Rock Island Argus., 1897-02-02
STATE TAXATION
As Applied to Raising Revenue
from Corporations.
CAN MAKE EN- PAY THE FREIGHT"

CAN MAKE EN- PAY THE FREIGHT"
Supreme Court Decision ON the Nichols
Law In Ohio and Indiana, Sustaining the
Law-How It Works in Ohio In RaisinG
the Tax-Nati0nal Debt statcment-De-
ficit Of %. 900, 900 for January-House
and Senate Doin9s.
Washington. Feb. 1.-The supreme
court rendered a decision that is con-
sidered by constitutional lawyers of the
very highest Importance in that it ma
terially enlarges the power of states to
tax the property of corporations that
have heretofore avoided taxation by
claiming avoidance rights under the in
terstate commerce laws. The case de-
cided. or rather group of cases. came up
from the courts Of Indiana and Ohio,
and involved the validity of what is
known in the latter state as the Nichols
law.
How the Law ''Soaks" the Companies.
In brief, 1t authorizes and empowers
the tax commissioners to assess and col
lect taxes on franchises and q propor-
tionate share of the capital stock of
telegraph and express companies doing
business In the state. The Importance
of this law In q material way to express
companies may be understood when it
is stated that the tax commissioners of
Ohio raised the assessment on express
company property from $289, 900 to $4,-
249, 600. A similar advance in the as
sessment was made in Indiana and
Kentucky, where the same law was ON
the statute books.
Been Three Years in the Courts.
The cases were bitterly fought, and
finally after three years Of litigation
reached the supreme court. The decis-
ion Of the court yesterday sustains the
state laws and establishes a new prin-
ciple Of taxation which will be seized
upon by legislatures of many states
which are in need Of more funds, and
which have found no way to get at the
real value of property of corporations
within their limits. A very vigorous
dissenting opinion was given by JUS
tices Field, Brown, Strong and Harlan.
Can Tax Them Three Ways.
1t was shown that under the Ohio
state law, which was assailed by the
express companies. these companies are
real estate; second, upon their gross re-
ceipts on business done within the
state. and third, they are additionally
assessed by a state board. 1t was the
last assessment to wich the companies
took exception. The increased valua-
tion was arrived at by taking the mar
ket value of the entire capital stock Of
the express companies as the basis for
arriving at the true value in money Of
the company's property in Ohio. The
chief justice did not make his opinion
public, merely announcing that the de-
cision of the court below had been af-
firmed.
What the Dissenting Judges Say.
Justice White delivered the opinion Of
the dissenting justices, saying: "The
recognition of the right of taxation ex-
erted by the state of Ohio in these cases
must, If followed in other states, not
only reproduce the illegality and injus-
tice here shown, but greatly increase it;
as every new imposition will be q new
levy on property already taxed, and re-
suit in an additional burden on inter-
state commerce. If the principles by
which such results are brought about be
recognized as lawful under the consti-
tuition, not only will congress be de-
prived Of all power to protect the citi-
zens Of the respective states and the
states themselves from these conditions,
but 1t will also be rendered impotent to
devise any just and fair regulation to
prevent the interstate commerce clause
from being made shield for avoiding
taxation and to cause property engaged
in such commerce to be subjected to
just and uniform taxation on the part
of the several states"
Indiana Courts Sustained.
The chief justice also announced the
decision of the court in the cases involv-
ing the extent Of the taxing power as
applied to express companies in Indiana,
affirming the decision Of the state court
in each case and thus sustaining the
law. The two cases involve the validity
Of the state law of 1893 for the taxation of
telegraph. telephone, palace car. Sleep
ing car. dining car, express and fast
freight companies, which empowers the
state board of tax commissioners to as
sess taxation other than that Of a local
character. This law imposes a penalty
OF 80 per cent. upon those who do not
pay their taxes within the time speci-
fled. Justice Harlan and White dis
sented In the Western Union case on the
ground that the law was a denial Of
equal righta