The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-04-20
THE STATE AND THE CORPORATIONS.

corporate interests.
In the disposition Of this important mate
rial question there are two things to be con-
sidered; first, the Limitation of the legislative
power in the granting of franchises and ex-
emptions; and secondly, the method OF ASSESS
ment Of taxes on the franchises and property
OF corporations.
The limitation of the legislative power in
this respect, as we'll as in the creation Of pub
lie debts, has been carried to greater extent
within the past four years than ever before.
In the Pennsylvania constitution the princi
pie was given an extreme application never
attempted before In the organic law Of any
State. The example set by that State was
Immediately followed by Georgia. and,
although this new departure cannot, as yet,
be said to be entirely removed beyond the
uncertainty Of mere experiment, still tmustb be
acknowledged that it was abundantly justified
by the experience OF these and other States
In the past. The fundamental principles
upon which the innovations In the constitu-
tons recently adopted by these States are
based are sound and practical, and we see
no reason why Louisiana should not accept
their work and adopt 1t as her own; nor do
we see In what respect we can materially inn
prove upon the models supplied to us.
These constitutions assert the right Of tax
alton to be q sovereign right, fnalienable and
indestruetible; they forbid the passage OF
any law making irrevocable any grant OF
special privileges or immunities; they for
bid any surrender or suspension, by any
contract or grant to which the State shall
be party, OF the power to tax eorpo-
rations or corporate property; they assert
the right OF eminent domain over corpora
tions and their franchises as well as over in
diyiduals, and declare that this right shall
not be abridged; they provide that the police
power OF the State shall never be abridged, OF
so construed az to permit corporations to con-
duct their business in such manner as to in
fringe the rights of individuals or the general
well being of the State; finally, they require
all corporations doing business in the State
to have an agent In the State upon whom pro-
cess may be served, that they shall not en-
gage in any other business than that ex-
own real estate, except such as may be neces-
cary for their Legitimate business and that
they shall not issue fictitious stock or EVIL
denCes OF indebtedness.
OF the wisdom of these restrictions there
can be no room for speculation. The neces-
sity for them. In view OF the recent decisions
of the Federal courts, giving the broadcast
latitude Of construction to the contract nature
OF charters and Of the constant disposition OF
those tribunals to assert the judicial power OF
the general government over the States. Is
most urgent and apparent. The only
sure way to avoid this most offen-
sive intrusion Of Federal authority
into State affairs and to obviate all excuse
for judica coercion on the part OF the gene
raj government In matters In which the
State is concerned, is to forestall their ag-
gression by such limitations upon the legis-
latve power of the States as will render 1t
impossible. This is what has been done by
and Georgia, and 1t is what we
should do, by forbidding our Legislature to
grant any franchises, privileges OF immuni-
Ties which shall not be revocabe at will, thus
to the State the absolute control
lions and rendering impossible the interfer-
ence, between them and the States OF the iu-
lciat power OF tire United States
This question settled, the next thing for the
convention to do is to establish some certain
and Ineligible principle upon which the tax
alton OF corporations shall proceed. This may
% left to the Legislature. Yet we doubt Ii
The convention itself should not decide in adj
vance the principles that shall govern the ap-
1raisement Of the property to be taxed. Take
or example railroad !; 1t might be well to in
IN xubn bar fha fay ff, hn
shall be In the shape of given
on receipts or on divi-
lends, with fixed percentage on
receipts where no dividend is declared, or OF
! tax on the gross value Of the property, in
sluding the franchises. A tax on dividends
,r receipts may coexist with tax on the
real estate; tax on the total
value OF the property cannot.
In Pennsylvania the former method pre-
walls, and in Massachusetts and Connecticut
the latter.
The plan pursued by the latter States
strikes US as the simpler and, therefore, the
better. In these States the market value
u the shares and bonds OF road are
taken as the assessable value Of the
Of the road, including, OF course, Its
and constitutes the basis of tax
alton. juster, more equitable and simpler
plan than this can hardly be devised 1t GER
tainly affords true and certain indication of
The real value OF the taxable property Of the
road and obviates the necessity Of separate
assessment Of the real estate. This principle
will apply with equal force and satisfaction
TO street railroads and to gas and telegraph
With insurance companies the
case would be different. With them gross
receipts do not rightly measure the value
81 their property liable to taxation Their
only assessable property Is their corporate
capital and assets over and above their Iiabil-
tiles, and their real estate. This plan, we
think, will afford far more efficacious sys-
TEN Of taxation in regard to these institutions