Daily Kennebec journal., 1878-11-08

L
pendtures, to which was referred the communi-
cation of Hon. j. II. Drummond in behalf of the
Maine Central Railroad Company, asking a re-
| ducton of the State tax assessed against ssid
corporation for the years lS74-56-7, after full
hearing of the matter, and careful investigation
are unable to agree Is to the market value of the
stock of said company for the years above named
The undersigned respectfully submits a minor
| ty report, with an order authorizing such abate
ments for those years as in his judgment is just
and proper.
II is somewhat difficult to arrive at q correct
valuation of the shares of this corporation. The
language of the second section Of the "act reat-
ing to the taxation of railroad corporations" rath
er increases the difficulty. 1t provides "that the
| Governor and Council shall ascertain the true
market value of the shares of each railroad corpo
ration in this State and shall estimate therefrom
the fair cash valuation of all of said shares con.
stituting the capital stock of said corporation on
the first day of April next preceding, which shall
be taken as the true value of its corporate fran
chise for the purposes of this act" The valuation
of shares depends somewhat upon the construc-
tion Of this section of said act. The "true mar
ket value" Of shares in any corporation. as re-
ferred to in this act, must be the price at which
actual sales are made 1t is quite clear that the
Governor and Council assessed the tax upon that
| basis. cannot see how q proper tax could be
| assessed upon any other construction of the law.
The Maine Central Railroad Company has con-
troll over more than three hundred miles of road,
| has a valuation exceeding ten millions of dollars,
is protected by the laws of the State and should
bear its just proportion Of the burdens of
| taxation. Claiming exemption under their char
ter they have for nearly four years resisted. by
legal means, the collection of the taxed imposed
by the State Unsuccessful in their efforts at law,
they now seek relief at the hands of the Govern.
or and Council as provided in chapter ~, laws of
1878.
I, is well known that a very large number of
shares Of this corporations changed hands in 1873.
at from sixty to hundred dollars per share, and
that the friends Of the company were active in
purchasing shares at those figures The value OF
the shares could not have materially changed at
the date of the assessment of 1874 The tax of that
year, in my opinion, is not excessive, and only
such an abatement should be made as 10 necessary
to correct errors in the amount paid by the com.
pany for local taxes.
1t appears from recent returns, showing the
amount that this corporation paid account of To-
cal taxation that the Council, in assessing the rail-
road tax in 1874 Sc, did not deduct the fll amount
paid by said corporation for local taxes. This error
was the fault of the company in not furnishing the
necessary information on that point. The correc-
ton of this entities the company to an abate
ment of fifteen hundred do liars on the tax as
sessed against them for each of the years 1874 IS
rs. The officers of the Company. neglectng to
appear before the Governor and Council when
the tax was assessed ought not at this late day to
complain that the tax of that year was excessive
The value of the shares Of this corporation in
1875 it is more difficult to fx ss but few shares
for the year previous changed hands. The Coun-
ell of that year made careful inquiries a. to ito
market value. The large stockholders of 1873
still retained their stock, which is good evidence
that they continued their confde nee 10 its value
Had it largely deprecated they could have ap.
pesred before the Council when the tax was as
sessed, and shown that fact; not appearing. it is
fair to presume that they preferred to accept the
judgment of the board As to its market value. In
view Of all the facts and circumstances connected
with the assessment of 1875, I am of the opinion
that forty dollars per share would not be excessive
The corporation Is entitled to credit .r error in
the amount deducted for local taxation for that
year.
| Nearly the same difficulty arises in fixing the
valuation of shares for 1875, the stock being held
| by the same parties. If held for the purpose of
controlling this gigantic corporation. it certainly
| had value. Large holders were not inclined to
part with their stock. A few shares only were
sold. hardly enough to establish its value. Never.
tbeless, in the absence of definite basis for val
uation the sum of thirty dollars per share may be
accepted for 1876. On the tax for 1877, no abate-
ment should be allowed.
| The total tax assessed for the years 1876,
against this corporation, $55,539.Sl. Deduct
ing error on account of local taxation and exces.
sive valuation of shares say Sl0,4l2 "a leaves 4
balance due the State of S45 1861, the interest
on which to Oct. lst 1878, is s., 900 81, making
the sum of 854 0297S, due the State for the tax
and interest of those years. The accompanying
order. the passage of which is recommended, au.
thorizes the sbstements and directs the State
Treasurer to collect interest on the several assess
ments from the date they became due and payable,
together with cost of suits prosecuted by the State
| for the collection Of said taxes.
| Respectfully submitted,
| S. c. HATCH.
| The order referred to makes the abatement for
errors, OF $l0,4l2.