Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1875-01-08


raised in a similar manner This is known as the
sinking fund of 1868, which row amounts to SiSo,
237. Both funds aggregate VI ,52l ,32i OF which
81 443, 800 is invested in State bonds ana Soooco,
including premium, in bonds of the United Saes.
Obviously nothing is gained by sinking fund,
except so far II may be rendered necessary where
public debt has been contracted so as TO mature
in larger sums than can be provided for by taxa
ton in any ore year. There Is nothing III the
machinery OF sinking fund which can add SIN
gle dollar to the amount paid by the people through
taxation, on account of the public debt. On the
contrary it is a complicated and by no means
economical financial device, having in 1t the ele-
mems of insecurity; and should be avoided when
ever feasible BY authority of act Of the last
legislature, this insecurity has been guarded
against in the case of the sinking funds OF this
State, SO far as possible; but experience. shows
that SO long as such funds exist there Is some
danger of their misappropra'ion
Under the acts creating the sinking funds oil
this State, by which investments can be made only
in bonds of Maine and of the United States, anoth-
er difficulty has manifested itself during the past
year, and is likely to increase nom year to year.
Under the influence of frequent purchase
of bonds of this State for the sinking funds,
their market price has advanced so that 1t Is
now impossible to obtain our securities without
paying from one to two per cent. premium Ihis
may be good thing for the holders OF Maine bonds
but hardly just to the tax payers who faithfully
discharge every obligation when they provide
means for payment of State bonds at their par value
If either or both of the sinking funds are to be
continued-ana the sinking fund Of 1868 cannot
be entirely dispensed with without an amendment
of the constitution that will admit of renewal OF
the municipal war debt loan which it was created
to meet-f recommend that the last difficulty to
which have referred be obviated so far as possi-
Bile BY authorizing the treasurer to make invest
ments also in the securities OF other New England
States.
Should the legislature concur with me in the
advisabilitv of renewing that part of the pablo
debt maturing on or before June 1882 the sinalng
fund of 1865 may be abolished, the State bonds Ill
the same cancelled, and the small amount Of | ;.
bonds in the fund transferred to the sinking fund
of 1868. All the State bonds in the latter sinking
fund may also be cancelled, together with all the
bonds of this state maturing IN Oct 1889 winch
may hereafter be purchased. Thus there will re-
main in the sinking fund of 1868 only $50, 800, III
United States securities to be increased hereafter
by such purchases of similar securities or Of bonds
OF other New England States as may be rendered
necessary by the inability to obtain bonds OF this
state at par. The probability indeed Is that 10y
such an arrangement not only the sinking fund of
1865 can be abolished, but also, by an exchange OF
securities which would be feasible when bonds of
our State are no higher than Of the other New
England States, the maintenance OF the sinking
fund of 1868, in even modifed form, be rendered
necessary.
THE RAILROAD TAX.
BY requirement of an act of the last legislature,
the governor and council have assessed tax on
the franchise of the following railroad corpora
tions incorporated under the laws Of this State or
doing business therein:
Atlantic K st. Lawrence, S50,oto o.
Koston & Maine 26,342 %
Maine Central 234l6 A.
Portland, Saco & Portsmouth, - 42e w
Dexter Il Newport, i,lo9 oo
Portsmouth Great Falls & CONWAY 80 90
St. Croix and Penobscot, Zl0 y
Portland Horse Railroad Co., o94 w
This tax aggregates Sl05 5O6933, and according
to the terms Of the act, has been assessed on rail-
road companies whose stock has market value.
That portion Of the tax which represents stock
held in this State-about two-ffths-goes to mu-
inequalities, and the remainder, representing non
resident stock, goes to the State.
BY the terms Of the act one-half of the tax was
payable July lst, 1874, and the balance January
Isl, lS.' The ST. Croix & Penobscot company
paid the whole of the tax assessed on this
corporation before it became due. The Port
land Horse Railroad Company also paid the Assess
ment this corporation in a satisfactory manner.
The Boston & Maine company also promptly paid
that part of the tax on this col poraon which fell
due JGly lst; and, in note to the State Treas
urer, the President Of the company has indicated
u readiness to also pay that part Of the tax which
fell due January ls, as soon as the directors shall
be assured that the tax on the other corporations
assessed is to be enforced. The Dexter 4 New
por, company appeared by their attorney before
the governor and council to urge claim for ex-
emption from ia, alton i'll consequence OF pro-
vision in their charter which will hereafter be
referred to, and also by virtue of special act of
the legislature in 1867, exempting the shares of
stock in the corporation from assessment.
Neither of the other companies has paid any
part of the tax assessed upon them, or given any
explanation for non payment. From unothc al
sources it has been ascertained that the Atlantic
4 St. Lawrence and Maine Central companies
claim that clause in their charters eXempts them
from all taxation, until the directors of the
corporation shall report to the legislature that
the net income of the company is "ten per cent.
on the cost of the road and its appendages and
and int idental expenses" (Which report has not
been and is not likely to be made) and even then
that the only assessment on the corporation shall
be limited tax on the net income of the road
above said ten per cent. SO far as the Portland,
Saco 4 Portsmouth, and the Portsmouth, Great
Falls Il Conway companies are concerned, no
reason has been even unotfically lntimated for
their refusal to pay the tax assessed.
The act relating 10 taxation of railroad compan-
les provides that "if any corporation fails to pay
the tax assessed the State Treasurer may forth
with commence an action of contract in the name
Of the State, for the recovery of the same, with
interest BY advice OF the attorney general,
concurrcd in by the executive coancil and myself,
the treasurer has deferred commencing actions
against the delinquent companies for the taxes
due the State, until the legislature can have an
opportunity to provide method OF enforcement
OF tax assessed by State authority as prompt and
effective given TO 1Or tne col
lection of local assessments, and as other States
have authorized for the collection of a similar tax
on railroads. The remedy provided by the act
would necessarily postpone the payment of a
single dollar of the tax assessed on the railroad
companies, until the legal points raised by those
corporations should be finally settled by the court
of last resort, which might cause delay of sew
eral wears. As it is competent for the legislature
to enlarge the remedy without mpairing the
validity Of the tax already assessed, recommend
the immediate passage of an act amendatory OF
section third of chapter 25S Of the public laws OF
eighteen hundred and seventy four, which shall
authorize the Supreme Judicial Court, on informa-
ton by the Treasurer of State, to issue an inunc
ton restraining the further prosecution OF the
business of any delinquent railroad corporation,
after reasonable notice, until all taxes due under
the act shall be paid, with interest and costs.
1t is certainly surprising that any railroad COM
pany should refuse to pay so light tax, when ii
is unquestionably in the power OF the Legislature
to authorize munic ilites to make the same
assessment upon the real estate Of the corporation
that is made other property, which in the ca sc
of all the companies assessed under the act OF
1874 would be at least twice, and in the cases Of
several companies from four to eight times as
large as the tax whose payment is refused. And
even such an assessment would be just and equal
! for taxation proceeds upon the principle Of the
we'll settled maxim that he who receives the pro-
lection and advantages of State, ought to sustain
the burdens in roportion to his ability. Certainly
railroad corporations created, protected and giver