The Rock Island daily Argus. [volume] (Rock Island, Ill.) 1872-1873, 1873-11-22
TAXATION CT CAPITAL STOCK
OF PRIVATE INcoRPoR-
ATOMS,
ARGUMENT OF HON JOHN D. CATION, AT
MORRIS ILLS.
Preliminary Injunction Granted by Judge Nc
Roberts Against Taxing the Capital
Stock Of the Ottawa Glass
Company.
(Concluded.)

mean IN addition to and by the same con
struction only could your Master have ar
rived at the conclusion suggested.
might 90 on with illustrations indefinitely,
showing that these words mean an excess
Of instead of IN addition to it is, however.
necessary. But suppose they are capa
I'd of either of these opposite construc-
tons; then the Courts will so construe
them as to make the law reasonable and
lust, and not so unreasonable and unjust as
TO be absolutely wicked. l think they are
CAPABLE of but one construction, which, If
fairly administered, will be neither grossly
unjust nor oppressive. The construction
which this State Board of Equalization / as
given this statute is as unjust to the Leg
islature as it is to these corporations which
are made the victims of their errors for
| do not think it necessary TO insist that
they acted corruptly in order to entitle us
to the relief asked. 1t is due, then, to the
Legislature, as well as to us, that this law
should be construed according TO its PLAIN
| language and manifest intention.
| 1t may be inquired Why assess the
stock at all, if the value Of the stock IS to
be ascertained by the value of the tangible
property which that stock represents?
and, if that was the meaning of the law,
| Why this useless provision TO assess the
stock? The answer, to me, is very plain.
| The value of the stock may not, in all
cases, correspond precisely with the value
of the tangible property, The stock rep
resents not only the value of the property
of the corporation, but also
ITS FRANCHISE,
which sometimes may be of real intrisic
value, especially where the right of emf
nent domain is included in the franchise ;
and only in such cases has the franchise
such a value as to make it capable of just
assessment. Again, the value of the stock
may be enhanced beyond the value of the
property, because of the good will of the
trade, or its high reputation for integrity
and the excellency of its products and.
from these considerations, the stock may
sell in the market at higher value than
would be represented by the value of Its
, tangible property. The policy which &C
tuated the Legislature is very manifest
; They did design to bear a little harder OF
? these corporations than upon individuals
, owning and possessing precisely the samt
| values With individuals, the actuul value
: of the tangible property constitutes thu
criterion for the assessment. But l
/ might happen, in some extraOrdinar.
+ cases, that the cash value of the stock il
t the market would exceed the value of tn
. tangible property; and in that case, tn
intention was TO tax such excess. 1t tn
actual value of the stock was less than tina
of the tangible property, there would b
no excess, and so no tax at all on the capl
tai stock, but only on the tangible proper
D ~. They meant to take all the advantage
which the difference between the value o
: the stock and of the property would allow
but it is manifest that no one ever though
of taxing both, and thus subgert
e ONE OF THE soUNDEsT PRINCIPLES d
L of civilized government whose duty it
n sacredly to protect property from wron
and oppression, and not become its grea
enemy, and thus drive it beyond its juris
diction
The wisdom or justice of taxing the in
creased value of stock over the value G
8 the property, which, in nearly all cases
+ must arise from integrity in its dealing
|. and fidelity in its management, Whic
4 gives it the goodwill Of the people ma
: be exceedingly questionable Itseems lik
10 imposing
= A BURDEN UPON INTEGRITY AND FIDELITY
q instead of promoting and encouraging ther
d "a course, | think, which true Statesman
d ship should dictate With that, howeve
A this Court, at this time, has nothing to do
! for | shall not now question the right
u tax such values. | refer now 10 such ease
is only to show why the Legislature inserte
e this clause | repeat it was TO tax the Ell
A HANGED value of the stock over and abOy
:; the value of the tangible property, til;
!" is, so much of the value Of the stock as
lin excess of the value of the tangible pro-
erty. 1t was intended to reach that Intal
gible value which the market value of Il
r stock shows has attached itself TO the stoC
IL such as its franchise, its good will, i
L reputation for integrity, and for the quail
!. of its products.
Had the Legislature really intended,
e this Board OF Equalization seems to SUI
er pose, to tax, first, all the property a CT
40 poration has, then the value of its stocI
and. in addition to that. all it owes,-as
- to owe 81 900 is as good as TO have 81 90
<, then, indeed we might infer settled d
he termination 10
er DRIVE FROM OUR STATE
Is all manufacturers, and to make us entire
to tributary to the manufacturers of 9th
. States for the experience of all cOuntri
I shows that it is often necessary to aggr
"a gate the capital of several individuals
w order IN raise sufficient capital to NAL
v manufacturing most profitable. Tru
much manufacturing is done by individ
ais, and well and profitable done butt is
such branches of business as require b
> small capital, or in a few instances of we;
thy individuals. Nearly all the large
manufactures in our State are carried
OF by corporations, and but for the encourag
ment held out by the law thus TO aggrega
ne the small capital OF individuals, very few
no these would ever have been establish,
, here and no one can doubt that their esta
or lishment has largely benefited the consume
in as well as augmented the general wealth
he the State, and given employment to ma
III thousand labOrers, who would otherwi
r. have been idle or making the same goo
Al in other States. Why, then, should {
tv Legislature
G. TAX THE GOODWILL
he of a corporation when it would not tax it
ne owned by an individually TIE good will
eT trade may be valuable, no doubt but eve
ed handed justice requires, if one shall p
'ct taxes on such value, then all should.
dalryman may Justly earn mgn repul
ton for his products, and thus secure t
goodwill of the public, which NAV douf
er the value of his establishment over the 1
as tual value of his tangible property wi
Nh which he produces his butter and cheese
- and yet it is not taxed for this increas
{" value, unless a number of farmers ha
'e- joined together and formed corporate
he and, in their aggregate capacity, have 1
ed quired the property and, by good condr
n have created the goodwill. Then, info
:" unately the number of farmers who h
en- thus united their small means would
Ip- taxed for their good reputation. homes
nh earned, when their wealthy neighbor, W
:, is able to own similar establishment in
" individual capacity, would enjoy his goo
IN will without burden.
ed beg the pardon of the Court for 4
he DEPRESSION, which may not be strictly per
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