New-York tribune., 1903-01-13
FRANCHISES As REAL ESTATE.

1t is amusing to note the anxiety of the public
service corporations to persuade people that the
taxa ton of their street franchises is a revoiu-
tionary imposition Their horror at the idea
of calling so --incorporeal' and Intangible"
thing as a street right real estate might be I'M
pressive if we did not remember their previous
success in proving that those incorporeal moth
ings were one of the most tangible and inde-
structible FORMS of property known 70 law
Their complaint of injustice at the size Of the
burden imposed upon them by the law which
with Punic faith they are trying TO invalidate BY
reason Of the features which they engrafted
upon il might arouse some sympathy if we did
not remember that for more than forty years
they did indirectly pay on these franchises
taxes which were computed on much the same
basis as the present direct assessments. Until
the Court of Appeals few years ago, in the
Union Trust Company and the Manhattan Rail-
way Company cases, reversed the old rule of
assessment it had been the custom when shares
of stock sold above par to treat the fact as con-
elusive evidence that the capital was unim-
paired and to assess locally as personally the
whole capital minus the company's real estate
and other minor deductions. Those decisions
worked revolution in taxation by holding that
the franchise values had wrongfully been in
cluded in assessments. So for some years, IN
Ill the passage of the Franchise Tax law, the
corporations enjoyed an exemption from a
burden which they had borne without COM
plant for nearly half century.
The Franchise Tax law merely reimposed the
old burden in a direct form. 1t is said that
these franchises are not real estate, and call
ing them so is a mere fiction. Then calling a
railway car real estate is more of fiction, yet
real estate it is. 1t is no more actual prop
erty than the title to the street. and il is freely
movable and not attached to the land as the
franchise is. Hundreds of things besides mere
land itself are real estate-houses, fixtures IN
houses. growing grain fruit on trees hop poles,
which are removed from the land every year.
The definition of real estate in the tax law of
New-York is long, and includes many things
besides land and immovable attachments.
Writers on real property treat of franchises
as among such properties, and Washburn points
out that at a very early day in Massachusetts
the property in ferry was held TO be "a pri-
vate estate in fee without being appurtenant
TO corporeal tenement-that is, the mere right
without regard to ownership of boats or land
ing places Years ago Justice Selden declared
of franchise granted by the Common Council
of this city:
II amounted TO an immediate grant of an In
terest, and II would seem Of freehold In the
soil of the street to the defendant The rails.
when laid, would become a part of the real
estate, and the exclusive right to maintain them
perpstually is vested in the defendant
The title to the rails when permanently attached
20 the land, and such right in the land as NAV
be requisite TO their perpetual maintenance, are
therefore granted
The title 70 maintain tracks In street is as
much real estate as the title TO maintain a
house on a piece of land. If it is not free
hold, IL lis at least leasehoId 1t is exclusive,
so far as the purposes Of the franchise owner
20. He buys. begs or steals from the city a
right of way over its land. If he got the right
of way for his railroad from private land
owner there wonld be no question about its be-
ing real estate. Because the city furnishes the