Robert R. Livingston's Reasons against a Land Tax

Beverly McAnear

[Reprinted from the Journal of Political Economy, Vol. 48, No. 1 (Feb., 1940), pp. 63-90]

INTRODUCTION

Among the papers of William Smith, Jr., in the New York Public Library, there is a manuscript essay in the hand of Judge R. R. Livingston, second lord of Clermont and a leader of the Livingston party from I759 to I775. To this paper William Smith, Jr., added the title, "Mr. Robt. R. Livingston's Reasons agt a Land Tax. "[2] Unfortunately, the manuscript is undated, but probably the paper was written about I752.[3]

In writing this essay Livingston's prime purpose was to defend the non-taxation of privately owned but completely undeveloped land in New York. Since great quantities of land owned by wealthy New Yorkers were still unimproved in 1752 -- and in this category fell thousands of acres held by the Livingston family -- the judge was seeking to protect a privilege of great value to his own class and his own family. In the course of this defense Livingston discussed the proper bases of taxation, finally reaching the conclusion that one of the wisest methods to raise governmental revenue was by an income tax graduated according to the ability of the taxpayers to meet the levy.[4] But with this analysis he was not content; he continued to defend the manorial system of landholding as a social and political bulwark for the people of New York and an economic blessing for the mother-country. This system, he asserted, was being endangered by the political ambitions and economic greed of the merchants, warfare to him unfortunate but not surprising, for he believed the rivalry between economic classes to be the mainspring of politics. The essay, therefore, is of prime importance for its plea for an income tax, for its definition and application of the economic interpretation of politics, and for its commendation of the New York system of land grants -- praise almost unique in literature of the period. Likewise it is of great interest because New York history of subsequent years reveals that this document is, at once, a description of one force driving a leader and a class into political revolt and, again, a statement of governmental policy which Livingston's party to some slight extent eventually put into practice.

In reading Livingston's essay, the reader must remember that in New York the provincial land tax was in fact a rate placed upon the several counties and each county collected its share under the individual methods of assessment and collection established by law for that county. Under these several systems of tax administration, no county in the province seems to have assessed unimproved land prior to 1753, and though after that date some of the southern and more populous counties required taxation of all land,[6] none of the northern counties prior to the Revolution permitted assessment of undeveloped land.[7] This exemption, originally customary but later ordered by statute,[8] resulted from several factors. In part it represented the political power of the great landholders, operating either through their votes in the legislature or through pressure exerted upon county officials.[9] Again, statutory provisions for taxation of undeveloped property in Albany County and New York City reveal that the lack of plats of survey often made it impossible to ascertain the ownership of a given tract, and collection of a levy was therefore impossible.[10] Since tax collectors held office for a year, a tax which could not be promptly collected could, in effect, never be collected." Finally, it would appear that there was popular prejudice against the taxation of unimproved land because nearly every property-holder possessed some undeveloped acreage.[12]

Against these exemptions there was objection, ably summarized by a writer in the New-York Gazette, revived in the Weekly Post-Boy of November 11, 1751. So well did this essayist express the arguments of those demanding reform that R. R. Livingston may well have been rebutting this essay. The primary premise of the Post-Boy correspondent was the unfair burden of taxation placed on the merchants, who, he claimed, were each required to pay L40-L50 a year in property taxes and L400-L500 a year in duties on his goods. Nor could these duties be passed on, for the price of goods was fixed by scarcity and not by the amount of taxes paid on them. Then there was a second group of taxpayers-the yeomanry. A yeoman might own 500 acres of improved land and adequate stock; yet he would be forced to pay taxes of only L5 or L6 a year. Finally there was a group of great land barons who paid nothing on holdings of 30,000 acres of unimproved land. To remedy this situation, the essayist proposed that all good land in the province be required to pay a provincial tax of one penny an acre, all bad land one farthing an acre. Such a tax he defended on the grounds that it would yield revenue-estimated at L35,416 annually -- large enough to meet all the demands upon the provincial government. Nor would the burden of such a tax be unduly heavy, for a landowner who leased 10,000 acres would receive an income of L1,000 a year rent, while the taxes would amount to only a little more than L4I. Finally, the essayist urged the reader to remember that the landowner had the advantage of the increased capital value of his lands.

The writer then turned to consider possible objections. He considered the argument that it would be unfair to tax poor lands and replied that poor lands usually were pine barrens and produced valuable timber. He admitted that the proposed tax, added to the royal quitrent, would in some instances be a double tax, but he denied that the amount or number of instances of double levies would be important. Finally, he disclaimed any intention of distressing the land barons: he urged that they were men of great wealth and therefore had "the largest Share of Power ....... Certainly it was fair that such men should pay taxes in proportion to their estates and "not load the Poor and Industrious with the Taxes .. . " And surely the land barons were prosperous enough, unless their estates were "attacked with those violent Distempers of Luxury and Extravagance, which will inevitably bring on a Mortgage, which is seldom or ever removed, but by the most diligent Application, or some surprising Turn of Fortune."

The taxes proposed in the Post-Boy would have meant ruin for the manorial lords, and in 1752 they had good reason to fear such a revision of the tax structure of the province. James DeLancey, the leader of the majority party, had proved himself to be devoted to the interests of the New York City merchants's and already he had financed all the costs of King George's War by property taxes.[14] It was this threat of tax reform, so fully explained by Livingston in the following document, that was one of the forces impelling the Livingston family to wean the northern manorial lords away from the DeLancey party. And the Livingston clan had other grievances against James DeLancey. The family had lost valuable offices as a result of the feud between Governor George Clinton and DeLancey, and the latter showed little appreciation of the sacrifice's Furthermore, by I752 Massachusetts was beginning to contest the eastern claims of the lord of the Manor of Livingston, and the assembly and the governors of New York-among them James DeLancey -- were to show little zeal in defending the claims of the Livingston family.[16] The fear of tax reform, anger over the loss of offices, the desire to protect land claims, all caused the Livingstons of Clermont in December, 1751, to plan open battle against James DeLancey. An alliance was offered to Governor Clinton and his supporters, who accepted, only to have the bargain nullified at the will of the head of the Livingston family, the lord of the Manor of Livingston.[17] But other members of the Livingston family were becoming restive, and the lord of the manor became ever more fearful of his eastern boundary. By 1752 agitation for the new party was well launched;[18] by 1754 the Livingstons had gained a respectable following in the assembly;[19] in the elections of I761 they gained a scant, though unreliable, majority of the representatives.[20] This document therefore is a clear-cut statement of one set of forces impelling a man to lead a successful political revolt.

The document also foreshadowed party policy of the Livingstons in years to come, for, in a limited field of taxation -- the levy for the maintenance of roads -- the Livingston party applied the thesis, argued by R. R. Livingston in the following document, that taxes "ought to be equal in proportion to their [the taxpayers'] several Abilities....." Under the basic act of 1703 -- and subsequent amendments -- the maintenance of roads was provided for in great measure by the labor of residents who, whether freeholders or not, were subject under penalty of fine to be called to work on the highways for not more than six days a year.[22] These payments for fines were, until the introduction of an additional poll tax in 1760,[23] the only sources of income available to the road commissioners for purchase of materials for road construction or repair. Thus, until 1764[24] the basic levy for highways was in every county a poll tax, either in services or in cash. Objection to the unfairness of this levy on polls was one of the early tenets of the Livingston party on the grounds that a poll levy was unfair to the poor and therefore inequitable,[25] and, after this party gained virtual control of the assembly in 1761, reform was gradually undertaken. The first step was to change the basis of levy from polls to property, a reform caused by the desire of some counties for funds to hire artisans and to purchase materials,[26] and of other political subdivisions to pay all costs of highway maintenance.[27] To transfer the cost of the maintenance of the roads from a poll levy to a property tax obviously placed a heavier burden on the wealthy, and that such would be the effect of the tax was clearly recognized at the time. Thus, in the instance of Albany and Tryon counties the revision was extended to a graduated scale of taxation by which the rate of the levy on the most wealthy taxables was one-third higher than that on the poorest taxables.[28] The defense of this policy is suggested by the Ulster act of 1770, which directed that the levies for the road tax be made "with due respect .... to the comparative Abilities of the Inhabitants therein assessed ..."[29]

A second type of reform of the highway levy was the creation of regulations which would place upon the wealthier a heavier share of the road work. Two methods were pursued to achieve this end. One device was to require that resident freeholders or householders should be forced to work twice as many days as non-property-holding tradesmen or laborers.[30] Another method was prescribed for Albany and Tryon counties in 1772. For just as this act had placed a heavier incidence of taxation upon the wealthier, so did it provide a graduated scale by which the larger property-holders were forced to assume a greater number of working days. Thus a man assessed for a property valuation of L50 was annually liable for 8 days' work, whereas a man assessed only L5 was assigned 3 days. This system of taxation was levied in order that the maintenance of the highways "may be as equitably proportioned BETWEEN the Inhabitants .... as the Nature of the Case will admit."[31] This note of social justice was stated even more clearly in an Ulster act of similar content: "According to the said [expiring] Act no Difference is made between the Rich and the Poor; but they are (contrary to common Justice) obliged to work every Year an equal Number of Days. ....[32] Thus the reform of the support for road maintenance was persistently based on the principle that the wealthier should bear a heavier share of the burden because of their superior ability to pay and because of the demands of "common Justice." It will be noted that those acts which stated those principles most fully -- in theory and application -- were acts extending to Ulster, Albany, and Tryon counties. These were counties which, from 1761 to 1775, were represented by assemblymen pledged to the Livingston party and their representatives were therefore only putting into effect R. R. Livingston's opinion that taxation should be graduated according to ability. Furthermore, it is noteworthy that the more sweeping reforms were constituted after 1769, a year in which the Livingstons met a crushing defeat at the polls throughout the province. Clearly, these adaptations of the tax structure were being developed by the Livingstons as one of the several programs by which they hoped to gain popular support at the next election.[33]

By accepting an economic interpretation of politics as the basic premise for his argument, Livingston was simply summarizing New York political thought; his statement is unique among the New York materials only because of its clarity of statement and precision of application. The theory was accepted without question by New York political commentators that self-interest -- personal, occupational, class, partisan -- was the basic control over men's political judgments.

An essayist of 1753 wrote: " 'Tis true, every Man ought to promote the Prosperity of his Country, from a sublimer Motive than his private Advantage: But it is extremely difficult, for the best of Men, to divest themselves of Self-Interest .... A propagandist for paper money in 1729 considered the probable reaction to his proposal by the farmer, the artisan, the lawyer, the money-lender, the merchant, the great landowner; he was able to decide the opinions of these several groups by adopting the premise "that Men are always powerfully influenced in their Opinions and Practices by what appears to be their particular Interest."[35]

In 1726 Cadwallader Colden, writing upon the proper methods of taxation, indicated in pungent terms his certainty of class interests:

I would ask .... in what country .... the whole Burthen [of taxes] was taken off the Poor, and laid on the Rich: Is it not generally the Rich that lay Taxes, and do they not constantly take care not to Overburthen themselves? It is true they are often Chosen by the Poor, but have they not always found out ways to keep them Dependent, either by their Hopes or their Fears? so that they are in effect, at the Command of the Rich, tho' they may think themselves ever so much at their own Disposal. Can they expect to be proof against the deep Designs of men .... whose Interest is so highly concerned to avoid a heavy Load themselves, and to shuffle it off upon others ... [36]

Luminously, Peter R. Livingston, a leader of the Livingstons, revealed the weight of economic gain in party disputes, when his father chided him for demagogery and fomentation of religious intolerance: Am Sorry to find that you think the present Parties are a Striving [?] whether the Church or Meeting shall rule. it is by no means so. But the DeLancyes are striving[?] their utmost to make our famaly rediculous and to keep them out of all Posts of Honour or Profit and are determined to oppose every thing and every body that they support which is too hard to bear.[37]

Thus the force of economic pressure in politics was to the mind of the contemporary New Yorker a constant-the prevailing attitude had been summed up in 1709 by an obscure English officer: "Interest that governs all the world, tyrannizes at New York."[38] In their discussions of the clash of economic interests, the New York pamphleteers at times differentiated between the demands of the rich and poor, and beginning in 1734 occasional references were made in the political literature to the middle class.[39] These appeals to class political action were more apt to be based upon prejudices or relatively minor annoyances than upon divergent economic programs.[40] The wealthier argued that they were better qualified to rule than their poorer fellows; if the poor would elect the wealthy to office, the rich would insure the material prosperity of the poor. Naturally, it followed that, once the wealthy were elected to the assembly, the representatives should rely upon their own judgments and not be subject to the pressure of the electorate. Therefore the wealthy opposed the publication of the votes of the representatives and open sessions of the assembly.[41] On the other hand, the middle-class leaders urged that the rich gained their political power by applying pressure upon debtors and those with whom they traded and hired and, to maintain this influence, were anxious to defeat proposals to inaugurate the secret ballot.[42] These pamphleteers were little impressed by claims that the wealthy inherently possessed the ability to rule, and, in addition, they questioned the morals of the rich and urged that the moneyed men, recognizing their superior powers of self-defense through flight, "the Force of Money, and Powerful or rich Relations," would be more susceptible to abuse of power than would be men of the middle class. To the contrary, "the middling People, the Farmers, Shop-keepers, and Tradesmen .... , had ample political abilities and were the most honest and moral class in the community. Upon them was placed the bulk of the burden of the financial support of the government and the defense of the province, and they too had property to protect against tyranny or invasion.[41]

Not until about 1750 did there appear an urban and a rural proletariat. The rural proletariat consisted of a number of farmers of the counties east of the Hudson who were either tenants-at-will or who held short-term leases. These men demanded, preferably, outright ownership of their land or, failing to gain fee simple, lifetime leases. This agitation flared up in Dutchess County from 1749 to 1753 on the Pawling and Beekman estates, from 1753 to 1758 on the Manor of Livingston, and from 1765 to 1768 on the great estates in Dutchess and Westchester counties. The anger of the tenants was expressed in refusal to pay rents, in ejectment by mobs of those tenants accepting leases for higher rents, in riots against the landlords, and in votes for candidates opposed to the land barons.[44] The New York City proletariat appeared as a result of a sharp transition of the pattern of production in New York after 1748, a shift which at once placed the skilled artisan completely beneath the control of a master and which likewise brought into the city a large number of unskilled day laborers -- men who worked for a wage approximately 50 per cent less than that of the artisans.[45] This heterogeneous group signalized their growth of numbers by rioting against a devalorization of English pence, a reform which bore heavily on the poor,[46] and the hard times of the 1760's brought complaints of low wages and high prices.[47] Tenants complained against statutes which prevented subleasing of rooms in rented houses and against excessively stringent building codes,[48] and the artisans of the city complained that small claims could not be collected as easily in the city as in the other counties.[49] Charges were made that poor and rich were forced to serve the same length of time in road work, the city watch, and the militia, and that therefore the poor were in effect taxed excessively.[50] Stress was laid on these grievances during political campaigns, and while neither urban nor rural proletariat ever developed a comprehensive political program, yet during the pre- Revolutionary years their restlessness was played upon by conservative and radical, Livingston and DeLancey, as the several groupings of the propertied classes each in turn sought the support of the Sons of Liberty.[51] That such political manipulation might involve a political and social revolution men of property became aware, and on the very eve of the Revolution James Duane wrote a clear expression of the fears that the wealthy politicians had of their propertyless supporters:

I am much pleased that young Mr. Livingston is raising a company in the Manor. I wish he may extend his View's further, in the only plan, which, independent of the grand Contest, will render landed property Secure. We must think in Time of the means of assuring the Reins of Government which these Commotions shall subside[. Licenciousness [?] is the natural Object of a civil afar [sic] discord and it can only be guarded against by placing the Command of the Troops in the hands of Men of property and Rank who, by that means, will preserve the same Authority over the Minds of the people which they enjoyed in the time [?] of Tranquillity.[52]

Part 2