The Portland daily press., 1884-12-31
THE STATES LAW BUSINESS.
Annual Report of Attorney General
Cleaves.


Cleaves.
Attorney General H. B. Cleaves, in his
annual report to the Governor and Council,
says:
TAXATION OF RAILROAD CORPORATIONS.
AT the date OF the last annual report the suit
against the Grand Trunk Railway Company to
recover the taxes assessed against the corpora
tion in behalf OF the State was pending in the
United States Circuit Court The action was
originally commenced in the State Court, but
the defendant being foreign corporation the
United States statute authorized its transfer to
the o. s. Circuit Court for trial. The case
was so transferred on motion of defendants
counsel. A hearing was had before the Cir
cult Court, Judge Webb presiding, on the 22d
day OF December. No decision has yet been
rendered.
A suit has been commenced during the past
year against the Knox & Lincoln Railroad
Company to recover a tax assessment levied by
the Governor and Council against the corpora
tion under the statute of 1881. The Knox &
Lincoln Railroad was originally chartered un-
der the name of the Penobscot & Kenusbec
Railroad Company. Section 16 of its charter
provides that all real and personal estate pur-
chased by the corporation for the use of the
same shall be deemed personal estate, and the
shares owned by the respective stockholders in
the corporation may be taxed to the owners
thereof. That whenever the net income OF the
corporation shall amount to IL per cent per
annum upon the cost of the road, one moiety of
the same, or such other portion as the legisla-
ture may from time to time determine, over
and ABOVE Twelve per cent per annum, frst to
be paid to the stockholders, shall be paid to the
State, and that no other tar shall be levied on,
assessed on the corporation.
There can be no question as to the power OF
the legislature when this charter was granted
to establish particular method of taxation
applicable to this corporation, and the courts
have repeatedly held that charters of this
character granted by tho State create CON
tract between the State and the corporation,
and within the provisions of the constitution
prohibiting legislation imparing the obliga-
tion OF contracts. The constitution of Maine.
however, was amended ia 1875, and it now pro-
vides that the Legislature shalt never in any
manner suspend or surrender the power OF
taxation. 1t is claimed by the railroad COM
pany that the assessment is in violation OF the
chartered rights Of the corporation. This suit
Is brought in order that there may be a judic .
ial discrimination OF the question.
All State assessments against railroad COR
porations are now made under the provisions
OF chapter 6, Revised Statutes of Maine 1888
The law declares that every corporation.
person or association operating any railroad
IN the State, shall pay an annual excise tax
for the privilege of exercising its franchises
within it's limits. The tax is based upon the
average gross transportation receipts per mile,
and the amount of the same is to be deter
mined by the Governor and Council and
levied on or before the first day of April of
each year. and payable. one haze on the first
day OF o1.v noAs after the levy is made. and
the other half on the first day OF October fol-
lowing. Interest at the rate of ten per Gems
per annum attaches, the corporation neglects
to pay the same when due.
In addition to this special tag levied unon
railroad corporations in return for the privi-
leges granted, all buildings, whether Within
or without the located right of way. and all
lands and fixtures outside of such located
right, are subject to taxation by the several
towns and cities in which the property is
situated.
The existing statute authorizes towns and
cities to levy upon all buildings of such COR
porations, and upon all lands and fixtures
without the limits of its right of way, an
equal and proportionate assessment for State,
county and municipal purposes.
In 1879, the entire amount of State tax as
seessd against railroad corporations vas less
than S36.0Os. 1t was believed that a more
uniform distribution OF the public burdens
was required, that corporate property of this
character should contribute greater p-opor-
tioH OF the revenues of the State, and to that
extent modify the burden placed upon those
whose proDerty was open to inspection and as
sessed at its value. The laws recommended to
and passed BY the Legislature have had that
object fn view.
Though the State during the past Ave years,
has been engaged in puch litigation. involy-
ing the construction and constitutionality of
the various tax acts, applicablato this class OF
property, land intended to equalizs the reve-
nues required for the support of the State gov
ernment 1t has been successful thus far in
maintaining its claims in all suits brought be-
fore the courts The litigation il comp ativs-
ly at an end, aud the only real question to be
determined in pending suits, relates to a spe.
cial exemption clause in the charters of some
corporations granted previous to the amend
ment OF the constitution, and before it had be-
come the settled policy OF the State to require
OF railroad corporations fair return in the
nstare OF an excise or franchise tax on account
OF she powers, immunities and privileges
granted.
The courts have determined that the legisla-
ture is invested with the power of raising rev.
enue for public purposes. 1t judges of the
propriety OF taxation, and defines the sources
as the exigencies OF the case require, su bject
to constitutional restrictions. The general
power OF taxation "for the defence and bens-
fit OF the people," is left with that body, and
while absolute uniformity and equality NAV
not always be attained, that system has been
declared the best which comes the nearest to
it,
The object should be to place the burden so
that 1t will bear as nearly as possible equally
upon all; such was the purpose in creating the
various tax acts applicable to railroad corpora
tions, and 1t is believed that the system adopt-
ed will yield to che State the amount of reve-
nue. anticipated from such sources. "a list of
assessments on railroad corporations, already
published in the PREss is appended.)
TAXATION OF TELEGRAPH COMPANIES.
The statnte providing for the taxation of
telegraph companies was passed in 1880. It
subjects every telegraph corporation, company
or person, doing telegraphic business within
the limits OF the State, to State tax of 81 per
ceDtum on the value OF the line, including all
poles, wires. insulators, Office furniture, bat.
teries and instruments, and any circumstances
or conditions which affect the value OF the
property. Nearly the entire telegraphic sys-
tenn of the State, by virtue of leases from and
contracts with other chartered telegraph COM
panies is controlled and operated BY the West
ern Union Telegraph Company. It was be-
lieved that there was disregard of the obli-
cations OF uniformity in permitting telegraph
to escape the machinery of taxa
tion, and that equality could be attsinsd In its
truest and best sense by q special tax act i'm
posing upon these corporations tax upon the
use tof the property, engaged in this particu-
lar business. The enforcement of the law was
resisted in the various suits Brought for the
collection of assessments, but without success
The position of the State was sustained by the
courts, and this principle of taxation declared
to be within the proper exercise of power
granted to the Legislature.
1t Is evident from the practical operation of
the act, that no injustice has been done to cor
porations of this character.
Here follows the list of assessments already
published
TAXATION OF TELEPHONE COMPANIES.
Since the passage of the act relating to the
taxation of telegraph lines the telephone sys-
tenn has been extensively introduced in the
State, and the service is constantly increasing.
Numerous oh harters have been granted and cor
porations endowed with extensive powers by
legislative enactment.
The tax act applicable to telegraph CORPORA
lions could not be invoked against telephone
companies without additional legislation. A
recommendation was accordingly made to the
last Legislature and an act passed authorizing
the taxation of these companies at the rate of
q per cent. upon the value of the line. There
san be no question as to the justness OF the act,
The following assessments have been made:
National Bell Telephone Company, ..... 81 $500
American Bell Telephone Company ..,.. 10000
Beedy Linscotts Telephone, ne,.,..... 1I25
EXPRESS COMPANIES,
The amount OF assessments against express
companies for the present year is $1,501.69.
Ihe principal portion of the same is against
'he American Express Company, corporation
existing under the laws of New York and
1oing business within this State.
INSURANCE TAXATION.
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