make plain my thought that the chief work of such board or commission, other than the assessment of public utilities required to be made by it, should be before instead of after taking, should be like the lawyer of today, a means of keeping us out of trouble rather than of getting us out after we get in, and like the physician whose duty it is to keep us well rather than to doctor us when we get sick.

And now, by way of concluding my discussion of this branch of my subject, let me say that with a state board of equalization or tax commission constituted as above, and with "a strong body of expert tax valuators working under civil service regulations," designated by Judge Howe in his address before the conference of this association in Denver in 1914 as the greatest need of the state of Kansas, and with the tax department so removed from the domain of politics that it cannot longer be the football of the political demagogue (that may be plagiarism, but I hope you will excuse it), there will be but slight demand for equalization after the tax rolls are once made up.

But equalization there must be, either before or after the assessment and you will note above that I maintain it should be before and sober, earnest thought and investigation, which brings me to the latter part of my topic, "How shall information be secured?"--the most difficult part of my subject-matter.

Just as there is no royal road to success, so there is no royal road to the information upon which equalization may be based. Speaking of real estate, a very common practice is to assume that the transfer value shown by a large number of sales represents the actual value of the property so transferred, but any man who thinks he can assess property at 100 per cent of a valuation so secured and escape the hangman is very greatly mistaken; and, on the other hand, any man who thinks he can make an assessment based upon the prices at which taxpayers say they will sell their property, and while doing so can supply the revenue required for the public service, will find himself badly on the wrong side of the ledger; of the two alternatives perhaps the better, but still a very undesirable condition. And if it shall be found necessary to

depart from the 100 per cent of either basis that might be chosen, how shall he determine, or who shall say what the variation shall be? The fact of the matter is that if I could just solve that one question of value, could propose a plan whereby taxpayer and taxgatherer could agree upon a valuation that would produce necessary revenue, then indeed would the tax problem be solved and then would boards of equalization and the National Tax Association be practically put out of business. But, gentlemen of the convention, I must confess my inability. The most I can hope to do is to open up the question for discussion, drop a suggestion or two, and trust that of the tax wisdom assembled here I can garner and take home with me something of benefit to the people of my own state. This fixing of value for taxation purposes reminds me, by opposites, of a little experience I once had as a court commissioner appointed to distribute in a crude and unscientific way the waters of a small river to some half dozen irrigation companies and many individuals entitled to the use of same. Every fellow, without exception, absolutely knew that every other fellow's stream was larger than his own. If there is one thing in the world over which men will fight more quickly than another it is what they consider to be their fair share of water, and I found that my only salvation lay in making them all believe that I was a good fellow and that I was doing my very best to give them all a square deal; and just as every fellow saw his stream smaller than his neighbors, so every taxpayer sees his tax larger and his property, for taxation purposes, smaller or of less value. And herein, if I have anything of value to offer on this question, is the crux of my idea: that the tax department, not only in the very important original assessment but in the matter of general supervision and equalization as well, establish itself in the confidence of the public.

This may seem to be somewhat of a digression from my announced topic, but perhaps only seemingly so. Let us make use of the "sales method", the "capitalization method", the gross and net income plans, the market value, all of which have been fully discussed, all of which have merit, and all of which are imperatively necessary, under varying conditions,

in any plan of assessment and equalization; but to all of which must be added, in the language of the Supreme Court, "the rule of reason". Our brilliant and estimable friend, Mr. Purdy, has well said that the "acid test" of any system of taxation is its ability to pluck from the goose the greatest quantity of feathers with the least amount of squawking; but no system of taxation not founded on equity and fairdealing, and with a knowledge and experience so wide that justice will obtain, can long endure. Hence comes the necessity of the above-mentioned expert tax valuators and of a governing board composed of members known not alone for their sense of fairness and equity but also for their intimate personal knowledge of values, of business conditions, and of the differing sections of the state. Having just passed through a somewhat strenuous equalization period following an assessment based upon readjusted and reduced rates, I want to say that no other factor has contributed so much to a successful meeting of the issues presented as has the personal acquaintance of the members of the board with actual values and business conditions.

Assuming, then, that the governor or other appointing power will make a wise selection of members of the state board or commission, it becomes the duty of such members to make diligent personal study of values and property conditions and to qualify themselves individually to fix values; in other words, to be themselves "expert tax valuators".

In conclusion, and in the interest of a quiet goose during the plucking process, and correlative to the suggestion that the board should establish itself in the confidence of the public, I would admonish the board to take the public into its confidence. In fact, I would have the news that goes out from the office through the public press censored; not with the idea of suppressing anything, but with the idea of knowing that the data and information given to the public are correct and not misleading. As an illustration: During our recent equalization campaign it was found that two important counties had increased their valuations under the reduced levies by 140 per cent and the newspapers so published the fact as to one of the counties, but as to the other said that the

valuation was 240 per cent of its valuation last year; which was correct, of course, but the result was that in the latter county largely attended indignation meetings were held and vigorous condemnation of taxing officials and methods expressed.

Another illustration: The legislature had created a special commission to study the tax question and to make report in the form of bills providing for the revision of the system. When the report came out, the legislature being in session, the two leading state papers (both of which were owned by mine-owners) opposed the proposed changes, one of them coming out in an editorial with the caption, "That Ferocious Taxing Plan", in the course of which occurred the following language:

But in fact it is not alone mines that are subject to this exacting inquisitorial inquiry; the same principle runs through the bill as applied to all species of property. There is nothing considered in favor of the taxpayer. The whole purpose, text, and idea in the bill is to make the taxpayer the helpless prey of the taxgatherer. Nothing is to be concealed, no reserves are to be permitted; the taxpayer must show up everything and must pay on everything.''

The commission considered the criticism to be praise of the highest order-but the bill failed to pass. So, it appears to me, inasmuch as a satisfied public is a very desirable element in the taxation problem, and inasmuch as we may take it for granted that any and all taxing officials are more than anxious conscientiously to perform their full duty, would not a board be justified in maintaining, in a way, a publicity bureau and in giving to the public not only the orders actually issued, but the basis upon which such action is taken? Sam Weller said to Mr. Pickwick, "Beware of the widders", and my advice to tax officials is, "Beware of the power of the press".

DISCUSSION OF PAPERS READ AT THE SEVENTH

SESSION

CHAIRMAN HOWARD: It is now in order for the conference to proceed to the discussion of the papers read at this morning's session. That will include a consideration of the budget idea, the taxation of intangible personal property, the income tax, and public expenditures. We will at once proceed under the rules.

MR. W. H. HART, of Indiana: The topic that was presented by the commissioner from West Virginia I think one of the most important that has come to the attention of this conference, the subject of public accounting. In 1909 Indiana asked for a non-partisan accounting commission. It was adopted practically by unanimous vote of the House of Representatives and the Senate. It has been in operation now for about seven years. At the time of its adoption this state, like all other states, had a system among county trustees especially where graft and extravagance had gradually crept in until it was a perfect scandal. The operations of this accounting board have been such that extravagance, graft, and waste have been entirely eliminated. There have been thousands of dollars recovered to the public treasury; the deterrent influence has been worth thousands more. There is not a dollar of public money expended in the state of Indiana, from the state house. to the last municipality, that is not under its supervision. I think that three of the factors in taxation all important are the taxpayer, the tax dodger, and the tax eater, and chief among those is the tax eater. Now I know the railroad strike is impending. I do not care to prolong the session of this convention, but I want to read from the report of this commission, issued yesterday, just two or three pages that I think will be of advantage to the conference, and those especially who are interested in the subject of public accounting-and all ought to be-and the matter of the budget. I think it was