The Mathews journal. (Mathews C.H. [Court House]) 1903-1937, 1911-01-19
RAILROAD MUST
PAY STATE TAXES
Decision Means Company Must
Pay Nearly 100000 Tax Ar
rearages and at Least $50
600 a Year on Its Gross
Revenues.
MoND. vA.-special.-

At last the Commonwealth of Vir-
ginia has got a strangle hold on the
, Richmond. fredericksburg and Po-
tomac Railroad, which under the pc
cuiiar provisions of It's superannu-
ated charter. heretofore has been able
60 enjoy complete exemption from
taxation.
Today the Virginia Supreme Court
of Appeals, through an opinion writ
ZEN by Judge Harrison. gave the
transportation company a terrific blow
when it decided the roads long-pro-
tracted franchise case In favor OF
the State.
If this decision of the States high
est tribunal stands-and there Is
naught to prevent It unless the mat
ter in some way is dragged into the
Federal courts-the Commonwealth
viii get between t17S.00o and $780,
900 at zone fell swoop."
This represents arrearages of taxes
between the years 1908 and 1910 In
elusive, today held to be due. together
with interest and penalties, which
each year have amounted to twelve
per cent.
All Sorts OF Money Coming.
But the golden harvest which SEEM
tngly Is about to fructify, does not
stop there. Under the finding OF the
court this morning, the road, forever
hereafter, win have to pay the State
one per cent on It's gross annual rev.
enues. which today are estimated at
50. 0OO. 900.
Time was, in less prosperous days.
when the franchise tax would have
amounted to- only about $4,000 a
year. but nov II Is safe to say that
the figure Will be at least $4,000 q
year. with strong probability OF a
continual increase.
And even these figures. which will
prove so soothing to persons who
tremble lest the public treasury be
depleted. do not tell the whole story.
Under the terms of the opinion hand
ed down, the Richmond. Fredericks-
burg and Potomac will be liable to all
sorts of taxation. just as other rail-
roads are. This means that counties,
cities and towns also will get a whack
at II.
the State. all told. ought to get pos
sibly $4,000 a year out OF the road.
A lawyer who has studied the litiga-
ton says that the valuation OF the
property. on a most conservative ba-
sis. ought to be at least S5e.eeo q
mile.
Naturally no one today is prepared
to give exact figures In the matter.
but it was not many minutes after
the opinion had been handed down
this morning. before lawyers and pub
lie officials were gasping at the sig
nificance Of the decision and the un-
compromising way in which it knock
ed the props from under the Rich
mona, tTGuoTlcKHDuTK ana POTOMAC.
Where the Road Erred.
The story Of how the railroad was
caught mapping is an interesting.
I though a technical one. An Assem-
bly, act OF the legislative session of
1894. page 127. allowed the COM
which it enjoyed for nearly seven
decades.
And then the trouble began. 1t
commenced to brew just after the new
Constitution became effective. The
road, along about 1901, began TO real
lie the necessity for double-tracking
and other improvements calculated to
meet its rapidly expanding business
An act Of the Assembly of 1912
allowed the road to make the required
changes and extended valuable privi-
leges which were subsequently &C
] copied. These constituted a charter
amendment The Richmond, Freder-
| tcKsburg and Potomac, to state things
crudely. was taken unawares. or at
least nodded at time when vigilance
was necessary. 1t forthwith went
ahead with the contemplated improve
ments and therein lay it's undoing.
When an attempt was put forth In
1907 TO make the road pay the fran
chise tax, 1t resisted and buttressed it.
self behind the old charter of 1884
Furthermore. II filed q petition in the
| Circuit Court OF Richmond claiming
It's exemption and asserting that any
infringement OF its rights would be
/ IN violation OF section 10 OF Article 1.
of the United States Constitution.
The Commonwealth. for its part,
aVerred that the road, by abandon
ing its original right of way, had
waived its exemption. To make a
long story short. the State lost in the
lower court.
In its opinion today the Supreme
Court says:
I'VE are of opinion that under the
facts and circumstances OF this case.
the amendments to it's charter tender
ed to tho Richmond, Fredericksburg
ana Potomac By act Of April g, 1902
were never accepted by Il until after
July 10. 1909. whea the Constitution
became effective; that the action taken
Dg the StoekholderE in general meet
ing November IT. 1902. and January
10, 1905, together with the radical
changes in its road already mention
co, made In pursuance of that ac-
tions constituted an implied accep-
lance of the amendments TO its char
ter, which were rendered by the act
or April 2. 1909; and that by such
implied acceptance OF these amend
nents the company, thereby, In ac-
coruance with the terms OF section
1913 OF the Constitution, surrendered
every exemption which &c might there
ter"
EpitOme OF Decision.
ma. b. Watts, editor of "Virginia
appeals. has made an admirable
epitome Of today's Richmond. Fred
erlcksburg and Potomac decision
Onoer the head Of RELIEF From Fran
chlse Observation-Disclosures of ny
einptlon, he has put tho following In
his syllabus: -
In an applications from a railroad
pdny Tor relief from 4 franchise
TAX assessed against IL, IN which IL
relies on an exemption from taxation
contained in its charter, no forms of
pieaolng being prescribed by statute
strlct technical rules are out of place
ana 1t Is competent for the Common
wealth. TO show in Its answer that the
company Is not exempt because Of
having surrendered such exemption.
Inc Commonwe had the right to
JUSTIFY Its assessment of the franchise
tax upon any legal ground that ex-
isted, and in no other way could the
just legal rights Of the parties with
respect to the tax have been settIed
Richmond, Fredericksburg ana Po-
tOmaC RafIrnod