New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-06-05
THE NEW FRANCHISE LAW.
Mr. MERRILL DISCUSSES THE MEAS
URE's CONsTTTUTIONALITY.
CASES CITED TO PROVE ITS VALIDITY
OPPOSITION ARGUMENTS REFUTED-
PROBABLE RESULTS OF THE
PIIJ WHEN IN OPERATION.
pITL WHEN IN OPERATION.

among State officers. One feature OF H. 'he p''"-
able reduction OF taxation by its operation is just
now attracting attention. The State TAX COM
missioners. in their last annual report to the Leg
islature say that the total assessment OF real ana
personal property IN the State In l@S amounted 10
s. 10 s74650 of which $fl2,2S410 was the assess
ment Of real property and s75s59l.2io of personal
property.
IL think" said a State official to-day. that the
assessment Of franchises will increase the amount
Of assessed property by at least one-ten;h. That
means that local and State taxes would be re-
duced by one-tenth. II appropriations or puohc
money are not increased. There would be n corre-
spending reduction in State and local tax rates
A corporation lawyer was quoted In newspapers
yesterday as declaring that the Franchise Taxa
ton law was unconstitutional under Section OF
Article X of the Constitution which says:
All county officers whose election appointment
is not provided for by this Constitution shaIl pe
elected by the electors of the respective thS
or appointed by boards of SUPERVISORS or olne.r
county authorities. the Legislature sha o airScs
All city, town and village officers f whose his com
stiution shall be elected by the electors Of sHcn
thereof or appointed by such authorities thereof
the Legislature shall designate Ioi .',at nd;nt
ment is not provided for by this Constitution ana
all officers whose Offices may hereafter pe
by law shall be elected by me peopie' vi "ppo''0
as the Legislature may direct
VIEWS OF JOHN J. MERRILL.
John j. Merrill. who has been Corporation Tax
Clerk of the State Controller for several years
who is an expert taxation matters, ana VINO
aided in the preparation OF the Franchise Tax ACT
made some interesting comments to-day upon thls
citation of the Constitution against the franchise
Tax law The chief case cited" he said. that
of the People VS. Raymond. 81 New-York AN. Is
not applicable to the condition which Will exist
when the assessment Of franchises by the State
Tax Commissioners begins. In the case cited the
Governor, with the approval or the senate hdu
named a taxing officer to assume the exact func-
lions of a local board of assessors. That was in
disobedience TO the commands of Section ?. Article
X, OF the Constitution: for this taxing officer was
70 perform the essential functions in making.
equalizing correcting and delivering the assess
ment rolls which were already performed by Ward
assessors at the time the Constitution went into
effect The ward assessors could not be super
seeded for that purpose by any ofncer appointed oy
the Governor and the Senate
But the case now in question. the authority OF
the State Tax Commissioners to assess special
franchises is altogether different. 1t does not
correspond with the Raymond case to which anu
sion has been made for this reason; Hitherto
there has been assessment or special franchises
nor has there been any authority vested in any
local officer 10 a local franchise As no
such condition existed at the time of the adoption
OF the present Constitution, in 1894, there could
have been neither county, city, town or village OIL
GERS elected by the electors OF such political dvi-
sons 10 exercise the functions now given 10 the
State Board o. Tax Commissioners; nor can the
State Board q Tx Commissioners be held 10 be
the local officers Of any such political divisions"
Mr. Merrill looked up precedents in decisions OF
the Court OF Appeals taxation laws. and then
added: LAS the proceedings under the Franchise
Taxation law different from those which have
been taken heretofore by local boards OF assessors
under the General Taxation laws Of the State 1t
would seem as though the case Of the People ex
C{lrpa OF oil pat
Town Clerk etc. and others reported in the Sixty
ninth WORK &c., were quite to the point. JUS
tce Rapallo who has been considered one Of tho
abest turists of the State. held that the provision
OF the State Constitution declaring that municipal
officers and others whose election or appointment
Is not provided therein shall be elected. does not
prohibit the Legislature from appointing Commits
highway in a village by proceedings different from
those which could have been taken by Commits
State The Court held that the. Act of 1870,
Chapter 62S. creating avenue commissioners, was
under consideration. but constitutional and valid.
JUSTICE RAPALLO's DECISION.
In the discussion OF the question Justice Rapallo
said:
These Commissioners do not take the place OF
Commissioners Of Highways. but are appointed for
the special purpose Of executing n power which is
undoubtedly possessed by the Legislature Of widen
ing certain designated avenue from those which
could be taken by the Commissioners OF Highways
under the general laws of the state. The Com
missoners Of Highways still continue In office. and
the charge of the avenue thus widened devolves
upon them after the fulhlment Of the office Of the
Avenue Commissioners.
Mr. Merrill then said: at is thus plain from
Judge Rapallo's opinion. that the Legislature can
create new officers for duties. clotbe old
officers with duties that have not hitherto been
executed by any else. The local tax assessors
have never had power to assess the value OF fran
chises and therefore no power has been taken from
SCISSORS will still continue to exercise their old au-
thority"
Mr. Merrill is much interested in the effect OF the
new franchise taxation law having given n great
deal OF study to taxation affairs THE new Fran
chise Tax law" he said to-day, us without doubt
the most far-reaching taxation measure enacted
into law in the State Of NewYork in the last half
century. This Is true not so much because Of the
revenue which the State In It's various cities and
towns will derive as to its effect upon the entire
question Of taxation. In the past corporations
have without doubt expended large sums for legal
services to keep their property at low valuation
on the assessment books. There is ample evidence
that they have largely succeeded I'm the past In
keeping personal and intangible corporate property
from entering into taxable values. That they have
succeeded is probably due 10 the fact that there
has been no active combined and forceful opposi-
ton from the taxpayers subject TO taxation on
real estate. BY the enactment Of the Franchise
Tax law the mass OF real estate taxpayers have
awakened to perception OF the fact that there is
and has been for years great body OF valuable
property rights escaping taxation. These taxpayers
will not be contented now that the situation is
understood. until they have shifted least a part
OF the burden Of taxation from themselves to the
holders of Intangible and personal property Those
who pay largely on real estate viii insist that tho
its fun value those who are forced TO pay on the
full value of intangbles and personals will in like
manner. demand that real estate instead of beins
taxed now at 80. 80 20 per cent. be taxed or
its full value. and the result OF this contention
| must be that taxable values will finally be full
| values and real estate Will he relieved OF a large
| portion Of its present heavy and unjust burden.
| HARMONY AMONG TAXPAYERS.
Nor will this result be so disastrous It would
| at first appear. The great amount OF propert,
now escaping taxation will, when added TO the lis
| OF taxable values, largely reduce the rate OF taxa