The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1893-01-26
THE RAILROAD TAXES.
Corporation Attorney Cross Before
the Committee.

SACRAMENTO, Jan. 25.-The Committee
on Corporations met in the Senate chamber
again this evening to listen to the discus
sion on the railroad TesSsessment bill.
Qnite a large number Of spectators congre-
gated 10 the lobby TO listen TO the silver
tongued oratOry of Cross. the railroad at
t0rney. As he did not conclude his argu-
ment last evening he was allowed to proceed
with it as the first order of business.
lie said that there were things in the bill
introduced by Shanahan which led him to
believe that the author did not understand
how a TAX was levied. He then told how
the State county and city tax was levied.
and how it was appOTtioned The levy of
tax was legislative act The bill was de-
ficient in many particulars. The Southern
Pacific ought to pay such proportion as the
value Of its property bears to all the other
property in the State. If its value is one
thirtieth it should bear one-thirtieih. and
50 on.
"a City Council" he said, "could 60 10
Ar. Huntington and pound him on the
head until be paid a certain sum OF money.
| have no doubt that such a course would
be approved of by many. But there is
better way, and that is for the Legislature
to enact a constitutional law to enforce the
payment of taxes. AS the matter stands
now the courts have been compelled 10 de-
eide that the methods employed for the COL
lection Of "a IlrORd taxes are Illegal. No
matter how much popular Legislators may
tax about the corruption OF the courts the
fact still remains that the fault lies with
tie men who framed the laws"
He then quoted a decision from the Cali
fOrnia reports to show tina the method to
be employed was simply to Tesssess in the
old way. After finishing his reading he
said that the Supreme Cour, had decided
that there were no laws in California which
provided for the proper levying Of a tax.
Now" he said, instead o. enaciing law
that would make it possible to levy taxes
legally they propose to pass bill to simply
proceed in the old Illegal way
Cross argued that be believed there was a
law by which. after a debt had been owed
for five years, and 10 written agreement
had been given renewing that debt, it was
wiped out
Shanahan here interrupted the speaker
to ask him to MAKE blnself plain and state
if bis contention was that the statute Of
Limitations had run on the railroad tax.
Said Cross: "Sir, you are one Of those
am leading to at a slower gait. you jump in
to get there before l do Wait, and let Us
get there together" On this point he de-
clared that he could fad no case in the
statutes of other States where they had
gone back more than three years to re-
assess.
III were asked to state how far back the
reassessment should 60 l should be in
something OF a Quandary. should have TO
FIX it within period Of time that the rail-
road company has paid every cent Of tax
that was due"
He reviewed that portion OF the political
history OF the State which showed how and
why the mortgage tax clause had been in-
serted in the new constitution. saying:
"a geneyal demand had been made that
mortgages should be deducted from the
value OF the property mortgsged. In the
drafting Of the clauses providing for revenue
and taxation il was discovered that the
mortgage bonds Of railroads were so held,
and il was seen that they would escape
taxation. So the constitution had TO make
an exception to the deduction Of mortgages
from the value of railroad property. 1t
would seem as though justice should be
founded On the principle that what is good
enough for individuals ought to be good
enough for corporations that the law should
see that all mortgages ought TO BE- deducted
from the value of all property.
Taking the statement Of a gentlemen
who is considered by the San Francisco
press as infalible, viz: that the railroad
owes the Government of the United States
more than the value Of the road. then l say
that every dollar exacted from the railroad
company. except that paid voluntarily, has
been downright extortion."
He then referred to the fact that the rail
road company had rendered taxes to the
State, which had been refused, and pro-
| ceedings had to be taken in the courts to
compel the officers to accept the same.
Where is there" he asked, "the spectacle
of any man paying voluntarily any sum
toward the support OF the Government un-
less it had been regularly levied and as
sessed? Where was the man, at a time
when the United States was in the throes
of civil war and in direst need. that ever
paid a cent unless it was first exacted
by law2
"Since 1855 there has been no law to CON-
pei the Southern Pacific Company to pay
any tax, yet the company had said 1t would
pay all taxes, no matter how levied IL rea-
sonable In amount. Now, IL this Legisla-
ture is reasonable and pas es a just and fair
law under which the railroad taxes will
be valid hereafter and reassesses the same
| for the years 1885, 1886, 1887. on an equally
fair basis the railroad company will pay the
amount levied for those years without ques-
ton, no matter whether the law be valid or
| invalid"
This was not exactly a proposition, Mr..
Cross said, but he was confident that tie
railroad company would pursue this course,
but If this Legislature should go to the ex-
IRENE and pass an unjust and unreasonable
and exaeting law In spirit OF oppression,
The railroad would refuse 10 pay any of the
amounts for these years unless forced
to do so by the courts of last resort. He
concluded by an appeal TO the legisla tors
present 10 frame and pass measure on the
lines suggested, and declared that it would
be glorious thing for them TO go home and
tell their constituents that by their votes
they had made it possible for the State to
receive vast sum of money. thereby max
ing the rate of taxation the lowest ever
known in California.
Al the conclusion of the argument Mr..
Cross offered 10 produce evidence on the
subject. In order to sustain the position he
had taken. 1t would take about three hours
to get through.
Mr.. Hart asked Mr.. Cross il he was en-
powered to make definite proposition as to
the exact amount the railroad was willing
20 pay as the taxes for 1867. The an
swer was, mo, sir"
The committee adjourned to meet to-mor.
row afternoon at 2 o'clock.
Alter the committee adjourned Attorney Gen
| eral Hart suggested bill which Is a substitute
TO The one OF which 6hanahan is the author. The
Important sections OF IL are as follows:
Section Sec. 3900A. Whenever, subsequent