New-York tribune., 1906-05-27
TO TAX CORPORATIONS.
MOVE MADE By SENATOR'S.
Sub Committee on District of Co.
Iumbia WouId Change Methods.
IFrom The Tribune Bureau

lFrcm The Tribune Bursan.l
Washington, May 26.-Taxation at the rate OF
II per cent of the net earnings of the streetcaT'
gas and telephone companies doing business IN
the District OF Columbia is the leading feature OF
a hu reported favorably TO the Senate by the
Committee on the District last week. The meas
ure. which was the product of long and earnest
work on the part of the subcommittee which
had framed 1t, met with vicissitudes in the SEN
ate. however, and was on motion Of Senator
GalIfnger referred back to the committee for
further consideration. What its ultimate fate
Will be. with the chairman Of the committee OPP
posed to It, is problernatical. although the resi-
dents of the district are all heartily in favor
of 1t.
Senator Hansbrough chairman OF the sub
committee which prepared this measure, says
that his committee made most searching eK-
animation Of the records of these companies and
or similar companies in other cities. and de-
termined that II per cent tax on the net earn
ings OF Washington companies would result in
their paying almost the same rate of taxation
Is paid by private individuals. There
are six railroad companies and one gas and one
telephone company involved. and taking their
net earnings for 1905 as a basis It is found that
had the proposed law been in operation then
they would have paid 100000 into the District
treasury.
the municipal car companies of Baltimore paid
taxes amounting to 20 per cent Of their gross
receipts, In addition 10 the regular tax on ell
real and personal property.
THE CONMTTTERs REPORT.
Aftar citing numerous instances where nunic-
ipal service corporations paid more taxes than
is the case in the District, the committee report
ing the bill said. in part:
With these facts before it. your committees
reached the conclusion that the public service coz.
Seouired to pay additional taxes 1t will be OBJ
served from the Census ofiee report that .rsS tn9
railroads In group Of fifteen states is 81 per cent
n ada09 ts TO ts sss sne ise pe Il paid SUB
stanfiai amounts for their franchises. whereas in
public service corporations are enjoying the right
to DO business free e This any yDTse comes n@ to them
an absolute gratuity and an examination OF tne
ss sss St on 4s pIt Is sns ssrs orpons p have
reached an amount which will justify the increase
The s1shs aw, imposing per cent .nG tax ,9a on
the receipts Of the street ao a8d teee eee
SgS & e weR ass .s earn the f press t
Since then there has been no change In the rate OF
The managements of the respective street rail-
way lines state that the entire street ra%ay raj PROP
oay eS N foe fos Of Thg is their outsde gre
Ths confined fnndsa iPdsbtsdness Sf the prop;
Siiss ens pad s0pnss aa annual aH Ss4sst f'S per
sar s Erse Gaa Rsx BE an and eoc ht
Ing plant are capitalized for e8l0oo0oo upon which
q interest tRat is being PAID upon the funded f.
year iss IN diyideads and interest os,.
that is being paid on real estate by private indi
viduals Ia II per cent on an assessment valuation
the pF2perty Taxing this as basis sv Of COMPUTE on 1a
thirds u the amount for which they Coincide the
lines can be reproduced about the same rate that
made without any reference whatever to the value
Of the franchises that being enjoyed by the
VALUE SHOWN BY DIVIDENDS.
Perhaps the most equitable basis Of assessment
is the value of eorporation's interest and divi,
the street railway and electric light companies Of
the District chow that the securities upon which
a9a o 80 afS & onns Il Ge Pa6 aDy S he
TIVE & sha az S1e here Of & Se sTy these
poraions. under a 11-cent levy. would pay ap-
@ they ou Faie6 s S sS
0e9 less than under the private individual rate,
bill relating to taxation which directs the proper
of these properties a basis for future taxation.
II such appraisement were 70 fix the valuation of
amount for which the managements say they can
be reProduoed.then, they are paying little more
Ia per cent paid by the private citizen If the as
praise w0s Gfi Sed Of r totd
uon-to-wit, 81 t0o000o-they would pay. under the
Il
| upon the total capitalization tha rate would be
sx-tenths of per cent
Some idea of the value Of these franchises may
be had when II is understood that In the case OF
the Capital Traction Company the stock is selling
on the market at from sA $50 per share the par
value being 600 per share. In the case of the
Washington Railway and Electric Company pre-
ferTed stock IS selling at about $50 share and
the common at $40 share, AS has already been
stated, last year the companies paid 81 07 300 diyi
| ana bonds. - ~
| There IS no present complaint against the rates
| OF fare which these companies are authorized TO
charge, but the disparity between the physical
| Nalue or the property and the amount upon which
profits are being derived argues strongly in favor
| Of increased taxation.
! Your committee. therefore. recommends, In addi-
! uon 10 the tax upon the gross earnings Of public
service corporations in the District of Columbia a
! tax OF Y per cent upon their net earnings This
| In the Judgment of the committee, will bring the
| taxes OF these corporations up to a figure nearly
| equal 10 the tax rate that is being paid by the
| private citizen.
| a clause has been inserted In the section rel
ative to taxation under which the corporations
named therein may at their own option, pay the
private individual rate of IL per cent in lieu
| or other taxes after the official appraisement to
| ascertain the real value of the properties and
! their franchises.
! CENTRAL TRAIN WRECKED