Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1901-11-23
WILL ASSESS CAPITAL.
United States Circuit Court Upholds
Recent Illinois Decision
Regarding Taxes
Board of Equalization Must Follow
the Instructions of the State
Supreme Court
Test Case Made at the Instance OF
Two of the Chicago Street
Railway Companies.

Springfield, Ills, Nov. 23.-The ap.
plication of the Chicago Union Trac.
ton company and the Consolidated
Traction company for an Injunction re.
straining the board Of equalization
from assessing the capital stock OF
those companies for 1900 was denied
by Judges Grosscup and Humphrey
in the United States circuit court.
The temporary Injunction issued by
Judge Grosscup in Chicago on Tuesday
was dissolved.
Immediately after the decision was
$75,000,000, and involving over $780,
100000 in 1900 taxes, were made by
the state board of equalization as the
fair cash value of the capital stock
of the traction companies over and
above the assessment on their tan
gible property. The $75.000,000 val
uations made take the place of 3d.
100000 valuations made last year as
representing the fair cash value of
the property assessed. The Teachers
Federation estimate was S125,000 900.
No written opinion in the case was
filed. Judge Grosscup stated orally
at length the reasons for the decision,
explaining that later Judge Hum
phrey would file a written opinion.
This oral statement occupied 40 min
! utes and the eager spectators were
| kept in suspense until it's very close.
! The law Of Illinoisy Judge Grosscup
sad, had erected certain machinery
! for the administration Of the taxing
| power The initial machinery was
found in the local assessor The duty
of the state board of equalization, gen
orally speaking, is to equalize the as
sessment with respect to the whole
state. This board possesses the final
reviewing power. It is in the highest
degree one of the tribunals of the
state, and is meant to be an independ-
ent tribunal.
"It has NO more right" said he, "to
depart from the exercise of it's own
Judgment than a court of law or equity
has a right to depart from its con-
science"
The method to be followed in de-
termining the value of capital stock
for purposes of taxation was dis
cussed by Judge Grosscup at length.
AS to bonds, he said, the Judgment of
the money lender might be reasonably
safe, but with capital stock it was
different. 1t would be grossly unfair
to base the assessment upon the stock
value quoted on the Stock Exchange.
These were generally
Determined by Circumstances
quite distinct from the real value of
the stocks il question. He cited as an
! illustration the Northern Pacific furry
of a few months ago. There nobody
would contend that the real value of
the stock exceeded par, yet the quoted
price reached $1,000. 1t was the de-
cision of the supreme court of Hi
nois in the franchise tax case recently
decided, he said, that these prices
merely must be 'Ftaken into consider
ation." 1t still remained for the equal
ization board to exercise it's Judgment
in determining the real value of cap
ital stock for purpose of taxation
Concerning the Union Traction COM
pany Judge Grosscup said that it's fail.
ure to introduce in the litigation in the
state court evidence respecting the
real value of it's stock had not been
explained.
"The probability is," said he, Chat
the Union Traction company knew
| that it had been escaping taxation, and
believed it could continue to escape,
and that it had chose not to make pub.
lie the real intrinsic facts upon which
a fair valuation of it's stocks could
have been arrived at.
"We believe, and are, bound to BE-
/ 1ieve, that the board will exercise it's
function as contemplated by the law
This would exclude the supposed dan.
| ger Of overvaluation. If it transpires
that the board of equalization, through
|. pique or. under the lash and spur of
some power or through personal fears
or moved by any other consideration
i than the impartial and independent
1 discharge of it's own duty attempts to
I certify an assessed valuation that in
/ its effect would be- a fraud upon any
taxpayer, the courts still remain
open to the injured taxpayer. This
we will assume until the contrary ap.
! pears" 81 - ,Ss3ss'5%
1 Chicago, Nov. s23. The refusal of
the circuit court to grant an Injunction
1 in thes traction company taxation case
caused heavy selling of the stock OF
the companies on the Stock Exchange.
1 The Union Traction company dropped
H Tx points to 104s, while the preferred
Issue deofinaa 11m Sffy,k nft fI1as Nfrtr,