seldom lacks force. Cynics may sneer at such popular manifestations as
paroxysms of virtue, but practical political leaders are not likely to
underestimate the damage which they are capable of inflicting. Even
if the machine emerges comparatively unharmed from such a period of
attack the heads of some of the leaders are likely to fall before the
popular fury. Remembering Fernando Wood’s caution about the necessity
of “pandering a little to the moral element in the community,”
farsighted bosses are therefore more and more inclined to limit their
operations in the field of vice protection and to seek support from
their relations with legitimate business interests. If this process
is carried on further, as now seems likely, the general problem we
are considering will be simplified by the reduction to a minimum of
corruption by the vicious element, although, of course, we would still
have on our hands the large question of corruption in the interests of
otherwise legitimate business.
With all their mistakes and wasted energy moral uprisings will help
this development materially. After a “spasm” things seldom fall back
into the lowest depths of their former state. We need more frequent
spasms, at least until we shall have learned to live continuously
and steadily on a higher plane. The gravest evil of the present
intermittent situation would seem to be that in our occasional fits of
indignation we write requirements into the law which, considering the
prevalence of minor vicious habits among large masses of the people,
are impossible of execution. One of the lessons which we have learned
in attempting to regulate business is that legislation of this sort
must be supplemented by special administrative agencies if it is to
have any effect whatever. Admirable child labour laws, for example,
remain absolutely futile without labour commissioners and a force
of inspectors created particularly to see them enforced. Yet in the
regulation of vice we rush on heedlessly piling one new duty after
another upon an already overburdened and underpaid police force. As
a consequence its chiefs become habituated to the idea that they can
exercise discretion as to what laws are to be enforced and what laws
may with impunity be neglected. Usually the police decision of such
questions is that crime must be dealt with vigilantly and severely,
vice, on the other hand, with large tolerance. No better situation
could be devised for the schemes of corruptionists. Moreover the latter
are materially aided in their nefarious work by the high standards and
the severe penalties which the moral element has written into the law.
Using these as clubs the corrupt politician can extort much larger
contributions than would otherwise be possible. There are only two
ways in which this situation may be met. Either we must reduce our too
ambitious programmes for the regulation of vice, or we must strengthen
our police forces until they are adequate to meet the demands placed
upon them.
In whatever way this question may be decided there is ample ground
for demanding the application of the most thoroughgoing civil service
reform rules to our police establishments. It is well known that the
rank and file of our police forces despise the dirty work forced upon
them by the political wretches “higher up.” No man capable of the
heroic deeds which are commonplace in the annals of the police service
rings the doors of bawdy houses and collects a tithe from the sorrowful
wages of shame except under the compulsion of the sternest bread and
butter necessity. Usually it is necessary to select the yellow dogs
of the force for this particular devil’s work, and the promotion of
such creatures for their pliancy is a stench in the nostrils of their
honest comrades. If one doubts that this is the real spirit of the
police force let him consider the character of the fire departments
of nearly all of our cities. The men in the latter service are chosen
from the same class, face dangers of the same magnitude, and receive
wages of about the same amount as policemen. In the main they deserve
and receive high praise for their efficiency and honesty. It is true
that they are not exposed to the corrupt temptations which surround
policemen, and also that their work is held up to exacting standards
by business men and insurance companies. The fact remains that our
police forces are constructed of the same human material as our fire
fighting forces. It is difficult to avoid the conclusion that if we
adapt our requirements in the regulation of vice to the capacities of
our forces, (or _vice versa_); if we criticise and appreciate their
work in the same way as we do the work of their sister department; if
we place their appointment, tenure, and promotion, upon grounds of
merit and utterly exclude the influence of the corrupt “higher-ups,”
we will have gone a long ways toward drying up the most despicable of
the sources of political corruption.
* * * * *
Certain of the moral aspects of tax dodging have been dealt with in an
earlier connection.[63] Contrary as it may seem to the principle of
economic interest there is a good deal of carelessness and stupidity
in this field, and cases are occasionally found of property that has
been over-assessed. On the other hand more or less deliberate dodging
is indulged in very largely. So far as this practice deserves the
stigma of corruption it is a stigma which rests to a very considerable
extent upon the so-called class of “good citizens.” Certain residents
of “swell suburbs” who daily thank God that their government is not
so corrupt as that of the neighbouring city are among the worst
offenders of this kind. As directors of corporations men of the same
standing are sometimes responsible for monumental evasions. Of course
what was said with regard to the reaction of business against state
regulation holds good here also. There are plenty of legitimate methods
of protesting against unjust or oppressive taxes,—before the courts,
before legislatures, and by open propaganda designed to influence party
organisations. But the furtive concealment or misrepresentation of
taxable values is a matter of entirely different moral colour, and it
is the latter practice that we now have to consider.
Tax dodging is so common and so well established that it has built up
an exculpatory system of its own. Instead of bringing his conscience up
to the standards set by the law the ordinary property owner inquires
into the practice of his neighbours, and governs himself accordingly.
Wherever business competition is involved the threat of possible
bankruptcy practically forces him into this course. Yet withal our
citizen is likely to be somewhat troubled in his mind about his
conduct, at least until he learns how shamelessly John Smith who lives
just a little way down the street has behaved. This information quite
restores his equanimity, and at the next assessment he may outdo Smith
himself. Thus the extra legal, if not frankly illegal, neighbourhood
standard tends constantly to become lower. And not only taxpayers
but tax officials themselves are affected by local feeling and fall
into the habit of closing their eyes to certain kinds of property and
expecting only a certain percentage of the valuation fixed by law to be
returned.
Back of such neighbourhood ideas on taxation there are at least
two lines of defence. One is that our present tax system is highly
illogical, bothersome, and burdensome. To a considerable extent,
unfortunately, this is the case, but it does not justify illegal
methods of seeking redress. Not much argument is required to
convince the ordinary property owner that all the inequities of the
existing system fall with cumulative weight upon his devoted head.
His pocketbook affirms this view more strongly perhaps than he would
care to admit, but anyhow the net result is that he feels himself
more or less pardonable for evading the burden as far as he can. The
other common excuse for tax dodging is supplied by the conviction that
much of the money raised by government is wasted or stolen. The logic
based upon this premise is most curiously inverted, but none the less
it sways the action of great multitudes. Politicians are a set of
grafters, says our taxpayer. The more money they get the more they will
waste and steal. I will punish the rascals as they deserve by dodging
my taxes, that is _by becoming a grafter myself_. Seldom, however, is
the latter clause clearly expressed. Yet the existence of corruption
on one side of the state’s activities is thus made the excuse for
corruption on another side whereby the state is mulcted of much revenue
which it might receive. Of course evasion results in higher tax rates,
which, by the way, fall crushingly upon the citizen who makes full and
honest returns, and thus part of the loss in income to the government
is made up. It seems clear, however, that in the long run government
income is materially reduced by the feeling prevalent among taxpayers
which has just been described and the procedure based upon it. On
the whole this is by far the most serious single economic consequence
of political corruption. It is bad enough that public money should be
stolen, that public work should be badly done, and that politicians
and contractors should grow rich in consequence, but it is far worse
that the state should be starved of the funds necessary to perform
its existing functions properly and to extend its activities into new
fields. In the regulation of industry, in education, philanthropy,
sanitation, and art, American government is very far from achieving
what it should do in the public interest and what it could do more
efficiently and cheaply than any other agency. Yet our progress toward
this goal is perpetually hindered by the existence of waste and
corruption on the one hand, and the consequent peremptory shutting of
the taxpayers’ pocketbooks on the other hand.
Consideration of the theory underlying tax dodging reveals certain
broad lines of correction. In proportion as our tax system approximates
greater justice, the evasion which defends itself on the ground of the
inequities of the present system will tend to disappear. To show how
this may be done is beyond the limits of the present study. Suffice it
to say that the work which reformers and students of public finance
are now doing on inheritance, income, and corporation taxes, on the
taxation of unearned increment, on various applications of the
progressive principle, and so on, should eventuate in the tapping of
much needed new sources of income, and thus facilitate the correction
of present unjust burdens. The introduction of economical methods and
the elimination of the grosser forms of corruption in the field of
government expenditure will weaken the excuses offered for evasion on
the ground of public waste and graft. There is an overwhelming mass
of evidence to show that the American taxpayer, once convinced of the
necessity of a given public work and further assured that it will be
honestly executed, is generous to the point of munificence. The annals
of our cities are full of the creation of appointive state boards
composed of men of the highest local standing and intrusted with the
carrying out of some great single project,—the erection of a city hall
building, the construction of a water works and filtration plant, or of
a park system. Very few such commissions are grudged the large sums of
money necessary for their undertakings. If every ordinary branch of our
government enjoyed public confidence to a similar degree such special
boards would no longer be needed, and ample funds would be forthcoming
from taxpayers for all our present functions and for other new and
worthy functions which might be undertaken greatly to the public
advantage. Finally our system of tax administration, like our system
of government regulation of business, needs strengthening. Larger
districts and centralised power in the hands of the assessors will help
to lift them above the neighbourhood feeling which is responsible for
so much evasion. Higher salaries will bring expert talent and backbone
sufficient to resist the pressure brought to bear by large interests.
As a matter of fact the first threat of a virile execution of the laws
wipes out a considerable part of the tax dodging in a community.
There would also seem to be much virtue in the plan for the reduction
of the tax rate advocated by the Ohio State Board of Commerce.[64]
Given a community with a high general tax rate it may be the case,
for example, that only about fifty per cent of true value is being
returned. Everybody knows it; everybody is sneakingly ashamed of it.
Still fundamental honesty is supposed to exist in the man who does not
cut the percentage below say, forty; the really mean taxpayer is he
who risks twenty-five per cent on what he feels obliged to return and
conceals whatever he can into the bargain. Under such circumstances
it is proposed to take the heroic step of reducing the tax rate to
one-half its existing figure or even less.[65] If this can be done it
is hoped that taxpayers can be induced to return their property at full
value, and that much personal property will come out of the concealment
into which it has fled under the menace of a high general property tax
rate. In support of this argument cases are cited where a reduction
of the personal property tax rate alone has brought in much larger
returns and converted into a source of revenue a form of taxation which
everywhere under high rates shows a tendency to dwindle to practically
nothing.
As against the plan it may be said that taxpayers are habitually
suspicious and extremely likely to regard any change whatever as
certain to increase their burdens. Many of them would see nothing in
the proposition beyond a tricky device to screw up their valuations
under the pretext of low rates with the intention of falling upon them
later with rates as high or higher than before. Unless the reform were
fully understood and then backed up by the most vigorous administration
there would be grave danger that revenues would materially suffer.
Given these conditions essential to success, however, the plan
would seem decidedly worth trying. A community willing to take the
plunge, it is pointed out, would enjoy large advantages over its
less enterprising competitors in the advertising value of a low tax
rate, particularly as a means of inducing new industries to locate in
its midst. The reform would probably not increase revenue, indeed it
does not aim to do so, but it would yield a moral return of immense
value. Self respect would be restored to many otherwise thoroughly
good citizens, and public opinion, to the tone of which the taxpaying
class contributes largely, would be lifted to higher planes. Under the
present vicious system there must be a considerable number who realise
secretly and more or less vaguely the inherent kinship between their
conduct and that of the corrupt political organisation under which they
live, and who in consequence remain inactive and ashamed when movements
for better things in city, state, or nation, are on foot.
* * * * *
In our earlier study of the nature of political corruption an effort
was made to distinguish between bribery and auto-corruption. As
examples of the latter, legislators may employ knowledge gathered on
the floor of the chamber or in committee rooms for the purpose of
speculating to their own advantage on stock or produce exchanges;
administrative officials who by virtue of their position learn in
advance any information which may affect the market (_i.e._, crop
reports) can do likewise; knowledge of important judicial decisions
before they are handed down may be exploited in a similar fashion;
insiders who have access to plans for projected public improvements
are in a position to acquire quietly the needed real estate for
sale at much advanced prices to the city or state when condemnation
proceedings are actually begun. In addition to large and striking
transactions of this sort there are innumerable smaller possibilities
for auto-corruption which present themselves to public functionaries
ranging in rank from the highest places in the official hierarchy
to that of the policeman on his beat. Logically the practices under
consideration are not separable from the general forms of political
corruption as the term is applied in the present discussion. Instead
they would seem to be a special method of carrying on corrupt
transactions of many different kinds. All cases of auto-corruption,
however, have the common feature that bribery by an outside interest
is excluded, and this absence of bribery has sometimes led to the
assertion that the practices included under this heading are “honest
grafts.” An illusory appearance of innocence is also conferred by
the difficulty of tracing the incidence of the burdens resulting
from such transactions. There is no moral ground for such favourable
distinctions, however. On the contrary, auto-corruption is clearly
worse than bribery in that an entire transaction of this character must
be guiltily designed and executed wholly by one person, and that person
an official charged with knowledge which should be used only in the
public interest. Moreover the profits of his secret treachery may be
turned entirely into his private bank account. If so he cannot even
plead in justification that he has been acting in behalf of a party
organisation by gathering and contributing the funds necessary to its
management. The latter feature of auto-corruption stands in need of
special consideration.
It may be laid down as a principle of fairly general applicability
that political corruption as such is disadvantageous to the party
organisation permitting it. From a purely tactical point of view
it would be the extreme of bad party management to tolerate loose
conditions under which a large number of officials could graft
freely on their own account and place the entire proceeds in their
own pockets. Whether they confined themselves to auto-corruption
or accepted bribes singly or in combinations the case would not be
materially altered. A day of reckoning at the polls would surely come,
and it would find the party treasury unprovided with the means of
defence. Yet conditions of this character prevailed pretty generally
prior to the advent of strongly centralised political machines.
Corruption was extremely diffuse, personal responsibility for it widely
scattered, party responsibility not so clear. Manipulation required
whole corps of lobbyists, “third houses,” “black horse cavalry,”
and the like. Under present conditions the party organisation with
strongly centralised management has a direct interest in limiting
corruption and also in seeing that contributions which arise from such
practices as it tolerates actually flow into the party war chest.
Corruption in purely selfish interest becomes treachery to the party as
well as treachery to the state. Of course even under strong centralised
and permanent party control cases of auto-corruption still occur, and
at times officials receive bribes without turning in their quotas. If
so, however, it may fairly be presumed that they make their peace with
the organisation in other ways. They may be exempt from paying tribute,
but they are nevertheless obliged to deliver votes or influence. Many
sins are laid at the door of the machine. It has at least the advantage
of enabling us to centralise responsibility for all corrupt practices
which occur under its management.
From this point of view one may undertake an outline of the form of
corruption connected with political control. All the preceding forms of
political corruption may be considered the obverse, this is the reverse
of the die. None of the practices earlier considered can be carried
on without danger; the corruption of political control is the crooked
means of avoiding the cumulative effects of these practices. It is
not popular, it is not good politics even in the narrowest practical
acceptance of that term, for a political organisation to grant corrupt
favours to business, to wink at the violation of the law by vice, to
allow its partisans in office to sell government property cheap and
buy government supplies dear. If any of these things are permitted the
organisation, like the common criminal, must take care to lay aside
“fall money” against a day of trial.
One might feel greater confidence in the restraining influence of
party centralisation were it not for the fact that the more dangerous
to party success are the forms of corruption which an organisation
tolerates the more lucrative they are apt to be. Though its sins be as
scarlet still they produce funds sufficient to buy indulgences and to
leave a handsome profit over. In connection with business regulation,
for example, bribery in any considerable amount is not possible until
legislation is enacted or close at hand. And legislation of this
kind is not likely to be passed or threatened unless a strong public
sentiment demands action. Political manipulation which attempts to
frustrate regulation at such a juncture must sooner or later prepare
itself to reckon with the public sentiment which it has flouted. Vice
cannot be tolerated except in contravention of laws against it, and to
do so means to offend the moral sentiment in the community which placed
such laws on the statute books. Franchise grabbing is not profitable
on a large scale until the experience of earlier public service
corporations has impressed upon the public mind the great value of
such grants. If, nevertheless, grabs are permitted by the machine,
the boodle must be sufficient to pay both for the personal services
involved and to repair any resulting damage to party prestige at the
next election. Of course many citizens are apathetic with regard to
such abuses or even ignorant of their existence, and there are others
who are so involved in corrupt practices, particularly in connection
with tax dodging, meter fixing, and the protection of vice, that they
feel themselves allied in interest with the party organisation and
accordingly vote its ticket. Always, however, there is a contingent,
and frequently it is large enough to hold the balance of power, which
is neither ignorant nor apathetic, and which, although perhaps too
quiescent ordinarily, will rise in revolt against any organisation
which grafts too boldly and too widely.
The situation of the venal machine is, therefore, substantially this:
more money can be obtained at any time if certain practices dangerous
from the point of view of party expediency are tolerated. If they are
tolerated greater expenditures of money and of other party resources
must be made when the final accounting with public sentiment takes
place. To put the matter in another way: the forms of political
corruption earlier described, _i.e_., corruption in connection with the
regulation of business and of vice and corruption in connection with
the buying and selling operations of the state, are for the most part
sources of income, whereas corruption in the form of political control
is mainly expenditure. Under George III., according to Mr. Dorman B.
Eaton, a “Patronage Secretary of the Treasury” was appointed
“whose duty it was to stand between members and partisan managers
appealing for places for their favourites, on the one side, and the
heads of offices who needed to have these places filled with competent
persons, on the other side. This Secretary measured the force of
threats and took the weight of influence; he computed the political
value of a member’s support and deducted from it the official
appraisement of patronage before awarded to him. It is said that
actual accounts, Dr. and Cr., were kept with members by this Patronage
Secretary.”[66]
Whether or not “accounts Dr. and Cr.” are kept by our political
organisations, a calculus of essentially the same character must
underlie the determination of their policy.