Omaha daily bee., 1902-03-21
VALUATION OF FRANCHISES
Mr.. Mcintosh Points Out a Way to Assess
Intangible Property.
QUOTES OPINION OF JUSTICE BREWER
argues hat Property May BE A.
sessed at Amount ~ f. worth
Rather Than at Amount
IL Cost Owner.

IL Cost owner.
The argument in the tax mandamus cas-,
was resumed before Referee Ryan at e:st
yesterday morning, Attorney j. II. Mcintosh
beginning where he left on Monday after.
noon. Most Of his address in the forenoon
was devoted to a recapitulation Of the cas-,
from the standpoint Of the REALTORS. After
the noon recess he talked one hour, and
then yielded the floor to Attorney John L
Webster, who closes the argument for
the respondents. Mr.. Webster will prob.
ably finish Friday night. The referee will
then decide whether he will admit evil
dence, and upon this decision will depend
whether the case will conclude this week
or whether 1t will drag on into the first
week Of April. In any event II will not
continue longer than Saturday. April s, as
the referee will need ten days in which to
prepare his report, which must be filed
with the supreme court by April Is.
Intangible property was the point to
which Attorney Mcintosh devoted most OF
his attention yesterday. "As Mr.. Mors-
man told us the other day." said he, "the
way to get at the value OF a franchise
is to add the value Of the capital stock
TO the bonded Indebtedness of the CORPORA
ton, and then from this deduct the value
OF the tangible property. The result will
be the value Of the intangible property, or,
In other words, the franchise"
But the statute says we must subtract
the bonded indebtedness flDm the value of
the capital stock" objectsI Referee Ryan.
True" said Mr.. McIntHh, land there is
no doubt but that is an error. It's an OBJ
vious error, In fact"
Admitting that It is, would We be at
liberty to do exactly the opposite Of what
the statutes tell Us to dol"
we would not only be at liberty. your
honor, we would be bound to do the thing
that will enable us to ascertain the fair
cash value Of this property. That is the
fundamental duty that is imposed upon us.
street Railway as Example.
Take the Omaha Street Railway COM
pany, for example. Why, IL that corpora
ion was worth only as much as the assessor
says It is. It Is insolvent and ought to be
In the hands of a receiver. 1t wouldn't be
able to pay so cents on the dollar Of its
bonded Indebtedness. 1t was assessed at
$625, 900. This is 40 per cent Of 1882, 500,
but the company has a bonded Indebtedness
Of $1,000, 900. This looks like a deplorable
state OF affairs for the street railway COM
pdugg DuI as u matter Oh IACI, I0eTe QaSu Z
been a time in the last six months that you
could buy a dollars worth OF stock for less
than so cents. l know, for I've tried It."
Mr.. Mcintosh read from an opinion by
Justice Brewer on the subject Of franchises.
He read in part: "In our complex ~civiliza-
ton Of today a large part OF the property
Of the community is intangible. A man re-
ceives a promissory note; this Is a type of
Intangible property. It represents a prom
ise to pay, and eventually will be converted
into cash. II is worth money to the holder
and may be sold or traded by the holder as
any other piece of property. To eliminate
this, then, from the taxing power would be
obviously unfair. Take another example.
A bridge Is built at a cost Of 81, 200, 900, but
It is so located with reference to railroads
and markets that II is worth to its owners
81, 1900, 900, and could be sold for that sum.
Then It was obvious that the state has a
right to assess 1t, not at what 1t cost, but
at what 1t Is worth, and to hold otherwise
Is to insult the common intelligence Of
every man."
Mr.. Mcintosh then passed to another
phase OF the case.
9Th is an ordinary lawsuit" said he.
land ought to be tried as an ordinary law
suit. Because the counsel, their property
being affected by the outcome, have sought
to change the ordinary rule Of practice, is
not a good reason why your honor should
do so. My experience has been that II is
always best to stick to the beaten trail and
then We can't go far wrong. It Is for your
honor to ind out the truth about the mat
tiers involved, apply the law to the facts and
make your report In accordance herewith
Basis of the Assessment.
|
do you think I ought to ascertain what
the basis OF the assessment is?" asked
Referee Ryan.
There are reasons why that should be
done, your honor" was the answer. 10Th ,
the presumption Of the court would
be that the property was assessed at its
fair cash value"
But suppose I should ascertain the basis
OF assessment. and should report Il to the
court; wouldn't that be binding upon the
OF Equalization ?"
mo, / thiAk not, but IT would give the
court something to go on. It will be neces-
sary for ycur honor to take some evidence
on that point in order to show the Unequal
ity Of the assessment"
City Attorney Connell announced that the
respondents wished to file another amend
ment to their answer.
Il object to their fling any more amend.
ments." said Mr.. Mcintosh. They got per-
mission to nle one amendment and the re-
suit is that their answer is SO thoroughly
that you wouldn't recognize it,"
but you have filed an amended motion.
and have we no right to make a response
10 that ?" asked Mr.. Connell.
Mr.. Mcintosh admitted that he had, but
Il was agreed that with the Forthcoming
amendment OF the respondents there would
be ne more amending OF motions and an
sWers. At II o'clock court adjourned until
2 p m.
Not an Assessing Board.
Mr.. Mcintosh resumed speaking at 2 p
n. The Board Of Equalization Is not an
assessing board" said he, its an equaIIE-
Ing board. 1t has no right to change the
.tancard OF the assessment as II comes to Il