The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1910-11-09
RAILWAY TAX CASE
WILL Be ARGUED
Franchise Assessment Against
R., F. & P. Comes Up
To-Day.
FULL COURT TO BE PRESENT
Large Amount Of Money for
State, and Perhaps for LOCAL.
ties Involved.

llCS luSOlNSt.
There is hardly doubt that the i'm
por.ant case of the Commonwealth OF
Virginia against the Richmond. Fred
ericksburg and Potomac Railroad Com
pany will be argued this morning In
the Supreme Court of Appeals before
full court The case is the first on the
docket.
No int!mation has been received at
the office of the Attorney General that
continuance will be asked for, and
there is no reason to apprehend fur
ther delay on that ground. All of the
Ave Judges have written Clerk II.
Stewart Jones that they will be pres
ent.
This case was argued on January
of this year, but at that time Juuge
John A. Buchanan was seriously Ill. and
within few days thereafter the court
ordered a reargument before a full
court. 1t was found impossible to have
a hearing at that term, so il went over
to to-day.
Big Sum Involved.
BY this litigation the State of Vir-
ginia hopes to collect a large amount OF
franchise tax assessed by the State
Corporation Commission against the
railway. Although the charter of the
road exempts 1t from all taxation OF
any kind, the franchise tax OF l per
cent. on the gross receipts has been
regularly assessed. lust as regularly
the railway has gone into the Circuit
Court of the city of Richmond and
secured an injunction to prevent the
Auditor of Public Accounts from col
lecting the tax. The existing case is
a test
Last year the Supreme Court granted
an appeal to the Commonwealth, and on
this the case now comes up for what 1t
is hoped will be decision.
The operation of the Richmond,
Fredericksburg and Potomac is i'm
mensely profitable It's gross income Is
large and is growing year by year, SO
that If the franchise tax of per cent.
can be collected the sum will prove
large revenue to the State. which
already draws a neat sum as Its divi-
dends on the stock which 1T owns In
the corporation.
Ancient Charter.
A charter was granted the road on
February %. 1884. in days when stage
charter it was freed from all taxa
ton. State or local, and it has never
paid any taxes on its roadway or on
its income. The provisions of the char.
ter In this respect are plain and incon-
trovertible.
However. amendments to the original
charter have from time to time been
granted by, the legislature. These
number twelve in all. The content on
of the State is that by the enactm mt
OF these amendments and by their ac-
ceptarce by the road, 1t has lost Its
exemption.
On the other hand. the defendant rail
way company relies on section OF the
Constitution of the United States which
forbids the enactment Of law by any
state which impairs the obligations OF
a contract This invocation of the Fed
eral Constitution Is taken to mean that
in any event, no matter what the de-
cision of the Virginia Supreme Court.
an appeal will be taken to the Supreme
Court of the United States.
Able Counsel.
orney-General Samuel w. Will
,;ams and former Attorney General
william A. Anderson will appear for
the Commonwealth. while Hill Carter
and probably Allen Caperton BraSton
will act as counsel for the Richmond.
fredericksburg and Potomac. Because
of the Importance Of the points at Is
sue and the large amount Of prece-
dents invoked, several weeks may
elapse before the court renders de-
csion.
In addition to the State franchise, a
decision in favor Of the Commonwealth
might permit the collection Of taxes
on the visible property OF the road.
If 1t is held that the charter exemp-
ton from taxation Is forfeited, 1t may
omen the way for assessment Of road
way and track. which would work
taxes for the State and a much larger
amount for the cities and counties
through which the railway runs
According to the last annual report
OF the state Corporation Commission
the total operating revenues Of the
road for the year ending June 80, 1909.
amounted to $2,O26.sa4.5s, and its other
income to s2s.1S1.15. This would make
a gross income Of $2o55, 5o5.73. per
cent. on which would be $20,555,05, The
taxes involved now amount to several
times this sum. for they have been ac-
cumulating for several years. while
the case has been In the courts,
e g e.