The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-07-24

Arguments to be made before Judge
Lochren. in the United States circuit
court, tomorrow morning, will mark the
beginning OF the end of one OF the
greatest legal battles ever waged in the
courts of Minnesota.
It will be the opening gun in the
city-s fight 10 compel the street ear
company to pay a per cent tax on
the gross earnings of the company
within the city limits.
Both the city and the street car COM
pany are going into the fight with full
knowledge of the big battle ahead, and
no point. no matter how small. will be
overlooked by either OF the litigants.
It is TO be fight between two powerful
corporations, with many thousands OF
dollars per year as the stakes.
The city contends that the company
should pay into the city treasury a 3
per cent tax upon the earnings of the
entire system within the city, this tax
becoming applicable as soon as the
company has constructed any new line
within the city or an extension TO any
of the present lines. This tax is i'm
posed by the provisions Of the new
home rule charter, recently adopted by
the city
Rights Under Horse Car Ordinance
On the other hand the street car
company objects TO paying the tax upon
the earnings of its entire system 1t
is claimed by the company that the tax
is only applicable TO the earnings Of
any extensions or new lines that might
be built. The company claims rights
under its original horse car franchise
which exempts the system already in
operation from the imposition OF the
tax provided for in the new charter.
A victory for the city would mean
an additional annual expense TO the
street car company of between $4,000
and $4,000 per year, and it is TO avoid
the payment of this amount=tha1 the
company is fighting.
The effect of the pending litigation is
the delay, or practically temporary
abandonment of the Improvements the
company proposes TO make in its sys-
TEN in ST. Paul. a year or more ago
the company, by the issuance OF bonds.
borrowed $4.00e.000,- to be expended on
Improvements in the Twin Cities. 4
Soodfy portion of this amount is to be
expended in st. Paul. but the company
declares that nothing will be done In
the line of permanent Improvement IN
I'll the present important litigation has
been disposed Of
General Manager Goodrich has de-
clared that, but for the litigation. the
company would have expended 81 ,20O,-
GOO IN improvements in st. Paul this
year Included in these Improvements
would have been two additional inter-
urban lines between St. Paul and Min
neapoliS. one over the Marshall avenue
route and another by way Of Fort
Smelling. An extension TO South St
P9ITf and q or r.fT "a
local lines was also contemplated The
company is delaying all of these i'm
pTovements in its effort TO secure i'm
muniIy from the gross earnings tax
But the city is just as determined
that the tax shall be paid as the COM
pany is that II shall not. During the
past several months every action OF the
council having to do with any street
car matter has been carefully scruti-
niZed by the corporation attorney and
no action was taken until It was de-
termined that its outcome would not
be advantageous 10 the street car COM
pany-
City Forces Company to Act
For several months both the COM
pany and the city held aloof from Iiti-
cation, each determined that the other
should take the initiative in the big
legal battle The city delayed matters
until the company was finally COM
PEELED 10 act, and the matter first
found its waXLRto the courts some
three months ago, when a suit was in
stituted in the federal court by II. D.
Bailey, of Superior. Wis, an action in
which the plaintiff asked for an in
junction restraining the company from
extending its Rondo street line Mr.
Bailey brought the suit upon his rights
as taxpayer, his complaint showing
him TO be the owner of lot on Rondo
street. along the line OF the proposed
extension of the Rondo street line
a week later d suit almost identical
TO the Bailey suit was instituted in the
district court involving the right of the
company 10 extend its Lake PhaIen
line along Maryland street. The plain
tiff in this latter suit was Emmett Fry,
a resident OF Chicago who owned
property on Maryland street
Corporation Attorney Michael did
not intervene. in behalf OF the city in
either OF these suits, and il was openly
charged that both were friendly
suits" instituted at the instance of the
company with a view of securing a
| favorable decision in the courts. Mr.
Michael says that neither of the suits
involved the most important points in
| litigation between the city and the
company.
III the BaIeV suit q nearing was mad
| before Judge Lochren, in the United
States circuit court. and a decision IA
/ vorable To the street car company was
+ rendered. The Fry suit in the district
! court has not yet been tried. but q SIM
/ liar result is anticipated when II comes
before the judges OF the state court.
Suits Not Pertinent
Corporation Attorney Michael saws
neither OF these suits will have any
| pertinent bearing upon the main Iiti-
| CATION between the company and the
| city, which is to be settled through
| other suits now pending.
| One OF these suits IS in the district
court and one in the federal court The
/ suit in the district court is the action
brought by the city for the annuliment
of the old horse car ordinance, under
which the company was granted its
first franchise in 1872 The company
claims 3 right under this old ordinance
/ TO enter upon any and all streets, and
under subsequent ordinances it claims
the right 10 use electricity as its mo-
| tive power on all OF its lines Upon
/ the provisions OF this horse car orcii-
nance the company bases its rights 70
operate without the payment of the
SrCSS earnings aT1d 1fa