The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-01-16
SUES ILLINOIS CENTRAL.
State of Illinois Trying to Collect
$5.OOO,OOO Back Taxes.


Springfield, Ill, jan 16.-Suit
company to recover back taxes
! amounting to $5,000,000, or more, al
legged to be due the state of Illinois,
has been commenced in the supreme
court at Springfield by Attorney Gen
eral w. H. Stead today.
The suit is in the nature of a
bill for an accounting between the
railroad company and the state.
That the attorney general should
begin the suit in the supreme court
will be a surprise to lawyers generally,
as it has been supposed that the 1n1-
tial litigation would be in the circuit
court.
Mr.. Stead will begin the proceedings
in the court of last resort on the
ground that it has original jurisdiction
in all matters relating to revenue, ana
that the claim of the state against the
Illinois Central is a proceeding with
regard to state revenue.
1t was to cover the expense involved
in this suit that Governor Deneen ask
ed the legislature to appropriate
$150,000.
The period for which the accounting
is asked is from 1877, when the I'M
nois Central first acquired control OF
mileage other than that granted by
charter provision, to the present cate;
Within that time, the attorney general
anything like the per cent OF the
roads gross income to which IT is en-
titled under the charter.
The amount out of which it is claim
ed the state has been defrauded Is not
set forth in the petition, as this can
be determined only by the accounting
prayed for. In Governor Deneen >
message to the legislature, however,
he places the states snare uncoVeIsu
by a partial examination OF the DOCKS
at $48OO,O00, and says complete IN
vestigation doubtless would largely
increase this.
The court will be asked to order an
accounting The state can not ascer-
tain. by reason of the complicated re-
cords of the road, just how much back
taxes to claim, but this will be settleo
during the litigation.
The states bill of complaint, when
COMPRISES las printed pages, declares
that according to the Illinois central
charter only one main line and two
branches were authorized constructeo'
The main line from Cairo to La sane,
one branch from La Sale to Dunleltn'
and the other from Central1a TO chi
cago. To aid the project the state gave
the company 2,595,000 acres of lands
Notwithstanding this restriction,
says the petition, the company IN 1870
began to acquire and build other lines
with the object of forming a great
| system A list of about fifty such
branches is given. The addltlons 70
| the charter lines are also said TO IN
cIude the Cairo and Dubuque bridges.
| The company is required to pay the
state 5 per cent of its charter lines
gross receipts, and must supply the
state auditor with an annual state
ment of all it's property for the pur-
pose of taxation. The taxes and the
per cent must equal at least per
cent of the company's gross receipts.
From 1859 to 1896, says the petit
ton, the company refused to list with
the auditor it's stock, property and as
sets for the purpose of state taxation
and refused to pay into the treasury
an amount equal to at least per cent
of the gross receipts or income derived
from the charter lines.
The company is charged with falling TO
credit the charter lines with their pro
norton of the entire system earnings.
Two cents has been charged on every
100 pounds of freight carried across either
the Dubuque or Cairo bridges, declares
dollars thus deducted from the charter
lines income.
alleged, the branch lines are doing large
portion of the business, but that the
charter lines do not receive tneIr pro
portion of credit, and hence another large
percentage of the gross proceeds IS lost
to the state. The company's practice in
this respect is characterized as CRAFTY:
causing the state to be defrauded out of
Among the other alleged practices of the
road whereby the state loses its share OF
proceeds follow: Giving mileage books 70
newspapers valued at 81, 700; carrying
for terminal facilities for branch lines;
allowing rebates to shippers; collecting
large sums from foreign roads as rental
for rolling stock, failing to credlI the
same to charter lines
Since 1877 the company has presented
false statements to the governor says the
bill and has refused the governors per-
mission TO examine the roads books TO
ascertain the true condition of affairs.
The bill asks that the road be compelled
To make q full accounting of it's gross
proceeds, receipts and income.