Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1877-02-05
RA1LRoAp rAx UKCOasIITUTIONAL.

49, "
Weeky-POstage free.
RAILROAD TAX UNCONSTITUTIONAL.
The Supreme Court has just de-
cided that the act Of the Legislature
of March 20, 1875, taxing railroads,
is unconstitutional. The act con-
sists of twelve sections, teno which
declare and specify minutely the
manner in which railroad property,
real, personal and mixed, shall be
assessed and taxed. 1t provides
substantially that all railroad prop
erty shall be subject to the same
taxes as other property. Some OF
the companies claim that they are
forever exempt by reason of pro-
visions contained in their charters.
To meet such cases, and las an In.
ducement. it would seem that all
would come in under the act with
out litigation or delay. Section
II declares:
THAT any railroad company, which
viii accept as q special amendment 10 Its
charter. for a period of ten years from
the LIST of January, 1875, and that will
nav annually to the treasurer OF the
State IL per cent. on the gross receipts
from ali sources OF such company shall
be exempt from the foregoing provisions
of this act, aud the payment OF II per
cent upon all gross earnings shall be IN
full tf all taxation"
The same section provides FUR
Their that all railroads accepting
these provisions should, at the end
of ten years, become liable to the
same taxation as other corporations
or individuals. In other words, to
surrender all exemptions acquired
at any time. The leading railroads
of the State accepted the act as an
amendment to their charters in
good faith, and began paying taxes
accordingly, claiming Of course
that sin full Of all taxation" ex-
empted them from sll county and
municipal taxation for ten years,
after which they would become liable
toall taxes the same as individuals.
But Sumner county claimed the
right to tax that part Of the Louis
vile and Nashville railroad run.
ming through that county. and the
collector Of Sumner brought suit,
which led to the above decision,
Judge Deadrick, in delivering tht
opinion, said:
The surrender Of supposei inmanitI
from taxation, though It might be 3 goot
consideration for the grant Of special
exemptions or privileges, 10 the sbs.ne'
cf any constitutional prohibition Il
make such grant. csunOt eve validity Il
40 act Of the legisture. which il is pro
hibited by the constitution from passing
1t is argued in support Of the validity
Of this eleventh section that the one anC
one.halt per cent Of the gross earning
Of the road is, by The act. sFeertsined t
be equal to the tax assessed on othe
property; and if the legislature baI
adopted this mode Of ascsrtsining value
it is authorized to do so by the express
provision of the constitution that tht
value Of property to be taxed shall be as
certeined in auch q manner as the legis
lature shall direct
If the tax Of /! per cent on gFosl
earniagsis TO be construed as the amour
OF tax arising upon the value OF the com
psny's property at 40 cents on the 500
then if the tax next year should be 81
cents, the company should pay per cent
20 preserve equality and uniformity, un
less their property should depreciate one
half in value. But the u per cent un
der the constitution, insisted Oh, CT nno
be increased under legislative contrac
contained in the section. Tie fret tel
sections Of the act do aim at equalit,
snd uniformity. But the llth section
proposes to release the companies for |
per cent. Of their gross earnings, fror
the operations Of the equal and %uni!orI
taxation provided in the preceding see
tiunO, and substitutes equal taxation, o
exemption from all taxation, for the Al
nual payment Of a sum to be ascerlaine
indefinite, uncertain 10 amount, An
dependent upon the amount OF their bus
ness.
The llth Section does not purport
ascertain the value Of the property
the companies, nor does it purport
levy a tax upon such property aecordin
to its value. but on the contrary it pr
poses to relieve them from the equal al
uniform tax upon their property levi
nv the preceding sections aud to acce
II per cent. Of their gross earnings IN f.
Of all taxation.
The legislature may direct the mann
Of Ascertaining the value OF properi
bnt it canuot tax it otherwise than a
cording to its value. II may choo
what agencies it thinks best to ascerta
the value Of the property, but the tax
imposed must be equal and uniform.
Under Section IL, for q considerable
the legislature has contracted in effe
not to tax property Of railroad col
panies at all
This cannot be done under the prese
constitution.
The judgment Of the Circuit Cou
will be revered and Judgment render,
in favor Of the plaintiff.
The following named railroa'
have paid taxes under section IL
the act; The Louisville and Mas