No thought was taken until 1907 - or at least none that led to any results - as to whether or not the state's business was organized and conducted as efficiently as its importance and magnitude demanded. In 1907 a board of state accounting was created whose duty it was to investigate the methods employed in accounting and transacting business in the departments of the state treasurer, comptroller, general land office, and in the penitentiaries, and in other departments as might be determined upon, and to recommend changes in the interest of economy and efficiency.3 A firm of certified accountants was employed and their report, covering only the departments of the treasurer, the comptroller, and the general land office, was made under date of January 22, 1909. As a result of their recommendations, the treasury department was reorganized and changes made in the general land office in 1909, and the comptroller's department was reorganized in 1910.4 The appropriation for the treasurer and seventeen clerks was $24,270 in 1908; it was $11,400 for the treasurer and six clerks in 1910; for the comptroller and forty-three clerks the appropriation for salaries in 1909 was $53,745. in 1912 it was $37,815 for the comptroller and twenty-eight clerks. The work of the school land department of the treasury which engaged ten clerks in 1908 was transferred to the general land office. The force of the general land office in 1908 was the commissioner and forty-nine clerks, and the salaries paid amounted to $63,990; in 1910 it was composed of the commissioner and fifty-three clerks and salaries paid were $69,290. The reduction in the number of employees in the comptroller's department was too drastic, however; its new clerical strength was inadequate to keep up with the demands made upon it, and in 1912 additional help had to be authorized.

1 Laws of 1901, Reg. Sess., p. 8. Report of the State Revenue Agent, 1897-1898. Before 1879 both years ended August 31, but in order to meet an emergency which existed in 1879, and which was peculiar to that year only, the appropriation year was made to begin March 1. See Report of the Comptroller, 1884.

2 Report of the State Treasurer, 1914, p. 4.

3 Laws of 1907, p. 52.

4 Laws of 1909, pp. 429, 438. Laws of 1910, Third Called Sess., p. 37.

Until 1907 the rates of state taxation for general revenue and for public free school purposes were fixed by the legislature. It took into consideration the assessed values, the revenue from other sources than the ad valorem tax, the probable changes in the assessed values, the cost and loss involved in assessment and collection, and the appropriations for the ensuing two years. In 1907 there was established what is known as the Automatic Tax Board to which was entrusted the calculation of the state rates.1 As amended in 1909 the law makes the governor, the comptroller, and the treasurer a board for calculating the ad valorem tax for general revenue and school purposes. The assessors report to this board by July 15 of each year the tentative assessments in their counties, and the total of these is the base of the ad valorem taxes. The method of arriving at the sum to be raised is as follows: the revenue from sources other than the ad valorem tax for state purposes derived during the first half of the current calendar year and the latter half of the preceding calendar year is deducted from the total of the appropriations for the following fiscal year. The remainder plus 20 per cent is then divided by the total of the assessed values, and the quotient divided by one hundred gives the general revenue rate in cents on the $100 valuation. The board fixes a rate for public free school purposes that will produce $4 per capita of the children within the scholastic age as shown by the latest school census. These rates are then certified to the assessor. The commisioners' courts are directed to calculate the county rates with respect to the taxable values shown by the assessment rolls.

1 Laws of 1907, pp. 195, 464. Laws of 1909, p. 371. Rev. Civil Stats., 1911, arts. 7351-7353.

An obvious defect in this law is that the 20 per cent margin is insufficient to cover the contingencies of large deficiency appropriations, the fluctuations in revenues from other than the ad valorem tax, and the fluctuations in the cost and loss in the assessment and collection of taxes. The poll tax is a very uncertain source of revenue and delinquency in the payment of the ad valorem tax likewise varies from year to year. Thus the per cent of cost and loss to assessed taxes, including poll and general occupation, was 16.2 in 1910, 23.8 in 1900, 22.3 in 1895, and 18.7 in 1891. Deficiency appropriations vary greatly from session to session and occur to a degree that disarranges the best laid plans of the tax board. If the state treasury were provided with a good working balance, it could be drawn upon in cases of emergency; but as the system now is there is absolutely no flexibility, and the most recent result was that the state treasury entered in March, 1913, upon a disgracefully long period of deficiency. There were deficiencies in the treasury under the old system, and to return to it without modifications is not to be recommended. To the creditor of the state there is as little choice between the old and the present one as there is between the frying pan and the fire.1 Another objection to the Automatic Tax Law is that it makes it possible for the governor to play politics with the tax rate. By vetoing appropriations, and with no opportunity for the legislature to pass them over his veto, he is able to manipulate the rate with a view to its effect on his future political ambitions. On the whole, however, the new arrangement is superior to the old. Its purpose is a more careful determination of the tax rate, and if the treasury had greater power in providing for emergencies there would be no deficits. Some curbing of the gubernatorial veto power would meet the last objection to the law.

1 Governor Colquitt criticized the law in his messages of February 22 and July 31, 1911, as unconstitutional in that it delegated to a board a legislative function.