The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-10-02
IppBArsrSG THE FRANCBISEs.

have restricted tno VOlumo OF uehllnkb on h'
sales. which on Monday wore 453.00O shares.
dyiniled on Thursday to 100000 shares
Many operators. too. must have been deferred
from engaging in new transactions by the high
rates OF interest for money. caused both by the
shrinkage Of bank reserves and by tho prop
arations for October interest and dividend ais
bursements The indications for this week
are that these disbursements. aided oy
,ackened de nand TOR currency in the aErlsul-
tural sections. and by i'm ports OF gold no" on
her way. will mitigate thu severity OF inc
money pinch. and. so far as that element !"
concerned. will tend to produce rselln prices
what effect n breaking out OF war IN eou'h
Africa may have. IL vet TO he seen
Tho owpers OF the SOCKS OF street railroad
sompapies. elevated railroad companies. gas
companies, and other corporations enjoying
publio franchises in this state, are very prop
erlv solIcitous to learn what will be the fhte OF
their propery under the new Franchise Tax
not which will 60 into operation next year.
The State Board Of Assessors, to which the act
commits the duty OF fixing In advance for taxa
ton purposes the value OF these franchises. has
not vet got to work. and though rumors OF its
intended action are In circulation they are pre-
mature IL not untounded. The first step tho
Board has to take 10 to procure from the COM
ranes owning the franchises the information
necessary to enable it to proceed intelligently.
Tho demand for this Information has not yet
been made though it will be made. probably,
IN the course OF the present week.
Atsr the needed facts have been obtained
thu crucial question will be: BY what rule and
uron what prlncpl. shall the Board appralse
the value OF the franchises? Senator Ford. the
author 81 the original Franchise Tax act con-
tend. for the rule followed in Massachusetts
and several other States. He would take at it's
market value the entire stock capital OF each
company owning a franchise. add its debts.
and deduct from the total amount the value OF
the company's property. other than its fran
chise Tn. difference would be the taxa bio value
OF the franchise For example. the entire capt.
tai stock OF the Metropolitan Street Railway
Company Of this 'sity il worth in the market.
say 5000. 900: it, debts. including lease OBJ
legations are. say. $50, 100000. making a total
OF S15o0OO.OO0. Deducting. say. $50 100000
for the value OF its tracks. mower houses and
equipment. leaves S10O.000.00O to represent
the value OF It's franchise. the tax which
would be at this years rate 81, 4S0. 900.
These CURES are not strictly correct but they
are near enough to illustrate the praotica
application OF the rule advocated by Senator
Ford The rule might not work out SO start
ling result in all cases. but In that OF the
Brooklyn Rapid Transit Company. It would
pretty nearly do 40. and would virtually con-
1ScAte inc property OF tnht nndny rs well as
that OF the Metropolitan Railway. 1t Is not to
be expected that the Board OF Assessors will
consent to this. Besides. they would have great
difficulty In dstermining what vnlue TO take "a
the market value of stocks which huctuate so
widely as do those OF most OF the companies
they are called upon to deal with. Within q
year Metropolitan Street Railway stock has
been as high as go and as low as 1853; Brook
lyn Rapid Transit has been down to 80 and up
to 1877; Con solidated Gas has been at one time
as high as 220. and at another es low as 1888;
and the like has happened "a other instances.
Obviously. the bittrr's. enemies OF franchise
owning corporations woul not desire to go TO
the l-aEh required by Senator Ford's ruls:
and. as soon as tho consequences OF applying
1t were seen. public opinion would condemn II.
To franc satisfactory substitute for Il is. how
aver not easy Franchises as such, arc not
bought and sold every day in tho market. like
wheat. cotton and other commodities in gem
aral uss. They are rarely offered and the com
pettors for th-m are few. Even for real estate
In localities whore Few transactions take place,
an appraisement is largely matter o. guess
work. as our cty's tax books show. Not only
present values have to be considered. but fu-
ture prospects,. A lot without any building on
Il NAV be- worth more than one with building
which brings in a good rental. and one piece OF
property may bring. under peculiar con ditions.
fancy price, far above what 1t would be worth
San investment. In the same way. a franchise
may be worth more. at one tmo and under
certain conditions. than it 10 at another time
and under other conditions
method OF apprasing franchises which 10
said to be- favored both by their owners and by
the Board OF Assessors. 10 to take as a basis
the revenue the tranch ses yield At first sight
this method seems to be lust and proper The
worth OF any investment IL usually measured