The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1873-01-22

UARY %. 1873. a.s. 5 ..a.
on the capital stock Of all corpora
tions created under laws ITO enable
Joint tenants, tenants ia common, and
adjoining owners Of mineral lands
to manage and develop the same. ir
In view of these facts, the praeti-
cal questions now are, can any furth.
! er reductions be properly made
And If SO, on what subjects 2 an
Heretofore, on several occasions, !
have invited the attention Of the Leg.
islature to the Importance of adopt
ing more liberal policy towards
those citizens who are engaged in in
dustrial enterprises which employ
large numbers of wsrkingmeu, and
tend to develop the resources Of the
Commonwealth. Involving great
risks, and requiring for their success
ful conduct q large amount of capital.
these operations have been, in the
main, conducted by associations, or.
ganized under the general laws which
regulate the incorporation of manu-
featuring, mining and improvement
companies. These laws, while they
resemble in their principal features
the liberal systems in other States,
fail in their ostensible purpose of en-
couraging manufacturing industry,
because the privileges they grant are
enormously burdened with taxation
This may be illustrated by suppos-
ing the case of twenty persons, who
each subscribe FIVE thousand dollars
to the stock of a company organized
for the purpose of producing oil, or
mining ore or coal, or manufacturing
cotton or wooden goods, iron or steel,
or any other commodity. The fund
thus created must be expended in
lands, buildings and permanent i'm
provements. which are taxable for all
purposes to the same extent as if they
were owned by an individual opera
tor. In addition tothis the company
must pay bonus Of one-fourth of one
per cent. to the Commonwealth upon
its stock amounting to the sum of two
hundred and fifty dollars. 1t is there
after liable to tax upon its capital
stock at the rate oflOne-half mill for
each one per cent. Of dividends made
or declared. In case of no dividends
having been made or declared, then
three mills upon the appraised value
of the stock. Also, tax of three
per cent. upon the entire amount of
net earnings or income. Also, tax
of Eve per, cent on all interest paid
to bondholders and other creditors.
For all these taxes, see act of May
4. 1869 80 sv n s.
An individual, wealthy enough to
furnish hundred thousand dollars in
similar business, would be, wholly
free from these exactions. The State
imposes none of these burdens upon
him. 1t does not keep an espionage
upon his business, or demand from
him sworn statements of his annual
profits. 1t discriminates in his fa-
vor against the association Of small
capitalists which it processes to en-
courage. And without sharing in
any of the stockholders risks, it
makes itself q partner in their profits
aud follows them with q grasping
hand, and never-ceasing official
vigilance of an inquisitorial character
over their affairs.
Such conditions are unknown to
the laws of New England, New
York and other rival manufacturing
States, which, without exception,
carefully prohibit duplicating of taxes
upon their own industry. Stock in
manufacturing companies is general
ly taxed by them at its value, like
other personal property of other indi-
viduals in the region where the lands
are located. 1t is by such liberal
provisions that these States have fOs-
tered their industries and maintained
a monopoly of capital and supremacy
in manufactures.
The Western and Southern States,
for many years our customers. are be-
ginning to be our rivals, and desiring
to draw to themselves the benefits
flowing from diversified industry,
they ore enacting the most liberal laws
for the encouragement of corporate
and individual efforts to establish
manufactures, and in addition to this,
towns are giving large subsidies to
secure the erection of mills and fac
tories within their limits. Notwith-
standing the discovery of large bod
les of coal in the western States and
their close proximity to vast masses
of pure ores, Pennsylvania would
still possess at least equal if not su-
perior, attractions for the investment
of capital, were it not for her oppres-
sive tax laws; all of which have a
tendency to drive capitalists beyond
her borders to seek locations less bur-
dened for their investments.
Nothing but very strong necessi-
ty could justify such variety Of tax
es upon the same thing. And if any
Justification ever existed | believe it
to exist no longer. The time has
comewhen, with heproper diligence in
collecting and econemy in expendi-
lures, the State can well afford areduc
ton oftaxation; and legislation in that
direction should be such as to relieve
the undue burdens of taxation from
every form reproductive industry. /
would therefore recommend that the
enrolment Of tax upon private acts
chartering industrial companies
when organized under general laws,
be considered a full equivalent to the
Commonwealth for the privileges of
charter; and that all State taxes
upon capital stock, net earnings and
dividends of manufacturing, mining,
and Improvement companies, and all
cooperative associations, be repeal
ed. This reduction will amount to
$549, ,554 23-the sum collected last
year. l also recommend the repeal
Of that revenue known in the Audi
tor Generals report as "Tax on
Loans" which amounts to $492,-
401 %.
1t is confidently believed that with
these proposed reductions, which
amount to $l,041,96l 81, the State