The news & observer., 1901-01-06

Mr. Justice Field of the Supreme Court
of the United States in SO U. S., said:
The franchises of railroad corpora
tion are rights or privileges which are
essential to the operation of the corpora
ton and without which it's road and
works would be of little value; such as
the franchises to run cars, to take tools,
to appropriate earth and gravel for the
bed of it's road or water for it's engines
and the like, they are positive rights or
privileges without the possession of
which the road of the company could not
be successfully worked; immunity from
taxation is not one of them.
Mr. Justice Miller in Railroad tax Case,
92 U. s., page SIS, said:
1T is therefore obvious that when you
have ascertained the current cash value
of the funded debt and the current cash
value of the entire number of shares OF
stock. you have by the action of one
who above all others can best estimate
it. ascertained the true value of the road,
of its property, it's capital stack and its
franchises, for these are all represented
by the value of its bonded debt and
of the shares of its capital stock.
IF taxes were assessed alone on the
value of the capital stock and franchises
of the corporal ton, cases might be found
where these were worth nothing and such
companies would pay no tax even for real
estate and personal property but indi-
viduals do not escape taxation on their
real and personal property because they
are insolvent. No State has ventured
to establish the principle of permitting
its visible and tangible prperty to escape
taxation. The valuation for taxes of this
class of property must be ascertained in
some other way, all methods being more
or less imperfect
Another authority says taxation on
railroads and other visible corporate
property upon it's cash value is equitable
and right as principle. 1t should be
considered and debated only as matter
of principle. 1t is the only way to bring
about equal taxation.
AS to your question, what do you think
of the suggestion of legislation looking to
an income tax on railroad earnings in ad-
dition TO ad valorem tax. This is for our
legislators to decide and ] will not eX-
press an opinion
I will give you d synopsis of the plans
OF taxation by the different States. | will
say however. that some Of the States in
addition to ad valorem tax levy per
centum tax; some on gross earnings, some
on net earnings and others on each pas
senger.
In the State of North Carolina by our
present method of assessing and valuing
railroads the tax can be increased or de-
creased by increasing or decreasing their
81, ] toll
method imposing a tax beyond what is
equitable, fair and just would stand the
test of the courts whether that tax be
undertaken on a property valuation,
gross income or on income and property.
If the increased valuation of 10000 900
placed upon the property of these corpo-
rations by the Corporation Commission,
and raising the valuation to 1000 900
the first year Of its existence should not
apear to our legislators as being suffi-
GENTLY high they could so instruct the
Commission. or if our constitution will
permit of it, the enactment of a statute
requiring per centum or license tax on
gross or net income. funded debt or CAPT
tai stock in addition to an ad valorem
tax.
give you synopsis of the
laws of the different States | give you
also table showing the cost of roads,
capital stock, funded debt, earnings,
taxes paid ETC., as appears by reference
to the report of the Corporation Commits
sion. From the table shown you will find
the value of all the railroad property in
North Carolina as fixed by the Commits
sion for the year 1900. would be $42, ,102,-
coz, or on an average of $11,376.00 per
mile Upon this valuation the railroads
would pay taxes including State, county
and municipal to the amount of about
$240, ,000; of this amount the State
pension and school tax would
be $1S1 ,03S, and the balance
county and municipal tax. The val
tax for the past two years in accordance
with order Of the Federal Court is on
$32. 600 600 in round numbers. The tax
paid being 1920, 600 for all purposes. Or
on so. .O00G COO less than the assessment
by the Commission for the two years. the
tax on which for the two years would
amount to about 5000, 900.
The valuation of the property by the
! Commission of the Southern Railway fol
| the .year51900 is SIS, ,470,72700
| This would equal a tax for all purposes
| of 1854 300.
Valuation per mile. e.........$ l2blS 0C
| Funded debt ...... q, ,09S fS9. .0f
| Carital stock ............. 35,02O@10.0 .0f
| Cross earnings ......... $3.50 III. .O(
Gross earnings per mile.... 56O3 .OC
Income from operation. . 2,4595 5000
| Value on basis per cent
capitalization .... ..... l0,842 1850
| Value on basis per cent
capitalization ..... ...... 80, ,631 SIS .0C
The valuation of the property of the
Atlantic Coast Line Railroad Company
by the Commission for the year 1901, is
| 1880, $500.
! NaIuatioA per mile ...s..$ 1fiS2. .0(
| This wodid equal a tax for all