The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1901-01-11
STATES POWER IN
TAXING FRANCHISES.

10 tne EollOr OF Inc fepUDnc.
Macon. Mo-. Jan. e.-Your very modest
suggestion to our Legislature not to dash
recklessly into franchise taxing legislation
was timely.
: From the great prominence given the sub
ject at Jefferson City. one would conclude
that some new and momentous question had
sprung upon US. One would suppose, from
this muck-talked-of franchise taxation. that
We had no law on the subject now on our
statutes.
This must be the conclusion arrived at;
yet this is not the case. We now have full
constitutional and statutory authority for
taxing every franchise in the State.
This supposed lack OF any present author
iy to tax franchises is. 1 think, the result
OF an erroneous idea \ vague. indeinable
impression prevails that a franchise Is a
peculiar. subtle something, lurking in or
about corporations. which has great value
that can only be found out and made sub
Ject to taxation by special law. such as is
now clamored for. If this were true, there
might be reason for such law. but that is
not the case.
Advocates Of some special franchise tax
ing law seem not TO consider that franchises
cannot be valued except In connection with
the entire business and property of any
given corporation.
If a franchise is OF any value. II will show
itself in the results of the business Of the
corporation.
A banking corporation is supposed to have
a franchise Can you conceive OF any
means TO ascertain what that franchise is
worth IL considered distinct and separate
from the business of that bank? What is
true of a bank il true of all business cor
pOrations, in this respect.
Income or profit received on investments
is the test of value in any business. IL a
corporation has $1,000 of paid-up stock of
OAR or face Nalup- and IL makes q noo orr
OF that business the FIRST year. that stock
would be worth $1,000. II the Assessor is
advised of the true state Of affairs. and as
sesses that stock ratably with other prop
erty on the basis of real value as meas
ured by its earnings, he will nave assessed
the franchise, 50 called. of that corporation.
Can anybody deny that plain fact? Then
just apply that rule to all other corpora
tons. and you will have the correct sclu-
ton of the franchise taxing question.
Will anybody claim that We have not full
authority to so value and assess every cor
porate franchise in the State Just that way2
l may ask. Are We not so doing to-day in
many. il not all, corporate assessments?'
/ know that banks are so assessed.
To my mind II is absurd to talk Of taxing
a franchise in and of itself. The so-called
franchises of hundreds of corporations ara
worthless. Not only so. but in the enjoy
ment OF these much-talked-Of franchises
corporations have not only failed to find
any value, but have found a grave for much
hard-earned cash.
At what would these franchise-taxers
value such a franchise? The money and
property would be gone. but the franchise
would still exist; and. according to the idea
that there is somehow, an in
tangible value yet remaining. the ~taxgather-
er must pursue the phantom.
II the lawmakers at Jefferson City will
allow a suggestion. l would say that it is
that is needed. but such amendments to the
present law OF assessing property as will
enable the Assessor to get at the true
value Of corporate property or holdings a
little better than he does now. It's question:
able whether even this is necessary. There
may be some classes of corporations the |
proper assessment of which may REQUIRE |
sOrs that they may the better get at actual
values. but this Is not taxing power, for, as
stated. taxing power now exists.
i have had more or less experience in ths
last twenty years as legislator. lawyer and
business man. and while / don't wish to be
understood as claiming to be wiser than
and the many worthy and
able gentlemen composing the Forty-frst
Assembly. yet / think l risk nothing in pre- |
dieting that the passage of any law looking
to specific and separate assessment and
taxation of franchises will not only fail in
its purpose. but result in great damage to
the State.
1t is very easy for legislators with the
purest motives to enact laws full Of dam
age to the State and to the people. The con-
amendment recently adopted and
as amendment No. 3 Is a serious
case in point. The bad policy Of such an
amendment was clear TO my mind. and as
a member OF the Housewife only eight
recorded my vote against its SUBJ |
mission to the people.
WEB NJ. RUBEY.