The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-03-03
ANOTHER REASON FOR SECTION
FIFTY.

in the Finance Committee made by ex-
Judge Graham, of Granville. in opposi-
ton to the motion to amend section fifty
Judge Graham has given more study
to questions relating to the taxation OF
quasi-public corporations than any other
member of the House, and his views are
sound and wise. If the railroads make
any serious fight to amend or repeal
section fifty in the House, the argument
with those who have not already made
up their minds, or who are not so biased
in favor of giving special privileges to
railroads that they are not open to
argument.
We also printed the valuable and IL
Eliminating statements of Mr.. NJ. S. Will
lard, of New Hanover, whose statements
gave additional force to Judge Graham S
argument Mr. Willard was a member of
the subcommittee that drafted the ma
chinery act of 1901, and his former state
ments published in these columns have
been very interesting. AS additional
valuable information and wise sugges-
ton, we print below later letter re-
cieved from Mr.. Willard:
Wilmington. N c. Feb. %.
Dear Mr.. Daniels: There was another
reason for the adoption of Section so,
and particularly the Subsection b,
which was fully discussed by the Fin
ance Committee of the Legislatu Of
1901. In the railroad tax suits the chief
contention was that railroad property
was assessed at a very much greater
proportion of its value than other prop
erty. AS the assessment of the Corpora
ton Commission did not separate the
value of the franchise from the value of
the tangible property The entire valua-
ton of 100000 vas the amount con-
sidereG when making comparisons with
other property. Il was i'nr0ssible to
say how much Of this $40 900 was
simply the value of the tangible proper
ty, but the value of the tangible proper
ty alone should have been used when
making comparisons with the property of
individuals or corporations which pos
sessed no special franchise privileges.
It was very evident that if this valua-
ton had been divided into two separate
amounts, even the inequalities which
were shown to exist would not have APP
peared, and it is more than probable
there would have been no injunction.
For this particular reason it was de-
Il fho Iox CHI ha
aration of the value of the franchise and
the tangible property, and Subsection
r was adopted for that purpose.
1t does not appear to me to be as
mandatory as the railroads representa-
tives claim. 1t is certainly mandatory in
directing the separation of the two class
es of property, and that should be So
1t is also mandatory in directing the
Corporation Commission to take into
consideration certain facts, and to follow
certain lines in arriving at their conclu-
sions.
1t seems that this had not been done in
the past by the Commission, or very diff
ferent results would have been reached.
But there is certainly left to. the Com
mission all the discretion they should
have as to the final assessment.
If they should flagrantly fail in their
duty. and refuse to be governed By the
directions of Section b., any taxpayer
could probably take legal steps to force
them to regard this section.
1t seems that the railroads do not
wish the taxpayers to have this privi-
lege.
In my opinion it is very much better
to tax property of railroads in this way,
than to levy tax on gross earnings or
mileage.
If the property is properly valued
Cloth tangible and intangible) the mile
age or gross earnings tax, if levied at
al, should be very light one.
Yours truly,
NJ S. WILLARD.
Whether a tax to be assessed as pro-
vided in section fifty is better than a
mileage or gross income privilege tax, is
a matter upon which there is two opin-
ions. If the subject were an open one,
we would incline to the privilege tax,
but inasmuch as, after the settlement
Of the litigation, the General Assembly
of 1901 decided upon the tax which Mr..
in