The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-02-25
MICHIGAN's AID vALOREM TAX
Law rs ATTACKED.
and Michigan Roads Carry
Case to United States Supreme Court,
Contrasting Justice Of Huge Sum Of
Taxes Declare Both Nations and
States Constitutions Are Violated.

also reaching Minneapolis, are appel
lants in cases which were argued in
the United States supreme court last
week. They are attacking the Mich
igan ad valorem tax law, passed In
1901, in accordance with constitu-
tional amendment adopted by the peo-
pie in the previous year.
The roads in the upper peninsula Of
Michigan and in Minnesota interested |
in this litigation are the 500, the Cop
per Range Railroad company, the Es-
canada & Lake Superior, the Duluth,
South Shore & Atlantic, the Chicago &
North Western, the Milwaukee,, the 500 |
Bridge company, the Mineral Range |
railroad and the Lake Superior 6 Ish-
peming. 4: ~
T.. What Law Provides.
The article of the constitution in
which the ad valorem tax has been i'm
posed, provides that "the legislature
may provide for the assessment Of prop
erty of corporations at its true cash val
ne, by state board Of assessors and
for the levying and collection of taxes
that the legislature shall provide an
uniform rule of taxation forssuch prop
erty as shall be assessed by a state
board of assessors, and the rate of such
taxation on such property shall be the
rate which the state board Of assessors
shall ascertain and determine Is the
average rate levied upon other property
upon which ad valorem taxes are as
sessed for state, country, township,
school and municipal purposes. -
The state board Of assessors was ap-
pointed by authority Of the legislature
and the corporation tax roll was pre-
pared for the year 1902. The average
rate originally determined upon was
$13.6S9O5 on each $1,000 Of valuation.
The tax was spread by the board on the
basis of relative adjustment between
the property assessed under the act
and that assessed thruout the state
generally and using as the divisor Of
the amount of levied taxes in reaching
that rate, what it conceived to be, the
actual rather than the assessed value
of the general property of the state.
Grounds Of Complaint.
The rate first determined upon by the
state board Of assessors was declared
illegal by the state supreme court as
not having been ascertained by the
method prescribed by the statute, and
. that board was compelled to reconvene
{ and reascertain and determine it. The
rate, upon reconsideration, In accord
: ance with the decision Of the state SUI
preme court, was then fixed at $16.55329
per $1,000 Of valuation.
| n otto ckin q
=. the law and the constitutional amend
- ment authorizing it, contend that other
properties are undervalued. It also is
o commended that unincorporated persons
!, associations, partnerships and joint
I stock associations own and operate
s railroads in Michigan, and they. also
8 own property similar in character and
T. engaged in the same business and
l. owned under the same circumstances
y as the railroad property Of the appel
lants. Another contention Is that the
d railroads also operate sleeping cars, anc
that sleeping cars are also operated by
d corporations and institutions indie
, pendent Of railroads.; that interurba1
n and street railways and their properties
Is are engaged in the same business al
J. the compliments.
l. Scores on Commission.
nj Answering the bill of complaint ii
o the trial court the state Of Michigan
denied the allegation Of invalidity ant
unconstitutionality, and also STATED
that the first rate established by tn
commission was not the result OF mad
r vertance, mistake or accident, but wa
Intentional and fraudulent. -.
T. The United States circuit court dis
missed the railroad companies bill o
complaint and an appeal was prompt,
taken to the supreme court, which
1t upon application, advanced it on tn
m docket so that it might be heard at thi
~ term Of court.
IN The railroad companies assign nun
10 Der Of errors. The first is that the syt
q tenn of taxation invoked by the LAY
L 7 and the constitutional provisions
r. question violates the fourteenth amene
oe ment to the federal constitution in tina
~ it denies to the railroad companies tn
- equal protection Of the laws The se
Ia ond is that it violates the provision 9
~ the fourteenth amendment inhibitin
: the taxation Of property without du
process Of law. y. -.
IS : One More Objection. 4
vo The. third alleged violation Of II
/ federal constitution is that the la
e@E regulates commerce between states. 2
is also alleged that the state constit1
~ ton is violated in that the state CO..
at stitution requires uniformity Of a
rs sessment Of all property subject to 9
re valorem assessment, whether taxed I
he the average rate OF generally, and thu
I'D the new system violates that uniform
n n. ity by permitting the deduction
LII debts to property generally but not
~ corporation property taxed under Il
u new law, and that it violates that Sc
e. ton Of the state constitution requiri1
q assessments at cash value.
The records in these cases are volu1
nous, as are the briefs ofsoppoing cou
" sci. Millions Of dollars are tied |
OF pending decision in these cases,
II the railroad companies have not pa
nd any taxes under it since it's enactme
at in 1901. They have settled with t
state for taxes assessed prior to tn
year.