Chapter I: Part 1

History of Taxation
in
Rhode Island
to the year 1790.

By
Henry B. Gardner.

------------------------------------------------------------------------

Contents.

Introduction Page 1
Taxation in Rhode Island 1636-1689 4
The law and administration 16
Taxation 1689-1710 25
The law and administration 32
Miscellaneous revenues 37
Period of paper money 1710-1751 38
Financial history 1751-1790 46
The law of taxation since 1710 63
Colonial and state valuations 69
Customs and excise duties 82
Tonnage duties 89
Notes 91

Introduction.

That method of raising revenue for the support of government which we understand by taxation marks a well advanced stage of economic life and is of comparatively recent origin among Germanic peoples. It was unknown while our English ancestors lived upon the continent of Europe and for many centuries after they had settled in their new home Society, and, as a consequence, government had not as yet become differentiated. Some of the most important duties, such as the defence of the kingdom, the care of the bridges and forts, were performed by personal service on the part of the people. Other duties incumbent upon the modern state, those which require the greatest expenditure, had not arisen. The private and public revenues of king were not as yet distinguished. The revenue of his private estates afforded him a considerable income and, in addition, he enjoyed the usufruct of the folkland. The growth of the feudal system gave rise to various other sources of income, and besides these there were payments for special privileges such as markets. The king also enjoyed rights such as that of carriage and purveyance, for example.

Taxation as we conceive it formed no part of the system. "Only in a condition of the deepest degradation, under Athelstan the Unready, could the national assembly be induced to levy a tribute upon the country to buy off the horde of Danish pirates."[1] Taxation developed rapidly after the Norman conquest, but as late as the reign of James I out of a total revenue of about £450,000, £180,000 came from dues on feudal tenures, and the crown lands, rented at much below their real value, yielded £32,000.[2]

Feudal dues remained an important source of revenue until the time of Charles II. All through the early period "the taxes voted were 'aids' and 'subsidies'; something to help the king eke out his income, as it were. Systematic taxation as a right--nay, as a duty owed by the citizen to the State--was an idea entertained with the utmost reluctance."[3] Even after national taxation had become established the local bodies continued to depend on personal service (or payments in kind) to fulfil their military, police, or judicial functions. It was the apportionment among individuals of fines incurred by the various local divisions for the neglect of these duties which first gave rise to the county rate, the hundred rate, and the tithing rate or town levy. From the Tudor legislation of the Sixteenth and early Seventeenth centuries local taxation received a definite form and character. The poor law of 43 Elizabeth which established the parish poor rate became the basis of the system. To this rate all others tended to conform.[4] In early New England the conditions were much the same in regard to taxation as in early England. The functions of government were few and simple and often easiest fulfilled by personal service on the part of the citizens. This was the case with respect to the maintenance of the roads, and with military service. The army was the folk under arms. The duties of public officers, whether of town or colony, could not have been burdensome and in many cases acceptance of office was looked upon as a duty to be performed without, or with small, recompense, refusal being accompanied by a fine. A considerable portion of public services such as those of the executive officers of the courts (and even of the judicial officers) were naturally recompensed by fees. Pauperism the great burden of the older country was hardly possible where land was abundant and labor scarce.

What has been said or New England in general applies with added force to Rhode Island, for here the political body concerned itself as a rule with neither religion nor education.[5] Taxation was regarded for a long time not as the principal means for meeting ordinary expenditures but as something irregular and supplementary.

Taxation in Rhode Island, 1636-1689.

_The towns before the Union._

Unlike Massachusetts the towns in Rhode Island remained the supreme authority under the king for some years before any central government was established by charter.[6] The first delegated government established in Providence was in 1640.[7] It was of the simplest nature. Five men were to be elected quarterly, who, subject to the control of the town meeting, were to have the disposal of lands and of the "townes stocke." Disputes between citizens were to be settled by arbitrators appointed either by the parties to the dispute, or by the five "disposers," payment for their time spent to be made by the "faultive" party.

Provision was also made for a clerk who was to receive 4d. for each cause that came to the town for trial and 12d. for each deed prepared. All the inhabitants were to join in the pursuit of a fugitive from justice.

The "townes stocke" was probably derived from fines and payments for land by the new comers,[8] as there is no mention of taxation. At the time of the union of the towns in 1647 the delegates from Providence to the general court, which was to organize the colonial government, were instructed to secure to the town the reservation of certain rights in the management of their own affairs, but neither in these instructions nor in the charter of very full powers afterwards granted to the town is there any direct reference to taxation. In Portsmouth and Newport the delegated power was in the hands of a judge and elders. These towns probably depended on much the same sources of revenue as did Providence; fines, fees, and payments for land.[9] The political development however was more rapid on the island than on the mainland and we early find in Portsmouth traces of taxation as well as of comparative advancement in financial affairs.[10] The records of the first year of the Newport settlement show that their financial transactions were of importance and that certain officers, such as the secretary and sergeant, received considerable payments from the town.[11] There is no record of the amount charged for land, nor any mention of taxes, though it is not improbable that they existed in some form, as the settlers in their first compact engage "to bear equal charges answerable to our strength and estates in common."[12] In 1640 Newport and Portsmouth came together under a common government, each town retaining however its own organization, and the control of its own affairs. The general officers were a governor, a deputy governor, four assistants, two treasurers, two constables, a secretary, and a sergeant. The magistrates (governor, deputy governor, and assistants) fulfilled judicial as well as executive functions. The only reference to the payment of officers is a provision in 1641 that the secretary should have 3s. per day for his attendance upon the various courts. In the following year this salary is taken away and it is ordered that both the secretary and the sergeant be paid by fees.[13]

The common expenses were met by drafts on the town treasurers. The financial transactions of the united towns were considerable in amount,[14] and there are several special taxes of interest. It was ordered in 1640 that the treasury of each town be always supplied with two barrels of gunpowder and with bullets and match. Every man who killed a deer outside of his own property was required to bring in one half to the treasury under penalty of forty shillings. Thus the town derived a revenue from the use of the public domains. In 1642 a bounty of five pounds was offered on wolves, to pay which it was provided that a rate should be levied on every man according to his cattle;[15] the idea of a direct relation between the tax and the service rendered. Bounties of this kind must have been one of the principal sources of expense to the early settlers. On wolves they were sometimes as high as £5, at other times not more than 30s., while the rate on foxes was 6s. 8d.

The above seems to be substantially all that remains of the financial records of the early towns. We find in them the conditions already noted; few needs, abundance of land, for sharing which they could demand a payment of all new comers, payment by fees or, if a tax was necessary, perhaps by a tax on a particular class, as in the case of the bounty on wolves. Fines, too, probably formed a not inconsiderable source of revenue, for the home of religious freedom seems to have been to some extent the home of those who desired freedom from the law as well. When a general tax for the common good was levied the "estate and strength" of each must have been a matter of common knowledge impossible of concealment. It should be noted also that neither at this time nor much later under the charter government was the business of the treasury managed with that exactness which we find today. Receipts were very often far behind expenses and bills were frequently allowed to remain unpaid until the money happened to be in the treasury.

The four towns first organized under a common government in 1647 by virtue of what is known as the Patent, procured through the efforts of Roger Williams in March 1643-4. Under this government the colony remained, with the exception of an interruption lasting from the spring of 1651 to August 1654,[16] until it reorganized under the charter of 1663 which remained the fundamental law of the colony and state for one hundred and eighty years.

The general officers under the Patent were a president and four assistants, a general recorder, a treasurer, and a general sergeant. There was also a committee composed of six representatives from each town.[17] A general attorney and a solicitor were added in 1650.[18] Under the charter of 1663 the president was replaced by a governor and deputy governor, the number of assistants was increased to ten, and, instead of the committee of six from each town, provision was made for six deputies from Newport, four each from Providence, Portsmouth, and Warwick, and two each from all other towns that might come into existence. The other general officers remained the same as before. Under both governments the magistrates (president, or governor and deputy governor, and assistants) performed judicial functions.[19]

Public service was considered as a duty the fulfilment of which was enforced by law[20] while payment, except where the method of fees was available, was either not given at all or was but daily wages for the time actually employed in the service. Payment for service in the general assembly or the court of trials did not exceed three shillings a day, with a much heavier fine for non-attendance.[21] In addition to this a law of 1679 provided that diet and lodging should be furnished those in attendance, the expense to be met out of the fines and forfeitures coming into the general treasury.

The services of the recorder, sergeant, and general attorney were compensated by fees, though the first two seem also to have had daily wages for their time employed, and their payment was among the chief sources of expense at this early period.[22] The general treasurer enjoyed a percentage, sometimes as high as ten per cent, on the amount of his transactions.[23]

The care of the highways and the poor was given over to the towns.[24] It is evident that the expenses of such a government could not have been great.

So small were the financial operations during the earlier years that the general treasurer "returned his accompte into the courte for the year 1649, that he (had) received nothing as Treasurer and therefore have nothing in his hande,"[25] and Gregory Dexter, town clerk of Providence, could write to Sir Henry Vane "Sir we have not known what an excise means. We have almost forgotten what tythes are; yea, or taxes, either to church or commonweale."[26]. In fact for many years fines and forfeitures seem to have been the chief reliance for defraying ordinary general expenses and they continued to form a principal element of the receipts until the end of the century.[27]. Taxation however could not be entirely avoided. It was necessary to place the colony in a position capable of defence and in 1650 each town was ordered to have in its magazine a certain quantity of arms and ammunition, the amount assigned to each town to be equally laid upon the inhabitants of the council thereof "according to each man's strength and estate."[28] Taxes were also levied to pay for powder and shot sent, over from England.[29] Prisons were necessary and in 1655 the towns were ordered to build two prisons, two cages, and two pairs of stocks, one of each on the mainland and one on the island at a total cost of £135.[30] Later court houses and a state house were required, but on the whole taxation to meet ordinary expenses remained almost ludicrously small until long after Rhode Island had become a state. The exercise of the taxing power was reserved for special occasions. The most important of these was war; next came the support of an agent in England. Wars which required the employment of a paid soldiery did not begin until the end of the Seventeenth century; agents in England to look after colonial interests were a necessity from the very beginning of the colonies and lasted until the colonies became states. Particularly was this the case in Rhode Island, small in population and territory, its jurisdiction attacked on every side by the claims of more powerful neighbors,[31] with a charter containing grants of such unusual freedom that it was a constant target for those opposed to colonial self-government. One of the acts of the first general assembly under the Patent in 1647 was to assess upon the towns a tax of £100 to pay Roger Williams for his exertions in procuring that document more than three years before.[32] Williams in company with John Clarke again went to England to secure the repeal of Coddington's commission. The former returned on the accomplishment of his mission but Clarke remained and cared for the interests of the colony, and it was in connection with his efforts to secure the charter of 1663 that taxation on any considerable scale began. The following table will show the taxes levied from 1662 to the fall of the Andros government in the spring of 1689. Those taxes marked with a star were levied under the Andros régime.

_Date of _Amount._ _Purpose._ _Payment may be
Ass'm'nt._ made in._

[33]June 1662 £288 "in silver Agent. "beefe, porke
pay" pease, and wheat,
at such prices as
it then goeth to
the merchants as
moneye pay;"

[34]Oct. 1662 £106 Agent. "goods" to be
priced by men
chosen for the
purpose.

Oct. 1663. £100 "in current Agent
bills."

[35]Oct. 1664. £600 Agent and others wheat, peas,
to whom the pork, horses,
colony is cattle, or any
indebted; sort of
provisions
"according to the
usual rate that
it doth pass at
amongst us".

[36]June, 1670. £300 "in pay Agent. Seems to pork, peas,
currant of this have been wheat, Indian
Collony" diverted to corn, oats, wool,
general purposes. butter or such
other pay as the
General treasurer
may accept.

[37]Oct. 1673. A farthing in the "payment of the See general tax
pound. collonys now law p.
knowne debts."

[38]Nov. 1678. £300 sterling. paying the money, pork,
colony's debts. beef, peas,
Indian corn,
barley, barley
malt, sheeps'
wool or butter at
stated prices.

[39]July, 1679 £60 sterling. to repay money or pay
disbursements in equivalent.
England on the
colony's account.

[40]May, 1680. £100 payment of the
colony's debts
and supplying the
treasury.

[41]Oct. 1684. £160 "in or as to discharge
New England colony's debts.
money."

x[42]Jan. 1686-7. A penny in the general expenses
pound; poll tax of the Andros
1s., 8d. government.

x Aug. 1687. A penny in the General expenses
pound; poll tax of the Andros
1s. 8d. government.

x Dec. 1687. £160. Building two money, wool,
court houses, butter, Indian
repairing the corn, rye or pork
prison and paying at stated prices.
the debts of the
province.

x March, 1687-8. £53-6s. 8d. Bounties on same as last.
wolves.

x [43]Aug. 1688. A penny in the general expenses
pound; poll tax of the Andros
1s. 8d. government.

The requirements of the militia service, which at this time supplied the whole military power of the colony, should also be taken into consideration. Militia systems had been established in the towns before their union under one government. The law of the island towns appointed eight training days a year for each town with two general musters. A fine of five shillings was imposed for non-appearance, and all men remaining on the island for twenty days were liable to the service.[44] The first assembly under the Patent enacted substantially this same law for the whole colony[45] and it remained essentially unchanged throughout the period of which we are treating. The limits of age were fixed at sixteen and sixty years. The only exemption from service were on account of "age, monage, sickness, lameness, or publique barringe of office at that time in the commonwealth."[46] In 1665, the number of training days was reduced to six and the fine for non-attendance was gradually lowered to two shillings. Those who were able seem to have been required to provide themselves with arms and ammunition, but in case of inability they might be furnished by the town council by means of rates or from the proceeds of military fines.[47] The military requirement acted to a certain extent as a poll tax, but the relations of the colony with the surrounding Indians was for the most part friendly; the need of strict military discipline does not seem to have been felt and various references in the laws themselves tend to show that military regulations were not strictly observed unless under the influence of some pressing emergency when special laws requiring their enforcement were passed; so that the military system seems in general to have been but little of a burden.

It is evident that on the whole taxation daring this period was light. The nominal amount of taxes of all kinds levied between 1647 and 1689 was not much over £3600 or about £84 a year. Nearly £1100 of this amount was levied between June 1662 and October 1664 to meet the expenses of procuring the charter. It was levied for the most part in "current pay" and the sterling value, probably, did not exceed £600. The collection also was extended over several years. Such taxation appears to us extremely light and even though we make, as is necessary, a large allowance for the difference in economic conditions then and now, the burden does not appear excessive,[48] while, if we look at the remaining years, taxation is almost insignificant;[49] it amounted on the average to but a few cents per capita each year. In fact it was altogether too light to meet expenses. The colony seems always to have been in debt. In September 1673 the debts due from the treasury exceeded the debts due to it by £71 9s. 2d.[50] Five years later the colony was indebted for £437 3s. 10d.[51] In 1684 the Assembly affirm that the existence of the government is endangered for the want of funds in the treasury.[52] In several instances money to meet public expenses was raised by contribution. In other cases the necessary amounts were advanced by individuals, to be repaid when the money should come into the treasury.[53] Though, judged by amount, taxation at this period was unimportant, yet it is here that we find the beginnings of a system which in theory at least endures at the present time. We turn therefore to a consideration of _the law and administration of taxation_.

Neither in the Patent nor in the Charter is there any specific grant of the power to tax;[54] it seems to have been regarded as implied in the grant of government, and was always exercised by the highest legislative authority, under the Patent at first by the body of freemen assembled in general court, and later by the court of commissioners, under the charter by the general assembly consisting of the deputies and magistrates, at first sitting as one body and later as two distinct houses.[55] The legislature apportioned the tax among the separate towns and required each town to collect and pay into the colony treasury its quota by the time specified in the act ordering the tax, the towns employing their own administrative machinery for the purpose.[56] Perhaps the system is best summed up in a law passed in 1655. "It is ordered, that ye raisinge of Generall Taxes shall be ordered by ye Generall Court of Commissioners, as they shall see cause from time to time as to ye sumes, and how they shall be proportioned on each Towne; as alsoe, who in each Towne shall have power to make ye rates, and who are to give forth warrants for ye gatheringe of them; as alsoe in case of any refusinge to pay, to order assistance to him or them that are authorized to give warrants, or to gather ye rates as need shall require."[57] In the case of the tax levied for the payment of Roger Williams it was ordered in 1650 "that the councill of ech Towne be enjoyned forthwith to proportion Mr. Williams that debt and other summes apoynted thereto, according to every mans strength and state;"[58] and for a while the town council seems to have acted as assessors. Just when the duty of assessment began to be assigned to separate officers we do not know, probably very early.[59] Collectors did not come until well into the next century, their functions being exercised by the town constable or sergeant.[60] During these early years custom rather than law seems to have been the regulating power, and it doubtless left much to be desired. An attempt to remedy these shortcomings was made in 1673 when what may fairly be called the first tax law was passed.[61] It throws much light on existing conditions. The preamble recites "the great dissatisfaction and irregularity that hath been by makeinge rates or raising a common stock for public Charges in the Collony in general or for any perticuler towne, and the great faileableness to accomplish it, and great delaies in performance," and affirms that public charges "should be born according to equity in estate strength."[62] The law then provides that where a rate is levied by the colony or a town every one shall "make a true valluation of theire estate and strength, every thinge that is any estate to them be vallued, which they are not rated for to another place; and when for a pertickular towne rate, what they are not rated to another towne." Each person is to pay "to the Treasury to whome it doth belong" a certain amount upon the pound of valuation as the assembly may order. Payment may be made in "anything that is rateable, and it shall not be refused at the price as by two indifferent men vallued."[63] If any do not rate themselves "the Generall Assembly may appoint men to gess at their estate, and rate them as they should have done themselves, and according to double the proportion for forbearance."[64] "If the Assembly judge any have undervallued their estates, such shall be required to give in to the Treasurer a true forme of an inventory of all their estate and strength in pertickular, and give in writeinge what proportion of estate and strength in pertickular he guesseth tenn of his neighbours, nameinge them tn pertickular, hath in estate and strength to his estate and strength." If they do not comply they are to be rated as those who have not rated themselves at all; "or if it be proved that there is more due from any than they have rated themselves, they are to pay double as much therefor (and for the forbearance), as for it they should have rated themselves." These latter provisions of the law clearly show the fact which would render it possible to successfully carry our such a system at that time. Each man could know the property of his neighbor almost as well as his own property and it was not for his interest to bear any burden which should properly fall upon another.

As a matter of fact taxes were seldom levied at so much on the pound,[65] but a definite amount was ordered, to be apportioned among the rate payers. This law provides for assessors only in case individuals neglect to rate themselves, and makes no mention of collectors. The custom, however as has been said was for the towns to appoint assessors whenever a tax was to be levied and to entrust its collection to the constables or sergeants. There were however many exceptions.

The central government was comparatively weak. Towns very often paid no attention to the orders of the assembly and it became necessary to resort to special means to assess and collect the tax. Town machinery was overridden. The magistrates were empowered to call town meetings to assess the rate[66] or the assembly appointed a committee for the purpose. The general or colony sergeant was required to collect the tax after the assessment had been made.[67] The troubles in connection with the collection of rates seem to have culminated in the spring of 1672, when what is known as the "sedition act" was passed.[68] This act after reciting the dangers arising from the opposition to the collection of rates provides that "if any person or persons in any town or place within this jurisdiction, shall at any time more especially in any town meeting or other publique assembly of people, appear by word or act, in opposition to such rates and impositions," made by the assembly or in opposition to any act of the assembly, made in accordance with the charter, such person shall be "proceeded against as for high contempt and sedition," and on conviction shall suffer at the discretion of the justices, "corporall punishment by whipping, not exceeding thirty stripes, or imprisonment in the House of Correction, not exceeding twelve months; or else a fine or mulct, not exceeding twenty pounds." This act was passed in April. In the following month the annual election occurred. Not a single deputy was reelected, and the same was true of the governor and six assistants.[69] Political revolution was never more complete. The new assembly repealed every act of its predecessor. So strong was the reaction that in the following November a limitation was placed upon the assembly's power of taxation, by the provision "that noe tax nor rate from henceforth shall be made, layd or levied on the inhabitants of this Collony without the consent of the Deputys present pertaining to the whole Collony, as there must be a major part of the Assistants (by the Charter), nor any way bringe the Collony in debt by any meanes." The assembly does not seem to have recovered its former powers until 1679.[70]

With the establishment of the Andros government the assembly disappeared. The right of taxation throughout his whole jurisdiction belonged to Andros and his council; for local purposes it seems to have been delegated to a court of nine justices which succeeded to the powers of both the Assembly and the Court of Trials.[71] So much an examination of legislative enactments shows us. We are fortunately enabled to fill out the picture to some extent from other sources. In Jan. 1678-9 the freemen of Providence took action in regard to their quota of the colony tax assessed in the preceding October. A committee of four was chosen "to draw aside a Little space of time, to consider togather of the suitablist prices, Which is meet to be sett on (ya Esteemed) Rateable Estate of ye Inhabitants of this Towne, x x x for to be a helpe & preparation to ye Lieviers." The rates of valuation agreed upon were as follows:

"Meaddow Land: One acar Improved, to be Vallued at 04-00-00
planting Land: One Acar Improved to be Vallued at 03-00-00
Vakant Land; & unimproved: £ Acar to be Vallued at 00-03-00
An ox 04-00-00
4 or five yeare old steers 03-10-00
Cowes & three yeare old Cattle, To be Vallued at 03-00-00
two yeare old Cattle, To be Vallued at 01-15-00
Yearleings-Cattle--Each of whom--To be at 01-00-00
three yeares old Horses, & horse kind--To be Vallued at 02-00-00
two yeare old horse, & horse kinde To be Vallued at 01-10-00
hoggs, or swine, Each of them above a yeare old 00-15-00
sheepe--above a yeare old--To be Vallued at 00-04-00"

"Ye Rate-makers" however "are not soe strictly tyed x x to ye Instructions of ye above sayd Committee, but yt they have a Libberty to Vary therefrom, as in theire discrescesion shall seeme meet Unto them, x x x they having the sayd Instructions as a Line for some guide of theire Judgement therein." Five men were then chosen to assess the rate.[72] At the meeting of the following March, it is ordered that notices be set up in public places stating that the rate is to be levied and requiring all inhabitants within fourteen days to bring in to the rate makers an account of "The quantity of their Land & Meadows Layd out to them, Improved & unimproved, As alsoe what Cattle of any Sort they have, otherwise none can justly be offended, if ye Raters only use what information they can get." When the rate makers have made up their lists of what each man is to pay they are to post them in public places and each tax payer is then to bring to the treasurer, at his dwelling, the sum for which he is rated. The assessors completed their lists in July. The town clerk was ordered to prepare a copy of the list and deliver it to the town constables who should collect the rate. If any refused to pay application was to be made to a Justice of the Peace who should grant a warrant of distraint against the property of the defective person.

Among the manuscripts in the Rhode Island Historical Societies Cabinet in Providence are preserved several hundred of the lists of rateable estates returned to the assessors by individuals during the period of which we are now treating.

The following is "The Account of ye Rateable Estate of Jon. Whipple of providence:

First Sixe Cowes, and one heifer; not 3 yeares old. Secondly 2 Oxen 3dly 3 Steeres of 3 yeares old 4ly one heifer; 2 yeares old 5ly 3 of one yeares old, one a steere; ye 2 heifers 6ly 3 horses 7ly one mare and colt, beside 3 more if not stolen or alive or made bobtailes 8ly one house lott within Fence 9ly 2 shaires in ye Great meadown where I mowe 4 lods of hay

10ly 4 Swine 11ly one yeare old horse colts"

John Whipple seems to have been blessed with more than the average amount of wealth in personal estate, but this list as do all the others clearly shows the character of the property which existed at the time.[73] But little if any property was owned beyond the limits of the town. Everything was tangible and could be concealed neither from the neighbors nor the assessors. It was not difficult to fix on a standard of valuation which should apply uniformly and fairly to all property owners. The method of taxation adopted was clearly the most suitable, indeed the only one suitable at all, for a community of farmers, where land was abundant, and where trade had not developed but each family produced for its own consumption.

Taxation 1689-1710.

With the restoration of the government in 1690, after the fall of Andros, Rhode Island enters upon a new period of her history, a period marked within by a stronger central authority and a more settled and orderly government.[74]

In 1695, the governor was granted a salary of £10 a year, the deputy governor £6 and the assistants £4 each. All these officers had previously been exempted from taxation.[75] Without the period was one of successive wars against the French and Spaniards, wars which required the support of a paid soldiery and, for a colony situated as was Rhode Island with her great extend of sea coast, the maintenance of strong defences against hostile ships. The charter was also endangered by the attacks of the Narragansett proprietors, and later of Bellemont and Dudley, and this required considerable expenditures to meet the expenses of the agent in England. The taxes and the purposes for which they were levied during the remainder of the period of which we are now treating can be seen in the following table.

_Date of _Amount._ _Purpose._ _Payment may be
Ass'm'nt._ made in_

[76]May 1690 £300 "for the support of wool, butter,
their Majesties' Indian corn, rye
interest against and pork.
the French and
Indian enemies."

July 1695 2d. in the pound. Same as last.

Oct. 1695 1d. in the pound. Agent, and, if
surplus, to pay the
colony's debts.

May 1696 2d. in the pound. July 1696

Aug. 1698 £800 "pay the Colony's
debts, and putting
monies in bank, for
sending an agent
for England."

Oct. 1699 £600 "for sending agent
for England"

March 1700/1 £400 "current "for paying the
money of this Collony's debts and
Colony" defraying of the
publick Charge."

March 1701/2 £200 "in money" "for the use and
benefit" of the
colony according to
the direction of
the governor and
council.

May 1702 £300 "in money or Same as last. Money, indian corn,
good pay oats, barley, rye.
equivalent."

Feb. 1702/3 £500 £200 for fort £150 money, indian corn,
for jail £150 for barley, wheat, rye,
debts oats, wool.

Jan. 1703/4 £500 "for the support of "money or pay
the government." equivalent,
according to the
Collony's acts
heretofore made."

May 1704 £700 in "money or money, wool, Indian
pay equivalent." corn, barley, oats,
rice, wheat.

Feb. 1704/5 £500 in "current "for defraying the See "Amount."
money of New Collony's debts."
England in pay in
like species as
the last £700
rate."

June 1705 £500, same as last Same as last Same as last.

Aug. 1705 £1000, same as £300 for agent; Same as last.
last remainder not
specified.

May 1706 £700 £400 for fort £100 Same as last.
for magazine, £200
for debts.

July 1706 £300 Same as last.

Feb. 1706/7 £500 £400 for the
expenses of a
cruise, £100 for
debts.

May 1707 £1500

Feb. 1707/8 £500

Aug. 1708 £800 "in money, or £100 for colony Indian corn,
specie answerable house, £100 for barley, rye, oats,
at the usual agent, remainder wool, wheat.
rates." for debts and
general expenses.

March 1708/9 £500 Same as last. Same as last.

May 1709 £1000, same as Same as last.
last.

Aug. 1709 £1000 for debts.

Feb. 1709/10 £1200 same as last.

There were two wars against the French during this period; "King William's War" from 1689-1697, and "Queen Anne's War" from 1702-1713. In the first Rhode Island took little part. She sent no men to aid the other colonies but confined herself to strengthening her own defences and repelling the French privateers which occasionally appeared in her waters, particularly off Block Island. The same is true of the early years of the Second War, although in this case the danger was greater and really considerable amounts were expended in putting the colony in a condition of defence, especially in strengthening and supplying the fort at Newport. A regular garrison was maintained at Block Island. The colony took part in the expedition against Port Royal in 1707, and in 1709 sent to Boston and maintained for five months two hundred men to assist in the proposed expedition against Canada which did not take place. The useless expenditure necessitated by this failure fell heavily on the colony and when, in the following year, one hundred and fifty-five men were sent to take part in the expedition against Port Royal bills of credit were issued to meet the expense.

During the earlier years expenses did not increase much and seem to have been principally for the completion of the colony house, begun under Andros, and for the expedition to repel the French from Block Island.[77] Beginning with 1695 there is a change. The payment of public officers becomes a considerable charge. The expenses of the Agent increase. Then comes the war expenditure, at first the maintenance of the fort and the Block Island garrison and then the expeditions against Canada.[78]

The receipts are now almost entirely from taxes, other sources having become comparatively insignificant with the increasing revenue. The burden of taxation showed a constant tendency to increase. The average annual tax from July 1695 to February 1709-10 was about £1000, from August 1698 to the same date over £1200, from January 1703-4 nearly £1900, from May 1706 £2300, from February 1707-8 £2500, and during the last year £3700 was raised. A census of the colony in December 1708 showed a total population of 7181 of whom 482 were servants, black and white.[79] This would show a great increase in the per capita taxation over the earlier period. During the last year the per capita rate was over half a pound. The taxes collected during this single year amounted to as much or more than all the taxes collected during the first forty years of the colonial government. There is no doubt that the burden was a heavy one and, following the example of others, the colony sought relief in issues of paper money. With the adoption of this new source of revenue colonial taxation practically ceased and was revived only under the pressure of another and greater war thirty-five years later.

The law and administration.

With higher taxes the necessity of a system of taxation just and at the same time capable of strict enforcement, was more strongly felt. We consequently find from the very beginning of the period a great increase of legislation on the subject, so that by January 1703-4 there was placed on the statute book a body of law which contains the substance of our law today, and to which little was added, until, within recent years, the rapidly growing complexity of our industrial life has necessitated[80] more careful and detailed enactments.

In the case of the very first tax after the Restoration Warwick complained of overrating, and the Assembly finding "that the manner of rating of towns by guess is no suitable nor certain rule, but may prove very prejudicial; x x determine that for the future, all rates that shall be made in the Collony, shall be made according to so much on the pound as the estates of persons are valued at."[81]

The three succeeding taxes were, in accordance with the resolution of 1690, percentage taxes and in connection with them we find much interesting legislation. A committee appointed in 1695 to draw up a plan of assessment reported as follows, "We therefore propose this way be for the rateing all lands and meadows and merchants, tradesmen and housings in this Collony; that every town shall yearly choose two or three able and honest men, to take the view of each of their inhabitants of their lands and meadows; and so to judge of the yearly profit at their wisdom and discretion; and so also of merchants and tradesmen; and to make this part of the rate according to the yearly profit; or as they, when they shall have had a more narrow inspection into the lands and meadows, shall see cause to set by the acre." The report was ordered to stand as an act by the assembly.[82] Persons who did not bring in an account of their estate were to be rated at the discretion of the assessors. In this assessment according to profit, particularly of tradesmen and merchants, we clearly see the influence of the commerce of the colony, which was just at this time beginning to develop.[83] Here too we see the first idea of assessors annually elected.[84] The penny in the pound rate of this year was levied in accordance with the same act, as was also the two pence rate of 1696. In 1698 percentage taxation was abandoned, not to be again revived, and a return was made to the former custom of assessing a specified sum and apportioning it among the towns. An attempt however was made in the adoption of the most detailed law with which we have yet met, to avoid injustice in the assessment. In each town the assistants or two justices were to appoint two men to take account of rateable estate and of males between sixteen and sixty years of age, a return to be made to the assistants or justices, who were to call a town meeting to choose "three well qualified men" to assess each person's estate, in accordance with the account returned and the act of 1695, so as to raise the required sum. All male persons between sixteen and sixty years of age were required to pay a poll tax of one shilling,[85] Indians, negroes and impotent persons excepted, unless they were freemen or had set up a trade or calling in the colony.[86] Any person who should conceal any part of his estate from those appointed to take account was to forfeit one fourth of the amount concealed. Finally an account of the rateable estates was to be brought into the assembly, in order that if any town had been overproportioned the error might be rectified.[87] Though this act was not a general law it seems in its administrative features at least with some slight modifications[88] to have been the basis of the tax system until January 1703-4 when was passed the act which as we have said, is the foundation of the present law, so far as its administrative features are concerned. Its provisions were as follows: Each town on its annual election day was to make choice of "three able, knowing men x x x for Assessors, or Rate-makers, to stand for the year ensuing, who shall be engaged as all other town officers; they, or the major part of them, in each town so chosen, to make and proportion all town rates, and likewise each town's part of all Collony rates". Collection was to be made by the town constables who in case of neglect were to be responsible for the sums entrusted to them for collection.[89] The act was amended from time to time as occasion required. In May 1704 the provision was introduced requiring the rate makers before assessing a tax to give ten days notice to each person to bring in an account of his rateable estate, anyone failing to do so to have no redress for overrating.

The rate makers were also empowered to administer an oath to all offering an account of their estates.[90]

The system of percentage taxation having been abandoned by the assembly that body endeavored to obtain a satisfactory basis for the apportionment of taxes among the towns by ordering from time to time that each town should send into the assembly an exact estimate of its rateable estate. I have been able to find no trace of these early valuations.[91]

Looking at the period after 1695, there is a plainly marked progress both in legislation and administration. Before 1695, no well defined system of taxation had been established by general law, but it was customary for each act assessing a tax, or the amendments to it, to contain the rules for assessment and collection. A practically uniform system doubtless prevailed by custom, but it was not embodied in the law. After 1695, we meet with general laws upon the subject of taxation which gradually result in a recognized legal system. When a tax is ordered reference for the method of assessment and collection is generally made either to some former tax or to a general law, the latter being always the case after 1703-4.

The same progress is evident in the administration of the law. During the first few years great difficulties were often experienced, as in the earlier period, and it was frequently found necessary to override town machinery and place the appointment of the assessors and collectors of the tax in the hands of the officers of the central government.[92] As that government became more firmly established, however, the towns yielded more willing obedience and during the later years of which we are speaking the heavy taxes were collected with great promptness by means of the ordinary administrative machinery. The cost of assessment and collection at the time was great amounting to seven or eight per cent. of the tax collected. In addition to this there was frequently a loss resulting from the payment of taxes in kind, either because the articles had to be disposed of at price lower than that at which they had been received or because of injury suffered while in the treasury.[93]

Miscellaneous Revenues.

There still remain to be noticed one or two matters which have not fallen within the foregoing survey.

The first has to do with legislation in regard to traders who cane into Rhode Island from other colonies, sold their goods and then returned remaining often but a short time. It was claimed that these traders carried off much ready money and produce to the detriment of the colony, at the same time escaping the burdens which fell upon the home trader. A law of 1698 levied a tax of five shillings on every ten pounds value of goods sold at retail by any trader who was not admitted an inhabitant of the colony. The tax on goods at wholesale was twenty shillings on one hundred pounds. This provision seems to have been aimed at foreign goods, as grain, provisions, and the produce of neighboring plantations were excepted from its operation.[94] In 1700 the tax on retailers was raised to five per cent.[95] and in the following year all merchants remaining in the colony for a month were made liable to all rates and duties levied upon inhabitants.[96]

The second has to do with other sources of revenue, in addition to those already mentioned, enjoyed by the colony, more important for the principle which they exemplify than for the revenue which they yielded. In 1707 an act was passed provided for the survey of vacant lands in the Narragansett country. These lands were sold to settlers and the proceeds devoted to the Canada expedition.[97]

From the nature of the colony ferries had always been a matter of great importance. The assembly had occasionally interfered to regulate their management in the interest of the public, and in 1699 adopted the policy of leasing the ferries for a term of years on condition of an annual payment to be made into the general treasury. The receipts were small but the principle involved was an important one.[98]

Period of Paper Money, 1710-1751.

The history of paper money in Rhode Island has already been treated with considerable fullness.[99] It does not strictly fall within the scope of this monograph and will be treated only so far as to give a clear idea of the financial policy of the colony, an idea necessary to an understanding of the part played by taxation.

According to the report on the state of the treasury in 1709; the year of the attempted expedition against Canada, notwithstanding the heavy taxation, the colony found itself in debt to the amount of £3830-15s.-4d. To cover this deficit and meet the expenses of succeeding expeditions £13000 in bills of credit were issued during the years 1710 and 1711. These bills passed equal to silver at eight shillings per ounce.[100] By this means the colony succeeded in transferring the balance to the right side of the account.

During the years of peace which followed the peace of Utrecht annual expenses greatly diminished. Ordinary expenditure was considerably under one thousand pounds, extraordinary expenditure sometimes added as much again or even more to the account.[101] With the growth of population, political and economic development,[102] and the depreciation of the currency, these sums gradually increased so that in 1731 a report made to the Board of Trade estimates the ordinary expenditure at two thousand pounds and the extraordinary at two thousand five hundred pounds. By 1739, when the Spanish war began the total of these two sums had increased to about six thousand pounds.

Notwithstanding the diminution of expenditure the colonists at the close of the war in 1713 were loth to take up again the burden or taxation and for the next forty years the government supported itself almost entirely by means of bills of credit. The usual method of procedure was this. Bills of credit were issued and loaned at interest, for a term of years, to landholders on mortgage security to double the amount of the bills. These loans were termed "Banks." The following table shows the Banks issued before the Revolution, the number of years for which they were loaned, the rate of interest received and the value of the bills at the time of issue.

_No. _Date._ _Amount._ _Years _Rate of _Value of silver in
of loaned._ Interest._ bills._
Bank._

I 1715 £40,000 13 5 12s. per ounce.

II 1721 40,000 13 5 16s. per ounce.

III 1728 40,000 13 5 18s. per ounce.

IV 1731 60,000 10 5 22s. per ounce.

V 1733 100,000 10 5 25s. per ounce.

VI 1738 100,000 10 5 27s. per ounce.

VII 1740[103] 20,000 10 4 6s. 9d. per ounce.

VIII 1743[104] 40,000 10 4 6s. 9d. per ounce.

IX 1750 25,000 10 5 6s. 9d. per ounce.

At the expiration of the loans interest ceased and repayment was made in ten equal annual instalments.[105] The amount legally outstanding in January 1740-1 was £340,000, (sterling value £88074-16s. 10-3/4d.)[106] the actual amount was doubtless greater, as we know that repayment was not always promptly made.[107] In addition to the Banks the General Assembly had from time to time made direct issues of bills of credit. Before 1739, however, these issues were principally to replace worn and torn bills and did not increase materially the circulation. According to a report made in October 1739 the amount issued up to that time (including everything but the banks) was £117,001-15s. This sum had been offset by bills burnt to the amount of £105,704-15s. 3d., leaving an increase of circulation due to these issues of £11296-19s. 9d. Under the stress of war which now began and continued for several years these issues were largely increased. According to a report prepared in February 1749/50, for transmission to the English government, there was issued from September 1740 to February 1747 £206,000. The committee sums up its report in regard to these bills as follows: "At divers times, from the year 1710, to the year 1747, the colony has emitted bills of credit to the amount of £312300, old tenor; and there hath been called in and burnt at several times from the year 1728 to 1748, £176,964, 6s. 10d.; and by the last settlement of the general treasurer's account, it appears that there was then in the public treasury, £24,891 10s. 10d. from all which it appears that there is now outstanding of the bills issued to supply the treasury, £110,444 2s. 3d.; the whole of which outstanding sum was issued in the years 1746 and 1747,and is equal to £10,040 7s. 5d. sterling."[108]. The amount legally outstanding in bank money was £390,000 old tenor (£210,000 nominal) sterling value £35,444, 9s. 2d. The increased issues had depreciated the paper money so rapidly that its relation to sterling was now as 11 to 1. As in 1739, the actual amount outstanding the legal amount. By the aid of remittances from England for the reimbursement of war expenditures Massachusetts succeeding in sinking her paper bills. Rhode Island with much larger proportional issues failed to follow the same course.

Douglas in 1748 estimated the total amount of bills of all kinds outstanding at £550,000 old tenor and even this seems to have been an under rather than over estimate.