of our day, such as trading and the like, were then looked upon as crimes, and Mr. Weil says: "Just think of it, this

66

66

66

'crime was nothing more than what is now the occupation

of every jobber, broker and wholesaler."

The coming together of small capital in combination was declared a common nuisance, calculated to put down "individual industry and competition. For a consider"able period the formation of partnership associations for "the purpose of trade was prohibited under severe fines "and penalties," and the suggestion to compare the state of the public mind of that era with the notion of to-day, which now favors the partnership association as against the corporations, is very pertinent. Yes, we might go back as far as the days of Rome, and we find the same objections in the same old form to the same tendency.

66

66

To quote:

"It may, with propriety, be assumed that at some future date the students of events will clearly see that the "attempts of to-day at the restriction of industrial com"binations, which are only steps in the evolution of trade, were as unnecessary and as ridiculous as appear to us "those laws prohibiting, regrating, forestalling and engrossing, those laws which sought to punish the "middleman as a criminal, those laws which prohibited partnership as being in restraint of individual trade, and punished the offenders as criminals." Macauley was truly prophetic when, writing of the opposition once made to the introduction of fast stage coaches in England, he said: "We smile at these things. It is not impossible "that our descendants when they read the opposition "offered by cupidity and prejudice to the improvements of "the nineteenth century may smile in their turn. We

66

66

have already had our laugh, we are now furnishing means of amusement for our descendants."

Every objection to the trust has been proved untenable by its own record and so long as the profit system, which has been in vogue to greater or less extent for centuries, continues to exist, the trust as one of the necessary evolutions must live and grow. It can be destroyed only by striking at the institution of the right of property by the substitution of socialism in place thereof, indeed, the minds of great socialistic thinkers like Bellamy and others of equal power are agreed that the trust is a necessary institution of transition leading to the final control by the Government of all propery. They claim that the taking of the control by the Government of the post, the telegraph, the fire department, the care of the streets, pawnshops, railroads, match, tobacco and hundreds of other industries are but the natural forerunners of the taking of the mills and factories as inroads into the individualism of Donisthorpe. The industrials badly organized will go to the wall. Good companies will continue to grow and be a commercial unit in the life of the coming century. Good-will is only valuable so long as the company continues to do a prosperous business, let the shadow of the sheriff be seen at the door of the factory and all the property that represents the common stock goes up in the air like smoke. The immediate result of this condition is that we can expect a great financial crisis; perhaps, the greatest panic of all times is hovering over the economic world, for confidence, trust and dependence is the foundation upon which the present economic structure rests and once that begins to fall, the entire economic temple, the greatest ever reared, will go with a crash, yes, with a mighty sound.

The only remedies that have been offered that are worthy of consideration is that publicity must be made of the affairs of all companies who ask the public to deal in their securities.

How reasonable that a person, asked to become a partner in an enterprise, should be permitted to know the true condition of the concern he is about to enter, and each investor is an incoming partner in an old and established firm.

I conclude that trusts are here to stay; they are legal and constitutionally protected. Trusts in themselves are beneficial as all combination is and the only setback the trust can receive is by the establishment of the equality of the rights of man in property as well as in government, and until that time the institution of the right of property will develop even into higher forms of which we at present know nothing. The remedy, if one is required, lies not in the hands of the legislatures, but in the hands of our people by the exercise of their supreme sovereign right, amendment to the Constitution.

(Applause.)

Louis M. King, of Schenectady:

I move a vote of thanks to Prof. Bostwick, for his interesting paper, and that it be printed in the minutes.

The President:

(Carried.)

I now take great pleasure in introducing to you the last speaker of the occasion, our old friend, J. Newton Fiero, who will read a paper "On the Taxation of Corporate Franchises."

J. Newton Fiero:

Mr. President, I ask leave to print.

E. T. Lovatt:

I move, Mr. President, that Mr. Fiero's paper " On the Taxation of Corporate Franchises," be printed in the pro

ceedings, and that the thanks of the Association be extended to him for it.

The motion was seconded and carried.

In lieu of the paper on the programme, Mr. Fiero has consented to the publication, in this volume, of an opinion prepared by him for the guidance of the State Board of Tax Commissioners in administering the law relating to special franchises.

THE TAXATION OF SPECIAL FRANCHISES.

In order to arrive with some degree of certainty at the proper construction and practical interpretation of the act in question relative to taxation of franchises, it is not only quite desirable, but absolutely necessary, to consider the condition of the law on the subject previous to the passage of the act.

It is held by numerous authorities that franchises are property. People v. O'Brien (111 N. Y., 1) involved this question, was argued by very able counsel, and received consideration in an exceedingly elaborate opinion by Chief Judge Ruger, citing numerous authorities. Upon a careful review of the statutes and decisions on the subject, it was held that certain corporate franchises have been uniformly regarded as indestructible by legislative authority, and as constituting property in the highest sense of the term. This decision was made with reference to the right of a street railroad corporation to a franchise for a surface road in the streets of New York, and determines decisively the question that a franchise of the character to be taxed under this act as a special franchise" is a property right.

This decision was followed in Coney Island, etc., R. R. Co. v. Kennedy (15 App. Div., 588), and also cited and followed in People ex rel. Coney Island R. R. Co. v. Neff

(15 App. Div., 585). In the City of Brooklyn v. Nassau R. R. Co. (20 App. Div., 31 [33]), the proposition was laid down: "A franchise to construct and maintain a railroad is property." This view was again strongly stated by Parker, Ch. J., in Ingersoll v. Nassau Electric R. R. Co. (157 N. Y., 453 [463]), citing III N. Y., I, as authority for the proposition: "It is well settled that a perfected railroad franchise constituted either by direct legislative grant, or by consent of local authorities and property owners, in pursuance of the Constitution and General Laws, especially when followed by actual construction and operation, is a property right that cannot afterwards be taken away or diminished, either by subsequent constitutional amendment or by legislative or municipal action, except in the exercise of the police power, or the right of eminent domain."

In People ex rel. Woodhaven Gas Co. v. Deehan (153 N. Y., 52), the court, in considering the effect of a franchise granted by the authorities of a town to a gas light company to lay conductors in the streets and highways for the purpose of delivering gas, held "such a franchise is property that cannot be destroyed or taken away from it." This language is cited with approval in Ghee v. Northern Union Gas Co. (158 N. Y., 510 [513]), opinion by Parker, Ch. J. In the latter case it is stated, speaking of consent on the part of the municipal authorities to lay gas light conductors by a gas company to conduct gas through the streets of the city, "that it operates to create a franchise by which is vested in the corporation receiving it a perpetual and indefeasible interest in the land constituting the streets of a municipality."