The St. Louis Republic., 1901-01-05
GOVERNOR STEPHENS MESSAGE
TO MISSOURI LEGISLATURE.
Reviews His Administration, Urges Worlds
Fair Appropriation and Discusses
Taxation of Franchises.

souri, Is subject TO taxation. This being so.
the only question remaining t. whether or
not provision has been made by the Cen
eral Assembly for the method of assessing
the tax and enforcing the collection there
Of. ,.-.
"All corporations should pay franchise
tax upon business transacted in MISSOURI
without reference TO the place OF their or
Ganization. and most certainly no disthG-
tion or discrimination should BE- mace
against our own corporations in iaNor OF
foreign corporations in that regard but III
framing legislation for the taxation 81 81
these intangible values IL should be bo1hss
I'm mind that the essentials Of a system ot
taxation are considered TO be the coilecloii
OF the necessary revenue for the state, az
the smallest possible expense consistent
with an equal and fair distribution of tne
burden. The interests OF the people require
4 method OF taxation at once eqlitdnie'
effective and free from unnecessary or
preston, one which will yield the REQUISITE
revenue, while subjcCtinC them as little aS
possible to inquisitorial vcXauon. anu
which should be attended with the least
expense for official services. and the teW'St
temptations to fraud. concealmcnt ana eva
sion. IL is true that scarcely single
method of assessment of taxation j. IISp
from adverse criticism. and that IN the
light Of the experience OF centuries very
few known general principles are fully ana
satisfactorily settled. while bitter contIU-
yersies arise upon apparently the most
simple questions. and are waged with Nieor
ard avidity as To matters both OF sub
stance and administration. as well on the
most trivial on vital points. But II Is
now well known that franchises are prop
erty, and should be taxed by some method
in proportion TO their value. But as the
equality OF taxation Is the justice OF taxa
tion. care should be exercised in the levy
Ing Of assessments. and collection of taxes
against this class. as well as all other
classes of property whether belonging 10
a corporation or to individuals.
DIFFERENT LAWS FOR
CLASSES OF FRANCHISE.
1T IS obvious at a glance that the vsri-
Gus classes OF corporations possess differ
ent kinds of franchises. and this necessari-
ly leads to the deduction that different
methods OF taxation for the franchises OF
the. several kinds Of corporate intangible
Property must be devised. IL the corporate
business is one of which the corporation
has. as public service agency, a substan-
tial monopoly. q much heavier franchise
tax could be readily paid than If the cor
pOrate business was one open to free COM
petition between corporations and individ-
ualS and in respect OF which corporations
would enjoy no special privileges or ad-
Nantages.
ITO illustrate: A given tax on the cor
porate franchises Of a street railway COM
pany, having q practical monopoly Of the
transportation facilities of a city, might
be just. yet the same tax on a trading com
pany, in the same city. with which every
one might compete, would at once operate
to the disadvantage or the commercial
corporation These are matters TO be con-
sidered in enacting laws for the taxation
of corporate franchises.
There are also embarrassing legal ques-
uons that must be carefully looked after
in the framing Of laws for the taxation OF
franchises Of corporations; and this is true
particularly in dealing with the question OF
taxing the franchises OF corporations, and
OF levying of taxes upon the capital stock
thereof. which are engaged In interstate
commerce business. and. in. this class OF
corporate franchise taxation care must be
taken TO avoid an unwarrantable regula-
ton OF Interstate commerce. In order TO
prevent clashing with the Federal Consti-
tuition. 1t is apparent at a glance that a
large number OF the most valuable IRAN
chises in any popul0us State VIII belong
to corporations doing an interstate ousi-
ness.
-''In the matter Of taxing the franchises Of
corporations engaged in interstate COM
merce business, the question TO what ex-
tent the intangible corporate franchises or
privileges are subject to State revenue laws,
has been before the Federal Supreme Court,
and tho lines marked out for state leglsla-
tion by that great tribunal mCst be strict
ly followed in the imposition OF taxes IN
the framing Of any law hoped to be efrso-
tive. To illustrate. the State of Mas
sachusetts imposed a tax upon the western
Union Telegraph Company upon its prop
erty owned and used within the state. the
value of which was ascertained by COM
pairing the length of its lines within that
State with the length Of its entire line.
The Federal Supreme Court declared the
tax to be distinctly an excise law ana up
held It; the tax was levied upon the cdpi-
tai stock OF the company.
1T would be well to remember in consid-
Grafton of the question OF the taNation OF
franchises that the right of privilege on
a franchise. as It may be termed. OF oeins
bers AMI is considered as property. separate
and distinct from the property Hhlcn the
corporation itself may acquire
THE organic law Of this state recognizes
poration as property and makes it subject
to special taxation.