The Saint Paul globe., 1899-02-01

bly, on 1t.
II. f. %, by Mr.. Jacobson Rep), Of
Lac qui Parle, increasing the gross
earnings tax on railroads from to 4
per cent, was recommended to pass
by the committee on taxes and tax
laws at a session of the committee last
night
Judge Thomas Wilson. chief counsel
OF the Omaha, and NJ. D. Grover, gen.
eral solicitor of the Great Northern
railroads, addressed the committee
briefly in opposition to the measure
A. V. Merrill, a Minneapolis attorney,
appeared for the author of the bill,
ard presented the legal arguments for
the measure. Mr.. jacobson also gave
a short talk, mixed with figures, in
support Of the passage of the measure.
The committee recommended the bill
to pass without any objection, although
all af the seventeen members did not
express themselves on the viva VOce
vote.
Mr.. Merrill replied to the arguments
made by the railroad representatives
at the last session of the committee,
who contended that, under the charter
granted to some of the roads when
Minnesota was a territory. a contract
had been made for the payment of 3
it was claimed, could not be increased
by the legislature. If, it was argued,
this could be done in instances where
the companies had not secured a char
ter until after the constitution of the
state had been adopted, it would neith-
Ell be just nor fair to such companies
to increase the rate of taxation.
Under the constitution, Mr. Merrill
argued, that all taxes should be as
nearly equal as may be- and all prop
erty upon which taxes were levied
should have a cash valuation and the
taxes equaiiZed and uniform. Under
the section a contract as to taxes in
the state could not be made with any
railroad company after its adoption.
All laws providing for the taxation of
railroads upon their gross earnings,
adopted, constituted a mode of taxa
ton voluntarily created by the legisla-
ture and could be amended or chang
ed as provided by the constitution
AS to the charters or contracts made
before the adoption of the state con-
stitution, Mr.. Merrill contended they
We're valid so far as they went. but he
contended that the rights of original
companies Of immunity from taxation
could not be transferred from one cor
poration to another by any action of
the legislature. All the railroad COM
panies owed to the state fair proper
ton of taxes, and any law allowing
them to pay only 3 per cen on gross
earnings was a gratuity as far as the
state was concerned, and was made
only mode and manner of arriving at
equal taxation.
Judge Wilson, representing the Om-
aha road, reiterated his argument that
the charters granted before the con-
stitution Of the state wasS3dopted could
not be touched by the legislature and
the gross earnings tax increased. He
read from decisions Of the supreme
court to show that the railroad COM
panies which had become possessed of
the charters and titles granted before
the adoption of the constitution were
exempt from taxation other than the
per cent mentioned in the original
charters. The state had said to the
railroads at the time the territory was
wilderness, If you build the roads you
will rot have to pay any taxes except
the per cent gross earnings tax. This
was contract made by the state, and
the constitution and the courts had
held that the legislature had not the
power to break the contract. AS to
roads which had not such charters it
would be neither just nor fair to in
crease the gross earnings on one road
which ran side by side with another
that could not be increased.
Gen. Grover, representing the Great
Northern, called attention to the char
ter of the Minnesota & Pacific which
was succeeded by the Manitoba and af-
terw.rd by the Great Northern. This
provides that there should be paid into
the treasury of the territory or future
state a per cent gross earnings tax
in lieu of all other taxes. He followed
this by reading from the state con-
stitution as adopted that all rights
claims and contracts granted under the
territory to persons or corporations
should continue as though no change
had taken place. If the Manitoba and
Great Northern roads succeeded to the
title of the Minnesota q Pacific they
succeeded to the charters and eXemp-
tions under the charter. He read from
the laws of 1876 to show that purchase
of railroads under foreclosure proceed
tngs vested all title rights franchises
In the purchaser, and the old compa-
nies simply became the same roads un-
der new name.
Mr.. Merrill said the state should
stand by its contracts, but he contend
ed that Mr.. Grover was talking about
contract made with the Minnesota
& Pacific road that road was dead and
the rights granted to it expired with
it. 1t was impossible for the legis-
lature to stand by the contract with
the Manitoba when it had none He
read from a decision of the United
States supreme court to show that that
transfer of immunity from taxation
could not be made by the legislature
for the reason that such action made a
new grant. When the people said the
present gross earnings tax was not
enough they had the right to change it.
Mr.. Jacobson called attention to the