The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-07-10
A GREAT QUESTION.
How Railroad Taxes Should
Be Fixed.
THE ATTORNEY GENERALS
ARGUMENT.
Present Value Not the Question
But Real Cost.

half of the state in the Great Northern
grain rate case. Attorney Grover resumed
his argument in behalf of the Great
Northern when court opened in the morn
ing, and after Mr.. Childs, who followed
him, concluded in the evening, Attorney
kellogg began his argument in behalf Of
the Northern Pacific. Mr.. Kellogg had
not finished when court adjourned, but
will conclude this morning, when the case
will be submitted to Judge Kerr to exer-
else his brain upon during portion of his
vacation.
In his address, Attorney General Childs
said, in part:
'It is an unjust measure of the value of
railroad property to say it is worth so
much, as compared with adjoining prop
erty, because that value arises by reason
of the existence of the roads. Wipe out
all the railroads in the state and what
would it cost for terminals and right of
way? I cannot in justice assent to the
proposition that the Great Northern or
Northern Pacific right-ofway is entitled
to much consideration in this case. Under
the system of tax on the gross earnings of
the roads they do not pay their just share
of taxation"
Mr.. Childs then read from A. B. Stick
ney's book "The Railway Problem" with
reference to the power welded by railway
corporations and their officials in the max
ing of laws and their administration.
Continuing, he said: "It is safe to say
that these roads did not cost over 33 1-3
per cent of the estimate of their present
value. The value of a railroad is almost
impossible to ascertain. The cost of
road cannot be taken as the proper basis
of the value on which it is entitled to
fair rate of interest. There may have
been extravaganza or rascality in the con-
struction and equipment of it, Neither
are they entitled to interest on the basis
of their present value, because, as | have
said, this value is largely due to the mere
fact that the road exists"
Judge Kerr-.Suppose one Red River
Valley farmer paid $25 an acre for his
land while another got his at $3.50 an
acre. Would the first be entitled to any
higher price for his land because he paid
the higher price for it? What we want
to get at is the principle.
''Your honor, should not for an in
stant attempt to controvert that PROPOSE
tion if we were attempting to set the value
of the railroad property-the price at
which it should be sold," replied Mr.
Childs. ''But we are here endeavoring to
ascertain the amount on which they are
lad <o Irox into q a Ua va
them the right to build the roads instead
of building them ITSELF
Mr. Grover-Suppose the state were ap-
praising the roads to take possession of
them under the exercise of the right of
eminent domain?
''Then there would be no question but
that they would have to be paid for on the
basis of their present value" responded
the attorney general, "but the question as
to the amount on which they are entitled
to a return is quite different thing"
"The supreme court makes no distinc-
tion between the taking Of property with
out compensation and the taking of the
use of it." retorted Attorney Grover.
"Well, I cannot assent to the PROPOSE
tion that the roads are entitled to inter-
est on their present value. 1t is repug-
nant to my sense of justice, said Mr..
Childs. Continuing, ne said: "The ques-
tion of rates is always a very difficult
thing to determine. The courts are all
disposed to consider every case in itself,
taking into account all the various cir
cumstances to arrive at the knowledge Of
what a fair rate is.
"If this principle had been applied by
the Great Northern company, it would
never have brought this case into court
but would have accepted reduction Of
rates to meet the present condition of the
farmers. Farmers have been losing
money raising wheat
from Central and Southern Minnesota 25
years ago, but since they have been en-
gagged in diversified farming there is no
more prosperous class of farmers in the
country.
II agree with your honor's opinion as to
the desirability of diversified farming"
returned Mr.. Childs, "and that is what it
must come to up North, but we must take
the conditions as we find them, and l SUBJ
nit that these people are entitled to some
consideration"
II agree with you in that" responded
the court.
"Then we will discuss the question no
farther" said the attorney general, with a
smile.
Mr.. Childs then went into the question
of the apportionment of interstate COM
merce, contending that the mileage basis
was the only fair one, and referring to the
testimony of one of the Northern Pacific
officials to bear out his assertion. If S100
was paid for hauling a car Of shingles
from Puget sound to st. Paul, every mile
of road over which it passed was entitled
to credit for the same portion of this
amount as every other mile, regardless of
the fact that certain parts Of the line
farther west may have cost a great deal
more than the line in this state.
Judge Kerr-Suppose the line west of
the boundary of this state were owned by
another company and we were trying to
divide the earnings, would the mileage
basis be fair?
"In case of that kind there would be
a joint tariff" returned the attorney.
The Court-Suppose the interstate COM
merce commission we're endeavoring to fix
rate from the western boundary of
North Dakota to Superior, would it not
take into consideration the cost of trans
portat:on in the respective states?
.No it would not consider state lines,
but would consider all the conditions sur
! rounding the line for the whole distance. y