The news in this publi
cation is released for the
press on receipt.
THE UNIVERSITY OF NORTH CAROLINA
NEWS LETTER
Published Weekly by the
University of North Caro
lina for the University Ex
tension Division.
NOVEMBER 19, 1924
CHAPEL HILL, N. C.
THE UNI VEESITY OP NORTH CAROLINA PRESS
VOL. XI, NO. 3
Elitorial
I, 3. H. Hobba, Jr.. L. B. Wllaan. B. W. Snlirht. D, D. Carrall, J. B. Baliitt, H. W. Oiium.
BDter«d aa Boeond>classmatt«r Navamber 14. ISH at thePoatoScaat Chapa] Hill, N. C., DDdat tha actaf Anguat 24. 1
FEDERAL REVENUE
North Carolina ranks fifth among
the states of the Union in internal re
venue paid into the Federal Treasury.
The following table shows the rank of
the six states that lead in Federal re
venue payments, and the amount paid
by each state for the year ending June
30, 1924:
Rank States Amount
1 New York $690,416,426
2 Pennsylvania 269,688,619
3 Michigan 221,380,006
4 Illinois 214,840,722
5 North Carolina 157.973,394
6 Ohio 153,524,833
No attempt is here made to point
with pride to the high rank of North
Carolina in the payment of federal re
venues. It is well known by all that
the bulk of internal revenue collections
in North Carolina are from tobacco and
tobacco manufactures, and that such
taxes are paid by the tobacco consum
ers of the United States, the burden
falling (>n our state only in proportion
as we consume our tobacco products.
In this study the sources of internal
revenue will be segregated and the
main facts pointed out.
The internal revenue collected in
North Carolina for the year ending
June 30. 1924, totaled $157,973,3^, di-
dustry in North Carolina, as measured
in terms of the annual taxes paid. In
1918 the federal taxes levied on tobac
co amounted to only $47,785,966. By
1923 the tax had increased to $118,-
370,326, while by 1924 it had jumped to
$136,892,476, a gain of more than eigh
teen million dollars in one year, which
means that the value of tobacco prod
ucts increased about 40 million dollars
during the year.
The second point of interest is the
firm hold North Carolina is securing as
the dominant tobacco manufacturing
state. This can be shown by the fol
lowing facts gathered from recent an
nual reports of the Federal Commis
sioner of Revenue. In 1918 North Caro
lina paid 30.6 percent of all federal taxes
collected on tobacco and its products. In
1923 the state paid 38.4 percent of the
total tax, and in 1924 North Carolina
paid 42.2 perceint of the total tobacco
taxes collected in the United States,
which means that the state manufac-,
tures more than 40 percent of all to
bacco manufactured in the United
States. In four or five years, at the
rate of increase of the last five years,
North Carolina will be manufacturing
more than half of the tobacco'‘manufac-
tured in the United States. About
eighty percent of the total tax collected
vided as follows: tobacco and tobacco i ™North Carolina Is paid on
manufactures $136,892,476, Income tax i North Carolina produces
$18,173,167, miscellaneous $2,907,762. |
more than half of the cigarettes manu-
The increase in federal collections over ;
I factured in the United States, around
the year 1928 was $17,626,027, the total i billion packages of twenty cigar-
gain coming from increased collections « Million cigarettes an-
on tobacco.
The miscellaneous tax comes from a
great variety of sources such as amuse
ments, boxing matches, theatres,
cotics, etc.
Federal Income Taxes
In the payment of federal income
taxes North Carolina does not rank high,
either in number of returns filed or in
total of tax paid. However, North Caro
lina led all the states in percent increase
in the amount of personal income taxes
paid, and in the number of returns filed
from 1921 to 1922, the latest years for
which data are available
The total income taxes paid during
the last fiscal year amounted to $18,-
173,167, a decrease of ten thousand dol
lars over the previous year, 1923. That
North Carolina has increased in pros
• perity since 1918 is shown by our higher
rank in the payment of income taxes,
In 1918, 22 states paid larger income
taxes, while in 1923 only 16 states
ranked ahead of us in this respect.
Due to the peculiar make-up of North
Carolina’s population and their ways
of making a living, the state does not
rank high in the payment of income
taxes. To begin with, nearly a third of
our population is negro. The bulk of
our people live on farms, small farms
as a rule. Our towns are small as a
rule, and trade centers for the most
part. Our industries also are small as
a rule, and consequently the minimum
levies are imposed on their net earn
ings. There are some giant industries
and these pay large income taxes, but
they are owned by relatively a few
people. Thus it is readily seen that
while the average North Carolinian
lives well, relatively few people have
large or excessive incomes.
North Carolina has 2.4 percent of the
population of the United States, but
pays only 1.07 percent of the income
taxes. In the United States about six
percent of the population filed income
tax returns in 1923 24, while the rate
for North Garolina was 2.2 percent.
Tobacco Taxes
It is from the tobacco and tobacco
products of the state that the Federal
Government makes its big haul, the
total collected on tobacco and its pro
ducts for the last fiscal year amounting
to $136,892,476. This is an enoromous
sum but, as we have said before, while
it is collected in North Carolina it is
paid by the Nation’s tobacco consumers.
(There is no federal tax on exported
tobacco). Id no state is the tax col
lected by the Federal Government paid
wholly by the citizens of that state.
There are some verf interesting
facts to be brought out in connection
with North Carolina as a tobacco manu
facturing state. The first concerns the
THE VALUE OF EDUCATION
It is $72,000, according to Dean Lord
of the Boston University College of
Business Administration; and the cash
value of a high-school education is $33,
000. The Boston institutidh has been
carrying out a careful study of the
earning capacity of college graduates,
and the report just issued contains a
number of interesting facts. Accord
ing to a New York Herald Tribune
summary, tb6 average maximum in
come of the untrained man is $1,200
year; that of a high-school graduate is
$2,200, and that of a college graduate
$6,000. The total earnings of the three
types up to the age of sixty are set at
$46,000, $78,000, and $160,000. It is also
estimated that while the untrained man
at the age of fifty begins to drop toward
dependence, the college man reaches
his maximum earning capacity at sixty.
As the report is quoted further:
The untrained man goes to work as a
boy of fourteen and reaches his maxi
mum income at the age pf thirty. This
maximum is, on the average, less than
$1,200 a year. In view of the fact that
this income is earned through manual
labor dependent on physical strength, it
begins to fall off at the age of fifty or
even earlier, and soon reaches a level
below self-support.
The figures show that more than
sixty of every 100 untrained workers
are dependent on others for support at
the age of sixty. Between fourteen
and eighteen, the four years which
might have been spent in high school,
_ the untrained young man usually earns
remarkable growth of the tobacco in-| not more than $2,00©.—Literary Digest.
nually.
In the field of industry North Caro
lina is usually thought of as a textile
state. It is very likely that, in so far
as the value of output is concerned, our
tobacco products now rank ahead of
our textile products. Calculated on the
basis of taxes paid, the value of the
output of the tobacco factories is now
close to three hundred million dollars
annually, and the annual increase in
the value of the output of manufactured
tobacco is far and away above the
annual increase in the value of textile
products.
It is North Carolina’s importance as
a tobacco manufacturing state, and the
tax levied on tobacco products, that are
responsible for our rank in the pay
ment of federal revenues. Due to the
remarkable growth of the tobacco in
dustry North Carolina, with monoto
nous regularity, displaces great and
rich states that have always ranked
ahead of us in the support of the Fed
eral Government. It is quite conceiv
able that in a few years North Caro
lina may rank next to New York in the
payment of federal revenues.—S. H.
Hobbs, Jr.
DREAMS COME TRUE
North Carolina is one of the old
est states in the Union. Twenty
years ago it was one of the poorest.
Today, with practically no immi
gration from other states, with only
the increase in population that
comes from its excess of births over
deaths, it finds itself one of the rich
est states, progressing rapidly in
every desirable instrument of civil
ized life—a community of contented,
industrious citizens, with beautiful
and modern homes, thriving farms
and factories, hotels in every small
city that can not be excelled any
where, highways that make travel
and commerce comfortable and ex
peditious, schools that are good and
daily growing better, a public health
department that has brought its
death rate to the lowest in the
country and best of all, a people of
one mind upon the great issues of
life, inspired by a common ideal,
informed with a common purpose,
heartened by their success in the
pursuit of a great vision, and confi
dently pressing forward to further
achievements.
About twenty-five years ago
there was a man named Aycock .
—From French Strother’s Article
on North Carolina’s Dreams Come
True, in World’s Work, Novem
ber, 1924.
THRIFT IN PUBLIC SCHOOLS
The fifth annual report on School
Savings Banking, for 1923-24, in
school systems throughout the United
States, has recently been made available
by the Savings Bank Division of the
American Bankers Association. In
complete returns make unsatisfactory
any attempt to work out averages that
would point to the relative thrift by
states of those school children partici
pating in the savings movement.
Ten city school systems in North
Carolina have enlisted in the thrift
campaign as follows: Albemarle, Con
cord, Durham, Greensboro, Hamlet,
High Point, Roanoke Rapids, Salis
bury, Wilson, and Winston-Salem.
Only three of these are outside of the
Piedmont section of the state, namely,
Hamlet, Wilson, and Roanoke Rapids.
Reports from two, Durham and Greens
boro, were incomplete.
The eight cities reporting showed a
total of 11,761 North Carolina children
participating, and their net savings
totaled $14,528.60, or an average net
collection of $1.23 per depositor. In
California 170,233 children saved $976,-
317.68. or an average of $5.73 each. The
participating children of Rhode Island
did nearly as well, averaging $6.43 for
each child for the past school year.
Other New England state;?, Connecti
cut, Vermont, and Massachusetts, in
the order named, ranked well up to the
front in this matter of teaching thrift
to school children. Has New England a
thriftier people than North Carolina?
A closer examination of the eight in
dividual North Carolina city school sys
tems taking part in the movement
shows Roanoke Rapids leading in net
savings per depositor with $3.08. Next
in order came Albemarle $1.77, Salis
bury $1.61, Concord $1.69, Wilson $1.41,
Winston-Salem $1.10, High Point $.34,
and Hamlet $.12.
In point of extension, Albemarle was
first, with every one of her 901 en
rolled pupils c^ixying a savings ac
count. Eighty-five percent of the en
rolled school population of Wilson par
ticipated, followed by Hamlet 83 per
cent, Winston-Salem 76 percent, Roan
oke Rapids 64 percent, Salisbury 51
percent, Concord 40 percent, and High
Point 40 percent.
The movement needs to be encour
aged. Where could the lessons of thrift
be better learned than in our public
schools? In the words of the report,
‘Thrift is not insinctive but is subject
to cultivation. Conscious participation
in the activities of school savings
banking at frequent intervals is essen
tial if the lessons of school savings are
to be factors in a thrifty adult life.”—
E. T. Thompson.
COUNTY GOVERNMENT
At the last regular meeting of the
North Carolina Club, Mr. Paul W. Wa
ger discussed Business Efficiency in
County Government. As an introduc
tion to bis paper Mr. Wager recalled
that in 1917-18 the Club had discusEed
this subject and-the discussions when
published in the year-book had attracted
great attention within and without the
state, in fact more than any other sub
ject ever undertaken by the Club. The
North Carolina Club was exploring a
new field. The awakened interest
in local government created by the
appearance of the Club Year-Book led
to the State and County Council held on
this campus in September 1919. Here
were gathered more than three hundred
representatives. The Governor presid
ed, and state and local officials brought
their problems up for discussion. It
was a unique conference and had a
healthy effect on North Carolina gov
ernment, both local and state.
Two years later came the first Re
gional Conference on Town and County
Administration. The state association
of county commissioners at their 1922
meeting endorsed practically every one
of the suggestions which ihadj grown
out of these conferences.
Owing to lack of time Mr. Wager
had to confine his renrarks to the ne
cessity for a more business-like admin
istration of county affairs. He said,
There is not a Democratic way|and a
Republican way to run a courthouse or
build a highway, but there is a business
like and an unbusiness-like way, the
business-like way being to administer
public affairs as simply, as directly, as
openly, and as cheaply as possible.
Tax Assessing
There are three phases of county fin
ance: tax assessing,^ax collecting, and
tax expending, and North Carolina
counties have been deficient in all
three.
As for tax assessing, it is to the in
terest of taxpayers that all property be
properly listed, and at a uniform val
uation. Every assessing officer is re
quired to swear that he will enforce
the provision in the constitution re
quiring that ‘‘all property be taxed by
uniform rule according to its true value
in money.” Yet the law had been so
completely disregarded that in 1919 the
Legislature had to pass a Revaluation
Act requiring that all property be listed
at its market value. The result was
that the assessed value of all property
rose from $1,099,000,000 to $3,156,000,-
000, or an increase of nearly 200 per
cent. There were added to the tax books
more than one million acres of land
that had previously escaped taxation,
Unfortunately this valuation was made
during a period of inflation and after
the slump there had to be a readjust
ment which was left by the Legislature
in the hands of separate counties with
the result that we are now further away
from a standard valuation than ever
before.
Tax Collecting
Mr. Wager next mentioned the de
linquent taxpayer, and the listing of his
property for sale, but in actual practice
not conducting a bona fide sale. Nobody
will buy because of the annoyance in
volved in getting a valid title, and the
county officials do notbuy in the property
because they are afraid of the political
effect. For awhile the unpaid taxes
stand against the land, but soon a new
set of county officers come in; they donot
wish to make themselves unpopular by
trying to collect old debts, so the slate
is wiped off and the new administration
begins afresh. In some counties the
loss from uncollected taxes, due to these
lax methods, is as much as ten or fif
teen percent.
The cost of collecting taxes has been
unneccessarily high as a result of pay
ing the sheriff on a commission basis,
since he is paid 5 percent on the first
$60,000 collected and 2 1-2 percent on
the balance. It is evident that with
taxes averaging $280,000 per county,
this is a pretty lucrative commission.
The treasurer has been another un
necessary expense, for there are banks
in every county which would gladly
handle county funds for nothing. At
ed the office of county treasurer, or
rather have chosen some bank as treas
urer.
Tax Expending
The other main source of waste is in
the expenditure of the funds. In 1922
there were only fourteen counties
whose current expenditures were less
than $100,000, while there were fifteen
that spent over $600,000. Strange as it
may seem, only three or four of these
counties have systematic business-like
methods of handling these funds—no
business manager, no complete audit,
and nomethodicalbook-keeping. Mostof
the officials are elected because they
are good fellows and need the office.
They are not selected for their business
qualities in the majority of cases.
Mr. Wager cited a long list of actual
cases recently brought to light within
the state which illustrated bis claims of
waste, inefficiency, and occasionally
fraud.
In one county it was discovered that
a carload of flour had been loaned to a
merchant. If the flour was ever re
turned there was no record to show for
it.
In another the sheriff bad collected
about $2,000 after the reports had been
sent in to the auditor. He had paid all
the state had demanded and was yet
due $2,000 but did not know it.
In Lenoir county an audit saved the
county about $30,000, still the auditors
did not charge any official with inten
tional wrong-doing—just a result of
laxity in the keeping of the records.
One county reports “The tax collect
ed aft6r the books were closed and the
errors and insolvents just about bal
ance, so we make no record of these.”
In one county of the state the sheriff
is $50,000 short. Yet in spite of this
the voters of his party renominated
him. He later withdrew his candidacy.
In one county the Clerk of the Court,
who was a good fellow, misappropriat
ed some $27,000 before finally being
caught.
In a nearby county the County Board
of Education has been found guilty of
practices that are not only unbusiness
like but illegal.
It is a common thing to begin making
collections for the new year before the
books are closed for the previous year.
In this way shortages may be conceal
ed for years. In one county the Com
missioners had not had a settlement
with the sheriff in four years.
No Headship
In our national government we have
chief executive in the President who
appoints the heads of the departments.
In a city either the mayor or the city-
manager has the appointive power.
But in the county there is no chief
executive and no gradation of authority.
Even the county commissioners have no
effective control over the separate offi
ces. They simply audit the books for
payment after the debt has been con
tracted. If the bill is reasonable they
pay it, if it is unreasonable they fume
a little and then pay it.
Some Remedies
In conclusion Mr. Wager mentioned
ten principles of business efficiency in
county administration that would help
to lessen the waste of public funds.
1. List all property at a uniform rate
of valuation.
2. Attach a heavy penalty to will
ful concealment of taxable wealth.
3. Abolish township assessors and all
other township officers.
4. Abolish the office of county treas-
6. Collect all unpaid taxes from per
sonal property if possible. Land
should be sold as a last resort and then
it should be a bona fide sale.
6. Except in the poorest counties put
all officers on a salary basis; every fee
and commission to be collected and ac
counted for.
7. Devise and install a simple and
uniform accounting system in every
county, with a manual of instructions
8. Secure adequate appropriations to
provide the state auditor with a com
petent set of field agents so the annual
audits may be completed.
9. Provide a full-time business man
ager to execute the orders of the board,
act as purchasing agent, audit the bills
as presented, and prepare the annual
budget.
10. Establish
least twenty-six counties have abolish-1 intelligible report of the financ4.
budget system in
every county and publish each year an