The Saint Paul globe., 1899-03-28
GOV. Lind DISSEN1'S
HE READS THE SUPREME COURT
DECISIONS DIFFERENTLY FROM
SENATE LAWYERS
GROSS EARNINGS TAX BILL

1t Results In the First Serious Clash
Between the Executive and Leg
fsIatfve branches of the State
Government-Gove Alleges
That the Judiciary Committees
Report Is Glib, but Not Sound.
Despite the findings of the senate COM
mlttee on judiciary that the Jacobson
bill increasing the gross earnings tax on
railroads to per cent would be invalid
as an invasion of existing contracts Gov.
Lind, lawyer himself, still clings to the
belief enjoyed by him when he wrote
his annual message. In a letter to Sen
ator Charles Halvorson (Rep), Lac qui
Parle, he writes:
In answer to your favor Of yesterday,
calling my attention to the language used
legislature at the BEGINNING R 81 the .9 zes me
sion. by which I clearly Intimate as my
opinion that 1t would be competent for
me legislature to. SO amend the gross
earnings tax now imposed upon railroad
property that that class of property
would no longer escape it's fair and pro-
portionate burden of taxation, and ask
ing whether, In my Judgment, there were
any constitutional objections to the pas
sage of an act imposing a higher rate of
gross earnings than the present law, per-
init me to say, that / have not the slight
est doubt that any we'll considered legis-
lation to that end would be constitutional
OF course, do not know what leads you
to ask this question, but assume that 1t
IS because OF the arguments advanced
that some of the railroads in this state
operate under territorial charters pro-
viding that the companies should pay
per cent gross earnings tax in lieu Of
other taxes, and that these provisions
amounted to contracts between the terri
tory and the railroad companies in regard
to taxation which are also binding upon
the state, and that for these reasons it is
not now competent for the legislature to
increase the rate to make 1t approximate
the general rate of taxation, without the
consent of the companies. In other words
that the territorial legislature contract
ed away the power of taxation, and that
we are bound by the terms of that con-
tract for all time to come.
III 1t were true, as matter Of fact, that
any OF the railroad companies in this
state. had adopted and complied with the
provisions of the territorial charters rela-
tive to taxation, then there might be
some force in the suggestion; but upon
examination it will be found that every
railroad company III this state, with the
possible exception of the one mentioned
In my message, is and always has been
paying taxes in pursuance of laws enact
ed by the legislature Of the state since
the adoption of our constitution.
PAID NO GROSS EARNINGS.
To make this point clear to you, let me
reiterate that there is not railroad COM
pany doing business In this state today,
with the single exception noted that has
the state in pursuance of the provision or
any. territorial charter; that the COM
panleS themselves repudiated the taxation
provisions of the territorial charters and
that all the gross earnings taxes that
have been paid to the state have been
paid under and in pursuance of legisla-
ton enacted since the admission Of the
state. BY examining the early history
OF the state as found in our public records
it will be seen that the companies who
obtained their territorial charters con-
vision, concluded that this rate would be
burdensome, and that, as soon as they
actually commenced to construct and
operate railroads, they applied to the
state for an abrogation of these provi-
sions and the substitution of a new law
by which they were to pay l per cent Of
the gross earnings during the first three
years after thirty miles of railroad had
been completed and in operation, 2 per
cent the next ensuing seven years, and
per cent after ten years had elapsed. An
act with provisions of that character, en-
tirely abrogatlng the provisions in regard
to taxation in the old territorial charter,
was passed in behalf of the Wtnona and
St. Peter railroad on March 10, 1862, chap
ter II of the Special Laws of Minnesota
for 1852 This act was later perfected
and made, specifically applicable to this
of 1865. A like act was passed In be-
half of the ST Paul & Pacific Railroad
company, now the Manitoba. on March
g. 1865, and similar legislation was enacted
in behalf of all the companies.
These various acts passed by the legis-
lature in 1865 and accepted by the COM
provisions of the old charters and es-
tablished new contracts" which were
accepted and acted upon by the COM
panies. This will be seen by the fol-
lowing statement in the report of the
state treasurer for 1868:
"The several acts amendatory to the
charters Of the various railroad compa
iSlature of the year 1865 provided that
A CERTAIN PERCENTAGE
Of the gross earnings OF said roads should
be paid into the state treasury in lieu
Of taxation.
These acts provide that during the first
three years after the completion of the
first thirty miles of such railroads such
taxes should be l per centum Of such
gross earnings; that during the seven
years next ensuing such taxes should be
2 per centum, and that after the eXpira-
ton Of said seven years such taxes
should be per centum of such gross
earnings.
ing payments have been made:
In 1866 Taxes for the Year 1866
Minnesota Central railroad. $454 81
Winona & st. Peter railroad. ...... 2,503 So
81. raul S Z dCillC IdilIOdu. l,ll9 IL
Total 1900. ...... ....-.... A,97S 81
In 1867, Taxes for the Year 1866
Minnesota Central railroad. ....... So, ,789 Sc
Winona & st. Peter railroad. .... 1856 81
st. Paul & Pacific railroad. ....... 1885 81
Minnesota Valley railroad. 331 80
Total ........ ........ ............ $3.50 55
In 1868, Taxes for the Year 1857
Minnesota Central (now Milwau-
kee & ST. Paul. railroad ..... Sc, ,S2O 50
Winona & ST. Peter railroad..... 472S 05
ST. Paul &. Pacific railroad. ........ 2546 SO
Minnesota Valley railroad ........ 1034 33
Southern Minnesota railroad 49,. 6S4 81
From the above exhibit it. will be seen
that the 1 per centum tax from the first
three roads named has been paid for
| three years, and consequently will now
be increased to per centum upon the
gross earnings of said roads for the year
! 1868, which rate will be paid for seven
years, when 1t will again be increased
to 3 per centum.
OLD PROVISIONS NOT IN FORCE.
1t is therefore absurd to say that the
l