Pullman Taxation

The Pullman strike investigation opens up inquiries into tax assessment and valuation, another source of local conflict with large railroad corporations, and Republican editor Edward Rosewater calls attention to the financial manipulations of these companies as further evidence of railroad corruption.

The railroad democratic rump ticket is a thing of beauty, and a thing of beauty is supposed to be a joy forever. But the rump Toburlington-Martin ticket is doomed to fade away like the flowers that bloom in the spring.

PULLMAN TAXATION.

Governor Altgeld may be deserving of some of the censure which many of his acts have called down upon him, but he certainly deserves credit for the inquiry which he has just had made into the taxes paid by the Pullman company upon its property in Illinois and other states. Mr. Pullman, it will be remembered, recently testified under oath before the United States strike commission upon matters relating to the conduct of his company, and incidentally was plied with questions bearing upon its financial status. He gave the capital stock upon which dividends were regularly paid as $36,000,000, with the small addition of $25,000,000 accumulated profits, which have been laid aside for a rainy day. The stock of the Pullman company, therefore, represents, according to its president, $61,000,000, without reference to the fact that it is quoted at high premiums on the market. The greater part of this is personal property, and under the common law, when not modified by statute, personal property follows the residence of the owner for purposes of taxation. Investigation discloses that in Illinois, where all of the company's real estate is located and where most of its stock is held, the property is assessed at $1,695,500, equivalent on a basis of true valuation to not more than $15,000,000. Whenever it has been proposed to increase the assessment, the company has always been at hand with the answer that the greater party of its property is assessed and taxed in other states.

To satisfy himself on this point, Governor Altgeld, through the auditor of state, has compiled the list of taxes paid by the Pullman company wherever it operates. Replies to inquires addressed to officials of each state in charge of such taxation bring out this state of affairs: In sixteen states the company pays not taxes at all. In several other states and in the Dominion of Canada no assessment is shown, and if any taxes are paid by the company the amount must be very small. In seventeen of the states the total amount of taxes paid by the Pullman company is $21,425. In the remaining seven states the actual taxes paid are not given, but the total assessment of the company in these states is $1,104,359, which means, assuming the rate to be the same as in Illinois, annual taxes of $19,326. In other words, the total taxes paid by the company outside of its home state is not much over $40,000. This, in Chicago, would pay the taxes on $4,000,000 worth of property, or an actual valuation of about $12,000,000. Further computations of this basis leads the governor to the conclusion that over $40,000,000 worth of property belonging to the Pullman company escapes taxation altogether.

The result for which Governor Altgeld is contending and what he recommends as the action of the Illinois State Board of Equalization is to compel the Pullman company to pay taxes in Illinois on all its property which it cannot prove to have been already taxes elsewhere. The fact that upwards of $40,000,000 of property now escapes taxation of very kind be characterizes as an injustice to the other taxpayers of the state. This might be properly broadened into an injustice to the taxpayers of other states as well. Not only ought Illinois to demand a just measure of taxes from the Pullman company on the property taxable within its jurisdiction, but every other state in which Pullman cars are operate ought to collect taxes in the ratio of the business done in that state. The tax evasion has been accomplished by asserting in Illinois that the company's property had been taxes elsewhere and by asserting in outside states that its property is taxable only in Illinois, where it is incorporated. If the Illinois board will force the company to show where and on what property is taxed throughout the United States, it will simplify matters greatly for the taxing boards in other places.