West Virginia’s Civil War–Era Constitution: Loyal Revolution, Confederate Counter-revolution, and the Convention of 1872

20. Taxation, Finance, Corporations, and the Public Debt

476 West Virginia’s Civil War–Era Constitution C h a p t e r 2 0 Taxation, Finance, Corporations, and the Public Debt The Standing Committee of Taxation, Finance, and Education’s name indicated its broad jurisdiction over public policy questions, but its formal title did not fully delineate its extensive breadth of responsibility. In addition to the named areas of concern, it developed constitutional provisions that dealt with corporations, including railroads and banks, and with public debt. This latter subject area—the Virginia debt—encompassed one of the most controversial contemporary issues, a matter that endured for almost eighty years of West Virginia history. The financial obligation of the mother state attracted nearly as much press comment as the various questions that touched race. Also, when various proposals regarding statewide assessment and taxation surfaced, bitter western Virginia memories about the previous discriminatory treatment of different species of property under the slave regime arose. The chairman of the eleven-man group was William Hicks Travers, a young Charlestown lawyer. Taxation, Finance, and Debt Despite the weighty subjects of state under its purview, Travers’s committee was the first to present its report, the taxation and finance portion, on 30 January to the convention. The Travers committee submitted the education or free school portion of its report later (which the following chapter will address). The convention as a Committee of the Whole initially entertained the report on 5 February. Attention centered on two areas: the question of constitutional or legislative exemption of certain classes of property from taxation and discrimination between property species. The committee report had proposed to give to future legislatures the power to exempt certain species of property from taxes and to have different tax rates for different kinds of property. The Constitution of 1863 had provided that all taxation be equal and uniform throughout the state and that all real and personal property 476 Taxation, Finance, Corporations, and the Public Debt 477 be taxed in proportion to its value. No species of property could be taxed higher than another of equal value. The legislature could only specify the level of tax levied on value. The legislature could also exempt from taxation by law property used for educational, literary, scientific, religious, or charitable purposes and publicproperty. John Marshall Hagans proposed a resolution that continued the present constitutional treatment rather than altering the approach as the Standing Committee recommended. Alpheus F. Haymond preferred to have accepted the committee’s report, but he was against giving the legislature any discretion in this matter.1 Rather than giving the legislature power to set variable tax rates and classifications for different species of property and continuing the constitutional status quo of equal treatment of all property, Alonzo Cushing wished to amend the report and to ignore Hagans’s proposal by constitutionally exempting from taxation all agricultural products, livestock, and all goods produced by agricultural labor in the precedingyearandremaininginthehandsofproducers.JamesS.Wheatofindustrial Joseph Wesley Gallaher (1826- ) of Moundsville, Marshall County, represented the Second Senatorial District and served on the Taxation, Finance, and Education Committee in the Convention of 1872. A retail merchant, a member of the county court, and mayor of Moundsville , he was successively a Whig and Know-Nothing in politics. In his county delegate election to the Virginia Convention in 1861, he unsuccessfully ran as the secessionist candidate. He became prominent in the reorganization of the Democratic/Conservative Party in 1868 and served a delegate to its national convention in New York City. His political star rose with the Democratic Party that propelled him to the presidency of the Board of Directors of the state penitentiary in Moundsville. (Atkinson and Gibbens, 400.) 478 West Virginia’s Civil War–Era Constitution Wheeling deplored the distinctionbetweenagricultural labor and capital and thatof manufacturers. William A. Morgan of Shepherdstown, reminding the assembly that agricultural products were the only taxable property in some sections of the state, observedthatexemptionofagriculturalproductswouldendupoppressingtheinterest that it was intended to benefit. The tax would have to fall on the farmers’ lands. Alexander Monroe of Hampshire warned that exemption of species of property and differingclassificationfortaxationpurposesweredelusional for ordinary people. He argued that exemptions from taxation always benefited the wealthy whether they be farmers or otherwise. John T. Peerce and Samuel Woods both expressed opposition to any species of property being exempt from taxation. The Standing Committee chairman, Mr. Travers of Charlestown, conveyed the committee’s wish that no exemption power be within legislative...