St. Paul daily globe., 1892-11-01
The St. Paul Chamber of
Commerce Gives a Note
Of Warming.
If the Railroad Am endment
Is Adopted Grave Results
Apprehended.
Great Loss Of Revenue to the
State Certain to Fol-
low,
And Great Corporations VIII
Evade Their Proper Share
Of the Taxes.

i he proposed c0nSituGioudl amend
ments furnished food for thought at
yesterdays meeting of the chamber of
commerce. One proposition is to pre-
vent special legislation, and the other
relates entirely to the system of taxa.
tion. The committee to whom had been
submitted the recondlte problem evil
IDENTIFY has given the matter very careful
consideration. The report follows as it
was adopted:
At the last meeting of the chamber of com
merce there was referred to special COM
mittee the following resolution, to witt
Whereas AT the last session of the Mime
sofa legislature two acts were passed sub
mitting to the vote Of the people of the state
two proposed constitutional amendments,
the first of which is designed to prevent spe-
cial legislation, and the second of which in
troduces certain changes in the taxation
methods of the commonwealth; and.
Whereas, The first, while aimed to accom-
plish an important result, goes further than
is warranted or desirable in the present con-
dition of our local development; and,
Whereas, The second opens the way for
favoritism and the exemption of special in
terests in the collection OF the states rev.
enues and exposes the state to the danger of
losing sources OF income which are at pres.
ent very valuable to 1t and promise to be-
come more valuable in the future; and,
4. Whereas, These proposed amendments will
be approved or rejected at the coming cleo
tion
Therefore, be it resolved, That, in the opln-
ion of the chamber of commerce of ST. Paul,
both of the proposed amendments should be
rejected by the people of Minnesota.
The committee respectfully reports that 1t
has had this resolution under consideration,
and that in its Judgment the adoption OF the
second amendment proposed would be seri-
ously detrimental to the public interests of
the state and that it should therefore be re-
jected. This amendment is the one author
izing the taxation Of the gross earnings in
this state of railroads sleeping. drawing room
and parior car companies, telegraph and tel
ephone companies. express companies and
Insurance companies, or, in lieu of such tax,
authorizing license fee and specific tax on
the output of mining properties. The rail
roads of Minnesota at present pay annually
into the state treasury in lieu of all other
taxation a sum equivalent to 3 per cent of
their gross earnings for the year.
This system dates from the lime OF the ter
ritorial government of Minnesota, and rests
partly on contracts between the territorial
government and railroad companies to which
existing railroad companies are the success
ors, and partly on laws which have been
passed since the adoption OF The state consti-
tuition Atits inception it was regarded in
the light of an exemption designed to en-
courage the construction of lines within the
state. During all the time that the roads
we're carving their great land grants and
earning but little from operating. 1t proved Of
enormous value to them. Their lands were
exempt from taxation under its provisions,
while their gross earnings were so small that
the per cent contribution netted but pal
try revenue to the state. In those days the
legality of the system was frequently assaileq,
but the railroad companies always resisted
such assaults with yigor and success. the
supreme court, at their instance. III evevy
case sustained the validity or the method as
supported by the solemnest contractual obli-
cations.
AS the population of Minnesota has in
creased however and its resources been de-
veloped, what was originally intended to be
OF peculiar benefit to the railroads has grown
to be of immense value to the state. Inc
lands which the railroads carried for so many
years, with practically no burden OF taxation,
have now in great measure been disposed
of and passed into the taxable ownership OF
private individuals On the other hand, the
gross earnings of the railroads. instead of
being insignificant have come to aggregate
a tremendous sum. and are constantly grow
ing larger In 1887 8 per cent of their gross
earnings amounted to S675, ,745 and this sum
they paid into, the state treasury In 1883 IT
was S713, 972; in 1889 it was $685., 435; in 1890,
S7Oo, 367; in 1891, S743.440, and in 1892, $780,,
0o1 These figures call attention to con-
dition OF affairs the significance OF which
the public probably does not fully realize.
The outlook is that in the not distant future
q system, which was at the outset established
projectors of railroad lines, will, II undls-
turbed, ado million dollars year to the
states income, and ultimately pay all the
state governments expenses, without the
eXactlon OF q cent OF contribution from any
individual.
The railroads of Minnesota would be more
than human if they would not be glad to be
relieved of a duty as onerous as this has be-
come AZ long as the gross earnings tax
meant lower rate of taxation to them they
would naturally favor and defend it. But,
with no greater difficulty in the way to relief
than the will of state Legislature, it was
mora than twenty years ago seen that, when
it was clearly settled that their interest was
in this direction, they would make an effort
to effect change i'll the system. In view of
this the state adopted, in 1871, an amend
ment to its constitution. by virtue OF which
the right TO repeal any laws taxing railroads
on the percentage system was taken FROM the
legislature and any such repeal was required
TO be submitted to the people Tor ratification
before it became efectual-
AS your committee construes the second of
the proposed amendments to be submitted to
the people at the coming election, it abro-
gates the safeguard, and vests in the legis-
lature the power to repeal the per cent tax
independently of the people, and in addition
thereto to tax the real estate owned by these
corporations not used i'll their business. the
same as other real estate. In other words,
this amendment removes from the legislature
the inhibition contained in section 81 Of ar
tlcle of the constitution, and exposes that
body and all assessors and collectors or taxes
in the state to the allurements which tho
great moneyed powers can exert for their
own advantage From these they have been
wisely protected by virtue of the present
constitutional provision, ana any change
mustresult in the corruption and debauch-
cry of the public service and vast loss in
the public revenues derived from this source
Should it be argued that the proposed
amendment will mot have the effect which is
here claimed for it, it is. in your committees
opinion q sufficient answer TO say that, un-
less it is designed to accomplish this it has
no signi ticance whatever The provisions OF
the law are at present adequate for the en-
forcement OF the existing system. Even a
constitutional amendment would not avail
to authorize an increase in the percentage
now eXacted from the railroads. They could
successfully resist this in the courts now just
as they did in the sixties. reduction or re-
peal of the per cent tax Is impossible as
the constitution now stands, without vote
OF the people. II the constitution is amend
ed as proposed this reduction or repeal may
be affected without popular sanction. Your
committee thinks that the system now in
vogue Is too valuable to be tampered with or
to be relegated to the independent and un-
controlled discretion of the Legislature.
All electors desiring and intending to so
vote upon this matter as to subserve the
highest interest Of the state should vote for
the rejection Of the amendment.
value of the first proposed constitutional
amendment relating to special legislation its
opinion was divided. and for this reason,
and because the importance Of the second
amendment eemed to make any remarks
which would distract attention from it un-
wise, it has decided TO submit to the cham
ber the first amendment without recon-
mendation. Respectfully submitted,
AMBROSE TIaRE,
w. z. MURRAY,
JOHN B. SANBoRN,
W. w. BRADEN
r. M. NEWPORT
One member of the committee, while
In full accord with the report, refused
to sign it for fear that he would be mis-
understood. This is because he is
railroad man. Col. Clough, of the Great
Northern, is the gentleman in question.
There was short debate, but no sent-
ments adverse to the report were Of
4