The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1901-11-23
HARD BLOW TO
CORPORATIONS
Decision Rendered Against Chi.
cagO Traction Companies.
CAPITAL STOCK TO BE TAXED
WILL PAY OVER $1,000, 900 INTO
THE CITY TREASURY.

Springfield. Ills, Nov. 22.-The ap-
plication of the Chicago Union Trac-
ton company and the Consolidated
Traction company for an injunction
restraining the state board of equal
ization from assessing the capital stock
of those companies for 1900 was denied
this afternoon by Judges Grosseup and
Humphrey, in the United States cir
cult court. The temporary injunction
issued by Judge Grosscup in Chicago
on Tuesday was dissolved.
Immediately after the decision was
announced assessments aggregating
$7J,000,000 and involving over 81 200, 600
in 1900 taxes were made by the board
of equalization as the fair value of
the capital stock of the traction COM
panies over and above the assessment
on their tangible property. The $75,-
O0O.000 valuation was in the place of
SSC0,000 valuation made last year as
representing the fair cash value of the
property assessed. The Teachers Fed
Grafton estimate was S125.000 000.
No written opinion in the case was
filed. Judge Grosscup stated orally at
length the reasons for the decision. ex-
=
would file written opinion.
Value of Capital Stock.
The method to be followed in deter
mining the value Of capital stock for
purposes of taxation was discussed by
Judge GrOsscup at length. As to
bonds, he said, the judgment of the
money lender might be reasonably safe,
but with capital stock it was different.
It would be grossly unfair to base the
assessment upon the stock value quot
ed on the stock exchange. These were
frequently If not generally determined
by circumstances quite distinct from
the real value of the stocks in ques-
ton.
He cited as an illustration the North
ern Pacific furry a few months ago.
There nobody would contend that the
real value of the stock exceeded par,
yet the quoted price reached 81. 900.
Nor had any court decided that the
equalization board must be governed
by the quotable market prices Of cap
ital stock.
Il was the decision of the supreme
court of Illinois In the franchise tax
case recently decided, he said. that
these prices merely must be taken
into consideration. It still remained
for the equalization board to exercise
its Judgment in determining the real
value of capita stock for purposes of
taxation.
Making of Assessment.
The bill in this case" he said in
conclusion, assumes that the board
viii not now exercise its independent
judicial function, but will confine it.
self to the mere arithmetic of adding
together the Indebtedness and stock
exchange quotations of the capital
stock. We are not at liberty to concur
in this assumption. We believe and
are bound to believe that the board
viii exercise its functions as contem-.
plated by the law. This would exclude
the supposed danger of gross discrep-
ancy and the supposed danger of over
valuation.
IF it transpires that the board Of
equalization attempts TO certify an as
sessed value, that in its effect would be
a fraud upon any taxpayer. the court
still remains open to the injured tax
payer. The board should be lust as
the state wishes to be, irrespective of
the past and without paTtiality. and
this we viii assume until the contrary
appears. The motion for preliminary
injunction viii be overruled and the
temporary restraining order dis
solved ~