The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-06-18
PUBLIC FRANCHISES.
Why They shO@Ida BE Taxed Like
Other Kinds of Property.

TO the Editor of tie, Globe:
The editorial and = article on public
franchises published on June 9, in the
Minneapolis Times would give a layman
the impression that there Is no law In
this state requiring the taxation of such
franchises, when owned by a corpora
ton; that only individuals, not cor
porations. amenable to taxation of
incorporeal franchises. Let such hy-
pcthes1s be accepted as the fact in
dorsed by the press, and the assessors
will be encouraged In assessing such fran
chises for a nominal value. or not at all.
as heretofore. The corporations in con-
troll of public utilities will be greatly
pleased to profit by such misconstruc-
ton of the law given publicity in daily
journals, without contradiction
LAWS OF NEW YORK
When Mr.. John Ford was last fall elect
ed state senator of New York he found
no law on the statute books of that state
requiring the taxation of public franz
ch1SeS; he was confronted with a decision
OF the highest tribunal in his state hold
ing public franchises exempt from taxa-
ton Senator Ford says that 1t was
to alleviate the manifest Injustice of ths
tax law to which a learned Justice caIIed
attention In decision rendered in the
court or appeals in the state of New York
that the bill to tax public franchises was
introduced in the New York Legislature
at its last session. Mr.. Ford has since
acquired national prominence through the
successful passage of a law in New York
declaring public franchises to be real es
tate for purposes of taxation The wide
publicity given to the passage of the New
I DIRK law leads people in other states TO
believe that the taxation of such FRAN
chlses Is a novelty, and that there is no
law, for instance, in Minnesota, requir-
a To- ffr.r, re ~
legislation is necessary to accomplish such
end, to which erroneous impression tho
owners OF public utilities are giving en-
enlargement. lest 1.-THE assessors NAV bv
force of public opinion enter the fran
chlses upon the tax books under the law
now in force - 49, -.
LAWS OF MINNESOTA
More than twenty years ago a law was
passed in this state providing for the
taxation of public franchises, whether
owned by private persons or CORPORA
tons Section 1850 of the present stat
utes Is applicable Ito corporations. and II
requires that the. officers of a corpora
ton, such as the street railway COM
pany, deliver to the. assessor a sworn
statement OF the amount of it's capital
stock, (a) the market or actual value
thereof, (b) the value. Of real and per-
sonal property, (cl that the value Of real
and personal PROPERTY shall be deducted
from the value of the capital stock, I'D
that the remainder shall be listed as
bonds, (e) that the real and personal
property shall be taxed separately co in
case of failure bysrthe corporation to
make such statement the assessor
shall make it., from the best information
he can obtain t3sf
SUPREME COURT OF MINNESOTA.
The wisdom of the Minnesota law is
manifest by the recent decision rendered
by our supEeme court, holding that the
provision Of the statute hereinbefore
quoted co4ers@thes taxation Off franchises
owned by street railways and other cor
porations; that additional legislation on
the subject is not rneGessarys,. that the
present statutory zprev1si6 n,sfs4.yth ex-
elusive method of taxing suche corpora.
lions owning public franchises Justfee3
Mitchell, in his opinion In that decision
says: @5'sfi-5'a@"@- t'-asf- s',f'
THE method provided for in said sec
ton 1880 is thepverye common, most equi-
table and efficient one of reaching the
franchises and other intangible property
for purposes of taxation through the
capital stock. = It is well settled
that these franchises, although neither
visible nor tangible, are property which
may be taxed the same as other proper
ty. Hence a very common method OF
taxing corpora tons is to list and assess
all their tangible property. real and per-
sonal, the same as the Ike property Of
other persons is listed and assessed, and
also list and assess sthe capital stock at
it's actual value, less the value of tangi-
BILE real and personal property otherwise
specifically listed land assessed This
system reaches every element of prop
erty owned by the corporation and at
the same time avoids double taxation"
Here we have decision Of the highest
judicial tribunal I'm. our state, upho1ding
the law in References. to taxation Of pub
tic franchises: the procedure outlined by
our statute for that9tpurpose is most
equita BILE and efficient
There are several corporations in this
state, notably In ST. Paul. Minneapolis
and Duluth, in control of exclusive public
utilities. deriving an Immense revenue,
without making but slight returns to the
municipalities from which they derive
their privileges. II this law were en-
forced "the results OF the operation Of
the same would be a revelation to the
people, and lessen they would not soon
forget in the art;of utilizing these re-
sources of revenue for public advantage.
instead OF permitting them to be used
exclusively for private gain
Valuation of franchises: Revenue to be
derived from such under the law in Ram
sey and Hennepin counties, No. /. The
Street Railways:
If said section 1885, as construed by the
supreme court of this state were COM
piled with only in one single instance, to
wit, by the street railways of the Twin
Cities, or the assessors in both counties
their assessment for the year 1895 would
be as follows:
May l. 1859
Ramsey County-St Paul City Railway
company, capital stock. $5,000.000. (a) Actu-
al value of So 900 shares capital stock IS
nl cal md T,rnu nrtx 70,
bonds" Granchise}. ss,sss, $50 Cd Rel
and personal property to be taxed sep
alton (estimated), 81 mills; taxes to be
paid testtmated). $112, 4e3. %.
Hennepin County, Minneapolis Street
Railway company, capital stock, IS. 0G0 900;
Minneapolis & Lyndale company. cap
ital stock, $685., GOO. "a Actual val
stoe 81 sa 6sSS shares saa capital
property to be deducted, s70O, 600. {c) To
be taxed as bonds" Gfranchise), s7,664.-
1870 cd Real and personal property to
be taxed separately like other property
Rate of taxation testimated), rs mills;
taxes to be paid (estlmated9. s191, 1904. 50.
KNOWN IN VAR STREET.
There is nothing stirling in the expo
sition of the value az the Twin City
stock of those street railways. The value
of the same Is mSstlS appreciated by
investors in Wall street stocks and bonds.
I'm general, it .may sbs stated that the
entire value of the, stoSk of such trans
portation companies fiss the measure of
the value of their respective franchises"
Modus operandiN Of CARRYING at the
value of franchis g. Twin city Rapid
Transit company cRntrAs4the street rail-
ways of the Twin Cities.
To fully undefStand the valuations
given in the feregpfng, statement it is
necessary to know that the Twin Citv