556 MISC. PUBLICATION 218, U. 8. DEPT. OF AGRICULTURE 
legislation stating or implying that the law constitutes a contract be- 
tween the State and the taxpayer. 
It should be noted at the outset that these ‘“‘contracts”’ often do not 
provide for any valuable consideration to be given by the owner in 
return for the special tax status offered, and thus a question may well 
be raised whether they are really contracts at all. Often the only con- 
sideration demanded is that the owner shall keep his land in a forested 
condition. Whether or not this restriction on the owner’s acts is ac- 
tually a valuable consideration given by the owner to the State has 
never been submitted to the courts. Suspicion as to the bona fides of 
the conventional contract provision is awakened when one observes 
that these so-called ‘“‘contracts” may generally be terminated at the will 
of the taxpayer, without very serious penalty, whereas, so long as the 
taxpayer lives up to his obligations, the State is not free to terminate 
the contract. Itis doubtful whether such a one-sided arrangement is 
a real contract. 
The Connecticut Supreme Court of Errors has held that in order 
to give a tax-exemption act the force of a contract it is necessary (1) 
that there be a clear intent to create something more than a mere 
privilege or bounty; (2) that the tax exemption be in the nature of a 
contractual obligation; and (8) that the contractual relationship be 
supported by a real and not a speculative consideration. The court 
then went on to say that a tax-exemption statute will not be con- 
strued as an irrevocable surrender of the power of taxation if it 
can be otherwise reasonably interpreted.” 
In answer to a question from the New Hampshire Senate, the 
supreme court of that State delivered the following opinion, January 
Wa 9S0: 
House Bill No. 5 provides for the exemption of standing wood and timber 
from taxation upon the owner’s entering into a contract with the State to pay 10 
percent of the stumpage value at the time of severance. It is entirely clear that 
the act is not within the limits fixed by the constitution. It undertakes to make 
tax liability a matter of bargain and sale at the option of a certain class of property 
owners, others having no such option. It seems unnecessary to say more upon 
this subject. The plan is so at variance with the whole theory of taxation in 
this State that its invalidity is not open to doubt. 
To these judicial decisions may be added the hard fact that in one 
State the legislature has already seen fit to amend the rates of a 
special forest-tax law which the enacting legislature had sought to 
make inviolate under the protection of a contract provision. The 
Michigan act of 1925 introduced a specific property tax and a yield 
tax and provided that amendments to the law should apply to all 
lands classified after such amendments became effective; owners of 
classified lands might apply, without prejudice, for classification under 
such amending laws. ‘This proviso has usually been understood to 
imply a contract under which the State, in case of amendments to the 
law, would not undertake to impose on property already classified 
provisions less favorable to the owner than those under which the 
property had been classified, while at the same time giving him 
opportunity voluntarily to take advantage of more favorable provi- 
sions. However, in the opinion of the attorney genera ,* such 
understanding is in error insofar at least as concerns the terms of 
taxation. He held that ‘‘specific taxes or taxation, or exemption 
57 State ex. rel. Foote v. Bartholomew et al., 108 Conn. 252. 
7 a This opinion was given to the acting director of the State department of conservation under date of 
eb. 21, 1928. 
