The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1913-03-15
ON RAILROAD TAXATION
Governor Fletcher's Statement Be-
fore Beard Of Appeals.

| FOllOWlng is the statement mdue
by Gov A. NJ Fletcher Thursday at
the hearing in Montpelier before the
board of appeals which is considering
the appraisals of railroad property:
81 appear before you gentlemen
with a view to discussing with you
the broad question of taxing these va
rious corporations as a matter of
| state policy and touching for mo-
ment, if | may, upon the primary mo
tive that | have in joining with the
state treasurer in making this appeal
| from all the decisions of the tax COM
missioner to you, as board.
1T is known to you, | think the
position that as the executive of the
state, | took in the early part of the
Legislature in sending a message to
| that body advocating a change in our
policy of taxing the railroad corpora
| ton, and the reasons you will per
haps remember in part, and you will
pardon me if again touch upon them
or some of them. They were, prima-
rily, that from conditions which had
arisen outside of the state the major
portion of the railroad corporations
of Vermont were controlled outside
| of the state and by corporations who
within themselves, in the carrying
! out of their own best interests and
| their own peculiar policies might or
might not interfere with the spirit of
our then taxation law; and the Legis-
lature saw fit to carry out the recon-
mendation that ! made at that time,
and changed the law in the respect
suggested, providing for an appraisal
of these properties. The tax COM
missioner made certain appraisals
predicted upon conditions, as he UNI
derstood them, at that time. They
are his findings in part.
Now l felt, and now feel that in
view of the radical change which was
made by the Legislature, the first
real and initial appraisal should be
made by the board as constituted by
you, as provided by law, and should
not be the decision of any one man,
and should be after a fair hearing of
the various interests, and that the
conclusion that you may reach in the
consideration of this matter may
stand for some time to come in this
state That had much to do with my
action in this matter, and | think in
a sense ! speak for the treasurer of
the state as well in that particular"
Treasurer Deavitt. Yes"
Gov. Fletcher continued, Now gen.
tlemen, it seems to me that it is for
you TO lay down now as matter of
state policy, some broad tun1amen-
tai principles which shall guide you
and guide the state hereafter in
fair way, and l am going to suggest
to you now for your consideration
that in arriving at your idea of a
fair value of this property, for taxa
ton purposes, you take into consider
alton the market value of the bonded
Indebtedness of these organizations,
of their floating debt and of their
capital stock, and that the aggregate
of that is the fair basis for their tax
alton, as fair as you can get at il in
any way; and ! suggest that for
your government in this NATTER
say ii is fair way of getting at ii,
as 1t would be in the case of an indi-
vidual. 1t is the market value of the
property And as the executive of
Vermont | say ii is what | would like
w SEC sOu wv WHAT Otil0Nt NOulu
be fair to them, what | believe would
be fair to the people of this state,
and what the people of this state
have a right to expect. You will have
to be governed by that which you
have knowledge of, knowledge that
appeals to you you are a law unto
yourselves; no constitutional limita-
tons except to do what is right Now
how are you going to get at this
broad question? Are you going to
engage engineers to appraise this
property and take months to do it?
That is physical impossibility. Are
you going to get at the earning power
of these properties? You may hear
in these discussions a great deal
about that.
Il say no. say that is a physical
impossibility under existing condi-
tons. Why? Here are in the main
the major portion of all our railroads
in this state controlled by two inter
ests, and those interests are not in
terested primarily in perchance what
the Central Vermont earns in this
state; what the Rutland or the atfiliat
ed property of the New Haven and
Boston and Maine earn in this state.
but what the New Haven earns i'm
Connecticut and that the Boston and
Maine earns in Massachusetts,, that
is what Massachusetts is interested i'm
and that is what the state of Connec-
ticut is interested in, and they care
not about Vermont What does the
Grand Trunk care particularly about
the earnings capacity of the Central
Vermont? They get it all. What
has been the spirit of our taxation
law? Has it been an incentive here
tofore 10 develop, to give to the Rut.
land and the Boston and Maine and !
the Central Vermont, the profits of an |
initial rate? Just think of that for a |
moment. Our law provided for a ply |
steal taxation of the property, the |
physical valuation, and it gave the
railroads the option to pay a certain
per cent of gross receipts or earn
ings. Was the spirit of that law for
20 years such as to build up the pro-
hts of those roads? | think not.
Not that the roads have violated
any law. No. II there has been any
error here IL has been the state of
Vermont itself. II gave the option.
II has seen the error of its way how
ever and changed that law. Now,