Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-05-29
Doi"gs Of the Governor and CounciI.-Ths
Railroad Tax,


The session Of the Governor and Council con-
| tinaed yesterday, and will probably close to-day.
Hon. A. w. Paine of Bangor, yesterday APP
peared on matters pertaining to . resolve which
passed by the last legislature instructing the
Governor and Council to adjudicste settle the
legal rights of the parties including the State,
interested in the soil and timber Of lands in Per-
| ham plantation and also in regard TO the Goddard
| claim. After the hearing the Land Agent was su-
horzed to adjust the claims of the citizens OF said
plantation.
A full hearing was given the Maine Central
Railroad Company for an abatement Of taxes as
| sessed by act of the legislature.
Hon. J. H. Drummond of Portland, opened the
| case for the company. He claimed that a certain
amount of the taxes should be absted or account
of the excessive valuation of the stock that the
| stock really has no cash value, and has not had
since 1873 when the sales were made to the East
ern road. Although the company had always
| maintained exemption under their charter, yet
they would not resist . reasonable tax. and as he
thought such an one would be arrived at after .
careful consideration Of the case.
I Hon. Abner Coburn. Hon. j. B. Brown Of Port
land, Arthur Sewal. ESQ, of Bath, Darius Alden,
Esq, of Augusta, Hon WIN. G Davis and G. F..
B. Jackson, Esq, Of Portland, were severally
Of the value of Maine Central stock, and the mat
tcrs which would 20 to form basis of taxation.
Mainly their statements we're to the effect that
stock had been offered al Is and IL cents, and had
sold as low as IL. Uhtil quite recently there had
been no sales since 1873, when the Eastern OBJ
tanned control. The stock has no value except for
voting purposes. Mr.. Drummond explained what
was meant for voting purposes. II is important
that the road should remain in such hands that its
affairs will be jQdicously managed so that the
nd he int on he dahf of
some s., 900, 900 should be paid. That was mat
ter of great importance TO those IN the State who
held the bonds Of the road. They would be af-
fected greatly, should the stock be placed in the
hands of parties who would not administer its al
fairs for their interests.
MIR. Jackson, President of the road, presen d
the following figures
According to the publ he'd reports of the road
the net earnings for the years ending
Decembe, 81, 1873, were S2SS "a
1874, 5096. 81
1915, "a $50 33
1876, 3S,4S6. "A
1858 5000 shares
1874 36U2O
1873 36,020
1876 36,O22
And the net earnings therefore exhibit for those
years that the stock would have paid six per ce Mt
on value per share:
1873, 1912 cents
1874, S225
1875, Sll.4O
1876, $3.50
Hon. l.. A. Emery, Attorney General. appeared
for the State. He said that this tax is tax upon
the corporate franchise of the company. This
corporation 10 gigantic one, owing controll-
ing 275 miles Of railroad, running through the
central portion of the State and property of
some SO 700 900. They could not control this
property without the possession Of that corporate
franchise. Now TO own or control this, 10 worth
something. II is not vaueless property and
Whatever it 10 worth, 1t Sd oud be made to bear
portion of the burdens of taxation. The Cover
and Council are required by the legislature to
make Q valuation from the market value Of the
shares. The issue is not what the shares are
worth as income producing property. but what
they are valued at and held. Are they desired,
and do men hold to them 1t is not what they
will produce, altogether, or what they will bring
in the market. but how much do men hold on to
them In 1873, the stock stood at 60 cents, and
that was deemed q fair standard Of valuation.
The Railroad Company, he would saw, had striv-
to bring about early settlement of this ques-
ton. The question is, did the Councils Of 1874
1915, put too high valuation upon the stock
Mr.. Drummond made the closing argument.
He would not criticse the action of the Governor
and Council OF the years named, but thought they
arrived at their decisions from imperfect data,
all the facts in the case not being before them.
Otherwise they would not have put the tax half so
high. True, thisi great corporation but 1t is
under the shadow oil \ great debt. he admitted
that it was the corporate franchise of the 70 ad
that is 20 be taxed.
We claim an abatement by reason Of excessive
| taxation, and for failure to deduct the proper
amount paid 10 municipalities for taxes assessed
He claimed that sales of stock to affect certain
purposes, furnished fixed ndard for the valua-
ton of stock the true value is what it will bring
il open market. The value of stock cannot be
Judged by the value set upon certain shares for
certain purpose. He asked what Maine would
have been had it not been for railroads, that has.
| developed the State and increased the value oil
| prosper The Maine Central could not have
paid the taxes assessed without running 10 debt
worth something.
The case closed here. though the Council have
not given their decision.