New-York tribune., 1902-01-02
CORPORATIONS.

At the last session Of the legislature recon-
mended the liberalization OF our corporation
laws believing that such policy would beneht
our State and its manufacturing interests
The wisdom of such legislation has already
been proven During the last fiscal year oil
more interpretations and twenty-five more cor
porations showing increases in their capital
stock have resulted. The total capital stock of
new companies and increase Of capitalization by
old companies amounted 10 Sl.365, so, being
an increase over the previous year OF $l93524-
III, upon which there has been received for
incorporation $500 43. The largest amount
at which any one company was capitalized was
SlIOpO.OOu. Two companies Increased their cap
ital by $4,000 OO0
While this is gratifying. l regret 20 say that
the largest combinations are still refusing TO
incorporate within our state. i comparison
shows that up to a capitalization OF $3.uUp.DNO
our laws ofer NOR favorable opportunities than
those of other Stat. Beyond this, however. on
other than manufacturing corporations the dis
elimination seems to be against Us. / do not
believe that should make any further con-
cessons. because it is certain that by incorpora-
ton in New-York advantages are offered which
are more than commemorate with the increased
expense.
But it Is unfortunately true that foreign as
sociatons, while nominally located elsewhere.
are virtually transacting all OF their business
within our borders This is unfair. because the
wealth Of our people which is invested in their
shares is taken out Of our taxable values New
York, therefore, loses proportion of taxable
valuation that by right belongs 10 H. II is not
desirable that any action should be taken by the
legislature which would embarlass or in any
way hinder the administration or building up Of
any company, providing that il is transactinf-
ITS business without detriment 70 the interests
of State
1t seems. however for the PRIVILEGES which
they enjoy. and without which Il would be i'm
possible to succeed they should not he entirely
free from taxation. Their shares should he sub-
ject to some form Of taxation, as they undoubt-
edly are under our present laws. The difficulty
however. is to reach them. If it were possible
. hEl N,-I, d,
in the State II would be easy to place such
valuations upon our assessment rolls and com
pei the owners 10 pay their proportionate sha re
OF our state and municipal expenses.
While the stock of domestic corporations which
pay a tax on their capital stock is not taxable
uhdeF our laws in the hands of individuals, the
same right should not be extended to stockhold-
ers Of foreign corporations unless they shall
have filed with the Secretary of State a certif-
cate or their incorporate and have paid upon
their capital stock annually a tax Of say one
mill per dollar up to ana including a capitaliza-
ton of SlO,OOO,OnO, and 500 per 81 600 900 upon
capltaIlZaton above that amount as a franchise
tax TO the state for the privilege Of doing busi-
ness In the State of NeW-YOrll and relieving
their stockholders resident In this State of taxes
Except the transfer taxi which would other
wise be assessed against them individual
owners of such shares. Such tax uDon the stocl,
in foreign corporations should not be subject to
deduction for personal debt The interest of the
stOckhOlder would cause him to demand of his
association the filing of incorporation Ccrtii-
cate in this State and would thus make certain
the collection of taxes which now escape en-
tlrely.
/ recommend, therefore, that the local assess
ors be given authority 10 compel the listing Of
stock holdings and that only such assessments
be omitted from the total return as represent
the stock of domestic and foreign corporations
which have filed their certificates in this State
and have become subject to the payment of the
franchise tax referred to. The revenue thus de-
rived In connection with the tax upon mort
cages recommended would undoubtedly provide
ample funds for the ordinary and necessary eX-
penses of government.
1t aimed by legislation of last year to
take away from manufacturing corporations in
corporated under the laws of other States unless
they had at least 40 per cent of their property
within the State, the exemption which is grant
ed to domestic corporations. That this has
been a failure has been instanced by le-
cent interpretations filed, whereby certain COM
panies have taken the amount of their cor
porate holdings in this State and incorporated
under the same name and with the same officers
as designated in the incorporation in other
States. thereby evading the taxes which they
otherwise would be liable for.
TO correct this injustice should be your aim
No iCnt stock company should be permitted tp
incorporate with the same name as ,hat borne
by corporations OF other States If for no other
reason than TO prevent confusion, and 10 COR
po~atlon thus formed should be allowed to merge
with or 10 be operated by foreign corporation
unless such foreign corporation has filed it's GER
tificate with the Secretary of State