The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-11-25
Leadsall North Carolina DaiesimNe amdC Circulation

citation, is the value of that intangible
thing called franchise and which most
towns and States also, are too prone to
give away for the asking.
In the recent edition of "The Theory
and Practice of Taxation, by Mr.. David
A. Wells, it is very plainly stated that
1.-The recognition of franchises, a species
of property as invisible and intangible as
the soul in q mans body, as a proper OBJ
iect for taxation is now regarded by
many as beyond any dispute. 1t is pc
cuiarly appropriate as a source of reve-
nue. for the exclusive use of the State,
inasmuch as the grant of franchises en-
anates from the State in it's sovereign ca
pacity." Mr.. Wells further illustrates by
quoting from decisions of the Supreme
Court of the United States which very
forcibly uphold the right to tax corporate
franchises. The great difficulty in apply
ing this tax is on account OF the lack of
any we'll defined and well settled principle
of appraisal. If this appraisal was made
based upon the value which the public
places upon the property, as evidenced by
the market value of its capital stock
certificates of Indebtedness, bonds or any
other securities the value of which was
predicated upon the earning capacity OF
the property the duty would be an easy
one. If the life of the franchise was linn
tied to a certain definite number of years
as it should be, the present value of the
property could be easily determined by
calculation based upon an estimate
of the average yearly profits for number
of years. During the last General AS
sembly an effort was made to adopt the
method in use in a number of States in
regard to railroads. of levying a gradu-
ated tax on their gross earnings. This
tax of course was not intended to affect
the general property tax of the railroads,
which they together with every other
citizen of the State, whether individual
or corporate, should pay. But it was of
the nature of a license taxa tax upon
the capitalization of the right to use the
streets of city, of the authority to take
property under the right of eminent do
main, or any other specific right or priv
ilege granted by the State. OF these
methods one or the other ought surely
to be adopted, That it will be accom-
plished without strenuous opposition is
hardly to be expected The ''line of least
resistance" along which our tax laws have
been framed is not the line formed by
the railroads and other public corpora
tions, but it is the line composed of the
small property owner who cannot afford
to take the action necessary to relieve
himself of his burden.
If these corporations loyalty accepted
! the yoke of the law, if they would cease
their inference in political matters, their
applications 10 Federal judges to nulli-
fly State laws by njunctions, when the
matters in controversy ought to be and
could be equitably adjusted by our own
courts, a great amount of unreasonable
opposition would be averted.
But when the question comes up again
we will have the usual stock arguments
about driving capital from the State, con-
fiscation of property, anarchistic opposi-
ton to wealth, &C., giving no one credit
for an honest desire to justly arrive at
an equitable solution of a problem which
has vexed mankind since the secession
of the ten tribes of Israel disrupted the
Jewish monarchy.
NJ. S. WILLARD.
Wilmington, n c.. Nov. "a.