Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-06-03


dore Roosevelt was governor of New
York. he secured the passage Of a law
allowing the franchis IS Of railroad and
other corporations using the public
thoroughfares to be taxed as real
estate. 1t was only after he had writ
ten two special messages on the subject
and called an extra session Of the
Legislature that the Jaw finally went
on the statute books. The franchise
holding corporation Of New York made
vigorous fight and have since been
keeping up the fight in the courts but
their desperate efforts did not avail
against the determination of Roosevelt
and now they have failed IN the highest
court in the land. The law was upheld
in the lower courts and now the Su.
preme court of the United States by a
unanimous decision has also sustained
the law. The corporations must pay up
their back taxes, and adjust themselves
| to the hard necessity Of paying yearly
in the future. The payment of the
arrcarages means about $24,OOO,O 900 to
New York city alone, and the now as
aured collection Of the franchise tax
hereafter will mean an addition of
about $4,000, 900 to the city's yearly reve-
nue..
The franchise tax IS one of the monu-
ments Of Theodore Iiooscvelt's single
term in the governorship. The corpor-
atoms affected haven't forgiven him:
they never will. The resentment they
cherish is of the inplacable kind.
Their contributions swclled the Alton
B. Parker campaign cnest last year
The count of the votes was a bitter dis
appointment to them. They are more
than little dazed ard stunned vet.
Theodore Roosevelt had the satisfac-
ton of seeing the validity Of his fran
chise-tax law unanimously upheld by
the New York court Of appeals. He has
now had the satisfaction of seeing it
unanimously upheld by the Supreme
Court of the United States Remem-
boring his own arguments for the tax
six years ago and :he objections with
which they were then met, 1t must be
peculiarly gratifying TO him to find
Justice Brewer. the bench's spokesman
on this occasion, saying to all con-
cerned:-
1T would not be doubted that il a
grant were made Of specific, tangible
property like a tract Of land and the
payment therefor was i gross sum, no
implication Of an exemption from taxa
ton would arise. Whether the amount
was large or small. greater or less. if
tn" payment was distinctly the consii-
Grafton Of the grant, that which was
granted would pass into the bulk of
material property. and. like all such
property. be subject to taxation. Nor
would this result be altered by the fact
that the payment was to be made an
nUally instead of by Il single sum in
gross. If it was real estate, it would
be equivalent to the conveyance OF the
tract subject to ground rent, and the
grantee taking the title would hold il
liable to taxation upon it's value. If
this be true in reference to a grant of
tangible property. it is equally true
with respect to a grant of franchise,
for franchise. though intangible is
none the less property and Oftentimes
property Of great value. Indeed grow
ing out Of the conditions Of modern
business. a large proportion Of available"
property is to be :Ouni in intangible
thiupq like fra nchicac"
The significance of this decision is
not likely to be misunderstood. It's
effect will be general throughout the
country and the Roosevelt law in New
York is likely to be copied in many
states. The tribunal from whose judge
ment there is no appeal has dccrccd
that if franchises ar" property for the
purposes Of capitalization and the earn
property for the purposes of taxation.
The greed Of those VINO secured these
franchises led to the franchise tax in
New York and the same cause will
lead to the same result in other parts
of the Union. unless. indeed. as is al
ready coming to pass in Chicago. their
greed and mismanaEcment forces
municipal ownership tCfore the tax is
adopted.