Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-03-26

/ motion by the same senator the bill wa.
amended by the adoption of Senate amend
ment A, and on motion by Mr.. Stetson o.
Penobscot, the rules We're suspended an
the bill as amended took it's second read
ing and was passed to be engrossed;,
3 Bill to authorize steam railroad cor
porations to build operate, purchase ant
lease street railroads, came up by specia
assignment On motion by. Mr.. Stetsor
of PenobScot, Senate amendment A was
adopted. motion that the phi :, pc lncel,
nitely postponed, made by Mr.. Staples OF
Knox, was lost; and the Dill, as AMENDED
was passed to be engrossed.
Bill, to repeal Section Is, Chapter 9, Re
vsed Statutes, in relation to taxation OF
corporations, came up by special assign
ment The pending question being upon
the acceptance of the report of committee
on taxation, majority ought not e pass;
of Somerset, moved the acceptance OF the
minority report.
Mr.. GOODWIN of Somerset: Mr.. Presi-
dent, the bill is very short, and simply re-
peals Section rs. This section was passed
in 1916. 1t Is an obsolete section today. I he
matter was first called to my attention in
the committee on revision of the statutes
in the report of Mr.. Morrill, of p. 8 OF
said report When this law was passed
there We're three corporations in the State
of Maine, the shares in which were made
personal by their charters-the Bath
Steam Mill Co, the Great Works Improve
ment Co., and the Vassalboro Steam Mill
Co, all now defunct. When passed, the
section was meant to apply to those man
ufacturing companies which were made
personal by their charters. Now comes
the evil part of Section Is, contained in
the last clause-that is, that no manufac-
turing corporation in any city or town.
real estate, machinery and stock in pro-
cess shall be assessed to that corporation
in the city or town where the corporation
is established; and then it provides that
i'll assessing the stockholders for their
shares in such corporation-their proper
tional part of the value of such machinery,
goods and real estate shall be deducted
from the value of such shares. That is.
the law provides that the stock in such
companies shall be taxed in excess of the
value of the plant. If you have manu-
featuring establishment capitalized at $780,
OGO and the plant and stock i'll process Of
manufacture and machinery are worth
100000 and the stock in open market is
worth $20O,00O the law expressly provides
that the excess OF the stock shall be taxed
to the. stockholders wherever they may
reside in the State of Maine. That is the
law as it exists today. But this Section IS
which is obsolete, and which was intended
to apply at the time of its passage simply
to those three corporations which l have
named. whose charters made them person
al in their nature-upder this last clause
of Section Is the shares of the capital
stock of such corporations shall not be
taxed to their owners in excess of the val
lie of the plant, machinery and stock in
process-that escapes taxation in the State
of Maine today. Now, as a simple legal
DTODOSlIlOIl, SecllOIt 20 IdNlHS Decl passed
to apply simply to those three corpora
tons, that law should be repealed. We do
not ask for anything different from exist
ing law, but we do ask that stockholders
in corporations should not be allowed to
take advantage of an obsolete law and
thereby escape taxation on the excess val
ne of their stock. We have another law
bearing upon this question which | wish
to cite to you, requiring that the treas
urer of a manufacturing corporation shall
ascertain the residence of stockholders,
and no dividend shall be paid to any stock
holder whose residence for the time being
is not entered upon the books thereof and
the cashiers of banks, and treasurers hold
ing property liable to be taxed shall by
the Sth day of April annually return under
oath to the assessors of each town in
which any of its stockholders reside, the
names of such stockholders and the
amount of stock owned by them on the
first day of such April. Under this sec
ton of the obsolete statute which l have
just read to you, the treasurers of manu-
featuring corporations, in many instances
now do not send to the towns where their
stockholders reside list of the stock
holders in their respective corporations,
because they say that under this section
shares of the capital stock shall not be
taxed to their owners; therefore they say
the manufacturing shares are not to be
taxed, and therefore they do not send
what the law plainly requires them to send
poration to the assessors of the town
where the stockholders in that corpora
ton reside. This matter is of great i'm
portanee. 1t has a considerable bearing
upon the amount of taxable property in
the State, and will undoubtedly bring to
the tax assessors very clearly information
as to who are stockholders in manufac
turing corporations, residing in their
towns, and give to the assessors of that
town an opportunity to tax the stock in |
that town, on its excess of value over the |
value Of the corporation and it's plant.
From the cersus of 1900. it appears that |
the total amount subject to taxation in |
Maine is Sl22. 91S, S26 The same census re
port shows that all that has been paid OF |
cut of $l22 100000 is taxed. Eighty-three
millions of dollars in manufacturing plants |
IS today escaping taxation. | do not mean |
to say that the repeal of Section rs will |
taxation because municipalities can make |
any contract they see fit as to taxing cor
porations within their limits, but it will |
have a tendency to increase the taxable |
property in the State. Now one thing |
will have to be DONE Either we shall have |
to repeal Section 2S, or we shall have to |
repeal all the law which is the law to-
lay. This measure is championed by the |
State Grange today. The simple fact is |
there is an obsolete law upon our statute
)ooks-Section Sand we ask TO have it
repealed in order that it may not be used |
rs cover to prevent the excess value of
he stock, over and above the valuation
If the plant, from being taxed in munich
)alitieS where the stockholders reside
Mr.. GARDNER of Penobscot: Mr.. Pres
dent, | feel somewhat lost, the senator
rom Somerset having taken strictly tech
neal ground for discussing this as an OBJ
;olete law; and l am going to leave the
discussion of that matter-whether it be
Or MOTTO gentlemen muchh more able
han myself to discuss whether this Sec
ion % is or is not obsolete. The committee
IN taxation gave this matter quite an ex
ensive hearing, and the result of that
rearing was that in the judgment of a |
of that committee this section il |
lot obsolete; and l hope there are some
members of this Senate much better able
han to discuss this technical point who
Will do so; and II not, later | will give the
'eaSons why that committee decided it
vas not obsolete 1t seems to me pecu-
lar circumstance if this law is obsolete
hat the action of the assessors all over
his State has been based on the asSump- |
ion that this was a living law. | am
,oing to leave the discussion of whether it
S an obsolete law to one side for the pres |
mt, and a gree primarily with the senator
rom Somerset that if this section is re- |
it seems to me shows con-
usively that the section is not obsolete
re other laws on he statute books which
uring companies over and above the real
Y and property. On that point, / wish to
AXE issue with him and to say that in the
Judgment of the committee the principle
as the policy of the State, prac-
ically holds holds that the excess of stock
n manufacturing companies over and
Lbove the real property should not be
axed. and that Is the ground we stand on
elatiye to the manufacturing corpOra