Decatur Democrat, Volume 38, Number 26, Decatur, Adams County, 14 September 1894 — Page 2

RAILROAD TJX SUITS. Origin, Object and Results of This Famous Litigation, Most Important of the Kind That Ever Engaged the Courts. tlie Democratic Law Fully Vindicated. Valuable Work of Attorney General Smith —An Adverse Opinion Would Have Bankrupted the State—Full and Succinct History of Those Great Suits and Analysis of the Law They Were Intended to Nullify. Prior to the passage of the tax law, approved March 6, 1891, the subject of taxation in this state was practically misunderstood. Those who paid taxes tinder the old system did’so upon valuations fixed by themselves, without the slightest legal restraint or desire to fix a value upon their property representing either a fair or true cash value. Every person had been educated to the belief that it was right to force valuations down, because it was generally understood that the policy of taxation in this state rested upon the principle that to force a low valuation of property was to escape, in a measure, the payment of taxes necessary to support the government. This principle was manifested most clearly in valuations fixed upon all classes of corporate property. The owners of this property, being able to present their contentions more fully before the taxing boards than the owners of other property, always got the advantage of the situation by representing a condition which caused the authorities to place the lowest possible valuation upon their property, and this fact was known to all the taxpayers of the state, and, to counteract its evil consequences, the owners of real estate and other small possessions entered into the spirit of the times and fully competed with the owners of corporate property to the end- that values should "be made as low as possible, and in this competitive struggle for low values the land owner and the possessor of homes and small holdings were necessarily the sufferers from such a system. They 'could not. and did not, compete in this matter with those who held large property' interests and controlled the corporate wealth of the state. Therefore in a short time the concentrated wealth of the state:-received thq largest benefit from this system of pressing down the values'ot th- taxable property, ayd the owners of other property were ueces- ’ sarily made to,bear the largest sbyaoaf i the public burden. This was t-uo condition of things wh< a the leg! iXture of . 1891 met to consider ways mupliieans to raise a sufficient revenue to (itnTy on the affairs of the state goyeiy : :it. to pay the interest on the pniZ'." debt and to gradually Vodnce the pris cipal. The principle of taxation, that justice and equality can only he maintained by placing a fair c.i- ' i yalv.o.upm a!t prop- i erty, had been lost right of. and those ■ most forteaarc in the scramble to avoid i taxation lore th - least sli.ire of the public burd.n while, as in : 11 such casfes, those who were most pun crons and farthest r- moved from the taxing auO thorities weremiade to ir :.r the gfeate.-t, as well as an unequal, share of the public burden. Prior to 18V.I th-. rc wasno such thing as equality in assessment of taxe. ? in this state. The constitutional provision which provides for a uniform and equal rate of assessme.it and taxation had been lost sight of or totally disregarded by those who may have misunderstood it. Another principle under this system of taxation, which had been forgotten or disregarded, was that an increased arid equal valuation of all property does not ■ mecesstirilj’-increase-the-mnoiint of taxe's to be paid by the Citizen, for the reason that where all property is placed upon the tax duplicate at its true cash value all citizens will pay equally, according to the property which they own, and the higher the valuation the lower the rate of taxation; so it is a fundamental truth that the proper way to reduce the taxes, which the citizens must bear as a reward for good government, is to place upon the tax duplicate, all the property of the state and attach to it a value according to the cash basis, which alone can equalize the burden of taxation. But this was not the rule prior to 1891, and the principle of equality having been destroyed by a violation of the constitutional rule of taxation, the burden of government fell most heavily upon that class of property which never can escape the eye of the tax assessor, the homes and farms and tangible personal property of the people, while railroads and banks and great corporate interests, the value of which is most, difficult to understand, bore but a slight portion of the public burden in comparison to what the people necessarily had to pay by reason of this misapplication of the equity rule in taxation. In 1890 the property of this state was valued so .Unequally that it scarcely produced a revenue sufficient to pay the or* dinary expenses of state government, and did not produce sufficient revenue to carry on the public institutions of the state and pay the interest on the public debt, necessarily requiring each year a temporary loan, at a high rate of interest, to meet these public expenditures-. And it was this condition, which was known and severely felt throughout the state, that prompted certain-persons to demand of the legislature of 1891 that the entire tax laws of the state be revised, and to cause a re-valuation for the purpose of taxation of all property, real, personal ami, corporal e, to be made in the year 1891. The revisions of the tax laws of that year did not essentially differ in principle from the laws that have always ’ been in force in thjs state. • ■ In fact, they had the same machinery for valuing railroad property and equalizing the value of real estate and to value small holdings and personal property of, the citizens prior to 1891 as is incorpor~ ated in the tax laws of that year. But the laws concerning the valuation of all

property for the purposes of this state had not been faithfully and honestly executed. The principle of valuing propertv according to its true cash value and placing all property upon the tax duplicate had not been adhered ' to, but had been abandoned, and the question was sharply presented to the people of tHo state as to whether The government of Indian:* should be supported by in vans of n uniform and equal rate of assessment and taxation, or bj going into th" market every year ami borrowing money to support the government, and thereby gbing into debt and increasing the state debt each year. The lesson taught- by the passage ot the tax law of I*9l was the lesson ot constitutional taxation based upon a uniform and equal rate of assessment. As s<>on as the law wits passed its execution assumed a partisan phase. One political party of the state, at least, denounced the law as infamous and retarded its execution and enforcement in every way possible; and so fierce were the assaults made upon this system of taxation by the Republican party that even the friends of the law despaired o. its execution and, at times, were almost willing to abandon the effort of constitutional taxation in this state. hile it was not a new law, yet it was a new enactment, and being a new enactment, its enemies urged against it all the objections that might have been made against an original and new law. It became necessary, to carry out the provisions of the law of 1891, that nearly every section of it should be defended and construed by someone. This defense began early in the spring of 1891 and was vigorously prosecuted by the attorney general until all the values for that year had been fixed and placed upon the tax duplicate. The contest which was waged during that year against the tax system by the corporate interests of this and other states having property in this state was the fiercest and most uurelenting that has been witnessed since the organization of the state government. From the tax boards, who fixed the values upon the property of the rich and. wealthy, appeals were taken to the courts for the purpose of . having the salient features of the law. declared unconstitutional It.was allegecliu the courts that this 1w vi ri:L <1 m argriall of the provision s in the coWritution of Indiana, and t at it violated the most essential provi-ons of the,, constitution of -the United • States; that it-rlenfed due process of law to the corporations; deni" the equal protection of the iws to them; that it was an invasion of the constitutional provision that the states shall not regulate < place a burden upon interstate comr w. . It was alleged by these corporations, who sought to break down this - -stem, that the valuations fixed upon heir property were so high that, in tli ns Ives, they constituted a fraudulent idministration of the law and, for this r> ason. they asked that the power of th court be exerted in their behalf. It t ill be remembered now, and a histoi • of transaction has been written, that die valuations’of all property in this .- tte, including railroad property . tttidrv.teOPXporatita:-;, was the result of the la ors of the attorney general, who ...gave.. teh gunstyuqtipn .to., this, system of raxati n that, when the values were inorea?'. I upon reaf estate- by the .local authorities, it became absolutely certain and net\f:iry that the values of-corpor-;ite prop riy' umb'-r the jurisdiction of the state b’».trl should be. increased by that. body. Th. re was no escaping the . proposition tu.it price to the passage of the law, rc .1 itate had borne.the heaviest share of t. e public burden, and although it was ipt valued at n.- true cash value, still it '• walued propcrtionafely higher than ci .’pmiite property wivhin the state, and-’-hht since the local assessors valued «•esiate at a sum deemed to be it t m cash value, thereby increasing the v .1 : pver IS per cent over, ■the vqlue of f .•). i years, that the authority chargee, i* . :x‘'th<- duty of valuing railroad pro ,-e. : .y inu-t increase the value of that pi >pc. t'y in such equal proportions as to 1 ring it up to the level of astatdtory ea-a value. The action of placing a ’yahr upon property for the purpose of tax ation is ntt rely an executive or admin str.-dive function which, . if honestly p< rformed, must proceed in the.line of construction given to the general system, so that one Hass of property shali beai - the sttine relation to the . public burden as any other class of property shall bear. Prior to 1891 railroad property in this state - had been valued in the aggregate at $69,000,000. It was admitted by the railroads themselves that, this valuation represented only three-fifths of the true cash value of such property, and to bring it up to the true cash value it would require a large increase to be placed upon all railroad property. This increase was the result of the general contest which was waged in behalf of ’the law by the attorney general of the state, who fought the corporations on the basis of equal and just taxation at every inch, and contested with them every step from the passage of the law to the values fixed by the assessing boards. • And with this contest the values on the property of railroads were increased from $69,000,000 to $191,000,000. This increase represents the difference between the true cash value of the property as fixed by the board under the construction given to. the law by the attorney general and the values which they themselves fixed upon their property. The per cent of increase of 1891 over 1890 was 130, and it was this increase that drove these corporations into the courts, where the attorney general appeared and fought them from the circuit court through the supreme court of Indiana and to and through the supreme court of the United States, in one of the most bitterly contested lawsuits that has ever been, brought or concluded in this country, and the success which crowned the efforts of the attorney general in these lawsuits is written in the history of this state. The amount involved, directly and indirectly, in the litigation which resulted in the supreme court of the United States holding the law to be constitutional and refusing to interfere with the assessment of the taxes against these corporations is, at first blush, fabulous. No such consideration was ever involved in any tax litigation in this country. The law was assailed because it was unconstitutional, and if the courts had held that it Was unconstitutional all the* taxes assessed under it would have been null and .void, and where any of them had been paid the state would have been obliged to refund .them to the qprporations. The amount involved in , tins litigatioii on thp day the supreme court of the United’ States decided the ’ ca.-w? in favor of the state was $7,101,827. df this amount at least $3,000,000 had been paid under protest, and since the dccis-

ion of the case by the supreme court of the United States there has been paid into the county treasuries throughout the state at least $1,000,000, the aired and necessary result of the victory won by the attorney general of Indiana over the corporations of this state. NtJsnch victory was ever before won for a state in the matter of taxation. The contest which resulted in bringing these taxes into the public treasury or the various counties of this state was directed planned and executed by the attorney general and by no one else. He commenced with the beginning of the controversy and first laid to the people of this state the doctrine of constitutional taxation in the groat bank controversy, which originated in the superior court of Marion county, wherein the best lawyers of the state appealed for the purpose of getting a decision not so much affecting the banks, but a decision that would break down these laws and destroy their force in the matter of railroad and corporate taxation. This contest was carried on by the Attorney general, not for any good result that might come in the so-called bank litigation, but for the purpose of asserting the constitutional power of taxation and maintaining it, so that when the threatened suits, which were afterwards brought, should be commenced, that this policy of battle should be continued all along the line as against them. And it is not forgotten that the fight made in the superior court and afterwards in the supreme court in the bank cases resulted in the establishment ’of the same constitutional doctrine as was afterwards asserted and settled by the supreme court of the United States. These contests on the part of the attorney general in asserting the true doctrine ’ of constitutional taxation has set at rest forever the objections raised against the law involved in these litigations, and the amount of taxes which the settlement i of these questions will produce to the people of the state of Indiana in the future cannot be well or accurately calculated. They are like Tennyson’S Brook. They will flow on forever, and if the public servants selected to administerthis law in the future will adhere to the doctrine as asserted by the attorney general, and execute the duties , of their trust with fidelity to the people, | it will not be 10 years until this system I of taxation will produce sufficient money i not only to cany on affairs of the state,. i but to pay the interest on the state debt ! and to wipe out the principal. And it is ' to be hoped that the lesson taught by this ; great contest will never fall upon deaf cars, nor be forgotten by the taxpayers I of Indiana, and it is the prayer of all ! good people that neither time nor jeal- . ousies, the egotism of sinne or the vanity , of others, will ever deprive the real an- 1 thor of this blessing to our state of tire merits due him for his labor and fidelity I in standing by the cause of all people in i behalf o/ just, uniform and equal taxation,to the end that every citizen of, high or low degree, of much or little 1 property, will be required to pay his just ■ share of the public burden and feel that , when the taxparing time comes,that he 1 has not been called upon to contribute j more to the maintenance of good v-j srnment ’than his neighbors have b n : required to do. .; PULLMAN IN INDIANA. rhe Great Magnate Now Has to I’ay For . His Privileges. The public generally will Irani with ! surprise, if not disgust, that he valua-

ble franchises of the Pulln an Palace Car company in Ind,ana w to enjoyed for years without the payment to the state of a single dollar for the privilege. His ears were rah. on every railrogd in the state, enjoying the protection of the laws and making enormous sums of money for the'owner, and yet there was no statute requiring any return for this. What was made, was < tear- profit, and if other states’have been -qually generous there need be little v- mder that this corporation found litth difficulty in accumulating a fortune. Ixemption from taxation is of itself equ .1 to a goeftl per cent on investment, as eery thing is receipts and no expenditure and the making of fortunes is greatly sinqilifled. Not only Pullman, however, but the telegraph companies :uid the express companies were equally fortunate in this respect. The only taxes they paid was on their office furniture and other appurtenances of this kind, which amounted to little or nothing. But for using the territory of the state for their lines and other privileges of indispensable value to such corporations these companies, like Pullman, went scottfree of taxation. During the last session of the legislature Attorney General Smith drafted a bill to remedy this omission and to add the favored companies to the list of state taxables. The bill was drastic in its provisions and supplied a long felt want, but it was by no means allowed smooth sailing through the legislature. On the contrary, it met with most determined and angry opposition. A robust and well paid lobby was on hand to fight it at every stage. The Western Union and the express companies, as well as the redoubtable Pullman, were on., hand “by attorney” to see that the bill was scotched if not killed. It was a formidable array of lawyers, professional lobbyists and interested parties that confronted Mr. Syjit-h, but the plucky attorney gt'iimriT succeeded in defeating the “army/if occupation” and finally got the bill passed. It was not, however, uiitil the very last day of the session and after the hardest land of a fight that the new statute became a certainty. As a result of its provisions the state of Indiana has been made richer this year by SIOO,OOO, and .this off of property which was never before a subject of taxation. It was not without a struggle, however, that the tax was collected, even after the law was passed. The companies refused to pay, showed fight aild the attorney general was compelled to enter suit against them. It is in the nature of corporations that if allowed to enjoy special privileges for a term of years they eventually come to, consider them vested rights. Abuses of this kind become entrenched and it is - always difficult — sometimes impossible—for the state to dislodge the imwssots with all the machinery of the law at its back. The new law above described makes a valuable supplement to the general tax law of the state, and for both the Democratic party deserves full credit. It has done invaluable work in ’the lu-t few years in teaching various corporations that the state has some rights which they will be compelled to respect. - t •

CONTROLLER’SBEPORT • Increase In the Volume of Business Since 1891 Shown. LETTERCARRIERS’ BACK PAY. Claims Being Paid by the Treasury Department In Accordance With a Court of Claims Decision—Opposed to the Be■noval of Geronimo mid Bls Band. Other News of the Capital. Washington, Sept. 11.—The annual report of the controller of currency was i made public yesterday. It is a record j of the work of the controller’s office and j shows that the total number of accounts, ’ claims and cases settled during the fiscal i year ended June 30 last was 33,165, involving $280,602,003.- By comparing the work of this office for the past three fiscal years the increase of business since 1891 in round numbers is $104,000,000, with an increase in the last fiscal year of $74,000,000. WILL HE EXCEED THE LIMIT? Congressman Holman Entering Upon His Sixteenth Campaign. Washington, Sept. 11, —It is a tradition that death or the turn of political fortune fixes.3o years as the limit of service in the national house of representatives. Longlived and successful statesmen have tried in vain to break that record. No one has yet exceeded 15 terms of service as a representative. The late William D.’Kelley, better known as “Pigiron Kelley,” was ‘‘the father of the house” for several terms, but just as he was about to enter upon the 16th term he suddenlyfailed in health and died. The mantle of the longest continuous service fell upon Charles O’Neil of Philadelphia. At the beginning of .the present congress Judge Holman congratu-- 7 lated Mr. O’Neil that he was likely to achieve the distinction of passing the limit. Mr. O’Neil shook his head, and reminded the venerable Indianihn of the tradition. In three months O’Neil was dead. And now it has come Judge Holman’s turn to experience what there is in the unwritten law. He is just entering the campaign for his 16th term. He is 72 years old, and as rugged as the Hoosier Democracy. But the reports from his district are that the Great Objector has the fight of his life on his hands. He hits begun by declining a challenge to joint debate from the Populist candidate, a farmer named Gregg, and the reason he assigns is a curious one. Holman and Gregg, live on adjoining farms, separated only by a small creek. The -epngressman says he is for free silver at’ 16 to 1, just as Gregg is. He* says he knows all of Gregg’s views; that he holds the same, and that, really, the only thing between them is that small creek. What is the use of a joint debate under such circumstances, he asks.

OPPOSED TO KEMOVAL. Ex-GoVernor Zulick Wants Geronimo’s Band Kept Out of Arizona. Washington, Sept. 11.—Ex-Governor Zulick of Arizona has written a letter to the president vigorously opposing the removal of Chief Geronimo and his Apaches from Mount Vernon barracks in Alabama, where they are now confined, to their former reservation in Arizona. In an interview on the subject he said: “In behalf of the people of Arizona I have felt .it .my duty to earnestly protest against their return. It was during- my administration as governor that they were removed to Fort Pickens, Fla,, by direction of President Cleveland. This band of Chirichua Apache Indians are without doubt thp most cruel savages ever born bn this continent.” Getting Their Money. Washington, Sept. 11. —The claims of the lettercarriers for backpay, for which judgments were teuderefl by the court of claims and for which appropriations were made in the last deficiency bill, are being paid at the treasury department. The vast majority of these claims, however, are still pending before the court of claims, but it is expected that when the court meets again, Oct. 22, judgments in those pending will be quickly rendered, based on the decisions in former cases. Italy, Spain and Japan Affected. Washington, Sept. 11.—The new tariff act contained a provision that the rate of duty under the McKinley act should be imposed on lead ore, lead dross or silver ore containing lead when imported from countries imposing an export duty thereon. The treasury department in a circular states that Italy and Spain are the only countries affected. Japan, however, is also affected by a subsequent proviso relating to the duty on pig lead. —————— Treasury Cash Balance. Washington, Sept. 11.—Cash balance in the treasury $127,830,816, of which $56,029,705 is gold. NOVEL BLACKLIST. Omaha Kailroad Men Mnch Alarmed Over a Peculiar Mark. Omaha, Sept. 11. — Omaha railroad men are much alarmed over the discovery of what they regard as a novel blacklist being worked by all western lines. Since the strike all men seeking employment are required to bring a clearance from their last company. The men claim that all companies are using a sheet of paper on which to.write those recommendations that have the figure of a crane worked in it, and while the writing may indicate that the bearer is ■all right the position of the animal on the paper, which is invisible except to a close observer, really determines the ap-. plicant’s standing. In this manner by a secret code of signals the railroads, the men say, can write them a favorable letter and by using paper with the figure of'the crane indicating dissatisfaction, prevent their seeming work. The men are very much alarmed. Weather.

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