St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1892-10-18
Its Adoption Will Repeal the
Law Providing for Rail-
road Taxation.
How the Word Railroad Crept
Into an Act Passed at the
Last Session.
People of All Parties Should
Unite Against the Com
mon Enemy.

vi Tie Sldte 10 secure partial or total
exemption from taxation?
AT the coming state election the peo-
pie of Minnesota will be called upon to
vote either for or against the adoption
of two amendments to the constitution
of the state.
One OF these is very necessary one,
and will put an end to that bug-bear of
every session, special legislation, ii
adopted.
The other one reads very nicely. and
is calculated to appeal to the voters who
desire to see a certain class of corpora
tons that now evade all taxation forced
to pay something into the state treas
ury. AS originally introduced this pro-
posed amendment would have accom-
pliShed this purpose without doing any
damage; but in some way, unknown to
the champion of the measure, the word
railroad crept into the measure. and
now the rejection Of the amendment is
public necessity.
The adoption of the second amend
ment will mean the virtual repeal of the
law providing for a tax on the gross
earnings of railroad corporations doing
business in this state.
AS is well known, this method of tax
ing the railroads was adopted at an
early period of the states history, when
the earnings of the railroads were small
and nearly all of them held enormous
amounts of land given to them for
building their roads either by the gen.
eral government or the state. 70 have
placed all this land Oh the tax lists
would in those days have been great
burden to the railroads, and one which
few of them could have borne up under.
There Was No Market
for the laid, and long before il could
have been sold it would have been eaten
up by taxes.
This was illustrated at the time the
celebrated measure known as House
File 157 was passed, back in 1887.
Against the lands of the st. Paul 81
Chicago, Hastings Il Dakota and kim
dred roads back taxes for long periods
had been assessed. These taxes, in
many cases, amounted to more than the
full value of the lands, and to get out
OF their dilemma the railroads COM
menced selling these lands for 81 an
acre. A brilliant thought struck them.
and they were sold to men who had
Influence" with the legislature of 1887,
and the result was that bill was passed
''for the relief of settlers and others
from the payment Of certain back taxes.
But now, after all the lands and prop
erty of these corporations have escaped
taxation when the burden would have
been heavy. it is neither fair nor Just
for the railroads to seek 10 have the
gross-earnings tax repealed. Minnesota
has many prosperous railroads, and re-
celVeS tremendous revenue from the
groSS-earningS tax. Indeed, in few
years the necessary amount of revenue
demanded by the state government will
be realized from this tax on the gross
earnings of the railroads.
Are the People Prepared
to give up this great source of revenue
and trust any future legislature to enact
new method of railway taxation?
The people know exactly what they
have at present, and it will be but a
matter of few years until the entire
revenue needed by the state will be
realized from this tax on the gross earn
ingS of the railroads. The voters of the
state should "spot" this amendment
All the corporation Influences of the
state are in favor of it. and not a Re-
publican organ has told the people what
the adoption of this amendment will
mean. 1t was worked through the leg
iSiature in a fraudulent manner, or,
rather, the word railroad was inserted
i'll the measure fraudulently, forgery
being the proper term to use. The his
tory of this amendment is told by Col.
John c. Wise, of the Mankato Review,
III the following concise manner:
How 1t Was Done
In the Democratic platform special
reference is made to a proposed con-
StltutlOnal amendment known as Senate
File No. l24, and the people of the state
are advised TO unite in defeating it.
There is an interesting history con-
nected with this amendment, which
could not be given at length in the plat
form, but which is necessary to proper
understanding Of the matter.
The bill was introduced in the senate
by Senator Leavitt. of Meeker county,
and as framed by him was intended to
provide for taxing sleeping car, tele-
phone, express and foreign and domestic
Insurance companies, and similar or
carnations doing business in this state:
and also providing that mining corpora
tons might be taxed specific sum
upon their products. 1t was intended
to reach class of corporations doing a
large and profitable business in the
state, but which has so far contributed
comparatively little or nothing to the
revenues of the state.
In this form 1T passed the senate. but
during its pendency in the house and
before passing that body. the word
ssRaiIroad'' Was Inserted
in the title and body of the act enumer-
ating the corporations to which its pro-
visions applied. In the hurry of the
closing days of the session this change
was not noticed by its author, and it be-
came law.
There is already constitutional
amendment levying tax of three per
cent upon the gross earnings of the
railroads in lieu of all other taxes, and
the revenue to the state from this source
last year was about S725,OOO. and it is
annually increasing. When it was en-
acted the railroads were poor, they held
large quantities of lands granted
by the general government exempt
from taxation, and the state received
very Slight return from this exemption.
The argument made IN its behalf was
that it would assist the roads in their
development and in settling up the
country, and when their business grew
to degree of prosperity the state would
receive its reward in revenue nearly
| or quite sufficient to pay its current eX-
penses without resort to other taxation.
| We are gradually reaching that condi-
| ton of things; the roads have parted
with their surplus lands, and in the
present rate of taxation they are bear
ing reasonable share of the expense of
maintaining our state government.
Effect of the Amendment.
| Now the ratification of this proposed
| constitutional amendment would repeal
the constitutional amendment which is
working SO satisfactorily, place the rail
road companies in the list with other
and minor corporations, and give to the
Legislature the power to fix from time to
time what this tax shall be. Every
voter knows what this means. Such
| change would result to the disadvantage
| of the state. for with matter of such
great Importance pending money could
and would be spent without stint. and
in body where such frauds
| as this are SO readily committed
| and at least one-third the members of
| one branch were actually bought to
| defeat certain obnoxious measure,