capable of improvement. What I am contending is that it is a step forward, and that this body, standing as it does for the ideal and aspirations of the business men of Texas, must take no step backward. To repeal this statute setting up nothing better in its place, retreating to a condition of which you, as thoughtful and patriotic citizens, must have been sick at heart, may bring us to have "fewer laws," but I am not able to persuade myself that those laws which are left will thereby have become any the better.

In my judgment, ex parte affidavits, which have the effect of making the truth cost money and of rewarding falsehood as if it were a virtue and not a vice, ought not to be exacted in any but the rarest of cases, and only where no other source of information can reasonably be found. And, for this reason, I have long preferred that the visible property of the State should be valued and assessed by the assessor rather than by the owner. But I am greatly in the minority in my opinion of this subject, and because that opinion is of absolutely no consequence, I refrain from enlarging upon it.

Proceeding, then, along the only road which is open for travel, and assuming that each owner shall continue to fix the prima facie value of his own assets, it can not be successfully denied that the interests of society demand that such valuation shall be made under oath, and that the value stated in every affidavit shall be the true, full value and not an arbitrary assumed and fictitious proportion of the same.

The "full rendition" law, considered in connection with other statutes in force upon the same subject, provides an admirable system of local equalization, and tends in a very considerable degree toward equalization throughout the limits of Texas.

But this is a State of vast areas and of prodigious distances, and in any such widely extended territory it seems to me that the physical conditions alone are sufficient to demand the enactment into law of some method of apportionment which will not depend entirely upon local views and local sentiments. It must be kept in mind that, while the Attorney General may sue to remove from office any assessor or member of a board of equalization whom he believes to be guilty of intentionally accepting undervaluations, yet, convictions for such offenses are always difficult to secure and the prosecution of the vast majority of such cases would be no better than a farce. The State government is practically without power to compel reasonable assessments in any county or section where the citizens are largely opposed to full rendition. The administration has no legal authority which it can effectually use, but must confine itself to moral suasion alone, and in controversies where interested parties are arrayed upon opposite sides, we, as a people, have never regarded moral suasion and merely moral responsibilities as a sufficiently effective force to be worthy of serious mention. We will not permit a judge to hear a case in court, or a juror to sit on a jury where either the plaintiff or the defendant is related to him within the third degree, either by blood or marriage. Arbitrators must be without interest and not related to the parties, and, in general, whereever an act is authorized which may affect the rights of others, the law

is vigilant in requiring that the officer or person acting shall be disinterested and impartial. Everyone will agree that these precautions against injustice are right and necessary, and yet I can conceive of no good reason why interested parties or their relatives may not be permitted to adjudge any other disputed claims quite as well, and with just as large a probability that justice will be done as when they were asked to determine what amount of State taxes they will pay.

A compulsory equalization of some character seems to me the next step to be taken in the forward march toward fairer taxation in Texas. We have come a long way from that original plan of 1837, by which an assessor and two neighbors arbitrarily determined what a property owner should pay, but we are still very far from home. Nor should this occasion surprise, for if the law is to be worthy of respect, if it is to be in any way effective as a force for the right, it must not be fixed and unchangeable, but, on the contrary, must be capable of infinite variety and infinite development, growing with the growth of the people who are its creators and enforcers, eternal in seeking justice, but flexible in adapting itself to the present.

In conclusion, gentlemen, permit me to call to your attention very briefly a few of the effects of the new tax laws. For if we are to return, as at least one candidate for high office is insisting, to the old order of things, we are abandoning not merely the so-called full rendition law, but all other of the recent enactments upon the same subject. We are to abandon the intangible tax law, the franchise tax law, the law taxing the gross receipts of certain corporations, and all other of the statutes of the Twenty-ninth and Thirtieth Legislatures by which a fairer adjustment of the burdens of government was sought to be secured. And if we abandon these laws we must abandon their undeniable benefits as well as their doubtful disadvantages, and pay taxes as we paid them in the good old times.

Now, in 1906, when these laws were either tied up in court or not yet in force, the property owners of Texas were called upon to pay a total ad valorem tax for the expense of the State government of $2,443,637, but in 1907 the ad valorem tax for State expenses was reduced to $2,044,566. The operation of the new tax laws reduced the burdens put upon property owners by $400,000, and of the amount which property was still required to pay, something near $214,000 was levied upon railroad intangibles. The saving upon the general property, aside from railroad and corporation taxes, was $614,000 for that single year, or State expenses alone. In the same way, the saving for the year 1908 will not be less than $900,000 on State expenses, not including the school fund.

It can not be successfully denied that the new tax laws have tended largely toward an equitable distribution of tax burdens and that in doing this they have diminished the amount paid by the average citizen, The intangible assets tax alone brought in a revenue for 1907 of $1,470,000 to the State and its counties, and cost for its administration the insignificant sum of $2650, a result which can not be surpassed in the history of governmental finance.

These are the triumphs which we are asked to abandon by returning to that system where "the assessors under the commissioners courts made the assessments as under former laws."

Now, gentlemen, I for one am not disposed to retreat. I am intending to go forward, not backward. And in the course which I am determined to pursue I am expecting to go arm in arm in the company of the most of those who are here today as the representatives of commercial Texas.

APPENDIX "E."

REPORT OF THE MISSOURI TAX COMMISSION.

To the Honorable Joseph W. Folk, Governor of Missouri:

The undersigned, appointed by you as a Commission to recommend and report to you what we may find upon investigation to be needed changes in the revenue system of the State, have organized and have carefully considered the very important questions involved.

We have been greatly assisted by the report of the Commission, appointed under Act of April 17, 1901, by your predecessor, Governor Dockery, to revise the revenue laws of the State, which was made on February 17, 1903. We concur in the conclusion of that Commission, that no change can be made in our revenue system correcting the existing inequalities without amending the Constitution of the State. In the language of that report: "The Legislature is so hedged about and hemmed in by the limitations in the fundamental law of the State, that, as the Constitution stands, no statutory change can be made in the general taxing system now in force." In other words, the general property tax assessed by both the State and counties and municipalities upon the assessment made by local assessors upon real and personal property is so generally recognized in the State Constitution that nothing short of a constitutional change, either by a new Constitution or a constitutional amendment, can open the door to the establishment of any other system.

We are satisfied from careful study of our revenue system that a change is required to remedy existing radical defects and to secure equality to our citizens in bearing the public burdens of the State. The Commission of 1903 reported that the assessments were not uniform in the different counties, and that discriminations were made even in the same county between diffrent kinds of property. Unequal taxation is unjust taxation.

We all agreed that the first step in any tax reform is the separation of the sources of State and local revenue. This change would not require the exemption of any class of property from taxation. The proposed change may be effected, if it is not deemed expedient to submit the proposition for a constitutional convention, by the submission and adoption of a single constitutional amendment in form, which can be readily prepared.

The general features of this separation of the sources of State and local revenues may be briefly summarized. The State would discontinue the levy of a general property tax upon the real and personal property of the State, leaving the assessment and collection of this tax to the counties and municipalities for local purposes, including schools. This would make a saving of the large expense incident to the present dual system. It would also dispense with that portion of

the work of the State Board of Equalization connected with the attempted equalization of assessments of real and personal property among the counties of the State.

The State would thereafter derive its revenue through its inherent general power of taxation upon general subjects of taxation, as by licenses, corporation taxes, inspection fees and such other forms of taxation as the General Assembly may from time to time determine. No change would be required in the present method of assessing public service corporations by the State Board of Equalization.

The different rates of assessment in the different counties, enforced by the different demands for local revenue, would no longer produce inequality in taxation with reference to the State tax. The remedy proposed is, in our opinion, the only effective remedy. On the other hand, the proposed system would give the people of the counties and cities of the State the largest measure of home rule and local option in the matter of taxation. Each community could fix its own rate of valuation as its local needs may require, without subjecting its citizens to the injustice of being compelled to pay an undue share of State taxation. Furthermore, each locality could adopt, subject to the constitutional requirement of uniformity, such modifications of the general property tax upon real and personal property as would be found most effective and best suited to the needs of that locality. We would thus have local option and home rule in this fundamental function of government, and we believe that this development of home rule in taxation would be in accord with the highest dictates of public policy.

In order more effectively to secure the principle of home rule in this matter of taxation, we recommend that no exemption, total or partial, shall be made by the county courts or city councils on any form of property, real or personal, subject to the general property tax, except upon a submission to popular vote of such county or city. Any danger of abuses in exemptions in any classes of property should be prevented by a constitutional requirement of uniformity, and also should be safeguarded by such legislative limitations as to time and otherwise as may be found necessary and effective.

There is now a certain kind of local option in taxation, which. consists in the variation of the rates of assessment upon property according to the local needs of the community, some counties paying taxes on 70 or 80 per cent of the real value of property and others on only 20 to 30 per cent. The report of the Tax Commissioner of 1903 says that the reports from the different counties in this matter would be indeed startling, if some of the facts stated therein had not been previously known, and that they showed a condition of affairs that should no longer be permitted to continue, adding, "It is within the bounds of truth to say that no two counties of the State have the same rule for the assessment of all classes of property, and, generally speaking, there is absolutely no uniformity as to the proportion of the cash value taken as a basis of the assessed value. Some counties value real estate, so far as our reports show, as low as 30 per cent of its selling price, while others have a 90per cent basis. Some assess real estate at 33 per cent, and tangible