New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-05-23

tiOn OF the 1dct tnat IL IL uoHe' o'iH "@'~'-
Is no legitimate basis for discomfort the Amer'-
can public is sure. sooner or later TO cease u
feel discomfort
The Legislature passed and there is now De
fore me. bin for the taxation of franchises oy
treating them as realty After watching the
nrosress Of this bill became convinced that
The opnosit.on to II was less to Its particular
features than to the general principle OF taxing
franchises In any way in other WORDS 1 became
convinced that any really effective measure OF
taxation aimed at franchises would be vlgor-
ously ooposed II, therefore. became OF u'hos'
importance to secure this year some statutory
enactment which would distinctly recognize the
principle which we seek to establish IowaFo
the end OF the session IT became evident tha'
the influence against the taxation or FRANCHISES
would be contented with nothing save the de-
feat of any measure OF substantial reiief anu
a measure Of less than substantial relief woulo
not accept Finally. II became evident tha' 'he
LEGISLATURE could pass only one bill and that
without amendment. ], therefore. sent IN spe-
cial message asking for the passage OF 'h's
bill. It was passed on the last day OF the SEES
sIon. II represents long stride In the rish'
direction. and one from which there must De no
retrogressioD
THE VALUE OF FRANCHISES
Nevertheless. 1t can be greatly bettered II
amended In two important particulars III 'S
essential principle. as that of taxing franchises
as realty, 1t is right and proper AFTER much
study of the question am convinced that i'll
this way we can come nearer TO DONG justice
than In any other which has as yet been pro-
uosed 1t is no new thing to treat FRANCHISES
as realty They are so treated IN Washpu'h
work on real property. and by Chahcehor Ne"''
Orty
row franchise cannot be taxed except by spe-
cial statute and as matter OF fact 'his eA'
,r.u.,, valuable species OF property is in very
many, II not in most. cases untaxeo OF 'aAeu
,.r below its value In comparison with other
Md. =, real estate Local franchises are
granted for various purposes and under vary
sne conditions: sometimes by special statute and
sometime, by the municipal authorities under
General statute The value Of the franchise, OF
course varies widely in different localities. de-
nending upon a variety OF circumstances. but
rreat mart OF its value is dependent upon the
ssn,e causes which operate to make other xmas
n, real estate more valuable in one locality thah
IN another The franchise is inseparapie from
the property OF the corporation IN the stree's'
whether this property consists OF poles pipes OF
tracks above the ground. under the grouho OF
on the ground. The right to lay railroad 'rach
and operate a railroad In puohc street oaH"0.
be separated or disassociated from the raliFoau
itself This is equally true OF the rlgnt u LAY
water and gas mains and the IKE Inc ia"
n,isa ts q necessary and inevitable element Oh
,aius and ia n proper subject Of consideration
IN determining the taxable value or the reai
property Of the corporation enjoying IT, Inc
right to occupy a street should not be ciasseu DIS
an Intangible something, distinct rom the o'nel
property Of the company. but should De tfea'e"
a. a necessary incident 10 the tangible prop
erty. and one TO be considered in measuring inc
.,a,rs a, the whole property The Nichols law
IN Ohio, which provides for the taxauon Oh GER
,.,r l,nds OF corporations such as telegraph
and telephone companies and the ike ooihs
business in the public streets. proceeds along
60. ,,rss and has In practice been found to
work admirably 1t is possible that further ex-
r.r;snce may enable US TO find some better
method OF taxing franchises, but with our pres
an, krow,edge II is certainly wisest to tax them
as realty. ga iii,
Under the bill before me the assessment VIII
nc levied nv the local authorities. This WOULD
result In many cases in dozen dlnerent se's
of local authorities assessing the value OF oil-
ferent parts Of the same franchise. IL is OH
every account far better that this assessment
should be delegated to the State authorities. VINO
will necessarily ascertain all the conditions al
,ect,ne the franchise, and obtain information
which will enable them to judge OF the value
of the franchise In the different localities IN
which II is exercised The Board of State Tax
Commissioners can coate the facts compare
conditions and determine values as result OF
n wider range of observation and experience
than can be obtained by the local officers, and
under them the system OF assessment will tend
70 produce justice. harmony and uniformity
This 10 the system adopted under the Nichols
Jaw. and 1t has worked we'll In practice
PRESENT HAPHAZARD TAXATION.
Furthermore the bill before me fails to take
account OF the fact that in a very unequal and
irregular way many corporations do already pay
q certain. though usually an utterly inadequate.
sum in taxes. Some pay nothing at all to the
local municipalities; but others pay sums vary
ing from l 10 per cent on their gross earn
1ngs. The amounts have been determined in
the most haphazard manner and bear no pro-
portion whatever TO the value Of the franchises
or to their earning capacity 1t Is obviously un-
Just when introducing a system under which
we believe that these franchises will for the
FIRST time be fully and fairly taxed according
20 their respective values not to allow for this
existing and inequitable taxation. Accordingly,
st should be provided that, from the sum as
sessed by he State authorities az the tax which
corporation must pay because Of Its local
franchise. there shall be deducted the amount
already annually paid ~ 1t TO the locality for
such franchise. In no other way is 1t possible
70 tax these corporations with uniformity and
equity 1t is contended by the advocates of the
bill that in reaching the value Of the franchise
under the new law the amount thus paid away
in taxes must be allowed for and deducted any
how; but II is not certain that this would be
done. and, in any event. the principle should be
Marriage is said to be an equal partnership. But