The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-02-19

statements show that the cost OF original
construction was $40. s32 per mile. and It
is further sworn 10 that subsequent bet
terment made the total cost the road $50.
216 per mile, or total valuation Of s24.-
0s9,2e9. The court in his opinion init
mated that the road was worth S63, 900 per
mile. So the commission was enjoined
from enforcing rates OF it's own and had
20 take those agreeable 10 the attorneys
of the railroads. they contending that tho
valuation OF the railroad commission was
fiagrantly erroneous and the opinion OF
the court seems to have given color TO the
contention OF the roads.
Taxed on the basis provided In the tax
commissions bill the total value OF the
road mentioned. ascertained by the value
OF stock and bonds at the current selling
value on the first day Of January, would
be s1S.6ls,000 The sworn statement filed
In November, 1898, by an official of the
road, said II cost s24.099, 800. The rail-
road commission valued 1t. or estimated
the cost OF reproducing the road. at $685.
903. and It was judiclally intimated that
It was worth s2S, $4,000 and entitled TO
charge freight rate sufficient 10 pay
something to the owners on that valua-
ton.
This brings the discussion OF this mat
ter face TO face with the declaration OF
JuhllCt DIbNtT III HIS OpluiUh IN INT tect
OF Adams Express Company VS.. Ohio State
Auditor on rehearing TAX Commission
Report, p. 93-4) wherein ne declares;
Now, II Is cardinal rule that
should never be forgotten that what
ever property is worth for the pur-
poses Of income and sale II Is also
worth for purposes OF taxation
Substance OF right demands
that whatever be the real value OF any
- a.
by the State for the purposes OF taxa
ton, and this ought not to be evaded
by any mere confusion OF words.
Here l will leave off any further dis
cussion OF the question as to whether the
selling value OF railroads should be made
the basis OF taxation. like other property
or the estimated cost OF the reproduction
Of It, The matter has been too well settled
20 admit OF discussion further, as TO which
Is the farest or Just rule.
might add. however, that II the rail-
roads are willing to take the railroad
commissions valuation for purposes OF
taxation the legislature might pass
resolution instrucing the commission to
base freight rates on the same basis, Or
this might furnish good reason Tor the
election OF railroad commissioner
pledged 10 As rates on the valuation fiXed
by tho commission. because II the railroads
ton and the legislature declares 1t TO be
a correct basis. the railroad commissioners
n seems 10 me. would no JUSTIFIED In re-
ducing rates accordingly.
what do think Of the Morrow amend
ment? | think 1t is a very curious dehni-
tion OF credits, II not unconstitutional 1t
certainly would result in exempting the
creditor class from taxation almost en-
tirely
tain to taxation except credits secured by
lien upon real estate This first pro-
vision makes plain note OF hand prop
erty for taxation but a note secured by
mortgage on land would not be property
or subject 10 taxation under this amend
ment. II an unsecured note Is property
and secured note Is not then perhaps
the amendment in this respect is not
inconsistent But 1t might be difficult
note is not property. "All property In
this State shall be taxed" says
the constitution. How are you going to
make an unsecured note property and a
subject OF taxation and In the same sen
tence declare that a occurred note Is not
a credit that is subject to taxation? II
the amendment does not exempt mort
gage and vendors lien notes from taxa
ton then ! do not understand 1t.
Then the first provso in the amend
ment 10 the clause defining credits, says
that the person listing credits shall DO
allowed 10 deduct the amount he may be
owing to others. Under this provision
In our present law nearly all forms OF
commercial and intangible property in
this State escapes taxation. But ho pro-
vides that debts secured by lien on real
estate shall not he deducted from credits
Then II comes TO this II man has
credits that are subject to taxation and
owes debts which he has secured by u
lien upon real estate then ho must pay
taxes upon the value OF his credits but
can not deduct his debts because he has
made them sure OF payment by giving
lien upon land. Therefore, II two
merchants doing business side by side with
equal capital. with equal holdings In
credits, owing the same amount of money
A having a stock OF goods worth $4,000
I ana owning $4,000 OF credits which he had
/ hypotheoated as collateral to secure tn,
/ payment of $4,000 he owed to a bank would
render. ut full value the stock OF goods
at $4,000 aud no credits because his iu-
dehtcdness to the bank offset his credits
| But II with his $4,000 stock OF goods aud
! hts $4,000 of credits horrows $4,000 from u
/ loan company aud secures It's payment
1 ny lien upon land Therefore. under
/ Judge Morrows definition Of o taxable
! credit Il would have 20 reudor his $40. GOA
/ HiNth Ni HhohN anu MS NonUV notes ana
| he would have tn pay taxes on credits aud
/ \ would he exempted from paving taxes
/ upon The same species of property and
for no other reason than that they had
/ pledged different security for the money
! they had borrowed putting one third mora
/ OF the TAX burdens upon h than upou
/ 4. This is one Of tho inequalities in the
| tax system of this State that this very
/ legislature instructed the tax commission
TO correct
| But the second proviso says that every
! debt secured by a mortgage or lien upon
real estate shall bear It's proportIonatu
share Of the taxes agplnst such real
estate and that the man owing the debt
shall pay the taxes upon the land and
I be entitled TO an offset against the hclder
/ OF such debt when he comes to pay It.
This Is an effort 10 tax only the equity
+ interest in land which is pledged as secu.
rity for debt. But II will not work the
relief II seeks to bring 20 the man who
owes the debt because II requires hin,
7 10 pay all the taxes on the land. or upon
his equity interest and the debt he owes.
lie must rely on recovering the taxes he
pays on the mortgage when he pays the
interest or the principal He has alread,
contracted with the lender to keep ali
taxes on the land paid and to pay stipu.
lated sum and the interest on H. This
\ contract can not be impaired by this
dehnition OF credit. or, more properly
speaking, exemption OF credits from taxa
ton. The inevitable result, II the amend.