The Portland daily press., 1901-02-08

TELEPHONE TAX

TELEPHONE TAX.
The COMMITTEES on taxation this eve |
ninR gave hearing on the bill for the |
taxation OF telephone ana telegraph COM |
panies. Superintsndsnt BedIow OF the |
Western Union Telegraph company nlea
with the committss q statement OF the |
business of his company. Mr.. Bedlo~
in his remarks, argued that while his
company did not object TO the system OF
taxation on the groas receipts OF the COM
panies, the rates In the pending bill wers
high.
Then the committee took mp the mat |
ter OF the taxation of the telephone |
companies. and Hon. Clarence Hale |
spoke for the New England comDany |
lie referred to the growth Of the business
In Maine. The teisphone, said MIR Hale, |
has become with the telegraph, one of
the great means OF communication |
IL is necessary that this businsss shoulu |
be done by companies covering wide
area. You can ies that the cost OF ooera-
tion in this state Is very large. Maine
a state OF great distances, i think, does
business In every hamlet OF 900 people
It 10 interesting 20 s--ves not only the
growth of the business. hut how muth
more we use the telephone than former
Iy. 1t has been figured out that to eFery
seven calls in day ten years ago the;e
are now "a calIs. Now the rowth OF Il 9
telephone business multiplies gson ctr
cally rather than arithmetIoally. 1t oc sss
much more than twice as much to
operate 1000 telephones as IL does TO
operate 1910, and this Is especially true
in Maine where the lines are long. mad
supposed that the legislature would think
best not to change the system of taxa
ton, but your bill has In mind to change
IL TO gross receipt tax. We are perfsos-
ly willing to accommodate ourselves 10
10. II you think that the best method.
Our gross receipts In this ttate for the
past year are s30T, 332 OF. l think that
you will agree with me that while this
bill Is formulated on ths principles az
piled to railroads the state would get
more income to make fiat tax OF a
osrtain amount rather than to base the
tax upon the earnings par mile. Now,
why? You tax railroad so much pr
mile. You cannot tax telephone oom
pany on that system. You cannot get at
any element based on the mile In the
telephone business. Continuing, MIR.
Hale said that as near as could be deter
mined the operating expenses OF the New
England company in Maine were 30 per
cent Of the gross receiDts. After many
years the company had been able to pes
a dividend of per cent with no surplus
IL was willing to pay fiat rate OF
per cent on the gross earnings which
would increase its tax from between
80, 900 and $4,000 to between sis.OCO and
Sl3,0 900 and be equivalent TO more than
one quarter of the net earnings in the
state.
MIR. Maynard Bird, representing tho
Eastern Telephone company, said that it
seemed TO him that a tax based In ths
gross reoeipts was the proper method.
MIR. Bird emphasized the Importance OF
the section which provided for ascertain.
!, ing the exact amount of the gross earn
. ings. he was opposed 10 the tiat rate as
suggested by Mr.. Hale and believed in
graded rate, In proportion to the earnings
The gross receipts Of the Eastern compa-
ny are $4,000.
MIR. Lewis A. Goudy appeared before
, the committee. He told of the history
of the telephone ssrvice in Maine. and
, told OF the doings of the Dirlgo company.
I'VE have stood out all these years and
have not bean absorbed, - he said. "Since
. last July we have thrashed out the
wheat and ohaff and have discovered that
we have the best charter, one granting
eminent domain, ever Issued in the state
OF Maine. The company represents an
. investment OF about 10000, and has
about 500 miles OF working circuits with
many subscribers. Our charter Is SO
broad and liberal that 1t is sufficient to
do a general competitive business against
the Bell Telephone company. have
been surprised tonight to hear my friends
!, Bird and Hale say that in the telephone
business the more business you do the
less you get out Of it. When was bak-
ing crackers for Giving L thought in
creased my net income when baked
10 barrels OF -four per day compared with
when 1 baked five.
81 know that the farmers OF this state
pay as q general thing double the tax to
the state according TO valuation than the
corporations. looked over the records
/, and i found that there was mosb In
explicable variation in the tax rate. While
one company paid tax on its gross
valuation others paid nothing. l found
that the New England Telephone and
Telegraph paid 2-5 Of per cent on its
investment in Maine, while my company
paid IL per cent and my friend Birds
company paid nothing.
81 am not believer in this bill, not
for a minute. 1 believe that the state
should impose franchise tax on tele-
phone companies different than on trans
i. portation companies. In the city OF Port
land 1t is estimated that the New Eng
land company has property valued at
$500, 900, of which the Oity gets practically
no taxation"
Mr.. Goudy then quoted statistics to