The sun., 1899-05-08
- ra1IAnoS or FRANCHISES.

a the gas war ana 'he p"linoh' W ophu
s2O.OOO.OOO Philippine indemnity.
o. n n downward movement. which. with
S".,nations. continued till the end OF the week.
uU rhich the immense oversuoscriptlon to
NV an' ew S7j.OuO.OOO copper company on
Wv ..,, day failed TO cheek. Indeed. THIS SUB
ln.' ',, ion was not followed by the expected rise
w., ,ri,, # the stock. and 1t looks, now. as
u n% " .upsc5bers for it would have consid-
w. amount Of 1t left on their hands. Alto
eI, e,s thc prospect OF continuance of high
E" "a not 50 good as IL has been.
P-. Franchise Tax bill has not yet been
Ly the Governor. and 1t Is, therefore.
F" p,n law. The Governor will give Its op-
NAN hearing upon 1t next Thursday. but
vofthc message he scEt to the Legisla-
,roiug its passage. his approving II is not
MI The assessments ior tax purposes
scity. for the current year. are. however.
,,ot,d and closed. SO that tho new law will
~ ". ,roct them. but in the rest OF the State tho
',,.sp,rnts are not made up until Aug. j. and
~, will Apply. Any defects in IT. legal or
"..,,,col will thus be discovered before next
ps,.r and measures can then be taken to
N.redy them. Hints have been thrown out
The law will be contested in the courts as
s..onstit,,, ,onal. but upon what grounds does
w., orpear, aud. presumably. none exist
Tho discussions in the newspapers. both edi-
,,olv and in the shape OF personal inter-
,,r. Of the probable financial results OF the
w, royeal a great confusion OF ideas on the
'"n,s,t md ignorance OF the facts relating to
!. C,rnorations not mentioned in the bill. as.
". example, ferry companies. have been in
,,,st in estimating the revenue 1t will yield.
,,d /, has been asserted by some that 1t will
IA 10 the taxable value OF the real estate
s,no,ed within this city the grossly exaR-
.,,,,sd amount OF $1,000. 100000. On the
'tsr hand. the officers and counsel Of some OF
,ta .,re.t and elevated railroad companies are
,.,or,ad as con,ending that. inasmuch as the
,srrhises possessed by these companies are
,l,.ody taxed or have been paid for. in one
r,v or another they are exempt from the new
,,r,,lon. and various other opinions equally
rr.oupd have been expressed
The general principle, that fralehise for
,,arstlng a railroad upon and over public
highway. or for laying and maintaining be-
r4ath its surface pipes for the conveyance OF
"a. steam and electricity, Is property that has
money value and is therefore subject to
t,uatlon like other property. is too clear to be
d.puted The Metropolitan Street Railroad
Conpany for example. pays. to their original
rap,ees. for tho franchises OF its lines in
Roadway aud elsewhere an annual sum OF
Sj0OUOO equal to- per cent. upon principal
| otS.AOOO 900. and the Brooklyn Rapid Transit
Company paws for the franchises OF the old
prooklyn City Railroad Company S1.200.00O
year. or 3 per cent. on S24 100000. besides
having recently bought the franchises OF the
Nassau Electric Railroad Company for over
$1,000 COO in cash and stock. No similar pur-
rbsses have fixed the value of the franchises
enjoyed by tho gas companies. steam com
tsDies and electric lighting companies. but
they must have some. since without them
The companies could not carry on their busi-
ness. Gas. indeed. might be compressed. and
te distributed. like petroleum. in tanks and
barrels and electricity might be delivered by
means OF storage batteries. but pipes and sub
WAYS are much cheaper and moro convenient.
tnd for steam heating and telegraphic pur-
poses Indispensable. That the privilege to lay
such conduits in the public highways should.
therefore. be taxed is only reasonable. The
4 value to be placed upon it for taxation pur
| poses is. however. another matter.
4 The rule has been adopted in Massachusetts
1 aud New Jersey Of fixing the assessabe value
4 oI,hp franchises We are discussing. by taking
\
wmIanies holding them. adding to it the
nnpanies debts. and deductng from the
| p,a the assessed value otthe companies prop
I ,ryother than their franchises. The residue Is
Bslmed to be the value OF the franchises. and
assessed at the same ratio as other property.
4 This Is the rule advocated by Senator Ford. the
il'hOr OF the bill now before the Governor. and
eythe Tax Commissioners OF this city. Apply
D., Al.
Metropolitan Street Railroad Company. its
nHt4l OF s4O.UOoOOO. at a market price OF.
nI ?iO, would be valued at S96OOO. 900 add
Er 70 which SJO.0OO.OOO for its debts would
E'duce total Of 100000. and deducting.
,S0,OOJ.UOO for the assessed value OF its
erproperty would leave for the value OF its
a. Aises SlOO.OOO.OOO. These figures are
approximately correct. but they are sui
'uty so to prove that the market price
Il ,ompany's stock is not a true guide to the
Nae OF its franchises. 1t includes the public
s' ate Of the ability OF the company's man
.Ge its future prospects, and the certainty Of
US ScontnunG TO pay dividends. its franchises
'einf only one Of the clements taken into con-
sderatlon How fuctuating. too. is the favor
which the public holds stock. the ups and
Owns OF the market abundantly testify. Con-
lbhtated Gas. for example. is. Just now. de-
p'essed because OF the fear that its war with
.Na!sas companies may permanently reduce
" "earnlngs year or so ago. It was In de-
rhnc at % points above its present level. on
exaggerated reports Of its prospects. the differ.
ece' calculated on its S4O.OOO.0O0 capital. rep
,F'Nntlng s2O.O0O,OOO. while tho value OF its
Ha'th!ses has not changed in the least.
n 'naeed' Their" arc cases in which the stock OF
~" 'ora'ion having no franchise at ALL except
VIZ ahchlse to be corporation. which can be
O"alned by any half dozen men at trifling ex-
.'aS sells In the market at q rate far above
wat OF the tangible property which IL repre-
"aF' chemical Bank stock. for example. con-
'S"Ls oi 5000 shares of 500 each, sells at
aNe than $4,000 per share; although the en-
Wv assets OF the institution would not yield. on
ssaNlson. moro than about s., 900 per share.
ave other s2,b)O per share. or ST.. 1000. 900 alto
.Snet' Is pa!i for an earning power aud good
n '"'cFea'ei by long course Of able manage
y' y'u' ana liberal dealing. The stock OF the
.'oonaI ity Bank, again. brings. in small lots
t''V per share or at the rate OF SlS. 600, ,OOC
" .n'% whole capital Of 81 Sl.OOO.OOO. although. on
tn', s uahSs books. the stock Is worth only
.p per share. or S6.OOOOOO for the whole
\ ~p"a'' buyers ara willing to pay at
wy rate ot sl20OO0OO in the aggregate
Ne banks present earning power and
"F prospects To say that the Chemical
I'll mas franchise worth $1,000. 900, and
'a'ipnal City Bank one worth 1000 900
fnlt ,..l..,