Morning journal and courier., 1880-03-06
PREPARATION OF RAm.RaAnx.

AAAA HUN OE RAILROADS There are few reforms more needed in this country than reform in our system, or, more correctly. our systems of taxation. This fact
 is generally admitted, though but little prog ress towards bettering matters is made. Per.
 haps MT. David A. Wells gives the right req son why so little is done where so much ought to be done. He says the subject as whole is lators shrink from attempting to understand 1t in detail; the regular sessions of Congress and of the State Legislatures are always pre- occupied with other business, and the presen- tation of any thoroughly comprehensive scheme of reform always affects so many pri- vate selfish interests, and runs counter to so many old prejudices, that powerful combina- tions to oppose all action spring up as it were spontaneously. It seems to him that the only way in which reform in taxation can be ac- complished is by undertaking the work in de- tail, or in departments or, in other words, that specific forms of taxation, or the incl dence of taxation on special forms of proper ty, of business, or on persons, should be taken up and considered separately, and the meth ods of assessment and collection in these special applications be either modified or the tax increased, diminished or abolished as after consideration may be deemed expedient.
 This being the case, MT. Wells would like to see the reform in the taxation of railroads proposed by the national com mittee on the subject carried into effect as beginning of the good work. This committee, composed of Charles Francis Adams, jr., of Massachu- setts, W. B. Williams, of Michigan, and J. H. Oberiy, of Illinois. having spent year or more in thorough examination of the mat ter, report that !all the requisites for a sound system of railroad taxation are to be found in taxes on real property and on gross receipts, and in others. Mir. Wells argument for the correctness of this proposition is seem ingly conclusive one. He says: Land and buildings have permanent situs, are as little liable to auctuation in values as any species of property, and are readibly capable of valua- tion by certain definite rules and comparisons Gross receipts are susceptible of clear and definite statement, are easily verified; and, taken in connection with the cost and length of any given road, constitute an almost cer tain criterion of it's value at any given period On the other hand, to tax the franchise, the capital stock as 8 whole, or the stock sepa- rateiy to its owners, is only @ roundabout way of taxing the gross receipts, for the value of each of these items depends on the amount of the gross receipts and their relations to expenditures. If the amount of gross re- ceipts is not sufficient, or only sufficient, to dsfray expenditures, of what value is the franchise or the stock? If the stock is made assessable to individual certificate hold CTS, what is to be done in the case of non- resident holders? And in the matter of rail- road bonds, the United States Supreme Court has decided Gin the foreign-hsId bond easel that it is not sufficient for State to merely have control over the owner of bonds as a citizen. but that the bonds themselves, in or der to be taxed, must be actually within the territory of the taxing power in order to give it any jurisdiction. Certificates of stock and obligations of indebtedness (railroad bonds), furthermore, are not property, but rspressn- tatives Of property. Their increase or de- crease does not affect the sum of actual wealth; and to find them and value them cor rectly presupposes an inquisitorial system of S~AasAOA dhN bA0 pO55bSblUu OE ClalrVOyGQG powers on the part of assessors. Rolling stock is property, tangible and visible, but in case road is located in more than one State, what is to determine the situs of such proper ty and how can the value of property that is continually changing in value through use be readily ascertainable ,
 But sensible and simple as this proposed system of railroad taxation seems, and sound as it is declared to be by those best qualified to judge, we fear there is small prospect of it's adoption. Mir. Wells himself is not at all confident that it will meet with favor. One great obstacle which seems to him to stand in the way, in the State of New York especially, (where reform is most needed) is the fact that it is not for the interest of those cities, towns or communities through which the railroads pass that there should bc any reform or change in the existing system. To them the rail
 road is financial sponge capable of being squeezed indefinitely, to supplement through it's product other taxes, or to meet extraordi- nary expenditures, as for an occasional new bridge, schoolhouse, road, and so forth. To such an extent, moreover, is the sponge an
 nualy squeezed that in some towns of New York the railroad contributes alone one-third of the annual taxes and such communities having once tasted the sweets of what is nothing other than arbitrary plundsr, and feeling their grip on the sponge to be reason ably secure, are not willing to be persuaded to let go. Under such circumstances the rail- road corporations are driven In self defence to take part in local politics; and their action furnishes precedents for interference with the purity of elections which are sure to be