Spring of 1916 and in no way connected with the assessment of general property that will be made in the spring of 1917. As to reproductive cost, not necessarily being "cash value," we call attention to the fact that the principle running through all assessments under the Michigan law is, "what is the selling value of the property at assessment time?"not what will it cost to reproduce. In all assessment problems, cost and value are not necessarily the same. It would cost as much, if not more, to reproduce the Majestic building in Plymouth or Wayne than it did cost where now located, but it would have far less value. It cost a large sum to build the Kalkaska branch of the Pere Marquette Railroad, but the State Railway Commission has authorized the abandonment of that branch and its only value is in the steel of the track now being removed. These thoughts should be in mind when considering public utility corporations assessments.

The State Tax Commission also annually reviews the assessing of iron mining properties. A shipping mine is a diminishing asset, decreasing annually in actual value and eventually reaching zero. New discoveries and developments, however, may disclose ore bodies not previously assessed, the extent and richness of which must be determined by a competent mining engineer and added to the previous assessment. Board of Geological Survey has allowed the State Tax Commission the services of the State Geologist for that purpose, and local assessors, where mining properties are located, are annually advised as to mine valuations.

The

In one other case the Board of State Tax Commissioners directly determines taxation. When the property included in any mortgage presented for record is located part within and part wihout the State, the Board of State Tax Commissioners must determine the proportion of the property within the State of Michigan, and compute the amount of mortgage tax to be paid on account of the Michigan property, and report the same to the treasurer of the county where first presented for record. It might be interesting to know that mortgages aggregating $335,336,400, mostly securing bond issues were thus passed upon by the Tax Commission the past two years.

DUTIES AS TO STATE AND COUNTY EQUALIZATION.

The second group of duties of the Tax Commission relate to state and county equalization.

Just as the assessment of property is the sole basis for distributing the general property tax to the individual taxpayer, so equalized valuations are the sole basis for distributing to counties and assessing districts their proportion of State and County tax. From the standpoint of "equality of burden," therefore, an accurate equalization of valuations between counties and between assessing districts in a county is as important and necessary as accurate equalization of assessments between individual property owners. To furnish a basis for a just and accurate State equalization, the Board of State Tax Commissioners is required "to ascertain and report to the State Board of Equalization at each session thereof the approximate cash value of each county in the State." The Chairman of the State Tax Commission is ex officio a member of the State Board of Equalization.

In 1914 the State Tax Commission performed this task systematically

and thoroughly. The verified sales method previously employed for ascertaining values was discarded as unreliable and misleading, and the entire equalization was based upon actual examinations and valuation of property. The counties at that time re-assessed by the State Tax Commission were reported at the figures of such re-assessment. In the counties not yet re-assessed all property was classified from the assessment rolls into 8 classes and the amount of property in each class computed as assessed, and a proper amount of each class actually examined and its cash value determined and compared with the assessed valuation of the same property, and from such comparison the valuation of the various counties was determined. The property actually examined for this purpose was approximately 17% of the real estate and 34% of the personal. In addition, wherever possible, the true value of all public utility and industrial properties, credits and bank stock, was ascertained,—not estimated. For five months, practically the entire time of the Commission and its field force and much of the time of the office force was occupied in preparing the equalization report. That the results of this work were wonderfully accurate, and fully justified the outlay of time and money, is shown by comparing the figures thus determined and reported to the State Board of Equalization as the cash value of certain counties not then re-assessed with the results of complete reviews of the same counties made by field men of the Tax Commission the following year.

The decrease in valuation shown in Kalkaska, Montmorency and Missaukee counties is fully accounted for in timber cut and removed from those counties.

The report made at the meeting of the State Board of Equalization held in August, 1916, was prepared on the same basis as that of 1914, but with the great advantage of being able to report sixty-three of the eightythree counties at the figures at which re-assessed and reviewed by the Tax Commission, and five other counties at the figures at which reassessed but not yet reviewed, leaving fifteen counties, most of them small and unimportant, to be reported on any other than a "cash value" re-assessment basis. Especially important from the standpoint of the State Tax Commission, was the fact that the re-assessment of St. Clair county and the city of Detroit had been completed in time for the report,

although not reviewed; but inasmuch as the complete valuation of both St. Clair county and the city of Detroit as reviewed later exceeded considerably the valuation reported to the State Board of equalization, the injury was not to Detroit city or St. Clair county, but to the remainder of the State. We would also call attention to the fact that in preparing this report as to the approximate cash value of the various counties, the work of the Commission in previous years in reviewing assessments, was for the purpose of this report, supplemented and brought down to date, not only by new examinations by representatives of the Commission, but by fifteen hundred special reports from representative citizens of those counties; the particular purpose of these special reports being to obtain from competent local observers their view-point as to changes in valuations since the Tax Commission's reviews were held.

The Board of State Tax Commissioners believes the report made to the State Board of Equalization in 1916 to be the most accurate report as to the approximate cash value of the State ever made for any purpose. The only apology we would make for any part of it is that because we over-estimated the amount of reductions and cancellations of assessments that would be found necessary as the result of the review, we underestimated the valuation of Wayne county.

As part of the scheme for securing equality of burden in all matters of taxation and restoring "cash value" assessments, it seemed proper to the Legislature of 1913 to provide for review of equalization between the assessing districts of a county, by the State Tax Commission on the appeal of a supervisor or assessing officer of a county. This duty is one the Commission enters upon with more anxiety and performs with less satisfaction than almost any other required of it. Appeals for a review of county equalization are almost always from counties that have not been re-assessed, and frequently are made after a long and bitter controversy between the supervisors themselves, and when but little time remains for investigation. The situation is further complicated by the fact that the law apparently contemplates that the State Tax Commission shall in making its determination, use all information in its possession, whether presented at the review or not; and the fact that the decision may be largely based upon such information cannot always be made known to parties interested. As illustrating this phase, we would cite the review of the equalization of Wayne county, held December 21, 1916, on the appeal of the supervisor of Greenfield township. There was but a small amount of testimony introduced by the supervisor making the appeal, and practically none by those upholding the equalization of the board of supervisors. The Tax Commission on the other hand, had before it the complete review of assessments in the city of Detroit. It had actual examinations and valuations made by its representatives of more than fifteen per cent of the property in the townships and much more than that per cent of the property in some of the townships adjacent to Detroit. It had also just completed in many districts examinations of hundreds of pieces of property preliminary to the complete reassessment of all the townships, more than eight hundred of such preliminary examinations having been made in the township of Greenfield, the supervisor of which had made the appeal. It had for comparison with this material the assessments of the supervisors in each case. With such an amount of accurate information, it could not be otherwise than

that the decision made, should be commented upon adversely by those who held practically no information other than the aggregate assessment as made by supervisors.

POWERS AND DUTIES AS TO ASSESSMENTS AND ASSESSING OFFICERS.

The third group of duties of the Tax Commission is one with which assessing officers and taxpayers alike are best acquainted and most concerned, and they explain why the Tax Commission has been reviewing assessments and advising assessing officers all over the state. In the language of the statute these duties are as follows:

Section 150. It shall be the duty of the said Board:

1. To have and exercise general supervision over the supervisors and other assessing officers of this State, and to take such measures as will secure the enforcement of the provisions of this Act to the end that all the properties of this State liable to assessment for taxation shall be placed upon the assessment rolls and assessed at their actual cash value;

2. To confer with and advise assessing officers as to their duties under this Act, and to institute proper proceedings to enforce the penalties and liabilities provided by law for public officers, officers of corporations and individuals failing to comply with the provisions of this Act; to prefer charges to the governor against assessing and taxation officers who violate the law or fail in the performance of their duties in reference to assessment and taxation, and in the execution of these powers the said board may call upon the Attorney General or any prosecuting attorney in the State to assist said board;

3. To receive all complaints as to property liable to taxation that has not been assessed or that has been fraudulently or improperly assessed, and to investigate the same, and to take such proceedings as will correct the irregularity complained of, if any is found to exist;

4. To receive from any officer in this State on forms prescribed by said Board of State Tax Commissioners such annual or other reports as shall enable said Board of State Tax Commissioners to ascertain the assessed value and equalize values of all property listed for taxation throughout the state under this Act, the amount of taxes assessed, collected and returned and such other matters as the board may require, to the end that it may have complete statistical information as to the practical operation of this Act;

5. To furnish the State Board of Equalization at each session thereof an estimate of the actual cash value of the taxable property of each county in the State, and to meet with the State Board of Equalization when requested by said Board to do so.

"To inspect the various assessment rolls after they have been passed upon by the several boards of review and prior to making and delivering of the tax roll to the treasurer for collection, and if such inspection shows property to have been omitted from the tax roll or improperly or unlawfully assessed, to hold reviews of such assessments, either individual or general, and to determine

and place upon the roll the true and lawful assessment of all such property."

"For the proper performance of these duties the Board of State Tax Commissioners, or any duly authorized representative thereof, shall have access to all books, papers, documents, statements and accounts on file or of record in any of the departments of State; and like access to all books, papers, documents, statements and accounts on file or of record in counties, townships or municipalities; and the right to examine books, papers and accounts of any corporation, firm or individual, owning property liable to assessment for taxes, general or specific, under the laws of this State; and the right to subpoena witnesses upon a subpoena signed by the president of said Board and attested by its secretary; and the power to examine witnesses under oath, administered by any member of the Board or its secretary; refusal to permit such inspection, or neglect to respond to such subpoena, or refusal to testify, making the offender guilty of a misdemeanor." (Section 148, General Tax Law, as amended by Act 153, Public Acts 1913.)

It will be apparent from the most casual examination that the above paragraphs of the general tax law were enacted for the particular purpose of restoring "cash value" assessments, and putting an end to the system of competition in lowering assessments that everywhere prevailed until recent years. We particularly call attention to the wording of these paragraphs of the general tax law. They do not read "the State Tax Commission shall have the right, or ought to do so and so," but they read: "it shall do so and so"; it shall supervise assessments and advise assessing officers; it shall inspect the various assessment rolls; it shall hold review wherever assessments are not at "cash value." We call the attention of the taxpayer or assessing officers, who object to the representatives of the Tax Commission inspecting the rolls of his district, that we are not doing it of our own volition, but by direction of the law, and in strict accordance with a well considered state-wide program, and we would be derelict in our duty and unworthy of office should we neglect these most responsible requirements. The Tax Commission does not make the laws. It is, therefore, not responsible for the tax laws or their interpretation. The Tax Commission, however, is responsible for the administration of tax laws as the legislature has made them and the courts have interpreted them.

All taxation is burdensome, and because it is burdensome, the taxpayer has the inherent right to demand that it be levied at the minimum consistent with efficiency and that it be equitably and legally apportioned. As to the amount of taxation, the Board of State Tax Commissioners is in no way responsible. That has been wisely left to the taxpayers themselves in the case of school and local taxes, and to their elected representatives in county and state government as to other taxes. The task of insuring the equitable distribution of taxation, has, however, been placed solely upon the Tax Commission, and for that purpose, it has been given supervision of assessments and assessing officers and the right to review assessments and county equalizations. In the performance of this task, the Board of State Tax Commissioners does not claim it makes no mistakes. The valuing of property is an act of human judgment, and