The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1875-01-15

SOURCES OF REVENUE.
The taxation OF the property of corporation
isa subject that demands, as it will dou otIess r
ceiVe, your most careful consideration II
Hberality of Tennessee, in fostering her railros
system, as well as the lavish hand with whiC
she has granted charters for other purpose
with large privileges, entities her depleted Trea
ury to the highest consideration from these oil
| jects OF her care and liberality. Yet, strange
say, although there Is within the limits Of til
| state between seventy-dve and one hun
| dred millions of dollars of railroa
property, the Treasury has realized notl
ing, either from these companies {
their stockholders. The major portion Of I'll
other corporations have escaped taxation, eithe
throu h some claim of exemption in their char
ter or the imI objection of the revenue laws Q
the lnethciency of officers. This is gross injgs
| tice to the tOiling thousands of the State, Wit
| support the Goyernmentout of their hard-earne
| IaDOrs, While the corporations grow rich ana OF
| lTeSsIYe, because OF the leniency OF the State.
1t l. "A pleasure TO inform you, that during tn
| last two years, under the We V commendabIe eff
| forts of the Attorney General, Treasurer an
| ComptrOl er, many Of these corporations, (othe
| than railToads,) have been compelled to pa
| their just proportion of revenue, and others arr
| being coerced to discharge this high duty, 81
| long disregarded.
| 1t is a question worthy OF grave consideration
( whether charter exemptions from taxation, eithel
| perpetual or for a term OF years, made by for
| mer General Assemblies, are, under our organic
| law, binding upon the STATE. If unauthorized
or not binding, respectfully suggest such legis
lat on as may lead to an immediate etfeCtua
mode OF taxing all corporation property in tho
4 state. claiming such exemption, together with
all other property and stocks. Indeed, if the
emptIOn was not authorized, or is not now bind
ing upon the State, under our Organanic law,
then the General Assembly has no option under
Art. H.. See. IS which provides that ''all prop
| erty, real, personal or mixed, SHAH be tdred.''
Certainly, the stocks in AL corporations are
| taxable, and more efficient measures should be
adopted to make them GrGjldGis fer rsrcRus
1t is believed that much larger revenues would
| be derived from corporations and at a reduced
cost, II II were made the duty Of the COmptrol-
Ter or Treasurer, by rules prescribed by the Gen
Cra Assem- bly,, to ascertain the value of all tax
able properly and assets OF corporations, and col
lCct the taxes thereon.
l have twice recommended that suits before
Justices OF the Peace should be taxed, the
law taxing other litigation repealed. Existing
legislation l. discriminating in its character be-
cause il taxes litigation i'll courts of record al d
docs not tax proceedings before Justices Of the
Peace.
II there have heretofore been any reasonable
doubts of your power TO tax litigation, they are
set at rest by the decision OF the Supreme Court
of Tennessee, in the case OF Harrison Pepper ct
ais. rs. i. j. Willis, decided at Nashville, De-
cember Term, 1872.
When it il remembered that there are more
than 500 Justices in Tennessee, and that fifty
cases each per annum would be a small aver
age, you can see that very large addition could
be made to our revenues by imposing small tax
these suits, without Oppr essing any individual
and, to that extent, relieve specific taxation on
real and personal property.
Many States levy a tax upon the execution OF
all bonds payable to the State. This is some
times specific, and sometimes graduated, &C
corning 10 amount. IN tennessee, we nave The
inconsistency OF leyylng graduated tax upon
COnveyances upon real estate, but impose no
burden upon bonds. A light tax levied upon
the execution of such instruments would add
materially to our revenues.
Another considerable source OF revenue, not
heretofore made available, is Tennessee bonds.
Although declared taxable by the revenue law
OF tue State, very few of them are reached. II,
instead Of assessing the bond now, and col
lecting revenue upon them upon other prop
erty, the Treasurer were required to retain the
tax when he pays interest this revenue would
be saved without cost to the State. Some such
plan would afford great relief to the Treasury,
and is Infinitely preferable to pending negOta-
tons between some of the States and their
creditors to change their currency interest. at a
slightly reduced rate, 10 gold interest, coupled
with pledge 10 pay the principal at an early
day through the instrumentality OF an Onerous
sinking fund tax.
Your careful consideration of the question
may develop some just and satisfac. DRY plan by
which the very desirable object OF making the
bonds pay tax, may be attained. Or, it may be-
considered just, both to debtor and creditor, to
atliN rate OF taxation upon the bonds and pledge
the State to apL ly it, every year, in eXtingUIsh
ment of the principal debt. This would materi-
ally contribute to diminish the amount of our
debt, and OF course, the line OF interest, and in
this way, relieve the taxpayer. On the other
hand. it is believed our securities, 30 far from
being deprecated, wOuld be enhanced by the
confidence it would afford the holders of real
iZing the principal well as the interest of his
bonds. 1t is certainly most desirable that pro-
vision should be made TO retire our debt, as fast
may be compatible with just sense OF duty
D those who bear the burdens.
FUNDING THE PUBLIC DEBT.
With the report OF the Comptroller will be
found "A complete statement Of the execution OF
the act of March l., 1873, directing that the
past due bonds and coupons, msturing on or be-
fore the first day of January, 1874, be converted
into the new series of six per cent. bonds, pro-
vidcd for by that act. The tables annexed will
show fully the number OF new bonds is
sued, old ones registered, and the num-
Der of each yet outstanding, and what
securities have been taken up and can
celled. They also give history OF the bonded
debt of Tennessee, from which can be obtained
all desired statistics ON that subject. The bill
provided that the new bonds and coupons should
he PAYABLE in Nashville or New York. at the
option Of tue creditor. To meet either demand,
l ordered the bonds, after obtaining bids from
the most reputable engTayers IN the United
States. Anticipating that the ''Option' Tor
bonds payable at Nashville would he very lin
tied, / only ordered two hundred OF that class,
none Of which have been called for or issued,
and OF the other. G,5UO, all costing $500 900,
which was paid on my order upon the Comptroller
Complete registrations of the bonds presented
and found regular as well as those taken up
and cancelled, viii lie found IN CONVENIENT and
durable form in the proper Offices of the Execu-
tive Departments. Duplicates of each bond
issued, with memoranda attached. exhibiting
the name OF the party to whom issued, as well
as securities taken up, are preserved IN volumes
boUud for The purpose.
The securities redeemed under this act, are
registered and cancelled, and await the inspcC-
ton of a committee 10 be appointed by the Cen
rral Assembly, which it is hoped may BE- done
A statement OF these securities is herewith
submitted.
Six per cent. bonds .................S $4,000 90
Five and a quarter per cent. bonds. 1000 90
Five per cent. bonds. .........-..... h2I-|iD Nb
Thirty dollar coupons. ......--...... 4,955 $50 90
Twenty five dollar coupons. .-..-... $50 20
In addition to the above, interest upon bonds
that never had coupons. but which by express
contract bore interest to maturity, has been al
lowed to the amount Of SIS, 40 16, and cash has
been paid TO the Comptroller to make even bonds
e. 70
We refused to fund or register any of the
bonds or coupons issued TO "the Mineral Home
Railroad Company. and those known as the
Valley OF Virginia Insurance Company bonds.
We also declined to fund or register any of a
lot of twenty bonds, letter Il. White, Nos. i,412
to .i9I, purFOrting by the records to have been
issued in 1886, TO the "MCMinnvie and Man
chrs er Railroad Company The records Of the
Offices Of the Executive Department show that
bonds bearing these numbers, and OF this de
sCriptiOn. ere issued to the MCMinnyllle and
MAJ chester railroad, but only one bond Of each
number, while duplicates of each number have
been presented for registration. The books do
not show that such duplicates ever issued from
this office, there any law authorizing
tn ir issuance and the matter is therefore refer
red to the General Assembly to settle the labi-
ty of the State, and the rights OF holders against
the State and as among themselves. Coupons
clipped from the bonds of the city of Memphis,
endorsed by the Little Rock Railroad Company,
as first cndOTser, and the State as second ell
dOrseT, have also been presented Tor funding,
and have been refused.
In this connection, it is my duty to call your
attention to the fact that the interest upon these
bonds has not been paid for some time by the city
Of Memphis, and no sinking fund has been paid
in reduction Of the debt. The assets OF the
Memphis aud Little Rock Railroad Company,
which is first en0oTser, have been to "A great eN-
tent absorbed. Hence the demand upon the
State as the second endOrSer. The act of the 2lst
OF February, 1896 extending aid to the Little
Rock Railroad Company, authorizes the Gov
ernOr OF the State to endorse 800 bonds Of the
city OF Memphis, for one thoussnd dollars each,
to be paid to the Memphis and Little 10 k Rail
road Company. yT0UiGgd, ''thC said Memphis
and Little Rock Railroad Company should hrst
endorse each Of said bonds, guaranteeing pay
ment OF principal and interest of the same;
and prorided further, that the city of Memphis
shall first. by its proper authorities, execute
mortgage, giving to the state of IcnnesSee
priority OF lien on the stock and interest OF said
CITY in said railroad company; and prOCjded fur
Their. that said raj road company shall give 20 the
State OF Tennessee a prior lien upon the whole Of
the iron sud cquipm. hts upon the first division
OF said road, extending from Memphis to St.
Francis river, in Arkansas" etc. Section Il of
said act provides further, That the said city
bonds shall not be - endorsed until the pTope-
authorities OF the city of Memphis shall provide
and set apart a fund known as a sinking tund,
out of which shall be paid, over and above the
six er cent. interest two per cent. per annum
on the raid bonds, commencing hEe years from
that date"
These bonds were issued, and in 1856 and 1851
indOrsed by the Governor OF the State. After
careful examination OF the archives OF the
State. have been unable TO find any mortgage
upon the stock OF the city OF Memphis IN said
road, or upon the iron and equipments OF the
first division of said road. have caused search
to he made also in the Registers Office at Mem