The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1889-11-27
MORRIS & ESSEX TAXES.

Mr.. william Gummere Continues the
Argument in the Case.
Mr.. William Gummere continued his
argument yesterday afternoon before the
arbitrators to settle the disputes over the
taxes which the State claims are due
from the Morris & Essex Railroad Com
pany.
A consideration of the evidence in the
case, he said, would lead to the o n
clusion that there were few matters of
fact in dispute. That the total amount
of the roads annual expenditure is
chargeable to it's capital account is un-
disputed. The annual payment which
the railroad company is required by the
supplement of its charter to make to the
State, he maintained, is not q tax,
because it is not IN impost levied for the
support of the State, but Is entirely a
matter of contract between the State I'M
the company. So the only question for
the arbitrator, he declared, was to deter
mine the meaning of that contract.
Mr.. Gummere then proceeded to con-
slider what vas meant by the term ''cost
of road" He maintained that when the
Legislature in chat connection spoke of
the road it meant the railroad, including
the right of way, with its embellishments
and excavations, rails n ties, bridges
AHA CulV6TlS, passenger u0pOUS anu lISlSuL
houses, together with the land used in
connection Herewith, and all other APP
pendages, whether necessary to it's opera-
tion or not, and in addition it's rolling
stock and equipments; and further that
by the expression cost OF said road" the
Legislature meant every expenditure
made by the company in the construction
of its road, or in the acquiring of property
necessary or proper for it.
A number of cases were cited by Mr..
Gummere in support of his position. 1T
should be borne in mind, Mr.. Gummere
said, that the proviso of the company's
charter which mad the cost of the road
only liable for taxes was in the nature of
a contract for exemption from taxation,
and as Such was contrary to public policy.
If the language of the alleged grant of
exemption WAS open to doubt the benefit
of the doubt must be given to the State.
He did not think it necessary to claim
that the railroad company intended to
defraud the State, but had misappre-
hended the meaning of its contract.
Upon looking over the testimony in this
case it will appear that in the early years
of it's existence the company treated all
construction expenditures as going to
swell the road account, no matter
whether for real or personal property,
roadway or for locomotives and cars.
| Every dollar. which was spent by the
company on its construction account was
charged against the State, and by that
means the total cost of the road was
swelled to such an amount as would pre-
vent the net earnings from amounting to
seven per cent upon its cost. Up to the
year 1868 it never paid 81 into the State
treasury under the provisions of it's con-
tract.
In 1862 the contract was repealed and a
supplement to its charter was enacted
that the tax of l 1-2 per cent. should be
paid annually, From 1866 to the time the
proceedings against the road were taken
the comdany did not charge up as q part
OF it's road account all items of expendi-
be considered as embraced within the
term 'scost of road" In this manner Mr..
Gummere claimed the road from the tune
of its construction down to 1884 had de-
Quoted from the cost of its road $13. 1877
444. "a.