The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1904-11-18
FRIDAY, SovEArR75R 49, 1904
Taxing Stocks.


rendered BY the United States snpre"''
Court involving tho payment OF 'aAe'
,,non railroad stocks. The case was tha'
~ 4he state of Georgia against the Ghof'
ola railroad and Banking Company OF ~
,assees. The company owns sl,5vo,"o OF
~ c,n,ta, stock Of tho Western of Ma
hama Railroad Company ana co ' ny
that its holdings were not supaect ~
taxation, as the company ISSUING 'he
stock il a corporation Of another s1aee'
me decision Of the Supreme Court was
a reversal Of decisions of Two lower
courts, the United States Distric1 Cour.
tn +hc Northern District Of Georgia and
hi tho United states Circuit CoHrt OF Ap-
-aa1s for the Fifth Circuit. In render
ing this decision,'' says the Atlanta Con
stit11tion. ''the Supreme Court has est sap
nshed on a firm foundation principle
Of Georgia law and hereafter al STOCK
IN foreign corporations held by indiv'd-
mails or Incorporated companies IN this
state must have taxes upon Il. This will
effect hundred Of shares OF stock or COT
4 porations in other States held and owned
N GEORGIA, all OF which viii now be
called on 10 pay taxes, State, county and
lnunia pal
W@, are not prepared to discuss ans
decision intelligcnuy as sc are not "a
,ni,Ear with the Georgia Law, and as We
have not read the opiEton OF the con, t.
t,,t IL the facts are as the Constitution
4,,,s stated them, the decision seems to
$E,,s unjust.
e- us suppose. for example. that q
resident OF the State OF Georgia owns
stock IN a Virginia ralirha'l corporation.
Under the law of Virginia railroad cor
pora tons are taxed on all their physical
4 property and in addition they are taxed
IN per cent. upon their gross earnings,
which is In the nature of franchise
lax. Let us suppose that the railroad IN
,,,est,on lies wholly within, the State
4 OF Virginia such a corporation would
bay TO the State OF yirgtaia taxes upon
all its physical property and upon It's
franchise. and Iii SO. upon what possible
principle of law or Justice could the own
or of stock in such a corporation be com
pelled TO pay taxes on his stock holdings?
THE Virginia Constitution provides that
the taxes thus .,assMssed ION railroad cor
snorations shall b. Al lieu OF all taxes
and that the shares OF stock issued by
fuch a corporation shall be exempt II
exempt in Virginia, why should they not
be exempt in all States? The stock is
not property, It Is merely the evidence Of
ownership in property, and where the
8 It, obviously the stock should be exempt.
for the taxes after all are paid by the
stockholders The money necessary to
pay such taxes is deducted from lie earn
ings OF the company, and. therefore, from
the dividends Of the stockholders.
Let us take another case by way Of
illustration. Lei us suppose that citi-
zen of Georgia owns n farm In the State
Of Virginia. The propeit; lies In this
State. although the deed which is the evil
dence Of Ownership, may De in The I,neEet
OF the Georgia resident. Is it possible
that the State OF Georgia would under
take TO tax such a property holder upon
his detd7 II so. he would 20 into tie
court and show that his deed was no
z property al all. but merely, us wa haze
/, said. the evidence 9f,oRncrship in mon
erty lying In anolher State, and lint as
his properly ia Virginia paid ful! taxes
to that state. It could not lawfully be
taxed In the State Of Georgia The urin.
c!p!e is that all actual. visible prone,,y
should be taxed once and oniy once, and
7 any departure from that principle is a
X violation OF justice.
5 )sat IL ii BE- unjust for the State Of
Georgia 70 ax read estate lying IN Inc
stare Of Virginia. which pays ,a.cs IN
# virginia why is u not equally unjus, for
II 10 lax railroad property lying in yir-
4 gitlia which pays taxes in this stateq
There srabso!utely no difference il, nr,n.
ciple IN, taxing railroad shares and IN
taxing deeds, as IN the two cases NC
i have supposed. There Is a moral oues.
ID Ton involved In taxation which no state
may fairly violate and when the s1atc
does violate such a principle II encour.
ages taxpayers TO bs dishonest. Ther,
Is but one fair way and one practical
sensible way Of dealing with the oiles
ton of corporate taxation, and thai 1,
70 tax the properly OF the corpora ton
franchise and all where The propert,
lies and let that be IN lieu OF all taxa
lion. II Is through the corporation It
self that the stakeholder is reached am
the only way that all the stockholder
can % reaeaea But wasa tAe CORPORA