The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-05-28
THE TAXATION OF FRANCHISES.

We published yesterday the significant
and truthful statement of Governor
Roosevelt that ''FT REQUIRES
GREATER PRESSURE TO GO FOR
ANYTHING LABELLED AN AT
TACK ON A CORPORATION THAN
TO DEFEND A CORPORATION"
There are members of the Legislature
of North CAROLINA who can testify to the
truthfulness of the Governors remark.
Mr.. Willard, of New Hanover, intro
duced bill to impose franchise tax
on the gross income of railroads, it was
approved by the finance committee,
passed the House, but failed in the
Senate. Some of the opponents of the
bill did so on the ground that the tax
ought not to be on the gross income
but on the net income, and others on
the ground that for the present it was
best first to secure Il fair increase of the
assessment of the property (which is
valued much too low before entering
upon the question of the franchise tax.
The final action taken. however, involved
the taxation of the franchise as well as
the property. Mr.. Willard and the
House wanted the Legislature to levy Il
specific tax. Mr.. Osborne and the Sen
ate wanted the Railroad Commission,
under instructions from the Legislature,
to embrace the franchise together with
the actual value of the property in the
assessment it is required to make of rail
road property on the first of June.
The News and Observer of March 8,
1899, discussed the method of taxation
imposed by the Legislature. 1t is timely
now. and is as follows:
When Senator Brown and Senator
Fields opened the discussion in favor Of
imposing the tax on the gross earnings
of railroads, they stated that at any
time the opponents of that method of
taxation would agree to fix the assess
ment Of railroad property on the basis
of eight per cent. earnings, they would
accept it in place of the gross income
tax. That proposition showed that the
advocates of that tax are not welded to
any system, their only object being to
have railroads pay their just proportion
of the burdnes of government. While
the Senate did not agree to fix the as
sessment.
Mr.. Osborne, chairman of the Finance
committee said that of he were on the
Corporation Commission he would levy
as much additional tax as would be de-
rived from the gross. income tax,
and in answer to question he
said that sections 80 and 60 wo.ld be
regarded as mandatory-''as alb Nlute
instructions"--to the Commission in
crease the assessment. When Sci er
Fields declared that railroad prop y
is not taxed in proportion to other p. D.
erty" Senator Osborne said. Il agree
with you," and argued that the failure
was due to the Railroad Commission.
TO the SAME effect spoke all the other
opponents in the Senate, thus giving
absolute instructions" to the Corpora
ton Commission to increase the assess
ment next June. leaving it to the Com
missioners to fix the value according
to the following sections, adopted on
motion OF Senator Travis:
Section 50. That for the purpose of
raising revenue and equaliZing taxation
the Railroad Commission or any body
succeeding to their powers are hereby
required and directed, as soon as prac-
ticable. and in time for the levy of 1899
to revise the assessments for taxation of
the entire railroad property of the State
and in doing SO they should take into
consideration the value of the franchise
the gross earnings and the net income
of each road"
Section 60. That said assessors shall
increase the assessments, where such
increase is justified, as will make each
part and parcel of railroad property bear
its fair proportion of the burden of tax
alton"
The speeches and these sections. ac-
cofding to Mr.. Osborne are mandatory"
on the Commissioners to increase the
assessment.
The sentiment in the House was even
more strongly expressed IN favo; of
having railroads to pay fair proportion
of the expense of government. The
original bill imposing tax on incomes
passed the House, and if there had been
another week of the session it is al.
together probable that it would Erve
insisted upon the tax. which dead loch
would probably have resulted in assess
ing the railroads for taxation on the
basis of six or eight per cent. earnings.
As it was the amendment from the Sen
ate was only concurred in by Il small
majority.
Judge Connor and Hon. Lee s. Over
man, who may truly be called the two