Omaha daily bee., 1903-01-13

Of all Of these public service companies
materially. but OnlN. one OF them appeared
before the. Board OF Review asking a re
was the Nebraska Telephone company,
whose original return called for ar. as
sessment in the sum OF $4,000 on real e6-
tate and SlS.Vo on personal property;
The figures for the personal property had
been raised by the tax commisstoner TO
restored to the amount returned by 1t;
While the officers OF the company failed
by the board with a view TO placing us in
position to stimste The value OF me prop
erty more accurately a decision was
the taxable value Of the property. From
the Information .adduced It appears that
the Nebraska Telephone company Is capt.
talzed at $l,79S.O00, all in stock. certihcates
drawing 8 per cent annual dividend. II Is
the contention of the company that this
figure representing the value Of Its capital
stock which sells at par on the market
must be taken TO represent the entire value
Of the company's property extending as 1t
does throughout three states. The prob
lem before Us then was to determine the
proportionate value Of the property M
cluded in the Omaha exchange. The Off
GERS OF the company made an estimate OF
the value of its tangible property through
Operates. credditing Omaha 10000 for the
plant located here. They figured that the
difference between the tangible property
and the capital stock represented the In
tangible franchise value and undertook to
distribute this over the the system in the
same ratio as the distribution OF tangible
to accept this method OF arriving at the
value Of the intangible property In. Omaha,
but preferred TO estimate the franchise
value on a basis of earning capacity. Civ
ing the company the benefit of all possible
deductions and exemptions, It's gross earn
ings exclusively within the city OF Omaha
aggregated for the year $4,000, while the
gg dT ne earnings ysa ,o OF ne the oS entiT RE- system SIenor TSS
chargeable to Omaha then is approx
mately sx-nineteenth of the, total. APP
plying this ratio to the capitalization and
deducting Tire real estate already taxed
gives us the figure $4S0,42O, at which we
have fixed our final assessment Of its per-
sonal property.
Pacific Express
The most perplexing puzzle presented by
the attempt TO enforce the hitherto disre-
gaIded provision of the statutes relating
to the listing of capital stock. of companies
Incorporated in Nebraska and having their
headquarters in this city has grown out
Of the assessment OF the Pacific Express
company. This company is a Neb1asks
corporation with a capital stock OF $6,OO0,OO0
worth at least par, the stock being held
entirely by three railway corporations, to
which IL was issued In exchange for serv-
ice contracts. The company made a return
Of its capital stock and of its real estate
holdings In this and other states, but mas
much as II does business In twenty-five
states and is taxed In some OF them upon
the basis OF earnings, in some upon the
basis of property, in some upon the basis
of mileage, and in others not at all, It
was manifestiy Impossible for IL to show
upon just how much of its capital 1t has
been paying taxes Elsewhere. The officers
of the company were cited to show cause
why the assessment should not be raised to
S~5,537627, being the amount of It's capital
stock, less the real estate holdings outside
of Omaha. They responded with such in
formation as was In their power, and after
considering the matter the Board of Re-
view. by a majority Of its members, voted
to assess the capital stock Of the company
represented by a capitalization of the earn
inRg on its Nebraska business, The tax
commissioner dissented and recorded him
self in favor of making the assessment
in the courts of the right OF the city to
tax this company upon its entire capital
elsewhere. We submit the question to your
honorable body and leave II to your judy
ment whether the assessment shall be still
further Increased.
Mercantile Embellishments.
In the matter of assessing mercantile es-
adjustments upon their capital stock and
stocks of merchandise, the board has en-
deavored to fix assessments that would
work substantial justice under the re-
quirement of the law that property of all
kinds should be subject TO uniform taxa
ton. 1t has been asserted that on the
whole mercantile capital has heretofore
been assessed much more ienientiy than
real estate, and the plea has been made
for a continuance of this discrimination
on the ground that to remove II would work
hardship especially upon corporations. and
firms with headquarters here, but doing
/ BUSINESS OuISlUe OF I0lS CITY III competition
with merchants and jobbers of other cities.
1t lras been urged that mobile property
should not be taxed to the extent of driv-
ing II out of the taxing jurisdiction and
thu destroying II as a source of further
revenue, and there may be some reason
for the argument that whatever encourage
ment is given to mercantile establishments
in the form of iishtened burdens Of taxa
tion rebounds in a measure to the benefit
of the owners OF real estate and such other
institutions as inherently belong here whose
value depends upon the maintenance of a
Acceding to these pleas, however, would
make II simply a question OF how much
advantage, II any should be given to mer;
in real estate and other fixed interests.
Representatives of some Of our jobbing
real estate were assessed on a basis OF
100 per. cent mercantile capital should not
be assessed snd trS on 2 9 ibsy R Msrs nt tha9 20 per s6
had invested they would be contributing
nicipai government. We have been unable
to see how any fair Interpretation OF the
law would permit us TO do this,
We have no doubt that several business
firms will appear before your honorable
body. when sitting as a board OF equali-
cation. to complain against the assessments
which have been fixed upon them by this
board. 1t may be well, therefore, for US
10 remind the equalizing authorities in ad-
vance that we have preferred TO err, II
at all, on the side Of leniency In all of
these cases rather than the reverse, al
I QuE WG NAhsfN " aNANHA AAlN AhAAN
of the argument that business houses
should be assessed only nominally here
because competitors in other cities, where
the expenses of government are much
smaller and the protection afforded far less
adequate. are taxed still less, To admit
the validity of this argumen would be- to
allow the authorities of other cities to fix
the taxes for Omaha. For aught We know
the assessments in other cities have been
pulled down by the came argument In
reference TO low taxes in Omaha, so that
II would be merely a matter of time before
all the different competing cities and TOWNS
would be RENTING taxes upon mercantile
capital altogether because sOme business
houses in small villages paid no taxes at
all.
Special difficulties Encountered.
In fixing the assessments upon certain
mercantile establishments the greatest din,
cIlty encountered has arisen from the fac
that their owners neglected or refused &c
give accurate for the guidance
Of the hoard. They seemed TO prefer Il
send their lawyers as missionaries 10 in
struct us al TO our duties I'm the premises
and the methods we should pursue. anC
when the suggestion was offered that the
toard preferred information to advice they
refused TO furnish the Information. com
pelling us 10 secure the necessary facts
from such sources as were available. I
was disclosed by our inquiries that thu
paid In capital stock Of our business house,
affords no invariable indication of the rea
amount Of capital invested or che stock
Of merchandise carried that should b.
listed for taxation. Many mercantile con