The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1894-12-21
THE AUDITOR GENERALS
REPORT.

mort for the year enulng november
40. 1904, bears down somewhat upon
lodging corporations, and admits that
State taxes are haid to get under pre-
vailing rules and regulations. He
clearly illustrates how dividends are
kept down to avoid the States levy.
After saying that the finances Of the
Commonwealth are in healthy con-
dtlon in spite of the cunning of cor
porations he makes the valuable sug.
pestion that reform is necessary, and
that more equitable methods of en-
forcing the provisions of some of the
present tax laws should be adopted.
He says: The total receipts
during the year ending November 80
we're $Ia,S73.7S6.Sa, or $37S,o4Lo7
less than they were in 1898, which is
IN part accounted for by the fact that
in 1893 the receipts included $oaI,-
o66.,o received from Philadelphia
from the Bardsley defalcation.
"There remains in the State Treas
ury an apparent balance of $5,oI4,
o4a.IS. In this, however, there is
$1,273,52S.oo personal property tax
due the several counties of the State,
which leaves real balance of $3,-
So7,747.62. In pointing with pride
10 this healthy condition Of the treas
ury the Auditor General does not fail
to appreciate that it may prove mix
ed blessing by inviting applications
for its appropriation to purposes
neither necessary nor deserving. He
suggests that if considerable portion
of the balance can be applied to some
needed public use, whose benefits
would be enjoyed by the entire peo.
pie, without placing upon the Com
monwealth an annual charge therefore,
it would seem we'll that the existing
surplus should be so used.
Much regret is felt that the taxa
ton of capital stock of corporations,
limited partnership and joint stock
associations cannot be made under a
tax law that can be enforced, upon
reports made to the Auditor General,
and under a general rule of apphca
ton. The reports of corporations
continue to show discrepancies be-
tween large net earnings, profits, di-
vidends or surplus, and small actual
case value. An examination of each
concern would impose upon the
Auditor General and his Corporation
Clerk an amount of work which could
not be performed for want of time,
and would greatly retard the settle
ment of accounts. A fixed rule of
settlement of the tax on capital stock
is suggested as likely to produce more
satisfactory results.
An objection urged against the
Revenue act Of 1885," says General
Gregg, "was that corporations earn
ing dividends in excess of percentum
could, by placing large amounts of
their net earnings in their surplus or
sinking funds, keep down their divi-
dends and thereby reduce the millage
rate in determining the tax on their
capital stock and that corporations de-
claring dividends less than 6 percen-
tum could underestimate the cash
value of their stock" Commenting
on this view, he says: Without
strictly applying the principle that the
capital stock of corporation should
be appraised at its actual cash value,
not less than the average price which
said stock sold for during the year,
and not less than the price or value
indicated by net earnings, it is feared
that with corporations, in the case OF
which no sales of stock were made,
the defects of the act Of 1889 will not
have been corrected.
"There are upwards of seven thou,
sand FIVE hundred corporations and
limited partnerships and JOINT stock
associations making capital stock re-
ports to this department. Of these
probably one. haf do not report sales
of stock during the year. In view OF
these facts it is urged that the Legls,
lature so amend the present law OF
taxing capital stock that 1t snail DC
possible for the Auditor General to
determine the tax in each case, save
in exceptional ones, from reports
made to his department"
PRIVATE BANKERS AND BROKERS.
The Auditor General advocates a
radical change in the law relating to
the taxation of private bankers and
brokers upon their annual net earn
ings, and the law requiring that they
shall be assessed by the Mercantile
Appraiser according to the amount
of business done by them. He sug
gests that Section 10 of the act OF
June 7, 1870, be so amended as to
limit the application of the word
broker" in the act to those brokers
only who receive deposits OF money,
AS a reason for this ne says that
there are in all about a,ooobankers
and brokers rated by the Mercantile