In the American colonies we meet with entirely new conditions. Public needs were simple and few, and were mostly local in character. Customs duties were for the most part controlled by the mother country in the interests of her general colonial policy. So the colonists were driven to other forms of taxation. Practically free trade in land existed. Land at a known selling value early formed a large part of the property of each citizen, and differed in no essential particular from his other property. There were in some colonies, to be sure, charges of a feudal nature known as quit rents, which were a recognition of the king's interest in the land. These never became of fiscal importance, and never developed into taxes. Nor do they seem to have ever seriously modified the essentially free character of land-owning, since they were so irregularly and meagrely collected. They were " acknowledgments His Majesty receives of the People's Tenure and Subjection."1 At times they developed into an apparent tax on certain lands. They seldom formed a part of the revenues of the colonial treasuries, being generally payable to the king.2

Just as there were three different forms of government among the colonies, so there were in the beginning three different tendencies in taxation.3 New England began with a tax on property and faculty. The General Court of Massachusetts laid down in 1634 the following principle : " In all rates and public charges the towns shall have respect to levy every man according to his estate, and with consideration all other his abilities whatsoever, and not according to the number of his persons."

1  Spottiswood Letters, quoted by Ripley, Financial History of Virginia.

2  See Wood, History of Taxation in Vermont, p. 13. Also Schwab, History of the New York Property Tax.

3 Cf. Seligm an, Essays, pp. 19 ff.

1 Later, however, poll taxes were used, and the general property tax was extended to cover property in the process of acquisition, or the earnings of labour. In all the New England colonies the resulting system was practically as follows : Each person was to contribute as he was able. Ability was measured, first, by property, real and personal ; secondly, by the person himself ; thirdly, in the case of wage-earners, merchants, and others, byearnings. With a few notable exceptions, as in the case of lawyers, the third measure of ability gradually fell into disuse. It has been repeatedly pointed out 2 that the New England people had the habit of saving. All earnings were soon turned into property. So that the demands of justice were fully met by the general property tax and the poll tax. In addition to these direct taxes, there were a number of indirect taxes, "imposts," some collected in the form of licenses, and many as excises.

In the Southern colonies, of which Virginia will serve as a model, the first taxes were the poll taxes. " Personal responsibility," says Mr. Ripley, " was thus the basis of taxation at first, but as the burden of taxation became heavier this liability was partly transferred to real estate."

1  Massachusetts Records, quoted by Douglas, Financial History of Massachusetts, p. 18.

2  Walker, " The Bases of Taxation," Pol. Sci. Quar., Vol. III.

1 This transfer of the burden to real-estate began with the practice of making the personal tax a lien upon the property of absentees, or of persons dying before the payment of the tax. The general property tax in a form like that in use in New England did not exist in Virginia before the Revolution. The grossness of the poll tax was modified by some reference to the different kinds of property owned. In consequence of the failure to develop a good system of direct taxes Virginia resorted to indirect taxes, export duties on tobacco and hides, import duties on liquors and slaves, and some general tunnage duties forming the main features.

The third or central system is fairly represented by New York. There, under the West India Company, 1621-1664, taxation first took the form of moderate indirect taxes on goods imported and exported and imposts on the consumption of beer, wine, and spirits. It was after the passage of the colony into the hands of the English that attempts were made to develop the property tax. The actual existence of this tax begins with the formation of the Assembly after 1683.2

1  Financial History of Virginia, p. 21.

2 See Schwab, Die Entwickelung der Vermőgensteuer im Staate New York, Jena, 1890. Also Schwab, History of the New York Property Tax, Pub. of the Amer, Econ. Assn., V., 5.

In all parts of the United States after the Revolutionary War the main reliance for local revenue was the general property tax. The commonwealths, as such, had little need for revenues until after 1840. In the formation of the Union indirect taxes were made the prerogative of the federal government, so that the commonwealths had to resort to other means. The character of direct taxation in the United States since the formation of the Union will be treated in the next chapter. The differences in the forms of taxation in the different parts are due both to political and economic differences.