The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-03
TAX ON RAILROADS UPHELD.
MICHIGAN'S AID VALOREM Law
DECLARED VALID.
Supreme Court Decides That In Respect TO
Taxation the State Had. Speaking Gen.
orally, the Freedom OF q Sovereign,
Doth rs to Objects and Methods.

Taxation the State Had, Speaking Gen.
orally, the Freedom OF q Sovereign
Doth ms TO Objects and Methods,
WASHINGTON, April 2.-In view OF the
pending rate regulation bill and the general
agitation Of railway legislation, the STU
preme Courts decision to-day upholding
the validity Of the so-called ad valorem
tax law OF the State of Michigan excited
more than usual interest here. This was
particularly true in the Senate, which Is
just now wrestling with o compromise
provision for the Hepburn bill, and several
Of the Senators who are prominent In the
compromise movement oke over the
decision with great care.
The unusual interest In the case lay In
the fact that the court in effect holds that
a tax levied on railroads Is not neceesar ily
illegal because 1t bear more heavily on
that property than upon other property
in the same State, and, further, that the
Federal courts will not interfere in the
matter OF State taxes unless the constitu-
tional rights OF the owners Of the property
taxed are clearly %infringed.
Prior to the passage of the ad valorem
act In 1901 railroad property in Michigan
was taxed on the basis Of gross receipts.
The new law provides for taxation based
upon it's valuation, the rate to be the aver
age rate assessed on other property In
Michigan for State, county, city, township,
village and school taxes. The railroads
attacked the validity Of the law, contend
ing that it was unconstitutional because 1t
taxed their property at its full value, while
other property paid only s2.A per cent. Of
its value; that it taxed property In other
States; that debts were not deduc ted, as
they were in valuing other property, and
as it taxed property used partly in other
States 1t was an attempt TO regulate inter-
state commerce.
Justice Brewer, delivering the unanimous
op Lnion o. the court, said there had been
freouent occasions to consider questions
Of State taxation in the light Of the Federal
Constitution, and the scope and limits OF
national interference were we'll settled .
There was no general supervision on the
part Of the nation over State taxation,
and in respect to taxation the State had,
speaking generally, the freedom Of a sover-
eign, both as to objects and methods. He
quoted the decision Of Judge VANITY in the
court below in dismissing the cases to the
plltCl lDdl u Z vi NilC iiStuSAtN o"N ''
form expressions OF opinions by the Su-
preme Court the Fourteenth Amendment
would not prevent a State from changing
it's system of taxation in all proper and
reasonable ways nor compel a State to
adopt an ifonclad rule of equality in tax
alton.
rate fixed by the State Board Of Assessors
was not a legislative act. but was in TACT
based on the valuation fixed by the 1900
local assessors throughout the State, the
latter eng the only officials exercising
any discretion or judgment, Justice Brewer
said:
The state prescrrbes as the rate of taxa
ton upon railroad property the average
rate of axation on all other property subject
to ad valOrem taxes. 1t provides the most
direct way for ascertaining such average
rate. deduCting 1t from a consideration OF
nil The other rates. No authority Is given
TO the local assessors to apply their )udg-
inent to the question If the railroad rate.
Their authority in aspect to the matter OF
taxation Is precisely the same as II was De-
fore and Independently Of this statute. " B"
II may be laid down as a general proposition
that where a Legislature enacts a specific
rule for fixing a rate Of taxation. by which
rule the rate is automatically deduced
from facts and events occurring within the
wear. and created without reference to the
matter OF that rate. there Is no abdication
of the legislative function. but, on the con-
trary. a direct legislative determination Of
the rate.
Further on. in dealing with the claim
Of n-unirormity, Justice Brewer says
that unless there be some specific pro-
Visions in the State Constitution com
uellinC other action, the State might treat
It's entire territory as but a single district,
and deal with all property as within the
district and subject to taxation accordingly.
lie added:
There is no mag ic in county organization,
no inherent necessity Of dividing the State
into small taxing districts. Frequently rail-
roads are separated from other property,
assessed by a State board, and the taxes
collected applied TO the general purposes
of the State. That so far as the
restraints Of the Federal Constitution are con-
cerned 1t IL within the power of a State to
separat a particular class OF property, sub
ject it TO assessment ana taxation In q mooe
and at a rate different from that imposed
upon other property and apply the proceeds
to State rather than local purposes. Ia not
open to question.
The opinion cases over the other quee-
tions raised in the case as not OF paramount
importance and concludes:
1t is enough to say that generally We accept
the findings Of a trial court upon a question
Of fact when the testimony respecting 1t Is
confictinc. 1t may also be said that a Leg g.
lature is not bound to impose the same rate
of tax upon one class Of property that 1t does
upon another As It may exempt all OF one
class, 80 it may impose a different rate of
taxation. 1t is sufficient II all of the same
| class are subjected to the sa me rate and the
taxes administered impartislly upon them.
The Judgment Of the Circuit Court for the
Western District Of Michigan. Diminishing the
! bills. is therefore affirmed
The Court held that the Texas law pro-
| vidine a penalty of S25 a day for failure to
furnish cars requested by shippers was I'M
constitutional, in that il was 30 arbitrary as
/ 10 amount to a burden on interstate COM
merce. The Court held that the law made
no provision for exemptions through acci-
dents, washouts, fires or congestion OF
trafic-conditions which would work in
Justice to the railroads-and as far as II APP