The Sauk Centre herald., 1899-01-05

alton, or on that portion OF the capital
engaged in business in this state, as is the
law in New York. Either course is valid,
and has been sanctioned by the courts of
of last resort, both state and federal
Tax on Foreign Corporations.
In addition to this, many of our sister
states levy and collect an annual fran
chiss tax upon corporations. Domestic
corporations and foreign corporations do
ing business in the state are alike subject
I to it, with such exceptions as the legisla-
tures have chosen to make. This, it seems
to me, is one of the most available as we'll
as legitimate sources that you can turn to
for revenue without burdening the indi-
vidual citizen. The tax, in itself is a just
ene both on economic grounds and from
the standpoint of public policy. The cor
porftfon permits the union of the capital
of several owners in way peculiar to that
form of organization. 1t gives the mass
solidarity and efficiency that can never
be attained in partnership. 1t is a well
recognized fact that there is an economic
advantage in the harmonious co-opera-
ton of numbers over individual effort
The business of the corporation is not in
terrdpted by the vicissitudes that befall
individuals. 1t enables the owner of linn
tied capital to participate in undertakings
That Would be beyond his reach but for
it's aid If business reverseS befall the cor
poratiop the shareholder is only liable for
it's losses to a limited degree. Numerous
other advantages might be referred to,
but this is enough to show that the state
confers special value when it grants a
corporate charter. The state comforting
these special powers and privileges, which
are constant and continuous in their
character, it is clearly just that an
Annual Return Should Be Rendered
for them. 1t is no sufficient answer to say
that the capital is taxed in the property in
which it is invested. The capital as such
would be liable to taxation in whatever
form. This principle cannot be better ex-
pressed than in the language of the Su-
preme Court of the United States (143 U.
s. 1861. The court says: a'The right and
privilege, or the franchise, as it may be
termed, of being corporation, is of great
value to it's members, and is considered as
property separate and distinct from the
property which the corporation may ac-
quire, According to the law of most of
the states, this franchise or privilege of
being corporation is deemed personal
property, and is subject to separate taxa
tom" The state having conferred the
franchise-the special value-is entitled to
the taxes imposed. 1t is one of the easiest
taxes to collect; practically self enforcing
If domestic corporation refuses to pay
such refusal can be made cause of the for
feiture of the charter. In case of the for
eign corporations, they can be denied the
process of our courts. This is the law in
New York. What has been said with ref
erence to domestic corporations applies
with greater force to the numerous foreign
corporations doing a large and lucrative
bpsifess in this state, such as the various
machine companies, the loan companies
the sarious trusts, and mining companies
in the northern part of the state.
Express, Telegraph and Other Taxation.
Referring to express, telegraph, tele-
phone and sleeping car companies, the
governor says that in his opinion the tax
of per cent upon gross earnings on bust
ness originating and ending within the
state is grossly Inadequate, besides being
liable to abuse. Railroad companies pay
per cent of gross earnings including in
terstate business. The tax, he says,
p-hether it be per cent or greater rate
should be computed upon the valuation
of the corporations property employed in
business In the state.