No. 196.
Mr. Welsh to Mr. Evarts.

No. 261.]

Sir: Referring to your dispatch No. 233, of the 18th of February last, I have now the honor to inclose herewith a copy of a report of the commissioners of inland revenue concerning taxation of railroads in this country, which has just been received from Lord Salisbury.

I have, &c.,

[Inclosure in dispatch No. 261.]

Report of commissioners of inland revenue as to railroad taxation in Great Britain.

May it Please your Lordships: We have the honor to return the papers referred to us by your lordships on the 18th instant, wherein the minister of the United States seeks information as to the taxation of railways in this country, and we beg to submit the following replies to the questions put as we understand them:

1. The taxation of railroads in Great Britain appears to have been based on the previous taxation of stage carriages, which had been in existence from the year 1779.

The railroad tax does not extend to Ireland.

When the tax was first imposed, in 1832, the charge was one-half penny per mile for every four passengers, the proprietors being required to keep accounts and pay duty monthly. The development of railway traveling soon rendered necessary a simpler mode of assessing the duty, and in 1842 the charge was made 5 per cent. on the gross receipts from all passengers. In 1844 a concession was made on behalf of the poorer class of travelers, and all fares not exceeding a penny per mile by trains stopping at every station were allowed exemption from duty.

The duty on stage carriages was repealed in 1869, but railroads having now obtained a practical monopoly in carrying passengers, and the tax having become an important branch of revenue, it is still maintained.

2, 3. Railways are only subject to the usual stamp duties in dealing either with real or personal property.

4. A franchise tax is not known in this country.

5. Railroad stock or debentures bear no tax as such.

6. Railroad proprietors, like other trading persons or companies, are liable to income tax on their net annual profits, and such tax is paid before any dividend is paid.

We have, &c.,

  • C. J. HERRIES.