Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1915-11-15
NORRIS CANAL
TAX SUIT WON
BY THE STATE
]. S. Supreme Court
COnStrues Waterway
Charter Provision.
SAVES MILLION PAID
TO N. ]. UNDER PROTEST
Also lnsures Future Payment to
State Of $1,000, 900
Taxes.

Taxes.
WASHINGTON. Nov 10. The su-
preme Court today affirmed the New
Jersey Court of Appeals decree,
which held that the Morris canal must
pay taxes to the state.
The Lehigh Valley Railroad Com
pany Is the owner OF the Morris Canal
and Banking Company, under which
title to the waterway is vested 1t
was claimed by the Lehigh that the
canal Is not taxable. The claim was
set forth that the waterway was ex-
empt because of a provision in the
canal charter. This alleged exemption
was to apply while the canal was
being actually used for navigation
purposes.
The appeal in the canal case has
been on the docket of the United
States Supreme Court for seven years.
It was taken up from the New Jersey
Court of Errors and Appeals on a
writ of certiorari.
The Morris canal was chartered in
1924 Its original charter provided
that its property should be exempt
from taxation. In 1871 the Lehigh
Valley railroad leased the canal prop
erty In perpetuity.
In 1907 the State of New Jersey
sued for ,221 taxes under the State
law Of 1884 taxing canals and rail
roads, claiming that the railroad lease
ended the canals tax exemption. That
such a contention was an abrogation
OF contract rights was the defense of
the Lehigh Valley.
Robert H. McCarter, of -efis city,
former attorney-ge for New. Jer-
sey appeared in behalf Of zine State
in the proceedings which led to the
decision of the Unified States Supreme
Court in the Morris canal case today.
The decision will mean saving of
more than 81, 100000 in taxes which
have been paid to the State under
protest since 1884.
In addition the State viii get $780,
900 additional more in taxes from the
Lehigh Valley railroad before the
canal reverts back to the State in
1871.
When Mr.. McCarter learned today
that the United States Supreme Court
had affirmed the New Jersey Court of
Appeals decree that the Lehigh VAL
ley Railroad Company, as owner of
the Morris Capal and Banking Com
pany, must pay taxes to the State, he
said that he was not surprised as
he had expected a favorable decision.
In discussing the case he said:
The Morris canal charter ex-
empted from taxation of all kinds so
much of its property as was used by
Il for canal purposes, until 1t was
leased to the Lehigh Valley Railroad
Company in 1871. It's property that
was used for canal purposes WAS
therefore exempt from taxation.
When the general railroad tax act of
1884 was enacted, the State claiming
that this lease terminated the exemp-
{. ton, taqed the property against and
in the possession of the Lehigh Valley
Railroad.
The Lehigh Valley paid this tax
each year under protest Annually un-
til 1906 when it sued out certiorarf
to contest its legality, claiming that
the exemption still existed, notwith-
standing the lease to the Lehigh VAL
ley. The Supreme Court OF New Jer-
sey and the Court aof Errors and APP
peals of New Jersey both sustained
the tax. whereupon an appeal was
taken to the Supreme Court of the
United States.
AppeaI in 1908
'.The appeal was taken to the United
States Supreme Court in 1908 where.
the matter has been permitted to lay
unargued until the present stipulation,
owing to the abandonment OF the
canal
Il retired from the office of attorney
general after the case. had been taken
to the United States Supreme Court
but the stipulation that the matter be
allowed to rest was agreed to by At
torney General Edmund Wilson on the
one hand and the I.ehigh Valley Rail
road Company on the other. Because
Of my knowledge of the case ! was
asked to argue 1t before the highest
tribunal The argument was made
about two weeks ago before the full
bench"
Asked to explain the manner in
which $1,000.00O would be saved to the
State, Mr.. McCarter said he based this
on an approximate tax of $4,000 a
year since 1884, as the tax was always
paid under protest. He said that. had
the highest court reversed the State
courts. the State would have been
obliged to pay back the taxes collected
on the canal since 1884. He said that
The right to collect the tax could never
again be questioned and the State
would continue to collect s50,000 year