The record-union., 1893-01-19


Pacific systems. He divides his report
into three portions.
The first. covering the railroad State
and county taxes for the years 1880 to
1854, inclusive, portion of which was
paid under the compromise effected by
Attorney General E. G. Marshall; the
second covering the taxes of 1885, 1886
and 1887, no portion of which have been
paid; and the third the railroad taxes
since 1887, which have been promptly
paid. With regard to the payment of
these delinquent taxes there has been re-
ceived by Attorney-General Hart but one
proposition, which is embraced in the
letter of Z. l.. Craig, of the Law Depart
ment of the Southern Pacific Company,
under date of January II, 1893, given here
in full:
Law DEPARTMENT
SOUTHERN PACIFIC COMPANY,
SAN FRANCISCO CALI January IL, 1898
Hon. w. II. II. Hart, Attorney General
DEAR SIR: am in receipt OF your favor OF
this date referring TO the pending contro-
versles between the people of the state and
the railroad companies composing what is
known as the Southern Pacific system, in re-
gard to taxes. and the suggestions heretofore
made on behalf OF the companies OF purpose
to submit some proposition for an adjustment
OF the same, and inquiring whether am now
prepared TO submit such proposition in their
behalf
In answer to your inquiry I viii say that.
while the companies referred 10 are desirous
of promoting speedy settlement of these
controversies upon such terms as shall be fair
to both parties, an examination of the subject
has convinced me that it will be useless for
the companies to submit any proposition
covering the whole matter and involving any
degree of compromise, because of the very
serious doubt as to the authority of any exec
utive officer Of the State to accept the terms
that might be proposed so as to bind the Stale
and relieve the companies from further con-
trOverSy in regard thereto.
AS I understand it there are those in author
a1s. t,rt,s.
nothing short of the fun payment by the
companies OF the amounts assessed against
them respectively since the controversies be-
gan. with ali tile cumulative penalties and
costs incurred in the proceedings had To en-
force the assessments, viii relieve the compa-
MES and their properties from the lawful de-
mands of the state. This claim is made not
withstanding the fact that for the series of
years up to and including 1854, nearly if not
quite all Of the suits have been determined
either by judgment in favor OF the companies
or by judgments against them which have
been fully paid; and that for the years follow
ing up TO and including 1887, it is claimed by
the comp panies that the assessment unlawfully
included the Federal franchises of the aided
roads, and thereby rendered the assessment
void as 10 them. The fact that the Federal
franchises were so included up to and includ-
ing the years 1856 is. l think undisputed
by anyone; and whether they were so in
ciuded in 1887 is in TACT now being litigated
between the parties. The effect in the case re-
ferred to of the Judicial finding upon this con-
troverIed fact must be so controlling that 1
40 not think either party is likely to make to
the other a proposition of settlement which
VIII be accepted.
The situation is further complicated by the
fact that in addition to the suit brought In the
name of the State for the entire tax claimed
10 be due to the State and counties for the
year 1857, suits have been commenced by
the several counties for their alleged proper
tions of the tax, thus subjecting the compa-
nieS 10 double litigation as TO each county
Tax.
The only other case now pending is that of
the people VS.. The San Pablo and TulaTe
Company before the Supreme Court of the
United States. The very small amount in
Solved in this case is insufficient to warrant
further controversy; and the other reasons
which were supposed tojustifyit it seems TO me
no longer to exist.
In view of the fact that the railroad com.
panies referred to as under the Southern
Pacific management have for five years last
past been promptly paying their taxes as
levied, and propose TO continue so doing; and
the further fact that a decision of this case,
even If adverse to defendant, cannot possibly
affect the main questions involved in the
other litigated cases, l think that the question
In this case will have ceased to be important
10 either party, If the taxes are paid in full,
with i've per cent. penalty claimed and legal
interest from the date of alleged delinquency
TO the time of payment, to&Jher with all
costs that may be chargeable therein-in
other words, If the company pays to the
State and counties all that can, by any possi-
bIlity, be recovered in the event of 1udg-
ment IN favor of the people.
understand that some two years or more
ago this company rendered full payment to
the State OF these taxes, ands that its officers
declined TO accept the payment.
I now renew, to you, the offer TO pay these
taxes, penalties, interest and costs, which ii
it be accepted, Will remove at least one OF the
irritating questions between the parties, and
tend to promote an adjustment of the others.
To this 1 will add, that l understand that
the companyis counsel, at the time OF entering
into the stipulation under which this case was
taken up, contended, and have ever since
claimed that the record in the case was not
such as to necessltate a decision upon the
point which the counsel for the State desired
10 have settled; and that since the stipulation
was entered into the the supreme Court of this
State has rendered "a decision in relation 10 the
statutory provisions for the collection OF
taxes upon which this action was founded
which, if adopted by the Supreme Court OF
the United states, as is usual upon such ques-
lions, may reasonably be expected to result IN
an afirmance of the judgment upon these
minor propositions, and without a decision
upon the main question supposed to be pre-
sented and sought to be settled.
Inasmuch as there can be no question of
your official right TO receive in settlement of
this case all that could by any possibility be
recovered IN il, submit to your professional
and Official Judgment this offer to settle the
case last mentioned, and as as soon as the
technical doubts as to any authority to settle
as l have no doubt they can be- / will submit
81 proposition, In the hope of settling all other
L. /. CRA1G.
OuNSI tnS I6d0 Vi Gl6 taxes lEOnl 1851
to 1881, inclusive, the report of the State
Controller for the thirty-second and
thirty-third fiscal years is quoted from at
length to show the condition of railroad
taxes for the years 1880 and 1881, the
amount originally delinquent and the
amount subsequently paid by companies
other than those embraced within the
Southern Pacific and Central Pacific sys-
TENS. and by those systems and their
branches in Sacramento, Merced, El Do
RADIO and Yolo Counties.
Quotations are also made from the Con-
troller's subsequent reports, showing the
history of the litigation entered into by
the State to secure the payment of the de-
inquent taxes. the disastrous effects upon
the finances of the State and the various
counties of such non-payment and the
action of Attorney-General Marshall in
compromising such taxes and accepting
on behalf of the State about so per cent. Of
the amount claimed as due.
Attorney-GeneralM Marshall paid into the
State Treasury on June 49, 1856, as the
States portion alone of the taxes collected
from the railroads, as follows:
S30, 900 SO
A : . o1.-...-.....--.. 100 O6
o--.-..-......-..-....... 34,514 26
80 333, ,377 13
3SSo o2O IS
s7es.e57 e1
Less express charges from san