The record-union., 1893-01-31
REASSESSMENT BILL.
FURTHER HEARING BEFORE THE
CORPORATIONS COMMITTEE.
Mr.. Morehouse Says Positively That
the Federal Franchise Was
Assessed.

The Committee on Corporations held
brief session yesterday afternoon and re-
sumed the taking of testimony in the re-
assessment bill.
L. c. Morehouse. member of the State
Board of Equalization since 1888, was the
first witness called, and in response to a
series of questions from Cross, Carpenter,
Seawell and others, made the following
statement: Il have been a member of
the State Board of Equalization since
January l, 1888, and during this time
have attended all important meetings of
the board. 1 have devoted much time to
the study of railway assessments under
both the old and new Constitution. Soon
after I became a member of the board
question arose as to whether the Federal
franchises granted certain roads i'll Cali
fornia should be set apart from other ele-
ments constituting taxable railroad prop
erty, and receive a separate and distinct
valuation.
This discussion arose because certain
members of the board came to the con-
clusion that State has no legal right to
tax franchise granted by the General
Government. L think that Secretary Mas
lin was the first to call the attention of the
members to the TACT that, should the rail
road company raise this point and get ia
vorable decision, then the whole ASSESS
ment would be void. Putting a separate
valuation and assessment on the franchise,
under the assumption that we were act
ing illegally in taxing it at all, would OBJ
viate complications which would be sure
to follow If the matter was pressed in the
courts, and the whole assessment invali-
dated by reason of the nullity attaching
itself to q single element-that of the
franchise.
Controller Dunn consulted Attorney
General Marshall in the matter" con
tinued MIR. Morehouse, land his opinion
was given in the presence of all members
of the board. Not thoroughly satisfied,
the members desired a written opinion,
and this was obtained from Delmas, Mar
shall, Terry, and others, eminent law
yers."
Senator Seawell here asked the witness
if in his opinion the assessment oftwentv-
two millions on the Central Pacific and
seventeen millions on the Southern Pa
cihc, in 1883, was excessive, and Mr.
Morehouse replied that he certainly did.
when compared with assessments on
other property in the State.
+. W. Masin, Clerk of the Board
Of Equalization from 1880 to April, 1891.
was called, and in the course OF his
testimony, said that at meeting held in
August, 1888, the Board decided to assess
the property as unit; that is, to include
the franchise with rolling stock, road
bed, etc
Witness always protested against this
measure, and held that the Federal fran
chise should be assessed separately.
Continuing, he said, Il held the same
opinion as MIR. Morehouse and considered
this the only safe course to pursue. Tor
the Supreme Court had already decided
against the position held by cer ain mem-
bers of the board, and the legal authori-
ties consulted on the subject, That the
assessment should be levied on the prop
erty as a unit.
81 called the attention of the board to
Maryland, one OF the many Supreme
Court decisions holding that State could
not tax franchise granted by the Gen
eral Government. Many warm discuss
ions We're held among the member of
board on this proposition. On one occa-
sion Attorney-General Marshall was
present, and gave his opinion to the
effect that the road should be taxed as a
whole.
"In 1888 the board decided that it had
no legal right to assess the Federal fran
chise, owing to United States Supreme
Court decision of the previous year. and
the assessment was accordingly reduced"
Senator Seaw ell asked the witness in
conclusion if he really thought that the
Federal franchise had been assessed.
MasIin replied that it had uneoubtedly
been assessed, and added that he did not
understand how any fair man, convers-