812 THE AMERICAN JOURNAL OF SOCIOLOGY
All corporations in Massachusetts, of whatever kind, are subject to state taxation upon the value of their " franchises," representing the right to do business an express assertion of the principle that the carrying on of an industrial enterprise is a social privilege rather than a fundamental or natural individual right. The value of the franchise is determined by the state tax commissioner, and is arrived at by taking the total market value of the stock of the corporation at the time of the assessment, and making certain deductions therefrom, as follows : In the case of a telegraph or railroad or street-railway company, the value of its real estate and machinery subject to local taxation within the commonwealth is deducted ; also so much of the value of its stock as is proportional to the length of its lines lying outside the state. In the case of telephone companies, the value of the real estate and plant subject to local taxation within the state is deducted ; also the value of all stock of other corporations held by a " domestic " l telephone company, and upon which a tax has been paid in Massa- chusetts or any other state for the preceding year ; and so much of the value of the stock of a " foreign " l telephone company as is proportional to the number of telephones it owns or controls outside the state. In the case of all other corporations, manu- facturing, etc., the value of real estate and machinery subject to local taxation is deducted. And it should be noted that the assessments for local taxation of corporations are subject to equalization or alteration upon proceedings which the state tax commissioner has power to compel.
The differences between the total market value of the stock and the various deductions specified is considered to represent the value of the franchise, and this is taxed at the same rate as that ascertained for the general state property tax in any given year.
That a system of public espionage and control so thorough- going and rigid as this should have given satisfactory results, on the whole, and without serious abuses, is a tribute to the relatively high standards of civic life and general political conditions main- tained not without exceptions, to be sure in the common-
1 " Domestic " corporation, organized under Massachusetts laws ; " foreign/' under laws of some other state.
