tions.2 The Committee on Personal Property reported a resolution recommending to local assessors that all bank, insurance, railroad and other stocks be returned at par value. The next year the Board passed resolutions recommending revision and amendment of the law, and in 1869 the Board authorized Chairman Lippincott and Secretary Stadden to prepare a revenue bill to present to the Board at its session in 1870.5 It was prepared as ordered and, from October 7, 1870, to October 24, the Board had the proposed revenue bill under consideration. On the 26th it was proposed to authorize a committee to urge its passage at the next legislature, but on the next day it was decided to leave the duty to Chairman Lippincott and Secretary Stadden. Governor Palmer, in his message of January 4, 1871, to the General Assembly, recommended this bill "as the work of practical men of extensive experience." At the regular session in 1871 the legislature failed to provide a new revenue law, but at its special session in 1872, on March 30, enacted the general revenue law under which the State Board of Equalization has had a large part of the work of assessing the property of Illinois corporations. In 1872 at a meeting of the Board of Equalization, Chairman Lippincott said: I can not forget that the State of Illinois owes to this Board the inception of an improved revenue system, which in my opinion will prove of inestimable service to the state....The care, the intelligence, the conscientious effort displayed by this Board in the original draft of the revenue law, calls for my high admiration.8 From the foregoing facts drawn from records of the Board's proceedings relative to its action in regard to the new revenue law, from the statement of Governor Palmer, 2Proceedings State Board of Equalization, pp. 37-38, 58-59. 4Idem, 1868, p. 81. Idem, 1869, pp. 37-39, 58-59. Idem, 1870, Oct. 7 to Oct. 27. "Journal of Senate, 1871, vol. 1, p. 27, Governor's Message. Proceedings State Board of Equalization, 1872, p. 61. and from the remark of Mr. Lippincott, it may be safely inferred that the Board of Equalization in its early period from 1867 to 1872 had a large influence upon the preparation of the present system of taxing corporations. Three other facts might be noted in this connection. First, the New York Tax Commission of 1870 recommended the "corporate excess" method of assessing corporations. Second, Chairman Lippincott of the Board of Equalization, who was chief author of the revenue bill of 1871-1872, was in New York in the summer of 1870.10 Third, in a letter to Governor Palmer five days before the pasage of the revenue law of 1872, Mr. Lippincott, urging the necessity of passing the new law, showed that under the laws then in force much intangible property was escaping taxation.11 Since the revenue law of 1872 the Board of Equalization has had a prominent part in the taxation of corporations. The powers and duties of the Board were enlarged by adding to its equalizing duty that of assessing the intangible property of corporations. The capital stock of companies and associations organized under the laws of Illinois12 is so valued by the Board as "to ascertain and determine respectively the fair cash value of the capital stock including the franchise over and above the assessed valuation of the tangible property." The excess in the value of the capital stock, including the franchise, over and above that of their tangible property, is known as the "corporate excess." To assist the Board in this work, the law provides that all corporations that are subject to assessment by the Board shall in addition to the lists of personal property, "make out and deliver to the assessor a sworn statement of Jas. K. Edsall, brief to United States Supreme Court, State Railroad Tax Cases, II Otto 592 (1875). 1o Report to General Assembly, 1871, vol. 4, page 85. 11Idem, page 101. 12Not all; certain classes of corporations have been exempted from time to time; see chapter IV. the amount of its capital stock, setting forth particularly: First. The name and location of the company cr association. Second. The amount of capital stock authorized, and the number of shares into which such capital stock is divided. Third. The amount of capital stock paid up. Fourth. The market value, or if no market value, then the actual value of the shares of stock. Fifth. The total amount of indebtedness, except the indebtedness for current expenses, excluding from such expenses the amount paid for the purchase or improvement of property. Sixth. The assessed valuation of all its tangible property, such schedule to be made in conformity to such instructions and forms as may be prescribed by the Auditor of Public Accounts."13 These statements are returned by the assessor to the county clerk, by him forwarded to the Auditor, and by him are turned over to the Board of Equalization. In case of Illinois telegraph companies, the data are collected in a slightly different way. Each company returns its statement directly to the Auditor, annually, in the month of May.14 The statements of the telegraph companies must, in addition to the information required of other corporations, contain information as to the length of lines operated in each county and the total in the state.15 There is, however, no means of enforcing the foregoing provisions. The law provides, that in all cases of failure or refusal of a corporation to make a sworn statement on the proper blank, and return it to the assessor, that the assessor shall make the return from the best information 13 Revenue Law 1872, section 32. 14 Revenue Law 1872, section 53. 15A foreign corporation that operates an Illinois corporation's line under lease, must make return for the Illinois line. Postal Tel. Cable Co. vs. Barnard, 37 Ill. App. 105 (1890). which he can obtain.16 To get additional information and to supply deficiencies in regular returns, data may be secured by independent investigation of the Board.17 The rules by which the Board of Equalization assess the "corporate excess" are, according to the provisions of the law, left to the discretion of the Board, itself. The Supreme Court of Illinois in 1874 denied that the granting of power to the Board to adopt its own rules of assessment, was a delegation of legislative power, and sustained the validity of the provision in the revenue law, granting such power to the Board of Equalization.18 The discussion of the making of their rules, and also, of the constitutional and statutory19 limitations upon the character of the rules for assessing the "corporate execess", will be treated below in the history of the Board's administration. After the Board of Equalization has assessed the amount of "corporate excess" to each corporation that is subject to its jurisdiction, its further duty consists in certifying the "excess" to the clerks of the counties in which the corporations are located, so that the "corporate excess" may be spread upon the tax roll along with the other property of the corporation.20 A brief history of the Board's administration might easily occupy an extensive volume. In this study is included such portion only of its history as is needful for the exposition of its powers and jurisdiction, its difficulties in getting data, its rules for valuing the corporation as a 16 Revenue Law 1872, section 32. 17 Sup. Ct., St. L. V. & T. H. R. R. Co. vs. Surrell, 88 Ill. 535 (1878). 18 Porter vs. Rockford, Rock Island & St. Louis Railroad Co., 76 Ill. 563. (1875, Jan. term). 19Laws of Illinois, special session, 1898. 20 The Supreme Court has construed the tax on the "corporate excess" to be a personal property tax. Quincy Bridge Co. vs. Adams County, 88 Ill. 615 (1878); Peter Saup et al vs. Morgan & Co., 108 Ill. 326 (1884); Parsons et al vs. Gas Light & Coke Co., 108 Ill. 380 (1884); The Hub vs. Hanberg, 211 Ill. 43 (1904). going concern, and its efficiency21 as an assessor of intangible property. The Board had but little difficulty interpreting its new powers and duties. The law is plain in regard to the duties; but it leaves the Board wide discretionary powers as to the rules it shall use. It may be noted that the Chairman of the Board from 1873 to 1876 inclusive, was Auditor C. E. Lippincott, who had been on the Board from 1868 to 1873 and had had much to do with the framing of the new revenue law. One error was made at the first session. The Western Union Telegraph Company, a foreign corporation owning lines in the state, was assessed at the same time Illinois telegraph companies were assessed. And the Supreme Court, in January, 1874, held that the Board had exceeded its jurisdiction in trying to bring foreign corporations under the operation of the "corporate excess" method of taxing capital stock and franchise.22 The Court decided the question on the wording and intent of the statute, not on the economic merits of the question. Economic opinion was not called for. In 1890 the Appellate Court decided that it is the duty of a foreign telegraph company operating under lease the line of a domestic corporation, to return to the Auditor the schedule or statement required by law.23 In 1880 the Supreme Court held that where a corporation is formed under the laws of Illinois, by consolidation of other corporations, one of which is incorporated under the laws of this and the others of other states, the new company is to be considered as incoporated under the laws of this state within the meaning of the revenue law of 1872. And the capital stock located or used in this state, of such corporation, is subject to be assessed and taxed as such.24 21 Facts brought out in this chapter; deductions from these facts brought out in Chapters III and IV, are reserved for concluding chapter. 22 Western Union Telegraph Co. vs. Lieb, 76 Ill. 172 (1874). 23 Postal Telegraph Cable Co. vs. Barnard, 37 Ill. App. 105 (1890). 24Ohio and Mississippi R. R. Co. vs. Weber, 96 Ill. 443 (1880). |