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Show THE TAXATION OF FRANCHISES. In a conversation In this city the other day with a gentleman of wide experience snnd marked legal ability, the question of taxation under our State Constitution came up. It .was conceded that under this Instrument It Is probably Impossible to tax franchises, as such; even though they may be the best-paying bu?lnescs of the State. It was thought possible, however, for the Legislature to reach them In theNew York manner, by "the ingenious device," as a late writer puis It, of calling these franchloes taxable real estate. Some years ago, the local assewore In New York City Included In the assessment assess-ment of a corporation the value of Its franchise. But the courts held that though the capital slock lo taxable, the market value of Its shares Is not, and that the franchise of a, corporation, though undeniably property, constitutes no portion of its capital, and therefore is not taxable. In another case, the court held that this untaxable franchise extended ex-tended to the use of the streets, which wc9 a valuable asset, but not taxable. The kinds or divisions of franchises aro . three; the franchise to exist, the franchise to act or to do business, busi-ness, and the franchise to make use of certain privileges as to use of public streets, to dig below them, or to go above them. Since, therefore. there-fore. It was Impossible to reach the real values of franchises as such, the "Ingenious "In-genious device" referred to was adopted, and the franchise lax "Illustrates the utility of legal fictions," as Edwin R. A. Sellgman puts It in an article In the Review of Revlewe, I But after this had all been planned, the question arose whether the tax so provided should be asrsesyed and levied by local or by State authority. The law first provided that the local authorities should do 1U But It was quickly amended, amend-ed, on the suggestion of corporations themselves, that If such tax were proper it should be laid by general and not local authority; and the State was entrusted with this power and duty. But the corporations cor-porations reversed themselves at once on this point, and fought the tax for the very reason that it had been levied by State officials, claiming that the local tax officials must do the work If It Is done at all. But the courts upheld the law, and the power of the State The Court of Appeals held that "the grant of a general franchise to a corporation corpor-ation to live and do business gives no right to occupy the public highways without special authority; that a franchise, fran-chise, whether general or special. Is taxable tax-able as a, species of property; and that the law Imposing such a tax Is a viola-lion viola-lion neither of the Stnte nor of the Federal Fed-eral Constitution. With reference to the home-rule contention, the court draws a line of distinction between local officers whose functions are purely local, and State officials authorized to carry out the provisions of a new system of taxation, taxa-tion, requiring the exercise of new functions func-tions which never belonged to local assessors. as-sessors. In short, the law was upheld In every point " An appeal was taken to the United States Supreme Court, and the case Is to be argued next October, tho State officials being confident of gaining tho case. The stake at Issue Is very great; In the additional revenue to be derived from street railways and gas companies the Increase Is something like a million and a half in New York City, and on all corporations throughout the State it must be at least double that. In Utah the corporation franchise tax would not be by any means fo Important proportionately as it Is in New York; but still it would be a substantial sum. It might be worth while for the Legislature Legisla-ture to test its powers In this direction and havo the question settled. If It is found that under our moth-eaten, ancient, an-cient, ambiguous, and contradictory Constitution, franchises cannot be taxed as in New York, this would be another powerful argument for tho assembling of a ne Constitutional convention which would authorize a competent board of (say) five of the best lawyers In the State to draft a Constitution, and then let tho convention adopt It and adjourn. ad-journ. Certainly, In many ways our present Constitution Is a delusion, an oppression, and a snar |