The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-02-27
GROSS EARNINGS TAX.
Its Legal Aspects Argued Before the
Tax Committee.

Tax Committee.
The house committee on taxes and tax laws
met last night at the capitol and took I'D the
JACOBSON measure increasing the tax on gross
earnings OF railroads in this state from 8 to
4 per cent. The discussion parficiDated in
Tor the most part by representatives OF the
legal departments of the railroads was largely
technical, the contention being made by the
lawyers n1, rs mat the matter was purely legal
one. The gist Of the argument was borne by
Judge Ihomas Wilson, of the Omaha road;
NJ. u. Grover, solicitor for the Great North
ern, and A Y. Merrill, who is known for his
cohnectlon during the last two or three ses-
s1ons OF the state legislature with measures
contemplating the taxation Of unused railroad
lands IN the state. Mr.. Merrill it was who
drew the bill introduced by Mr. jacobson
Judge Wilson, who first spoke said that the
present gross earnings tax system really
amounted to contract between the state
character lnv1olable and irrepeaable. He
pointed out that no law which the legisla-
ture might see fit to pass could in any way
impair the obligation Of the contract, and
argued That II his theory was correct that
no Dill passed could in fact be made opera
i've AS authority for this position, he cited
d decision OF the state supreme court in the
Parcher case. Judge Wilson, further than
th1s, took the ground that no lawyer whose
opinion was valuable would deny that rail-
Foao LANDS Were exempt by virtue of tina
gross earnings tax system now in vogue,
dhQ could not as matter Of fact be taxed
uhder the provision Of the Anderson bill
passed two years ago. The judge said, in
IepIy 10 query from a member Of the COM
tnltLee That In his opinion the contract re-
terred to was one which should stand for all
tl1ne and which the legislature could in no
way interfere with.
Mr.. Grover read to the coo1uittaa +ba
charter of May. 1857, under the provisions Of
when the Great Northern read is at present
Delng operated, and which contains the 'condi-
uohs under which the road has agreed to the
gross earnings tax. In this the land grant ia
excepted, and he maintained that the STATE
could not tax both the land and the earnings
OF the company. He further contepded that
under the present system the state secured
tax upon interstate earnings, which if coud
GnIy get by such an agreement or contract
state. Thls tax, very naturally, was sure to
increase the development of the country until
IL should be almost. If net entirely the SIM
port OF the state government.
me territorial roads entered the comDact
uy tne very acceptance of their charters in
the nrst instance; other roads entered into II
unQer me law passed in 1870, for the Still
water ana Taylors Falls roads by the filing
Oh Cnelr acceptance in the Office OF the secre-
tary OF state. Mr.. Grover took occasion m
sLate Cndt ne Iuily concurred in the view ex-
pressed by Judge Wilson that such contract
was IN every sense inviolable. Mr. Merrill
IN very brief. but comprehensive talk on the
t tha showed his thorough familiarity with
me subject, and enlarged on points which
ADDED not a little to the scope Of the discus
sion. The friends Of the bill, he pointed out
~ III NOT dispute the Soundness of the doc
There was no disposition, he expia: med to
ul1er with either Judge Wilson or Mr.. Gro
yer, II the roads were actually operatinp
under ti their original charters. In this connec.
IlOh' however, he made the point that tha
Winona st. Peter road was the oniv one
operating under its original charter, and thus
was entitled TO immunity from other taxa.
ton on account Of the gross earnings tax i
paid. the original territorial charters were
granted the Winona & st. Peter road The
transit company, the Southern Minnesota
road ana the Minneapolis G Pacific.
All these charters. save that of the Wipona
& st. Peter had, he claimed, gone out of ex
lsIence. ana the charters under which the
other roads were really operating had been
granted since the adoption of the state consti-
tuition, and which forbids ally grant of imnu
nifty from taxation. All three gentlemen wera
pied with variety Of questions from mem
pers OF the committee. touching on the legal
details OF the case. and 1t was decided best TO
go stll more deeply into the matter at some
future date Mr.. Merrill agreed to Cite au
thorlties for his position in brief. for the
preparation Of which he was allowed a week
after which the railroad attorneys NAV havc
anotner week in which to reply The case is
CONSIDERED quite momentous one and every
nemDSr or the committee WAS nraSaot