The Birmingham age-herald., 1905-11-26
Alderman FoIney Says Gross Re- ctipts of Public Utility Con-
 panies Should be Taxed
GIVES OUT STATEMENT
 SHOWING HIS REASONS
Says That the City Could Increase Fire Department and Improve It's Other Departments by
 This Tax.

Alderman John c. Forney has made the following statement regarding the tax ation of the so-called quasi public uuli- ties:
 Hike all other persons in this com nrunity, I have been deeply interested an reading the exceedingly timely and ex- tremely able editorials printed in The Age Herald on the subject of improving the fire department of this city. There can be no doubt in the Judgment of intelligent critics that the presentation of the case as made by The Age-Hera1d has been fair, comprehensive and convincing. The posi- tion taken by The Age-Herald that we need increased facilities for our fire de- pertinent cannot be successfully assailed. and I think the thanks of the whole com munity are due to Birmingham's only morning newspaper for the prompt, vigor- ous and intelligent campaign 1t has con ducted in the effort to provide this city with fire department that will be suf- f1cient to our need.
 After reading the editorials in The Age-Herald and the various interviews that have been printed in its news columns all persons will agree that we need more men, more apparatus and more water. Our people can only differ regard ing the ways and means of obtaining these. And I think everyone who has studied the subject is ready to concur in the opinion expressed by Alderman Henry B. Gray that the situation is one that calls for action. and that he City Council must either find way or invent one to raise the money necessary to provide the requisite increased facilities.
 Practical Means.
 "As a citizen of Birmingham. and as a member of the Board of Aldermen I hope you will permit me to state that the ofi f1aa nj that purpose Is the levying of fair and moderate tax on the gross receipts of our so-called quasi public utilities This sub ject Is one that is engaging the atten- ton of the whole country. As an economic principle 1t Is recognized as just, and as economic policy it is admitted to be, wherever 1t has been tried, eminently wise. I submit in all candor that taxa ton on gross receipts or street railways. for instance has in it, from the point of view of a franchise tax, a great deal to commend 1t. There Is nothing that so truly measures the value of a city rail- way as the amount of It's gross earnings. They furnish the true index of its actual value. The rapid increase of gross earn ings indicates good management and re- minds the public of the increasing value of the franchise of the street railway. In the amount of annual earnings a person sees something real, tangible and significant.
 
 ways strain every nerve. Such a tax unites at once the self interest of the com panies with the general interests of the public. For every one hundred dollars in- crease of gross receipts by taxation on gross earnings comes an additional f1nan- cial advantage to the public treasury. In no other way Is the public so surely com- pensated for the increasing value of the franchise granted by them.
 "If the railway prospers the taxes from taxation on gross receipts thereby in- crease automatically, and there is then no need of the valuation of the property at frequent intervals.
 In Other Cities.
 'In several cities the tax on gross earn ings Is progressive tax, increasing in rate as the earnings increase. In Mon treal for example, this tax ranges from ( per cent on earnings below one million up to 15 per cent on earnings above three million. In Toronto the lowest rate Is per cent, and the highest Is 20 per cent on earnings above three million. Mon treal has 250.OO0 people. The Birmingham Railway, Light and Power company serves 120.000 people.
 '"The special committee of the Massa- chusetts legislature appointed to fnvesti- gate street railways says: The tax on gross receipts is now conceded to be the most equitable basis of taxation
 Tn Washington taxation on gross earn ings is characteristic of recent charters, and takes the place of all other taxation, except the tax on real estate. Washing ton fixes the rate at per cent. Balti- more charges per cent on gross receipts and Cincinnati per cent.
 There are many cities in the United States that recognize the intrinsic value pf the companies franchises. Indeed, Tn Louisville Minneapolis, New Orleans, Omaha. Duluth. and in the larger cities of California not only are all tangible as- sets appraised by the assessors, but the street railway franchises are included in the tax lists at valuations ranging from st0o0 to the enormous sum of s4.000.O00 The franchise of one street railway com panv in San Franchise Is valued at s42s7,0Oo.
 Some Figures.
 "According to the returns of the Bir- mingham Railway. Light and Power com pany the valuation of its real and per sonal property is s1,117,o0o, and the market value of their property approaches ST. 100000 Subtract from the market value of the entire property this H,117o0o. which 1t returns for taxes. and it leaves some