The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1922-02-03
Testing Validity of !
State Tonnage Tax
Arguments For Restraining Or
der Heard BY Judge Morris
In Duluth
ASSOCIATED 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 Norris 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
repl esenung 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 hearing on per-
manent injunction, IL was said. This
will 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. y
When the bill was passed it was es
timated that the revenue would be
about $3,400,0O0 annuallyg This to
tai was reduced 10 approximately one
half for 1921, because about that pei
1 cent OF the usual tonnage was lie.
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 lest the consti-
tutionality Of the state occupation tax
will be hearc in ST. Paul about March
l, Judge Page Morris indicated in
United States court here today when
he granted an order restraining the
state OF Minnesota te,nnn amy ron
proceeding any further With eyamina
ton OF the company's BOOKS or as
seSsment Of the tax.
Three federal judges viii hear the
case.
In granting the restraining order
| today Judge Norris held that the min
ing companies would su=e! an IRE
parable loss il the stare were a-:owed
10 examine their books EVEN though
the law were later held unconstitu-
| tional
Oakley Represented State.
Egbert S. Oakley, assistant attor-
pey 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
OF information from the companies
| 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 it risdemeanor
to fail to show the books on demand
1t was also brought Out that on
February i 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-
ton needed.
Our taxes would probably total
$1.000,000 and such a penalty would
! be 100000" counsel for the Oliver
Mining company said. Resides the
state may levy l per cent a month
additional which would be $500 a day
Only a 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 hack If the law IT, rot upheld y
,, Mr.. Oakley declared here that the
mining companies would not suffer al
all, because no suit can be begun un
til June when the tax becomes due.