Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-23
Would Require Higher Taxes.

with these facts before 1t. your commit
tee reached the conclusion that the public
service corporations OF the District of CO.
lumbia should be required to pay additional
taxes 1t will be observed from the census
office report that the average gross earn
ings tax paid by the street railroads in
group of fifteen states is 81 per cent. In
addition to this they pay taxes In other
forms. In some Of the states these corpora
tions paid substantial amounts for their
franchises, whereas in the District of Co
lumbia street railway and other public serV-
Ice corporations are enjoying the right to do
business free of any francl ise tax or other
charge whatsoever. This privilege comes to
them as an absolute gratuty. and an ex-
animate of the statistics contained In this
report VIII show that the profits of the
public service corporations have reached an
amount which will justify the increase In
taxation proposed. The existing law i'm
posing a per cent tax on the gross re-
ceipts of the street railways and the cleo
trio lighting company was enacted about
fifteen years ago, when the earning power
of these enterprises was much less than
Il is at the present time. Since then there
has been no change In the rate Of taxation.
THE management of the respective street
railway lines state that the entire street
railway property In the District of Column
bia could be duplicated today for S1775o,-
O00. This is their outside figure. The com
bined funded Indebtedness of the proper
ties amounts to $1s.444 .0OO upon which
there is being paid an annual interest of
per cent. nearly can be aScertained.
In addition to this the street railway cor
porations and electric lighting plant are
capitalized for S31 000, 600, upon which cap
italization dividends were paid last year
amounting to s1.14500o which, added TO
the amount of interest that Is being paid
upon the funded Indebtedness, gives a total
of 50 067 200 paid for the year 1893 in div
idends and interest.
THE rate of taxation in the District OF
Columbia that is being paid on real estate
" nrty lie Dnnr
on assessed valuation which is about
two-thrds of the actual value of the prop
erty. Taking this basis OF computa-
ton, the street railways are now paying
two-thirds the amount for which they
concede the lines can be reproduced about
the same rate that the private citizen is
paying. This calculation is made without
any reference whatever to the value of the
franchises that are being enjoyed by the
companies.
Value of Dividend-Paying Securities.
Perhaps the most equitable basis of as
sessment is the value of corporations in
terest and dividend-paying securities. The
sworn statements of the street railway and
electric lighting companies OF the District
show that the securities upon which inter-
est and dividends are being paid regularly
aggregate $40, 4i4. coo. So that II We apply
to them the rule that prevails here of levy
ing tax upon two-thirds of the value OF
the property these corporations under a
ia per cent levy, would pay approximately
$oCo,OOo year. Should this bill become a
law they would pay $:ts5 000. which Is S1lJ,-
o0o less than under the private individual
rate.
There is clause in the proposed sec
tion OF the bill relating to taxation which
directs the proper officials of the District to
make an appraiseTnent of these properties
as basis for future taxation. If such ap-
praisement were to fix the valuation of the
street railway properties at SlT $50 OoO-the
amount for which the management saw
they can be reproduced-then they are pay-
Ing little more than l per cent under
existing law, as against IA per cent maid
by the private citizen II the assessed val
uation were fixed by such proposed an
pralsement at two-thirds of their total cam
1talization, towit, S31 .0oO 600, they would
pay, under existing law, nine -tenths of i
per cent. IL based upon the total capitals
ration of S31 100000 the rate wouid he
six-tenths OF 1 per cent
Some idea of the value of these fran
chises may be had when IL Is understood
that In the case OF the Capital Traction
Company the stock is selling on the market
at from Slfi TO $50 per share the par
value being 500 per share. In the case of
the Washington Railway and Electric Com
pany, preferred stock is selling at about
so per share and the common at $40 per
share. As has already been stated last
year the companies paid S2G67 900 dIvi-
dcnds and interest on nearly Sc. .00D COO of
stocks and bonds.
Equal to Rate Paid by Citizens.
'srhere is no present complaint against