RECORD OF PROHIBITION IN WEST VIRGINIA

West Virginia prohibitionists during the month of July, 1915, celebrated the first birthday anniversary of the Yost law, the title of the state-wide prohibition law of that State. Commissioner of Prohibition F. O. Blue issued upon the occasion a statement in which he claimed that prohibition in one year had reduced drunkenness "practically seventy-five per cent" and decreased crime "practically 50 per cent." Further along in this article I will demonstrate to the reader the utter unreliability of Mr. Blue's figures. It is sufficient to say here that they are vicious and entirely misleading.

Many of the things that prohibition has accomplished in West Virginia beyond a doubt were not mentioned by Mr. Blue and his fellow-reformers while they were celebrating the birthday of the Yost law. It is of interest and value to briefly refer to some of these, for the purpose of supplying information that the prohibitionists omitted.

Prohibition, for example, in West Virginia has resulted in the highest rates of taxation ever known in the history of the State. The particulars will be given further along.

The issue of prohibition in the politics of the State has thrown together in a political combination extravagant office-holders and moral reformers. The most odious machine politicians that the State ever had to endure and maintain, and the accredited leaders. of the Methodist Episcopal Church, lay down in the same bed and made prohibition possible. Offices have been multiplied until the main building of the State capitol is inadequate to house the army that appears at the pay window once a month for their salaries. Money has to be borrowed to meet this drain on the treasury.

The Yost Law deprived the State treasury of $650,000 a year in licenses formerly taken by the liquor dealers. The several counties of the State that had retained the license system under local option were deprived of a like amount. Without subterfuge, the State increased taxes of all kinds to make up the loss and the cities and

State. He asserted that the Yost Law had deprived the State of approximately $650,000 a year, or $2,600,000 for the quadrennial period. The only way he saw to raising revenue to cover the loss was in making tax rates higher and hunting out new subjects for taxation. He warned the State that penitentiaries could neither be reduced in size nor abolished, the criminal courts could not be done away with, and that sheriffs' offices and police forces would have to be maintained just as if the Yost Law had never been enacted. Such speeches and messages from the governor nettled many of the professional prohibitionists. They had used the stock argument that prohibition does not increase taxes in the campaign, and Governor Hatfield was placing them in the light of having mis-. led the people for political effect. They were convicted of bad faith by the governor.

WHY GOVERNOR HATFIELD WANTED HIGHER TAXES

It is possible that I am too fair in giving the West Virginia prohibitionists credit for frankly admitting that a prohibition law makes higher taxes necessary. They may have been driven to the admission by circumstances that did not confront their brethren in other Southern States where prohibition laws have been adopted. It is well known that every Southern State that has adopted prohibition has been forced to issue bonds to make up deficits in their revenues caused by prohibition. These States for the most part have carefully avoided increasing taxes to an extent like West Virginia. By issuing bonds to cover deficits, the necessity for higher tax rates was obviated. But West Virginia's constitution is different. Prohibition orators overlooked this fact. Governor Hatfield did not. Neither did he overlook the fact that his State was in dire financial condition; that it was menaced from another direction also.

West Virginia's constitution does not admit of a thirty-year bond issue, or of any other bond issue to run a certain number of years and then be refunded into new bonds. For certain purposes bonds may be issued by West Virginia to run twenty years, but onetwentieth of the issue must be retired every year. There is no such thing as issuing bonds in West Virginia in the same manner as in

Tennessee, Georgia and North Carolina-to run thirty or forty years and then be refunded. It is a mandatory call-bond proposition in West Virginia, and if this provision in her constitution does not explain why West Virginia has no bonded debt, I can not do so. It is highly probable that the same provision kept the West Virginia prohibitionists from saddling the burden of their folly on future generations. Hence, Governor Hatfield and the State Board of Control knew that they could not sell thirty-year bonds, like their sister prohibition States, to repair the wreck to the treasury, and they met the condition squarely.

Near the time when Governor Hatfield was wrestling with the prohibition problem, the United States Supreme Court rendered a verdict against West Virginia in favor of the Old Dominion for approximately $15,000,000. The interest on this judgment is piling up at the rate of about $1,800 a day. With this burden added to the loss from prohibition, Governor Hatfield, it would seem, had good reason to believe that he could not borrow money at the bank to meet payrolls, and other expenses, without some visible evidence that the funds would be available to meet the notes at maturity. I assume that such would be the case, applying to the problem the principles that govern well conducted banks generally.

Thus, with the State facing a deficit of $650,000 a year from prohibition, and the large judgment hanging over him in favor of Virginia, Governor Hatfield knew that if taxes were not heavily increased bankruptcy was certain. West Virginia prohibitionists were caught between the upper and nether millstones, and Governor Hatfield courageously pulled them out of their perilous situation, for the time being at least.

This incident is valuable for the reason that law and circumstance forced the prohibitionists of West Virginia to admit by official action that State-wide prohibition laws so deplete State revenues that either higher taxation or bond issues become a necessity; and that prohibition is a heavy load which the people must bear at some period of their existence. In West Virginia the people begin paying the costs next year. Their tax bills will be multiplied by about three, as I shall show later.

THREE SESSIONS NECESSARY TO PILE ON THE TAXES

Three sessions of the Legislature became necessary to the enactment of tax laws satisfactory to Governor Hatfield. They were stormy, and resulted in much scandal. In the meantime a moratorium, as in war-swept Europe, did business in West Virginia. State officials went unpaid. Public school teachers sucked their thumbs. Funds due the public schools could not be paid by the State treasurer. Even the State University had its allowance cut off. Out of these conditions came a sentiment that finally, in May, forced the third session of the Legislature to enact a new tax law. This law is expected to add $1,200,000 a year to the State treasury funds. It is known as the Omnibus Revenue Law and is a dragnet for corporations doing business in West Virginia. Likewise it bears heavily on the owners of all kinds of property. Briefly, it doubles the charter tax, triples the tax on non-resident charters and imposes an excise tax of one-half of one per cent on the net earnings of corporations. The State Auditor is made attorney in fact for all foreign corporations doing business in West Virginia and is given authority to examine their books at his discretion. He is the whip to drive corporations to the pay station in the State capitol at Charleston. He may impose heavy penalties for non-compliance with his orders or with the law.

This new law increases the property tax from ten cents on the hundred to fourteen cents, the highest rate ever known in West Virginia. In 1911, before the State began tampering with prohibition, the property tax was only six cents on the hundred. It should be explained in this connection also that property is assessed for taxation in West Virginia at its cash value, or as nearly so as possible. About half of the increase in taxation of $1,200,000 a year is laid on corporations and the other half on property. Banks, insurance companies, joint stock companies, and all kindred organizations of capital are covered by the new law.

COMMISSIONER BLUE AND HIS SPECIAL ARMY

Section 16 of the Yost Law makes the State Tax Commissioner the preferred czar of prohibition. At the time the law went into