tax for the privilege of conducting such business within the state which tax, with the tax provided for in section forty-one, is in place of all taxes upon the property of such corporation, association or person employed in such busiress, and of all taxes upon the shares of the capital stock of any such corporation.

"The amount of such annual excise tax shall be ascertained as follows: when the gross receipts from business wholly done within this state, for the year for which the tax is assessed on such corporation, association or person in the operation of such business exceed one thousand dollars and do not exceed five thousand dollars, the tax shall be one and one-fourth per cent of such gross receipts; when such gross receipts exceed five thousand dollars and do not exceed ten thousand dollars, the tax shall be one and one-half per cent. of such gross receipts; when such gross receipts exceed ten thousand dollars and do not exceed twenty-five thousand dollars, the tax shall be one and three-fourths per cent. of such gross receipts; when such gross receipts exceed twenty-five thousand dollars and do not exceed fifty thousand dollars, the tax shall be two per cent. of such gross receipts, and so on increasing the rate of the tax one-quarter of one per cent. for each additional twenty-five thousand dollars, or fractional part thereof, of such gross receipts, provided that the rate shall in no event exceed four per cent of such gross receipts.

"The excise tax collected under the preceding sections shall be in lieu of all taxes upon any corporation therein designated, upon its shares of capital stock and its property used in the conduct of its telephone or telegraph business, including the poles, wires, insulators, office furniture, batteries, instruments, telegraphic and telephonic apparatus, telephones and transmitters used under license or lease or owned by such corporation, association or person; provided, however, that the real estate and also personal property not hereinabove exempted, owned by such corporation, association or person, shall be taxed in the municipality in which the same is situated; but the amount of the tax assessed upon such real estate if owned and actually used by such corporation, association or person in the transaction of their business shall be deducted by the board of state assessors from the tax laid hereunder. The assessment of taxes on such real estate shall be legal, whether assessed as resident or non-resident property.

"TAXATION OF EXPRESS COMPANIES.

"Every corporation, company or person doing express business on any railroad, steamboat or vessel in the state, shall, annually, before the first day ut May, apply to the treasurer of state for a license authorizing the carrying u1 of said business; every such corporation, company or person shall annually pay to the treasurer of State two per cent. of the gross receipts of said business for the year ending on the first day of April preceding. Said two per cent shall be on all said business done in the state, including a proportional part on all express business coming from other states or countries into this state, and on all going from this state to other states and countries, provided, however, that nothing herein applies to goods or merchandise in transit through the state.

"The taxes assessed upon express corporations, companies and persons as aforesaid, is in place of all local taxation, except that real estate owned by such corporations, companies or persons, shall be taxed in the municipality where the same is situated, as non-resident real estate, but the amount of taxes assessed upon such portion of real estate owned and actually used by

them in the transaction of their business shall be deducted by the board of state assessors from the tax hereinafter provided." ❝

A Board of State Assessors was created in 1891, "consisting of three members, not more than two of whom shall be taken from the same political party and chosen by the Legislature by joint ballot of the senators and representatives in convention, for a term of six years." As usual in the majority of the States, this board has both a general and a special function in connection with assessment and taxation. On the one hand, it constitutes a board of equalization for the adjustment of municipal assessments as a basis for the levying of the State and County taxes and the apportioning of the State taxes on this basis to the several towns or ultimate municipaliies. And, on the other hand, it has original jurisdiction in assessing all taxes upon corporate franchises, including railroad and other corporations covered by the sections of the tax laws above cited. The returns, however, of gross revenue upon which the steam and electric railroad taxes are levied are obtained from a separate board of Railroad Commissioners. This board prescribes to the railroads a form of report, following closely that adopted by the Interstate Commerce Commission, and intended to secure uniformity of returns throughout the New England States.

The total revenue derived from the corporation taxes for the last two years is given as follows:

:

67

Of these amounts it must be remembered that a portion is returned to the municipalities in the shape of the one per cent. on the stock held by their residents. This applies to the taxes collected from railroads, both steam and electric, and from telgraph and telephone companies.

The total amounts assessed as real estate to the railroad and street car companies by the municipalities of the state are:-68

Railroad Companies

Street Car Companies

......

.$3,260,713
593,140

The returns are not furnished for the individual railroads. The return to each municipality of one per cent. of the domestic railread, street car, telegraph and telephone stock held by its citizens, appears a somewhat anomalous proceeding, which is due to historic conditions.

Its

66 Report of the Board of State Assessors of the State of Maine, 1903, Appendix Laws Relating to Taxation, pp. 10-19.

67 State Assessors' Report, p. VI. 68 State Assessors' Report, p. 153.

expediency is dealt with in the Massachusetts Report of 1897. Evidently the idea was that since the general stocks and securities owned by the citizens were taxable under personal property, it would not be fair if, when the citizens happen to hold shares in certain domestic companies which were specifically taxed by the State, and the shares of which were therefore exempt, the municipality should lose the benefit of the tax on the shares held within it. Hence it was considered that the State, out of the taxes collected on the gross receipts of certain corporations, should return to the municipalities, in which any of the shares of these corporations were held, the uniform rate of one per cent. on such stock. It is provided, however, that the State should not be required to pay in such a form more than it collects from any corporation. But while it is comparatively easy to trace the ownership within the State of the stock of the companies chartered or operating in it, since these can be required to make returns of their shareholders, etc., it is very difficult to determine what outside stock is held in the State. As is notoriously the case, very little of the stock of outside corporations is covered by the assessment of personal property. Thus inequality of taxation is the result, and certain towns in which considerable quantities of domestic railway stock are held are unusually favoured by the provision which requires the distribution of railroad taxes in this way. Bangor, for instance, receives from the State, in the shape of the one per cent. allowance on railroad and other stock held by its citizens, more than enough to pay the whole of the State tax levied on that city.

On the working of the main system of taxation, the Ontario Commission obtained much interesting information from Col. E. C. Farrington, Clerk of the Board of Railroad Commissioners, and Mr. James Plummer, Secretary of the Board of State Assessors.

An interesting phase of the Maine system is brought out in connection with the assessment of the Canadian Pacific Railroad, which owns 176.7 miles in the State and operates 56.1 miles of the Maine Central railroad. As we bave seen, the gross earnings per mile are arrived at by dividing the gross earnings of the whole of a railroad system by the total length of the line operated. Now the representatives of the C. P. R. claim that, as its earnings are derived from its water and land routes combined, and that as they quote through freight and passenger rates it is impossible to make any accurate distinction between the land and water earnings, so the total mileage of the line must be considered to include the water routes as well as the land routes. Obviously, when we include the ocean and lake mileage of the C. P. R. steamers the earnings per mile, calculated on the whole system, will be modest enough. The case is still in dispute. The Minnesota system, it may be observed, escapes such difficulties as this.

Quite apart from the ocean routes and business of the C. P. R., which might be eliminated, this point has special significance for Ontario, where already more than one line of railroad has either combined or alternative water and rail sections in their systems of transportation.

According to the Maine officials there is practically no friction between the railroads and the State, as regards the system or the amount of taxes levied. As stated by Col. Farrington "This has been the law of the State from early times, and has been perfectly satisfactory to the railroads. Two years ago there was a little feeling on the part of the people that the railroads were not paying enough and the Legislature took decided action and increased the rates. In fact it was agreed with the railroads that the matter should be settled amicably; the railroads agreed that if present conditions

were unsatisfactory an increase should be made. The increases were accordingly nearly doubled." (Ont. Com. Interviews). Both Mr. Farrington and Mr. Plummer commended the liberal policy of the railroads in the State of Maine towards the industries and needs of the State, and stated that there was a corresponding desire on the part of the public to show a liberal spirit towards the railroads. "There is a very kindly feeling between the railroad organizations of the State of Maine and the people at large. Nevertheless, there is always the feeling that the railroads should pay their share of taxation, and the system now in existence is considered fair."

Mr. Plummer referred to the fact that "the lumbermen, who compose a great part of the population of Maine, are beginning to build narrow guage railways for getting our lumber, on account of the lumber being cut each year further and further back from the waterways. These roads are taxed just the same as the others,-on gross transportation receipts." 69

It appears that though the Railroad Commission has power to investigate the returns of the railroads they are generally accepted without question when furnished under oath. As Mr. Plummer put it, "We expect any report made to the Commission under oath to be correct, and it would be necessary to have a very strong case before we would investigate on the assumption that a false return had been made." 70

There is no return of the amount of taxes paid by the railroad to the several municipalities on their local real estate, but as the total amount assessed of the various railroads is given and the average rate of municipal taxes for the State is about $20 on the thousand, we have the following estimate as approximately correct:

Steam Railroads. Street Railroads.

Real estate assessed

Taxes collected at average of 2%

3,260,713
65,214

593,140 11,862

The C.

The following table exhibits the mileage and amount of taxes paid on gross earnings by each of the steam and street railways of Maine. P. R., and the G. T. R., are the roads which operate in Canada. Taxes assessed upon the railroads for the year 1903, giving also the Railroad Commissioners, and the

doing business in the State of Maine tax assessed to pay the expenses of the mileage of each road in Maine.

Compiled from data furnished in Annual Report of Railroad Commissioners, 1903. and Annual Report of the Board of State Assessors, 1903.

MASSACHUSETTS.

Massachusetts has not devised for its railroads any special system of taxation. The railroads and other transportation companies organized under the laws of the State fall into the class of general corporations and are treated as almost all other companies organized within the State. Banks and trust companies are treated in a special manner in certain particulars. The general property tax, covering the usual forms of real and personal property, is assessed and collected by the officers of the several municipalities, but the general corporation tax is administered entirely by State officers, though the greater part of the proceeds is distributed to the municipalities.

The nature and operation of the general corporation tax which applies to railroads and other transportation companies is very admirably stated in a report of the Commission appointed to inquire into the expediency of revising and amending the laws of the Commonwealth of Massachusetts lating to taxation, 1897.

8a R.T.C.

re