The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-03-09
ATTACK JACOBSON BILL
NJ. ID. GROVER AND C. w. BUM
CLAIM GROSS EARNINGS MEAS
URE is UNCONSTITUTIONAL
PRESENT RATE IS PERPETUAL
Railroad Counsel ExhaustiveIy Re-
viewed Legal Objections, and ia
cObscn Defended His Pet
Measure-NO Action.

A meeting Of the general legislative
committee Of the house was held last
night in the chambers for public dis
cussion upon the Jacobson railroad gross
earnings bill. M D. Grover, general
counsel for the Great Northern and East
ern Minnesota, and C. w. Bum, general
counsel for the Northern Pacific and St.
Paul & Duluth, addressed the committee
from the railroads standpoint, and Mr.
jacobson argued from the other side
Mr.. Bum, who spoke first, said the
act was not valid, fair nor right He
said that 1T could not possibly apply to
the railroads of the state, whose charters
had been derived under the act of the
territorial legislation, which imposed a 8
per cent gross earnings tax which, as
the courts have repeatedly held, shall
be perpetual. No legislature, he SAID
could have the right to annul or repeal
this act without the consent of the rail-
roads.
In comparing the tax which the roads
of Minnesota pay with that paid in other
states, Mr.. Bum held that it was too
high in proportion to the amount of
gross earnings. He cited the tax and
earnings of several roads, among which
was the Baltimore & Ohio which pays a
gross earnings tax of 1.64 per cent; tHe
pennsylvania, east of Pittsburg LBS, and
Mr.. Bum called attention to the local
taxes paid by the several roads of this
state on property not occupied in trans
portation or for transportation purposes,
and said that when this was considered
the roads pay a great deal more than
5 per cent.
Mr.. Grover affirmed what Mr.. Bum
had said about the invalidity of the
Jacobson act and stated that the con-
Mt hot ba iIrOo Is
and the state through the territorial
charters by which it was specifically
agreed that the roads should never pay
to the state a gross earnings tax of
more than per cent was binding upon
the state and could not be dissolved
without the consent of the roads He
cited legal decision to sustain his point.
Mr.. Grover said in reference to the
argument that the roads do not pay
their just share of taxation, that they
are paying more, proportionately, in
Minnesota than in many other states.
He said that if the mileage taxation of
Illinois was applied to the roads in this
state the gross earnings of last year
would have been $4,000 less than they
were. He said the rate of earnings per
ton per mile for the last year on the Min
nesota roads was only l cent and that
this exceedingly small income alone kept
the taxes from amounting to $2,50O,OOO.
In considering this matter of raising
the rate of taxation, Mr.. Grover urged
that the legislators bear in mind the
fact that the state is collecting taxes
from Interstate as we'll as state traffic.
If only the traffic which originated in
this state were made subject to the
per cent taxation he said the amount
of money thus turned into the state
treasury would be decidedly less. In this
connection he urged also the argument
that the two great coast lines are just
entering into enormous Oriental trade
which will likewise come under the gross
earnings tax and will pour into the
vaults of the state large sums of money
at the present rate of taxation
In his speech defending his bill, Mr..
Jacobson said that the gross earnings tax
should be increased to 515 instead Of only
to per cent, and that if the contract
derived from the territorial charter was
perpetual the state should know it and
could never gain this knowledge without
enacting such a law as a test.
The committee adjourned at II o'clock
without taking further action on the bill.