Indiana has not by any means realized an ideal system of taxation. In order to show the superiority of the present partially centralized administration over the former decentralized method of taxation, it is not necessary to claim that the system is perfect or even better than that existing in some other State. It is the opinion of the writer that the evidence herein presented does demonstrate that centralization of administration has greatly improved the system by decreasing tax evasion and equalizing the burdens of taxation. The fact that a large proportion of personal property has escaped assessment does not invalidate this conclusion, but rather emphasizes its soundness. For it is in this particular field that the State Board of Tax Commissioners had almost no authority until 1901. Even if the conferring of more extensive power upon the State Board should fail to correct the defects which are inherent in the general property tax, this would not disprove the fact that great benefits have been already derived from its existence. Such a failure would, however, furnish additional testimony that the evils of the general property tax are so deep-seated that they cannot be up-rooted even by a strong-toned central authority. It would confirm the opinion that justice in taxation can be realized only by a further disintegration of the general property tax and a separation of the sources of local and State revenues by the assignment of fees, business taxes and taxes upon real property to local authorities, and inheritance taxes, corporation taxes based upon net earnings or capital and funded debt, and, possibly, an income tax to the State government-the administration of the State revenues being placed under the supervision of State officers. Amendment of the Constitution would be necessary to accomplish some of these ends. Under the existing restrictions' of that instrument, a centralized adminis

1 State ex rel. v. Indianapolis, 69 Ind. Rep'ts, 375.

tration of the tax system is essential to maintain its present efficiency or to contribute to its improvement.

4. THE ABSENCE OF STATE CONTROL OVER LOCAL FINANCES. It has already been shown how thorough was the central supervision over local finances in the early territorial period' and how this control was gradually abandoned until complete decentralization was attained at the time of the adoption of the Constitution."

Not only was there lack of uniformity in the keeping of accounts, but there was great diversity in the organization of the the bodies charged with the county and township business. This was due to the evil of special legislation. At one time there were in existence four kinds of county boards: an elective board of three county commissioners; 3 a board composed of all the justices of the peace of the county; a board composed of one justice of the peace from each township of the county; 5 a board composed of one supervisor from each township. In some counties the township officers were elected; in others they were appointed by the board performing the county business; in others some officers were elected and others appointed.9 The officers of the same name in different counties did not have the same powers and duties. As early as 1835 Governor Noble saw the possible evil and confusion that might arise from this want of uniformity. In 1841 the Auditor of

1 See pages 246-7, 251-2 above.

10

* Laws, 1816-7, p. 115, and 1826-7, pp. 15-18.

'Rev. Stat., 1824, p. 86.

Laws, 1825–6, p. 84, and 1826–7, pp. 15, 18.

'See pages 252-3 above.

• Ibid., 1825, pp. 43-6.

'Ibid., 1825, pp. 43-6; 1825-6, p. 84; 1826-7, pp. 15, 18; 1828–9, p. 63; 182930, p. 27.

Laws, 1828-9, pp. 20, 21, 23.

10 Message, Sen. Journ, 1835-6, p. 22.

• Ibid., p. 23; 1834-5, p. 72.

State urged the introduction of a more perfect organization of the civil townships which would dispense with a number of local officers and would insure the greater safety of funds.'

The Constitution of 1851 prohibited such special legislation. The next year all special laws providing for the transaction of public business in counties and townships were repealed and general laws were substituted.3 The township trustces thus created were elected, and were practically independent of the county and State authorities in the levying of their taxes and the management of their moneys. In 1859 a slight check was imposed upon their powers by requiring the "advice and concurrence" of the county commissioners in making their tax levy.5 For nearly half a century the township trustee possessed more unlimited authority and discretionary power than any other officer in the State. His functions as a school officer and as overseer of the poor have been described above. He had almost a free hand in the levying of taxes and in the appropriation of revenues for two political corporations-the civil township and the school township. Besides, the auditing of his accounts was superficial and perfunctory. His authority was simply autocratic.

The power of the boards of county commissioners under the laws of 1852 was unrestricted by any central authority except that afforded by legislative and constitutional limitations. Not five years had passed before a "wholesome system of retrenchment . . . especially in county expenditures" was urged."

1Rep't of Aud., Doc. Journ., 1841-2, House Rep'ts, p. 27.

Constitution, Art. iv, sect. 22.

Rev. Stat., 1852, i, pp. 224–5, 495-6.

•Pages 116–118, 149, 193–195 above.

Three in each township; after 1859, one in each township.

Laws, 1859, p. 222.

'Communication of Treas. of State to House, Jan. 12, 1857, Doc. Journ., 39th

Sess., p. 407.

Beyond an inquiry into the amount of the fees and salaries of county officers,' nothing was done for many years. However, there was an unmistakable popular demand for reform in the administration of county affairs, and for the reduction of the fees of county officers. Several laws providing a graduated scale of salaries for county officers were passed 3 but were held to be unconstitutional. It was necessary, therefore, to amend the Constitution so as to enable the Legislature to enact a law grading the compensation in proportion to the population and the necessary services required. Not until 1895 was a satisfactory law of this kind passed.s

The high fees and salaries were not the only items of excessive expenditure. The indebtedness of local corporations increased rapidly. In general, the local taxation always greatly exceeded that imposed for State purposes. The aggregate amount not infrequently surpassed the State tax from three to four times. The importance of some additional limitation upon the power of imposing local taxes, appropriating revenues, and contracting debts was recognized. In 1874 the Auditor of State recommended that the debts of counties, townships, and cities should be reported every year. In 1881 the power of local authorities to contract debts was restricted by a constitutional amendment, limiting the amount of indebtedness which might be incurred by any "political or municipal corporation" in the State.

Laws, Spec. Sess., 1861, p. 43.

Message of Governor Baker, Doc. Journ., 1871, ii, p. 37; Message of Governor Williams, Jan. 10, 1879, p. 22.

'Laws, 1871, pp. 25-40; 1875 (Spec. Sess.), pp. 31-49; 1879 (Spec. Sess.), pp. 130 ff.

• Constitution, Art. iv, sect. 22.

•Rep't of Aud., 1873, p. 41.

Constitution, Art. xii, as amended.

• Laws, 1895, pp. 322–358.

Ibid., 1874, p. 32.

In 1875 and 1883 a legal limitation upon the indebtedness which a township trustee might incur was provided, by compelling him to procure an order from the county board of commissioners when it might be necessary to incur any debt which would exceed the amount of funds available during the year for its liquidation.'

These laws were not sufficient to remedy the abuses; and in 1885 a number of township trustees brought disgrace upon themselves and suspicion upon the office by the fraudulent issue of township orders. The only other restraints imposed upon local financial officers were the requirements that county auditors should publish in a newspaper a statement showing all allowances made by the county commissioners at each session; 3 and that township trustees should carefully register and number all orders and warrants, and should post and publish an annual statement. Such provisions did not meet the needs of the case. More stringent measures were demanded. Serious charges of inefficient management and fraudulent conduct on the part of county commissioners and township trustees continued to be made.s

There were two remedial courses open: either the State should extend its supervisory authority over these local financial officers; or there should be a complete separation of their legislative and executive functions. At the session of the Legislature in 1895 a bill for an act creating the office of Inspector of County Officers and Records was introduced in the Senate but indefinitely postponed." In

Laws, Reg. Sess., 1875, p. 162; 1883, pp. 114-5.

Rep't Supt. Pub. Instr., 1885-6, p. 177.

•Laws, 1895, p. 159.

Laws, 1893, p. 342.

'Papers read before the Indiana State Board of Commerce, Dec. 30, 1896, and Jan. 18, 1898. See The Indianapolis News of same dates; also editorial in same, Dec. 31, 1896.

•Sen. Journ., 1895, pp. 121, 163.