Every evening, Wilmington daily commercial., 1921-03-05
VIGOROUS PROTEST
Continued from page

we have examined this law In the
| time we have had at our disposal. and
| find that II In no now thInG. II " almost
word for word texcopt In some pro-
| visions more drnatic) aa the present
| law of the state of New York. II took
| no tax expert to take u printed copy of
tho New York law and reduce IL to type
| writing for presentation to your honor
able body. and any attempt To cnll thia
| original work or the work Of tax ex
| pert ia ridiculous. II is common hnowi-
edge among all men who do business
that tho great Empire state OF Now
! York. with It's largo territory and its
| great number of manufacturing estnb-
lishments necessarily located there
| geographically. has. by n law prao-
| tically identical to the proposed law,
| driven from it's borders every corpora
| ton which could possibly got out
we are Informed TINT the experts
| who drafted this Inv say they believe
| 10 will raise two million dollars. We
want To say To you that this In theo-
| retical and probematic. and In our
| opinion not Justified by any facts. The
! law as drafted must look to getting the
! greater part of tho proposed two
| million dollars from Delaware corpo-
rations who do their buainess sbso-
| lutely outside of the State. The pas
sagc Of such law will not only kill OFT
| tho future corporation buainess of this
| state, which has been growing steadily
/ from year To year bat will cause the
| present Delaware corporations who pay
! annual taxes tn tho state to tumble
| over themselves In order 10 get out
State Would Lose si.50o.00o Annually.
The net result will he that instead
| Of hnt tsf,, afeahftU tnTrea ninu and ~
bo relied upon income. amounting at
/ prerent TO between fourteen and fifteen
| hundred thousand dollars annually, In
| side of aix months the state VIII have
| iost 30 per cent Of ita revenue from
| Delaware corporations going out OF the
/ State. and no new corporations coming
| in. for tho sake of passing an act which
/ In theory may raise revenue Of ap-
/ prr1inlatply two million dollars, but tho
| very corporations from whom they hope
/ 80 raise u will no longer be hero 'o ho
| taxed
| In other words the State win give
| up definite. certain. and constantly
| increasing revenue for an uncertain
and Indefinite theory which. In our
| opinion from our wide corporate rg
perience, will not actually bring Into
| the state twenty nva per cent of what
| the state now receives from Delaware
| corporations.
1T IL the most unwise and ridiculous
! niece W leelslatiou which has ever come
/ a. our attention. The net result will
/ he that the state will loso approximately
/ nfteen hundred thousand dollars a year.
which they are new getting from Dol
/ aware corporations who do business out
| side or the State. and will have to make
/ IL A.. IA fRr he 10.
needa hv taxing citizens of tho State
who are actually residing here. and
without our corporation burinesH we
| see no possibility pf raising such an
amount ~ revenue from any citizens.
| except by further tax on real estate :
! Tho letter then Rooa on 80 set forth
| objections 70 the Hrhool law and cnn.
| tinuing the letter Htatea
/ law soon out Of Date.
owing tu fact that this proposed
i Law is ba srd somewhat on Federal in
come tax law and that law~,yill without
/ aup4tlon be amended AT the forthcoming
scRnion of CougreRa. the passage of this
Att VIII nut on tho statute bookH a
! law that would not only be out Of date
lut out of lne with the scheme of
| Federal taxation
In reference 60 the organization of
holding companies. our experience
/ shown that there ara very few holding
| companies holding majority or a con
/ trolling interest IN the stocka of other
+ corporations 40 that such ownership
i would constitute n control OF the man
aKcmcnt and affairs Of such other cor
porRtious I hnvc examined tho many
/ holding companies which wa repreHent
/ in this officc and from a somewhat inti-
mate acquaintance with the general
+ Couu sci OF these various companies we
are unable 10 and but two holding COM
pantes whose assets consist Of the
stocks and securities OF other corpora :
+ tious TO the extent OF controlling tho
| management and affairs of such other
/ corporations. Tho passage of this bill.
with this Article IL In tho form in
/ which Il now is. would result I'm the
reorganization Of between 1900 and 1900
! OF our corporations and the consequent
| loss to the State of Delaware Of the
| revenue from these corporations I'm the
shape of franchise taxes.
The trainers of this bill have owl
! IDENTIFY overlooked entirely the retalia
/ tory features of the laws of several of
i the states, for instance. tho state of
| New Jersey has a retalintory feature
| whereby a Delaware corporation doing
business In Now Jersey would be taxed
! ia New Jersey at the same rate and
! under the same conditions as a New
Jersey corporation coming into the
| state OF Delaware would be taxed
In other words. the taxation of one
| New Jersey company would cause nun
/ dreds of Delaware companies 10 be
| taxed in New Jersey. The history OF
/ taxation for all the states will clearly
| show you that the states that do not
have this retaliatory provision WILL as
soon as they find out Delaware lis tax
| ing It's foreign corporations. immedi-
ately pass "a retalis tory feature. there
! by taxing Delaware corporations going
/ into these other states as foreign cor
| porstions. That in itself is enough to
cause grave concern 10 the charter
granting business in this state.
The history Of the so-called charter
| granting states has been such To
clearly prove that any attempt at taxa
| tiOn affecting corporations organized
| for the purpose Of taking advantage of
| the law of the state Of incorporation will
drive such corporations out of business.
| Would Destroy Della wares Best Income.
After an experience in this line OF
businaaT for n period of more than