New-York tribune., 1899-05-06
THE FORD BILL AND EXISTING LAW.

4oxo,on nv tho Ford bill are apparently going
TO try TO avoid any increased assessments oh
the plea that the bill really makes no cnange III
existing law 1t is declared that franchise u
use n public street for railway or other sucn
nurpose always has been real estate, ana lnaC
the Ford bill simply Incorporates statement VI
the existing law in the statute therefore 1t
viii be said that undee the new law no other
taxation than that now permitted VIII ne poSs'-
BILE The corporations which claim interests Ill
tho streets as vested rights declare 'ha'' vi
course. that interest is real property that 1t
should he taxed and has been taxed ana tha''
excont for pOssibly correcting laxty on the part
% ocsessors the Ford bill will make no dlHer-
ence whatever. Rails and gas pipes are worth
,oss ~ TORN ont of street; 1t Is only the iran
obiso that gives them value as plant. ana as
.ho nlont is taxed the franchise is taxed. Inc
I'D hill only states In terms the nature OF that
+oxotion but does not create II, and so may ne
treotod as n practical nullity by the assessors
This construction, II we'll taken would lndeeu
sor,.o tic nurnose and allow the corporations 10
continue 70 use public property without paying
.oxoS On tho actual value of that occupancy.
r. +bo Ford hill does not make radical change
in the law. the expectation Of any great reform
, 90 largo increase Of the taxable value or
,-onertv in this city is without foundation In
tho+ cose assessments In the old way might De
q tride more rigid, but no increase OF moment
,conld be made by the assessors NevertheieSS
we do not think either the assessors or the cor
norations would be wise in regarding the ora
hin as merely a command TO do what is already
done: for in fact it is a command to do what IL
NOT now done. and what the Court of Appeals
ha
rant of an express statute, exactly such as 'iio
Ford bill will he after it Is signed.
II is true that many years ago franchises were
taxed for local purposes. In connection WI"
this # is necessary TO keep clearly in mind inc
difference between local and state taAa'ion'
The State corporation tax levied by the Con'rol,
Ter has nothing whatever to do win the locai
assessment OF property 1t is also necessary u
distinguish between two sorts OF franchises-
that which is merely n permission 10 TRANSACT
certain kinds Of business and that Whlch con-
fers a grant Of public property Tor private use
! The Ford bill applies solely to the assessment
of the second sort of franchise by the local as
! SCISSORS and that has not been possible TOT SOME
time under the law laid down by the court
! of Anneals Before the decision in the case ol
the People OK rel Union Trust Company VS..
! Coleman II had been the rule where shares OF
! stock sold above par to treat that fact as con
clusive evidence that the capital stock had no'
been impaired. and in assessing the corporation
for norsonalty TO deduct only It's real estate
stocks Of other corporations held by 1t ana STOCK
~ tba cornoration In question held by charities
o.o Tbus the value Of the franchise was really
Included in the assessment and in fact, though
NOT in name. was taxed But that decision
r,orked q revolution in methods Of assessments
and little later. in the case of the People eN
rel Manhattan Railway Company vs. Barker
tho doctrine was carried further and the iran
chises of n street railway company were held
EXEMPT from local taxation. That, up to the
prescnt time IS the law of this State. How ap'
solutelv It is the law. and how clearly the need
of some such amendment AS that or the Foru
bill has been recognized, is shown by suDSe-
ouent court opinions on tax questions.
pcrhaps no Judge now on our State bench mas
riven more attention to taxation than Justice
Cullen In his opinion in the Brooklyn Chy
Railroad Company case, to the effect that street
railroad franchises are not taxable locally ne
saws: "It is therefore now settled law that cor
"porations have two classes Of properly, one
"suhiect TO local taxation and the other wholly
"ovon,nt from f. This being the law.
"tbere should no longer be any attempt to avoid
at or 10 tax property that is exempt. If the
"IoU, is inst every one should favor 1t; If II he
"uniust the only remedy is by application TO
"the Legislature to alter IT, for it is unquestion
"ably within the power OF the Legislature TO
"subiect this character of property to the same
"pubnc burdens which other property within
"the State has TO bear. burden which for over
forty years corporations have borne without
"cavil or complaint and without suggestion that
''it was not imposed on them by law The
Ford bill simply reimpOses that old burden
which was lifted by the Court Of Appeals by
lust such an enactment as Justice Cullen fore
shadowed as remedy for the exemption. In
that same opinion Justice Cullen refers 10 n for
mer decision in the Coney Island and Brooklyn
railroad case in which. though. Of course. fol
Glowing the decision Of the court Of last resort,
"nnd holding the franchise of that company 10
'be exempt from assessment we suggested that
there might be marked distinction between
1.-The franchise TO construct and operate rail
way on n street which franchise Is absolute
property. independent Of the existence Of the
corporation, and other corporate franchises
"such as those OF trading companies. which are
merely TO be n corporation and to do business -
Thus we see that the Court was striving to find
some way which would not conflict with the
Court of Appeals Of making these great absolute
properties bear their share Of the public burden
and IL never dreamed that the payment of cor.
poration taxes 10 the State for the right 10 do
business could be set up as bar to local taxa.