In 1925, the amount of government taxes on the Class 1 railroads of this country was equivalent to more than six and one-half times as much gold as all the gold mines of the United States and its possessions produced during the year. Since 1911, railroad cash dividends have shown a decrease of 14 per cent; railroad taxes have increased 263 per cent.

During the fiscal year 1924-25, the interest. bearing debt of the United States Government was reduced by some $827,000,000. While there were certain tax reductions, the total yield of income was increased; government expenditures increased a little over one per cent. During this time, the Nation reached its highest annual mark in foreign loans, foreign capital issues publicly offered in the United States amounting to $1,382,000,000.

The Department of Commerce reports that the "investment" by the American taxpayer in the foreign trade promotion work of the Department of Commerce, involving an annual appropriation of about $3,000,000, was returned more than sixty-fold during the fiscal year 1925-26 by the new foreign business secured for individual Ameri can exporters as a direct result of the assistance of the Bureau of Foreign and Domestic Com

merce.

The National Industrial Board after an exhaustive study of government cost, states that 8.1 per cent of the income of the American people goes to Federal, state and local employes, and for public charges. In other words, the annual cost to each non-government worker as his share in support of government expense is $126. An other startling discovery made by the Board is

that in 1924 the amount paid to government em ployes and for public charges was 37 per cent of as much as was paid in wages and salaries by all the manufacturing plants of the country the previous year.

Mitchell B. Carroll, Division of Commercial Laws, Department of Commerce, reports on the "revised System of Taxation in Italy." It is a very thorough study of the new system which abolishes war and postwar levies, and has reduced direct taxes, with alterations, to the three origi nal levies on income from land, buildings, and movable wealth, superimposed in the case of indi viduals, by a complementary income tax with progressive rates. The tax of 15 per cent on dividends has also been abolished, but such rev enue is subject to the complementary tax when the holder is resident in Italy.

Walter J. Greenleaf, Interior Department, Bureau of Education, has compiled statistics showing that $79,011,421, or 51 per cent, of the total incomes of state universities and colleges in the United States is expended for salaries and wages; 23 per cent for materials and supplies; 14 per cent for lands and buildings, and 4 per cent for equipment; the other 8 per cent goes for miscellaneous expenses.

Californians are interested in the fact that of all state universities and colleges, the largest amount for salaries, $5,804,557, was expended by the University of California. The University of Michigan expended the largest amount for supplies, California ranking second; Michigan expended the largest amount for permanent equip

ment.

A reduction of the number and forms of taxes will do more to bring factories into town than signboards down at the depot.-Lorain, Ohio, Journal.

What observer of government in action expects a tax law to bear no marks of politics? Too often, everybody concerned in the making of such a law plays politics.-Ohio State Journal.

Taxes, unless confiscatory, must come out of annual income or net production. The smaller the amount taken in taxation, the greater the amount left for the taxpayers' own use and the greater the amount that is likely to be added to the productive capital of the country. The amount of capital available for productive enterprises has a direct bearing on the prosperity of a country with large undeveloped resources.— Canadian Taxation.

President Coolidge before Federal Budget Conference:

The Federal Government has strayed far afield from its legitimate business. It has trespassed upon fields where there should be no trespass. If we could confine our Federal expenditures to the legitimate obligations and functions of the Federal Government, a material reduction would be apparent. But far more important than this

would be its effect upon the fabric of our constitutional form of government, which tends to be gradually weakened and undermined by this encroachment. The cure for this is not in our

hands. It lies with the people. It will come when they realize the necessity of state assumption of state responsibility.

It will come when they realize that the laws under which the Federal Government hands out contributions to the states is placing upon them a double burden of taxation, Federal taxation in the first instance to raise the moneys which the government donates to the states, and state taxation in the second instance to meet the extravagance of state expenditures which are tempted by the Federal donation.

The Chief Executive may preach economy, but, unless the people in the service practice it, the preaching is in vain. There are still reductions to be made. There are yet wastes to be eliminated. I expect you to prosecute a campaign of relentless economy to that end.

Sacrifices will be required. I want to see the sacrifices of those who are charged with the expenditure of the money of the government somewhat commensurate with the sacrifices that have to be made in the home by the taxpayers who furnish the money for government."

THE Apostle Paul said: "I am a citizen of no mean city." Likewise, C. C. Young, who on January third was inducted into office, could say in pardonable pride:

"I am now the Governor of no mean Commonwealth! A Sovereignty of more than 150,000 square miles of area-thirteen and a half times the area of Belgium, three times the area of England, threefourths the area of France, and almost the area of Germany. A Commonwealth which for three-fourths of a century has been of the United States. A Commonwealth, the history of which runs back nearly four centuries to when Cabrillo landed on California shores in 1543. A Commonwealth with four and a half millions of population." Thus he might speak, as doubtless he thought, when he took over from the capable hands of Friend W. Richardson the gubernatorial authority at Sacramento.

It is not a trivial event when California changes Governors. It means the transfer of large powers. Equally, it means on the Governor's part the assumption of large responsibilities. An elected and inaug. urated Chief Executive resembles not at all a citizen as a candidate. Then he was asking of the voters. Now he must return something to the voters-redeem his pledges, or be false to all standards of sociologic and political decency.

The Pasadena Star-News thus states the proposition: "Governor Young has outlined a forward-looking, constructive, businesslike program," and goes on to commend the Governor for pledging the square deal for all legitimate business.

ALL this is pertinent to these columns

because in his inaugural, Governor Young made several specific references to taxation and administrative issues which are vital.

We accept the Governor's purpose as commendable, and as based on his conception of that which would make for the public weal. He is an honorable man, and a patriot.

THE Governor has announced his poli

cies. Let us at the moment concern ourselves with only those which are basic. Governor Young declared for "an economical administration," the creation of a commission to examine California's taxation system, "consolidation of various groups of independent boards and commissions." "unification of governmental functions," and "the creation of a Governor's cabinet or Council, composed of heads of departments who shall meet regularly with the Governor to discuss the various problems confronting the State."

In so far as concerns unification, consolidation and a Governor's Cabinet, these proposals are almost exactly what Frank O. Lowden as Governor of Illinois during the war proposed, and finally made actual as shown by Gov. Lowden in THE TAX DIGEST of November, 1925, page 33. They resemble that which is laid down as its objective by the New York non-partisan commission on state governmental reorganization, a statement on which appeared in THE TAX DIGEST of February, 1926. page 57.

T

HESE declarations are important, California, in common with many if not most of the States, has multiplied these boards until government, in some respects. has become just one state board action after another, often to the point of inefficiency by reason of too great complexity and sometime perhaps meddling.

If a simpler, more unified form of government be devised, if the trouble be attacked at its root, if thereby waste, useless expenditure of the taxpayers' money, and unnecessary interference with the legitimate freedom of private effort be lessened, the realization of Governor Young's reorganization proposals will be immensely beneficial to California.

Governor Lowden, largely through reorganization, actually reduced Illinois taxes during the war, when other states were carrying a heavier tax burden.

Reorganization alone, if done wisely, would enable tax reduction, besides increasing governmental efficiency. There is therefore no ground for claiming that necessarily taxes in this state need be increased, either in their rates or volume. They can be reduced and reorganization supplies the opportunity.

ON

NE measure-uniform budgeting by political subdivisions will aid to wards economy. A bill for an act providing for such budgeting by counties has been drafted by California Taxpayers' Assocation through the Tax Counselor, M. D. Lack, and has been introduced in the Legislature by Senator Frank S. Boggs, of the Tenth Senatorial District, Stockton.

This bill has been most carefully drawn, has been approved by the Board of Directors, and should be enacted. The text of the bill is to be found on Page 64 et seq. of this issue.

It is commended to the attention of the Governor and the members of the Legis. lature.

MAY the new Chief Magistrate prosper;

may he perform so that, through the four years of his incumbency, he can hold as he now has the kindly thought of the people of California.

taxpayers and especially the members of the Press, to call. They will find Califor nia Taxpayers' Association in much larger quarters, every square foot in intensive use, and every member of the staff genuinely busy. A year ago, the Headquar ters staff numbered six; today, twenty; and it has not yet attained full growth. Besides, there are a dozen well organized local county committees, and another dozen will be organized in the immediate future.

Eventually each of the 58 California. counties will have its local committee. There is encouraging news from the field, and efficient work of organization.

The work of research goes on, too, with increasing efficiency, and will during 1927 be greater than ever before. Several important surveys will be made during the

year.

From the Department of Tax Counselling, communities are receiving valuable assistance. This is in the nature of "follow up" work, to crystallize and apply practically the results of surveys by the Research Department.

A new department has lately been added to THE TAX DIGEST activities. Fred D. Fenn has taken hold vigorously of promoting the circulation of the magazine, and is getting results.

THE members of the staff have lost no

time in squaring away for a year of better work in 1927 than in 1926, fruitful as 1926 was. The original high purpose of the Association was again clarified for the staff when, at holiday time, Dr. Johnson re-stated the one motivating thought

To induce a reduction of taxes for all taxpayers of California, large and small; to pull no special interest chestnuts from the fire; and to labor for efficiency of gov

ernment.

A "long pull, a strong pull, and a pull all together," is the slogan, and it is exemplified by every member of the staff, by unity and intensive individual effort for the common good-"To put more sense in the California Tax Dollar."

W. E. MORGAN, assistant State Super

⚫intendent of Public Instruction, writes from Sacramento: "Our attention has been called to the report made under your direction concerning elementary schools in Sonoma County, and published