The Mankato free press., 1922-01-27
Testing Validity of
State Tonnage Tax
Arguments For Restraining Or
der Heard BY Judge Morris
In Duluth
[Assoclated Press Dispatch.l.

Duluth, MINI. January 26.-Argu-
ments TO obtain temporary restrain
ing order enjoining the state from
proceeding with the collection of the
occupational or tonnage tax begun in
United States district court here to-
day before Judge Page Morris by
counsel for thirty mining corporal
ions.
Judge Morris signed an order Tues
day requiring the state to show cause
why such an order should not be is,
sued. Attorney General Hilton is
representing the state at the hearing.
Ii the order is issued, a hearing on
a temporary injunction will be held
later at st. Paul before three judges,
to be followed by a hearing on a per-
manent Injunction, it was said This
viii be of the state contention during
the present hearing.
Defendants named by the mining
corporations include all members of
the state tax commission, and the
state, attorney general, auditor and
treasurer
When the bill was passed it was es
timated that the revenue would be
about $3,400,000 annually. This to-
tai was reduced to approximately one
half for 1921, because about that per
cent OF the usual tonnage was re-
moved.
Three Judges Hear Case.
A nearing on an interlocutory in
junction sought by the Oliver Iron
Mining company and thirty indepen-
dent corporations to rest the consti-
tutionality of the state occupation tax
Will be heard in st Paul aSout March
United State coeft 81 n fssass{ 4 asa
ne granted an order restraining ths
state OF Minnesota temper "a fify 9fon
proceeding any further with examiiia
tion OF the company's books or as
sessment of the tax
Three federal judges will hear the
case.
In granting the restraining order
today Judge Norris held that the min
ing companies would suffer an ire
parable loss if the state were allowed
to examine their books eVen though
the law were later held unconstitu-
tional
Oakley Represented State.
Egbert S. Oakley, assistant attor-
ney general, represented the state
He argued that there would be no loss
if the state tax commission were al
lowed to proceed with :he collection
and the examination Of the books for
this purpose.
Counsel for the mining companies
insisted, however, that the companies
would not only be harmed by being
forced to show their books in case
the law is held constitutional but also
that they would suffer a danger of a
fine and Imprisonment daily should
they refuse to show heir books The
law itself makes ii a nisdemeanor
to fail to show the books on demand
1t was also brought out that on
February / the Minnesota tax COM
mission has the right to assess the
taxes for the coming year under the
new law. If the information needed
is not in by that time. they have a
right to act on information in their
possession and besides to impose
penalty Of ten per cent On taxes col
lectable for failure to supply informa-
tion needed.
"Our taxes would probably total
$1,000,000 and such 4 penalty would
be 100000" counsel for the Oliver
Mining company said. Resides the
state may levy / per cent a month
additional which would be $500 a day
Only restraining order can save US
from such penalty, for The law pro-
vides no machinery by which we may
pay under protest and then get our
money hank IL the law Is rot upheld
Mr.. Oakley declared here that the
mining companies would not suffer at
all, because no suit can be begun un-
til June when the tax becomes due.