No. 460.
Mr. Fish to Mr. Evarts.

No. 168.]

Sir: Referring to my No. 158, I have the honor to inclose herewith a copy of my note to the Swiss Government requesting the information desired in your instruction No. 83, respecting railway taxation in this country, and also of their note in reply, together with a translation of the latter.

I have, &c.,

[Inclosure 1 in No. 168.]

Mr. Fish to Mr. Hammer.

The undersigned, chargé d’affaires of the United States of America, has the honor? under instructions from his government, to inform his excellency Mr. Hammer, President of the Swiss Confederation, that at a recent convention of boards of railroad commissioners, held at Columbus, Ohio, a committee was appointed to examine and report upon the methods of taxation as respects railroads and railroad securities now in force in the various States as well as in foreign countries, and that the object in view being deemed by his government one of general interest, he has been instructed to obtain, if possible, such statements in detail as may be necessary for a correct understanding of the systems of railroad taxation in use in Switzerland.

The undersigned has, therefore, the honor respectfully to request his excellency Mr. Hammer to kindly enable him to furnish his government with the desired information, well knowing the interest and willingness which characterizes the high federal [Page 971] government in complying with requests of this nature when made by friendly governments.

It is particularly desired that the information should specially cover the following points:

On what general recognized principle, if any, is the railway taxation of Switzerland based?
In how far are the railroad companies taxed as holders of realty?
In how far as holders of personalty?
In how far are they subject to a franchise tax?
In how far is their stock taxed as personalty to its owner?
What taxes are levied on the receipts of the company, whether net or gross?

The undersigned, while hoping that the high federal council will be willing to furnish him with such information as is obtainable on this matter, avails himself of this occasion to renew to his excellency Mr. Hammer, and to the high federal conncil, the assurances of his most distinguished consideration.

[Inclosure 2 in No. 168.—Translation.]

Mr. Hammer to Mr. Fish.

In answer to the note of the chargé d’affaires of the United States, of the 10th instant, the federal council has the honor to furnish him with the following information:

The Swiss Confederation does not impose direct taxes; consequently the railway companies pay no contribution to the federal treasury. On the other hand, the companies are bound as regards the Confederation, by virtue of article 19 of the law of December 23, 1872, concerning railways—
To carry, free of charge, the letters and parcels concerning which the prerogative of the State has reserved the right of transportation to the postal administration.
For the other parcels (de messagerie) expressed, the postal administration pays to the railroad company a compensation calculated on the basis of the general express tariff (tarif général de grande Vitesse) by calculating the total weight of the parcels for one month, and also taking into account the diminution of the (prestations) contributions occasioned the companies by such transportation. If the Confederation and the companies cannot agree, the federal tribunal decides. The conducteur attached to this service is carried free.
To carry, free of charge, the postal cars as well as their employés, and the persons charged with inspection.
To pay an annual tax of concession of 50 francs for each section of one kilometer in operation, when the revenue of the operating attains 4 per cent, after deducting the amount for loss by wear and tear, or that assigned to the reserve fund. In the event of this revenue thus calculated attaining 5 per cent., the tax of concession may be raised to 100 francs, and to 200 francs if this revenue is 6 per cent, or over.
Moreover, the cantons have the right to tax the railway companies in conformity with their legislation respecting taxation. Nevertheless, according to the circumstances, not only have certain companies obtained from the cantons a complete exemption from taxation, while other railway enterprises have been called on to pay contributions to the cantons, or to the communes, there exists such a variety of provisions that it is not possible to fix a general principle applicable to the collection of these taxes.

The federal council regrets that consequently it is impossible to reply categorically to the questions specially presented by the chargé d’affaires of the United States, and it avails itself of the occasion to renew to him the assurances of its high consideration.

In the name of the federal council—

The President of the Confederation,

The chancellor of the Confederation,