Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1910-10-28
Supreme Court Reinstates
Suit of State for
Back Taxes.
OUTLAWS OLD CLAIMS
Bars Accounting Prior to 1905
Verdict for $15,OO0,00O
Impossible.

Springfield, ILL.,, Oct. 2S.-The Illinois
Central suit by the state for back
taxes tentatively placed at s15,0O0,000
was sustained in the preliminary hear
ing of the case by the decision of the
supreme court today. The effect Of
the decision Is to send the case back
to the circuit court of La Sale cOun-
ty for hearing on its merits. The low
er court had sustained the cOmpanys
demurrers aud dismissed the com
plant
Old Claims OutIawed.
In the decision the court ruled the
claim on accounts prior to 1905 are
outlawe6. Under this ruling the $15,-
100000 claimed dwindles 20 about
one million.
From 1905 the court lays down a
rule for accounting by which the
state, it is estimated, will receive So
100000 in annual revenue from the
road, instead Of $l,O0O,00O or less,
Is at present.
Claims State Was 'EMIIked.-
It is the contention of Governor De
neen that for 33 years the railroad has
been milking the state through its
system OF accounting for gross earn
ings on which it is required under the
charter 10 pay Z per cent 10 the state
IN lieu Of other taxes.
When the state filed its bill in the
La Sale county circuit court three
years ago the railroad entered a de
murrer TO the amended bill filed later
by the state. The circuit court sus-
tanned the demurrers, issuing a de
cree dismissing the complaint.
States Appeal Sustained.
From this decree the state appealed,
and today's decision indicates the SUI
preme court finds the complaint suft-
ciently tenable on it's face to warrant
a trial on its merits. The remanding
of the case means a trial on the evi-
dence. The date for this will be de
termined by the La Sale county cir F..
cult court.
I. @. Suit Filed In 1907.
The suit against the Illinois Central /
was filed by the attorney general early /
in 1907 following a message of Gov .
ernor Deneen to the legislature in .
which 1t was asserted that the Illinois .
Central had been so manipulating its
accounts as to credit millions of its
earnings to the non-charter lines not
subject to the per cent tax.
The governor at that time obtained
a special appropriation from the legis-
lature to defray the expenses of an ac-
counting. This accounting swelod the
amount which the governor had estima-
ted to be due the state from $1,000
600 to $4,000, 900.
Charter Granted in 1851.
The history of the suit dates back
to 1851, when the state granted a sDe-
cial charter to the road which provided
in consideration of a land grant of p
100000 acres-that the company should
pay annually 5 per cent of its gross ]
receipts, plus a property tax of q of
l per cent, which should at least be
equal 10 per cent of the gross earn
ings on the mileage in Illinois.
Accounting Not Correct.
According to the charges made by
the governor and the attorney general,
the railroad has not only construed the /
per cent provision as maximum in S
stead of a minimum, but has failed to ]
give the state a proper accounting 7
since 1877. and has so arranged its ;
'ates as to credit an undue proportion
If its earnings 10 the lines south of :
he Ohio river and west OF the Mis-
issippi. The total amount charged to !
lave been concealed in this manner
vas placed at $214.OOOOOO, of which I
yer cent is S15.00000O a
The amounts paid by the railroad d
regated over $3OO0O,C00 since the ST
harter went into effect and now n
mount TO well over a million dollars W
year. II
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