The Saint Paul globe., 1900-12-05
CONTRACT nUST B] KEPT
CANNOT BE VIOLATED BY THE
STATE IN THE MANNER
ATTEMPTED
SAME JUDGMENT BY ALL
Although This Judgment Was
Reached on Different Grounds
Gen. Bum Explains the
Important Ruling.

declared to be unconstitutional were
made yesterday afternoon to the G o b
by Charles w. Bum, general counsel OF
the Northern Pacific. Mr.. Bum covers
the matter thoroughly, and in addition
to his statements, as published in the
G o b yesterday, gives a clear expo
sition of case in which Minnesota has
for some time been deeply intnrested
Congress on July e. 1864, incorporated
the Northern Pacific Railroad company,
to build railroad from Lake Superior
to Puget sound. In this charter The COM
pany was authorized to accept any grant
from any state, and was also required,
before it should build through Minneso-
ia or Wisconsin, to Obtain the consent
of the legislatures of those states. in
this charter congress made grant OF
lands to aid the company in construct
ing it's railroad.
OTHER LANDS. GRANTED.
Congress also granted lands to the
state of Minnesota to aid the construc- =
ton of a railroad from the Mississippi
river to Lake Superior. The state in
corporated the Lake Superior & Missis-
sippi company for this purpose (after-
ward St. Paul & Duluth Railroad COM
pany).
''In 1865, before either road was built,
the state granted to the Lake Superior
& Mississippi company the lands 50
granted to the state by congress, and
provided that the company should pay
to the state perpetually 3 per cent per
annum or it's gross earnings, which
should be in lieu of all taxation, both
on the lands and on the company's other
property; but the lands should become
taxable as fast as they were sold or dis
posed of by the company This agree
ment was put in the shape of a contract
between the state and the railroad com
pany, was accepted by the company, and
on the faith of it the company built It's
railroad from st. Paul to Duluth.
In 1870 the same act was applied to
the Northern Pacific Railroad company
and its lands, which act was also ac-
cepted by the Northern Pacific, and
line was built by its projectors through
Minnesota in reliance on the faith of
the state as pledged in the said contract
The roads were built and many mil
lions invested in the state in reliance on
these contracts, and the companies have
always paid into the state treasury the
stipulated annual payment of 3 per cant
on their gross earnings. which payment
Tor the last year amounted, in the case
OF the Northern Pacific, to $3.50. 400. II: in
the case of the st. Paul & Duluth 10
300 1913. The companies are undoubted-
~ pound by these contracts to continue
such annual payments to the state. in
A0u VI OIner taxation.
.ood IN 1898 the legislature passed, and in
1850 the people approved, an act which
provided that all land grant lands grant
ed by the state or the United States
or the territory of Minnesota, to any
ralroad company, should thereafter be
assessed and taxed as other lands are
taxed, and also that the railroad com
pan1es should continue to paw taxes info
the state treasury upon their gross earn
iHss III the same manner and in the same
amount as then required by law
Ihe railroad companies challenged the
Vahdlty OF the last mentioned law as he
ing contrary to that provision of the con-
sttution of the United States. which
pfohplts state from passing any law
Vlolatlng the obligation of a contract
IN THE SUPREME COURT.
The case involving this serious and
fundamentally important question as
well as several other difficult Questions
not here stated, was argued in the su-
preme court of Minnesota. and in that
court under the rules an hour and a half
on side only was allowed to the discus
sion The time SO allowed was wholly
inadequate, and did not enable counsel
10 present TO that court the case with
mat fuIlness and thoroughness which
It's Importance and difficulty demanded.
On the other hand, the supreme court
OF the United States first heard the case
argued, allowing three hourse to each
side for its presentation, then, desiring
more light, ordered the case rearound AT
the next term, allowing two hours on
side at the second argument 1t has in
that court been fully, fairly and exhaus-
lively considered. 1t is clear that that
court has not passed on the case until
each one of the nine judges thoroughly
understood and digested if
The supreme court of Minnesota did
not question that the contract was one
fairly entered into, clearly expressed and
performed in letter and spirit by the
railway companies. But the supreme
court of Minnesota decided the rather
technical point that the legislature of the
state had 10 power to make such a con-
tract because forbidden to do so by those
provisions of the constitution of Min
nesota, adopted in 1858, which say in sub
stance that all property should be taxed
according to its value; that there shall be
no discrimination and shall be uniformity
in taxation.
But the supreme court of the United
States has unanimously decided that the
state cannot, in the manner attempted.
violate the obligation of this contract
SO fairly entered into and performed
Apparently the majority of the court
in the opinion delivered by Mr.. Justics
Brewer. holds that as to this property
devoted to a public trust to build rail-
ways for public use ard the DEVELOPMENT
of the state, the legislature had per
feet right to make any contract it pleased
with respect to taxation; that the United
States government the original owner
of the land, might, in granting it. have
provided for its immunity from taxation.
and consequently the state, as the agent
of congress, to execute the trust. might
do the same thing; and that the pro-
visions of the state constitution, that
property should be taxed according to
it's. value in money, did not apply to the
situation. Apparently Mr.. Justice White,
Harlan. Gray and McKenna did not con-
cur in this conclusion, but concurred IN
the judgment on different ground viz.
that the state at least could not, as it
attempts to do in the act of 1855, dis
affirm the contract by taxing the land
grants and in the same breath appropri-
ate and retain all the benefits of the con-
tract, that is, by compelling the com
panies to continue to pay per cent on
their gross earnings.
LANDS AND OTHER GRANTS.
''Whle the case directly involves the