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The Property Tax as a Coordinating Device: Financing Indiana's Mammoth Internal Improvement System, 1835 to 1842

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John Joseph Wallis
Abstract

The state of Indiana set out to build a Mammoth system of canals, railroads, and turnpikes in 1836, after a decade of intense debate in which sectional rivalries prevented any state action. This paper investigates the role played by the adoption of an ad valorem property tax in ameliorating the sectional rivalries and coordinating the costs of financing the transportation system with the taxes levied to finance it. It also traces the rise and fall of land values in the state between 1835 and 1842, estimating the effect of internal improvement projects on land values.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Historical Working Papers with number 0136.

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Date of creation: Nov 2001
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Handle: RePEc:nbr:nberhi:0136

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N0 - Economic History - - General
N4 - Economic History - - Government, War, Law, and Regulation

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  1. Peter L. Rousseau, 2000. "Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837," NBER Working Papers 7528, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. English, William B, 1996. "Understanding the Costs of Sovereign Default: American State Debts in the 1840's," American Economic Review, American Economic Association, vol. 86(1), pages 259-75, March. [Downloadable!] (restricted)
  3. Coffman, Chad & Gregson, Mary Eschelbach, 1998. "Railroad Development and Land Value," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 191-204, March. [Downloadable!] (restricted)
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