The result of this combination is that actual rates on assessed valuations varied in the different localities from 7.85 to 25 mills on the dollar. In our full report (see Volume Five, the Pittsburgh Survey), these inequalities were brought out en masse by dividing the detailed table of localities and rates into three large groups, placing all realty paying under 12 mills in the first, all paying above 12 and under 16 in the second, and in the third all property paying 16 mills and over. It was found that the low rates were being paid almost entirely by large "agricultural" holdings and expensive residence property, while the high rates were saddled upon small business realty, small residences, and congested tenement neighborhoods. The middle group included principally the downtown business wards, several manufacturing wards and a number of well-to-do residence districts. The conclusion from this grouping was inevitable. The inequalities of the land classification and of the separate ward rates did not offset each other. Rather they tended to accentuate the disproportions.

It may be objected that such conclusions as to the injustice of the tax burdens cannot be drawn until the tax is followed a step further; that the ultimate payers of the tax, not alone the property taxed, must be located. The answer is found in two theories of the incidence of taxation.

The first is the one held by the average business man, and is that the whole tax, both on land and on buildings, is shifted to the shoulder of the tenant. The second, that held by the economists, is that in the main, when both house and ground are occupied by the owner, the real estate tax cannot be shifted, but is borne by the owner. When the owner rents the property to another, the owner still bears the tax on the land. The tax on the house, however, is shifted to occupier or tenant. When, however, tax rates throughout a city are very unequal, as is the case in Pittsburgh, and when the people tend to congregate in certain quarters of the city and seem unwilling to move out to the suburbs, as is usually the case with immigrants, a part at least of the taxes on land that is rented, and all the tax on the buildings, tend to be shifted upon the tenants. So on the theory of the business man and of the economist, the conclusion that the bulk of the local real estate taxes fell upon the renting population, the small home owners, the working people, and the small storekeepers they deal with, is not changed.

tion: under-valuations; assessment revisions; triennial assessments; results or to aggravate them. Four points deserved special atten

and exemptions.

MAP 3. ACTUAL TAX RATES APPLIED TO ASSESSED VALUATION IN DIFFERENT PARTS

OF THE CITY.

laying the municipal tax burden which tended to minimize these up was whether there were any other elements in the system of Any Mitigating Elements in the System. A question next taken

As to the first, it is proverbial that the small man carries the heavy end of assessed valuations; and the lack of publicity in Pittsburgh had no other effect than to aggravate this condition. A number of Pittsburgh property owners familiar with local taxation testified to the local working of this tendency to undervalue, relatively, large holdings. In support of the accuracy of the Pittsburgh assessments, however, it should be noted that the assessors appraise buildings and grounds separately, a procedure which is more likely to get at correct market values than by lumping them together. On the other hand, the difficulty of estimating values in a city subject to such revolutionary growth as Pittsburgh was illustrated when we chose a number of districts typifying expensive residence property, small homes, tenements, small business property, downtown business property, and so forth, and had them appraised by several leading real estate men of the city. These figures varied as much from each other as they did from those of the assessors. Moreover, the transfer books in the assessors' office showed that out of 56 transfers in the new first ward in 1910, 34, or 60 per cent, were for considerations of $1 or other nominal amounts; 25 out of 41 in the second ward, 26 out of 66 in the third ward, and so on. It was impossible, therefore, to any large extent, to compare sale prices with assessments, or determine the percentage of valuation assessed against various kinds of property. With such disparity in estimated values and with the actual considerations concealed in so large a proportion of sales, the extent to which under-valuations were likely to favor the big property owners rather than the small owners depended very largely upon the personnel of the assessing staff, and the publicity given their work. In regard to publicity, very little was done beyond keeping the assessors' books open to public inspection.

Second, while the privilege of appeal for revision of assessments is open to all, it was the large property owner chiefly who benefited by it. The board of assessors in Pittsburgh is also the board of tax revision. At certain times each year the revision board gives notice that it will hear appeals for changing appraisals; and the number of responses to the notice is large. By leafing through the assessors' books, in which the revisions are recorded in red ink, we could see that a goodly number of appeals had succeeded, the revision being downward, of course: and that in the great majority of cases the properties affected were those held by the well-to-do and rich

large and valuable holdings. This impression was corroborated by the statements of several members of the board. The explanation is not necessarily that such taxpayers have greater influence. Few, if any, of the small property owners ever appear before the board to ask for revision, but it pays the big owners to appeal; real estate men, agents and attorneys for owners scrutinize the assessments closely, watch the papers for notices of hearings, present their cases in the best form, and meet with some success in their appeals, almost as a matter of business.

As to the third point, triennial assessments, under the plan in vogue for years in Pittsburgh, tax rates tend to rise in the second and third year after assessments. Where, as was the case in Pittsburgh, tax burdens are unequally carried, such increases in the tax rate, of course, add new burdens to be borne in the same old unequal ratios. Until 1909, assessments oftener than every three years were illegal. The new act, however, provided for new assessments in any ward where they should be deemed necessary in any subsequent year. Thus the assessors were armed with full power to make annual valuations throughout the city as is done in New York, Philadelphia, Boston, St. Louis, and many other large cities. The department did not make a new assessment for 1911, however, nor for 1912, in a thoroughgoing way as was done for the triennial year 1910.

Fourth, Pittsburgh's exemptions of real estate from local taxation may be divided into two groups, commercial property and noncommercial. Non-commercial property included the long list generally exempted in all cities, such as churches, synagogues, Christian and benevolent associations, schools, colleges, libraries, hospitals, asylums, cemeteries; also city property, such as fire department buildings, city halls, parks, bath houses, police stations, and markets; and county, state and federal property, including court houses, jails, penitentiaries, armories, and post offices. In addition, of course, all public streets and alleys are not subject to tax levies. The city markets and the post offices are grouped here although they are commercial in character. They are owned by the government, however, and their profits do not go to individuals.

A more or less unique feature of local exemptions is found in the commercial group. In 1910, Pittsburgh exempted $22,774,857 of

3 The total valuation of these exemptions had never before 1910 been computed by the assessors.

real estate owned by railroad companies, street car companies, gas companies, telephone, incline plane, water, light and heating companies. This amount is split up among the different kinds of companies, as follows:

Exempt Commercial Property in Pittsburgh in 1907

These amounts are taken from the assessors' book of exemptions for 1907, as the 1910 book had not at the time of this inquiry been written up. New exemptions had been added on the records and property recently taken out of the exempt list substracted; but a careful appraisal of exempt properties was evidently not regarded as of importance, some of the valuations going far back of 1907. The figures, therefore, are considerably under present values.

Sixty-six feet of right-of-way of all railroads operating within the city limits is not subject to local rates. The total of railroad land exempted amounts to $17,106,701, or 76 per cent of the total commercial exemptions. Practically all is right-of-way. The other 25 per cent of total commercial exemptions is mainly buildings and equipment of railroads and building sites and buildings of the other companies indicated. Of these, railroad property, other than land, in turn represents almost one-third.

The Pennsylvania Railroad owns the largest amount of this exempt property-64 per cent of the grand total. Thirteen million dollars in land and over one and a half million dollars' worth of buildings, sheds and so forth, belonging to it pay no local taxes. The buildings are situated almost entirely on the North Side and include the Fort Wayne depot valued at $145,000, a number of freight buildings, machine shops, storage houses, offices, and over $900,000 in tracks.

• Exemptions were listed, however, in 1913.