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RAILROAD TAXATION IN
Arguments of Counsel on the , Issues Raised in
, Case Before Nebraska -Supreme Court
Argument for th relator by Johi D.
He we:
If the court please, I hold la ay
lund the document, a part ot whloh wai
prepared by nt, which bu drawn out from
counsel on the other side auch sever com
ment. If tbsrs were to it tuoh thing at
havo been Imputed and charged, I might
think It waa unfair, but tor ry word
there la between the ltde ot tola book that
I wrote, I abate not one Jot or tittle. I
nope now to emphailze It and underline It.
A word about the blatory of thia eaae may
be In order. The present iMue wae made up
in the main, and the brief waa nearly all
prepared at a time when there had (Men
preaented to thta court limply a question of
law. The question arose with counsel upon
our elde. "What shall we do under the new
order allowing an amended answer te be
filed ?" An order stood requiring briefs.
"Has that order been abrogated per se?"
Perhaps that view was permissible., but we
concluded to serre this argument upon the
counsel upon the other elde and draw their
fire that we might see their band! Two
gudgeons developed that bit at It like a
trout aoapplng at a fly In a mountain brook.
The others were too sharp. The twe prin
cipal companies came In here- by their re
epectlve counsel and served upon us and put
upon the flips of the court their briefs to
constructed and so filled with nguae ef tax
commissioners and the like that we had
them. When they aorved tie with those r
gumepte and showed us their hand, I said
"the enemy is delivered into our bands." -
Your honors have beard severe .criticism
upon the gentlemen who stsnd here for this
writ. I stand here far no Individual; I
stand here without money and without
price, as do my associates, Mr. Harrington
and Mr. Blmerat. Money compensation did
ot have the power to Induce me to engage
in a work of this magnitude, and such as it
has been the past three weeks to me. the
cost it has been to me, and that I knew it
would be to m. We stand here for 1.200,
000 people. 1 have waited here, during all
the suffering bt these thirty year of thll
conduct by two of the principal companies
for this hour to strike. Here and now - la
the center of the storm Renter of tne agi
tation for tax reform whloh Is spreading
ever this state, not excluding the cltle.
thank Ood, where the worst- exnibltloa It
abown and the worst injustice Is - felt
Thankful we are to know that there are
sympathetic friends outside ef the . ottlea
who are willing to auggest (aa Mr. Karrlng
ton has done here) that the cities also have
relief from their suffering. tnoaw are
here urging, with all our powers, that all
the people of this commonwealth shall be
relieved from the injustice of what baa been
done. "
We see upon the other side these learned
gentlemen with their stenographers and
y tax commissioners behind them, their audi
tors and accountants and everything1 that
capital can command, to help them.. How it
it when men step out from a community, in.lt
'an arena like this, how are they placed
Not a stenographer, not an accountant,' no
testimony furnished by auditors,; working
against the very greatest ot olds! . We
expected to receive the abuse cf , ' these
gentlemen. We expected to make enemies.
But we think we msy rely a little cn the
hope that we make some friends, too. to
offset these powerful enemies. ' - Tour hon
ors, has It occurred to yon, In making such
fight as this, acting In the pame of ttlie
atate, challenging their officers .for, mis
conduct, where those Who touch the but
ton stand T The people will wait a long
time before atarting, but' when' two or
three do start they suffer much.' They
are made' to feel the power. . s There : is a
pathos in tblst The -people, busy .with
their farms and at their work, betrayed, at
we say they have been betrayed by. this
board, and betrayed, as we say they have
been habitually in many quarters, 1 bev
submitted, and will submit, unless some
one steps forward and undertakes tbe labor
and incurs the responsibility that that ttep
involves. I cannot view It otherwise tboa
suggesting something painful. 'At the
Scotch aay "how peetlful bow peetlfuL".
Now there has been inaugurated in thlt
atate a movement tor tax reform.. It started
mainly here, I think, and In Omaha. One
. great decision has been already secured
from this court which has shown that we
have a constitution with a, provision la it
that had been forgotten or overlooked, re
. gardlng franchises, as we also have . one
regarding municipal government and
municipal taxation, and all stand on the
same plane, that the taxpayers shall be
treated with absolute uniformly.. ,
la the early days of the , territory this
present system ot assessing, which Ignores
tbe statute that aaya the full value shall
be assessod, waa Inaugurated and under
It the greatest abuses have arises. It has
been the greatest , properties . that have
gained the most and, while the people have
not known It, they have been, paying a
great deal more of the burdens ot govern
ment than they should. This movement
has commenced at the right end;' It has
not commenced with the small, property
owner; we have not been pursuing him. bat
- - - -. -. 1 1 1 , i.1
"Tbe square peg in tbe round hole."
figuratively expresses tbe use of means
ttnauited to the desired end. A great
many people who have been cared of
dyspepsia and ether diseases ef the stom
ach and its allied organs of digestion and
nutrition by the nse of Dr. Pierce's Goldea
Medical Discovery say: " VVe tried aiany
medicines with only temporary benefit.
It waa not until we began tbe use of
'Golden Medical Discovery' that we
found a complete and lasting cars."
It is undoubtedly true that Dr. Pierce's
Golden Medical Discovery, holds the rec
ord for the perfect end permanent cure
of indigestion and other diseases of tbe
stoni'ich and associated organs of diges
tion aud nutrition. It is not a palliative.
It cures the cause of diseaoe aud builds
up the body with solid healthy flesh, not
flabby fat. - !
It 1 with pleasure Uat I t0 yon what Or. .
riarce'a Gulden Medical Diacomty sad ' rcilcu'
ave done for we," write Mr. T M. SmlBiar, of
fcede, Kaulraea Co., Texas. T0 year eao I .
vu taken wuh aromaca Sad buwa) ttonule.
Everything I nta would pnt me in daatreaa. I
Uved two weeks oa milk and rv tkal ga SM
pain. I felt u tltttush 1 woufti starve to death.
Three duttora attended me oar aaid I had dya
Cpata. two aaid catarrh of the aluanach and
we la. They attended me (oe at a tuna) ke
cue year. 1 Mopped taking their isediciue and
tried other patent medicine ; got BO kettar, and
I grew so weak and nereoua my heart would
flutter. I could not do any kind of work. How
I tan do my houaa wbrk vary tmm"
m Jtnk sao Mttfth, and caa ask a aching I
waul."
Accept no substitute lor : Dr. Pierce's
Goldea Medical Discovery.' . ' . .
Dr. Pierce's Common Seat Medical
Adviser is seat fret on receipt of stamp
to pay expense of mailing only. Send ,
si one cent stamps for tbe paper covered
book., or 31 stamps for the cloth bound
volume. Address Dr. K. V. Pierce, Buf
falo, N. Y.
'r. S ft V
we have commenced in this ease with the
greatest properties la the state. Let ut
get them set right and let as hope tax
reform will spread out. as It prebsbly
will. In all quarters until' we redeem this
ttste from tbe odium of thke fraudulent
method of procedure which has ob
tained bere ever alnce we were a territory,
doing an injustice to the state and aa es
pecial Injustice to the poor.
Now, the foundation of the law of this
case It found In two sentences. The law
branch of our argument was prepsred by
Mr.. Blmeral and a part of It has been
preaented to your honors. These princi
ples ars found In the language first of
Judge Brewer and secondly in the laaguagt
of that other great Jurist, Justloe MUler.
We find, that In half a dosen or more
states these questions have come up. Tbey
have lately come up In Ohio, Massachu
setts. Pennsylvania, Illinois, Indiana and
Nebraska, and where they have come up,
where the question of the aaaessment of
thess great estates ha oome up, not before
special tribunals like these, bosrds of
equalisation that art la most cases not
only willing but anxious te be humbugged,
but whenever tbe question has oome up
before a Judicial tribunal the assessment
of these properties has been doubled. In
the Kentucky cass the franchise alone ot
one corporation was raised as a result
from $30,000,000 to $60,000,000 and unless
the assessment of thess roads is doubled
In this state I shall feel that our work
has been In part a failure.
Now, what did Justice Miller eayt 'The
current market value of the funded debt
and of the stock Is the best criterion of
value." Now tbe market price settles the
value. There Is , a great . machine down
east called the New York Stock exchange.
Hundreds of millions of operation are done
there weakly and it la right there, through
that treat machlna, that we find out bet
ter than any ether way, says this great
Jurist, the value t these quaal public cor
porations with their great franchises
franchises which are truly a part of sov
ereignty and which In thta state have
been a very great and undue part of sov
ereignty. Justtee Brewer eays: "What a railroad
is worth tot Income and sale it la worth
for purposes of taxation." That 1 ax
iomatic; the heart ef It is outside and
we aee It; we know It is true. Thta court
has spoken along the tame line, so we
have felt no doubt whatever as to what the
law governing this case. is.
Now, I iatended to go at some length
Into comparing tbe two answer one pre
pared by the attorney general and the au
thor of the othor unknown. That first
pleading save that on tbe 14th of March,
two days before the assessment waa pro
mulgated, tbe board had agreed upon valua
tion of the tangible property. That was
the day whea they had that great hearing
there, with Mr. Kosewater and Mr. Blmeral
protesting and expounding te them the
very law which we are expounding hers;
quoting from your honors' decision and
from Justice Brewer's, and arguing It thor
oughly, aa shown by several column! of
the newspaper testimony that it here.
vTbat bearing came up, tuch a one had
never come up before; something bad oc
curred; for thirty years they have read that
atatute literally; reading it literally It
meant the physical property. Tbey have
never assessed in thta state anything but
the tangible property and nobody has ever
Insisted they should.. Most of then didn't
know of that provision ot the constitution.
That franchises should be assessed was em
phasized by special mention la the constitu
tion. Recently, It was brought out, brought
to this court and by this court expounded.
Tben what happened? Why the sua of
Austerllts arose, S. V. P I After that, no
board had any right to do what tbe other
boarda had done.
Two or three weeks after that decision
was announced It was read with great sat
isfaction all over this stats this board sat.
This proceeding waa born of that decision.
They bad that letter which goes Into the
details of the prices of stocks and the In
crease In value ot theee properties In late
years, by Mr. Harrlagtea. It was aent
to the governor and read to them, petition
ing them and protesting, but. your honors,
I doubt that they did anything more than to
give It the laugh in the secrecy of that
chamber where they worked; that star
chamber where they held that session with
tbe representatives ot these railroads In
cluding Mr. Beaton!
"In executive session" that I what they
said they were In "executive session,"
everybody else excluded, behind 'dosed
doors! When the assessment waa chal
lenged by one who had tbe courage to
touch the button, they threw the doors
open and all the world knew what took
place there. Whoever heard of that meet
ing ot thess railroad officials, sitting
Jointly with the executive board in execu
tive session?
Now, then, that la what the first answer
says: "The physical property - had been
assessed." The second anawer "hors;d"
entirely around. Before that, the - case
had been tried before the board by the
tax commissioners. I wouldn't say tu ill
natured word against them; tbey were doing
their duty as best they knew how, but they
were not lawyers, they were trying the
Issue before the board before that, and
they aaid "No, why you have no authority
te assess ths franchise. No, you cacuot
do that." That waa their burden.
But when the matter got out from the
hands of a: tribunal that waa ready, willing
and anxiau te be humbugged and before a
Judicial tribunal the lawyers , said, "for
Qod'a aake, we cannot maintain any such
position as'thst; that answer must bs
changed; If we have to go down there In a
body and take them by tbe throats, thsy
hsve got to chsngs that." That amended
answer does show that they did not assess
ths frsachlse '"separately from ths physical
property." How could they have considered
It any other wayt For they had already
arrived at ths vslus of ths tangible prop
erty, although It waa not announced; they
had not lost Jurisdiction of ths matter.
Their record was still open. It makes a
difference la the valuation of this prop
erty and I say It once for all, whether you
piecemeal this great transportation prop
erty and aasess Item by item, every bit of
rolling stock aad every pin end every line
and avary franchise separately, or whether
you say it U oae property aad ws will
asssss it all together. It is Just like a fur
nished house and lot. You caa tsks aa la
veatory ot, all the furniture, ths value ot
the house, the value of the lot separately
or you caa value them all together. There
is nothing la thlNt,lk about ths fraachlss
and separatloa of the tranehiae; there is
nothing la It.
The great charter word ta tbe act that
ereatea thia board are: They shall arrlr
at "the fair cash value;" that Is all; there
are so strings 00 that, a limitations, a
directions how to do it. Just accompllea
that reault la your owa way, unrestricted
and unlimited; you have the whole unlverss
ef Information to draw oa. Piecemeal It.
lump it r separate It, It doeaa't amount to
that (saspplag the fingers).
What deee that language la the aecoal
aeawer meaa? Is It put there for fua or
doe It meaa something T It It like the
THE OMAHA
hair that got In the butter f The men who
drew that answer knew what they were
about; they bad to put something la there
because the coatraat waa so great between
the flrtt and second anawer oa the fran
chise question; something had to be said
and they had forgotten (or thought we
wouldn't find out) that they had said that
the physical property had already been
valued. . 80 w now come to the brief of the
attorney general. That tacitly admlta that
the franchise waa not assessed or inten
tionally assessed. Then hs says, whether
It was assessed or aot depends upon the
decision of thia court! Now, even if these
franchise are aot worth 1200.000,000 sup
pose we say they are not worth over $100,
000,000 isn't It a strange thing tor the at
torney general of the atate to aay that
whether that $100,000,000 ta assessed or
not depends upoa what this court will de
cide as question ot law Why, your
honors, it the franchises were assessed It
must hive bee at the rate of two for a
dent, for the assessment is no higher than
In past year lower, rather; taking the In
created mileage, it ta evea lower than laat
year, I believe, oa a mileage basis. There
1 ao pronounoed difference, such at $100,
000,000 or $300,000,000 must necessarily have
made la itt It ta aot there.
The truth 1 these men Just followed a
rut, notwithstanding they had beea givea
tbe tow, notwithstanding they were urged
aad knew better. It they knew anything;
Utile they were utter Imbecile they kaew
better, aad, knowlag better, they did not do
their duty I They undertook to straddl
dutyl .
I mutt hurry ad reach the grand as
sessment rolL These tax commissioner,
doing the bt they know bow, brought la
a great .many statistics a to bow tbe rail
roads are being treated in different place,
different states, brought In the census re
turn ahd a great maay statistics, which
make up the body of these two great ar
guments great In bulk, I mean. Thsy did
not know anything' about the principle that
bound the board, blade me and every cltl
tea of the ttate, whloh will not operate
to relieve - these railroad companies be
cause It will not relieve me and every
taxpayer la the atate. They oanaot bring
In garbled statistics (tor w know that fig
ure d lie) and put all that atuff before
the, board and before thta court except sub
ject to that principle ot law. Thta princi
ple wlsmr It all off Just aa I wipe all that
tuff oft that table and leave a clear place.
The assessment la thta state ta mad by
authorised tribunal and authorised offi
cers -under oath. It oanaot be Impeached
In ' any such proceeding aa thia. It binds
the' railroad companies a It bind me.
How would I look going before the as
sessor and saying. "Hare, there la a lot ot
property In Nebraska that ta not oa tbe
assessment roll aad for that reason I want
my take reduced or my assessment re
duced? How would any taxpayer look do
ing it?- That principle aweep out all that
testimony, render it nugatory and leave
tht board bound, a everybody else 1
bound, by thst principle. Right or wrong,
this atisesment must be made with ref
erence to it a though It were right. It
It bi wrong we all suffer and we must all
suffer 'la common. This tax reform I hop
will relieve the people hereafter by getting
thete railroad hundred ot thousand of
dollar la bonds, hundreds of thousands
of sores of land. No one ha given me one
bond or one acre of land, In addition to
that we have given them the great trans
portation franchise which binds all of their
property into a great mass. Into a great
use. sod a profitable use, a more profitable
use than any other we have In this state.
.The people have given them all of that,
those lands, those bonds, those franchises,
and they are higgling over their taxes! Two
million dollars will not oovsr the taxes w
have paid In our county oa their account.
The road must tak it into account that
the decisions havs established this, that
they , must take a great big lot out of their
earning tor taxes. They must not aay
taxes are a side lasu any mors, hut a real
burning issue! Do not cite to us Iowa and
such ttatet as that, railroad ridden aa their
legislatures always have been' la Ne
braska! They want relief over there and
they .ar agitating It there, and a are other
Ute. the earn a w ar her. We, oa
our lid, bavt cited Mtouri. Indiana and
Kansas. They do not say anything about
those state abd their method ot assessing
this else ot ptopertyl
; I. detlre to say a tew word on the aver
age and percentage that these gentle
men deal la to much. The Union Paclflo
Railroad company necessarily wants t be
iterated up with the Elkhora and with tbe
Grand Island 4 Montana. Now all I deslr
to say upoa ths idea of averaging the great
est properties with the little one la thta:
Th Onion Pacific eays, "For heaven' sake,
look at that Blkhorn road, aee how poor It
la aad that road that goea away up to Mon
tana) don't you eee how each ta struggling
along far existence? Haven't you any bowels
of, ompasslon? Why don't yen be sorry tor
us? Juit look it thess poor peopi look at
that washerwoman over there, laboring over
her tub, her children ragged and hungry!
Haven't you any bowels of compassion whoa
you look at our property? Averag us.
Average us with the washerwoman and
these poor line."
Why, In Egypt, oa th border of th
Libyan desert. Is a grsst city, th city
Of Cairo, with large properties la It. Now,
tuppose the city property over there would
be averaged with the acreage la the Libyan
delerL Would that be Just? You
don't hear the little roads talk about aver
aging with the Union Pacific; it is not help
ful to their ells. But the Union Paclflo
wants to be averaged and scsled down.
This great bulk ot railroad property In
this etate is worth $325,000,000 la round
hurabere. That Is a great property. That
ta the market valus. Here Is thta great
bulk ot property, every Inch ot which is
earning ' something, much or little; the
great use te which it Is applied 1 born of
a' franchise, bora ot the sovereignty.
'. Whta they tomplatn about paying 15.4 per
cent, as they claim they do pay, of our
taxes, I say point ma out 15.4 ot sny other
property, 'Just aa It average la thl state,
that has saywhers Bear its value, lhat la
squat to $0 par east of It value. Look at
it la that way; this property, welded to
gether by tbe frsachlse In a maas; a fraa
chlss that rsachea Into every maa't door
yard,' into every man's kitchen. Into every
farmtr't root eellar; that goes into every
'meal we eat. Thoa great transportation
fraachltes ars worth a great deal of
mdney, especially whea they ars exploited
by capital and have gone oa aad gottea
possess loa of territory aad taken It away
tram competition. You needn't be afraid of
anybody paralleling the Ualoa Paclflo sys
tem whsa thsy hav ths territory! I say
that instead ot 15.4 per cent that 25 per ceat
er $0 per cant would be a fairer aaaessment
of theee pltat in th state. You csnuot
pick out $0 per ceat of property Just as it
come. Just It verge. horses, mules,
farms, elty property, etc-, good, bad sod
ladiffereat. that will begin to be valu
able a thta railroad property or that could
be cashed tor as much er that pay . aay
tuch revenue or anything Ilk 1U That dis
DAILY DEE: SVS DAY,
COURT
the Mandamus
tx.
pose of their plea for uniformity and for
J us tie.
In our cltle th railroads say, "No, you
cannot assess our property," Although ths
constitution and law say it shall be, by
city assessors. W must have that state
board down there la Lincoln asses thl
property and you must take your assess
ment from that board' assessment. Henc
16 per cent 1 the county and city aa
aessment for railroad (or less than that)
for general purposes, whits the citlsens of
Omaha for this year and of Lincoln and
South Omaha must pay on a basis of 100
per cent; that ta th program now In
Omaha thl year, meaning $8 for the cltl
ten where they pay $1. Aa to the Union
Pacific bridge (which earns half a million
dollars every year) half of It I assessed
at $1,000. and my piece of vacant ground,
worth $2,500, 1 assessed t 4$ per cent
and pay more tsxes than that bridge! I
that uniformity? If not, why not? Why
not wipe thos twe line out of th city
charter, line Inserted there by tbe rail
road? Why not do as you did with ths
ether section (section $2) when, for th
first time after thirty year, th assessors
know how to asseas looal corporations and
for th first time they will know how to
assess railroad property! Your honor
should say that thos two line are uncon
stitutional. Qlv us Justics all over the
state; clean the platter; first give It to
the etat at large; deny It to us if you
must, but if you can. and I think you
ought, give us similar relief! 1
I am going to give a few figure on th
question of interest. I wsnt to expound a
little bit the mysteries of Interest. I have
been looking Into the matter. All over
thl country lntereet la low. There was
never auch a time; It ha continued tor
year and th prospect Is it will continue
In th future. Whose property is that
great lowaess? I that lowness a property
of these railroad . oompaales ? It I the
property ot 76,000,000 ot people! Where do
the people get anything but mall rate of
Interest upon their ssvlngs?
Let us see how these railroad are
profiting by th refunding process. Th
Nsw York Central will, thl yer, ave
$1,500,000, and from this tlm on. each
year, Just by simply refunding high-rat
bond tor low-rat bonds. Tbat makes
their property so much mors valuable.
Tbat amount could be laid atldt by the
New York Central. It will pay Interest on
$46,000,000 of securities at 4 per cent. They
csn put that $46,000,000 of assets Into their
treasury. The Northweatera will save. In
the tame way, $660,000. equal to $16,000,000,
capitalised in that way. Tbe Burlington
ha already retired om ef theirs and
next year $22,000,000 bearing 1 per cent
mature, and they caa be reduced, I take it,
to 1 per cent bond, because the Bur
llngtoa ha got out, at th statistics show,
t per cent bonds on the Illinois division,
maturing In 1949, la the sum of over $26,
000,000 quoted above par. So much for
what money Is worth, so much for what
Its use 1 worth. Wbst will the railroads
do? Will these railroad companies cut the
rates? Will they reduce the rates? Will
they pay more taxes upon their assets?
If not. why not? What will they do to do
Justice to the people?
Now about the fraud alleged. I will
speak of tbe two principal companies.
Fraud Is alleged. The relator alleges
actual knowledge. They did ao wrong a
thing at to refuse to consider $100,000,000
or $200,000,000 worth ef property, when the
people of this ttate, by their volunteer
representatives, urged them to consider It,
and after this court had substantially said
It 1 your duty to do it! The board could
not escape by reading the law literally any
more! Past boards have been mistaken,
but you have no excuse now to be mistaken
as to your duties! These protests were
there, Mr. Harrington and Mr. Slmeral
were there. Your decision was there, and
the information was all there! Why dlda't
they use the information unless they were
willfully bllad and lame and halt unleet
they had, your honors, been hypnotised, un
less they had asked to be chloroformed alto,
how eould they escape It? What Is fraud,
la God's name. If that Is not fraud? Who
has a photograph of it If tbat Is not ont?
I have already mentioned that dark lan
tern meeting in executive session between
the board aad railroads, the railroads being
there. Just as though they were members
ot the board, and having more Influence
than members ef the board. The whole
thing was cut and dried then, I have no
doubt What difference did It make to them
that the Burlington railroad hadn't made
any report or that half a dosen railroads
hadn't made any report? What do we
want of reports; what do we want of the
annual reports of the Q road, they must
bare said? Tbe report should hsve been
filed In January and April, as the constitu
tion and law require. "What do we want
of the tax list or revenue return called
for by the revenue law? Why, we don't
need them. Tbey are not here, but we
haven't missed them at all." They were not
asked for; they were not even missed.
Then these delinquent railroads, two or
three of them, hustled around and sent
down their annual reports which should
have beea there la January, and they
hustled together a list for aaaessment, as
tbey called them, of th Burlington' fifteen
companies, mere skeleton companies, mere
keletoh. showing fifteen skeletons, not
even cadavers, for their flesh had rotted off.
They were lined up there la a row after
the assessment waa made!
I caa finish all I have to aay about that
C, B. Q. road and their methods and on
that fraud question in the short time al
lowed me. I make the startling statement
that the C, B. ft Q. railroad, which oper
ates more railroad la this state than any
other company, Is not sssessed for one
penny in the etat of Nebraska! Its nams
is not In th list, it has returned no list,
but Its auditor, under instructions, hss put
la fifteen skeletons, not svea csdavera or
stiffs, with no resemblance to a living
thing. It is showa here that the Q road
should be assessed oa many millions of
dollars, as I shall show presently, and yet
It ta aot assessed -for one centl Is that
fraud or Isn't It fraud?
We got a valuable bit of lntormattoa, or,
at least, it is picturesquely brought out la
the Union Paclflo argument by Mr. Baldwin,
which will eerve for aa illustration. I can
use It for my purpose. He speaks of ths
Burlington's so-called "mala line" to Kear
ney. If I were the railroad and had to pay
taxea oa th main line I would want tt
very short line. I would rather pay on 101
mile running out t Ktarney than 450 mil a
running toward Denver. I would grub up
pretty good showing of earnings. In eome
way or other, so as to havs some excuse foe
calling it th mala tine, because 11 ta lees
thaa 450. It would cost less. New that lias
la aseeassd for $10,580 a mile, th great
"mala line," and yet the gentleman tell na,
with great, elmple honesty, that It earns
$11,561 per mile net! Assessed at less thaa
It ast earnings! How would you ssseaa
building that would sarn $11,651 net? For
leaa thaa it ast earnings $2,000 less?
Here ta aot oa bulldlag alone, but 11
building!
I Liaoola on building 1 show to hav
earned, ast. ,000. What la that assessed
for? Ninety-five Jhousaad dollars! about
JULY 20, 1902.
tsa time. Whea I capitalise tbe Burling
ton' "mala line" bet earning at 4 per
cent, which mean par. It shows a capital
ization of $312,000 per mile for every mile
of the 191; therefore that main line I as
sessed at about one-thlrtleth ot what ws
say Its value 1. valuing It oa a basis of
4 per cent; It I one-thlrtleth aad It refut
ing to pay anything to speak of In th
cities!
Your honors, you csn not tsk th great
mischief th railroad do In our cities, and
they do mors in th great center than in
the country, you cannot take that and
spread It out on th mileage basis! Th
wrong they do In our cltle w cannot
spread out on a mileage basis! And yet
they want to be taxed and assessed on a
mileage basis! And ths gentlemen, tbe
grandiloquent man, the talking man of
the Union Paclflo I believe he Is called,
pleads for Juetlc for th railroads! He
want your honor to keep cool aad not do
theni an Injustice, not to listen to this rab
ble, not to listen to these three disap
pointed agitators, who ar full of hat,
they say. Well I am full of It. I admit I
am full of hate and that I am disappointed
that tor thirty year thta wrong ha been
going en! I feel encouraged now and
brightened up, because It seems to me a
better day has dawned and a Juster oa.
The argumanta of counsel hsve been
made up, a I hav stated, from tbetr tax
commissioner's figure In th main. When
your honor get a little Insight into these
exhibits, you need only to glano at them
and you will be amaxed. aa w have been,
that gentlemen should bring In here before
thl tribunal auch srguments, such Im
peachable figure, that ar adapted to a
board that 1 willing and anxious ta be
humbugged, but out of place before a Ju
dicial tribunal! I eould prove that easily,
detail by detail, but It there ny doubt
la anybody mind why the gentlemen
were driven to auch expedient? The rea
son ts, these railroad companies and these
members of the board were all standing
la a hole together. Tbe paramount prin
ciple that governs railroads, aa we all
know. Is, "we must stand by our friends.
That board hat ttood by ut and above all
other thugs we must Justify their figures,
even t taking tbe tsx commissioner's state
ments; we cannot go back on them!" That
Is th only excuse thst can be given to
Justify these gentlemen In producing such
figure her.
Now we will glance at a few thing with
reference to th Union Paolfic. Their own
attorney has endeavored to oonfuse the
Issue, to muddle It up, by bringing In three
great transportation companies the Union
Paclflo system, he says, la composed of
three . separate transportation companies.
That 1 said for muddling purpose and
nothing els. Th two Oregon oompaales
operate under their own charter and have
no property in thl state. We have nothing
to do with them. We wHl take that one
paper In evidence, the Union Paclflo state
ment, showing "mileage, capital stock,
earning aad operating expenses" of the
Union Paclflo Railroad company for the
year ending December 81, and the earning
for It mileage in Nebraska alone; It can
be read in two minutes. It gives gross
earnings, operating expenses and net earn
ings for Nebraska. It showa Ita net earn
ings were $4,711 for esch and every mile
In. Nebraska! Ths Union Paclflo Is stocked
and bonded for over $130,000 for every
mile of Its road. Every mile Is treated
like every other mile. Its stock and bonds
are worth In the market over $120,000 per
mile. Taking, however, these earnings
only, and they equal 4.7 (nearly E) per cent
on $100,000!
Now take all their figures, what do
they amount to a compared with tbat
solitary fact? That tells th whole tory.
And yet ths Union Paclflo has part of ita
line, lxty-flv miles and a fraction, sep
arated from the parent company as a
separata concern, although It show it 1
operated under the Union Paclflo charter,
and assessed at $3,000 a mile. One thou
sand seven hundred dollars less per mile
than tbe net earnings of that same com
pany! Three thousand dollar is less than
one-thirtieth ot a hundred thoussnd dol
lars! There ar 414 miles sssessed st $3,600,
or 3 per cent of $100,000, $1,200 less than
each and every mile of It earn net! Tbe
great main line that carries the traffic of
the continent and of the Occident and
orient across th continental divide ta as
sessed at less thaa 10 per cent only 0.8
per cent on $100,000 ($9,800). Your hon
ors, It that Is not fraud, if that aaaess
ment ta not Impeachable, what is the
matter with tt? Is It full of righteous
ness or of unrighteousness? At the vary
lowest, their ssseesment should be double
whst It 1 on th main 11ns, on every mile
they have in the state.
And while I am on thl Union Paclflo
question I want to aay I have forgotten
something. I ssld in opening my argument
that I have tor twenty-five year wit
nessed th wrong doing of thess railroads
in thia state. I referred to tbe old Union
Paclflo company, not th new one, and I
want to do that much Justice to the new
on. It Is four year old. It is on trlsl,
it has a gentlamsn and a scholar for It
president, and, so far ss I know, it ta well
officered.
- I might hav aaid, with reference
to the B. ft M. Company in Ne
braska, that It ha been dead for
twenty-two year. The concern waa con
solidated with tbe parent company twenty
two year ago, laat January, and th reo
ord of th secretary ot state's office con
tain the record of it. Before leaving tbe
Burlington. I will say that all of It line
here, its fifteen lines, ar operated under
the Q charter tbe Q franchise, every mil
of It earn an equal amount, aad every
mile muat be asssssed silks, main line and
branches. Bo w aay that property la
worth, according to Mr. Harrington's fig
ures, $50,000 a mile, and Its market value
$55,000. Ita earalnga, taken from the peo
ple, some of It unfairly taken, make large
Interest on that; and not for on mil, but
for every mil of that system.
Yes, truly, w may get soms compensa
tion for th wrongs I think we hav Buf
fered from that company presence In our
tate-for the laat quarter of a century. W
will not ask ths court to go back and re
aasess thoss properties for tbess past
years; they have had these great benefit
for all thos year, but we will forgive
Although they hav not taught us to be
generous, and they never hav shown u
how to be Just, w know how to be Just,
and w will be generous as to ths past it
w caa get thl great tax reform inaugu
rated on the right line for th future.
I hav already said all I car to say
about th Pullman company. About th
Sioux City ft Paclflo, which has been over
looked. Th Bloux City ft Pacific, accord
ing to th Information before this board,
wss conveyed to the Cblcsgo ft Northwest
era in August last, therefore It must be
operated under the Chlesgo ft Northwest
ern charter, and not under Ita own charter,
nd it must be assessed as a part of ths
Chicago ft Northwestern. Th big bridge to
a part ef the great eatat ef the Chicago
ft Northwestern. ,
What has made these rallrotd proper
ties so rich so auddealy? They hav
farmed th people, th people have paid
the freight, they have not aaseased th
people, in fixing their tariffs, aa amount
sufficient to make remunerative the actual
value of their physical plants and ao more;
yet they ask to have their property as
esssd for tax purposes upoa th value t
th tangible property alone! Thsy hav
welded th branch and mala line Into ar.
entirety under their franchise, making ths
small line equal to the great one; they
have stocked aud bonded every mil alike
nd at aa exorbitant aggregate; thta thsy
levied upon the millions ot people west
of th Mississippi river an omnibus exe
cution called a rat sheet, to tak forcibly
from th people enough to bring their
stocks and bonds to psr. That I th way
they hav made these properties rich. Ths
Union Paclflo is stocked and bonded for
$130,000, for every mile, good and bad;
It hs tsken enough from the people to
bring their aecurltle In this amount ap
proximately, to par. Why did they not
make it $200,000 per mllo and bring It to
par in the am way?
Mr. Harrington ha told us thst in 1900
a common agreement wss made in Chicago
by the representatives of ths railroads
which plsced alt territory west of a line
running from Chicago and 8t. Louis and
down the Mississippi to ths gulf, tsklng
all th territory west ft that line and
putting It Into a division, and Issued a
rat sheet known at Classification No. 20,
binding upon every railroad within that
territory; this rat sheet Increased th
tariff 47 per cent on 240 articles in com
mon use; bo, as a result, a man who paid
$100 freight before had to pay $140 after
It took effect. The cost of carrying freight
had not Increased a dollar: the rate eheet
simply Incressed the profit ot the rail
roads, says the Interstate Commerce com
mission. Thst omnibus execution! Thus
were the people despoiled in order to en
rich the few! And the people should know
It! Now we aee the railroads higgling
over their taxes I '
Qwestloa of Manlelpal Taxation.
Your honor. I now com to th question
of municipal assessment. Thess city
charter each create a city tax commis
sioner and In each hat been inserted three
line la th am language. Thsy read
thua:
The tax commissioner shall tak the
valuation and assessment of railroad prop
erty within the city limits from the return
made by the State Board of Equalisation
to the county clerk.
The atate board take a a basis of valua
tion ons-slxth or one-seventh the real
value; the city assessor this year takes aa
a basis 100 per cent. Hence, th general
taxpayer will pay $6 or $7 where tbe rail
road will pay $1 on the 'am amount ot
property. Much of the railroad property
ta not assessed anywhere.
I draw attention to our petition, or re
lation, In thl case. Also to the brief at
pages 19. 20 and 41; to the brief in behalf
of the Burlington, at pages 46 and 47; to
the brief for the Elkhorn company, page
4, where it ta stated to be one of the
three principal complaints. The consti
tution says all municipal taxea
hall be uniform In respect to persons
and property within the Jurisdiction of
tbe body imposing ths same.
That is (in Omaha, Lincoln and South
Omaha) within their respective city limits.
Under It tbe legislature baa created these
cities; In each It has created a city tax
commissioner to assess this property. Th
legislative policy is declared. The legis
lature recognised the necessity tor special
government, celled municipal, and for a
special method of assessing city property
for municipal purposes. It 1 common
knowledge that municipal government is
under extraordinary expense not known to
state and county government. In Omaha
nearly $1,000,000 ta required for general
purposes, $500,000 for achoolt, another
$500,000 must be raised tor county pur
poses, most ot which Omaha property pays.
Your honors, I feel strongly on this
municipal question, but I have reserved it
till the last to take such remnnnt of time
bb might be left. I do not believe it Is
because I am a cltlsen of one ot these
cities; I believe It ta tbat something In
me tbat has ' made me so full of "hate"
that has mad m a "disappointed agita
tor" (as they say) It is th love of Justloe;
all men possess tbat. I hope it ta true
that it ta accentuated a little bit more
in me than In some people. I believe it
ta true that there are soms men who suffer
at ths sight of injustice. Just as there
are some who suffer to see a wounded dog.
In the three principal cities of the state
we have a - population forming a consid
erable portion of the population of this
state, probably 175,000. The capital Interest
Is vsry strong In them, but It is confined
to a email percentage of the population,
however. Tbe common people, I want to
ay. In these three cities, those who are
not so richly blest with wealth they are
good people, they average well, have sym
pathy with the whole atate and all parte
of the state, whenever and wherever there
ta wrong done or suffering endured. A
wrong notion, I think, mistakenly obtains
in some quarters, that we are all rich In
the cities, and that we . are all bad and
haven't any blood stirring for humanity In
us. That is a gross libel, if anyone eays
anything like that. Olve to the atate at
large ita full measure of Justice, but; In
cidentally, at least, relieve us from tbii
Injustice, to exaggerate which' would be
impossible.
Why. isn't It a duty almost for me to
urge here, appearing as I do on behalf ot
the public, as I think I do, or try to do,
and volunteer to do, to speak a word
In behalf of those tax officials who are
not relieved and enlightened upon thlt
question by a Judgment of thlt court. The
tax assessor that hav to sasess local
corporations under section 82 have been ao
Instructed. Deduct - indebtedness and It
leaves nothing to be taxed. For thirty
years that has gone on,' under section 82,
and other people have been wronged. Now
the court baa spoken and thess officer
Here is Your Chance.
We fine we ere long on several of our high grade and
medium priced Iiunaboutg, Buggies and Surreys, and will
make special prices on everything for the balance of thia
month. , Remember our goods are sold under the manu
facturers' plates and fully guaranteed.
We are the leaders in Automobiles, Oraphophones
and Bicycles.
H. E. Fredricksoti,
Fifteenth and Capitol Ave. Omaha Neb.
15
know their duty. The city officers, these
city assessors, dealing with ths tsxes ot
176,000 people, I think I may aak that they
should be In true ted to whether part
of the statute la unconstitutional; mean
ing those lines Inserted by the rsllrondti.
The constitution say cltle may b
created; they may hav the power to lax,
but the grest thing, the greet llmllstlon,
I. thst all taxation shall be uniform ae to
all property within the city limit, "within
the Jurisdiction ot the taxing board," that
Is th expression.
Now, If th legislature ha th power to
whittle away that Jurisdiction. If they can
withdraw from the city assessor Jurisdic
tion railroad property, then they oaa .
withdraw th property of all ather cor
porations. If tbsy.eaa withdraw from the)
Jurisdiction of tbe taxing body all that,
tbey can withdraw all personality. It th
legislature baa power to withdraw from th
Jurisdiction of the taxing officer all that
property, thy can withdraw all real es
tate. Npw there 1 soma? discussion la
our brief upon this same subject. Qeneral -Manderson's
brief, or ' Mr. Kslby's. I don't .
know which on prepared It and Mr;
White's, hav spoken of It as on of th
bate of these proceeding. Th board r
fused to tak into acoount any elty prep
arty valuation. Thsy reduced all elty
property to the level of country property.
They were asked to allow something for
th higher valuation of elty property. To
keep up special government called mu
nicipal, witb all It department, meant a
great Increase In the taxet. The people
outside do not know what taxe are! Whea,
the board wss urged to do that, they re
tuaed. Why did thes tax eommltslontra
drive them ao hard, why didn't they let up
a little bit, why didn't they yteld torn
thing, why did they tak fjs ltt drop
of blood and Insist on their pound of flesh?
Hsd they no compassion? Had they ao
sense of Justloe? Did they not know that
such things as tbat would lead to revolt,
that the long-auffering people will at last
turn? Even tbe worm, under certain otr
cumstances, will turn and drive it fang
Into Its pursuer! Would to Ood th peopl
had the spunk ef th worm!
That constitutional provision I a com
mand that require city property to be as
esaed with uniformity. If th tat board
ha Jurisdiction to make an assessment, it
becomes a etty assessor. How can It as
sess city property of railroad without
comparing valuations in th city and know
ing what they are? If they do act In the
capacity of a ctty assessor, it they do that,
It is unconstitutional; If they do not do It.
I efflrni tbat their aotlon la unconstitu
tional. Tbe rule of uniformity 1 lmper
tlve, as It ta fundamentally Just.
The very law creating the state board
reqnlres It to assess railroad property oa
a mileage basis. It must ascertain th
total value, divide that by th number of
mile of each company and certify the ro
ault to the county clerks. It acta under
section 1 of article tx ot the constitution,
which Is confined to stste and county taxa
tion. Under section 4 of th constitution,
municipal taxation 1 authorised, limited
by the rule of uniformity also. Property
In Omaha cannot be sssessed In Cheyenn
county. It ta legally and morally Impossi
ble ta distribute tbe valuation of the rail
road property In the cities on a mileage
basis without absolutely Ignoring the con
stltutlonsl rule of uniformity. In taot. the
state board has always sunk the valuation
of railroad property In cities, eo that it
hat paid nothing anywhere to anybody.
No on has profited except tbe railroads.
Our county has paid a much aa $2,000,
000 in taxe on bond donated to these
companies, and yet they ssy they should
not be assessed like other city property!
should pay only $1 (on what does appear -on
the tax roll very - little) when the
general axpayer must pay $6. This 1 so,
although the railroads reoelve in fact mora
protection from ctty government than any
10,000 private cltlxens. The Union Paclflo
bridge, with Ita enormous revenues, It val
used as a fraotlon of a mile ot road at
bout the ssme valuation as a vacant lot
assessed at $1,600. Furthermore, railroad
brldgea and terminals are not subject to
special taxes for sidewalks, pavement, re
pavement, etc., although the lot epoken of
may have been taxed $500 for tuch things
things tbstt a city must havs. Our citizen
hav been assessed for these specials from
$12,000,000 to $15,000,000. Building a city
here has helped tbe railroad more than
any other interest
The evidence Introduced shows that In
Lincoln the basia of assessment Is 100 per
cent; that a building there, earning $9,000
net, was sssessed at $95,000. Also other
slmllsr Instances were ehown, yet rail
road terminals there were assessed by th
state board at about the asms figure as
tbat one building, on about a 10 per cent
basis. Where Is there uniformity In that?
Where anything but the grossest injus
tice? Th three line In th statute ar
ao clearly unconstitutional that th wonder
is tbat ths courts hav not been appealed
to long ago to so declare. How should th
Union Paclflo bridge be assessed If treated
as other city property On Omaha 1 to b
aaseased this year? Such bridge els,
where, of no greater value, ar sssessed
t from $1,000,000 to $2,000,000. Why should
thl on be sssessed at $1,600?
In conclusion, let me say we aak, flrtt
and above all, for Justlo ta tt tat at
large; secondly and tubjeot to that, w
pray for Justlc to our municipal tax
payers! (Th End.)