The San Francisco call., 1906-11-29

lation 10 the losses in taxes sustained
BY California through the evasiTe meth
ods Of the corporations:
$50 Franlin Street san Francisco.
NOV. "a, 1906.
Editor OF the San Francisco Call:
Dear Sir-I have read with interest
the editorial in your issue of November
e entitled Taxes Lost by California
In this you set forth the large surplus
accumulated by certain corporations,
notably the Pullman Car Company. the
Central Pacific Railroad. the Southern
Pacinc Railroad and Wells. Fargo &
Co You state that these corporations
nave never paid any taxes IN California
on these accumulations. and in conclu
sion commend the matter 10 the consid-
Grafton OF myself and the State Board
Of Equalization. With the assessment
OF steam railroads am not concerned.
il being a matter which by law is
wholly in the hands OF the State Board
Of Equalization
The Pullman Car Company is a cor
poraIon foreign 10 this State and op-
crates practically no part Of its system
within this city and county. so that all
1 can legally assess II for is its rolling
stock that might happen TO be in this
city Al noon on the first Monday in
March.
Regarding the assessment of Wells.
argO & Co. l have endeayoTed TO as
sess the corporation for franchise
based on its earning capacity IN this
city. these earnings going TO form part
Of the surplus referred TO. Wells, Far
90 & Co is incorporated in Colorado
Besides its express business il has q
number OF bankS-one in Salt Lake. one
IN Portland and one in this city. The
otfcsals declared the surplus 10 con-
stiIuIe its working capital invested
outside this State and used in its bank
ing business The corporation has re-
sisted the payment Of the tax on its
franchise assessment and has success
1ully prevented its collection by means
Of an Injunction obtoined from the Fed
eral courts
when the day arrived for the sale
or property on which taxes were delin-
Quent by the Tax Collector he would
be served by the attorneys OF The cor
Dordtion with an Injunction from the
FEDERAL court restraining him from
selling their property. This Injunction
would be served about Il o'clock in the
morning. the sale being set for y
o'clock Of that day This would give
the city authorities no opportunity 10
had passed The effect OF the injuuc-
ton is 10 prevent any penalties for de-
hnquencies which might thereafter ac-
crue-
The usual remedy OF a taxpayer who
claims that he Is unjustly or illegally
assessed IS 10 pay under protest and
appeal 20 the courts. as the law pro-
Flces ne shall In this way the city is
not deprived OF the taxes for an in
definite period.
I believe II is usually the custom. If
ANA A--r -1A 10 Ia-lL -uIELlOnS Only
when the law provides no other re-
course. The use Of an injunction in
such case as this nuliideS the opera
tiOn OF the State revenue laws as ap-
plicable 10 such cases. Although the
hrst assessment against the franchise
OF Wells. Fargo g. Co. was made Eve
or six years ago for $3.50. o.0o0, ! do not
believe that the corporation has ever
been called upon 10 defend itself in
court Each year Il has repeated the
tactics SO successfully employed by il
10 prevent the collection of this tax
Other State banks. notably the Bank Of
California. have as the law provides,
paid their taxes on their franchise un-
der protest and appealed TO the State
courts for redress
The State courts have compelled our
banks 20 pay the tax on this franchise.
while the tax on the assessment of the
franchise OF Wells. Fargo & Co.'S bank
has been successfully resisted by this
corporation The bank has recently
been merged with q national bank and
therefore IS now exempt from taxation
by Federal law on this part OF its
property The assessment against the
corporation for its express business re-
mains
II the reform IN our revenue system
which has been instituted by Governor
Pardee is adopted Dy the people all
Of these corporations viii be taxed by
the State directly by some definite rule
this being n most instances tax col
lected by taking a certain fixed per
centage Of these corporations gross
receipts collected on business done
within this State Our present revenue
far as this class Of property is con
cerned- Very truly yours,
WASHINGTON DODGE
Assessor OF San Francisco.