The aegis & intelligencer. [volume] (Bel Air, Md.) 1864-1923, 1875-02-05
The Exemption Question.

1t Is not our purpose to crlticisc the Courts
decision III the case of the State against the
Northern Central Railway Company. Political
economy would teach that no considerable part
OF the property of State should be withdrawn
from public taxation. Discrimination is not
| only unjust, but odious because unjust The
people desire equal and fair taxation, and think
| truly that the almost absolute monopoly rail-
| way companies enjoy by their charters should
satisfy their demands for privilege, without in
sisting on the right to do business and enjoy
protection in their rights and property without
| paying their just share of the expense of that
| protection. There is no good reason why the
owner of real estate, or steamboat properly, or
stage. coach stock should pay taxes, whilst rail-
road companies, also conducting business for
| their own benefit, should be exempt The whole
system OF privilege and monopoly is against the
policy ola republican government, and calculat-
ed TO raise powerful agents, too strong for even
sovereignty to deal with.
1t is held by many corporations that they may
by virtue of exemptions In their charters, 90 on
to acquire unlimited wealth, which may absorb
| the bulk of the best property in the State and
hold the same free from taxation because, they
say, the shares of their capital stock represent
the capital and property of the corporation, and
those shares are by their charter exempted.
| And SO the sovereignty Of the State is laid at
the feet of one ofits own creatures. Ifthe Leg.
islatnre has the right to contract that the State
W. never in the future exercise one gifts high
est and most essential prerogatives, and SO NAV
exempt property from taxation, vet it would
seem the exemption should not be erte,adtd by
| construction and implication. There is, perhaps
no charter to BIO found in this State that does
more than exempt the shares of the capital
stock" from taxation. To exempt the property
OF the corporation, under such clause, it must
BIO first determined that the language: ''the
shares of the capital stock" is tantamount to
"all the property and franchises of the company.
And 1t is by just this reasoning and construc.
tion the State courts here have held the corpo-
rate property of certain railroad companies ex.
empt. Is not this eXempting by implication
Is 1t not the person who is taxed in this State
Is 1t property? Is not property only the mea.
sure provided by law by which to assess the
person? lfso, the shares of stock belong TO one
person, the corporate property to another. The
one to the shareholder, the other to the corpo-
| ration itself Is not the distinction manifesto
On Judgment against stakeholder, who might
own half the stock in q railroad company, could
an execution be levied on the property of the
| corporation? And, mutdtiS nlutdadis, could an
execution be levied on stockholders individu-
al property on Judgment against the corpora.
| ton in which he held stock:
| As the railroad ease is to go to the Court of
Appeals, it is well to keep IN mind the position
Of the State. Her counsel insisted that it was
| suicidal to exercise the power of perpetual ex-
emption. That if such power was not, in the
nature of things, impossible, vet the thirteenth
Article Of the Bill of Rights of Maryland ex-
| pressly restricted our Legislature, and did more,
| imposed taxes on the Opner, not on the property.
| That article is as follows: "That paupers ought
| not to be assessed for the support of govern.
ment, but every person in the State, or person
| holding property therein, ought to contribute
| his portion of public taxes for the support of
| the government, according to his actual worth
| in real or personal property"
They then insisted that if the power to ex-
| empt did exist, yet the exemption could 20 no
further than the owners of "the shares Of the
capital stock" That in the Supreme Court OF
the United States, it had been settled definitvc-
~ That tax on the shares of the capital stock
was not tax on the corporation. Hence, an
exemption OF the shares of the capital stock
could not be an exemption of the property of the
| corporation. The cases referred to were those
arising on the taxes laid on shares of stock of
the National Banks. 1t was claimed that the
shares were exempt, because they represented
the capitalize property of the banks, and
part OF that capital consisted of non.taXable
United States bonds. The Supreme Court held,
that the shares belonged to the stockholders in
dividually-and the capital, property, bonds,
&C., of the bank to the corporation. That the
ownership was perfectly distinct, and tax on
one was not n tax on the other. And it held
the same MS to stock of State banks held by per-
sons resisting the taxes laid upon them by rea.
son OF their ownership of it, because the State
bank had Its capital Invested in United States
bonds.
1t would seem, if the decisions of the Supreme
Court are to stand, that an exemption of the
shares OF the stock of the railroad company here
would not, if the case should get to that court,
protect the property Of the railroad from taxa.
| ton. But the acts of 1877? and 1874 are also
claimed to be taxes on the corporation directly
and not on its property and, as such on its
business. Such a tax was sustained in the Su.
| premc Court Of the United States last year.
| 1t is due the Legislature which passed these
| laws, and the officers who are endeavoring TO
enforce them, to say, that they were not and are
not considered as in violation OF any contract
entered into by the State, The laws were pass
ed in the interest of the people Of the State at
| large, and with manifest desire to equalize
t0Xation.-BdNimolt SMNdoN Nelcs, Jan. q.