The free lance. (Fredericksburg, Va.) 1885-1926, 1899-05-11
New YOrks New Tax Law.
Baltimore Sun SAWS /:

National interest attaches 20 the
contest, now transferred from the Leg
islature to the courts of New York. over
what is known there as the Ford fran
chise tax bill.
1.-THE Legislature which recently ad-
iourned passed this bill by Overwhelm-
ing majorities in both branches, and 1t
is a remarkable fact that Mr. Thomas
O. Plat worked hard, though by his
usual silent and underground tactics. to
prevent this being done. Governor
Roosevelt worked equally hard. and in
his accustomed open and aboveboard
way, to have the bill passed Apart,
therefore, from the merits of the meas
ure itself. its passage by the Legislature,
which Mr.. Platt was supposed to own.
in spite of Mr. Platts desire to have it
defeated, is an occurrence that has large
national bearings. 1t seems to mark
the point Of separation between the pop
ular young Governor of the Empire
State and the veteran State boss of his
party. without whose assent and aid he
certainly could not have been nOmi-
mated, Notwithstanding the laurels Of
war which he won on San Juan Hill.
1T is already evident that Mr.. Plat
is very much disturbed over the pas
sage of the Ford bill after he had crack
ed his whip to the contrary. Mr.
Boardman, of the law firm of Tracy,
Boardman Il Platt-the junior member
of which is Senator Platt's son-has
come out with the strong declaration
that in his opinion 1.-THE city Of New
York will never receive one dollar Of
revenue from the Ford bill This, of
course, is more than he can be sure Of,
because the constitutionality of the
new tax law rests not with him. but
with the Court of Appeals. But it is a
significant utterance, highly indicative
Of the anger of Senator Platt. whose
wishes. rather than opinion of his son s
law IL pubAAN.
The Ford bills intention is very
clear Its purpose is to assess for taxa
tion the public franchises Of street rail-
roads and all other corporations that
enter, occupy and use the public streets.
The franchises thus intended 10 be tax
ed must be carefully distinguished from
the general franchises under which all
corporations do business. and which are
already subject TO a State tax Senator
Ford, the author Of this new and far
reaching tax law. defines its aim by
pointing TO the specific example of the
New York Central Railroad. All the
land and buildings actually owned by
that corporation and occupied by its
roadbeds are taxed now as real estate.
But when its trains leave its own prop
erty and travel over the public streets
Of New York. as they do, Of course. in
many places, they pay taxes on that
right of way. The Ford law treats this
valuable right Of way as real estate and
proposes to tax it as such.
In other words, the new law declares
that the privilege of using the public
streets is equivalent to the ownership Of
real estate. just as truly as is the road.
bed Of the corporation, and shall hence
forth be taxed as such. The bench of
the Empire State, as Court of Appeals
has already decided that such a privi-
lege is a right in perpetuity in the
streets. The determination of its value
can readily be made in the case of the
corporations that do all their business
on tracks laid in the streets by ascer-
tanning the market value of their stocks
and bonds, which are, in turn, fixed by
the net earnings of the roads. There
are other methods Of assessing the value
of such public franchises. Ex-Governor
Flower, who. though himself a director
aud large stakeholder in many corpora
tions that will have TO pay the new
Ford tax, yet favors it. is of opinion
that the gross income Of corporations is
the best, because the most definite,
basis of assessment He advocates that
method. with a graduated tax, to be
increased as the gross earnings increase.
Meantime the eminent counsel who
represent the corporations affected are
compiling their briefs for a grand pitch
ed battle in the courts, and are saying
that the new law will be declared UNI
constitutional The stakes to be fought
for are very great. If the law stands it
will add one thousand millions to the
taxable property Of the State, and the
treasury of the city of New York will
get new revenue estimated all the way
from fifteen to twenty-five millions a
year.
II the final decision sustains the law
1t will practically revoke and cancel all
the grants Of valuable street franchises
that have been made to trolley. gas and
telephone corporations in the city Of
New York without compensation to the
city. For, if the city can tax their
right of way, it can, by advancing the
rate of taxation, compel them to sur
render their privileges entirely or con-
tinue them on such new terms as it sees
fit to make. 1.-THE power to tax is the
power to destroy" as celebrated judi
cial ruling says.
The issue of this big battle in the
New York courts has double national
interest. 1t will certainly set an inn
portant precedent for tax legislation af-