The Daily clarion. [volume] (Jackson, Miss.) 1866-1888, 1878-03-02
The Settlement with the ~ Obile
and Ohio Railroad Company.

1
ing the protest of Mr.. Gallagher, OF Laud-
erdale, made yesterday in the House of Rep
resentatives, against the acceptance on the
part of the State of the com promise propo-
sition of the Mobile and Ohio Railroad Com
pany, the undersigned members of the com
miftees that have had the same under con-
sideration, desire that the motives which
| prompted them to favor the com promise
should likewise be made public through
the same medium.
! In 1S4S, the Mobile and Ohio Railroad
Company was granted, by its charter, ex-
EN- ption from taxation on its road until said
road was paying per cent on cost of con-
struction. In 1850, the Congress of the Uni
ted States donated to the State OF Mississippi
large amount of land, to be held in trust
for purposes of internal improvement. In
1852, the State vested in the Mobile and
Ohio Railroad Company over 100000 acres
OF said trust lands, and in 1854, the Legisla-
ture OF the state eXcmp pied said lands from
taxation for twenty years. In 1875, the
Legislature of the State of Mississippi passed
an act providing for privilege tax of SIS
per mile on all the railroads of the State :;
but by the third section OF the charter of
1913, the Mobile and Ohio Railroad was ex-
einpt from the provisions of this law. In
1875, a tax was sought to be collected by the
Sheriff of LauderdaIe county, on the road
bed and lands of said company, for the year
1874. The case was brought before the
Court on demurrer and the decision was
rendered merely upon question of law !;
and the fact a tn whnthar thpra yvaro opv
taxes due by the company was not involved
at all, and the only question presented by
; the demurrer was whether the property of
said company was liable to taxation or not
The Court decided that under the third
section of the original charter, the com pany
was not liable to taxation on its ''franchise,
road-bed, right-of-way, rolling stock, depot
grounds and buildings, machine shops and
machinery, in short, every sort and species
OF property, real and personal, necessary to-,
and used in the actual business of the COM
pany as common carrier of passengers
and freight" unless it was shown by proof
that ''in point of fact, the earnings of that
portion of the road located in Mississippi"
have been sufficient to pay an annual inter
est of eight per cent. upon the capital eX-
pended in the construction of said road :.
This proof has not been made in the Courts
as vet See Mobile and Ohio Railroad vs.
Mosely, Sheriff, etc, 80 Miss. p. l27. AS to
the detached lands belonging to said road,
the Supreme Court of the State held that
they were liable to taxation at this time.
Under the terms of the grant of lands by
Congress to the State of Mississippi, the
State came under obligations to the Federal
Government, if the road was not completed
within ten years to return to the United
States all money that said company derived
from the sale of said lands. An Injunction
is now pending in the Federal Court re-
straing the collection of the taxes on the de-
tached lands before mentioned. Grant that
this inj un elton would have been dissolved
upon motion. the com pany would doubtless
have taken an appeal to the Supreme Court
of the United States, there to remain for
several years, for that Court is now behind
with its docket three years.
We must not only take into consideration
the delay that would necessarily follow in
an appeal to the United States Supreme
Court, but the risk we would run of that
Court falling to concur in the views Of our
State Supreme Court as to the liability of
the lands to taxation, and, further. the SUI
preme Court of the United States might pos
sbly decide that the company had not COM
piled with the conditions of said grant, and
that therefore SAID lands would revert to
the United States Government, and the
State would be required to pay to the United
States the amount of money that has been
received by said company from the sale of
said lands.
Should the Supreme Court of the United
States have decided the suit favorably to the
State of Mississippi. the road would still
have been at liberty to resort to the courts
to contest the amount of taxes for which
its lands were liable. on the plea of over as
sessment, and would probably have baff1ed
| the State for another term of six or eight
years And when the final decision should
have baen reached, the accumulation of
taxes for so many years would have render
ed the amount SO large that the mpany
would have permitted the lands TO sell for
taxes; and they would have fallen into the
hands of the State without ever having
yielded one dollar of revenue to the State.
F The Mobile and Ohio Rrilroad Com pany
owns at this time 657 900 acres of land, much
of which is Of little value except for its tim
Der. But estimating the value of all the
lands of the company at fifty cents per acre,
the whole value amounts to $32S,500. Fix
ing the rate of taxation at twenty mills on
the dollar. the taxes on these lands for 1874,
1876, 1876 and 1877, will amount to $26, $50
1t will thus be seen that the concession made
by the advocates of the bill to compromise
with the mpany for $25000, is merely the
nominal sum of $3.50, which Is more than
balanced by the immediate settlement of the
taxes, a withdrawal of the suits and pay
ment of costs by the road, and by the plac
ing of the lands of the road on the assess
ment rolls, to bear their proportional share
of the burdens of taxation for the future.
/ In arriving at these conclusions it will be
proper TO state that we have had frequent
consultations with the Attorney General of
the State, on this important measure, and
have been assured by that distinguished gen
tleman that our views as stated above are
correct, and that the bill ought to pass.
1t is scarcely necessary for us to state that
we have had in view the interests of the
State, and especially of our immediate con-
| ctit xuI,n daanlu tod irnf 20