The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-01-10

outstanding bonds, they are reflected in
the reduced value of the stock, and If
there are no outstanding bonds, that fact
is similarly expressed in the higher value
of the stock. The only effect of this
change would be to subject all corporate
franchises and privileges to equal taxa
ton, irrespective of the fact of outstand-
ing bonds.
Third-Under our law, as it now stands.
there Is no provision for taxing foreign
corporations doing business in this state,
except on such tangible property as they
may have. This is manifestly unfair TO
capital owned In this state and to our
greater advantages under the law than
do foreign corporations. A law should
be enacted for the taxation of the latter
on the same eoo lines as the provisions of
paragraph 1880, with the amendments
above suggested. except that the assess
ment should be made by the state board
OF equalization and the tax paid into the
state treasury. The real and personal
property owned by such corporations
would, of course, be deducted from the
assessment made by the state board and
the taxes on such property paid in the
municipalities where located. Under such
an enactment the state would be enabled
10 derive some revenue from such cor
poratlons the loan companies and other
corporations doing business in this state
ana now escaping taxation.
tourth-In my message of two years
ago, urged upon the legislature the inn
portance of revising our system of rail-
road taxation, so as to make that class
of property contribute it's share toward
the maintenance of the. state govern
ment and the support of our public in
situations. Then 1 said:
You will also find upon Investigation
tnat our rate of taxation by percenta ee
on on the gross earnings is much below the
rate that prevails in our sister states
which are within the domain of the sys-
TENS Transferring most of the business In
cur state. All of our railroads with the
exception of possibly one, are interstate
MOI
ence to state lines, but as systems. The
companies do not keep separate accounts
IN each state. For the purpose of tax
alton they apportion the gross earnings
OF the systems among the several states
through Which they run in proportion
TO the mileage in each. This is the only
pracuca6le way and Is approximately cor
rect and fair So far as our railroad
traffic is concerned we are to all intents
and purposes one jurisdiction with North
ern Illinois, Iowa and Wisconsin, and to
some extent with the states west of u.s.
Ih1s group of states is on the Whole
traVerSed and dominated by the same
systems and the business of each operat-
ing within the group is treated as
unit. Our state is therefore aside from
the need of the revenue) interested in
seeing to it that it obtains substantially
as large proportion of the earnings Of
these companies for the support of it's
COVER nment and institutions as is taken
by the other states in the group. If we
Go not insist upon this, we simply COM
pei our people to help pay taxes in the
other states. If our railroads were con-
hned in their business operations wholly
within the boundaries of this state, the
rate of taxation would perhaps not be
so material, for high rate of taxation
would necessarily in the course of time
be reflected In higher transportation
rates; so also a lower rate Of taxation
would have a tendency to produce lower
transportation rates, but inasmuch as we
are part and parcel of the states re
TSTr6d
we cannot in justice to ourselves be gov
erned by any such considera tons, unless
they are also needed by the other states
In the group. Iowa and Illinois have al
ready secured materially lower trans
rortation rates than we have. If we
continue to also permit them to exact
higher rates of taxation from the railroad
which operate In those states and IN
our own, than we collect, manifest IN
Justice will be done to our people The
maximum rate of gross earnings tax in
illinois Is per cent; in Wisconsin, per
cent; In Iowa, per cent; in our own
state, 8 per cent. The average rate ac-
tually collected in the several states is
rs per cent in Minnesota. 3.5 per cent in
per cent in Illinois, as appears by the
statement furnished by the board of rail
road and warehouse commissioners,
which [ APPEND. The average rate of
states nan'ed is over 4.3 per cent; more
than one-third higher than the rate i'm
POSED in this state. In ether words, IL
the railroads had been Subjected to the
same rate of taxation in thi. state. rs
the average of the rates IN iowa, Wis
consin and Illinois, we would have re-
Of something over $11OC,C00 This is a
condition of affairs which neither the
legislature nor the executive can ignore"
! take. the liberty to supplement this
General Douglas. submitted to the SUI
preme court of the United States in the
recent case before it. as follows:
ION Jan. %, 1899, the board of railroad
and warehouse commissioners, of Mime
sofa, made report to a committee of
the legislature then in session, showing
the total percentage of stock and bonds
for Minnesota of all railroad compa MES
The face amount of such stocks '; and
bonds is reported to be the sum of $275,-
while the market value there
of was stated to be $3.50 1925 90. The
amount of taxes paid upon railroad
properties, appearing from this report for
the year ending Dec. 81, 1897, (being the
last year for which statistics were then
The percentage rate of taxation upon
other property in Minnesota for the year
1897 was reported at "a 6.10 mills on the
dollar. (See journal of the house for
tie value of all the railroad properties
in this state was the market value of
their stock and bonds on Jan. rs, 1899,
and estimating the amount of taxes due
81 6.10 mills assessed against other prop
erty, provided such properties were as
sesscd at their true value in money,
there would have been due from the Fail
roads of Minnesota to the state for the
year prior, the aggregate sum of SHE
421.88. A recent report Of the total
amount of railroad taxes paid for the
year 1898 shows the same to be the ag-
gregate sum of $1,261, AT. 1t may be as
serted that while the constitution requires
that all property shall be assessed at
~
ter of fact, in the practical execution
of the laws of the state, the assessments
are fixed at a less amount. While such
assessments are always returned as rep
resenting actual value, still there is some
truth in the suggestion. AS illustrating
the assessments upon one class of prop
erty which may be fairly taken as rep
resenting all classes, the state board of
equalization, recently in session, whose
duty it IS to equalize all assessments
throughout the state, adopted a reso-
luton which for many years has hereto
fcre been in force, equalizing the assess
nents Of all banks throughout the state,
on a basis Of SO per cent of the face
value of their stock plus the surplus.
Estimating the amount of railroad
taxes upon this basis and taking for the
purpose of the computation one-half of
the total amount above noted, OF <he
stocks and bonds of railroads outstand-
ing Jan. 28, 1899, such amount will pro-
duce, at the average rate of taxation not
cd the aggregate sum of s., 1885, 0192l, or
nearly three times the amount of taxes
paid by the railroads of the state for the
year 1887.
1T thus clearly appears that the banks
of the state. whose taxes are estimated
at the usual rate of taxation upon an
amount equal to so per cent of the
face amount of their stock, pay nearly
three times the proporticnate amount of
taxes actually paid by railroad compa-
ries upon their properties
In view of these facts, I can hardly
conceive that this legislature will adj
journ without doing justice to the people
of the state in this matter. The bill
increase the gross earnings tax was de-
feated, as was commonly reported, ON