the fact that in the case of five large Irish railways where the actual value of the rolling stock was taken out and supplied to the Commissioner of Valuation by the companies the value varies from 108 to 147 per cent. of the gross receipts. That such a rule of thumb system of valuation could prevail in England in the twentieth century is almost beyond belief.

"Perhaps the paucity of its merits, and its general indefencibility, are best displayed by the fact that although repeated onslaughts have been from time to time made upon it, yet the motto of those who ought naturally to be its foremost champions has hitherto been "Discretion is the better part of valour," for they have scarcely ever ventured to enter the lists in its defence." 125

The article favoured the Scottish or Cumulo system, with certain modifications in the method of allocation to taxing districts.

In a later article the same paper drew attention to the enormous expense which the English system entails upon the railways and the people in connection with the collection of local rates and strongly approved of the adoption of the Scottish and Irish system of having the valuation of the railways as a whole placed under a Government department. "It is wellknown that the annual cost incurred by the English and Welsh companies on their rating departments, appeals and litigation arising therefrom amounts, on the average, to a very large sum. One important case contested not long ago, cost the assessment committee and the railway company together over £30,000. Now the rating surveyor of one of the principal railways has recently estimated the average annual outgoing thus expended at a sum not exceeding £1,500 per annum for each railway. As there are 106 different systems given in the Board of Trade Returns for 1902, excluding those worked by other lines, this would mean £159,000 per annum. If, on account of the smallness of some of these systems, and in order that our estimate may be on the safe side, we deduct 50 per cent. from this sum, there will be left, say £80,000 as the probable annual outlay, under the Parochial system, due to the three heads of expenditure above mentioned.

"The cost of the Department of the Assessor of Railways and Canals (Scotland) is defrayed by the companies whose property is assessed in proportion to their valuation, and the late assessor stated, in his evidence before the Royal Commission on Local Taxation, that the expense amounted to one-fifth of a penny for each £1 of gross estimated rental, or, say, onesixth of a penny for each £1 of rateable value.

"The general Valuation Office, Ireland, presided over by the Commissioner of Valuation, deals with the valuation of all classes of rateable property, its powers, unlike those of the Scottish Department, not being confined to railways and canals. The expense in this case is borne partly by the Treasury, and partly by the local authorities, by means of compulsory presentments paid out of the local rates; but the total liability of the latter bodies takes the form of a fixed annual contribution of £8,000 per annum. Even assuming that the cost of a Government Department established for the purpose of assessing all the English and Welsh lines were to be 50 per cent. greater than is the case in Scotland, the total expense would only amount to about £18,000 per annum, the present total rateable value of those railways being taken to be about 17 millions.

"During the last 12 years not a single Irish company has appealed against the valuation of its system, although the assessment of every line revalued during that period has been, with one exception very largely increased. Further, the outlay incurred on rating appeals has been insigni

125 The Economist, 1904, p. 820.

ficant, since only two local authorities have applied to the Courts, and since none of these companies possess either a rating department or a rating surveyor, none being required.

"It seems reasonable to suppose that, if the same system were applied to England and Wales, similar results might be looked for, i. e., the number of, and consequently the expense involved in, appeals would be diminished, and the companies would be forever rid of the necessity of maintaining large staffs solely for the purpose of dealing with rating matters." 126

TAXATION OF RAILWAY AND OTHER TRANSPORTATION COMPANIES IN CANADA.

ONTARIO.

In Ontario there had been practically no change in the taxation of railways, from the first period of railway construction in the early fifties, down to the introduction of the Provincial mileage tax in 1899. The railroads were taxed by the municipalities alone, and only upon their real estate, which meant, in most municipalities, simply upon their lands as valued at the same rates as adjoining lands. Their personal property was not taxed. The stock of railways and other similar corporations was exempt from taxation, though not the income therefrom.

The law as it stood at the time of the last revision of the statutes in 1897 was as follows :-"Every railway company shall annually transmit, on or before the first day of February, to the clerk of every municipality in which any part of the roadway or other real property of the company is situated, a statement showing:

"1. The quantity of land occupied by the roadway, and the actual value thereof, according to the average value of land in the locality, as rated on the assessment roll of the previous year;

"2. The real property, (other than the roadway) in actual use and occupation by the company, and its value;

"3. The vacant land not in actual use by the Company, and the value thereof, as if held for farming or gardening purposes;

"And the clerk of the municipality shall communicate such statement to the assessor, who shall deliver it, or transmit by post to, any station or office of the Company a notice addressed to the Company of the total amount at which he has assessed the real property of the Company in his municipality or ward.127

"The personal property of a Bank or of a company which invests the whole or the principal part of its means in gas works, water works, plank or gravel roads, railway and tram roads, harbours or other works requiring investment of the whole or principal part of its means in real estate, shall, as hitherto, be exempt from assessment; but the shareholders shall be assessed on the income derived from such companies.'

"" 128

Under the new assessment act of 1904 the power of the municipalities with reference to the assessment and taxation of railroads was somewhat enlarged and the law as it now stands is as follows:

126 The Economist, 1904, p. 904.

127 R. S. O., chap. 224, sec. 31.

128 Ibid., sec. 39, (2.)

RAILWAYS.

"(1) Every steam railway company shall annually transmit on or before the first day of February to the clerk of every municipality in which any part of the roadway or other real property of the company is situated, a statement showing:

"(a) The quantity of land occupied by the roadway, and the actual value thereof (according to the average value of land in the locality) as rated on the assessment roll of the previous year;

"(b) The vacant land not in actual use by the company and the value thereof;

"(c) The quantity of land occupied by the railway and being part of a highway, street, road or other public land (but not being a highway, street or road which is merely crossed by the line of railway) and the assessable value as hereinafter mentioned of all the property belonging or used by the company upon, in, over, under, or affixed to the same;

"(d) The real property, other than aforesaid, in actual use and occupation by the company, and its assessable value as hereinafter mentioned;

and the clerk of the municipality shall communicate such statement to the

assessor.

"(2) The assessor shall assess the land and property aforesaid as follows: "(a) The roadway or right of way at the actual value thereof accord

ing to the average value of land in the locality; but not including the structures, substructures and superstructures, rails, ties, poles and other property thereon;

"(b) The said vacant land, at its value as other vacant lands are assessed under this Act;

"(c) The structures, substructures, superstructures, rails, ties, poles and other property belonging to or used by the company (not including rolling stock and not including tunnels or bridges in, over under or forming part of any highway) upon, in, over, under or affixed to any highway, street, or road (not being a highway, street or road merely crossed by the line of railway) at their actual cash value as the same would be appraised upon a sale to another company possessing similar powers, rights and franchises, regard being had to all circumstances adversely affecting the value including the non-user of any such property; and

"(d) The real property not designated in clauses (a), (b) and (c) of this subsection in actual use and occupation by the company, at its

actual cash value as the same would be appraised upon a sale to another company possessing similar powers, rights and franchises. but the telephone and telegraph plant, poles and wires which are used exclusively in running trains or for any other purposes of a steam railway and not for commercial purposes shall, as heretofore, be exempt from municipal assessment or taxation.

"(3) The assessor shall deliver at, or transmit by post to, any station or office of the company a notice, addressed to the company, of the total amount at which he has assessed the said land and property of the company in his municipality or ward showing the amount for each description of property mentioned in the above statement of the company and such statement and notice respectively shall be held to be the assessment return and notice of assessment required by sections 18 and 46 respectively of this Act.

12 R.T.C.

"(4) A railway company assessed under this section shall be exempt from assessment in any other manner for municipal purposes except for local improvements.

"When an assessment has been made under the provisions of section 44 the amount thereof in the roll as finally revised and corrected for that year shall be the amount for which the company shall be assessed for the next following four years in respect of the land and property included in such assessment; but at any time before the return of the assessment roll, in any year, the said amount may be reduced by deducting therefrom the value of any land or property included in such assessment which has ceased to belong to the company, and a further assessment may be made of any additional land or property of the company not included in such assessment." 129

This for the first time renders the rails, ties, and other superstructures of the railway subject to taxation, though only when situated on a public highway. But in the absence of a Provincial board of valuation and assessment, this portion of the act is likely to be unequally applied.

Most of the transportation companies, coming under section 39 of chap. 224 of the revised statutes of 1897, escaped taxation on their personal property, but otherwise, in the matter of taxation, were treated as private property. Under the Assessment Act of 1904, however, the taxation of several of these corporations, for municipal purposes, has been very much altered and in some cases materially increased.

In the first place, the taxation of personal property has been abolished all round. But this will affect only those corporations which previously paid taxes on personalty. When the income of a corporation is maue subject to taxation the dividend or income of private individuals from stock held in such corporations is exempt from taxation, in other words, the income is assessed to the corporation, not to the shareholders. This leaves all such corporations as electric street railways, telegraph, telephone, express, and other transportation and transmission companies subject to taxation for municipal purposes on their real estate only, except where additional taxes are specifically prescribed. Such additional taxes are pro

vided for under the name of "Business Asesessment." This takes the form of a surtax based on the regular real estate assessment.

Express companies are subject to a business, or surtax of 75 per cent. on their real estate assessment. Telegraph and telephone companies and electric or street railway companies are subject to a surtax of 25 per cent. on the ordinary assessment "exclusive of the value of any machinery, plant or appliances erected or placed upon, in, over, under or affixed to such land."

Telegraph and telephone companies, in addition to the taxes already specified, are subject to another special tax for municipal purposes.

In cities, towns, or villages, telephone companies are to be assessed at 60 per cent. of their gross earnings, and in cities of over 10,000 inhabitants, 75 per cent. of their gross earnings.

In townships, telephone companies shall be assessed at the rate of $135 per mile for each single wire or circuit, and $7.50 for each additional wire or circuit, the length of wires in villages and for short branches not to be included.

Telegraph companies in cities, towns, or villages shall be assessed at 50 per cent. of their gross receipts, and in townships the assessment shall be at the rate $40 per mile for a single wire, and $5 per mile for additional wires.

In virtue of this special taxation, telephone and telegraph companies are, in townships, to be exempt from all other forms of taxation, and in cities, towns and villages, to be exempt from assessment "in respect of all plant, appliances and machinery wherever situated, and in respect of all structures, poles, on, over, under or affixed to any highway, road, street, lane, or public place or water.'

The telegraph and telephone companies are required to furnish to the Provincial Secretary the necessary returns as to gross receipts and lengt of wires, to serve as the basis of the special assessments provided for.130

In 1899 the Province of Ontario made a new departure in providing for taxes on various corporations to supplement the Provincial revenue. Among such corporations were those connected with the leading forms of transportation and transmission.

The railways were treated in the simplest possible manner, regardless alike of the relative values of their general property, of the capital employed, or of the earning power of the roads. This, however, was of comparatively small importance, since the tax levied was at the very modest rate of $5 per mile, switches, sidings and double tracks not being included. This tax did not apply to electric railways or tramways.

In 1904 the tax was considerably increased, and some rough graduation in rates introduced. As it now stands, "every railway company owning, operating or using a steam railway in this Province shall pay a tax of $30 per mile for one track and $10 per mile for each additional track, where the line consists of two or more tracks, operated or used in any county in this Province, and $20 per mile for one track and $5 per mile for each additional track so operated or used in unorganized territory, being the districts without county organization; except that a railway company owning and operating a steam railway not exceeding 150 miles in length from terminus to terminus, and not being leased to or amalgamated with or forming part of the system of any other company, shall pay a tax of $15 per mile for one track and $5 per mile for each such additional track."

131

The mileage for taxation purposes shall not include switches spurs or sidings. The Provincial tax on street railways is also levied on the mileage basis and is graduated according to the length of the whole system. Thus every street railway "shall pay a tax of $20 per mile for each mile of track in such city, when the whole line does not exceed 20 miles, $35 per per mile for each mile of track when the whole line exceeds 20 miles, but does not exceed 30 miles, $45 per mile for each mile of track when the whole line exceeds 30 miles, but does not exceed 50 miles, and $60 for each mile of track when the whole line exceeds 50 miles. In all cases the mileage shall be computed on the single track, each mile of double track being counted as two miles of single track. 132

Telegraph companies which own lines operated by others, or companies which operate lines owned by others shall pay a tax of 1-10 of 1 per cent. on the paid up capital of such company. A similar tax may be levied upon the amount of capital invested in a telegraph line owned by a railway company so far as it is situated in Ontario, and so far as it is not used exclusively for the running of trains. '33

"Every telephone company working or operating a telephone line for gain in the Province shall pay a tax of one-eighth of one per cent. on the paid up capital of such company." 134

130 4 Edward VII., chap. 23, sec. 15. 132 62 Vict. (2), chap. 8, sec. 2, para. 6.

131 4 Edward VII., chap. 5.
133 Ibid. paras. 7 and 8.

134 Ibid para. 9.