, 1873-12-25
STATE TAXATION.
Bill Filed by tho Chicago P1ow
Company.
How Shall Capital Stock Bo Assessed,
ind What is tho Value Of O
franchise,
The Action Of tho Slato Board Claimcl
to Do Illegal alltl Void.

Tho ChicaBo Plow Company, filed In the Circuit
Count bill for M injunction ngninat Hermann
Liob, County cloik, and T. II. Clary. Town
Collector for South Chicago. to rcstrain the ono
from extending, md tho otlor from collecting,
tho sthto and ottor taxoB for 1873 on the yalu-
alton Of tho property OF tho orato1 nnlo by the
State Doard aud on tho rato per cent certified by
tho Auditor Of stato.
Tho bill sets forth that tho Chicago
Plow Company Is a corporation oxiating
by yirtuc Of Tho state lnw, passed April
10. 1849, providing for tho organization or matt
ufacttiring, agricultural, aud other corporations;
TINT its pltunipal Office is IN tho city Of Chicago,
and its property Is taxable thore. It's roal ostntp
consists Of several iota In tho 8 outl, Branch Ad-
tlition. .fts authorized capital is 9l65,0o0, aud
tho stock iHsuod 9115.000.
Its roal mud personal property was aasesaod
May I, 1873. by tho Town Assessor, for tho taxos
fot that year, and WAS afte1w warda elualtzed uY
the County Board Of Equalization; which fixed
tho valuation OF tho real estate ut ST. 7li10. and
Of tho personal and tangible pronofty ut 3d.
and juRt, md fair tnsla for tho extension Of
tle various taxcs to be raiscd In 1878.
Tha orator oHns no other property Of any
kind subject to taxation under tho Constitution,
nnd Is not ta1able upou any other property.
Tho only othor tax which could DO imposed utt-
dor tho Constitution would bo ono imposed on
tic corporation BY reason Of It's exercising. cor
rorato franchises, md that can be imposed ouly
by the Legislature, BY gouoral law. But no Huch
law has yet been pussed.
assessed, tllero are debts duo tho corporation to
the amount Of $4,000, occurring in tho regular
course OF blsiness, by selllug goods oil credit.
aud its franchise, II n franchise for making
piows, derived under tho Gonoral 1ncor}ora-
Indebtedness. contracted ID tho ordinary course
Of husinosB, exceeds $50 000, aud, therefore, TILL
dor tho Revenue law the corporation is not iia-
bio to tnxation on what IL duo it. All the prop
city liable to taxation las therefore, bcon as
which llas no pecnniary valne wl,atovor as prop
erty. 1t is a moro right to mako plows, com
mon to all tile ciizenH OF this State. md its cor
porate existence ia derived Bolely from tho gon-
oral Incorporation law, which Is common to all
citizonB.
Tho capital stock belonging to all the sharo-
holders was worth, May l, So cent? on the dol
lar, and tint yalue was derived from the ,eal
aud personal property which lad already been
assetsod: In obedionco to tho law. tho capital
actual value, 10000; tho total amount OF IN
debtedncas, except for cnrront expenses, boing
e140900
The State Doald Of Equalization assessed tho
adding together tho deot aud ascortainod value
taneibto p1opetty, md calling tue result tho
value Of the stock and franchises. Tho slnros,
howevor, ehonld bo taxed againBt tho sllare-
holders, and 1t In unjuRt TO ta1 tile orator OH all
its property liable to taxation, and tlon on tho
stork representing 1t, thttB taxing It twice. Tho
entiro capital stock Is owned by peisons other
than tho petitioner, and all living in this stato,
ind It was tho duty OF tho Assossors Of tho
against them to tho extent Of itB value. All tho
stouls wnH assessed against those RlnreLollors,
Aug. II. 1878, the State Board Of Equalization.
pretending to net under a law Of the Legislature,
inc o ysso so Sf t G t properly
tato LOT por cent, titus yaluing tho porsonal
property at S20,8s0 md tho zeal cstate 516,-
o30.2o, the total being s42,91o.2o. The Board
also made direct assessmene on tho canital
stock and franchises as tho basis Of further tax
alton, aud declared that their value for taxation
was $117, 400.
The samo Board. it is alleged. increased the
aggregate valuation OF the State moro tllan
per cont IN violation Of the statute. It Ia also
Board to asscss and value capital stock mud
frauchieoB. BY the law, individual stockholders
must list their shares, anti, in that caso. they
cannot bo assessed agatnht the corporation.
The authorized capital Of joiut stock compn-
MOS, go fur a8 their stock las not been issued
ia Of nc. yaluo whatever as property in tho
6ands OF corporation. Whe, issued, it ia
valuable only as the property of tho inulyidual
holder, aud not OF the company. Moreover, u
franchise created by grant from tho State is
not property euch as caa bo mado subject to tho
taxing power Of the State 10 admit tho power
OF the State 10 impose an ad libitum tax Of this
character upon flanohisos Of it's own creation,
when vested rights hare attached, would be in
violation OF that provision of tho Constitution
prohibiting Interference wit:i yosted rights, and
would allow The Stato to destroy ita own croa-
turo. A franchise las ITO fixed marketable or
certain value, and my attempt to ascertain ono