Entangled by White Supremacy: Reform in World War I-era South Carolina

Chapter 10. Taxing Wealth

When the general assembly convened in January 1920, South Carolina’s white reformers greeted the new session with hopeful expectation. With World War I successfully concluded, reformers anticipated continuing the state-centered activism they had marshaled to meet wartime demands. Soon after the armistice, reformers ’ optimism received institutional expression through the organization of the South Carolina Development Board. This private , statewide organization promoted reformers’ comprehensive postwar reforms, justifying the optimism and commitment to statelevel reform that had been spawned by their wartime-mobilization experiences. Further buoying their confidence, Cole Blease’s historically poor showing in the 1918 U.S. Senate race had signaled the weakening of their leading political nemesis. A final, significant factor explained their hopeful anticipation: the state’s postwar prosperity was at its zenith. Encouraged by the wartime economic boom, Governor Robert A. Cooper touted South Carolinians’ “unwonted prosperity” and “remarkable freedom from economic strife,” in his 1920 annual address. Cooper hoped the new prosperity would prompt the state to “undertake greater constructive work than ever before.”1 White reformers intended to parlay Cooper’s call for an aggressive reform agenda into passage of their long-desired changes, beginning with tax reform. Niels Christensen Jr., state senator from Beaufort, quickly emerged as the most important leader of the tax reform movement. Owner and editor of the Beaufort Gazette, Christensen also worked in the family hardware, lumber, and building supply business, N. Christensen and Sons, and managed Christensen Realty. A longtime Taxing Wealth 242 Chapter 10 Taxing Wealth 243 proponent of tax reform, Christensen entered the battle on several fronts. When the 1920 legislative session began, Christensen introduced a resolution to appoint a joint legislative committee to study the state’s taxation system and guide proposed legislation to passage. As chairman of the finance committee, he hired outside experts to study South Carolina’s tax system. Along with his legislative positions , the energetic senator used his leadership in the private sector to build support for tax reform. Christensen played an instrumental role in the formation of the South Carolina Development Board, a private organization of prominent business, industry, agriculture, and education leaders who planned to promote economic development in South Carolina. In March 1920, Christensen addressed the board’s organizational meeting on how to get action from the legislature on tax reform. Christensen became the president of the board, which enthusiastically endorsed the legislature’s willingness to tackle the issue of tax reform. Christensen’s real estate and business interests might have influenced his passion for tax reform. With entrepreneurial vision and extensive ownership of undeveloped land in the South Carolina low country, Christensen perhaps envisioned long-term opportunities for himself and the state if he could erode the existing tax liability associated with holding unproductive land for future development.2 Just as Christensen had planned, the general assembly created a legislative committee to study South Carolina’s tax system. Formally named the Joint Special Committee on Revenue and Taxation, the committee had six members—two senators and four representatives. The two senators were Christensen and John Marion of Chester. Marion chaired the committee, which became known as the Marion Committee. The committee conducted its study in the months following the 1920 legislative session and submitted its report, commonly known as the Marion Report, to the general assembly at the 1921 session.3 The committee conducted an extensive study and published an informed and exhaustive analysis of the state’s tax structure that offered recommendations for future reform. After a detailed analysis of the state’s cumbersome tax structure, the Marion Report summarized its findings in three broad conclusions. First, while endorsing the broadly shared and popular sentiment that property tax rates Entangled by White Supremacy 244 were too high, the committee dismissed the charge that extravagant appropriations and wasteful spending were the culprits. Second, the report concluded that in order for the state to operate efficiently and to support charitable and correctional institutions, public schools, institutions of higher learning, and public welfare more generously, state government needed more revenue. Third, the committee concluded that South Carolina’s flawed administration of the general property tax reinforced and compounded the inequity of the existing tax system.4 Based on its analysis of these problems, the committee made a series of specific recommendations intended to overhaul the state’s tax system. The Marion Report recommended that South Carolina create a radically different tax...