New-York tribune., 1903-07-30
TELEPHONE FRANCHISE AssEssurv7

III seTles OF carefully prepared articles "The
brooklyn Eagle" has brought an Indictment
against the State Tax Commissioners on ac-
count of the assessments of telephone comma
MES for purposes OF franchise taxation II
makes specific charges of wholesale discrimina
ton against the independent companies in
various cities, and of favoritism for the Bell
companies which demand the most searching
investigation by the proper authorities. It also
states that one of the Tax Commissioners
Lester +. Stearns, OF Dunkirk, was formerly
counsel for the Bell telephone interests in this
state, and that the discrimination against the
Independent companies is particularly gIaring in
his home town of Dunkirk and in other Darts of
Western NewYork. These are serious charges
II the inequality of assessment is as real as
The Eagle" makes it apparent a thorough
gong reform, not merely of the assessment
put ol the assessors, is needed. If the Unequal
lty Is due not to error, but to corrupt motives
which The Eagle" plainly insinuates have
controlled the assessments then punitive as
well as reformatory measures will be in order
When Governor Odell returns from his we'll
earned vacation, he will no doubt investigate
these charges with diligence and impartialtv.
Inc Eagle marshals figures from all parts
OF the State to sustain its charge Of systematic
discrimination In Dunkirk the Bell company
has 40 telephones, and in 1902 was assessed
for 3,4OO. The independent company. with
only $50 telephones, was assessed for 5000
In Natertown the Bell company has about
twice as many telephones as the independent
company, but its franchise assessment is 50 800
as against $4,000 on its smaller rival In
Niagara Falls the independents have only S95
telephones and are assessed for $4,000. while
the Bell people, with 1850 telephones are as
| sessed for only $4,000 Similar figures are
| given respecting other cities. In some places
where the assessments are not actually higher
on the independents they are said to be pro-
poruonatey higher. In Rochester the Bell as
| sessment for 1902 is $221 ,OOO and that of the
Independent company is $21OOOO. If the Bell
| assessment is correct, then the independent
assessment, it is declared, should be, in propor-
ton to its business, only $4,000 Variations
are also pointed out in the valuation of fran
chises in different places Thus in Cortland
the independent company is assessed for 500
OOO while in the neighboring city of EImira
| the Bell company, with three hundred more
| telephones and what would seem to be a more
valuable franchise, as the population and busi-
hess are there much larger, is assessed for
only $4,000. In regions where the Bell COM
Pany has monopoly It's assessments are much
lower than where there is competition as is
shown by comparative tables one item of
which indicates that in Avon, where the Bell
has exclusive service, with 1850 people the
assessment is $500, while in Sennett, a com
petitive point. with only LAO people, the as
sessment is 81 300.
Now, these figures look bad. They may per
haps be explained and justified; and If pos
sible they should be. 1t is not necessarily true
that, as "The Eagle" says ''the greater the
| revenue the greater, of course the value Of
''the franchise" though it might be expected
ha bayr 4ba
telephones would have the most lines and the
largest franchise privileges. Franchise assess
mentS are not based on earnings The tax is
not one on gross incomes. such as the CORPORA
tions have asked, but the value Of the
rights owned in streets. 1t is meant among
other things to penalize companies who hold
franchises which they do not improve It is
possible that these seemingly overtaxed indie
pendents have blanketed their towns with fran
chises, or have lines utterly out of proportion
10 the telephones working on them while the
Bell people have their business concentrated
and carry no unimproved franchises This. in
deed. does not seem probable, for 1t would be
natural TO expect that the old companies, exist
ing long before franchises were taxed. would
have secured the largest street rights, and that
their rivals established in the last two or three
years would not only have been able to secure
much less valuable privileges but also would
have been careful about acquiring useless fran
chises subject to taxation.
In view Of the many unknown factors IN these
valuations. are by no means ready to con-
denim them, but The Eagles" figures show
such apparent injustice as TO require explana-
ton in detail Of any facts which can Justify the
seemingly unequal assessments The admins
tration Of the State Tax Commissioners with
their enormous power over corporations. must
be put beyond suspicion. The enemies Of
franchise taxation have predicted abuse of au.