Part 27

I have recalled to your recollection those old days of the golden age of Texas for one purpose only, which is that you may be reminded how, in the words of Solomon, "there is nothing new under the sun." There is nothing new, not even our troubles, and I can imagine that, even in the time of the Republic, our citizens desisted momentarily from the lighting of Mexicans and the pursuit of hostile Indians to hold indignation meetings all the way from Nacogdoches to Matagorda Bay, where fierce protests were drawn and adopted, condemning Houston and Lamar and the members of the First Congress for their wickedness in procuring the enactment of a "full rendition" statute with which to oppress and impoverish the Lone Star people.

I, myself, am reminded in this connection of the solemn utterances of some of the daily newspapers, most excellent oracles of Democracy, warning us in editorial columns long that this is a new country, where a continuous stream of bottoms is dropping out of our real estate booms, and that it is a great big mistake to assess our new and fragile values at anything approaching their face. And in my mind's eye, I can see right now one of those ancient and beloved heroes, recently companion to the immortal Davy Crockett, the tails of his coonskin cap fluttering in the wind, addressing an indignation meeting in the days of the First Congress, arousing unlimited enthusiasm with the very same argument which is now so commonly used, founded upon the newness, three-quarters of a century ago, of this country of ours, which some of us profess to believe has not yet grown sufficiently old to tell the truth for purposes of taxation.

The statutes of Texas have always been "full rendition" statutes, and our Constitutions, except for that one which was adopted in 1836, have always been "full rendition" Constitutions. And, in my judgment, there can be no honest attempt at a fair adjustment of the burdens of a direct tax upon the general property of this or any other country which does not make a decent effort at an equalization in proportion to the true value of each article which is taxed. The true value of an article is necessarily its fair, full value, nothing more and nothing less. If we levy general property taxes, we are compelled to require by law that all property subject to the levy shall be taxed in proportion to its value, and such a rule is inevitably a law for a "full rendition."

If a government were to command that its taxables should be listed at one-fourth their full value, and that a tax of $1 on the $100 should be levied on the values so listed, it would in substance have enacted a law for the taxation of its property, at full value, at 25 cents on each $100, and no amount of figuring can make out of it anything less or anything more.

The proposition that property shall be taxed at one-fourth, or at one-fifth, or at any other fractional part of its true and full value is wholly inadequate to meet any of the objections which are urged against the "full rendition" bill. If a tract of land be assessed at $100 an acre at its full value, January 1, 1908, and by reason of any change in conditions, the value has diminished before the arrival of the tax-paying season, say December 31, 1908, to $50 an acre, and, if it be assumed that it would be an injustice under those circumstances to require the owner to pay a tax in December which is based upon such a valuation, still the slightest reflection will convince you that this injustice has not been obviated by assessing the land at $25 an acre and, at the same time, multiplying the tax rate by four. In either case precisely the same amount of money is exacted from the owner, and, in either case, the tax is in truth based upon the full value January 1st, which we have assumed to be $100 an acre, and no account is taken of any subsequent depreciation.

But, if it be urged that the owner will be better satisfied to pay 25 cents an acre if his land be valued at $25 an acre than he will be to pay the same 25 cents on the same acre upon a valuation of $100, then I can only answer by saying that the Texans with whom I am acquainted are so well fixed with brains that you can not fool them with a trick so transparent as this. If a citizen pays a tax of $50 on a 200-acre farm, he knows that he is out just $50 in good, common, hard cash, and all the assessors and collectors in the State can not fool him into the belief that he has paid only $40 by showing him how low his land was assessed and how high it was taxed. Having paid his money, he will feel neither better nor worse because of the valuation put upon his property, provided only that he has had a square deal as compared with the other taxpayers.

This is the whole of the tax question, as I see it--to deal justly with every man in the sight of God--to tax every person as nearly as possible in proportion to his ability to pay. And under any ad valorem system the measure of the ability of each individual and the only approximately fair measure which the ingenuity of man has ever been able to devise is found in the reasonable, full value of the taxable property of every owner.

No revenue law is wholly bad which tends in this direction and, on the other hand, every such law is good and valuable in direct proportion as it is so drawn that it will aid in bringing about this all-desirable equality in the imposition of public burdens.

Granting that taxes are apportioned with reasonable fairness, there is but one way whereby an impartial reduction can be had and the benefits of such reduction distributed proportionately and honestly among the taxpayers, and this way is by cutting down the expenses of the government. Every other effort is either the pursuit of a ghost, leaving the pursuer empty handed if he were to succeed in catching it, or it is an effort at tax dodging. The average taxpayer is no shirk, and the very best for which he can hope and the things for which he should always be demanding are, first, an economical administration of public affairs, and, second, the utmost fairness in the distribution of public burdens.

The Constitution of Texas, as I have already shown, has always commanded an equality in taxation, to be attained by levying upon all property in proportion to its value. The laws of Texas have been enacted in obedience to the constitutional mandate, as full rendition laws, but have until the late session of the Thirtieth Legislature failed in one respect, at least, for they provided no adequate means by which they might be enforced. And under these laws, which on the face required a fair assessment, but did not undertake to compel obedience to their provisions, a practice of evasion was begun and spread all over the State, until a condition prevailed which was anarchy, pure and simple. County strove against county and neighbor against neighbor, each one trying unjustly to shift some portion of his rightful burden to the shoulders of another. It was a reign of lawlessness, gentlemen, when, as some of you members have demonstrated, the average assessment in one county was only 24 per cent. of the value of the property assessed, while the average in another county was as much as 75 per cent. And the remaining counties of the State ranged themselves anywhere you please between these two extremes.

Equality in taxation was a thing dead and forgotten, and honorable people were being taught to look with contempt upon the affidavits which were required to be made before the assessors. A strong and manly people who throughout their history had held the vice of lying in peculiar detestation, were made accustomed to falsehoods, uttered for profit, under the supposed sanction of an oath. A condition prevailed which would in time have compelled the moral deterioration of all citizens.

Now, it is certain that it is one of the most important of the functions of government that it shall secure justice and fair dealing as between all those who are subject to its jurisdiction. But more than this, and more than all else, it is the duty of those who are in control of public affairs that they shall permit no condition to continue which threatens to undermine the moral character of its people. For I venture the opinion that civilization is not builded of capital and labor alone, but that its chief component parts are the love of virtue and the sense of honor and the devotion to truth and integrity which are in the hearts of all persons, and if these good attributes are no longer actuated by these high ideals, then I predict that mankind will have become from that moment forward incapable of maintaining social order.

The practice of undervaluing property for purposes of taxation, which had become common and almost universal in Texas, was destructive of all possibility of justice as between the respective owners, and had in addition thereto a distinct tendency to debase the morals of an uncontaminated and virtuous people. The movement for what I will venture to call purer and better laws did not begin in the Thirtieth Legislature, but years and years ago, and the so-called Full Rendition act of 1907 is merely a mile-stone in the forward march of a progress which has continued throughout the ages, and which will never end.

The statute for the taxation of banks and banking capital is a "full rendition" statute, designed to enable and to require assessors to list at full value the stocks or properly of such institutions and all funds employed in that particular business. The act for the taxation of the intangible assets of railroads, an act which I had the pleasure of assisting to pass in the Twenty-ninth Legislature, is another "full rendition" law, under the operations of which nearly $174,000,000 of additional railroad values is exposed to view and listed and taxed. These and other statutes of the same kind, which I have not the time to mention, are just and fair, if all other property is also assessed approximately at its value, but they become discriminatory and oppressive as soon as undervaluations of other taxables are purposely allowed.

I am fully aware that there are certain vices which appear to be necessarily inherent in any system that can be devised for the direct taxation of both real and personal property. And while I am not inclined to believe that these vices render this character of tax more difficult of fair apportionment than is any other, yet I would not for a moment attempt to render blind either myself or you to those imperfections and weaknesses of human nature which make it apparently impossible entirely to effect the purpose of any law, no matter how just or wise it may be. But I would remind you that we can not give ground in the face of this argument without abandoning all effort at an orderly rule of society and plunging headlong into the deadly chaos of anarchy. If our inability, entirely and in all cases, to enforce a full rendition law is just cause for the abandonment of the full rendition principle, then, in the same way and for the same reason, we shall be driven from any other plan that we may adopt. Indeed, if we once admit the force of this objection, we must abandon all law, for in no case are we able satisfactorily to enforce any statute which is upon our books.

Remember, gentlemen, I make no pretense that perfection has been attained in the act of the Thirtieth Legislature, or that the act is incapable of improvement. What I am contending is that it is a step forward, and that this body, standing as it does for the ideal 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, wherever 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, for 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 $2,650, 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 to-day as the representatives of commercial Texas.