in the Constitution. For the current year, this percentage on the average will be equivalent to a flat rate of 2.8 mills.

The Montana classification law guarantees to every property owner the percentage of the true and full value of each class of his property that will be taken and used as the basis for the imposition of his tax. The use of the true and full values of all taxable property on the assessment rolls, and for the purposes of equalization, will avoid the confusion that arises in the minds of taxpayers and boards of equalization, from comparing percentage assessments. The application of the Montana classification law is only a detail to be performed by the county clerk when extending the rolls and computing the taxes.

The legislature in 1919 provided for the classification of lands in the state of Montana for assessment and taxation purposes, authorized boards of county commissioners to cause such classifications to be made, and provided a tax levy to pay the cost thereof. This legislation may be novel. Since it has brought forth wide interest and discussion, a brief review will be given to it. This legislation was not recommended by the Tax and License Commission although favorably looked upon after the bill had been introduced into the Senate.

This law makes it the duty of the state board of equalization to provide a general and uniform method of classifying taxable lands, for the purposes for which they are valuable, so as to secure an equitable and uniform basis of assessment of said lands for purposes of taxation. It also makes it the duty of the board of county commissioners of each county, to provide for the classification of all lands within their respective counties, in such manner as they may see fit and to keep a record thereof, upon such maps and plats and to enter it in such books as are prescribed by the state board of equalization. Such maps, plats and books shall be official records of the county. The law requires all lands to be classified into the following classes: agricultural, irrigated, non-irrigated grazing, timber and stump and those valuable for mining, stone, coal or other mineral deposits. Authority is given the state board of equalization to provide for such additional subdivisions of classification as it may deem proper. Lands

which may be valuable for more than one purpose are to be so classified. All lands must be classified in accordance with the legal subdivisions thereof. The classification must be full, complete and accurate and be used as the basis upon which land values shall be fixed for purposes of assessment and taxation and it is made the duty of the county assessor to assess all lands for purposes of taxation in accordance with the classification.

After providing for a classification fund in each county, to be created by a special tax levy and the payment therefrom of the cost of classification, the law concludes by making it the duty of county commissioners to forward by registered mail, with a request for a return card, to every owner, notice of the classification of his land and requires the board of county commissioners to investigate and determine the true. and correct classification of such land, when the owner is dissatisfied with the classification as first made and returned.

These are the features of the Montana land classification law. Broadly stated, its purpose is to put into an official record all of the reasonably permanent features of the taxable land in the state. Railroads, highways, buildings, fences. telegraph and telephone lines, streams, irrigating ditches and canals, lakes, swamps and every physical feature are required to be shown on the plats and record, as well as the different classifications of land in every legal subdivision of forty acres.

The purpose primarily, of this land classification, was to make available for each county assessor, every physical factor entering into land values. Being an official record, it will be a reliable reference for mortgage loan companies and purchasers of land, to confirm the representations of borrowers and vendors. It is to the interest of every land owner to see that his land is exactly classified, not only that it may be taxed equitably, but that his assessment is at its true and full value and so becomes a reliable basis for loan or sale purposes. No taxpayer can afford to have his land improperly classified. If he seeks to escape his share of taxation, he jeopardizes his interests in other ways and vice versa. Montana land owners well may and properly should, demand that legislation shall be enacted to disclose the true and full value of every class

of property in the state as inexorably and as exactly as this law will disclose the full and true value of land.

The classification of the taxable land is now under way throughout the state. Some counties hope to complete this work within twelve months. In other counties, two years may pass before it will be completed. When this shall have been done and an accurate appraisal is made every year by competent assessors and deputies, it is believed that Montana will have not only an equitable assessment of its taxable lands but also exact and complete land data for every private and public purpose.

Such are the beginnings that have been made toward a better tax system in Montana. With the immediate adoption of uniform assessment lists, uniform tax rolls, uniform ownership books; with uniform supervision and uniform equalization, Montana looks to the future and is unafraid. She stands proud of her ambition and invites attention to her advance in matters relating to revenue and taxation. The tremendous total of details and vexations incident to such a transition does not discourage those who are to administer the laws.

No other state presents more interesting phases of taxation than Montana. Lying at altitudes ranging from 2200 feet to 11000 feet above sea level, it lends itself to every industry. In agriculture, stock raising, timber, metal mining, water power, fuel, building materials and other resources, it is unexcelled and each industry is constantly presenting new problems for exact classification, according to productivity and ability.

In the taxation of land alone, homesteaded lands, alloted lands, "script" land, ceded lands, state land-grant lands, Indian lands, coal lands, placer and quartz mining claims, mineral reservations, state lands leased and sold, lands in railroad land grants, lands in forest reserves, lands privately owned in national parks, timber and cut-over timber lands, lands in the Carey and in the U. S. Reclamation projects, lands in irrigation districts, waste lands and all other lands, must often be valued differently for assessment purposes because of the United States Statutes, the provisions of the

Constitution of Montana and the statutory laws. These often have to be further interpreted or modified by reason of the decisions of the federal and state courts as to their proper assessment and taxation.

The constitutional amendment to be submitted to the people, that provides for a permanent tax commission with full powers of supervision and equalization; the energization by law of the state board of equalization; the assessment by the state board of equalization of all properties constituting a single and continous property operated in more than one county; and the classification of taxable property for purposes of taxation, are the basic changes that have been wrought in Montana during the current year. They provide a broad and safe foundation for the future. The superstructure is yet to be completed. Many rough materials remain to be fashioned into a complete and perfect whole. To enumerate them would be premature. In the absence of complete data the degree of their perfection or the extent of their crudeness cannot even be stated approximately.

[Adjournment of Session.]

THIRD SESSION, TUESDAY EVENING, JUNE 17, 1919

ROUND TABLE

PERMANENT CHAIRMAN ARMSON: Gentlemen, if you will come to order we will proceed with the third session of the conference. It is my pleasure to introduce as chairman of this session Mr. Link of Colorado, who will preside over the round table session.

CHAIRMAN LINK: Gentlemen of the conference, it gives me pleasure and a sense of responsibility, to preside at this round table session. During the life of our association we have found that round table sessions are among the very best we have because it gives a chance to clean the slate; it gives us freedom to discuss any points about any papers that have been read, to bring up any subjects that have not been discussed,

or to ask any questions that we may want discussed. We therefore wish you to feel at perfect ease and we wish as many of you as possible to be free to take part in these discussions.

To expedite business it will probably be well for us to start on the papers that were read today and not discussed. The first one was on the taxation of banks, and we have not only a veteran tax commissioner of one of our splendid states but a veteran of our civil war in the person of our ex-president, Mr. Howe, to lead the discussion.

SAMUEL T. HOWE OF KANSAS: Mr. Chairman and gentlemen, we have had some troubles with bank assessments in our state, as you have all had, probably. We have a constitution which requires banks to be taxed upon their bills discounted, notes, mortgages, and everything of that sort. The federal law regulates the taxation of national banks and our state has made similar provision for state banks, so the federal law has nullified our constitution in that respect. Until quite recently we had a law which assessed bank shares practically on the basis of capital, surplus, and undivided profits. In recent years it has been required that stock corporations are assessable at figures which included the tangible value and we felt constrained to make it the same in regard to banks. Therefore, year before last, we gave instructions to the assessors, in accordance with supreme court decisions, to assess the banks at their actual value in money. The result was so disastrous that we never tried it again, nor would we ever try it again. We had about one thousand assessors, I guess, who assessed shares of banks. They were not qualified. You know how township assessors are selected,-with no idea at all of their qualifications. They cannot assess any kind of property, much less stock of banks. We had such unreliable, such unequal taxation, that last winter we had the legislature amend the law so as to put it back under the old plan. There is a statute in our state which provides that a bank may not invest more than one-third of its combined capital and surplus in real estate. There is also a statute providing that the capital of a state bank invested in real estate shall be deducted from the