El Paso daily herald. (El Paso, Tex.) 1881-1901, 1898-08-01
Why The Shipper PAYS The Tax.

Why The Shipper Pays The Tax.
The Express Gazette. representing
the express interests of the country,
states as follows the question at issue
between the carriers and shippers:
When the war revenue bill was un-
der consideration in the United States
senate. the question of who should pay
the tax which the bill imposed upon
freight and express shipments was
fully discussed by the mem bers. with
the result that the provision for this
specific tax was so worded that the
solution of the question would even
tually be left to the practical Judgment
of the railroad and express companies.
The law merely provides that ''there
shall be duly attached and Cancelled to
each bill of lading. manifest, or other
memorandum, and to each duplicate
thereof, a stamp of the value of one
cent This can in no way be construed
to mean that it was the intent of con-
gress that the transportation companies
should bear the burden of the tax on
bills of lading and receipts.
Senator WOleott, of Colorado, on
May 28th, when this provision of the
bill was under discussion, said:
I'm the imposition of this tax. as in the i'm
position of Il tax upon every other trade and
business which we reached, it was the desire
of the committee as it must be the desire Of
the Senate, to raise money and not crush out
industries $. Whatever we may desire to do
in the way of legislation to crush out people
who are doing large business, or aggrega-
tions of capital which get together for the
transaction of the affairs of life, it is at least
proper to say that in this particular revenue
measure, the object OF which is to raise
money, we do not intend by its provisions to
strike at any industry to the extend of driv-
ing it out of business or hampering it in the
| transaction of its affairs or In any way to
prevent it from paying as large a revenue as
possible TO the government.
las no laws general in their application
work without specific injury to certain in
dustrieS and to certain interests, / have to
say that | think the committee has made
one serious mistake in the imposition of the
heavy tax upon express companies as includ-
ed 10 this general section of the bill, for,
curiously enough, an accurate statement of
the packages carried by the express COM
panies OF the United States are l6O OOO, 900, and
taking the railroads which carry their own
express matter and there are several such
railroads, the express packages carried up
on the express lines of this country aggre-
gate about $50, 0O,OOO or almost as. many as
thelnumber of packages or shipments carried
by all the railroads of the country put to-
Rether.
"a tax, therefore, upon the express COM
Danies to the extent of one cent upon pack
a-e would collect from those express COM
panies s1.SC0 900, or from the four principal
express companies Of the country $1,000. 600.
They are already taxed, and taxed heavily
often upon gross earnings in the different
states of the Union, Their total capitalize
ton is but S55. ,00n, and the tax which by
this single section is imposed upon express
n is a tay To
upon their capitalization, a tax which, it is
needless to say, the express companies can
not pay and continue their bus mess without
RAISING their prices.
After the passage of the law, the ex-
ecutive officers of the various express
companies held meeting in New York
and thoroughly canvassed the situa-
ton. Careful computations showed
that in the case of the principal COM
panies this new tax would amount to 3
per cent upon their com bined capital.
An announcement was thereupon made
That the companies had decided that
the payment of the tax by them would
take too large a proportion of their
entire net revenue. Two propositions
were considered: One, to Increase the
rates to an amount which would make
good the expense of the tax; or, second,
% add the tax directly to the existing
rates.
Under the contracts with railroad
companies, the express companies are
aol1ged to pay u certain percentage,
varying from 40 to 80 per cent. of thei.
gross receipts as compensation for ia
cllltles upon the various roads. The
adoption OF the first of these measures
would have pecessitated an increase in
the rates of the express companies to
sum nearly double the amount of the
most feasible plan was the adoption of
the rule that only the exact amount of
the tax should be collected from the
shipper.
Notwitb landing the soundness of
this reasoning many merchants saw fit
to protest against its "iniquity,'' and
appealed to the internal revenue COM
missioner for a ruling and he has in
all instances replied that: Express
and transportation companies must
affix stamps to bills of lading.'' This
s just what the express companies
have all along conceded, and are will
log to perform. Commissioner Scott
did not say that the companies must
pay the tax, but merely held them re-
spOnsible for the affixing of the
stamps.
Thereupon the merchants associa-
tions in some of the cities took I'D the
cudgel and threatened legal proceed
ings. Feeling satisfied with the legal
ity of their stand, the express com
panies willingly agreed to have the
matter tested in the courts. After a
conference with the merchants asso-
citation of New y ork City, it was agreed
that New York merchants send press
kilograms announcing that test case
will be made there, and advising the
suspension of legal action elsewhere
pending final decision of the New
York case, and also advising shippers,
protest.
This is the present status of affairs.
and eXpress-men and the public will
await with interest the decision in the
New York test case.