The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-01-11
THE METHOD OF TAXING QUASI-PUBLIC COR
PORATIONS.
Worth for Purposes Income and Sale it Also
Worth for Taxation,

The great question before the Gener-
al Assembly is the question of taxation.
This body is confronted with deficit
and the problems incident to a deficit.
The. money expended was for causes that
WE'RE necessary. The whole subject was
discussed during the campaign. The Re
pub licans denounced the expenditures.
The Democrats defended them. The
Democratic State Convention endorsed
the action of the Governors Council in
borrowing the money to pay the appro-
priations for education, Confederate SOL
diers and the insane. The voters at the
polls endorsed the action of the State
Council and ratified all that they had
done with reference to the indebtedness,
and they did it by a majority greater
than has been heretofore known.
The people ratified the debt already
due, but they instructed their represen-
tatives to make ample provision by
regular taxation to meet all the expenses
of government hereafter. The Revenue
Bill of two years ago would have raised
enough or nearly enough revenue to pay
the appropriations if all it's provisions
had gone into effect at once. The Su
preme Court held that the sections i'm
posing tax on quasi-public corpora
tions, which are hereafter to be assessed
only once in four years at the time that
into effect until 1903 The law enacted
with reference to taxing railroads. tele-
graph companies, express companies, ind
other quasi-public corporations is tie
wisest yet enacted in this State. 1t is as
near perfect as legislators can draft. In
deed it is almost in the identical words
of the famous decision of Justice Miller,
of the Supreme Court Of the United
States, in which that great jurist laid
down the best method of arriving at
the true value of a railroad or other
quasi-public corporation. Many methods
have been recommended. That alone of
Justice Miller, embodied in the Revenue
Act of 1901, provides the fair and GER
tain method of assessing quasi-public
corporations at their market value.
Heretofore the Corporation Commission
has been instructed to consider all ele-
ments of value in assessing railroads for
taxation, but no rule has been laid down
which required the commission to assess
the property "as evidenced by the market
have listed their stock and bonds on
the Stock Exchange. The market
value" of such roads VIII be easily as
certained and when the Corporation Com
mission ascertans the true market
value" it will have no duty except to as
sess the property at TIE price at which it
sells in the markets of the world. Sec
tion so of the Machinery Act provides the
methods which the Corporation Commits
sion must follow in assessing railroads
for taxation. 1t is as follows:
"(a) The said Commissioners shall first
determine the value of the tangible prop
erty of each division or branch of such
railroad, of rolling stock, and all other
physical or tangible property. This value
shall be determined by due considera-
tion of the actual cost to replace the
property, with a just allowance for de-
probation on rolling stock, and also of
other conditions to be considered as in
the case of private property. (b) They
shall then assess the value of the fran
chise, which shall be determined by due
consideration CT the gross earnings as
compared with the operating expenses;
and particularly by consideration of the
value placed upon the whole property by
the public (the value of the physical prop
erty being deducted), as evidenced by
the market value of all capital stock, Ger
tificates of Indebtedness. bonds or any
other securities, the value of which is
based upon the earning capacity of the
property; (c) The aggregate value of the
physical or tangible property and the
franchise, as thus determined shall be
the true value of the property for the
purpose of an ad valorem taxation"
The present honest Corporation Com
mission, under the above section, would
have an easy task in assessing railroad
property. They will be mere ministerial
officers, charged with ascertaining GER
tain figures and adding them up, and the
great subsidized appeals, paid for at so
much line, or so much a sentence,
heretofore addressed to the Commission,
mot to drive capital out OF the State"
by taxing railroads at their true market
value, will have no place. The hireling
who ISLANDERS the State will find his occu-
patton gone
1t is notorious that the railroad prop
erty of North Carolina is now assessed
at less than fifty per cent of it's mar
ket value" and yet-thanks to Simonton
it was not until the State of North
Carolina had been harried through Sim
onions court that the $42 900, 900 valua-
ton was allowed to stand. The State was
held up" and forced to compromise its
fifty per cent tax assessment. The old