Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-17
Struggle of New York City
Street Railroads
TO AVOID PAYING TAX
DUE THE STATE UNDER THE
FRANCHISE LAW.
Big Array of Legal Talent in the Argu-
ment for the Com
panies.

Another battle royal between corporations
and the law commenced In the United
States Supreme Court today, promising 20
almost rival in public interest the famous
Northern Securities case, which. by coin
cidence, comes to a close today by the
issuance of the courts mandate carrying
out the concluding act in that celebra ted
litigation.
The case which came on for argument
today involves a struggle between the street
railroads of New York city and the state
of New York, over SO coo 600 in taxes, said
to be due the state under the franchise tax
law. That law was passed by the legislature
mainly as result of the vigorous urging of
Theodore Roosevelt when he was governor
of New York. 1t was one of his favorite
reform measures and he called an extra ses-
sion of the Legislature to perfect 1t after
the bill had been passed on the closing day
of the regular session
The case has been fought through the
the higher courts of the state of New
York. the final decision being in favor of
the tax law and against the railroads.
Eminent counsel were present in court to-
day to take up the argument. Julius VI.
Mayer. attorney general of the state of
New York and his assistant counsel. Louis
Marshall contended for the law. Such
lawyers as Elihu Root. William ID. Guthrie.
Charles 4. Collin and William +. Sheehan
were in opposition.
The Railroad Argument.
The railroad argument was that the
errors asserted and urged are that the
franchise tax law. by which the assess
ment of the special franchises of the rela-
tors were made is unconstitutional in so far
as 1t purports to authorize the assessment
and taxation of the intangible right or
property included in the special franchises
of the relators, namely
.f,-i,, l,N oh li.rntf fAnC Of
contract of the REALTORS with the city and
the state.
Second-As depriving the REALTORS of their
property without due process OF law
Third-As denying to the realtors equai
protection of the laws.
There are a number of railroads parties
TO the litigation and different arguments
apply to the several cases. The argument
for the state sets forth, among others, these
propositions:
That no contract was created by the
several statutes and ordinances which pre-
cluded the state from imposing a tax on
the special franchises of the relator.
THAT the corporation operating rail-
road in the subway is not the owner or a
special franchise, but that the franchlse is
the property of the city of New York. The
ownership of this franchise residing as 1t
does in the public under well settled rules.
is not to be classified with property WHOSE
ownership is vested IN lndlVluuatS OF PIT"
yate corporations.
Exact equality is practical impossipfl-
ity under any system of taxation and Is not
required. The present act treats with equal
hand all owners of special franchises In like
circumstances. The act has merely per-
mitted the deduction of lien or charge
against a special franchise and this act or
grace cannot be contorted into one of in
Justice. single rule is applied which oper-
ates with entire equality upon all In IKE
circumstances. To require more OF a sys-
tenn of taxation would require the impos-
sible To sustain the contention of the
,ola inf in would nulllfX every known
system of taxation
Gov. Roosevelt's Message.
Accompanying the briefs submitted to the
Supreme Court today was the message of
Gov Roosevelt, to the New York legisla-
ture In 1890 Some extracts have a IA
miliar sound to those who have read his
recommendations to Congress on corpora
ton regulation. The governor said:
1.-The line of cleavage between good and
bad citizenship does not follow the line
dividing the men who represent corporate
interests from the men who do not; it runs
at right angles to 1t. We are bound to rec
ognize this fact, to remember that we
should stand for good citizenship in every
form and should neither yield to demagogic
influence on one hand nor to improper cor
porate influence on the other.
There is no intention of depressing the
people who have put their money into tran-
cnises If franchise is worth very little
il should be taxed very little; but where the
franchise is of great value 1T certainly
should be heavily taxed. and the value Is,
of course, based upon the use OF the city
or tbe states real estate. Such use of the
puolic real estate should not be given with
out substantial returns, not only in the way
of service to the public which, OF course, a
street railway or a gas company gives,
nrecisely as the proprietor of a grocery
store or dry-goods store also gives 1t. but
also in the way of bearing just share or
the burden of taxation.
1--WE are the true friends of the men of
means we are the true friends of the law
ful corporations which do good work for
the community when we insist that the
man of means and the great corporation
shall nav their full share of taxes and bear