Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1876-01-07

and issued only as they can be substituted for at
least an equal amount OF the bonds they are 4n-
tended to renew and extend.
No effort has been made under this authority to
issue new bonds In substitution for those proposed
!, to be renewed, although the language OF the act
seems to imply direction to execute and issue
them whenever the substitution should be found
to he practicable. There is at least such room Tor
doubt, whether it lies in the discretion OF the
Treasurer to defer action looking to the subslitu-
ton until it shall appear to him to be for the inter-
ess Of the State to effect the exchange as to rem
der ii advisable, in justice to that officer, to dehne
his duty in this respect more explicitly.
The only action necessary, however, II my sug-
geston should recommend itself to you, would be
the repeal Of so much of the act referred to-that
CT February "a, lS15-as relates to the execution
and issue of new bonds The Legislature would
then retain control OF the matter and be leit 10
prov ide for the payment Of the loans in question:
or for their renewal and extension, as they sever
ally approach maturity, Or whenever it may suit
its own pleasure. The report OF the treasurer
will present to you the elaboration Of suggestion
for the payment Of the loans maturing in 1850 and
1883, the former OF which amounts 70 Soo' ,vW'
and the latter to 1886 000 and demonstrate that,
since the State has other liability to meet with
in the period from 1873 to 1889, such payment can
be provided for at future date by means Of com
paratively light tax and temporary loans
The extinction Of the sinking fund Of 1865 effects
relief from annual taxation 10 the extent Of about
$780, 900, and is a measure Of eminent justice and
good policy. The period from which this burden
has been lifted remains heavily incumbered by
State and local debt and the financial and busi
ness difficulties by which the people are at present
confronted tend TO make the weight more and
more oppressive. If we shall have happy deliver
ance from present and threatened ills, the spirit Of
our people affords full assurance for the belief that
they will turn this temporary alienation to SO good
account in the development Of the resources of the
Stats and the increase Of its wealth, as to render
more ,tan equivalent Tor the exemption they
have CDlaIEed.
The sinking fund Of 1868, which remains and is
required to be maintained was established to pay
the prime ipal Of the loan for the equalization Of
municipal war debts" The loan natures in Octo-
Der, 1882 and now amounts to something less than
three millions Of dollars, having been reduced by
the cancellation of some Of its bonds which formed
= part OF the abolished sinking fund. 1t gained
500 1853 tie past year by taxation, transfer and
interest, and now amounts TO Stl6,' lll2.
The State, in common with all other investors,
| has of late years been obliged TO pay high pre-
MUM for the securities prescribed by law for its
investments, and il is matter well worthy of
Jour consideration, whether its interests would not
be subserved by enlar9ing the list Of authorized
investments for the sinking fund, BY the addition
of some other classes of securities Of undoubted
value.
TAXATION.
The reyenue of the State. in addition to the sum
procured by the State tax, the levy OF which is G-
reced and The rate fixed by the Legislature annu-
ally, is derived from the tax on railroad companies
| savings banks anu insurance companies. A tax oil
| one and one-half per cent. is levied upon the
porate franchise OF railroad companies incorpora-
ted under the laws Of this state doing business
| therein. the value Of the franchise TO be deter
| mined for the purpose by ieauctng from theascer
tanned market value OF the capital stock OF each
| company the value of its real estate and other
property actually subjected 10 local taxation, and
| by deducing also, in the Sc OF lines extending
bevona the State, the proportional valuation Of
| such extension.
The act imposing the tax upon railroad compan-
les was passed by the legislature Of 1874, and an
assessment upon Them for that year was made nm
der its provisions. Several companies having
| failed 10 pay the taN assessed upon them, an act
was passed by the legislature of last year to pro-
vide more speedy and elective method OF en-
forcing payment
| While the State treasurer taking steps to
| proceed uader the new law against the delinquen,
companies, one Of the stockholders of the Maine
Centr@! 'rpany, residing in another State.
| brought i bli n equity in the United States
Circuit court, alleging, in substance, the nonvalid
tv Of the act of the legislature under which tax
had been assessed against the Maine Central COM
pany, for the reason that it impaired the oblga-
ton of the contract contained in the charter grant
ed by the state to that company. and praying the
court TO enjoin the treasurer from collecting the
tax. A temporary injunction was granted by the
court. and the treasurer is therefore precluded
from farther efforts to collect the tax, and viriu
ally restrained from proceeding against the other
delinquent companies whose charters contain
clause similar to that upon which the Maine Cen
trai rests its claim for exemption. a further hear
ing upon the question Of permanent injunction
will be had al the April term of the court provided
the parties do not unite III bringing one about at
| an earlier day. The distinguished gentleman who
acted as counsel for the State in this matter, in the
absence of the attorney general. IN his report 10
| nv predecc ssor, says, 81 have entire confidence
that the ultimate result will be the sustaining OF
the legislative act taxing this corporation"
OF the $50, i.52 received from the tax on rail-
road companies for Isl, the sGm Of SO, ,O35.e3 ha-
been apportoncd to the cities and town, wherein
shg:eh qaaess had their residence.
The tax of one per cent. on the deposits in sa
Wings banks yields large and easily collected
revenue, one half of which is appropriated by law
for the use Of schools, and one half to the use Of
the State
No consideration of justice POLICY present.
itself to my mind in opposition to the maintenance
of the tax the present rate. The substitution of
State for local taxation effects discrimination in
favor of deposits in savings banks of at least fifty
per cent. The object in view in subjecting themto
fixed and lower rate of taxation was not, presum
ably, a recognition OF the merltorousnesS OF such
Accommodations and the promotion of THRIFT, but the
encoura gemeLt of the continuance and growth OF
fund readily accessible to taxation, constituted
by earnings and sarpius capital which might other
wise prove fugitive and elusive in this respect.
The continued increase Of the amount of deposits
indicates that the tax exercises deterrng infiu-
ence upon depositors, and so far as am informed
bank officers geherally do not regard the tax as
onerous or tending to repel deposits Institutions
recently organized, suffering from the failure OF
inve,tnents finding themselves unable to declare
the maximum dividend allowed by law, may be
apprehensive that the consequences will prove I'M
favorable TO them. Ii should be borne in mind,
however, that low rate of interest is the rule al
fecting all capital seeking investment, and that,
while it continues in force, depositors would gain
nothing by Withdrawing their funds since they
could not obtain elsewhere greater interest com
bned with equal security. Their condition is not
one of exceptional hardship: Other interests suf-
fer more from the business depression Of the :me,
and are far more heavily taxed.
I A law Of 1874 imposes an annual tax upon for
+ eign insurance companies doing business in this
State, of two per cent upon all premiums received
t after deductng the amount paid for losses during
the year, unused balances on notes taken for pre-
mums on open policies, all sums repaid or al
lowed for return premiums, and the legal reserve
on life policies. The first assessment under II Wa
in April last, and amounted to Sl243f1l. Fire
! and marine companies were assessed Sl0,92sS'
, life and accident companies the remaining Sl 50J
"a of the amount. The insurance commissioner
report, that the former class received premiums tc