New-York tribune., 1903-04-29
TIE FRAycHISE TAX UPHELD.

The decision Of the Court of Appeals sustain
sng the Special Franchise Tax law is an impor-
eant vindication Of the right Of the State Ihe
franchise holding corporations have worked
5ard to confuse the issue and escape ta1auon
on their most valuable properties They, who
used 10 buy and sell franchises as real estate
when no work had been done under them, who
established the doctrine that franchise grant
sronferTed g freehold which could not be Tor
6eited even when obtained by fraud, went about
hyhining that the State was making them pay
eutrag geous sums for the mere permission TO DO
business To confuse rental and taxes they
took advantage of the fact that the owner of the
streets and the taxing authority was the govern
lrnent. They complained that in few car IL
censes and percentage payments they were al
ready paving taxes on the value OF their privi-
1eges. whereas they were only paying rent TO the
Swner Of the streets for the use Of his prop
prtv These arguments confused many persons
while the legislation was under debate, but no
tribunal from Judge Earl TO the Court OF Ap-
11eals has made the least question that the State
Exercised its proper powers in putting on the
na1 books these great valuations, which were
she basis Of stock and bonds the subject OF
lease and sale
The chief reliance Of the corporations in every
stage OF their litigation has been the machinery
,created ar their own request 10 guard them
from local injustice in the imposition of the
tax. The plea that assessment 10y State OIL
GERS was invalid was sustained by a majority
of the Appellate Division in the Third Depart
lnent reversing the finding of Judge Earl Now
1.-THE Court Of Appeals unanimously upholds the
aaw st every point and the franchise holders
therefore viii have 10 pay the taxes that have
Flpeen levied upon them for the last three years
"a particularly gratifying feature of the decision
Us its unanimity. We have so often had divided
courts on important questions, and especially on
Shis matter Of the boundaries between State and
hocal functions prescribed by the cOnstitu-
aion that il has been increasingly difficult to
know what the law was. The present unani-
irnous decision does much to clear the air, and 1t
Is certainly in accord with common sense TO
hold that the legislature in creating new sys-
tenn Of taxation of new sort of property might
provide the appropriate machinery to enforce
81 without regard for the local officers levying
the old taxes.
Doubtless the corporations, having been beaten
sn court, will now begin agitation for changes IN
the law, and viii again propose various schemes
of percentage payments They should all be re-
sisted II VIII be said that the payments Will
be as large or larger than the present tax II
So the companies would not propose them.
Any1CW. Gtclft VI iGc oLolC OA6AA ASN ~ ~
10 mulct the corporations. but TO tax them
Justly The principle of franchise taxation is
ttust, whether the receipts be larger or smaller
than q percentage Of gross incomes 1t treats
corporate property IN streets just as 1t treats
private property anywhere. The man who
owns vacant lot pays taxes on Us value re-
rariless of the income. The corporation which
owns a right Of way in the street should pay
IN the same basis. and under the ruling OF the
Court of Appeals ii viii so pay. Public opinion
VIE think. can be relied upon TO block any at
4empts 10 overthrow the system now nrmiy
established. For the share which The tribune
had tn securing the passage of the law. and De
tending its justice and consututonalty since,