The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1885-05-06
CORPORATION TAXES.
A LEGISLATIVE COMMITTEE TACKLES
A COMPLICATED QUESTION.
Illinois Statesmen Endeavoring to Find
why Corporation Property Is Valued
So Low for Taxation--Some
Figures on the Subject.


taxable purposes, ami the accompanying
allegation that it does not bear its propor
ton of the public burden.
This resolution and inquiry was largely
BASED ON communication recently sent To
the senate committee on corporations by Mr.
X. A Mcclellan, an old real estate dealer
of this city, who has interested himself in
ii subject on behalf of a large number of
citizens. This communication says that the
stock of the three Chicago street railway
compani was worth May l, 1883 a total of
Sla,0oo 600 The tangible property of these
companies was assessed by the town
assessors for 1884 at only $3.50, 035,
the assessment being less than one
twenty eighth of the cash value of the capi.
tai stock. While these three comranies
were assessed by the state board of equaliza
ton on their capital stock for 1888 only
$500 900, that stock was worth Nav l, 1884,
the sum of SIS, $4,000. The stock of the
Chicago City Railway company the cable),
consisting OF 80, 900 shares at $3.50 per share,
was worth, May /, 1884, 81, 100000. The
company was assessed on its forty-six lots OF
real estate $52, $50, on its personal property
in Hyde Park 5000, and on its South Chi
cago personal property 500, 900; in all $685.
$50 This leaves 81, 231 220 worth of prop
erty not taxed, not including the very valu-
able franchise of the company The stock of
the West Side Railway company was worth
Sl0,3lO, 600 on May l, 1854 Yet this COM
pany was assessed on its real estate $50, 0TO,
and on its track and personal property
$50 025, in all not quite $3.50, 900, leaving a
balance to be assessed by the state board Of
equalization, including franchise, of over
S10,000,00n. The North Side company's
stock was worth one year ago 800, 900, and
its total assessed valuation was SIP, 100.
The market value of the stock of the Chi
cago Gas Light and Coke company was
S. $50, 900. The assessed valuation of its
tangible property was only $l99, 740. The
franchise of the Peoples Gas Light
and Coke company west side was
valued at S3,000000 on MAY /,
1884, its new gas works at 5000, 600, AMI its
real estate at $2S), OGO. making a total of S.
$50, S14. The total assessment of its tangible
propertyiwas $40, $50. The communication
says: 1T is evident from the large premiums
paid for the stock of the corporations re-
ferred to, as shown above, that a valuable
franchise was secured by ordinance passed
hy the city council in 1858 AMI 1859, which
seems to have been overlooked by the state
hoard in valuing their capital stock for the
year 1883 The franchise granted to the
city railways was for twenty-five years, re-
| serving the right of purchase at the end OF
that term. subsequently, in 1865, the stat
| legislature passed an act extending theil
franchisa to ninety-nine years. AMI confirm
| ing the reserved right OF purchase, by which
| act the corporations secured a valuabi,
vested right that is very important in III,
assessment of their stock. 1t appears from
the list of assessments above that the tangi
| bic propety assessed by town assessors O
| the corporations referred to is but a very
| small part OF the total cash val ne of thei
| capital stock"
The committee met at IL o'clock Monda,
forenoon in parlor G of tho Sherman house
| Mr. Mcclellan appeared before the com
mittee and quoted figures from the report
| of the state boar1 Of equalization to show HOY
the capital stock of corporations droppet
! gradually out Of sight as taxable prop
er1y. For instance, the capital stock of on
Of the Chicago gas companies was assessed
in 1874 at 500, 900 in 1879 at $3.50, 900, an
in 1884 at nothing -
| MI u +. buusoH Ouc pToSlu cnI u III
| Consumers Gas, Fuel and Light company
orsanized not long since on the sou tn 81 le
was sworn ami testified concerning the valu
Of the cornpany's property. He stated
effect that the property, according to h
estimate, was worth 1881, $50. The stoc
was worth nothing, except for the purpos
of organization. There were 81, 900, 900 c
first-moTtgage bonds issued to pay for th
construction of the works, and $3.50, 900 {
second mortgage bonds, negotiated wit
city banks later. All these bonds drew
per cent. interest, which had been paid S
far. No dividend had ever been paid on tt
stock.
MIR. Il. A. Childs, the attorney for th
company, was sworn. He said the stoc
was owned by about $50 persons and We
not worth near as much as the amount of il
bonded debt.
Mr. Charles d. Smith, attorney for Il
Peoples Gaslight company, testified: "Tl
capital stock of the company is nominal
81 000, 900 ] have been told that it h;
never paid dividend. The bonded debt
81. 600, 600, which draws per cent interes
| believe this interest has been paid regT
IGrly The stock is not worth much.
have known of some of it change hant
within u year at 5 or 6 cents on the dollar
Mr. Smith said the principal officers serve
without salary and the Offices of the COT
pany were economically conducted.
Tuesday one or two other witnesses wei
examined, their testimony with reference
the corporations with which they were co
nected the Traders Insurance company an
Ind the Western Fire Insurance compan
being similar in tenor TO that of MesSr
Judson and Smith.
The committee then adjourned, subject
, the call of the chairman in Springfield I'll
senator said privately, however, that tt
committee would return to Chicago at son
future time and resume its labors.