The times. [volume] (Richmond, Va.) 1890-1903, 1902-01-22
TRIUMPH OF A PRINCIPLE.


Tho great privilege OF taxation which
The Times has been declaring day in and
day out during the past several months
has been adopted by the Finance Com
,ni,tcc of the Constitutional Convention.
and if the convention viii only put the
principle in the Constitution and make
it the basis of all subsequent tax laws.
the tax problem will be solved, and var
sinia will be in The front ranks Oh the
most progressive States in the Union
1t is provided in the committees re-
port that all railway and canal corpo-
ratious shall pay taxes upon all thelr
property, including i franchise tax, and
that this shall be in lieu Of all taxes OF
license charges whatsoever upon Inc
shares OF stocks, the bonds, securities.
and other evidences of debt issued by
such companies.
Here is the great principle: All actual
property in tho State, of whatever KIND,
including franchises, should be taxed
once, but only once. We do not think
that the committees plan makes the
principle broad enough in its application,
but the principle is there, and the recos-
milton of it is a, great triumph for honest
and progressive taxation.
There has been 6. great deal of talk in
this State about tax lodging, and all
sorts of efforts have been made to reach
the holders OF stocks and bonds and
MAKE them come TO book but these eff
fortf have failed for the simple reason
that The procedure was wrong. Stocks
and bonds are not property. Stocks are
evidences of ownership, and bonds are
evidences OF debt, but they are no more
p,operty than shadow is substance; and
So in chasing after stocks and bonds the
tax assessors of Virginia have been
chasing after shadows. The Finance
Committee of The Constitutional Conven-
ton propose to proceed upon an entirely
different principle They propose to levy
a tax upon the substance and let the
shadow CO. They propose to reach the
stockholder through the corporation. and
that is the proper way and the sensible
way, for when the corporation is taxed,
cach and every stockholder, whether he
be in or out of the State, is compelled
to pay his part for the tax comes out
before dividends are paid
How absurd for the State to chase
after the stockhoder and pry into his
private affairs and arouse his resent
ment and encourage him 10 hide his ef-
fects away and perjure himself, when
it was a perfectly simple matter TO tax
The effects of the corporation, which
could not be concealed!
But some will say that franchise is an
Intangible sort of thing, which cannot be
fairly classed as property. Nonsense. Here
is little street railway, which cost in
the construction s25 900, but which is sold
for Sl35,ea We know of such a case in
Virginia What was it that gave the adj
ditional value? The position of vantage;
the right of way through the streets of
2 progressive city; the privilege of haul
ing passengers at a profit; the earning
capacity; the protection of laval these
advantages which gave it a certain
earning power and made it a profitable
enterprise upon an investment seven
times as large as the original outlay.
The franchise in this case and in many
another case is the thing of greatest
), alue and it is a very proper subject
of taxation.
But whenever corporation, of what
ever character, is taxed upon fair
valuation of its physical property, Us We
call it, and its franchise, it cannot then
be fairly taxed upon its evidences of
ownership. nor its evidences of debt, no
matter in whose hands they chance to be-
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