PRINCIPLES OF TAXATION. 609 



prosecuted for larceny, the court held that the offense was not 

 larceny, which is the unlawful taking and carrying away of per- 

 sonal property, but trespass, inasmuch as the corn not severed 

 from the ground was real estate, but would have been larceny if 

 the corn had been gathered or disconnected from the ground pre- 

 vious to its taking. Thereupon a bill was introduced into the 

 Legislature of Tennessee to make it a felony to steal corn from a 

 field under any circumstances. 



From these illustrations it seems obvious that the distinction 

 between real and personal property and real and personal taxes 

 is, to a very great extent, an artificial and not a natural distinc- 

 tion. 



The following are some of the other terms used to designate 

 particular forms of taxation, the meaning and technical applica- 

 tion of which may not be readily apparent : 



A franchise tax is a tax on a franchise, or on a right granted 

 by a State to a corporation or association to exercise certain privi- 

 leges. In fact, a franchise is a privilege, and in most cases it is 

 an exclusive privilege, and has an actual value largely dispro- 

 portionate to the amount of capital invested by the company or 

 corporation upon which it has been conferred.* It has been held 

 by the courts that a franchise tax is not a tax on capital or on 

 real estate, but on privilege, and does not exclude additional taxa- 

 tion on any property covered by the franchise. 



The terms imposts and" customs" (Latin " consuitudines ") are 

 generally understood to mean indirect taxes on the importation 

 of commodities, while the term duty is more properly applied to 

 a tax upon exports. 



The origin of all these terms is obscure and involves some 

 interesting features in English history. It appears certain that 

 they were in the first instance applied to exactions on trade gen- 

 erally, and not, as was finally the case, on imports and exports 

 exclusively, and were in use before indirect taxes on personal 



* The following is a case in point, derived from actual experience : A street railway com- 

 pany in a city of the United States reported the gross earnings of the corporation for 1891 at 

 $1,188,000. Its net earnings were $400,000, or nearly six per cent on a capitalization of 

 $7,000,000. Its city property tax was only $11,000, or $2.10 on $500,000. It is evident, 

 therefore, that the value of the capital of this corporation was due largely to the value of 

 its franchise. 



The value of a franchise is an eminently proper subject for taxation, though it is not 

 commonly so regarded. The Supreme Court of Pennsylvania, in a recent case (1894), has 

 held that under the laws of that State it was proper and lawful in ascertaining the actual 

 value of the capital stock of a corporation (Susquehanna and Schuylkill Railroad Company) 

 to take into consideration, as affecting that value, the franchises of the company. Fran- 

 chises conferred by Congress upon a corporation created by it, to be exercised within a 

 State, can not be subject to taxation by the State without the consent of Congress. Cali- 

 fornia vs. Central Pacific Railroad Company. 



VOL. LI. 46 



