98 
FIFTEENTH REPORT. 
dispensable to the administration of any adequate system and would 
be at the disposal of the authority entrusted with the immediate problem 
of taxation. 
This brings us to the question of taxation. Obviously, there must be 
a choice made from several possible policies as we find them suggested 
by our financiers. This choice can be made from at least three methods 
— corporate excess, gross earnings or receipts, or the ad valorem prin- 
ciple applied to both kinds of value. Doubtless, we are thoroughly con- 
vinced of the defects of our present plan and are ready to modify it ; 
but are we equally of one mind as to what shall be substituted. It 
seems to the writer that the particular policy to be adopted ought to 
be determined somewhat by the taxing systems already in use in the 
state. Too radical departure from existing methods might not only be 
difficult to bring about through our legislature but might prove dis- 
astrous if attained because, if the state subjects different property to 
unlike methods of taxation, there my result more rather than less in- 
equality, a condition sure to produce discontent. Inasmuch, then, as 
we have adopted a definite principle — ad valorem for both tangible and 
intangible elements of value — for particular public utility corporations, 
and have created the machinery for its administration, it would seem 
wise 1<> extend this existing machinery of the state to the taxation of 
the corporations in question. As a method of solving this problem, we 
would advocate that a campaign be instituted to persuade our legisla- 
ture of the wisdom of clothing our state Tax Commission with the 
power to determine the taxable value, both tangible and intangible, of 
our local public utilities. 
Thus far in this suggestion we are following the existing law. At 
this point we would depart from it in that we would advocate having 
the Commission apportion these valuations to the various taxing dis- 
tricts in which the various corporations perform their services. This 
procedure would necessitate some equitable basis of distribution and 
should be done with the proviso that the local assessor shall accept 
this valuation for his tax roll and shall apply to it the local rate of 
taxation. 
This feature both creates and solves problems. At once the query 
arises. What shall be the basis of distribution? The previous sugges- 
tion that distribution shall be to the districts where the tangible prop- 
erty is found, would mean that such property shall be considered realty 
and not personalty, and therefore the plan of distribution must be in 
keeping with this view. Without question, this plan of distribution is a 
difficulty, but no one conceives it to be beyond solution. It may neces- 
sitate modifying the special plan for each type of corporation. In some 
cases the relative shares of these valuations may be determined by 
the distribution of the tangible portions of the property. Again, possibly 
the income from service may offer a solution. Surely some method can 
be devised which shall approximate justice to the localities justly laying 
claim to participate in such distribution. 
On the other hand, the plan being suggested would seem to dispose 
of troubles likely to arise over the average rate. Such a rate can be 
defended for property of wide distribution in the state and whose earn- 
ings are derived from a multitude of widely scattered sources, but for 
property whose owners are local residents, and whose earnings are 
chiefly local in origin, it seems much less likely to create disaffection 
