Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-04-02
ASK REDUCTION
Continued from PAGE One)

T1O1A INEDOC11J
Continued from Page One)
committee appointed by the Governor
were not particularly anxious to have
this bill passed. The same results
! could be secured by assessing the
tax on the same basis as that of 1920
was assessed. 1t was not the method
to be adopted which was of moment,
but the result to be attained.
The situation, Mr.. Pattangall said,
was so acute that there was q justi-
f1cation for bringing this matter be-
! fore the committee at this time Dis
| cussing the possibility of meeting the
situation by an increase of freight
rates he said that he could not think
OF greater disaster to the Industries
of Maine. The Maine Central hoped
to effect a saving Of $3,300,000 in op-
Grating and general expenses this
year. Although the labor board at
Chicago was at work on the problem
no very immediate relief could be ex-
pected in wage reduction. The Maine
railroads now pay a larger franchise
tax than those of any other eastern
State. The estimated tax on the
Maine Central this year, unless relief
was granted, outside that assessed
Upon bonds, would be, estimated,
S1.SS5,000. He believed that the tax
alton committee would see the injus-
tice of this.
Apply the tax paid by the Maine
Central to other industries. The
road has paid a gross earning tax
since 1911 of IL per cent. In 1900
the tax was fixed at per cent, but
the Maine Central was showing diff
| ferently then. A difference was
shown between it's gross and net
earrings Of about "a per cent, so the
Taxation committee said it would
take part of that and made the tax
accordingly and thought that limit
safe The Maine Central was then
so prosperous that it was decreasing
rates. Then came 1911, Il hard year
and as an emergency act the Legis-
lature made the tax 5 IL per cent.
which down to 1917 the road could
| stand. Now the conditions have
changed.
Apply that tax to other industries
u.
know q paper mill putting out daily
50 tons OF paper at 800 ton. If
taxed as the railroad it would pay
$132,OOO A country store turning
over $4,000 year, would be taxed
$3.50. 1t has been said that a sales
tax would be good way, but sales
tax is on gross receipts, and no one
has suggested taxing that over per
cent. and most only / per cent
The railroad tax is not a property
tax but a franchise tax. The prop
erty remained for other taxation
just as any property. The stock IS
exempt; the property pays $4,000
tax. All the property of the Maine
Central and allied roads is about
S12,OOQ.0O0 and if we should apply
the franchise tax rate as a property
tax you would get better than an 8
per cent. tax. And If applied to the
five-sixth that is in Maine, it would
be over 0 per cent
The Maine Central in 1917. with
its stock at par, paid $539,00O in
taxes and today. with it's stock worth
but 40 per cent, is paying 1912, 900
1t may be that a feeling of antag-
onism has arisen and that we don't
care what becomes of the railroad
but we can't say that of our indus
tries and the road depends absolute
ly on what it gets from those indus
tries for business. We must then
see that we do not tax the railroad
too high, for then it comes back as
a tax on ourselves.
It's been said that one way for the
railroad to get the needed money is
from the wages. The Maine Central
cannot change the wages Of a single
employee except of the IS in the exc
cutive department, nor its rates, be-
cause the Federal Labor Board fixes
the wages and the Interstate Com
merce commission fixes the rates
That is a federal law. think my
self that inequalities exist in the
wage matter, but that they will be
Strengthened out.
But if you take from the men the
81 500, 900 the Maine Central must
haxe next year, no one would say cit
must all come out of you, at a time
when the State is taking more in
taxes from the road than ever before.
Unless you change the law, you are
increasing the railroad taxes. 1t
has been said that the railroad asked
a rebate of taxes. The Maine Gem
trail paid last year $795.00O and un-
less you change the law it will pay
$275.00O more than that next year.
Is there any excuse for further bur-
dening the railroads?
Some have said that it is purely
plan to. depress the stock so the road
can then buy it in. A Washington
dispatch three days ago said that
Vice President Coolidge and Sec.
Weeks had called President Hard
in's attention to the desperate situa-
ton of the New England railroads
and the President had called the
| ,<.h s,,n 80 - Tc& r.