Work in this direction has been going on for the past two years with gratifying results. Considerably more than one half of the towns have voluntarily adopted the system prepared in the office of the tax commission, and the other towns are arranging to come in line at the beginning of the new year.

It is unnecessary to argue in favor of a simple analysis of accounts adapted to each and every town as against two hundred and thirty-five different methods of handling the same items.

The expense of maintaining a town hall may as well be included under "town hall expense" as under "miscellaneous expense," also incidental highway expenses properly come in the "highway account" instead of "miscellaneous expense."

The books and vouchers are so prepared that at any time the town treasurer and selectmen may know at a glance not only the total receipts but also the total payments charged against highways, police or whatever.

At the end of the year the town report is completed by simply taking the footing of each column or account, and the necessity of separating all the vouchers and classifying the accounts no longer exists.

Again, a summary of the expenditures of all the towns can be made which will show the total amount of money expended in the state for schools, highways, care of poor, etc., which now is not known and cannot be readily ascertained.

While this information may not be of great importance, it certainly will be of interest.

A business concern handling more than seven million dollars a year would regard its bookkeeping as a very important feature, and it is equally important to the taxpayers of the state that the seven million dollars of their contributions be correctly accounted for and well managed.

Chapter 129, Laws 1917, relating to municipal finances,

ness and substitutes serial notes or bonds to be cared for by an annual levy without vote of the municipality.

The special investigation made under the direction of the tax commission in 1916 disclosed an indebtedness of $1,390,000 incurred under the municipal bond act of 1895, against which no sinking funds at all had been established. It further appeared that sinking funds accumulated to meet a certain indebtedness had been used for other purposes.

Provision for the payment of debt by definite amounts is a matter of comparative recent consideration not only in this state but in all states.

In this connection it is of interest to note the advice of the late Isaac Adams, who, under the date of March 13, 1867, fifty years ago, reported on the aggregate indebtedness of the town of Sandwich, and methods of repayment.

He said, "In regard to the management of the remainder of the debt, I would respectfully advise that town bonds be issued, and that their payments be so timed that a convenient and definite portion of the principal, as well as of the interest of the debt, shall fall due about the first of January, every year, until the whole shall have been redeemed."

Thirty-five years after his death his recommendation appears almost word for word in the chapter under discussion.

Municipalities and counties shall not issue notes payable on demand, nor shall they incur debt to provide for the current maintenance and operation expenses, except loans in anticipation of taxes as authorized by law.

This exception refers to c. 21, Laws 1907, which is here quoted because it has been too little regarded.

"Cities may by a two-thirds vote of their city councils, and towns by a major vote of their legal voters in a legally warned town meeting, incur debts for temporary loans in anticipation of the taxes of the municipal year in which

from by such vote; such loans shall be payable within one year after the date of incurrence and shall not be reckoned in determining the authorized limit of indebtedness."

It has been the general practice of selectmen to borrow money on town notes whenever money is needed without much reference to their authority to bind the town, nor have lenders paid much attention to the question of the legality of the notes.

This will be a serious question in the future, however, in view of the proper limitations imposed by chapter 129.

It is needless to comment on the fact that current maintenance should not exceed current revenue, and that money borrowed in anticipation of taxes should be repaid within the year and from the taxes of that year.

Finally, the act fixes a definite debt limit not to exceed six per cent of the last assessed valuation, but this is so arranged that the limit is three per cent for a county, city or town, two per cent for a school district, and one per cent for a precinct.

Debt for water supply may be incurred outside of the above limits.

From the standpoint of municipal finances, which concerns every person in the state, this chapter was the most important enactment of the present legislature.

CONSTITUTIONAL LIMITATIONS.

There are several notable facts connected with the constitution of New Hamphsire: it has not been amended in any important particular since its establishment October 31, 1783; the people have consented to call conventions but seven times in a period of 133 years, namely for the years 1792, 1852, 1876, 1889, 1902, 1912 and 1918; the subject of taxation does not seem to have been considered prior to the convention of 1902, and not until 1912 was there any effort to unloose the restrictions imposed by the words "proportional and reasonable assessments" (Part II, Art. 5), and this effort was rendered abortive at the polls.

Thus for nearly three hundred years has the general property tax prevailed in the state by the consent of its

voters.

An amendment of 1902 permits the taxation of "other classes of property, including franchises and property when passing by will or inheritance" in addition to polls and estates. (Part II, Art. 6.)

What latitude is afforded by the words "other classes of property, including franchises," has never been determined, either by attempted action on the part of the legislature or by decision of the supreme court. See Opinion of the Justices, 77 N. H. 611, 616.

A corporate franchise has long been regarded as property, and taxable like other property at its full value. Robinson v. Dover, 59 N. H., 521, 527 (1880). Railroad v. Prescott, 47 N. H. 62, 67 (1866). Railroad v. The State, 60 N. H. 133, 139, 141 (1880).

Early advantage was taken of the amendment by the enactment of c. 40, Laws 1905, imposing a collateral legacy and succession tax at the fixed rate of five per cent upon the value of the property passing.

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The constitutionality of this act was called in question and sustained in Thompson v. Kidder, 74 N. H. 89.

Answering the contention that the tax was disproportional, the court said, "There is no more reason to conclude that the power to impose an inheritance tax, expressly given, is abrogated by a necessary lack of proportion attaching to such a tax. But although the power to impose an inheritance tax is clear, it must be exercised so far as possible in accordance with all other provisions of the constitution. It must be an equal tax in the sense that it must affect all persons equally."

When, in 1911, the legislature asked the court whether a graduated progressive inheritance tax with exemptions would be in violation of any provision of the constitution, the court found no objection to a tax assessed at a different rate upon property passing to direct heirs than to collaterals, and that a distinction may be made between relatives more or less remote in the direct line.

But they said, "Upon the question whether, in view of fundamental provisions of the constitution as it was construed and understood prior to 1903, it was intended by the amendment then made to authorize an exaction from those in the same class or relation to the testator or ancestor, varying in accordance with the amount of property passing or, in other words, to authorize a classification based upon amount merely-we find that we are not agreed. The question is new in this jurisdiction. In others where it has been raised the courts are in conflict."

As the matter now stands, a tax may vary according to relationship; but whether it may vary according to the amount of property passing is uncertain.

An amendment permitting grading and rating in accordance with the amount of property passing was submitted to the people by the convention of 1912, but out of a total vote of 28,131, failed by 323 votes to receive the necessary