The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-08-21


value, at private or public sale.
"The railroad companies seem to be
well satisfied with the result of the ey-
animation here, insisting as they do that
the only question to be determined by
Judge Simonton, is, whether there is
such rule or custom existing in this
State, as the one contended fer by the
railroads. If there is, or, if facts are
shown from which this rule can be rea-
sonably improved, then the complain
ants are entitled to the relief they de-
mand
I'm this case, when the standing mas
ter shall have reported the evidence to
the court his duty is performed He
makes no decisions, decides no issues
of fact; he is only to take the evidence,
and competency.
deciding questions as to it's admisibility
"This is an important case, one in
which are to be decided very important
questions The compliments maintain
that when their property is valued at its
full value for taxation and the private
property of the citizens of the State at
one-half or two-thirds of its value for
taxation, there is a discrimination
against them, and the rule of uniformity
required by the constitution is ignored.
This being the case, they invoke the
protection of their right under the
fourteenth amendment to the constitution
of the United States, which provides that
no State deny to any person within its
Jurisdiction. the equal protection of the
laws. In these suits it is contended there
are Federal questions involved, and for
that reason. the United States Court has
Jurisdiction TO determine them.
''The compliments have 80 days from
the 14th inst. to submit their evidence,
after which time the defendants have 60
days to submit their evidence"
A representative of The Observer yes
terday called upon Col John w. Hns-
dale. one of the counsel of the corpora
tion Commission. and asked him for a
statement of the controversy between the
railroads and the commission and of the
contention of the latter in the premises.
He said: "Tke railroads are seeking
to enjoin the collection OF taxes on $10,-
900 900 of property annually on the ground
that all the real and personal property in
the State has been assessed for taxation
by the township assessors at an under
valuation of from 25 to 33 1-3 per cent.
while the railroad properties have been
an unjust discrimination against them.
In order to give United States Court
of Equity Jurisdiction of the cases, they
allege, and, for this purpose they are
obliged to allege, that this differentiation
has been made according to long estab-
lished rule, by preccncert of action among
the assessors, and with the fraudulent de-
sign that the railroads shall be made
to bear an undue proportion of the public
burden. 1t is only by the charge Of fraud
that the court of equity can obtain jur-
isdiction in the premises.
There are two fatal mistakes Of fact
upon which the suits of the railroad COM
panies are founded:
81. While in some of the counties prop
erty has been undervalued, notably in the
prosperous county of Mecklenburg, it is
asserted by the commission, and will be
proved by an avalanche of credible testi-
mony that in most of the counties, real
property has been assessed at not more
than it could be sold for-especially on the
1st of June, 1899, when cotton was only
515 cents a pound and there was a conse-
quent depreciation of farming lands. That
there was no preconcert Of action or
agreement, by the township assessors to
violate their oaths and under assess real
property, which they were required by law
to swear that they would assess at true
value IN money. That they were govern
ed by no rule of differentiation at two
thirds Of the real value. That while in
every county instances of differentiation
can be pointed out, a greater number of
cases of generalization will be made to
appear That for the railroads to sue
coed, they must show that personal as
we'll as real property has been underval-
ued by the same rule. That as matter
of fact, the township assessors have lit
tie or nothing to do with the assessment
of personal property. The individual tax
payer upon responsibility of his oath
fixes a value on his personal property
and swears that it is the true value. That
as to cash on hand and solvent credits
there is no doubt but that they are as
sessed at actual cash value without dis
counts or deductions.
'But even if it were true, that there
has been uniform differentiation of
real and personal property throughout
the State land nothing else will avail the
railroads in their suits) it is maintained
by the commission that the properties OF
the railroad companies have not been as
sessed at so much ttwo-thirds of their
true value in money and that they have
no right to complain. The commission
will prove this upon a stock and bond
basis, and upon a net earnings basis. The
Supreme Court of the United States has
in a number of well-considered cases, ap-
proved of the stock and bond basis, and
there is high authority for the net earn
ings basis. Take for example the Will
mington and Weldon Railroad Company.
1t was assessed for the year 1899 at So
765, $50. It's net income for the last Is
years has been steadily increasing, year
by year. For the year ending June 80,
1899, according to its own reports, it was
81, 1876, 486.10 This is 6 per cent. on $1S,-
941 ,435. So upon 6 per cent. capitaliza
tiOn it ought to have been assessed at
1854, 436, instead of 9.765,62O. When
United States bonds bearing 2 per cent.
interest are worth par, it would seem
that a 6 per cent. capitalization is fair
to the railroads.
Upon a stock and bond basis the prop
erty of this company was worth SIS, 142,-
400. The differentiation of rolling stock
CT the several railroad companies is most
striking. The commission has accepted
/ Il