New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-20
PUBLIC SERVICE FREE.
HAS NEVER Paid TA4ES.
assessors an Doubt as to Status OF
Big Jerseg Corporation.

II was learned yesterday that the Public ser
vice Corporation, which controls all trolley lines
and lighting plants in Northern New-Jersey' ana
which was lately reported taken over by the
United Gas Improvement Company, of Phila-
dephia. since it's organization, nearly three
years ago. has not paid a cent of taxes to either
city or State. The company has an au-
thorized capital of $25OOO000, of which half
has been issued and is outstanding, while the
other half is about to be issued.
This condition is due to the fact that doubt
exists in the State Board of Assessors as to
whether public service should be assessed as
public utility corporation, using the streets and
subject to the franchise tax law on its gross re-
ceipts or simply corporation subject only
to a tax on it's capital stock issued and out
standing under the Corporation Tax act of 1854.
The city taxing officers say they know of no law
which permits Of the taxing of the known value
of Public Service stock as bank stock is now
taxed. The corporation says that it operates
but does not own the many lines under its con-
troll and therefore is not liable to franchise
tax so long as the tax is paid on the individual
franchises.
These facts were brought to light in Newark
yesterday. when Joseph Mcguire. secretary or
the board admitted that the corporation had
never paid cent of taxes as a separate cor
poration Public Service is not taxed as a unit
in Newark, It's birthplace, because the properties
which it holds under lease or ownership are
taxed they exist.
The East Jersey Traction Company. a concern
held under d perpetual lease as a constituent OF
one of the Public Service subsidiary companies,
with 100000 per cent forty year gold bonds
issued by IT, the principal and interest of which
are guaranteed by the Public Service, is another
ia q
SCISSORS. According to report of the East Jer-
sey company. filed with the State Board of AS
SCISSORS in April 1904, the 100000 bonds were
issued In a report filed December. 1908, no
property on which the bonds might have been
based appears. The last report recltes that the
company's capital stock issue is $4,000, OF
which $4,000 was paid in.
In reply to the questions concerning the cost
of road or equipment, operation, source of divi-
dends number of miles Of track location OF
track and the income, the answer is None
Frank Bergen, as president signed the report
and Thomas n. McCarter, president or the Pun
lie Service swore him in as Master In Chancery.
Chapter of the Laws of 1901 was called TO
the attention of the assessors, with reference to
Public Service, since there Is doubt as TO now
to class it. This act was enacted at the suggese
ton of the assessors to prevent the Sinking or
taxes by corporations. 1t reads IN part:
All corporations incorporated under the laws
Of this State, other than those which are subject
to the payment OF a state FRANCHISE TAX as.
sessed upon the basis of gross receipts, shall
make annual return Of the amount of capita!
stock issued and outstanding at a graduated
rate according to the amount of capital ranging
from one-tenth Of per cent to 500 on each
S1,000,O00 capital.
It is argued that the Public Service Corpora
ton should pay a license fee on its stock Issued
On that basis the corporation would now be
$500 IN arrears. and it would necessarily be
listed with 1900 corporations the charters of
which Governor Stokes recently declared forfeit
ed because of non-payment of taxes.
The resolution with reference to the status of
Public Service, coming it does just at a time
when a big financial deal is in the fire, with
Public Service behind it, there is considerable
anxiety and guessing at present, particularly in
Newark financial circles.