The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1891-06-03
A Great Field for the "Journal's'
Lawyer.

Lawyer.
The charge that the new tar law reduces the
tax OF corporations is made out of whole cloth.
II increases the taxes Of corporations very mate
rally. Under the new law they will Day more
money into the public treasury than they have
ever paid before. They will be taxed, for the
first time, on their NEUTRALITY-SUSPICIOUS..
The new law does provide that franchises
shall be taxed, but that cannot affect ex-
isting franchises The idea that a tax law
could operate on franchises already grant
ed is PECULIARLY brilliant. THE SENTINEL
doesn't know much more law than GREEN
SMITH.-Jotundl.
Where did the Journal obtain the brill
liant idea" that an act taxing franchises is
ex post facto law7 This state law library
does not contain a report, state or federal,
in which a decision can be found to
sustain the position the Journal has taken,
and certainly no reputable lawyer in
the city would risk his reputation by
maintaining that "a tax law could not
operate on franchises already granted"
except when the charter expressly ex-
empted the franchise from taxation.
"Desty on Taxation" the standard
authority on that subject, defines fran
chise thus:
The franchise of corporation is deemed
personal property and is taxable as such,
but it is not tax on property but on the
privilege of carrying on the business. 1t
is personal tax to be assessed at the
place where the business is carried on.
The supreme court of Illinois held that
franchise of a corporation is property
and has value capable of being esti-
mated, and Is taxed, but under the con-
stitution, is required to be taxed in
some appropriate mode" The U. S.
courts have also repeatedly decided that a
franchise is personal property.
The courts OF several states and the U. S.
courts have also decided that for the pur-
pose of police regulation, to raise rev.
enue to support the government, the
legislature has the power to tax any spec
flied class of property within it's jurisdic-
ton, and the mere fact that property ex-
listed prior to the passage OF the act does not
prevent the legislature from taxing the
same.
The courts having invariably held that
franchises are personal property, law
taxing them is not ex post factO.
'Desty on Taxation" saws:
The taxing power is inherent in every
sovereignty, and there can be no pre-
sumption in favor of its REIMBURSEMENT
surrender, or abandonment. 1t
is never presumed to be relinquished un-
less the intention to relinquish is de-
clared in clear. unsmbiguous terms. 1t
can never be presumed to be abandoned
or surrendered except by clear words and
for what is deemed at the time by the
lswmaking power an adequate considera-
ton. The surrender cannot be extended
by implication.
Hundreds of decisions could be cited
from the federal and state reports in cases
arising from the taxation of franchises,
but, strange to say, not one corporation
ever raised the issue that "a tax law could
not operate on franchises already
granted"
In 1871 the state OF Nevada taxed the
franchise of the Central Pacific railroad
company. The company refused to pay
its tax because it derived its franchise
from the national government The
supreme court of Nevada decided that
the taxes must be paid. Estate VS.. Cen
trail Pacific railroad company, 10 Nevada
A. This decision was based upon the
opinion of the U. s. circuit court for Cal
ifornia in Huntington vs.. Central
Pacific railroad company, Sawyer
sos. The tax law of Nevada which
taxed the franchise of the Central Pacific
was enacted long after that corporation Sc
cured its franchise from congress, yet its
abe lawyers never raised the point that
the tax law could not affect existing fran
chises. II was unfortunate for HUNTING
TON, STANFORD & Co. that the Journals
constitutional lawyer had not yet discov-
cred that tax law could not affect exist
ing franchises. HUNTINGTON, STANFORD.
CROKER & Co. are still paying taxes in
Nevada on their franchises notvithstand-
ing that the tax law of that state was
passed long after they obtained them.
Here is a chance for the Journals con-
stitutional lawyer. Heneed not stop with
the Central Pacific. There are thousands
of corporations in Pennsylvania, New
York and other states paving taxes an
nually upon franchises obtained prior to
the enactment of the laws authorizing
their assessment for purposes Of taxation.
There's millions in it" for the consti-
tutional lawyer of the Journal.