Omaha daily bee. (Omaha [Neb.]) 187?-1922, July 15, 1902, Page 7, Image 7
THE OMAHA DAILY BEE: TUESDAY, JULY 15, 1902. '. -LJ.3 RAILROAD TAXATION IN COURT Arguments of Counsel on the Issues Raised in the Mandamus Case Before Nebraska Supreme Court-- v. Argument by E. W. Slmeral for th re lator : If-rour honors plrut, Id presenting to the court the argument, to far I tm concerned, I desire briefly to go over tome of the eallent point In tbe testimony and I will aleo present whit the relators be lieve to be the law governing this case. In the first place, I might say that when the brief of the relators was In the bands of the printer, or at least part of It, and almost all of It had been written, we were met by the second answer of the respondents, which they say changes ma. terlally the lsauea of fact to be determined In this case. The only question, which was one of law, as the case originally stood, was whether or not under section 19 and 40 of the revenue law the words "railroad property" Included everything pertaining to or belonging to railroad, be that property physical, tangible. Intangible, corporate stocks.' bonds or franchises. Therefore, we devoted our attention so far as the law was concerned to showing that under sections 39 and 40 It was the duty of the board to value the railroad property as a unit to value It In all of Its factors, tsklng Into consideration not alone the physical property, but also the In- '' tangible property and the franchise. That ' a railroad must be taxed as a unit Is Virtually conceded by the briefs of coun sel for the respondents. They now raise, ' and I believe it Is a question of law, the question whether or not the franchise can be taxed separate and apart from the tangible property. As I said In our first brief and in the answer, the question was whether or not under our law railroad property Inclnded the franchise. It now comes down to the question whether or not the franchise Is such a piece of prop erty pertaining to the railroad that If It Is v omitted the court will require the board to ' reconvene and assess It. I care not what counsel may call this In tangible property this franchise. By some , decisions it le called intangible property , a tax upon intangible property. In other It Is designated as a tax upon the fran- ' chlse. . Bo that now we propose to show by . the authorities that it Is the duty of the board to oaseB the franchise as such. In their second answer to this writ respon- l dent ay that all the property was assessed by the board as a unit as a going concern . but we find by the testimony of Mr. Wes ton, the auditor, that they did not consider the frsnchlae at all. We claim that a fran .' chUe is as much a separate and distinct . jilece of property, I as much of an entity, although intangible, as would be the depota i and terminal facilities, and bad this board ,. la Its session in May last eliminated en ' tlrely all the terminal facilities of these rsllrosds, all the property that they owned r in Douglas county, and we bad shown it to be worth millions of dollars, undoubtedly the court would have ordered them to re '. convene and asses that property. So here .. taday we aay that they have omitted the xnost valuable portion of this railroad prop arty throughout this state, that by falling to assess the franchise they havo omitted the lire of the railroad, it very existence. It very power, and they should therefore be o.dered to reconvene and assess that '' property eallrd a franchise. Our constitution provide In so many word that the property and franchise of corporations (hall be assessed. Another .( rrovUlon of the constitution, and in the A;lim actJole,- provides that rto property hill be exempt from taxation; therefore franchises must be assessed. A to wh'ther or not a franchise I a separate and distinct piece of property which Is assess- , able I shall first refer to the case of the Southern Railroad company in Kentucky agalnat Oust O. Coulter, decided June 10 ' of this year- I do not auppose It ha been reported in the Southwestern Reporter, but I tent to the clerk of the court of appeals of Kentucky and have here a manuscript copy of the opinion. I might say before reed ng from tbl opinion that In Kentucky they have two separate boards, one of the board assessing tbe physical or tangible property of the railroads and other corpor ation and the other, which meet there- " after, assesses the franchises of these vari ous railroads, deducting from the total value of the roads the amount of the as sessment made by the previous board, . thereby getting at the value of the fran- ehts. This opinion was delivered by Chief Justice Guffy and this decision was baaed Upon taxes which had been assessed for four year back, from 1896 to 1900, so that the " tnard of assessor in that stats went back and assessed the railroads for that which they bad not been assessed for prevloua "- year. When the railroad said, "Why, you have no business to assess us for past year," their answer 'Was, "You have had the value of the money and got Interest on ' It and saw you have to pay th taxes." If - th board here ahould do that I think th state debt might be paid oS. Among other thing this court says: There Is soma evidence Introduced by ap pellants (that 1 the railroad companies) attempting to show that they did not take Into consideration the value of the fran .i. chlse. but we are not inclined to th opin ion that th testimony sufficiently show v that th commlaelonere did In fact fix any .i larger value upon the roads than If they Jiaa not tnougnt or tne franchise. How applicable that 1 to tbl case and , . th testimony of Mr. Weston. Born comment has been made In regard ' to the apportionment of the tax In propor tion to tne length of the road or line In the 1 county. However, It Is manifest that th Intention of the leKlslatur was that this tax should be certified to the aubdl vision In proportion to ths mileage without any regard to any other question, snd such rule Is manifestly eaultable. for. while It Is true that th tangible property of the raJlroads differ In estimate, yet the franchise doea not. For Instance take the tanathle nroD- rty of the road In Franklin, a dlatance of ten mile of th track toward Louisville, the totdl value of the tanalb e orooertv th total value of th tangible property would he worth much more than the ten mllea of the tangible property further on, - but the franchise of the last named ten rntlta Is worth ss much as the franchise of the first named ten miles, becajse the whole of the track I necessary to make the franchise of any appreciable value. Hence It follow that the manner of certi fying the value of the franchise as re quired by the statute la Just and reason able. I refer to that for the purpose of show log that after that decision they assessed th franchise as something separate and , apart from th tangible property. But that la not th only decision upon th question. I might cite a great many, but I have taken but on or two more. I now refer to tb cas of Porter against Rock Island St. Louis Railroad Company, 78 III., tii, whoa syllabus covers ths whol question X am now d'scusslng: A franchise of a corporation 1 property and as such I liable to taxation aa well as the capital stock, and tangible property of th corporation. Th franchise mev also, be condemned for public uaa under the right of eminent domain upon due com- Sensatlon being made. The fact that It la ifflcult to tlx a true value upon a fran chise furnishes no objection to the rlttht of the state to tax It, aa no other specie of property can escape taxation on account of the difficulty of ascertaining lta value. Ab solut accuracy In the asrsmnt of prop erty I not essential to the validity of taxea baked upon It. Than the suprem court of tb United Etste. la th cass of th Csntral Pacing Railroad Company against Ths People of th SUU of California, cited la 18 8up. Court Reporter I read from page T7. Thia waa a cas in which th state of California through Its board of assessors had assessed tb franchise of th Southern Paclflo Rall roa4 company. Th company claimed that. being a government railroad, chartered by the general government, th frsnchlae wa that of th United State government and therefore could not be assessed by the state, but the stste had also granted right through their general law to the Southern raelfle Railroad company, and th supreme court held that it wa the state franchise which was being assessed and not the fed eral franchise. This opinion wa banded down by Chief Justice Fuller. I read a few sentences: The question here Is not a question of the value of the state franchise, but whether that franchise existed, for If, In 1W7. plaintiff In error possessed any sub sisting rights or privileges, otherwise called franchise, derived from the state, then they were taxable, and the extent of their value was to be determined by the board of equalisation. So from that decision and from many other I might cite to your honor. I be lieve it to be a truism that a franchise is to b aasessed a property, a much as the tie or the locomotive or th terminal facilities of th railroad. Anothor rule of law, and constitutional law, too, which per tain to the taxing not only of railroad property but of all other property, Is that it must be equal and uniform and that equality must extend to every part and every division of th state; it must be equal as to its valuation and uniform as to the amount of tax placed upon It. It two per sons own a thousand dollars worth of prop erty each and one 1 taxed at one-seventh and the other at one-tenth, that is not equality and uniformity. They must both be taxed the same and for the same value of property. It has been claimed by th briefs and will undoubtedly be urged In argument by counsel, that all they are asking and all that they are seeking 1 absolute uniformity In taxation so far a the railroad are concerned, with other property n th state, of equal value. Now, there 1 a great difference between the manner of obtaining these values look ing at It as a whole or as a unit. Here Is the assessment In this state of 1320,000.000 or $326,000,000 worth of railroad properties. It la not all scattered over the state in piece, separate and distinct, a are the farms, th horse or tho cattle. It Is not owned by th million of people within th commonwealth, but It I owned by a few companlea, corporation held together by the same power created for the very am purpose and that 1 what make up th large amount of value and that I what we were asking this board to assess this franchise this homogeneous property, sot the property scattered, a that of indi vidual. And when they seek to say that they want taxes uniform and equitable, then w say. "What other property in this commonwealth can you liken to yours T" There 1 and I presume there always will be a great disagreement with regard to th manner of arriving at valuation. No tax, I presume, that th human mind can conceive of will be absolutely equitable. It cannot b to individual. It cannot be to corporation. AH we ask Is that they bear their Jut proportion of the burden of government No more and no less. They claim, I believe, that they pay 18.40 per cent of the taxea of this state. Grant, for me sax or argument, that that ba true, and yet, If they have 25 per cent or one fourth of th property in this atat. con stituted as It 1 of a homogeneous mas, ought they hot to pay accordingly T It Is asserted by these respondent that the board assessed th valu of th fran chise this year. I believe I am within the bounds of truth when I cay that never be- Ur, me nistory of , the stste of Ne braska has this question of franchise ever been brought up before the State Board of Equalisation. It wa. an original que. Hon. so far a thl. board wa concerned, and i . u e nnaT Tnelr who' mouis i. Why. the other boards did "not." Llk Adam, they .y. "Oh. Eve gave me the the "1. 1 The' almot that were aasessed ten or twelve years ago. If anything, they have lowered J?n Taluat,on of railroad property per .... 1 ca" your nonor' attention to on thing In this book-In 1874 th Omaha ft """n natiroaq company waa as sessed 19.690 per mile. Her. I a piece of property 47.05 mile, long that wa. J . fw71"' ' " 9-890 nd during tho. year, was their property worth a. much a. It 1. today T Ha. th.r been uojucrea. i the population of thl. .tat? f .K-f bMn no ,ncr l th valuation kL- Z V v "7 ,lne tnenT Haa there of th., !!" .In tb " 'Militia, of that property alnce then? Why. at that a-eu .!? th:r baT,T What' kind of V.ih"ufelt w" disgrace and they kept It up until 1898. Then they Put in a building, and from that day to thu Ra'nr"17 ' thl m,U 8outhw..t.rn $6,600. and for yean back their property haa .teadlly Incr.a.ed In valu. and ...sment ha. a. .teadlly decrease! Tnat I but a sample.. Th gentlemen may .ay. "Why, what I. It you want to a..u vv Jt. franchiser , don't k7w aa I can define 11?! ' 'J1'" 1 ' It to " --"-"""a wno nave .tudled that mat- rlf'6 ut I know what a franchise do f. - .. ..., II w lu rauroM are Tt in till, ' 9W.am 0t the" It In their office, in Wall street and they tZUT' bond' ,er nl,n,on, of d0"". "5 then they travel through thia commonwealth and a.e the cltle. and town, and village, and farm properties, and they say. "Why tola I v. i ' 1 " " - "uoiness community out here . .t.ie is wealthy and w. have got to have a tri .. .... " l" f bonds." That Is how a franchise oner.., . "w .. uww " rancniee operates. .. interest on our lv v ucn a tariff a will pay ft no? UPn Ur ck, w w lJf a. ft. V 7r' to P' otl these bond, and thes. dividend, but for generation. thev I., . .Tb" U' '""hi... and If- . .1. m"',M and lien upon every Jlngl. thin, that come. Into thl. state Jd nl ah0o?.0Ut f lt-,h b" th4t 7", lPn T0Ur f"t 'Whin, you , . ever'rthln that I. created In thl. .tat I mortgaged to pay th?s dlvi- ay and their attorney win ei,im that they have assessed the.. fn,n. in ..ninV?BV,t 1f ,h relator. They hid fm. hve, doubt whether -hey hud" In! ' uhority under the aectlona of I5?."Ik'u,iLJ?'?ri ? o value and as' and f..r tk. ,,Ll1 corporations, I,?, k ? ,lh6 I'""0'1 ht said board had ft "ii,!".1!'! ' ,U "diction and poweri an.i demand of relator's representative. Thai waa their first answer. That has been Introduced in evidence. In their sec ond aosaer tbey say: JltInd.enu fl'rbr answering said writ aver thut on the 14th day of May. u i.r:.,lH.,or' 5V Edward Rewufer. Its ueen assessed, the franchises of said r.,r. S,.,k which the relator, acting aa thl? .2'1rl.r'fu,,l to do' for ,h reaaon Ib iVh .? . r ,h lu creating said board o to'do. power, it doubted it right They tUt they bad already iiiiwd L,. ","ae "emana on the respond- ITii I 1., s'Ulng e such board that the J."tr aeaee. In addition to the tangi- sleeo nr"yr ' ""?'f 'J?: -.i-iiirsj inicn ntaa airAiiv the tangible property on the 14th of May. Now tb respondents, In their last answer, say: Respondents further represent that the Items mentioned In the foregoing para graph are the matter and things which these respondents took Into consideration In arriving at th value of the property of tne said railway, teiegrapn, Sleeping and dining car companlea for the purpose of taxation; that salrt respondents did not be lieve that under the law defining the pow era and dutlea of the respondent hoard it had authority to value snd aseees the cor porate franchises of said companlea sepa rately and apart from their tangible prop erty, and here submit the facta that were actually taken Into conaideratlon by said board In the performance of lis said .duty. Now, they assert by this second answer, filed under very peculiar circumstances to say the least, that they doubted their power to assess the franchises separate and apart from the other property, and It will be as serted here that thl. first answer wa. a mere conclusion. Why Isn't It just as much a conclusion to say that they did not a.- ess the franchiser So I say that so far as ths second answer is concerned it does not claim in so many words, in a straight-forward manner, that they did aeeess the fran chises. It leave It for inference. And If I understand the rule of law with refer ence to a return to a writ of mandamus It 1 that nothing must be left to Inference; It must be poeltlve It must state exactly what they did or what thy did not do and If anything Is left to inference the presump tion will be against them. We have said, your honors, that fraud I. not only alleged but proven In this case. I car not whether you call It actual fraud or whether you call It a legal fraud. Cer tainly tbe Ignorance, the Egyptian dark ness displayed by th respondents when they were upon the stand a. to the value of railroad property entitle, these relators to believe that It was at leaat legal fraud. They did not know bow to arrive at th value of any railroad property. They said upon the stand In reference to th manner In arriving at value that they couldn't tell didn't know anything about It. It was an exhibition for the gods. Cal it fraud or call It Ignorance, I car not which. Call It a mistake if you pleas- certainly It was re- markable Ignorance and something which tbl court should correct and tell them how to go to work to arrive at the value of thl. property. Another evidence of fraud It might be but little, but, nevertheless, I think it tends in the same direction Is tbe fact that they refused to make any record at all when requested to say whether or not they would value these franchises. Now, your honor, must remember, as I said before, that this board was the first one which ever bad the question raised before it. They could not be in ignorance. They knew very well that there waa a value connected with thl property. And right her let me call the court', attention to some of the docu ments that were filed before them, and those which Mr. Weston had locked up in bis safe. Here Is tbe argument made by the Union Paclflo tax shirkers. He shows that the total value of this property aud mind you he only take the physical prop erty alone, the right of way, etc that the total value of the railroad property property throughout lta entire length and breadth 1 $30,853,000.67. That 1 the value of this great Union Faclflo railway, this transcontinental railway, for taxation pur pose., though for tariff purposes, I pre sume It i Increased considerably. And he gives hare a list, to which be makeo thl note: "Not that thl. testimony wa Introduced for th purpose of maintaining ratea and not for taxation ' purposes." When Attorney General Smyth waa taking some testimony, this wa tb valu of their tangible property, and that to their argument right atralght through, on which they appealed to thl board to asses, only the tanglbl property. And If anything wa needed in confirmation of that fact we hav only to turn to th argument the Burlington Missouri River Railroad com pany made through Mr. Pollard, it. tag agent, which I will tak th liberty of read ing: It 1 U 11. flfti 0O9 mrnmm Mimlnn1 ,T pensea, twelve millions and something. Net earnings for the year ending June 30, 1901, 84.322.8M.41; earnings per mile, gross $4.8u6; net earnings per mile, .1.137. cnicago, Burlington & Qulncy. Missouri line (1 pre sume that embrace all your lines), S33, 7,0u0 gross earnings; 822,026,000 operating expenses, 811,661,000 net earnings lor tbe year ending June 80, 1901. Earnings per mile, gross, 8i,42; earnlgs per mile, net, 82,916 per mile, ao that our lines east of the Missouri river, our franchises is mora valuable than those west of the river, a they earn net nearly three timea as mucn. I understand that the receipts of Chicago station alone are nearly 81.oc0.o00 per month. over twelve timea a much as any station on the B. & M. They have 1M miles of main and side track in Cook county, Illi nois. I am sure I am safe in saying that thay are worth five time a much a that number of mile of main and side track west of the Missouri river, either from an earning standpoint or cost of reproduction. The fact that we have double tracks prac tically across Illlnola and Iowa must not be lost sight of. The bonded debt on June 80, 1901, on the whole Chicago, Burlington & Qulncy system waa 8133,264.454; capital stock, 3110,6;7,7uO; an average of $29,b60 per mile. The net earnings east or tne river are nearly three times as much as those west of the river. If It were not for the lines east of the river it Is very doubtful If the lines west of the river could have any more than paid their proportion of In terest on the bonded Indebtedness of 818.400 per mile, and consequently the capital stork of the line west of the river would have been valuelesa. How. for Instance, would Illinois like to have lta mileage in that state vslued at the same figure per mile as our line from Hotdrege to Chey enne? Would that be fair and equitable? The fact is that we have to return to the state of Illlnola, Iowa, etc., the property we nave tnere, and these bonds and atocks are issued largely on the value of the prop erty we own east of the Missouri river, and not on our lines west of the Missouri river, which were more cheaply built and have leas earning capacity. If, therefore, w are assessed on a stock and bond basis hera In Nebraska, the moat valuable part of our road has already been assesaed In the states eaat of the Missouri based on what we have there, ln't It a eecond or double assietament and consequently lllvgal and void, it is not aa it an our property was In one state, such as the Denver & JXin Grande In Colorado, or In one county, arch aa the Street Railway company in Omaha. R. P. I'OUKI), Tax Agent. Now, that is their statement. Here are also aoma figure from th Union Stock Yard aa to hogs and cattle and horses, which enow the value for taxation and bow much they sold for and I suppose we will hear a great deal abuut that. Mr. Kelby Are thoee paper, filed? Mr. S'.meral Ye. !r. Mr. Kelby Introduced by the relator? Mr. Slmcral Yea, sir. Now, what Is ths assessment per mil in thl state? About 11.660 per mile for these railroads. The BBe .ineui tevi.a oy mis poara amount to "abo-ut thai 0, 6 704 m..",.:T be.reUvU.: " something over 1.000 mile, of sidetrack and various other things. That Is what la taxed at $4,600 and a little over per mile. Isn't that undervaluation? And In any way that ycu could figure on the value of tbe railroad property In thU state, taking It as ao ag. grcgate, you cannot make it less than $300, lOO.oi 0 to $325,000,000 worth of property. Now, bat doe. the suprem court of Illi nois say upon this question of undervalua tion aa an evidence of fraud? I ahall read but Just on paragraph from this decision a cas I presume your honors are thor oughly familiar with tha Gogglns case: That In the assessment of the capital stock and franchise of the Consolidated Traction company over and above its tangi ble property as asrecd by the local as sessors was fixed by th state board at lUO.Oug, while that of the Union Traction company waa Cxd at ew,0w, which, ac cording to the contention of counsel tor re spondent, would make the net total as sessed rash value of the capital stock and franchise of said thirteen omitted compa nlea of said Chicago Consolidated Traction company and Chicago Union Traction com pany aggregate the sum of ITOn.pon, while the uncontradicted evidence establishes be. yond a doubt that the cash value of the capital stock of the Chicago Consolidated Traction company and Chicago Union Traction company, together with the bonded Indebtedness to be deducted there from, the assessed value of their tangible froperty alone exceeds that amount by a arge sum. It therefore clearly appears that the capital stock and franchisee of said thirteen omitted companies, as a mat ter of fact, wcrs not valued and assessed by the State Board of Equalisation of the said several corporations, nor were the same Included In the assessment of said traction companies, but that the same were wholly omitted from the assessment of 190. We have repeatedly held that an assess ment may be Impeached on the ground that property hae been fraudulently as sessed at too high a rate. In Hall against Ueber. 83 III., we say: "Where the valua tion ts so grossly out of the way as to show that the assessor could not hav been honest In his valuation and must reasonably have known that It was ex cessive, is accepted as evidence of a fraud upon his part ae against the taxpayer and the court will interpose." And in Haliroad Company against Cole, T5 111.: "Valuations must be the result of honest Judgment and not of mere will. The converse of the proposition must be true and that an as sessment may be Impeached where the assessment has been fraudulently made at too low a rate." I come now to Mr. Baldwin' brief. Mr. Baldwin, In one part of his brief, seem, to be much afraid the Union Paclflo railroad Is not a monopoly, because ha aay that under tbe law of thia state a franchise may be granted half a doeen persons to build a railroad. Well, when th Union raclflo ceases to be a monopoly I do not believe anyone within the sound of my vote will car very much. Mr. Baldwin take up from page 15 to page 22 of hi brief th argument that section 32 of the revenue act doe. not apply to th Stat Board of Equalisation. Now, we never .aid It did; we do not think it doe. apply, but w do aay that under the law you have to as.es all railroad property, that th only way they could value that railroad waa to take Into consideration bonds and stock., a. provided by section 82. That Is the guide, that 1. the polar star. It may not be incorporated Into those section, pro viding for th board, but the word "rail road property" include and suppose that when assessing that railroad property they will take Into consideration stock and bond, because no other way 1 known to the law to arrive at a Just valuation of tho railroad without ao doing. But the argument of counsel goe too far. It Is a self-evident fact if they did not tak Into consideration th provisions of section 82 ta valuing thl railroad property that they had no data before them from which to arrive at a Just valuation thereof. But Mr. Baldwin, on page 82, gives us Something. Mind you, be haa claimed all the time that you cannot valu th franchise separate and apart from th balance of tho road it cannot be done but If there la a atat in th union tinder the domination of th railroad., I presume that atat would be Montana, and yet how doe the board asses. it there? GREAT NORTHERN, Frsnchlse f 132. M Roadway 800.00 Roadbed k. l.Km.OO Kails 1,800. no Rolling stock 1,400.00 Making th total ' valuation, including Uje franchise, whloa yov ae I separately valued there, of $5,432.'- Then come th Oregon Short Line company, which la a part. I preium. o th line controlled by th Union Pacific. Thar tb bar- franchise I valued at $182.60 and he goe. on and ahowt the valuation of th other element and, according to Mr. Baldwin', brief In Montana, ths Oregon Short Line la valued at $6,662 per mile and th Union Paclflo railroad her In Nebraska to valued at $6,572 per mile. But another item in Mr. Baldwin' brief which I think, to say th least, i. Tory puxzllng to me, or pethapa I hsuld say it to astonishing, U tbl., on page 88, headed: The correct statement la mm follnwat Union Pacific Re.tlroad romn.nv. Oregon DQon i,ino itntiroaa company, uregon Kali' roaa ana navigation company. That all of th stock and bonds issued for those three system on June 80, 1901, was: Total bond Issued, $331,279,800; total stock. Issued, $263,999,000; total bonds and atocks, $595,278,800. Then come, in th as. tonlshlng part. Mr. Baldwin takea out the bonded debt entirely. You eliminate it en. tlrely there, wholly, Mr. Baldwin. And you knock out about a million dollar worth of stock because you .ay, "Less e'curltles owned by th three companies, $332,601, 259.87." You haven't atopped . taking out then. Why, lr, if you go on taking out, you will have your road a "cadaver" "moonlight on a shovel." You haven't don yet. Then you tak out land asset. $5,353,353.95; water line properties (estl mated), $3,000,000. Now come th mile age. With th Union Pacific and th Ore gon Short Lin and th Oregon Railway and Navigation company all united th rail road mileage amounts to 6,679.88 mils and th entire bond and stocks covering them, according to Mr. Baldwin' figure., are $254,297,186.68; for bond, and atocka, par mile, $45,574. Now, where does h get that? He gets it out of the Union Paclflo report. Ha had those before th board. He take the total amount of th bond and stock of these three railroad companlea that are outstand ing at $595,000,000. Then he take out what? He take out all tha atocks and bonds owned by th railway companies, owned by the Union Pacific Railroad com pany and th Oregon 8hort Lin and tbe Oregon Railway and Navigation company he takes out tbe total owned by tb three companies, amounting to $332,631,259.87. That Is exactly the amount that you hav In your brief and which you lent before th board by thia llttl piece of testimony. He forgets all about the fact that the are mostly assets; h charge them up a. lia bility.. H. says, "We are poor," and ha charges up the stocks and bonds aa liabili ties instesd of as assets. Yet I find they hav 124 locomotive, which cost $1,914,000, or $15,000 apiece. Are they assessed at any thing near that rat? I don't know where It is. So that when we get Into Mr. Bald w n's brief and also tb annual statement of tb road and knowing that tbey put tbl testimony before th board prior to th valuation, w see how they misrepresent th valu of thslr road, $48,000 a mile for tb Union Paclflo Railroad company, bonds and- stock, and verythlng of that kind! Why, the value a. shown by tb market re i 'V ' f. Tb ST ""I; tive estimate that can poaslbly ba placed upon it la $100,000 a mile, yat tbey .ay It 1. worth only $45,000. I can fully appre elate that for taxes it I. worth $45,000 when ycu rsk them) but when It come, to the que.tlon of Imposing a tariff upon th pro ducer In this stats It 1 worth a great deal more than $45,000 a mile. Then they have to make interest upon their bond and dlvl dends upon their stock and these men lt ting in tb money center of thl country do not aik bow they do It or why they do It, but Juat simply say, "Do It." They aay to tbe managers of th roada her In thl eoun try th same a th manager of th East India company said to Warren Heatings: Get vojr money and get It any way. W want dividends. We want dividends and nothing else will satisfy us. We must have dividends upon our stock. It don't make any diflervuc hew many people may be Vig Spiclal Excursion leav Omth Tueidiyi Aug. B. II W X Writ for foldtr-rUtE. l SyS. J FRANCIS, Otn'l Pan, Agent, crushed to earth by so doing, we must have dividends. And therefor I say that for dividend purpose th Union Pacific railroad 1 worth at the very lowest and most conser vative estimate $100,000 a mile, but for taxation purpoaea it 1 worth, according to them, only $45,000. Let u. now take up the B. ft M. brief of General Manderson or Mr. Kelby. By their united efforts they have produced some re markable results. In the first place, on page 4 I will read thl for th benefit of Mr. Kelby a well a. the court and In th light of the testimony given by Mr. Weston yesterday: Correlated to or supplementing sections 39 and 40 are other provisions of the law and constitution, one of the apparent ob- Jects of which I to afford the board a means dv wntcn to oniain ana utilize re liable Information" relative to railroads aa a basis for admeasuring values. These pro visions are recited In full In relator's brief. for which reason It la unnecessary to copy them here. We have said that one of the apparent objects of these provisions Is to supply the board with Information to en able it to make a proper and just deter mlnatlon of the value of railroad proper ties. But whether this waa the purpose or not la immaterial. If the railroads com piled with these provisions this Informa tion waa accessible to the board. That the railroads did return to and file with the auditor information of the character pre scribed by these provisions Is not and can not ba queatloned. The writers know that a printed copy of the annual report of the Chicago, Burlington A Qulncy Railroad company for 1901 was, prior to the meeting or tne DOara, uiea wun tne auaiivr ana r matne a pert of tha public records of tbe state. Here 1 a report filed befor tbl board on th 23d day of May, 1902. And yet they mad the assessment on th 16th. They did not hav thl at all at the time they mad the assessment. That la th first point that 'I hav to make with regard to General Manderson'a brief. I have already referred to that statement of Mr. Pollard of tha Chicago. Burlington Qulncy. Now on page 8 of General Manderson". brief be .ay.: It were idle to claim, and we do riot claim, that the assessment fixed by the board represents thi actual value of the railroad property. What we do claim la that the assessment of railroad property la far In excess of the average ratio of as sessment to actual or cash value and that the average ratio of aeseesment In Ne broaka of actual value doe not exceed 10 per cent. In other words, property of all kinds other than railroad property within the atate of Nebraska is and always haa been, as we propose to show herein, as essed at lei. than one-tenth of ita actual or true value. Where h get that I don't know. Prob ably though h obtalna it from th cen.u. report. Well, If I remember right, th census report .bowed that Omaha had 140, 000 in 1890, but w did not. That la all there 1 to it. They were not there count ing dead men and everything else, tbey wera not there and th report for 1900 show. It. Bo when they begin to talk about eeneua reporta, they must remember that when a cen.u. enumerator goe to on for th purpose of obtaining tha value of hla property, ha la not going to report on lea than ha has. It I a very different proposition, the cen sus proposition, a. to valuee, than fnat of th return of th assessors, and It to th return of the assessors that wa must look to. And what ao tney .now wun regam to Nebraska? Tha auditor testified that be had return from th county clerk of thl entire state which showed that tne as.e.ed valuation all over thl. atata wa. from one-fifth to one-lxth of tb casn valu of th property, or from 16 2-8 per cent to 20 per cent. We hav alleged In our writ that th property of other property owner In tbl state wa. assessed at 20 ner cent of It actual valu. Th consti tution and the law of thl atat provide that property aball be assessed at its true cash value and thl. court cannot pre.um that all th a.sessor. throughout tb entire state hav failed to do their duty, where there 1 nothing befor thl court directly showing that they hav failed. W ara hera to Impeach th action of tbl. board of assessors with regard to railroad property and tbey coma in and say in and Why bera ar ail tb assessors oi an tnia tato that we propose to Impeach." By what? By tbe census report; by the sales that have taken place of property through. out the atat. What were tb sale that these gentlemen wer looking for. Who compiled the sales? Why, w know that tbey wer compiled by tbe railroads. The railroad, were not there for th purpose of showing that th sales were very much below; tbey wanted to put tb sale aa high aa possible and, of course, to put th taxes down aa low aa posslblo. So, when tb counsel make an argument that thl exhibit bar was before the board, thowlng a great number of aalea In a number of counties throughout tha atat and that land wa assessed there for $5 an acre and sold for $50 aa acre, you must re member it comes from the rellroads But her w hav something that th board bad to obtain and we have ber th tatemecit of tb Improved land, and unimproved land, for tb. countle. through out tbe .tate, a. to tha value of aasesament the assessors agreed upon in their meetln In March, and what Is It? As I said. It ts between one-sixth and one-fifth. That is what It shows. But what ha. been th aasessed valuation of the railroads? From one-tenth to one-fifteenth General Manderson lu bis brl.-f ba com mented upon th funded debt of tb C, B ft Q. railroad. Let us are what Uiat ta He place tbe funded debt a. $147,000,000 and tha capital stock at $212,000,000, figured at 192 per cent. Now th Great Northern ft Northern Pacific took over all the stock of the C, B. ft Q. and it is now out of the market entirely. You do not find it quoted. Here I tha report made to tha directors. Her is ths report made to, tbe director, of th Northern Faclflo tor .-the year 1901 on thia que.tlon. It say: - Purchase of Burlington stock: The Great Northern Railway company and the North ern racino Hallway company nave jninur purchased 1,076,772 shares, or $107,677.2M of the capital stock of the Chicago. Burling ton ft Qulncy Railroad company, being 96.79 per cent of the total authorised issue, and In payment for same have Issued their Joint collateral trust bonds and secured to the amount of $216,164,400. Further bonds of the same series up to a total of $222.4w. may be Issued for acquiring the residue of the stock. The bonds are dated and draw lntereat from July 1, 1901, and mature July 1, 1921. and may be redeemed on the first day of January or July after January 1. 1906, at 105 per cent, wltn accrued inter est, and draw lntereat at the rate of 4 per cent per annum, payable January 1 ana July 1 of each year on coupon bonda, etc. The shares of the Chicago, Burlington ft Qulncy stock thus acquired have been de posited with the Standard Trust company i Nov Vnrir am iruatMi under collateral trust, under trust indenture, to secure the above bonds. A contract has been entered Into between the Great Northern and the Northern Paclflo defining the right nnd hllltic nf thn pomnanles growing out of the acquisition of the stock. They paid 200 cents on the dollar for every .hare or atocK tney aoi. 1 So we find tbe actual aale of every emgle olltary bit of tb Chicago. Burlington ft Qulncy stock for ' 200 cent on tha dollar. Yet what doe Oeneral Manderson figur It at? Why, thl property ha would flgur to be worth In one plac only about $29,000 mile, and from that up to $30,000 a mile, But you have to add the stock and bond. and when you do it you will find tbat a 1. not correct, for It. 2,416 mile. In the lata of Nebraska are worth about $50,000 per mile, according to a conservative cal culatlon. And on of the beat piece of testimony we hav in thl cas 1 fur Dished by General Manderson on page 49 of hla brief, wherein he says: TV,, fklxao-n Ttiirlfnrtnn A OulneV Rail road company waa one of the railroads subject to assessment in imnois, amu nmtwri w hv that board assessed at ii ofti fnv tha vear 1901. The ratio o aasesed to total value in Illinois la 20 per cent. The actual value, per mne, mere- fore, or tne cnicago, nurungion wuuiw n.tirn.il rnmninv. as fixed by the board. was 844.890. Taking the same basis for the lines in Nebraska, which is absurd, rela. tlve conditions considered and compared, th aasenaed valuation In Nebraska would be 84,449 per mile, upon a ratio of 10 per cent. But while that 1. true upon a ratio of 10 per cent, upon th ratio of what other property 1 paying throughout thl. state it would be at on-ixth $7,481 per mil. It make all tha difference in tb world to the rata Here 1 another strange thing I would Ilk to have counsel explain: General Mander son. In hi. brief, figure, th Chicago, Burlington ft Qulncy road at 8,842 mile According to their annual report you cannot find, to aava your life, even taking In the railroad bought here tha other day you can't find over 8,000 mile. Mr. Kelby Look again. Mr. Slmeral Ye, I will look. Look at your annual report, and your annual report lvea a ths total number of mile, of your entire system. Including Iowa, Illinois, Mis souri, Nebraska, Colorado, where you will 992.60 mile, but what doea their railroad tax shirkers say? I will get that. That Is the B. ft M. railroad tbat is, everything west of the Missouri river 3,800 miles- Chicago, Burlington ft Qulncy, Missouri line and everything east of tb Missouri river, 000 miles. Can you make mor than ,800 miles out of that? Mr. Kelby I can; yes, .lr. Mr. Slmeral Well, then you will hav to figure different from anything I can find In your annual report. Mr. Kelby No. Mr. Slmeral If you have lost aoma In th shuffle, if you hav a lot mor cadaver, for assessment purposes, perhaps you can find It, but If you bava live railroad, which are making dividend., which hav a franchise upon them, you can't find mora than 7,800 mllea to save your Ufa in any of your re- UUIifTTITT.hnT,9 Mother's Friend, by its penetrating and soothing properties, allays nausea, nervousness, and all unpleasant feelings, ana so prepares the system tor the ordeal that she passes through the event safely and with but little suffering, as numbers have testified and said, it is worth its weight in gold." j)i.oo per bottle of druggists. Book containing valuable information mailed free. INC BRADrillD REGULATOR CO.. AtUaU. v porta any property that I covered by your bond and stocks. Mr. Kelby Read this. Mr. Slmeral "Leased lines." Ye, that I a narrow gauge Una of 178 mile In ad dition to th standard gauge mileage th Chicago, Burlington ft Qulncy railroad con- trola. Mr. Kelby "Operates." Mr. Stmeral No, It .ay. "controls." On hundred and seventy-eight miles. Tbat wouldn't make It. Mr. Kelby And the Atchison. 204 mllea. Mr. Slmeral Tbat wouldn't make It. You are atill short about 400 mllea. Mr. Kelby Add the seoond track. Mr. Slmeral Oh, th second track I thought It waa the seoond track. Why, Mr. Kelby, if you and Mr. Manderson can't get some better excuse than that you had better quit. I. tha aeeond track aasessed in this state, the eecond track? Mr. Kelby We haven't any. Mr. Slmeral No, air! you haven't any. Why don't you add turnouta, switches and everything else, and that bridge down in Rlcbardaon county, and all. There you pay an assessment of $1,000 In Ricbardaon county, and I preauma at riattsmouth you pay $1,000 a mil there for th bridge as sessment. It is like th Union Paotflc, $1,600 for one-aixth of a mil of th bridge at Omaha, where they tak In thousand and thousand of dollar, a month ther for it, and yet they say, "Wa want equality aod uniformity In taxation." They aay, "We must have equality and uniformity In taxation," and yet tb Union Paclflo ' bridga 1 assessed on the Nebraska aid at lesa than $1,600, although a few year go It was asaeaaed at, $125,000, and In Iowa it wa assessed at $280,000. I believe. There I one other brief her. I bad forgotten that. That 1 th relator, brief, and 1. designated Juat "Memorandum brier or "Memortal," I don't know which Memorial, I think. The attorney general says "We don't know whether wa as. aessod $200,000,000 worth of property In thl. atata or not, but we think we did. If we did not we want tha court to tell us." Tbat la exactly what he aaya. Tbey don't know. It waa lost in th huffi this fran chise. They ask th court to tell them whether they assessed $200,000,000 worth of property. I hop th court will tell them they did not, because there to no evi dence of the fact that tbey did. Bo that I say to your honor., If thl. board will Just act honestly will Juat act aquarely with tb people, a. well a. with tha railroad., they will hav no troublo in arriving at an honest conclusion In reaching the value of these properties, and, too, they will find that there la a great deal of exemption in favor of railroad and against property owner, of thl. .tate. Card from Mr. How. OMAHA, July 14. To th Editor of th Be: An article appeared In tha World Herald Sunday, written by Charles Q. De Franc, on th railroad tax cas, which la Interesting and Instructive; but th writer fell Into an error that doe. Injustice to others and to me. The erroneous statement refer, to my aeverlng my relation with th Omaha railroad as It general aollcltnr some dosen yeara ago. Tha service waa en tirely pleasant. My relation with th other officers were always cordial. It wa. a mis take of fact to Intimate tbat anything waa required of me, while I held that poaltlon, that was Inconsistent with tha highest con ception of professional ethics. Mr. Pa- Franc waa misinformed. Pleas mak th correction. Your truly, JOHN D. HOWK. IS. !, Otova. Thl. nam mut appear on every box of the genuine Laxative Bromo-Qulnlne Tab lets, tb remedy tbat cure a cold la on day. 25 cent. Matthew Klllllea. 1 Dying:. MILWAUKEE, Wis.. July 14.-Th death of Matthew Klllllea, former owner of the Milwaukee and St. Louis clubs, snd legal adviser of the American la expeoted at tny time today, doctors having announced that he could hardly live through the day. Ban Johnson is expected to be at hla bedside today. 1.0 iu IUt LliUUltUp euu uu home can be completely happy without them, yet th ordeal through which the ex pectant mother must pass usually is so full of suffering, danger and fear that she looks forward to the critical hour with apprehension and dread. MKf$ m