equivalent of a rate of forty-five one-hundredths of 1 per cent upon the cost of the road. The third class, which pays 3 per cent of their gross earnings, pays but twenty-eight one-hundredths of 1 per cent upon the cost. The fourth class pays but four and one-third one-hundredths of 1 per cent upon the cost, while the fifth class pays but one and eight-tenths one-hundredths of 1 per cent upon the cost. "The commissioner's report shows that some of the roads which pay the trifling sum of $5 per mile in taxes, and from which the aggregate sum received varies from $60 upward, show in their own reports large earnings, and, in some cases, that the management of the roads have been able to pay large dividends.

"In view of these very noticeable inconsistencies I recommend that the classification be abolished entirely and that a uniform license fee upon the gross earnings be charged all roads doing business within the State, regardless of what their mileage or earnings may be. If the 4 per cent fee upon the gross earnings which the first-class roads now pay were charged all of the roads, the income of the State, based upon the returns for the past year, would be largely increased." In personal conversation with Governor Scofield, who has apparently given the subject of taxation in Wisconsin very careful thought and study, he highly commended the license system as applied to the taxation of railroads, the tax being levied by the State for State purposes, stating that he regarded it as the best system yet devised for the taxation of such property; that, in his opinion, the railroads in Wisconsin paid more taxes according to property value than any other corporate property in the State; and that he was inclined to the opinion, from the investigation he had made, that under that system they were paying their full proportionate share of taxation, apparently having taken into consideration in reaching that conclusion the fact that real estate is grossly undervalued and that a vast amount of personal property escapes taxation under the local assessment system.

SLEEPING-CAR COMPANIES.

By an act passed in 1883 sleeping-car companies were required to pay an annual license fee of 2 per cent of their gross earnings made by the use of such cars between points within the State during the preceding calendar year.

In 1885 the statute was amended, increasing the amount to 4 per cent of the gross earnings, which continued to be the rate until the year 1899. The supreme court of Wisconsin construed the act to mean that under its provisions the companies were only required to return the gross earnings they derived from the transportation of passengers from one point to another wholly within the State, and if such were not the construction of the act it would be unconstitutional, as interfering and restricting interstate commerce. (State v. Pullman Co., 64 Wis., 99.)

This decision was put to a practical use by some sleeping-car companies by selling to a passenger desiring transportation between two points within the State a ticket to some point beyond the State line. This increased mileage was of no benefit to the passenger, and the sale was not reported in the annual report of earnings.

The limited amount of earnings so returned and the comparatively small benefit derived by the State from such taxation is shown by the following table of the yield of sleeping-car company taxes in the years 1890 to 1898, inclusive:

In 1899 an act was passed which provides for an assessment of the actual value of the property of sleeping-car companies within the State.

By the provision of this act each sleeping-car company, wherever organized or incorporated, including companies owning dining, buffet, chair, parlor, and palace cars, is required to file with the State treasurer, during the month of July in each year, a report under oath for the year ending April 30 next preceding, containing the name of the company, location of principal office, nature and when organized, officers, chief officer or managing agent in Wisconsin, total amount of capital stock, number of shares, par value and market value, or, if no market value, the actual value of the shares, situation and value of its real estate in Wisconsin used in the business, location and value of all its real estate outside of Wisconsin used in the business, total length of lines of railroad over which the cars of such company were used in Wisconsin and elsewhere, total length of lines over which the cars of such company were used in Wisconsin, and such other facts or information as such company may deem material upon the question of the taxable value of its property within the State.

The State board of assessment, consisting of the secretary of State, State treasurer, and attorney-general, meets annually and proceeds to assess and levy a tax upon the property of such sleeping-car companies according to the following rules, after hearing such testimony and argument as such sleeping-car companies may offer:

First. It shall find the actual value in money of the entire amount of capital stock of each sleeping-car company used in its sleeping-car business, and from that amount it shall deduct the actual value of all real estate used by such company in its sleeping-car business without the State, and the remainder shall be taken and considered as the actual value of the capital stock of such company invested in its sleeping-car business.

Second. The amount so obtained is then divided by the total number of miles of railroad over which the cars of such sleeping-car company were used, to obtain the value per mile. The value per mile is then multiplied by the number of miles over which such cars were run within the State, and the result is taken and considered as the actual value of the property of such sleeping-car company within the State of Wisconsin subject to taxation and assessment.

The board thereupon assesses such value and levies a tax thereon for the use of the State at the average rate of taxation, State and local consolidated, of the State of Wisconsin, certifying the assessment, rate of levy, and the amount of the State tax to the State treasurer, who thereupon notifies such company of the same by registered letter. The sleeping-car company is then given 30 days after the mailing of such notice within which to pay such tax.

Upon neglect to so pay the tax, a suit may be commenced by the attorney-general against such company to collect the same, together with a penalty of 10 per cent of the total amount of such tax and costs of suit.

Sleeping-car property which is owned by railway companies, and the gross earnings of which are taxed as a part of the gross earnings of such railway companies, is exempt from taxation under the provisions of the foregoing act. The result of the operation of this law in 1899 is shown by the following state

ments:

Items.

Actual value of entire amount of capital stock..

Actual value of real estate used by such company in its business within the State.

Actual value of capital stock

Total miles of railroad over which the cars of the company were run.
Value per mile..

Number of miles within the State

Actual value of property within this State subject to assessment and taxation

Average rate of taxation, State and local consolidated, in the State..
Total amount of tax.

FREIGHT-LINE COMPANIES AND EQUIPMENT COMPANIES.

They are required to make the same statement, and the value of their property is assessed by a similar process and at the same rate as sleeping-car companies. The results for 1899 were as follows:

Equipment companies or freight lines, 1899-Continued.

Prior to the year 1899 the only tax collected from express companies was that levied upon their tangible property, as upon the property of private persons, located within the various taxing districts of the State, their intangible property wholly escaping taxation; but in 1899 an act was passed providing for the assessment of the actual value of their property within the State.

By the provisions of this act any person, or joint stock company, partnership, association, or corporation, whether organized or incorporated, conveying to, from, or in the State money or property of any kind by express (not including railroad or steamship companies engaged in the ordinary transportation business) is deemed to be an express company.

Each express company is required to file during the month of July in each year, with the State treasurer, a statement in the form prescribed by him under oath, showing, with reference to the business of the fiscal year ending June 30 next preceding, the name of the company, its nature, location of principal office, when and where organized or incorporated, officers, authorized capital stock, capital stock issued, number of shares, their par and market value, their actual value; the situation, income, and value in detail of its real estate in Wisconsin; the total income and cash value of all its real estate situated outside the State, a full and correct inventory at the true cash value of its personal property, including moneys and credits within the State; the true cash value of all its personal property, including money and credits, outside the State: the whole length and the names of the railroad lines and water and stage routes over which it did business, and separately, in detail, the portion of such lines and routes within this State, and the portion of such routes over navigable waters of the United States within the State, and such other facts or information as may be material upon the question of the taxable value of its property within the State.

The State board of assessment, consisting of the secretary of state. State treasurer, and the attorney-general, thereupon meets upon the third Wednesday of August and proceeds to assess and levy the tax upon the property of such express company after notice to such company of the time of hearing upon such assess

ment.

After due hearing the board proceeds to determine the true value of its property according to the following rules:

The actual value in money of the entire amount of capital stock is found. From the amount so obtained is deducted the actual value of all real estate situated outside the State and the actual value of personal property not used in the express business.

The remainder is taken to be the actual value of the capital stock of such company invested in its business. Such amount is divided by the total number of miles of railroad, stage, water, and other routes over which the company did business, and the value per mile so obtained is multiplied by the total number of miles of route within the State, exclusive of the number of miles of water route over navigable waters of the United States within the State. The result is declared to be the actual value of the property of such express company subject to taxation.

The board then proceeds to assess and levy a tax thereon for the use of the State, at the average rate of taxation, State and local, consolidated, of the State. The tax so assessed and levied is declared to be in lieu of all other taxation.

Failure to file report or to pay the tax is attended by a penalty of 10 per cent of the amount assessed for taxation, together with the costs of suit brought by the attorney-general to recover the amount of such tax.

The following reports will show the methods of the State board in the assessment of express companies under the law fixed by the legislature in 1899 and their results:

Telegraph companies are required to file annually with the State treasurer a statement, under oath, showing the total number of miles of their telegraph line, and the number of miles of such line within the State, the number of wires employed on each division of such line, and the aggregate number of miles of single wire operated within the State.

Upon the filing of such report the State treasurer issues to each telegraph company a license, upon payment of the license fee for State purposes, which is as follows: For the first wire, $1 per mile; for the second wire, 50 cents per mile; for the third wire, 25 cents per mile; for the fourth and each additional wire, 20 cents per

The yield of the tax for the years 1890-1898 was as follows:

Telephone companies annually make a sworn statement of their gross earnings for the fiscal year ending December 31, and file the same with the State treasurer, who thereupon issues to each telephone company an annual license, upon the payment of the license fee, as follows: If the amount of gross earnings be over $100,000, 3 per cent of such gross earnings; if under $100,000, 24 per cent. A penalty of $5,000, to be paid the State, together with forfeiture of rights and franchises, follows the neglect to obtain such license.

Such taxation is in lieu of all other taxation, and an additional license fee can not be imposed by a municipality. (Wisconsin Telephone Company v. Oshkosh, 62 Wis., 32.)

The yield of such taxes for the years 1890-1898 was as follows:

STREET-RAILWAY AND ELECTRIC LIGHT AND POWER COMPANIES.

These companies are required to pay annually to the treasurer of the city or village from which their franchise is derived a tax upon their gross earnings, as shown by a sworn statement filed with such treasurer.

The rate of taxation is graduated as follows:

1. Three per cent upon the first $800,000 and 4 per cent upon all amounts of such receipts over $800,000.

2. Those whose gross cash receipts are less than $800,000 per annum, as follows: One and one-half per cent on the first $250,000 or less, 24 per cent on all amounts of such receipts over $250,000. Provision is made for the apportionment of this license fee between two or more municipalities, based upon the number of miles of track or wire within each; also where the track extends beyond the limits of the principal municipality to a town or village, such municipality shall receive 3 portions of such fee to 1 in such town or village. The distinction in apportionment between electric companies and railroad companies is based on the theory that the former are distinctively local corporations, and that there is less reason for payment of their license fees into the general funds of the State.

Of the taxes so collected, the State receives 6 per cent, the county 3 per cent, and the municipalities 91 per cent.

Yield of taxes to State on street railways and electric-light companies, being 6 per cent of the whole:

Reference has already been made to the manner in which the property of these companies is assessed. In addition, we quote the following from the report of the tax commission of 1898:

"After various unsuccessful attempts in some cities to properly tax some of the corporations of these classes, and after several decisions of the supreme court prescribing the legal method, a statute was adopted providing for the taxing of waterworks companies and gas plants.

"By this method all the land, pipes, appurtenances, and franchises are treated as personal property and assessed in the district of the principal office of the company, and the taxes are collected like other taxes on personal property; and where the property is in more than one municipality the law provides for the apportionment of the just amount to each.