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.
M.4Y 9, 1928
CHAPEL HILL, N. C.
THE UNIVERSITY OF NORTH CAROLINA PRESS
VOL. XIV, No. 26
Editorial Uoardr E. C. Branson. S. H. Hobbs. Jr.. P. W. Waster, L. R. Wilson. E. W.'Knlght. D. D. Carroll. H. W. Odum.
Entered as second-class matter November 14, 1914. at the PostoiRce at Chapel HIH. N. C., under the act of August 24. 1911.
OBSCURE \m COLORLESS | N. C. MUNICIPAL FINANCE
North Carolina has something over
four hundred sub-census-size towns,
that is, towns with less than 2,600,
population. In 1920 there were 66
with iess than 2,000 and more than
1,000 people. Miss Ina Young of the
Institute for Research in Social Science
is making a study of these towns, and
in this week’s issue she tells us some
thing about their finances. The ac
companying table gives their assessed
valuations and tax rates.
There are probably 120,000 people
living in North Carolina towns of this
size. On the whole, they are a high
class of people—merchants, teachers,
lawyers, doctors, garage men, artisans
of various trades, retired farmers, etc.
Some of these small towns contain
industries but, if so, the industrial
workers are outnumbered by and
merged into the general population.
They are, in the main, homogenous,
democratic communities.
The small town has too often been
ignored by the census bureau, cari
catured by the novelist, and despised by
both the city and the country. Some
times it has deserved to be criticized,
for it has been ugly in appearance, torn
by internal conflicts, laokiogin progres
siveness, devoid of any ideals of ser
vice, and quite unconscious of any re
sponsibility to the countryside from
' which it draws its sustenance. Often
times it has manifested a profound
complacency and been quite unmindful
of its shabby and colorless character.
Some Become Active
The renaissance of the South has
affected the villages and towns, how
ever. Many of them have caught the
new spirit, have been aroused out of
their lethargy, and have surprised
themselves with their own achieve
ments. Too often, .however, the town
which witnesses some activity and
growth becomes dominated with a sin
gle ambition—r|amely, to become a
city. As soon as it gets a paved street
and a fire engine it calls itself a city. It
measures itself in terms of population.
It pushes out its boundaries in order to
show an increase in numbers. Then it
organizes a Chamber of Commerce and
advertises for industries, all of which
is good. The pity of it is, such a town
surrenders its own individuality and
its own character in the mad scramble
to become a city—or if not a city as
much like a city as. possible.
Preserve Individuality
Everyone must admit that the South
needs industries and that it needs cit
ies. And it is encouraging to see
towns once inactive become bustling
industrial towns. It is encouraging to
see some of them growing into the
proportions of a city. Yet not all of
our four hundred and more small towns
can become cities. Not all will attract
factories. But there is not one,
whether it be industrial, trade, or res
idential, that cannot become distinc
tive. If its people unitedly work for
it, a town may develop into a delight
ful place to live in, even though its popu
lation remain small. It may become so
attractive physically that passing
tourists will remark about it and will
stop to pay tribute. Every village and
small town ought to try to acquire
some characteristic which is unique—it
may be a town common, a tulip-
bordered boulevard, an unusual row of
shade trees, an artificial lake, or a well
equipped playground. It may be a
town ball, a community church, a
choral society, or a village band. It
may be the presence of some historic
shrine or some noteworthy institution.
It may be the absence of something
which is characteristic of most towns,
such as ill-kempt vacant lots, dilapi
dated and unpainted buildings, or the
severe and unvaried architecture of
the business blocks.
In short, the theme of this article is
that each town in North Carolina
should dijCover its own peculiar endow
ments and magnify them. It should
cease trying to be like other towns, or
even to be as big as its neighbors, and
try to be more attractive physically,
more harmonious internally, more
serviceable to the countryside, and,
most of all, try to preserve and
develop its own individuality.
North Carolina had, according to the
1920 census, 413 incorporated places of
sub-census size, that is, of less than
2,600 population, with a large number
of places of similar size unincorporated. ;
There were only 67 census-size cities;
and towns—incorporated places of over i
2,600 population—and the largest cities !
in the state had less than 60,000 in-1
habitants. North Carolina, then, is!
still a rural state, though through the :
present process of industrialization it;
is rapidly becoming urbanized and will j
probably have one city or more in the j
100,000 class when the next federal
census is taken in 1930. j
By definition aa incorporated town is ;
any group of people living in one
geographic unit who have organized into
a political unit ifor the purpose of re
ceiving advantages which individually }
and unorganized they were not able to
secure. In North Carolina this priv
ilege is granted on petition to the
legislature, and the requirements are !
that the contemplated incoriiorated
territory shall contain at least 60
persons and 26 eligible voters. To pay
for the benefits of such incorporation;
large revenues are necessary, and this j
is the chief problem to be considered!
in connection with city government. ]
As to the measure of local self-1
government received through incor
poration. the cities and towns in North
Carolina have very little, as their
powers are limited by law, and they i
are almost entirely under legislative |
control. This is especially true of:
finances. The poll tax' is limited by j
the constitution to ^1.00, and the!
general property tax rate is also limited j
to $J.OO for general purposes, though it
may be supplGnienteci to cover the!
amount needed for bond issues. More-1
over, the Municipal Finance Act re- *
quires that a bond Issue may not j
exceed 8 percent of the total assessed ;
valuation of property, “unless the]
bonds . . . are to be funding or refund
ing bonds, or are bonds for water, gas,
electric light or power purposes . . .
However, any specific town may secure
a special public-local act through the
legislature, permitting it, as an excep
tion, to violate this law. This is a
constant practice, and the legislature
through its inconsistency in grant
ing unlimited special acts defeats
and contradicts its own general law.
The question may well be asked, what
is the value of having such an act,
when any city or town so desiring
may be given permission to violate its
requirements?
But what is the actual situation as to
the administration of finances in North
Carolina municipalities? Sixty-five small
towns having between 1,000 and 2,000
population were selected for special
study, and 7 of the largest cities in the
state—those having over 26,000 popula
tion-chosen for purposes of compari
son, were also considered. Following
are some of the facts discovered in re
gard to these. The figures are those
given in the Report of the Commis
sioner of Revenue for the year 1926.
Assessed Valuation
The assessed valuation ot real and
personal property in the 66 towns
studied ranges from about $1,000,000 to
$3,000,000, the average assessment per
town being around $2,000,000 or about
$1,600 per capita, whereas the average
assessed valuation per capita for the
cities is about $2,600. Of this about
20 percent in both cases is personal
property. The assessments of cities
and towns are made, according to law,
by the counties for all purposes, and
are usually at about 70 to 76 percent of
their actual value.
Receipts and Revenue
Great variation is shown in the re
ceipts reported by the various towns.
Six report less than $10,000, while nine
report over $100,000. The majority re
port receipts ranging from $30,000 to
$70,000, the average being around $60,-
ooo’ each. The , average revenue per
capita, or the average cost of govern
ment per individual in the small town
is $46, while that of the city is about
$126, though in the case of the latter
much of this is paid by the large cor
porations and not by the individual
citizens. But of course the differences
in services received must also be taken
THE VALUE OF BEAUTY
Like tbe individual, a town or
city is invariably judged by the ap
pearance it makes. If the general
effect, as shown in its public build
ings, churches, schools, streets, and
homes is that of a well-ordered,
self-respecting, beauty-loving com?^
munity, its influence is immediately
felt. Every visitor or traveler
brought into personal touch with
these evidences of progressive spirit
immediately responds to their in
fluence and is unconsciously trans
formed'into a medium for spreading
the fame of the town as a place in
which to live and rear a family, or
as a place where business may be
done cleanly and with economy.—
Charles S. Bird, Jr., in Town Plan
ning for Small Communities.
into consideration, although it would
be interesting to know if the dif
ferences in cost are commensurate
with the differences in services re
ceived.
As to the taxes levied on property,
this in most cases constituted less than
one-half of the total receipts, the ma
jority of the balance being receipts
from bonds or borrowed money. In
fact, in the case of the towns, the
latter constituted about one-third of
the total, and in the case of the cities
about two-thirds. Twenty-seven towns
reported no receipts from borrowed
money. Only one of the cities studied
reported no receipts from borrowed
money.
The next largest item of receipts was
from electric lights and other public
service, hifty-three of the towns re
ported receipts from this siource, 44 of
them receiving a'net income, and 7
of them realizing a profit of over $10,-
0t)0. Twenty-five of the tow^is are re
ported in McGraw’s Central Station
Directory as owning municipal electric
light plants, though few of them
generate their own power, being merely
distributing plants for some of the
larger power companies of the state.
Expenses and Disbursements
The total expenditures of the towns,
and also the receipts, varied greatly
throughout the state, some having
heavier payments on bonded indebted
ness than others, but practically all of
them expending from $1,000 to $60,000
for this purpose. The expenditures
also included the expense of operating
public service, which item in some
cases was quite large.
The total expenditures for the vari
ous towns range from less than $10,-
000 in some of the mill towns to over
$300,000—one town spending exactly
this amount on streets and sidewalks
during the year, another $240,000 for
the same purpose, and two others over
$100,000. In fact, except for payments
on bonds, this seems to be the chief
item of expenditure made by the towns,
and perhaps the boncl payments were
in most cases also for this purpose.
The average expenditure per town
towards bonds and other indebtedness is
about $20,000 a year, while that of the
city is around $1,600,000 or about one-
third of the total disbursements in the
case of each. If, as suggested, a large
proportion of this is for streetf and
sidewalk improvements, then a major
proportion of the town’s disbursements
go to this purpose. Since this is the
item that necessitates the largest
amount of expenditure it constitutes
the chief burden on the town. The
total expenditures for the towns
average around $60,000 each or about
$40 per capita, while those for the
cities average about $4,000,000 or about
$126 per capita, which are approxi
mately the figures given for average
and per capita receipts.
Comparing the receipts and disburse
ments, we see evident lack of proper
budgeting procedure, which is a specific
legal requirement for the municipalities
in the state. In many cases the expen
ditures exceeded the revenue received,
and often also there was an unneces
sarily large balance at tbe end of the
year, which is an almost equally signif
icant sign of poor financing; whereas
if a proper budgeting system had been
in use neither of these results would
have appeared.
Bonded Indebtedness
All but ten of the towns reported un
collected taxes for the year in amounts
varying from a few hundred dollars
up to $40,000—the greater number
ranging from $6,000 to $10,000. This
is also evidence of poor business ad
ministration, bat is, however, no more
characteristic of the towns than of the
counties or the larger cities of the
state; three of the latter reported
over $100,000 uncollected taxes for the
same year, which makes a very bad
showing for municipal administration
in North Carolina.
As to tax rates, we find great varia
tion here, which indicates individuality
among municipalities as among in
dividual citizens. Twelve of the towns
had a general property tax rate of less
than $1.00, while all the other towns
had a property tax of $1.00 or over, 11
of them paying a rate of $2.00 or more,
which is allowed by law for the purpose
of paying bonded indebtedness. In no
case did tbe cities mentioned have a
property tax exceeding $1.60 which is
perhaps the point at which the great
est differentiation between city and
town government occurs, as the pres
ence of large corporations in the
city relieves the individual taxpayer
from paying such excessive rates.
This is one of the arguments in favor
of the larger unit of city government,
for alihough the ^average per capita
cost of government is more in the city
than in the town, it costs the individual
citizen less. As to poll taxes, only 17
or abou\ one-fourth of the total num
ber of towns have as low a rate as
$1.00, although a constitutional amend-
ffient of 1917 made this the maxi
mum limit of the poll tax. Eight
towns paid a poll tax of between
$1.CO and $2.00, 14 between $2.00 and
$3.00, and 17 had a poll tax rate of
over $3 00.
The large bonded indebtedness of the
towns is one of their characteristic and
most significant features, and consti
tutes, perhaps, their most serious prob
lem. Only six towns report no bonded
indebtedness. Twelve had a bonded
indebtedness of less than $100,000,
while the remaining 47 report an in
debtedness of from $100,000 to $600,-
000. The average for the group is
about $200,000, while that of the cities
is nearly twice as much in proportion
to population. But again this must be
thought of in terms of advantages re
ceived. The law on this point has
been noted above. Such heavy in
debtedness is a challenge to study and
investigation. Most of the towns also
reported some current liabilities, or
short-term indebtedness for current
expenses. As to sinking funds, these
are ceasing to be an important item
of .finance, as serial bonds are becoming
more universal, only about two-thirds
of the towns reporting under this head,
and moat of them for small amounts
of less than $10,000.
Conclusions and Suggestions
In view of the above facts, what are
the next steps to be taken toward the
improvement of municipal administra
tion in North Carolina? Following are
some of the things that might aid in
this direction:
1. The assessment of all property
at its actual or real market value,
and the discovery of some method of
listing as great a percentage aa pos
sible of the total personal property
owned.
2. The discovery of whether or not
public service plants owned by the
towns pay or whether it is more advis
able to allow these services to be
furnished by private companies, and
the pursuit of a policy in accordance
witii the decision.
3. Some provision whereby the ex
pense of public improvements, such as
streets, which constitute such a heavy
burden on the cities an(^ towns, might
be borne by others than the individual
citizens.
4. The practice of following a prop
er budgeting procedure, so that cur
rent liabilities might be lessened and
expenses not exceed income.
6. Some system 6f administration
whereby^ the collection of taxes might
be enforced by holding the tax official
liable.
6. The discovery of other sources of
revenue, so that such a large percent
age of receipts from bonds or bofrowed
money will not be necessary.
7. Finely, less legislative control
and the granting of more freedom to
tbe cities and towns, substituting for
the former system a state supervisory
administrative control through some
sort of municipal board, which would
have the ability to advise as to policy
and the power and authority to enforce
the general municipal laws of the state.
— Ina V. Young.
NORTH CAROLINA’S SMALL TOWNS
Their Valuations and Tax Rates in 1926
Listed below are the sixty-five incorporated towns of North Carolina which
had a population in 1920 ranging from 1,000 to 2,000. Seven or eight separate
ly incorporated places which are parts of larger towns are omitted.
The assessed valuations and tax rates for 1926 are given except in the
cases of Fairmont and Lowell where the 1926 figures are given. The combined
city and local school district rates are given for all except the follow
ing: Southport, McAdenville, Gibsonville, Farmville, Fairmont, Lowell, St.
Pauls, Mayodan, and Wendell. In these cases no special school tax is included.
This information is based on data assembled by the State Department of Con
servation and Development.
It will be noticed that Andrews has the highest tax rate, $3.60, and
Franklinville the lowest, $.60, if we limit the comparison to towns -for which
the combined town and school district rate is given.
Department of Rural Social-Economice, University of North Carolina
Town
Ahoskie
Andrews
Ayden
Belhaven
Benson
Brevard
Burgaw
Chadbourn
Cherryville ....
China Grove ..
Clayton
Cornelius
Davidson
Dallas
Elkin
Enfield
Fairmont
Farmville
Franklinville...
Fremont
Gibsonville
Granite Falls .
Hertford
Hillsboro
Kernersville...
LaGrange
Littleton
Louisburg
Lowell
Madison
Maiden
Marion
Maxton
Assessed
valua
tion
1926
Local
tax
rate
1926
..1,718,839 2.16
..1,263,663 8.60
..2,152,187 2.06
..1,293,388 2.60
..2,679,761 2.71
..2,601,687 2.40
.1,111,809 1.10
..1,820,617 1.28
..2,764,196 1.36
..1,126,882 1.22
..1,828,867 2.07
..1,104,933 1.06
..1,118,840 2.00
..1,416,973 75
..3,166,000 1.10
..2,011,683 2.00
..1,324,761 1.76
..3,220,012 1.66
.. 606,671 60
. 1,800,778 2.10
..2,234,366 76
..2,280,622 1.10
..1,661,362 1.66
.. 798,800 1.46
..1,663,613 1.30
.,1,640,363 1.66
..1,200,000 2.10
..1,628,666 3.46
..1,661,839 10
..1,614,666 1.80
..1,486,000 1.60
..2,799,868 1.82
..1,889,932 2.00
Assessed Local
valua- tax
Town tion rate
1926 1926
Mayodan 1,368,001 10
McAdenville 182,046 33
Mebane 2,626,922 1.72
Mocksville 1,762,467 1.66
Mount Holly 3,604,072 1.20
Murphy 1,439,693 2.26
Norwood 1,471,042 1.30
Plymouth 1,079,143 3.27
Raeford 2,069,096 86
Ramseur 844,491 80
Randleman 1,208,600 1.60
Robersonville 1,220,104 1.66
Roper 269,003 1.18
Roxboro 3,672,691 2.00
Rutherfordton 2,081,316 3.20
St. Pauls 1,689,631 1.00
Selma 1,629,627 2.06
Siler City 1,603,366 1.68
Smitbfield 3,169,702 2.44
Spring Hope 966,967 3.30
Southport 991,666 1.45
Taylorsville 820,964 2.36
Troy 1,698,714 2.10
Tryon 1,228,840 2.66
Wake Forest 1,206,608 2,00
Warsaw 1,269,802 93
Waynesville 2,729,076 2.26
Weldon 1,911,010 2.16
Wendell 1,062,046 2.00
Whiteville 1,803,819 2.46
Williamston 1,639,629 2.60
Windsor 1,003,130 2.76