July lo; 1902.
THE ITEBRASKA INDEPENDENT.
THE RAILROAD TAX CASE
. Itiamt of ErenU Uadln; np to the Salt
Quotations From Brief FiledThe
Proper Bmd7
"The State of Nebraska, ex rel The
Bee Building Company and Michael
F. Harrington, relators, versus Ezra
P. Savage, et al.as The State Board
of Equalization for the state of Ne
braska, respondents," is the title of
genera! number 12,723, in the supreme
r court of the state of Nebraska. Ap
pearances: Edward W. Simeral, Mich
ael F. Harrington, attorneys for re
lators; John D. Howe, of counsel;
Frank N. Prout, attorney general, and
Norris Brown, deputy, attorneys for
respondents. ')AmicI curiae," which
In the language of the immortal Doo
ley means "frinds iv the coort": John
N. Baldwin (who has a sort of platonic
love for the Union Pacific, and who is
famous for announcing the result of
the republican state convention nine
. days before the scrap was pulled off);
Charles F. Manderson and James E.
Kelby (both with yearnig3 for the
Burlington); Frank T. Ransom (who,
with the aid of Tommle Benton, car
ries on a flirtation with the Pullman
people) and Benjamin T. White (more
-familiarly known as "Ben" White of
the Elkhorn) ; .
Relators' brief, a 42-page document,
was filed June 17. The "amici" have
briefs as follows: Union Pacific, 53
pages, filed June 27; Burlington, 2
pages, June 28; Pullman, 17 pages,
June 30; Elkhorn, 42 pages, July 1.
"Necessity" Prout, on July 5, filed
"memorandum" on behalf of the re
spondents. But the real contest, how
ever, is between the relators and th3
"amici."
The various steps in this case have
been recorded from time to time in tho
daily papers, but it may not be amiss
now to recite a little of its history.
The question of railroad taxation
and government regulation of freight
Tates have been in a process of evolu
tion for a great many years, and It
would be idle to deny that the peopla
know more today regarding these ques
tions than they did twenty years ago,
ten years ago, or even two years ago.
The early idea was, that the railroad,
being of great public benefit, should
either be exempted in whole or in part
of bearing the burdens of taxation,
or In lieu of that should receive as
sistance in the way of bonuses or sub
sidies. The exemption plan never pre
vailed so extensively as did the prac
tice of voting bonds and giving land
grants. Extortion in freight rates on
th one hand and tax-shirking on the
other, on the part of the railroads,
gradually brought about a change of
public sentiment. It was seen that
if a public benefit is to be exempted
from taxation, either wholly or par
tially, that nearly every line of busi
ness would be entitled to share In the
exemptions; and if all are to be ex
empted,' where are the necessary pub
lic revenues to come from? The ap
parent futility of regulating transpor
tation charges by law, set the people
to thinking more upon the other ques
tion the question of taxation. If the
railroads, by the aid of. shrewd law
yers and biased courts,, could, nullify,
any attempt to check their extortions;
the people at least still retained the
power to tax or thought they did r
and the sentiment grew that the rail
roads were not only taking more thau
they ought In freight rates (which
seemingly could not be prevented),
but they were paying less than their
share toward support of government
(which apparently could be remedied)
There is much yet to learn regard
ing the question of railroad taxation,
and it will never be settled satisfac
torily until public ownership and op
eration is accomplished. Then there
will, be neither taxation of the rail
roads nor railroad taxation of the peo-
pie. But a bridge must be reached be
. fore it is crossed, and the question of
railroad taxation will be a live one
for years to come.
For a good many years there have
been mutterings of discontent regard
ing the action of the various boards of
equalization in assessing the railroads,
but never before the present year was
tre matter so thoroughly discussed and
so well understood. It is no discourt
esy to former boards to say that they
did not understand the matter as well
as it is understood now, and they
should be given credit for doing the
best they could according to the lights
they had. It is idle to contend that
public servants, selected from the
ranks of the people, will be greatly
wiser than the average of the people
from whose ranks they were taken.
The whole question of taxation is yet
in i process of evolution, and clearer
light is just beginning to break upon
its most difficult phase the taxation
of quasi-public corporations. Of what
ever condemnation and censure which
may be meted out to the various
boards of equalization, the present
board should have the lion's share.
Never before was the matter so well
understood and so ably presented.
"Pripr to making the railroad assess
ment for 1902, Michael F. Harrington
made an able presentation of the mat
ter in writing to the board, and Ed
ward Rosewater and Edward W. Sim
eral appeared before the board and ar
gued the question orally. Mr. Har
rington's brief was filed away with
out comment, and Messrs. Rosewater
and Simeral were subjected to ridi
cule and scorn, and the board insulted
the intelligence of the people of Ne
braska by making a ridiculously slight
raise in the total assessed valuation.
This aroused the ire of Mr. Rose
water, and on the 20th of May, at bis
instance, Mr. Simeral filed in the office
of the clerk of the supreme court an
affidavit and motion for a writ of
mandamus, setting up the facts and
praying for a writ to compel the board
to reconvene and reassess the ra!l
roads, etc., determining the fair value
of the "property Including franchises."
An alternative writ was issued at
once, but Governor Savage, Treasurer
Stuefer, and Auditor Weston had
"folded their tents like the Arab" ana
left the city, so that service and ofll-
HEADACHE
V
At el drug stores.
25 Dmms 25s.
cer's return were not made and filed
until May 28.
On that day the board made answer,
the essential averments, stripped of
legal verdiage, being as follows:
"Respondents, further answering
aver that . . . Edward Rosewater made
demand . . . that the said board assess,
in addition to the tangible property of
said . . . companies, which had by said
board already been assessed, the fran
chises of said corporations, which the
respondents v . . refused to do for the
reason that under , the statutes ... it
doubted its right to do so.
PRAYER. ,
"Wherefore, the respondents ask
this honorable court to place a con
struction upon : the constitutional pro
vision above quoted and the sections
of the statute herein cited and instruct
the respondents as such board wheth
er or not it has power . . . to value and
assess the franchises of the corpora
tions named In the affidavit of relator,
and if so, to announce some equitable
rule by which, the value of such fran
chises may be ascertained."
This answer was . signed ' by Frank
N. Prout, attorney general, and was
verified and sworn,to by Charles Wes
ton, auditor of public accounts, one of
the members of the. board and really
the moving spirit against any substan
tial increase in the assessment. Gov
ernor Savage had. previously, given out
an Interview in which he favored a
considerable increase, but Treasurer
Stuefer and Auditor. Weston hald to
gether against him and controlled the
board's action. ;
On the 3rd day of June Michael F.
Harrington asked and obtained leave
of court to file a notice and application
to intervene In the case as one of the
relators along. with. -Rosewater and
the Bee Building Company. -
Things began to look blue for tho
railroad tax commissioners and attor
neys, whose tenure of office depends
upon their ability to help rake in large
dividends for theeastern stockhold
ers and bondholders. The board had
said flat-footedly, "We did not assess
the franchises." If the case should go
to trial upon the issues as made up
by the motion and answer, there was
nothing for the court to do but to an
nounce an equitable rule for deter
mining the franchise values (according
to the constitution, statutes and prior
decisions) and direct the board to re
convene and reassess. That would
mean an addition of anywhere from
ten to twenty millions on the railroad
assessment, for, the railroad franchises
alone in Nebraska under present con
ditions are , worth above the hundred
million mark. A raise of ten millions
in the railroad assessment would be
the signal for a number of really es
timable gentlemen tax commission
ers and railroad attorneys to lose
their jobs. .
So on the 6th of June a delegation
of railroad attorneys visited the capi
tol, a hurried star chamber session
of the board was called, and after two
hours of discussion a new answer,
previously prepared with great skill
by the railroad attorneys, was verified
and sworn to by Auditor Weston and
filed in the office of the clerk of the
supreme court.-, This amended answer
is intentionally long and wearisome to
read. It sounds like-the crafty, guard-;
ed utterances rof a t skilled politician
who uses a great many words to say
actually nothing, yet to leave the im
pression that something is said. The
vital points are:
"And said board did then and there
enter upon consideration of the value
of the properties . . and thereafter .'. .
did assess the value of all the proper
ties of the said railroad . , . companies
In the manner provided by law, . . .
That in arriving at the valuation . .
said board considered that said com
panies . . . were actually engaged in
using and operating all their proper
ties in the performance Of the duties
incumbent upon them ... by law to
perform . . . and each of the proper
ties . . . was valued as a unit for said
purposes of assessment and taxation.
Said respondents did not believe . .
the board had authority to value and
assess extra corporate franchises . . .
separately and apart from their tan
gible property.
PRAYER.
"Wherefore, these respondents sub
mit to thisxhonorable court that said
state board of equalization performed
its full duty in the hearing, considera
tion and assessment of the different
properties of the several companies,
railroad, telegraph, and sleeping car,
doing business in the state of Nebras
ka." Every lawyer will readily under
stand the purpose of the amended an
swer, but some ? explanation may be
helpful to the layman. Mandamus
may be resorted to only for the pur
pose of compelling action, but It is
not a proceeding to correct errors. The
court could properly require the board
tc act, but it could not control the act.
In other words, the court could say
to the board, You must assess the
property and franchises of the rail
road, telegraph and sleeping car cor
porations; but It could not say, You
must assess the railroads ten millions,
twenty .millions, fifty millions. Tin
act of making the assessment, deter
mining the amount,-is Judicial in it
nature and no court can properly di
rect what 'the judgment shall be. The
supreme court has no power .to make
railroad assessments, and unless the
state board of equalization should fail
or refuse to act at all, or should act
fraudulently, the. writ must be refused.
So long as there is no overt act 'nt
fra':d or corruption, on the part of the
board, the people have no relief by re
sorting to the courts the only relief
can come through a board composed of
officers pledged specifically as to what
they will do, and men who can be de
pended upon to carry out their prom
ins. .';. i
The pleadings of relators do In fact
charge fraud ; in making the assess
ment, but the burden of proof rest9
upon them to prove it a very difficult
thing to do. It is pretty generally
believed that the members of ": the
board wear the corporation collar and
that they purposely made the assess
ment just as low as they dared but
to prove an overt act of fraud com
mitted by them will be practically im
possible, and that means that the su
preme court will have no other alter
native than, to deny the peremptory
writ, f Under the original answer the
board admitted that it did not do cer
tain, things and " asked . Instructions
from the court; but under the amend
ed answer the hoard claims ft did ef-
The Historic Value of the Wild West
; If we could see before us living rep
resentatives of the soldiers who fol
lowed Alexander and Hannibal, or
groups of the brass armored, and hel
meted legions which fought for the
Roman empire under the Caesars,
what vivid impression of those an
cient times would be obtained.; If we
c6uld see squadrons of the dragoons
who carried the sabre for Napoleon
the Great at Wagram, Lodi, Austerlitz,
the Pyramids or Waterloo, how much
better we would understand that per
iod of history. If we could have horse
men who wore the British uniform as
Scots Greys hussars and heavy dra
goons on the Spanish and Portuguese
Peninsula under Wellington and help
ed to finally overthrow the Corsican,
how Interesting it would be now on the
threshold of the 20th century. Even
if the men who followed Marion or
Tarlton during the American revolu
tion could come back to life and show
what kind of soldiers they were, ev
ery body would want to see them.
These thoughts arise on reading the
announcement made in our advertis
ing columns that the Wild West 13
coming. Col. Cody is still able to
show us genuine specimens of the sav
age Indian- races which so long re
sisted the advance of the, white man
into the interior of this continent and
what was once known as the Far West.
He still has real western cowboys,
teal cavalry from many European
countries, all veterans of recent and
present wars. But one day not very
far. distant these Indians, cowboys and
European and Asiatic veterans will
have joined all the other - warriors
whose deeds emblazon the pages of
history. Then the Wild West will
disappear foi its realism and truth are
its greatest charms. Go now while you
may, It will be here on August 1.
erything required by law, and if that
be true, the court can do nothing but
deny the writ, no matter how outrag
eous the assessment may be, unless
corruption or fraud can be proven.
The five briefs before' me are In
teresting reading. A few quotations
from them might throw further light
oti the subject. I shall take them up
in the order of filing, beginning with
the brief for relators. The authorship
of this brief is not certain, but I sus
pect John D. Howe contributed a num
ber of the more striking passages. A
man who would voluntarily resign . a
railroad attorneyship because of the
underhanded practices required of him
is certainly competent to write en
tertainingly and instructively on th?
subject. The brief begins with a short
statement of the case and takes up the
constitutional and statutory provi
sions pertinent thereto. Citations are,
made to State Railroad Tax Cases,
92 U. S., 575, 605; Pittsburg C. C. &
St. L. R. R. Co. vs. Backus, 154 U. S.,
439 (see 133 Ind. 625); Franklin Coun
ty vs. Railroad Co., 12 Lea., 521, 539:
Railway Co. vs. Wright, 151 U. S. 470,
479; Delaware Tax Case, 18 Wall.; 206 r
Erie Railway Co. vs. Pennsylvania, 21
Wall., 492; W. U. Tel. Co. vs. Massa
chusetts, 125 U. S., 530; Pullman Pal-J
ace Car Co.' vs. Pennsylvania, 141 Uj
S.; 18; Maine vs. Grand Trunk Rail
way Co., 142 U. S., 217; Railroad Co
vs. Gibbes, 142 U. S., 386; Sanford vs.
Poe, 165 U. S., 149; and many others.1
Several propositions are well sus
tained by law and precedent. The Ne
braska constitution requires the tax
ation of property and franchises. The
value of a railroad's property and
franchises "are all represented by the
value of its bonded debt and the shares
of its capital'tock." Where the road
of a corporation runs through differ
ent states, a tax upon the franchise is
properly apportioned by taking thv
whole value of the franchise, and the
iength of the road within each state,
as the basis of taxation; in other
words, if forty per cent of the mileage
of a given road is in Nebraska, then
Nebraska is entitled to tax forty per
cent of that road's property and fran
chises. The tangible property of two
express companies in Ohio was return
ed for assessment in the sum of $51,
868 In the year 1895; but the amount
realized by these companies from their
business in Ohio that year was $633,
965. Commenting on this fact, in the
lawsuit which arose between the tax
ing power and the companies, the
judge said:
"Considered as , distinct subjects of
taxation, a horse is, indeed, a horse;
a wagon, a wagon; a safe, a safe; a
pouch, a pouch. But how is it that
$23,430 worth of horses, wagons, safes,
and pouches produce $275,446 in
single year? Or $28,438 worth pro
duces $358,519? The answer is ob
vious." . '. , j
The second part of this brief treats
of the ' "Two Answers" heretofore
mentioned "The first answer or re
turn," says the writer of the brief,
"was a fair, honest, and manly one.
It told the truth. It did not please the
railroads. - Upon their demand another
was made. The railroads, in a suit ;o
which they were not parties, prepared
a second answer. They usurped the
state board of equalization. In the
face of this shameless performance,
who can doubt that it is time for open
revolt: by the people. . . Truth is
mighty and will prevail. The rail
roads have overleaped themselves.
Ihey have made the hoard turn a dou
ble Bummorset In the very face of all
the people. Whom the gods would de stroy
they first make mad."
Recounting the history of the or
ganization of . domestic railroad cor
porations mere construction , compa
nies which afterward leased to the
Burlington for 999 years, the brief con
tinues, "The Burlington (for tax pur
poses) causes the O. & S; W., and still
other 'underlying companies' to report
in their own names to the auditor, in
this way,- for tax, purposes, breaking
up their system into a dozen or mow
properties. And yet these underlying
companies, in the main, are mere
ghosts they have no rolling stock no
earnings, no expense account, no divi
dends, no souls. Of course the fran
chises of these concerns are dormant"
for. tax purposes they do not exist.
All the essence of them has been ab
sorbed into the later franchises that,
In fact, do operate these properties."
"These great quasi-public 1 corpora
tions," the brief goes on, "some of
them operated in every state ' in the
union, are composed, first, of a body of
stockholders scattered all over the
union; second, a directory that sits In
places far distant from us; neither "61
these bodies has part or lot with the
million of people composing this com
monwealth except insofar as they may
exact tribute from us may farm the
people; third, officers, including pres
idents, general managers, and also tax
agents. We rlook in vain for the seat
of responsibility. These officers and
agents are put In the field to operate
these plants; they are , under bond;
they wear a yoke; their positions,
their salaries, and their expectations,
all depend upon their making these
properties successful in earning capac
ity,; the question is never asked by tho
owners How have they done it? Have
they been just or unjust? Have they,
dealt fairly with the public or prac
ticed extortion upon it? Have the
earnings been honestly or dishonestly
obtained? Only this is asked: Are
good dividends forthcoming? If so,
these officers are faithful and efficient;
if not, not So these officers are put
in a hole, and, in many cases, what
they do in national, state, county, and
city affairs is often oppressive, unjust,
extortionate and even dishonest. The
fault is somewhere in the system.
Where is the responsibility? We
must be moderate in our condemna
tion of these officials, since they ara
the victims of the system and often
really deserve sympathy, for they are
usually honorable men, and would un
der no circumstances do a wrong in
their personal affairs. We must awak
en to the fact that the people canr.ot
expect them to safeguard or look af
ter the people's interests. ' The people
must look after their own. Under
certain circumstances, the worm wili
turn. Would that the people had
the spunk of the worm. The people
must stop electing to office the maa
named by the "railroads."
The briefs of the "amici" are In the
main , dignified, well written docu
ments containing a fund of valuable
information, colored no doubt as high
ly as possible with' "railroad red."
One or two of the "amici," however,
could not resist the Inclination to
"roast". Relator Rosewater. "The
comment of attorneys for the relator,"
says "Amicus" 'John N. Baldwin (he
who "discovered" Mickey), "is con
temptible and should receive the con
demnation of this court That part of
the brief . . . is a harangue and appeal
to passion and prejudice. It is en
tirely lacking! in argument and mada
up wholly of Vituperation and vilifl -cation.
, . . It sbunds like the talk of
agitators, and not the argument of
lawyers. . It is without fact, without
even the raw ' material of a thought,
without argument, and without sense,
and without defense." "Counsel : for
relator," say "Amici" Manderson and
Kelby, "hysterically proclaim that tho
railroads prepared the second answer,
and thereby 'usurped the board of
equalization.' It is evident that coun
sel do not like the ; amended : answer
any better than they say the railroads
liked the first answer ( ?) for they in
dulge in the cry, that the preparation
and filing of then amended return was
such a 1 shameful performance as to
justify-the view! that the time is ripe
for open revolt jby the people. The
condition of mind vwhlch gives vent to
thoughts such, as i these perhaps de
serves commiseration, but certainly
demands' condemnation. Such charac
terizations are the ' creations of obli
quity and prejudice and are the mat
terings of hate and the cry of the dis
appointed agitator. If it was not for
the michief created by such unbridled
venom and the discredit brought upon
our highest and most august tribunal
it would be laughable to see the im4
potent rage that vents its spleen by
such choice expressions as 'caricat
ures 'usurpers, 'cadaver, 'stiff,
'moonlight on a shovel.' A variety
loving and long suffering public may
perhaps find a little consolation that
these choice expletives have replaced
the old favorites of the relator, 'cor
porate cormorants' and 'venal vam
pires.' " "Part of this brief for re
lators," says c "Amacus" Ransom,
"reads like unto signed editorials;
part reminds one of the inflamed fan
cies which produced Carlyle's French
revolution; while still another part
brings to mind interviews with that
eminent; but unfortunate individual
'Citizen Train'
Aside from the citations, both the
Burlington and the Union Pacific briefs
are devoted largely to statistical In
formation with which the people are
by this time tolerably familiar, thanks
to .those bulletins "Issued under au
thority Of the railroads of Nebraska'
The close similarity is so marked as
to cause one to Inquire whether the
men who wrote the bulletins did not
also write the briefs, or Vice versa.
Proceeding on the assumption that all
other property in Nebraska is assessed
upon 10 per cent of its true value,
"Amici" Manderson and Kelby fur
nish some comprehensive schedules to
show that the Burlington assessment
Is scandalously high anywhere from
$300 to $1,700 per mile too high. Con
siderable stress is laid on the. state
ment "that the industrial worth of the
capital stock of any corporation can
rarely ever be determined by market
quotations, which latter are unstable
as water. It is par today, minus ox
plus tomorrow, ; depending upon tli3
Influences which affect it. The market
quotation is a composite of commer
cial rivalry, strategy, power, ambition,
envy, speculation and ruin it means
nothing." The fact is that these same
factors affect? the market price of
wheat and corn and other things sold
on 'change, Burlington stock never
exceeded 192 when sold in small quan
tities, yet the stockholders were given
200 for it when the whole amount was
sold at once. The. Choctaw, Oklahoma
& Gulf railroad which was sold recent
ly commanded a higher figure for nil
Its stock than any portion of it; ever
reached on the stock exchange. Th
water-like instability errs, if at all, or.
the side of .conservatism, except in
rare instances like : the Northern Pa
cific squeeze in 1901. But an average
for the year preceding Is the fairest
possible Index to the value of rail
road properties and franchises. Capi
talization of net earnings is not so
fair because of the arbitrary assump
tion that a certain rate is' enough -it
is pitting the judgment of a few as Vi
what constitutes. a fair return against
the combined judgment of many thou
sands who buy and sell railroad stock3
and securities. "The value which prop
erty bears in - the market? said ; Mr.
Justice Brewer, in Adams Express Co.
vs. (Ohio, 166 Xk 185, 220, . "the
Annual
July Ckarin
The Greatest of all Lincoln Sales The Semi-Annual event every shrewd buyer awaits. The
money saving sale of the summer season. The unalterable folicy of this house to carry no goods from
one Beason to another forces every department manager to close out every vestage of summer merchan
dise. No matter what the cost; no matter what the lpss. AIL HOT WBATIIEIt GOODS MUST GO.
75,000 Yards Wash Dress Goods
At 30c, 40c and 50c on the $1.00
Absolutely the greatest wash dress goods clearance in; our history. Phenomenally priced.
Choice of all fine wash goods worth JJ 7n
to $1.00 per yd.... 2u
Choice of all fine wash, goods worth Q f
50 to 65c per yard. . . . Ot'U
Choice of all fine wash goods worth I "7 1
to 35c per yard.. ............... 2
Choice of all fine wash goods worth I En
: 25 and 30c....... flU
Choice of all fine wash goods worth I fln
15 and 20c... . ...i (JU
Choice of all fine wash goods worth r f
to 12Jcper yd.. ....QC
. ' -
Lincoln's Progressive Store, Lincoln; Nebraska.
Write for Illustrated Prospectus of goods on Special Sale. Mailed free on request. Mention this paper.
amount for, which its stock can ha
bought and sold, is the real value.
Business men do not pay cash for
property in moonshine and dreamland.
They buy and pay for that which is of
value in its power to produce income,
or for purposes of sale."
'Amicus" Ransom's brief on ' be
half of the Pullman Palace Car Com
pany contains an able discussion of the
law regarding the assessment of sleep
ing and dining car companies, -lust
why these companies should be as
sessed as they are, while the express
companies escape by being assessed
locally on a few old horses, wagons,
safes, and pouches, is one of the things
no pop can find out; but one of the
things the next legislature must find
out if .it does its full duty.
From a legal and argumentative
standpoint, "Amicus" Ben White's
brief is perhaps the ablest in the
bunch. He indulges in no biting sar
casm, or statistical tables, but con
tents himself with a philosophic il
(perhaps at times sophistical) discus
sion of the subject. One of his argu
ments will certainly give the social
ists something .to say anent the ex
ploitation of labort "To the extent
that interest payments are made upon
bonds," says Mr. White, "dividends de
clared upon stocks, or net earnings are
derived from the operation of the prop
ertyit must be remembered that ful
ly one-half thereof is contributed by
labor.. Hence, if assessments of val
ue are to be placed upon the aggre
gate worth of the securities, or nec
earnings are to be capitalized, it 1
clear that only one-half of the result
thus obtained can be based upon tho
value of the property, and the balance
results from the labor employed. When
these values are used, therefore, for
the purposes of assessment and taxa
tion, the companies are compelled to
pay taxes not only upon property used
in their business, but upon the labor
employed, thus doing violence to the
constitutional requirement that taxes
shall be derived from a property valu
ation." There is N a way by which
the railroads could escape paying taxes
upon the results obtained from the la
bor of their employes they might pay
higher wages. . ,
One of Mr. White's arguments de
serves more than passing notice. It is
the argument that if values are ascst
tained by reference to the value c!
stocks and bonds or net earnings, that
no reduction can be made in freight
rates, and the further fallacy that the
rate-making basis and the taxing basis
slould be the same.
Primarily the private ownership of
a public highway is indefensible from
an economic standpoint, but if per
mitted, the owner is entitled to a fair
return not upon the value of his high
way, but upon his investment.' He is
entitled to sufficient revenue to keep
the plant in as, good condition as when
first constructed, fair interest on the
capital he has invested and nothing
more. The farmer, engaged in a busi
ness purely private in its nature, is
not interfered with, because In his
business competition rules and pre
vents extortion, and there is no irre
sistible v tendency to consolidation,
combination and monopoly. He is not
restricted by law as to what he shall
charge for his products or services.
He has no guaranty from the courts
that he is entitled to a fair or even
any, return upon his investment.
If it were possible to so nicely, ad
just all' railroad charges that this fair
return could always be depended upon,
the value of any given railroad would
coincide with the value invested in It;
but such rates and such volume of bus
iness and such business management
as result in greater operating expenses
than gross returns, invariably result
in making the railroad less valuable
than the actual investmentajad con
versely when the . ratf-" jine of
business and mana . produce
such gross returns tha Alter the oper
ating expenses are paid, large net
earnings result, the value of that rail
road is much greater than the value
invested in.lt. Here is where the val
uable franchise comes In. If the net
returns are such that only a : fair in
terest Is received upon the actual in
vestment, the franchise, although es
sential to operating the road, is val
ueless it produces no income. But
whenever the net returns constitute
more than the normal, current inters
est rate, then' the franchise ? acquires
value it produces income. Under
properly adjusted rates there could be
no value to the franchise. H And if It be
valuable, it Is because the road has
been charging extortionate rates. It
is no part of the investment It was
donated by Uie people, through the in
strumentality of government, and the
owners of it have neither legal nor
ethical right to use It as a basis for
fixing ; rates.; Rate-making -must :. be
done on the basis of the actual In
vestment. -
But taxation is quite another mat
ter. Taxes are levied upon values in
the present, hot upon investment. The
farmer who pays taxes on a $50-an-acre
farm may have invested all told
less than $3,000 In his quarter sec
tion. The price of a bushel of wheat
grown on fifty dollar land will.be no
more In Chicago or New York than
that of a bushel grown on ten dollar
land unless the quality is superior.
The basis of taxation must always be
the present value of the property (and
this term includes franchises); but the
basis of rate-making can be nothing
else T than the actual investment, al
lowing sufficient to make up for de
preciation of the plant.
Whatever may be the outcome ot
this suitthe people of Nebraska are
certain to gain by it: ; They are even
now. receiving a liberal education on
account of it. And in the future If
they do not secure their rights, and
permit themselves to be robbed at
both ends of the line, they have only
themselves to blame. They certainly
cannot plead ignorance of the subject,
i CHARLES Q. DE FRANCE.
In July and January
. Last week appeared in The Inde
pendent a large ad. announcing the
July semi-annual clearing sale of Fred
Schmidt & Bro. In January and July
of each year the Schmidts have a sate
that represents great and liberal dis
counts from their regular prices. As
they have the largest trade and buy
more goods and in larger quantities
than any store of Its class in the city
it is hot surprising that they are able
tov offer the remarkable bargains they
do. It will pay every economical buy
er to read Mr. Fred Schmidt's adver
tisements carefully and purchase while
the sale is on any goods that may be
needed now or in the near future. The
quality of the goods is always the most
durable and best to be had. They do
not handle any of the inferior grades
of stock. Read the ad. and buy what
ever you may need before the sale
closes.:, ; -.''; .
WHAT CONGRESS HAS DONE
Oar Correspondent lkea m Brief Mention
of What Hm Been Accomplished
Washington, D. C., July 7, 1902.
(Special Correspondence.) A brief re
sume of the work done during the ses
sion of congress just closing Is Inter
esting as, In a considerable degree,
sustaining the contention of General
Qrosvenor, the republican political fa
bleist, that "the democrats seem to b.
running things."
The Philippine tariff bill was the
first measure of Importance - consid
ered and the republicans won this
fight, although, the bill was so pernic
ious in its provisions that, with 40 ma
jority in-the house, they were only
able to pass it by 10 majority.
The next fight came on over the
oleomargarine bill, and although this
was fought viciously by leading repubr
licans at the Instance of the packing
nouses, it was passed and suitable pro
tection thus afforded to the butter
product of the farmers. Mr. Shallen
berger and his three fusion colleagues
from Nebraska were prominent in sup
port of this measure, Mr. Shallen
berger making one of the leading
speeches In ; its favor,
v The next -fight was upon the isth
mian canal question and was between
the actual supporters of such legisla
tion and for the Nicaragua route, and
those who were really opposed to any
such legislation led by Mr. Cannon,
but who professed to favor the Panama
route, doing this at the Instance of
the railroads to defeat the whole mat
ter.. The fate of the bill was decided
by the democrats, among whom were
Shallenberger and his three fusion col
leagues, voting solidly for the bill and
passing it with the help of some re
publicans who had not surrendered
themselves completely to the transpor
tation corporations.
The next: fight was on the Self ridge
I war claims steal. A bill passed the y
house appropriating about 300,000. It
the senate some $2,000,000 of 40-year-old
claims, which had been rejected by
government inspectors, was added
thereto and attempted to be forced
through in a conference report. TLa
democrats fought the report in solid
phalanx and, with the aid of a few ra
publlcans, defeated it, thus saving th
$2,000,000 to the taxpayers by pre
venting this filching of the treasury.
Next came the great fight on Cuban
reciprocity when the united democrats
overthrew the republican leadership
for the first time in eight years, and
with the aid of a few republicans n.t
only passed 'the reciprocity bill, but
struck a body blow at the sugar trust
at the same time by striking off the
differential duty on sugar.
" Next came the Chinese exclusion bill
when the democrats again solidly fav
ored the enactment of a strict law,
such as was asked for by the labor or
ganizations of the country, and passed
it by the aid of Pacific coast republi
cans. The republican senate rejected
it and re-enacted the old Geary law.
which has been proven inadequate ia
its provisions. -
Now comes on the naval appropria
tion bill and again the democrats were
united. By the assistance of a dozen
republicans, the bill was passed with
an amendment providing for the con
struction of three of the six new bat
tleships in government navy yards, In
stead of farming them all out by pri
vate contract to those who would fur
nish republican campaign funds in re
turn, r
Next came the Hill bill, the enter
ing wedge for the Fowler bill, and tho
purpose of which is so nefarious that
the republicans did not dare pass It
this sessionbut will wait until next
winter and crowd it through aloup;
with the ship subsidy steal. Mr. Shii
lenberger made a speech In opposition
thereto which is a, valuable contribu
tion to the literature on the money
question.
The irrigation bill came next an I
the democrats won another signal vic
tory. The bill was fought by every re
publican of prominence in the housp.
and was passed over their protest. Th
Nebraska fusionists were prominent
in this fight and did Splendid work
for the passage of the measure. Sir.
Shallenberger was a pioneer in tha
movement, led the fight to amend the
original bill and provide for national
controland has achieved national re
nown by his speech in closing the de
bate for the measure. Newspapers all
over the great west commend his effort
In high terms and requests for copies
of the speech have come from all over
the country. Through Shallenberger'
work, the Fifth Nebraska congres
sional district will come in for a large
share of the funds to be expended for
irrigation purposes.
This is the, only general public ap
propriation ever secured for the Fifth
district and will amount to a number
of thousand dollars every year to b
used in making productive the arH
lands. of the district. Taken In con
nection with the $125,000 appropria
tion for a public building at Hastings
secured by Mr. Shallenberger, he has
the distinction of being. the only man
who ever represented the district la
congress to secure any allotment cf
public funds for public purposes.
A genuine good feeling prevails
among democrats and fusionists in
congress over the accomplishment of
fusion in Nebraska and the splendid
state and congressional nominees al
ready named. H. W. RISLEY.
GREAT HAY RANCH
I have for sale 2.360 acres of lanl.
Two-thirds of this is the very best of
hay land; part of It farm land and bal
ance fine pasture and adjoins 5.000
acres of free range. Purchaser can
have this year's hay crop to winter-his
cattle if taken quick. Price $18 an
acre. No better ranch in Nebraska.
Running water and pure well water.
J. A. DONOHOE,
O'Neill, Neb.
CHEAP CATTLE RANCH
I have for sale 320 acres of deeded
hay land,' 160 acres of homestead with
frame house, corrals, sheds, ten thou
sand acres free range fenced; well
watered;, two wind mills and tanks.
Price $6,500 if taken quick. ' Imme
diate possession given. :
J. A. DONOHOE.
, O'Neill, Neb. -