The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1874-12-02
A LETTER FROM HON. HORACE
FAIRBANKS.
a statement of Facts.

ST.. JoHNsBURY, Nov. 28, 1874.
TO the Editor of the Coledonian.
In the account of the governors veto Of
the bill to incorporate L. & T. Fairbanks
& Co., published in the Cdledonian of the
eth inst, 1t is stated: "He considers the
provision exempting the stock from tax
alton still more Objectionable" He says
eff the general law of taxation Is Just and
proper, he can see no reason why special
exemption should be granted to this COM
pany" Such exemption he considers sun
Just to other manufacturing corporations,
aid other taxpayers, unwise, and establish
ing q precedent of special legislation OF
dangerous and mischievous tendency"
The same statement has been published by
most of the newspapers of the state. From
this statement the impression generally OBJ
tans that the firm, of which | am men,
Der, was attempting by the bill to secure
some special exemption from taxation, and |
some unjust advantage over other like cor
porations, and over taxpayers generally. |
This is entirely incorrect, and an incom-
plete statement of the governors objection |
to the bill, as a careful reading of his veto
message will show. The facts in the case
are as follows:
In the establishment and prosecution of
us to establish, in the principal cities of
the United States, and in some foreign
countries, stores or houses for the sale of
our scales. In these houses we keep con-
stantly on hand a large stock of our manr-
features, and on them we pay taxes yearly
to the amount of several thousand dollars.
We do not complain of this. The states
and countries in which we constantly keep
these stores and stock of manufactures
have the same right to tax us for them that
| this state would have to tax a non resident
! for store which he should keep filled with
goods for sale in this state. The protec-
ton which such states and countries give
to our manufactures and the privilege they
grant to us of selling them, confers the
right to tax us. The fact that this state
does not have these manufactures to protect,
neither does it have the right to protect us
IN the vending of them, should in equity
take from this state the right to tax us on
such manufactures, after they are perma-
nently removed from this state. So long
as we pursue our business as partners, our
laws do not ask us to pay taxes on such
manufactures permanently removed from
the state, and which are taxed in other
states and countries.
To pcrpetuate our business permanently
in this state, and that it might not be
broken up by the decease of a partner, we
desire an act of incorporation. The gen
eral law in relation to the taxation of man.
ufacturing corporations We found to be,
that the machinery and real estate owned
by such corporation is taxed to the corpor-
alton, and the stockholders are then taxed
for the value of such capital stock above
T the value of the real estate and machinery.
(Section ID, chapter SO, general statutes.
This is just and equitable where all the cor
porate property is within this state TOR pro
lection, which is the condition of most man.
ufacturing corporations in this state. AS
the capital stock in our company would rep
resent all the property which we hold per
. manently for sale in other states and coun
tries, it would subject us to double taxa
ton on all the property on which we are
; Justly taxed in other states and countries
or In other words compel us to pay year
ly penalty of ten thousand dollais or up
wards for the privilege of becoming incor
porated. We thought this unjust. Hence
in the bill it was provided that the propert,
of the corporation should be taxed to tn,
corporation as such, the same as it woul'
be if owned by an individual. That w
might have no advantage over any corpora
: ton, in similar circumstances with our
selves, if there were any such in the state
: we caused at the same time a bill t.
81 be introduced providing for the taxation
corporations in the same manner On in
quiry we found that the universal practic
y in this state so far as we could learn, wa
!, to tax the corporate property OF such cor
II porations to the corporation, and that NJ
taxes were assessed to the stockholders, al
J though the law was as stated. We desire
. to comply with the law, if we became in
u corporated. This latter bill failed to he
:, come law for reasons that need not b
u stated! The governor then objected to on
act, not because it gave any exemption
from taxation, but because it created a dit
= ferent method TOR taxing the property O
: the corporation from that provided by til
l, general law, and would relieve the corpora
" ton from double taxation and would nc
l. fuI nish the same relief to all other corpora
tons similarly circumstanced, if any sue
e there were or should be; in other word
It because the legislation was special rattle
k than general. Immediately on learning @
II the governors objection and veto W
2, amended the act of incorporation, obtaine
u its re-enactment by the legislature, and ais
e, obtained an amendment to the general la,
81 for the taxation of Incorporated manufa(
1t turing companies, so that if such a con
pany is taxed on its property representa-
=, by its stock and situated in another stat
n or country, by such other state or country
T. the value of the property so taxed is to b
l. deducted, as well as the value of the re;
h estate and machinery, from the value c
m its capital stock in determining the amour
ID for which the stakeholder is to be taxed i
\. this state. See section IA, chapter 49, gel
n eral statutes. as now amended.
Il: BY this amendment double taxation
is the property OF such corporations is avoi(
If ed and no exemption secured to such CO.
porations, and by this amendment to I'll
general law, and by the act of ncorpor
ton as now passed, both of which have r.
ceived the approval of the Governor. "
have secured the same results we sought |
secure in the original bills.
This is in harmony with the laws
most il not all of the states IN regard
IS taxation. Some of the states limit
s, special statutes the right of taxation
'f property within the state" and Other
provide that no statute shall be so constrl
al cd as to subject property to double taxt
ton. 1t is in harmony with the spirit {
$, our laws. BY section 5, chapter SO, gel
ID eral statutes, person resident in the stat
is not taxed on stock in a foreign corpor;
4. ton if the property is taxed to the corpc
I'd ration in the state where the corporation
located.
4. If it is the policy of the law to secure
person against double taxation, who il
c. vests in the stock of foreign corporation
d much more should it be to secure the sam
protection to person who is willing to il
D. vest his property in corporation in tn
srate and thus establish and carry on PEE
n. manent business here. If an earnest an
|. honest endeavor to secure such protectio
l. to ourselves and others IN like circumstaI
ces, subjects us to the charge of attempt
'. ing to secure special exemption froI