood among the retail trade. Our Board of Trade and manufacturing associations and others are composed largely of the manufacturing and the wholesale firms, and they are looking at their difficulties from their own standpoint. We are looking at the matter from the standpoint of a retailer, and I think there are going to be good results from bringing different objects before this. Commission, to have us all tell our own story. You take a boy who bas cost the state $17.40, as I understand each child in Toronto costs us to educate. That boy starts out into life and he wants to find something to do. He learns the drug trade or he goes to the jewellry business, or even the dry goods business itself, or other lines of trade which require years of experience, and require money for those boys to understand their trade. That boy as soon as he learns his trade or business is immediately met with this vicious competition, which is not legitimate competition. We have no objection to a bootmaker developing and having a building ten stories high by 150 feet long or 150 feet wide; no objection to a jeweller growing as big as he can, or a dry goods merchant growing as big as he can, but we object to the system of having one store take capital and destroy all the other outlying businesses so as to control the trade, and then destroy the majority of the business property of the city of Toronto. We have here this afternoon a retail merchant who had spent his life in business and through his savings accumulated a competency which he invested in store property. Now he will tell you that his store property has depreciated so much, although he purchased it with the idea of having a competency in his old age, that it does not pay him one per cent. on the actual cost of the property after paying his taxes. This is a large subject and I do not know that you will be prepared to hear all the details of it. It runs along so closely to the subject of taxation that we dealt with that. As an Association, we would not consider for one moment having a business tax of five, two or three per cent. placed upon the retail business houses and stores of Toronto unless we had this additional tax. Now, if you will follow it out in a few instances; one wholesale house that is paying $2,900 on the amount of personalty that they have, would pay, under a seven per cent. rental tax, $205; and the retail merchant who is paying now $170 would pay $850; so that you see how it would just turn the matter over and throw the weight on to the retail merchant. A little store that is rented for $25 a month, $300 a year, at the highest rate mentioned here, seven per cent, would pay $21, which is a large tax for a small store, perhaps a little grocery store down below with living overhead, and they may not carry in that store more than two or three hundred dollars worth of goods. Now, if you give that man an opportunity to do business in his district, if you give the little grocery an opportunity of doing the trade that he should have around his neighborhood, and competition will keep prices right; or it has kept prices right as far as we can follow it out-if you give him that trade he could pay that $21, even as high as seven per cent; but if you centre the trade down into the large departmental stores, according to the evidence brought before the Court of Revision, one concern is carrying a stock, according to their own figures, of $685,000, and yet it can only be assessed at $85,000 because they owe the balance, and yet it is reported that they are doing a business of seven or eight million dollars yearly. Now, this is not merely sentimental, the fact that the business houses absorb the trade of the city and Province, but I have before me thirty-sevez petitions sent by all the large and influential merchants throughout thirty-seven towns of the Province, all realizing that this system of advertising bargains to-day and getting people to send their money, flat their money right over the head of the municipality and send it down to Toronto-doing us no good because it is simply rolled up and sent to Europe, we do not get much benefit out of it, we get a few girls and boys at $4 a week and a few heads of departments, but I only find eight of them are paying on their income tax, all the rest don't get more than $700. This is a large question, and I will not take any more of your time to day with it, but if there are any more features about it, we would be only too pleased to bring further evidence before you. Mr. E. J. GIBBARD (druggist, Toronto). Mr. Chairman and Gentlemen of the Commission:-I can do nothing more in taking up your time than to emphasize when has already been said to you by our president and secretary in connection with this matter. I was not here during all the speeches this morning of the gentlemen from the Board of Trade, but I was here when Mr. Kemp was speaking, and the thought that Mr. Trowern has touched on to-day struck me. The inequalities and injustice of the present system of assessment, and how it tends to dishonesty, has been admitted by all who have come before you to day, and that something new is wanted. When the suggestion was made of a rental value, the thought struck me, would it not have a tendency to do as Mr. Trowern has already said, shift the burden from one to the other? It is a well-known fact that in wholesaling, position or locality is not essential. With retailing it is impera tive It is not necessary for the wholesaler or manufacturer to seek a location where the community can reach them; a back street within the limits of the city would answer their purpose, or a side street with an entrance on a main street, and the rental value of that property would be very much lower than the rental of a site in the centre of the city. Take a property, we will say on the corner of Yonge and Temperance street, and you will find the rental value there would bring up the retail man's taxes and send the wholesale man's taxes down; so that in any plan that is devised for the remedy of the evil which we all know to exist, and which we d plore, it will be necessary to be careful and see that this element of unfairness as between the classes of business is eliminated. Now, I admit that the rental value thus applied is fair as between individuals of the different classes; but is it fair as between two classes? If we are to depend on that alone, I prefer to take the suggestion of our friend from Hamilton, Mr. MacKelcan, as his has the element of fairness if that is accepted alone. In the interests of the retail merchants there must come into your deliberations and recommendations something along the line suggested by Mr. Rogers, the plan that is in force in Germany for special licenses in these cases. The more carefully and closely you look into and study the changed conditions as brought about by these large departmental stores, the more you see the injury to the community' which it has wrought. I know that the man who buys insists that he should be allowed to buy just where he will, and I do not know that we can license or control that by legislation, but at the same time the interests of the community at large have also to be considered, and it is extremely doubtful whether the benefit that is derived by the purchaser at those large places is at all commensurate with the amount of injury that is done to the community at large. We are not so sure that there is any benefit from purchasing of these people, but we do know that the city has been injured by millions of dollars by those institutions, and they have offered us nothing in return. The home has been invaded; the business of the head of the home has been taken away; the home circle has been broken up; the son and the daughter have been forced to look for their living, and the head of the house has been forced to work for starvation wages because he cannot afford to take the staples of one line of business and make use of it to develop another line and therefore destroy the legitimate trade of a city like Toronto or a country like Ontario. I have nothing further to say except to emphasize the fact that any plan that may be suggested or recommended by this commission and accepted by the Legislature for the remedy of the evil that we are suffering from in the present system of assessment, must of necessity include in it some consideration for the retail merchant for what he is suffering from this new condition. No plan you can suggest will relieve the retail merchant unless this other is taken into consideration; it cannot be, because it is not legitimate competition, it is an unfair advantage that they are taking of us and that we must have protection against. Mr. ROWLAND, Toronto: I have been a retail merchant in an outside town, and like a great many more, having as I thought a competency I came into Toronto and put it into property like a great many more, and I invested with the greatest of care. Some property that I bought I even went down to the late Assessment Commissioner, Mr. Maughan, and asked his opinion about it. He said "Mr. Rowland, you are all right buying that property, it is good property, you cannot make a mistake in it ;" and what is the result? Through these departmental stores, instead of getting $40 or $45 a month I am glad to get $20 or $25 now, and sometimes cannot get them rented at that. That is considerable of a depreciation, and I do not suppose if I went down to the Court of Re Mr. ROWLAND: I believe in a great respect it is due to departmental stores. There is this about it; when I try to raise my rent the tenants say "we would not object, Mr. Rowland, to pay you $40 or $45 if we were doing the business we used to be doing." The rent is nothing to a man if he is doing the business, but if he is not doing the business he simply cannot pay it. Now that is where it affects it. I succeeded in business and made money and thought I could live comfortably, but the bottom dropped out. There is no doubt these departmental stores are affecting property, as you will see by that property. I can take you down to the property and you can see the tenants, and if you can get any more rent I would be very glad to get it; but it is these departmental stores. There is a great deal being said here about assessing merchants. I know all about that. They used to come in to assess me Well, the duty of a merchant is to owe all he can, have as little paid for as you can. I wonder this Board of Trade and these men don't see it. How are they going to get men to pay for their stocks quickly if they are going to be taxed for every cent they own? If it is right to assess a mortgage income why is it not right to assess the income from property? Why should I be assessed on thousands of dollars worth of property? I have got to put up nearly $150 a month before I can call a copper my own; I do not say it is all in Toronto; some is outside, but the bulk is here. I do not see how I should be burdened that way whereas if I had simply put it in mortgages I would have had no taxes and no bother collecting rent or getting repairs done or anything at all about it. There has been a good deal said here abcut assessing stocks and all that, but after all there is only one right way of getting at it, and that is at the turn over rate, the business done. You do not want to go into a man's store and ask him how much he owes and all this, but simply, "What business have you done during the year?" The principle is admitted here in Toronto. How do we work our street railway! It is the turn-over. $500,000 a year I think it is at eight per cent on the turn over, but if it gets to a million dollars it is a little more, ten per cent. It is the turn-over exactly. In the Legislature your mines are done in the same way—so much taken out by the week of minerals. a thousand dollars, say, and you pay so much; you take out $2000 and you pay so much more. It is the same by the Dominion Parliament in the Yukon Districtit is the turn-over there; and the only true way you can get at it, is the turn-over plan. There are hundreds of merchants in business that you could not get any stock if you went in there. For instance, go into an auctioneer's room; how much stock would you get in there? He would tell you, "This belong to Tom, Dick and Harry and you could not assess anything; yet that man does thousands of dollars of business. Go into the butcher and perhaps he has got $100 worth of meat there, and you have got nothing to assess and the assessor walks out, but the man does thousands of dollars worth of business. So go on to these different departments, these large men like Mr. Brock. You go still further aud take these commission merchants. Mr. Brock has a beautiful warehouse, a credit to our city, we are proud of it; Gordon & McKay and John Macdonald & Co., they all have fine warehouses, and they employ help, they pay taxes there, they carry a large stock there, they have light and fuel and everything to keep their business going; and yet some of those agents come out here, that I have dealt with myself, say Arthur & Co., of Glasgow, and they go to a small property or they have got 7 x 9 rooms here, and 1 |