Omaha daily bee., 1902-07-19

certainly without express statutory sane
ton; that is something that can only be
conveyed away by the members Of the cor
poration.
Before a corporation can have capacity
TO receive or be capable Of accepting a
grant. IT must exist and therefore the con-
s%titution seems to have reference to those
grants which are conferred upon corporate
bodies already in existence, that are per-
forming the functions such as are enjoyed
by and conferred upon local utility compan-
les. In respect Of these purposes for which
corporations are by our constitution and
laws authorized to be created, they are
doubtless intended to be and to exist upon
equal terms, within their mission, with in
dividuals. AS the natural person is en-
dowed by nature with certain rights, so
also is it intended, certainly within the
place where they are Incorporated. that the
artificial person shall have like rights with
in the sphere in which they are authorized
to act. The individual is born Of nature;
the corporation Of the legislature; both are
equal in a commercial sense. II. therefore,
the primary franchise, that is, the permits
sion Of the legislature to the individual to
exist and be as an artificial entity, is a
privilege conferred upon the members who
ConlpOSb ~ unity IdlntI lndu upon lnt
unity itself, how can the legislature author
lie that privilege to be taxed? 1t Is clearly
not an asset of the corporation itself, which
is clothed with neither control nor dominion
over 1t.
If there is any virtue in this proposition
1t is that persons as well as bodies Ger
porate may possess, own and enjoy fran
chises that are the essence OF property,
and as such are exclusive in their nature.
Such are those grants to street railways,
gas, telegraph and electric light companies.
These rights are exclusive. They are in
the nature of vested rights which cannot
during the term for which granted be in
vaded or disposed of by the legislative
power. At common-law franchises of this
character were exclusive. / mean those
franchises, such as privileges to collect
tolls from the operation of bridges or fer
ries. They naturally excluded contiguous
competition. All grants Of this kind were
SO construed as to give them due effect by
excluding all other persons from partici-
pating in the privilege, whether under an
alleged later grant from the sovereign or
otherwise; and any attempt on the part of
any other person to trench upon the rights
granted, as by operating a ferry or bridge
In competition, was denominated a null
sance which the law very soon abated.
From the long recognition Of the exclu
siveness of such rights has undoubtedly
grown up the doctrine OF vested rights
so-called. The right, therefore, In a local
utility company to operate, for example, a
railway on a public street or streets, is an
! exclusive right, a franchise that is prop
erty, that can be sold or assigned, is a
most valuable right, one that is taxable as
such.
My proposition is then, that a franchise
of this sort is the franchise required to be
taxed to the individual or corporation. The
mere right to do the business for which the
corporation Is organized is surely not q
thing to be taxed. For II you tax the cor
p~oration upon that right you Immediately
destroy the element of uniformity COM
manded by the constitution. The right Ia
do business is not property and therefore
not taxable. If you tax the manufacturing
corporation upon the right to do business
you at once permit 1t to be destroyed by
competition. For In that case the corpora.
tion would be paying a tax which would re.
suit directly In the diminution Of It's prof.
its as compared with the profits OF the in.
dividual, and this cannot be. II a corpora
ton be created for the purpose we will say
of selling dry goods. and invests in tina
business 500 900 which is denominated cap
ital, and 1t sells $500, 900 worth of dr.
goods each year and makes a net profit o.
Is per cent, that profit would be reflected
perhaps In it's capital stock so as to appre-
ciate 1t Is per cent, or $115, 900. Were yol
to tax 1t on the basis of capital stock a
market value you would tax II as $115, 900
while in the case Of the individual in tn
same business with the same capital pro
ducing the same profit. you would impos'
the tax on the valu Of the merchandise oil
a particular day, thus using one rule for tn
corporation and a different rule for the In
dividual. Surely, such a course is Unequal
ity itself and a violation OF our law ant
constitution. You do not tax the individus
upon his earnings; but you attempt to Ia,
the corporation upon its earnings. But 1
this view be entirely fallacious, II It b.
without basis In logic. we are not neces
sarily driven from our position, for afte
all II It be determined that the right to be
the right to act, the right to do business, 1
a franchise, then we insist that that RICH
has been assessed by the Board OF Equal
cation in this case.
The property of railroads In this state 1
by statute designated for the purpose O
taxation as personal property. A franchis
is personal property and, following tn
language Of our statute In sections 80 an
40, II Is personal property used nrst In tn
construction, and afterwards In the sue
~cessful operation OF the road. It is, in othe
words, the use Of the road itself. You nee
It as much in the construction as you DO 1
the operation, and therefore It is include
within this section 40. Now, II your honor
please, l want to call your attention spe
c~ihcally to the language OF this section. an
/ read:
The number OF miles OF such railroad an
telegraph lines In each organized county 1
the state and the total number of miles 1
the state, including the roadbed, right-oi
way and superstructures thereon, mai
and sidetracks, depot buildings and depo
grounds, section and tool houses, rollin
stock and personal property necessary 10
the construction, repairs or successfl
operation OF such railroad and telegrap
, line.
t Now, your honors would necessarily Civ
| full intendment to the expression of tn
; legislature In performing the duties whic
the constitution ~enjoins upon It. The
were required by section 1 OF article TX I
provide a mode or name for determlnin
the valuation OF railroad property. We IN
sist that the enactment Of these two sec
tions are fairly Intended to and must b
construed as giving effect to the require
4 ment Of that section OF the constitution. an
{ that included In this is the so-called fran
( chise or the right to be and exist. the rigt
TO collect toll and the right to operate tn
railroad.
The matters generally involved in TIL
d case have been very carefully gone over b