New-York tribune., 1894-03-26
REBATES TO RAILROADS.
A VAST SUM WRONGL Y PAID
OVER s,5oo,oO0 TAXES ON INTERSTATE
BUSINESS RENTED BY THE STATE.

BUSINESS BY IHE
THE REBATES GRANTED BY CONTROLLERS CHA
PIN. wEMPLE AND cAMPBELL-MR CAMPBELL
FULLY ADVISED BY ATTORNEY GENERAL
RosENDALE OF THE UNITED STATES ST.
PREME COURTS DECISION UNFOLDING
THE TAX-sUIT BROUGHT TO RE-
COVER $4,000 PAID BY HIM
TO a RAILROAD.
LEY TELEGRAPH TO TIE rRIBUyEl
Albany, March 25.-Further information waa
given out to-day by State officials in regard to
the alleged discrepancy of sl,6OOOOO in the States
accounts While it would appear that there has
been no defacation In the course Of the admin
istraton of Alfred C. Chaplin, Edward Wempe
and Frank Campbell, the three Democratic pred
ecessors of James A. Roberts, Republican, the
present Controller 1t would nevertheless seem
that Mr.. Chaplin. Mr.. WemEle and Mr. Camp
bell RENTED taxes to corporations to the amount
OF $1,6O0,00o which they should have retained
in the state Treasury. The taxpayers OK the
State, through an erroneous Interpretation OF the
taxation laws by these three men, have thus lost
81 100000. This is a pretty heavy burden for the
Democratic party, as represented by Mr.. Chaplns
Mr. Wemple anG Mr. Campbell, to shoulder.
r..
Mr.. Chaplin and Mr.. Wemple can plead in their
defence that the United States Supreme Court
had given certain decisions which led them to
believe that 1t would be unlawful for them 10
tax the interstate business of the railroads. but
Mr. Campbell is prevented from submitting such
an explanation OF his conduct by the fact that the
United States Supreme Court early in his term
gave a decision which clearly declared that the
railroads can legally be taxed on their inter-
state business Moreover he was advised OF this
decision early IN his term Of office by Attorney
General Rosendale, one Of his Democratic COL
leagues. Mr. Rosendale also brought suit 10 oo-
tain the opinion Of the courts OF this state upon
the subject, and found that they agreed with
the United States Supreme Court. Yet, notwitn-
standing this warning from the law ofncer OF the
State, Controller Campbell went right on paying
rebates to the railroads. just as his Democratic
predecessors had done. Moreover, he TOOK II"
steps which would bring to an immediate settle
,nent the question whether or not the raiiroaoS
were compelled under the laws or thls Sta.e "
pay this interstate tax. 1t was early III lo'H
that he learned from Attorney General Rosendaie
Of the d. csion of the United States supreme
Court. puc 1t was not until late in 1898 that ne
fixed ur a test case Meanwhile the payment OF
the rebates went on; and it was continued atter
the test case had been brought.
Controller Roberts through the State courts.
Yesterday began a suit to recover for the state
Treasury part Of the sum which Mr.. Camppeu
TINS paid over to the railroads while aware tnat
the United States Supreme Court had deciareo
the tax a lawful one. Mr.. Roberts IS slili ID
Buffalo but will be here early tomorrow iho'"'
ing and will then make public the result .. aA
examination Of the books in the Cohtroners
office showing the amount OF the repales Paiu
To the railroads OF the State since 1885, OF sihce
Controller Chaplin decided that the railroad COT
porations were being illegally taxed upo" .he'
interstate business These rebates were paiu oA
the theory that since $780, when the Corpofa''oA
r,x law was passed, the railroads had been
illegally taxed upon their Interstate business
and that the amount they had unnecessarily
paid must be returned gradually TO then''
,,p ROBERTS EXPLAINS THE DISCREPANCY
Speaking about the matter over the lohs-u'S
..rce telephone to-day. Controller Roberts saiu'
"A great many corporations in TINS s'a'e' pa
,,cuIarlv the railroads do large volume OF IN
terstate business BY this is meant pusi''eSS
which begins in this State and is tinished III an, an
n,bar I'm 10 the time Mr.. Chapln ehteleu ',,u
Controllers Office. it had been customary ~ tha,
a tax all OF this interstate pusit,e romrt made a
time the United States Supreme Court hia".
r,,lino that this could not be taxed. Ihen 'ne
safe began paying back to the corporations. 80
taxed rebate This has conoinusu aon W his rebate
nresent time and about $l6oooo oi this leoasS .;S
s,Ni remains unpaid Up to date the rebates pau
m various roads on this account alh~oun' ~ ~ ,h;s
$4,000 or :hereabouts ana .hae o,, orses Since
Statement of 81 5000 900 discrepancy arises c.tos
.his rebate was arranged the thl'eu So. o.,
court would seem to have reVerseu l.' Nv Nv sran
ing as a recent decision declares ma ,thir ~, the
nhise granted to the corporations within ',u in
80 ~ transact this interstate business IS u.
itself of intrinsic value, ACCORDING 10 Jne rnora
OF such business ""N
ton. ..xo ,na. n defalcat ation has
heen discovered in your department have
.1'here has been no defalcation ina. na ns
- rrowledge of. / think the WHOLE t"i"s
s,rows out of this rebate question
px. x.ATroRNEY-GENERAL RosENpALES "O'io''
ci,ron W Eosendale. OF Albany VINO up ="
January / was Attorney-Generai OF 'he ota.e
s,id to-day. in response to inquiries Vi i
Tribune correspondent regarding MS SUIT " ~
the constitutionality Of the state Ia" 'aN"e w
Interstate business Of the railroads.
"rarIv in my term OF Office as Attorney-ueh-
aral In 1892 | came across a decision VI '''e
cunrene Court Of the United states WHICH co"-
WINGED me that the State had the right u 'aA
that norton of the interstate business Oh 'ie
railroads which Is done within THIS STATE ~
was a test case which had been brought py '"e
Grand Trunk Railway Company ana the S o.'.Sa tSa
states Supreme Court squarely decIueu tnae '
railroad mast pay tax upon the amour. 81
interstate business II should do withlh the Seae ar
~ Maine | at once called Controller CampbeIs
attention to this decision. deeming 1t my duty 70
do So although l had my doubts as 10 the WIS
don, Of the State OF New-York taxing its rail-
roads upon their interstate business. and thus
nutting them at a disadvantage with other great
railways of other states in competing ior 'h'S
business. 80, A., ...
"But / had nothing to do with the question
OF the wisdom OF the tax. What was my con-
corn was the legality of 1t. and certainly be-
leved 1t to be legal after the decision OF the
United States Supreme Court. A test case was
not made up. however, until September. 1888
/ was not responsible for this delay. IL was
tben argued before the General Term OF the
supreme Court OF this judicial district. Charles
L, Wells appeared for the railroads. and rep
resented the State The test case that OF
a tax which had been levied upon the interstate
business Of the Pittsburg and Dunkirk and Allie
nhanv Valley Railroad COMPANY. Mr. WeIIs