Omaha daily bee., 1907-01-26
HARD BLOW At HILL LINE
Attorney General Of Minnesota Starts ut
TO Forfeit Old Charter.
COMMON RAILROAD PRACTICE ATTACKED
RiEht Of One Company 60 Organize
Others TO Bald Lines oues-
TONED in Suit Mt
81. Paul.

ST. PAUL, Jan. 25.--Attorney General
Young today began mandamus proceedings
4 In the supreme court TO compel the 81 Paul
Il AIinneapolis &. Manitoba Railroad company
10 show cause why its charter should not
be forfeited. This company was formerly
known as the Minnesota a Pacific company,
and is really the parent company Of the
Great Northern Railroad company and the
Great Northern is Joined in this issue.
II is the owner Of the Manitoba company's
stock Attorney Young has given the AS
sociated Press digest Of the allegations
set UP in the bill sent up in the supreme
court The complaint comprises about
eighty typewriter pages and goes into all
transactions Of the Great Northern COM
pany, with It's Constituent companies for
forming the merger known as the Great
Northern Railway company Attorney
General Young says:
We have commenced an action in the
name of the state against the St. Paul,
pany to compel forfeiture Of its charter Shis for
the reason that ever since Il transferred It's
Tstoad with all its eggigmehnS s1d ap
company in February T. 1890, It has ceased
TO- perform the function for Which Il .i wSs
TO exist under our laws as a railway com
pany
Great Northern Involved.
We have Joined the Great Northern Rail-
way company, as a party TO this action
because II is the owner Of all the stock OF
the Manitoba company and for the further
reason that in the alleged purchase Of the
property the assets OF the Manitoba com
very large amount Of water in the Stock
was issued by the latter company. which
State e npop w ES be nb he a la" now S ana
large dividends We ask that this stock
dividends thereon be prohibited
We have proceeded with elaboration in
this matter on account OF the magnitude
of the interests involved and the great i'm
portance of the questions both as to the
state and companies affected 1t viii assist in
understanding the transaction between the
Manitoba company and the Great Northern
company was created by the stock holders
Of the Manitoba company, and at the time
Of the transfer Of the properties the stock
1t seems that the Great Northern company
was created solely for the purpose Of max
OF the system by, making a sale Of the
properties to the Great Northern at a price
in, excess OF their value, 1t is easy to see
Hsor ~ cHo ooS company should pay premium
5ro SoG ~ on The purchase OF the stock
Refusal to Pay Tax
When the gross earnings tax on railroads
was raised from to per cent in 1905 the
Great Northern company refused to pay
the increased ratio on that portion of it's
road In this state which was originally
constructed by the Minnesota & Pacific
ter from the territory, in which 1t was
provided that the company never should
be called upon to pay more than 3 per cent
on its gross earnings The company be-
came bankrupt and In 1878 the Manitoba
company purchased It's road and franchise
ever since the purchase the Manitoba COM
pany has claimed that 1t acquired, by the
purchase. the same immunity from any
raise in its rate OF taxation that the Mime
sofa Il Pacific had
Last March, when the taxes for 1905 be
load H.
ern, which operates the road under an al
paid only B. per cent, and soon afterward
the state commenced action against It
for $4,000, being the unpaid per cent of
the claim to immunity from any increase
above per cent in its taxes, rs claimed
pany by virtue Of the rights Il Claims S'i e
have acquired at the purchase of the road
in 1878.
The suit Is not yet disposed of and Il will
probably take many years to get Il through
all the courts The railroad taxes for the
there will be an additional amount, greater
than that above mentioned in dispute 70.
We are convinced that the Manitoba com.
pany Is no longer entitled to existence as
railroad company ard that the speeches 81
from the rate of taxes paid by other rail-.
way companies is to have its charter wiped
, would be Obliged TO pay its taxes at pei
cent, the same as other COMPANIES.
We are also of the opinion that the
Great Northern should not be allowed t
pay dividends on watered stock, heretofor'
Issued and that II should be required t
show whether the large amount OF stool
which, acco. ding to the records accessible
10 the public, appears to be fictitious, hai
any right to further recognition as par
OF It's capitalization.
This suit will involve also the question
OF the company's right to create lot o.
subsidiary companies, composed of Its owl
stockholders, to build all extensions ans
then issue stocks and bonds at WILL with
out any public supervision, and the RICH
Of the Great Northern company to diver
the proceeds OF the sale of Its capita
stock to the purchase OF the stocks an,
bonds of such subsidiary companies.
Chief Justice start ordered the writ L