Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-05-18
RAILROAD PROPOSAL
Assessors Report Approved
by Commissioners.
THE PERSONAL TAX
WHAT THE COMPANY Is WILLING
TO DO IN THE CASE.
Assessor Insists OH the Record Charge
and is Sustained by Corpora
ton Counsel


West his report relative to the PROPOSE
ton of President McDermott OF the WASH
ington Railway and Electric Company. In
regard TO the payment of the Districts
claim against the company for personal
taxes for the year 1903. against the Metro
politan and Columbia roads. branch lines OF
the Washington Railway and Electric Com
pany. President McDermott, in brief. pro-
posed that the company pay to the District
a franchise tax amounting to per cent OF
the gross earnings OF the roads mentioned
for the year 1908. The company objected
to making the payment as a personal tax
charge.
The proposition OF the company was sub
mitted to the Commissioners in a communf-
cation from President McDermott, setting
forth the company's side of the contro-
versy. In reporting on this communication
and proposition Mr.. Darneflie holds that
the District should insist on the payment
of the claim, amounting to more than $40,-
GEO. as a personal tax assessment agsinst
the roads and not as tax against the
gross earnings of the Metropolitan and CO.
lumbia lines. The District assessor states
that he does not believe that there can
legally be made any change In the assess
ments or charges, and recommends tnat
Mr.. McDermott be informed that the taxes
against the roads which he represents must
be paid as charged and that II the arrears
standing against the Metropolitan and Co
lumbia divisions be not paid at once steps
will be taken to enforce collection.
Commissioners Approve.
Corporation Counsel A. B. Duvall. in an
Endorsement on the papers in the case,
concurs in the conclusions expressed by
the assessor, and all three Of the District
Con missioners have approved the report
and recommendations of Mr.. Darneille.
The questions connected with this claim
Of the District against the railroad COM
pany have occupied considerable attention
on the part of the District authorities for
several months. The original charters Of
the Metropolitan and Columbia roads, pro-
vided that the companies should each be
liable to a personal tax, based upon the
assessed valuation Of their capital stocks.
When the roads were merged into the
washington Railway and Electric Com
pany in February. 1902, the company
claims, the capital stocks of the roads were
practically obliterated and therefore could
not be assessed. The District authorities,
however. assessed the roads for personal
taxes, the assessment being based upon
the gross earnings Of the roads for the
year 1901.
Washington and Great Falls, the Anacostia
and Potomac River Railroad Company, the
Georgetown and Tenleytown company, the
Brightwood and City and Suburban COM
ton. agrees to the proposition that these
companies should pay in full on all earn
ings had by them within the District, dur
ing the calendar year of 1902 and 1903. Con-
unuing, with the railroad company's side
OF the case Mr.. McDermott says:
Company's Contentious.
There remains to be considered only the
question of whether companies, organized
under the laws of Congress for operation
within the District of Columbia and subject
to taxation of per cent upon their gross
earnings, must pay under this provision a
tax to the District upon earnings had in the
state Of Maryland. where extensions of the
roads are operated under state authority.
This question arises as to the railroad
operated between the District line
and Cabin John bridge and also as to the
properties owned and operated in Maryland
by the City and Suburban railway of
Washington. Some of these taxes have
been paid under protest and some remain
unpaid, there not being any dispute as to
amounts if earnings in Maryland are SUBJ
Ject to assessment by the District Of Co.
lumbia. The total amount involved is about
$4,000. and there is an unbroken line of adj
JudicatiOn denouncing, as interference with
interstate commerce, such taxation when
imposed by state. Whether such a tax
can be imposed by Congress presents a
question that l think should be settled by
judicial finding.
Having doubts as to whether I, as re-
ceiver of the City and Suburban railway of
Washington, can pay these taxes, 1 respect
fully suggest that a case, displaying the
question as to that company, be prepared
and submitted to the Supreme Court of the
District of Columbia, asking that 1 be di-
rected in the matter of these taxes as to
my duties as receiver, and that the decision
In this case shall govern the question of
payment upon all receipts had in the state
of Maryland by the Washington and Great
Falls Electric Railway Company as well
htr fha ffxr C,1,,t rINay,
Washington, and shall also govern the
question of the return or retention by the
District of such taxes as have been hereto
fore paid. under protest, upon such extra
territorial receipts.
eff the propositions are favorably con-
sidered by you the following taxes will be
paid to the District during the present
month:
"By the Washington Railway and Elec-
trio Company, per cent on its gross earn
ings from the operation of the lines for
merly owned by the Metropolitan and CO.
lumbia railway companies from the list
day of July, 1902, to the 31st day of De-
cember, 1903, both days inclusive: also 4
per cent on the gross receipts, within the
District OF Columbia, had from the opera
ton of that part OF its railway system
formerly known as the Washington and
Great Falls Electric Railway Company dur
ing the calendar years 1902 and 1903; by
the City and Suburban railway of Wash
ington, the Brightwood Railway Company,
Company. the Georgetown and Tennally-
town Railroad Company. per cent on
their gross earnings within the District for
the calendar years 1902 and 1903.
ut will be seen that the proposition is to
pay per cent franchise tax upon all earn
ings from the operation of the lines former
ly owned by the Metropolitan and Column
bia companies to the LIST day of January,
1904 This being done, the Washington
Railway and Electric Company admits the
legality Of the assessment, and the pay
ment being made, 1 respectfully submit
that the assessment of franchise tax
against the Metropolitan and Columbia
companies for the year ending June 80,
1903 should be cancelled of record"
Mr.. Darneille's Report.
Mr. Darneille. in his report on the com
municatIon OF Mr.. McDermott. states that
the latter agrees to pay exactly what the
District claims Is due in the case of the
Brightwood. the Anacostia and the George
town and Tennallytown railroads Contin-
uing, he says:
"In the case of the City and Suburban
railway of Washington, the disa greement be-
tween the District authorities and Mr.. Nc
Dermott Is that the former claim that this
road should pay per centum on the gross
earnings of the entire system for the call
endar wear 1902 and 1909 and Mr. McDer-