Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-02-06


cal were taken up This bill provides tor a se-
assessment and re-levy OF all taxes assessed
since 1879 which for any reason have proven in
i valid. The Secretary Of the committee by Cii-
| rectlon OF the ChaiImen of the joint committee,
! read communication from Hon. Greed Hay
monG5 counsel for the Souihern Pacific Com
| panyr which communication was addressed TO
| the committee IN reply TO letter sent TO him,
| requesting him to appear before the committee
! and present lis views N regard to the bill Mr.
! Hsymond's le55erwas as follows,
LETTER FROM HON. CREED RAYMOND.
san FRANCISCO, February 1, 1889.
! Hon. A. ,. Jones, Chdirnsd3 Sss9syts Judiciary
/ Committee, StcTa1aest9-NY DEAR SIR: Your kind
| invitation 0t January seth, to be present at the
meetlngef yeur committee on February 5th, is
| at hand.
! I have seen, and have examined with some
care, the bill which you propose 70 consider,
aud which provides for the reIevy of taxes and
| by ason.ot the llegality Of the tax or assess
ment, from any cause the tax has not been
paid.
| This bill is supposed TO materially affect the
interests Of the Southern Pse te Company, my
client. Upon consideration of the entire matter
am satisfied that the only eject it will have.
| upon the company II any, viii be TO Involve 1t
| N useless litigation. since 1850 the railroad
companies of that system have paid TO the state
al q TO the counties more than three and z half
millions OF dollars III taxes, an amount far in
excess of what they would have been peanired
| TO pay had the properties been valued in the
same proportion as other property in the State
| -As an evidence OF this permit me to c4Il yeur
attention 10 the fact that last year the total tax
assessed by the State Board of Esualiz alton was
| about s52l 900. The companies interested had
| nine hundred miles more of road than in 1850
most OF which was built or purchased within
! the last four years. The tax for last wear was
larger then that levied on any other single trark
| railroad in the United States and f.om twenty
| live to thirty per cent. higher than that which
| was placed upon other property
The companies. although not legally liable
for one dollar OF II, voluntarily paid the whole
amount. Even taking the tax for last year as q
fair one, and computing all that the companies
| have paid since 1880 and dividing it by the
number OF years, giving due consideration to
! the increased mile ge you will readily see that
aul correct IN the statement that these eonapa-
| nies have paid more than they should under a
| tair rate OF taxation.
80 well satisfied was that the property of the
companies was VALUED out of all proportion to
| other property, that in November. 1885, in re-
sponse TO an open letter written By the Con-
! troller of State. made a propos ton, TO which
no answer has ever been returned, which prop
oSition was as follows:
q VIII stipulate for my clients in form
| which the Court viii hold binding
''First-To set aside all judgments aud orders
heretofore inside by any Court i'll all or any of
| the tax cases aud TO withdraw all answers and
defenses therein.
ments made against my clients for the past five
years and all payments made thereon.
"Third-To let the Court determine on prinei-
pies of right and ustIce-aN legal tech nicaities
| being waived on either side, and with or with,
out appeal, us YOU may prefeI-whether the
railroad assessments were made on a basis of
equality ana uniformity with the.sverage asse
ment OF other property i'll the state for the cor
resi- onding years, and whether or not the sums
| paid exceed or fall below what would have
been justly charged had the assessment been so
made
"Fourth-If it is decided by the Court that the
| sum paid is less than the amount equitably due
that Judgment shall be rendered against the
| railroad company for the balance, but if the
| Courts decide that the payments have been
| greater than the amount equitably due, then
| the faith Of the State is pledged 10 return the
| railroad companies the excess.
! - Fiith-One case presenting fairly the legal
| questions raised in the cases to be reserved and
presented TO the Supreme Court Of the United
| States for decision. in order that the State and
| companies may hereafter understand their re-
! spectlve legal tights
Prior to 1880 there never was any difficulty
| between the railroad companies and the State
| and counties in relation to taxation except in
| single instance, where the rate was excessive
| The companies prevailed in that case but sub
sequerty PAID the tax upon what ali parties
| agreed was fair rate.
There has been much litigation since 1880
AS result of it, the following propositions have
/ been established:
/. That the fourteenth amendment to the
! National Constitutional hicn declares among
other things, that all persons shall be entitled
| TO the equal protection of the laws-applies to
, corporations such as these railroad companies
are that the word "persou" in that amend
ment includes these corporations
2 That the provisions of the State Constitu-
! tion-the fourteenth amendment having b en-
| held applicable 10 these corpora ionsSwhich
| allow one person or corporation TO deduct the
| value OF the mortgage from the assessed value
oithe properly, and refuse this right to another,
Is discrimination against the latter and is the
| equivalent of leyying one rate upon the prop
erty OF the former, and another and higher rate
| upon the property OF the latter
8. That the tenlral and Southern Pacific
| Companies ere governmental iustrumentalities
| created by the National Government for ma.
tional purposes, and that no State, by any kind
OF Legislation, can destroy either of than him
der, delay control or impede their operation
4. That the power TO tax is the power to
destroy, and that therefore the right derived
from the National Government to operate and
maintain and do business upou these roads
cannot be taxed by the State Government
ave not gone into detail in presenting the
cases which establish these propositions as Won
are undoubtedly familiar with them. You will
/ readily perceive that SO long as the State Com
stituion stands as it is, it will be impossible to
to enact any laws upon this subject which can
be enforced. if contested.
These railroad companies, Notwithstanding
these decisions and Notwithstanding the dis
elimination against them in the Constitution
and made by the State Board OF EqnaliZation
| have paid all and more than all which could
have been properly exacted from them under
valid law. The bill upon which you are to act
won q be entirely Intellectual for this and for
other reasons which could be stated. did time
permit, but l. would be potent as a means OF
oppression AID of producing confusion in the
every report, has shown concusively that there
has not since S79 been fair and legal assess
ment OF other property IN the State that some
classes OF property escape assessment almost
entirely that other classes of property in def
ance OF the mandates of the Constitution have
been asses ed at thirty, forty, fifty. sixty and
eighty per cent. of their value. These REPORTS
show that under bill of this kind all OF this
property might be reaSseSsed il the Assessors
should determine 10 do Sc, or If they should be
compelled 10 do so at the Suit of any taxpayer
Wnnin ha n To ali ttr
property in the : tate. Ii covers all pror erty
aud resches every person within the State.
| The wide distinction N eject between bill of
the character OF the one before you and a bill
which simply re leyies an invalid tax upon an
assessment roll ready in existence IS tCo appar-
ent to need comment.
For this reason, have never seriously con-
s'dered that there was any probability OF its be-
coming law. Now. that California is rapidly
advancing in prosperity, that immigration is
flowing in ard that lands are passing from hand
to hand almost without cessation and at en-
hant ed values, every man. i'll the Legislature
ana out of il, is deeply interested in seeing that
titles should not be unsettled and clouds thrown
upon the right to convey and mortgage prop
erty.
The persons who control the management of
the Southern Pacific system are identified in in
terest with the people of this State. hey have
never for moment attempted to eyade their
obligations to the State, but have complied with
them, though they rested upon moral sanctions
alone. so long as these persons control this
system the State can be sure that whether the
assessment is legal or illegal. yet if it is fair,
equitable and just, 1t will be paid. In the ma
ture of things this property will change hands
rs control and management will pass 10 others
who may not be identified with our people, to
those who ay not be willing to perform these
obligations.
1t would therefore be wisdom on the part of
the Legislature TO provide Just and equitable
system of taxation. Owing to the difficult ques-
tions involved, the interest which the federal
Government has in the matter and the nuSer-
Gus adjudications that have been had upon the
subject, this result cannot be attained without
great deal of labor, Ior can the conclusions be
embodied in a single section of the code.
You have very kindly invited suggestions
and have as freely offered them With less
interest in the subject than you have-for YOU
are charged, for the time being. with its de-
| termination-I would submit that it would be a
wise thing, in view Of what may happen in the
future, for this Legislature TO provide for
the appointment OF Commission, composed of
men OF high standing and character and per-
fectly disintereSted, to examine this question
devise and formulate plsn of taxation and
submiti: at another session of the Legislature; or
what would be fully as well, have the Senate
appoint " committee of its hold over senators
to SIT after the adjournment of the Legislature.
with power to employ counsel and perform the
work suggested for the Commission. As a
precedent for this refer you to the resolutions
ofthe Senate. passed at its session in 1876 rela-
tive to the appointment of a committee te ex-
anime into the Chinese question. a copy OF