The representative. [volume] (St. Paul, Minn.) 1893-1901, 1894-01-31
AN IMPORTANT
DISCUSSION.
A Letter From the Vice President
of the Great Northern, and
Reply From Mr.. Burke.
R. r. TAX QUESTION AGAIN

Reply From Mr.. Burke.
R. r. TAX QUESTION AGAIN.
GREAT NoRTHERN RAILWAY LINE,
Jan. 10Th, '94.
HON. IGNATIUs DONNELLY,
DEAR SIR:-I am much obliged for
your favor of 18th inst. [ have re-
ceived a letter from Mr.. Burke, of
which l herewith enclose copy. AS
it was apparently written by Mr..
Burke in your behalf, I direct an an
swer to yourself, as follows:
First. 1t is not true that the
Saint Paul, Minneapolis and Mani
toba Railway Co., has received any
''gross earnings" from the railroads
owned by it since February 1st, A. D.
1890. On that date, in pursuance of
express authority contained in the
charter of both companies, the Saint
Paul, Minneapolis and Manitoba
Railway Co., leased to the Great
Northern Railway Company, all the
lines then owned by it, and those
thereafter to be constructed or ac-
quired by it, for a long period. By
this lease it was agreed, among other
things, that the Great Northern
Railway Co., should, during the con-
tindance of the lease, itself manage
and operate the railroads; and for
their use pay to the Saint Paul, Min
neapolis and Manitoba Railway Co.,
an annual rental. equal to the
amount of interest on the outstand-
ing obligations of the St. Paul, Min
neapolis and Manitoba Railway Co.,
and of six-per-cent annual dividend
upon the capital stock of the latter,
amountingto 800, 100000 The sum.
to which you refer in your letter,
was not ''gross earnings" derived by
the Saint Paul, Minneapolis and
Manitoba Railway Co., from the Op-
Grafton of any of it's railways; but
was wholly rental for the use of it's
railroad, paid by the Great Northern
Railway Co., in compliance with the
conditions of the lease.
The taxation of the property owned
by the Saint Paul, Minneapolis and
Manitoba Railway Co., payable to
the state of Minnesota, is definitely
fixed by a contract between that
nd cf0 70 i01, irrir
ated in the territorial period, and
was ratified and confirmed by the
constitution of the state, upon it's
admission into the union. This con-
tract has been, on several occasions,
construed by the Supreme Court of
the state of Minnesota, and notably
in the following mentioned cases:
State of Minnesota VS.. the Saint
Paul, Minneapolis and Manitoba
Railway Co., 30 Minnesota reports,
page 311, and the state of Minnesota
VS. the Northern Pacific Railroad Co.,
81 Minnesota reports, page 294.
In these cases it was decided, that
no part of any sum of money received
by the Saint Paul, Minneapolis and
Manitoba Railway Co., from any 9TH
er railroad company, or person, as
rentals for the use of it's railways, is
subject to taxation, owing to the
contract between the company and
the state; on the other hand, that all
earnings from operation received by
any company, made upon the tracks
of the Saint Paul, Minneapolis and
Manitoba Railway, are liable to taxa
tion at the rates specified in the con-
tract, namely three per centum per
annum. AS the sum of money refer
red to in your letter, and above in
this one, received by the Saint Paul,
Minneapolis and Manitoba Railway
Company, consists wholly of rentals,
it has not become obligated, and can
not be made to pay any taxes upon it;
the same having already paid tax
of three per centum, while it was yet
in the hands of the Great Northern
Railway Company, which had re-
ceived it as part of it's earnings
from the operation of it's leased rail
ways. 1t is not believed that the
state of Minnesota has yet arrived at
the point where it is necessary, for
the proper support of the govern
ment, to pay taxes twice upon the
same property in the same wear: and
least until such necessity arises it
would be great unfairness to re-
quire the Saint Paul, Minneapolis
and Manitoba Railway Co.. to do such
a thing with reference to the moneys
received by it for rentals, even il it.