Pagina-afbeeldingen
PDF
ePub

about 1,000,000 tons annually are produced in that way. Certainly a great triumph ; but of what use is it if, in this rich country, other still better sources of supply are developed, whose union has every prospect of putting into the background the old reputation of Pennsylvania.

So long, indeed, as the importations of Scotch and other foreign pig iron continues to augınent, there is no near probability that the old works will lose their custom, or that the new ones will find no buyers for their products, and for this reason the optimists imagine that Pennsylvania, which has been so long looked upon as the iron-producer of the nation, will yet, by reason of the newly discovered ore beds in the southern part of the State, maintain the first rank in this department (of industry). Others are not of that opinion."'*

What is here said of the iron industry may be more emphatically asserted of steel in the new processes of its manufacture, which must be numbered ere long with the first industries of the nation and of the world.

Pennsylvania must learn that capital and labor may find other fields, where nature has been as liberal, in States which do not obtain their revenues in the easy and informal disregard of common right with which Prince John carried off the purse of Isaac of York, or exact tribute in the more effective way adopted by Front de Boeuf. Miles of factories have been erected in New Jersey by Pennsylvanians, and every day the capital of our State is drawn away to found industrial establishments which would be set up within its borders were it not for the sinister aspect of the tax laws.

I have looked in vain in the codes of every State in the Union for such inventions as enrollment taxes on charters of manufacturing companies, bonus on their capital, and tax on their net earnings, superadded to taxes upon stock and all other taxes borne by the property represented by it.

Governor Geary is right in saying that in other States “stock in manufacturing companies is generally taxed at its value, like other personal property, but first the value of all real estate reprepresented by the stock is deducted, and made taxable like the

* Translated by Joseph Wharton.

property of other individuals in the region where the lands are located.”

The code of Alabama excepts from its taxes on Acts of incorporation, all Acts incorporating manufacturing companies, and they are subject to a tax upon the value of their capital stock of one half of one per cent.,any portion which is invested in property being first deducted. Georgia imposes an equal tax according to its value upon the stock and earnings of corporations. Michigan, by Act of 1853, levied a tax of one-half of one per cent. upon the paid up capital stock of corporations for manufacturing purposes in lieu of all other State taxes. Wisconsin taxes as personal property such portion of the capital of incorporated companies liable to taxation on their capital as shall not be invested in real estate. The code of West Virginia taxes the real and personal property of corporations at their value, deducting debts, etc., and provides that where the capital of a company is assessed the property represented by it shall not be, and in such case the stockholders are not obliged to list their stock. The laws of Vermont, Rhode Island and Ohio are similar ; the property of corporations is taxed as other property, and, as provided by the code of Vermont, “in assessing shareholders for their stock in any manufacturing company there shall first be deducted from the value thereof the value of the machinery and real estate belonging to the company.” The code of New Jersey taxes all real and personal property subject to taxation at its actual value, exempting so much of the property of incorporated companies represented by the capital stock thereof as is taxed in the hands of the stockholders. Lands of corporations may be exempt by charter. In Arkansas, Indiana, Iowa, Illinois, Kansas, Missouri and Minnesota, the laws are in accordance with the principles of equality of taxation which their constitutions establish.

The revised code of New Hampshire, Chapter 49, Sec. 5, which includes in its enumeration of personal property subject to tax the stock of corporations within the State, excepts stock in manufacturing companies. Section 6 provides that stock in corporations shall not be taxed if the nature and purposes of the corporation be such that no dividend of its profits can be made. Section 7 enacts that no statute provision shall be so construed as to subject any stock to double taxation, and it is provided by a subsequent section that towns may by vote exempt from taxation, for a term not exceeding ten years, any establishment therein and the capital it employs in the manufacture of cotton or wool or both.

The Constitution of Connecticut is silent on the subject of taxation, but its code is equitable and liberal, the property, real and personal, of corporations being valued like that of individuals, and stockholders are exempt from taxation on their shares.

By the code of Massachusetts stocks in moneyed corporations are included in personal property liable to taxation, but it is provided that “no income shall be taxed which is derived from property subject to taxation,” and “in assessing the stockholders for their shares in any manufacturing corporation there shall first be deducted from the value thereof the value of the machinery and real estate belonging to such corporation.”

The revised code of Maine , Title 1, chapter 6, sec. 14, provides that “all machinery employed in any branch of manufactures, and all goods manufactured and unmanufactured, and all real estate belonging to any corporation, shall be assessed in the town or place where they are employed, and in assessing the stockholders for their shares their proportional part of the value of such machinery, goods and real estate shall be deducted from the value of the shares." Section 9 is as follows: “All manufacturing establishments and all establishments for refining, purifying or any way enhancing the value of any article or articles already manufactured, hereafter erected by individuals or incorporated companies, and all the machinery and capital used for operating the same, together with all such machinery hereafter put into such buildings already erected, when the amount of capital exceeds the sum of two thousand dollars, are exempt from taxation for a term not exceeding ten years from the time the city or town in which such manufacturing establishments or refineries may be located, shall in a legal manner assent to such exemption, which assent shall have the force of a contract and be binding for the time specified.”

In addition to the liberal provisions of their laws, such is the desire in States east and west of us to encourage the establishment of manufactures, that towns not only vote them exemption from taxation, but also give their promoters a large bonus. The governor has alluded to this practice in his message, and as examples of it I may cite the city of Joliet, Illinois, which gave $175,000 to the company that erected the rolling mill and steel works in that place, and the town of La Grange, Missouri, which has given a larger bounty to a similar enterprise.

If we care to listen we may hear a chorus of silvery voices in every part o: the land, inviting by the assurance of justice and the offer of exceptional favors the men who wish to associate to mine ores or coal, to weave cloth, to manufacture iron or steel, or engage in any of the industries which make States prosperous and their people healthful and intelligent. These invitations will surely call away many of our best citizens, for Pennsylvania offers to such associations perpetual annoyance and exceptional injury.

It can do no harm to speak out openly and characterize the policy of our State according to its deserts. The matter cannot be kept in a corner. It is a subject of national interest, and has been drawn into the discussion of measures affecting the policy of the general government. It has been repeatedly charged by free-trade members of Congress that Pennsylvania raised her revenues by exceptional taxes upon manufactures, and the amount of income realized by the State from enrollment taxes on acts incorporating manufacturing companies, bonus on their capital, tax on their stock and tax on their net earnings, as reported by the Auditor General of the State, may be found set forth at large in free-trade speeches upon tariff bills. I admit that the facts are as our adversaries have stated them, and they would be an argument as well as a reproach if protective tariffs were for the benefit of Pennsylvania alone. They are for the general good, and our miserably unwise tax system merely tends to partially neutralize their beneficial influences by placing Pennsylvania at a disadvantage with respect to her sister States. If the Legislature is not determined to refuse consideration of measures affecting the general good, we may hope that the recommendations of the governor's message will be heeded. His forcible condemnation of the folly of imposing cumulative burdens upon industrial associations concludes as fol

“Nothing but very strong necessity could justify such a variety of taxes upon the same thing. And if any justification ever existed, I believe it to exist no longer. The time has come when, with proper diligence in collecting, and economy in expenditures, the State can well afford a reduction of taxation ; and legislation in that direction should be such as to relieve the undue burdens of taxation from every form of productive industry. Governor Hartranft in his inaugural address renews these recommendations in well-chosen and forcible words. I would, therefore, recommend that the enrollment tax upon private Acts chartering industrial companies, and the bonus upon stock of such companies when organized under general laws, be considered a full equivalent to the commonwealth for the privileges of a charter; and that all State taxes upon capital stock, net earnings and dividends of manufacturing, mining and improvement companies, and all co-operative associations, be repealed. This reduction will amount to $549,554.23—the sum collected last year. I also recommend the repeal of that source of revenue known in the auditor general's report as “ Tax on Loans," which amounts to $492,407.28.

“It is confidently believed that with these proposed reductions, which amount to $1,041,961.51, the State can still pay all her current expenses, the interest on the public debt, and make an annual reduction of at least one million five hundred thousand dollars upon the principal.”

I have cited the case of industrial associations for the reason that it is a good illustration of the evils which have resulted from the absence of a constitutional provision, limiting the power of the legislature, and defining principles of taxation. Other cases of as great hardship could be found. Interests capable of defending themselves are perhaps as much injured in the end as those which are defenseless, and what all persons and corporations liable to taxation should most supremely desire, is exact justice, which can be found only in absolute equality, from which nothing shall be excepted save those occupations which are created by law or which are deemed proper subjects of police regulation in most civilized States.

One great and growing evil would be abolished by providing that no property should be exempt from taxation except such as in accordance with general laws belongs to the public, or is wholly dedicated to public use, free from every form of sectarian control. Equality is so good a thing that we had better have it, and if other good things are delayed, we can wait for them.

« VorigeDoorgaan »