The morning call., 1893-02-05
THE RAILROAD TAX SUITS.

by singular g00u fortune tDe case WHICH
Judge Hebbard has just decided included
all the main issues raised by the railroad
against the collection of its delinquent
taxes, and his decision shows what we'll
informed persons have all along believed
that the company had no case, and merely
resorted to legal chicanery in order to gain
time for the payment of large sum OF
money which did not happen at that mo-
ment 10 be in its treasury.
Six months ago. on the trial of the demur-
rer filed by the defendant, Judge Hebbard
decided that the system of taxation EN-
ployed in the case of railroads operated in
more than one county of the State did not
conflict with the constitution of the State
or with that of the United States.
In the decision rendered on Friday the
Judge decides that the franchise was not
assessed for taxation. As matter OF fact.
long before the assessment was made, the
Supreme Court at Washington had decided
that Federal franchise was not taxable
by State authority. 1t would have argued
strange inadvertence ia the Board of
Equalization to have included the franchise
in their assessment in the face OF that de-
cision. They did not make that mistake.
Messrs. Dunn and Wilcoxen of the Board of
Equalization testify positively that the
franchise was not taken into consideration
when the assessment was made, and though
Mr.. Warehouses; recollection is different,
he is but one witness against two, and the
preponderance of evidence must govern.
Judge Hebbard further decides that the
assessment was not invalidated by the re-
fusal of the Board Of Equalization to deduct
the volume of the mortgages from the value
OF Ea hoo
was in exact conformity with the Language of
the constitution, which directs that railroad
property will be taxed In its entirety, while
as to other property only that portion shall
be taxed which is over and above any
mortgage thereon. The reason seem
simple. The holder of a mortgage on
piece Of property in this State is supposed
to be in the State and to pay the tax on the
mortgage as part of his taxable estate;
were the owner of the property required to
pay on the whole a case of double taxation
would arise. Whereas the great bulk Of the
bonds issued by railroad companies in Cali
fornia are held out of the State, in the East
and in Europe, and cannot be reached by
the State tax-gatherer. Hence the tax is
imposed on the mortgagor. and he-as the
Southern and Central Pacific did-uses the
fact that the company pays the tax as an
uducement to people to buy the bonds.
Judge Hebbard's decision on these points
is so clear that it is not easy to see how it
can be overthrown on appeal 1t would tax
the ingenuity of Judge Field himself to con-
trOyert tie terse statement that the com
pany has been Seeking to avoid liability
by technical defenses which are not sus-
tanned either in fact or in law" The iurst
who claimed that the corporation could evade
its duty as a property-Owner on the ground
that the Board Of Equalization had included
its fences in the assessment Will be puzzled
to pick hole in the plain, cOmmon-sense
conclusions of the Superior Judge.
1t is possible that the long and vexatious
controversy may have come TO an end at
last The chances Of obtaining a reversal
of Hebb ards decision on appeal are too
small TO make it worth the while Of the
company To incur the expense and the
odium which the proceeding would involve.
After all, the Southern Pacific has accom-
plisbed its object. 1t has gained several
years tine, during which its business has
been swelling and its gross income has
grown from something over forty 10 con-
siderably over fifty millions year. 1t can
now conveniently pay that which it did not
feel ii could easily pay seven years ago. 1t
had better DO so without further demur.
Nothing would help II so much as frank
announcement that IL acQuiesces in Judge
Hebbard's decision and will pay the back
taxes as fast as possible 1t would find no
disposition on the part of the State officials
10 treat it unpleaSantly.
In the meantime the decision will bring
the procee dings at Sacramento ON the SUBJ
iect of the bank taxes TO a standstil. SEN
ator Carpenters proposal to compromise
and to take one million for three years
taxes is knocked on the head by legal de-
csiOn which declares that the company
owes a million for one OF those years. The
Senate committee is bound TO take that
decision as the basis Of any bill which it
may frame, and whatever it may abate of
the harshness which members naturally
feel inclined to indulge. it cannot embOdy
in q statute proposition that, in the mat
ter Of taxation, recalcitranee may purchase
immunity.
NATIVE CHINESE.