The Nonpartisan Leader Newspaper, February 3, 1916, Page 4

FOUR Facts concerning influence brought to bear successfully on legislators. at Bismarck by business and banking in- terests and a story of legislative trickery in the interests of corpora- tions of the state are brought to light in a decision of the supreme court, just rendered, holding uncon- stitutional the law for the taxing of moneys and credits passed at the 1915 session of the state lawmake;s. The case is Amerland vs. Tax Commis- sion and Cass county. The decision is remarkable in that it takes cognizance of -the secret workings of ‘the legislature and goes behind surface indications to de- nounce in no uncertain terms one of the boldest frameups ever perpe- trated at the state capital. The money and credits bill, known as ‘house 'bill No. 331, introduced by Burgett and Wesdal, proposed to place a tax of three mills on:all - mon- eys and credits in the state, and had, it not ‘been, as the supreme court says, “deliberately rendered unconstitu- tional by its enemies” in the house -and senate, would have added, $600,- 000 revenue annually to the state :of North Dakota, according to the -es- timate of the state tax commission. ‘Law ‘Dead ‘Letter The bill was devised principally to force the corporations of ‘the state to contribute something in taxes for the great intangible property holdings on which the state is now collecting practically nothing because present taxing :laws, supposed to cover this class of property, are dead letters. In addition to pointing .out how this bill was deliberately mutilated din committee to render it unconsti- tutional, the supreme court in its .decision discloses an attempt of leg- _islative "friends of a money lending corporation to compromise for a mere: .song a .suit in which the state was ;attempting to .collect taxes from the corporation under ‘the 'old money and «credit law of the state. This at- tempt to settle a private lawsuit by an act of the legislature was in the shape of a rider to house bill 331, and it “throws .its dark shadow over section 4 .of ‘the . hill,” to .use the language .of the supreme court. 4 ‘No ‘Effective Law ‘Now ) There has 'been no effective law iin North Dakota for ‘the taxation ‘of in- tangible ‘property such as moneys:and credits. :Money :and .credit of banks “is supposed to be .reached by. the special assessment plan for hanks, but all property of this kind -owned by . others is supposed to be listed and taxed on the personal property schedule, paying the full rate of tax- . agion in-the districts where it is own- e has never assessed as much as $1,000,- 000 worth of moneys and credits, though it is known that hundreds of millions in this kind of property ex- ists in the state. So house bill 331 was introduced and passed in the house, providing for the special as- sessment of this kind of intangible property at the rate of three mills on the dollar. The bill was modeled on the plan of the Minnesota law, the most successful law of the kind in the United" States and would have brought the state a revenue of $600,- 000 annually, mostly paid by the big corporations, money lending firms and larger businesses of the -state. ‘Devise -Clever Trick This bill, of -course, ‘lined up the most powerful, vested, money inter- vests of tthe state in opposition, but the plan of operation :was mot ‘to de- feat the :bill in- the .ordinary, open way, or to put senators and .repre- “sentatives on record as voting against it. The ‘plan was to -amend it so it would ‘be unconstitutional after -passed. This was carried out. "In its decision finding the bill uncon- =stitutional ‘the supreme court ‘says: “The history of this legislation is ‘enlightening ‘and as it has a vital tbearing upon ‘the results of this suif ~we will take a moment to review it. “Chapter 285 .of the Minnesota ses. sion laws of 1911 provided for ‘the - ‘taxation of moneys and credits. 'The #ax commission of Minnesota attempt- ‘ed 'to collect .a nominal fee from ‘the "Winona ‘Motor .company. Resistance “feing made, the matter reached ‘the ‘Supreme court of Minnesota, who thanded down a decision February 9, 1912, upholding said law against the constitutional attack made thereupon. ‘Some person who was, undoubtedly, familiar with the Minnesota legisla- “tion ‘drafted house bill ‘331 and “pre- -sented it to the North Dakota 1915 legislature. .. .The author, no doubt, "hoped that if it .became a law 'in North Dakota three years after the Minnesota court had declared ‘it con- stitutional there :it would stand the - tests of ‘the North Dakota courts. :Quotes Senate Journal “If sthe ‘author of the bill was fam- iliar with the ‘Minnesota legislation - 'THE NONPARTISAN LEADER Decision Just Rendered Shows How Legislators Dared Not Vote Against Bill To Tax Corporations But Amended It To Make It Unconstitutional----Framed Rider To Aid Seltlement of Private Lawsuit. there was somebody with influence in the North Dakota legislature who was .equally . familiar with section 176 of our state constitution and the case of State vs. Klectzen, 8 N. D. 286.” The supreme court then quotes the senate journal to show how the bill was amended so that the clause dis- ‘tributing the tax to be levied, that is, specifying into which funds it should go and for what purpose, was eliminated by amendment. “This is a simple chapter from the history of this bill as .disclosed by~ the public records, of which this court can take judicial notice,” con- tinues the supreme, court. “Section 175 “of ‘the state constitution reads as fol- lows: . “‘No tax shall be levied except in pursuance of the law, and every laww liberately rendered the bill unconsti- tutional.” Committee Named Now, who were the enemies of this moneys and credits bill thus denounc- ed by the supreme court of North Dakota? The journal of the senate discloses their identity. = The bill passed without amendment in the house and in the senate was referred to the committee on taxes and tax laws. This committee consisted of the following senators: H. W. Allen, Emmons and Kidder counties; F. W. Vail,, Sargent; C. F. Mudgett, Barnes; 0. O. Targeton, Northwood; O. T. Loftsgaard, Walsh; A. L. Nelson, Rolette; C. H. Porter, LaMoure,; D. H. Hamilton, McHenry; _P. T. Kretschmar, McIntosh and Lo- Under this éystem North Dakota ° Lawmalking Machinery -of ‘State Prostituted. Over :one ‘hundred million dollars worth of intangi})le property in North Dekota—meney .and “credits—is -escaping taxation because tax laws intended to:get at this huge :amount of :property iare «dead letters. ‘These figures ‘are conservative and a matter -of :public record. A 'bill was introduced in the last legislature to correct existing ‘tax laws ‘on'this subject .and provide a workable system of taxing tthis vast wealth. This was house bill No. 331. It passed after :amendment in committee. E ‘The :supreme court -of the state thas just rendered ;a de- cision ‘*hdlding ‘this ‘act uinconstitutional. In making :that :de- cision ithe :supreme .court ®xposes :almost unhelieveable trick- ery by legislators. "The .court points out that this ‘bill was deliberately amended by its -enemies so that it was uncon- stitutional :and would inot stand ‘the test of the .courts after- wards. As intreduced the measure Followed the Minnesota law ‘on ‘the subject, -which -stood ithe ‘tests ‘of the courts in that state. As.amended it 'was minus = “distribution clause” and under ‘the -constitution of this state could not stand. This bill was-oppesed by the ‘corporate ;and -monied inter- ests of North Daketa :and Big Business resorted to trickery to kill it, in order that timid legislators would net have to g0 openly on record ‘in ‘the ‘house :and senate :as ‘opposing it. The plan succeeded, ‘but the supreme court went -outside of the briefs before it and examined the journal of ‘the legisla- ‘ture to expose this plot to the people of North Dakota. The ‘public record, taken in connection with-a few outside facts and the things pointed :out by the supreme -court ‘tell the story and reveal the men in the legislature who had to do with killing ‘the 'bill while ostensibly jpassing iit. 3 House bill No. 331 as amended :and passed contained a rider. "This rider as first :approved in committee was an at- tempt ‘to compromise for $300 a lawsuit in -which one of the counties -of the state was ‘trying ‘to «collect $12/000 in back taxes from a money lending corporation. As further amended the bill provided for compromising this lawsuit for $3,000, and it was actually compromised’ for that amount before the supreme court held the bill unconstitutional. ' The public record reveals the men who had enough in- fluence to obtain, by an :act of the lawmakers of _the great commonwealth of North Dakota, the settlement of a private lawsuit. The supreme -court comments in strong language ‘on this use by corporate interests of the lawmaking machin- ‘ery of the people. S : The detailed facts in this legislative shame are given for the first time to the people of the state in ‘the accompany- il ‘ing article. AR N imposing ‘a tax shall state distinctly an;- W.'B. Overson, Williams and Me- ‘the .object of the same to which only enzie; Charles Ellingson, Steele .and, it ishall ‘be ‘applied.’ ] Griggs. ’ These ‘senators ‘were the memhers Must State Purpose B of the committee' which-amended the “In State vs. Klectzen it is said: law so it would be unconstitutional. ‘All taxes, whether state, cit ; X ‘The . committee report appesars: on or school, are aid ‘into the page 785 of the senate journal;:1915. _county treasury* * *but the disposi- ~'The report was adopted by theien- tion to ‘be made of the praceeds of ate and later ‘b “taxes ‘when collected depends wholly a -conference uion the terms of the law under both branches. which is levied and collected. In this reslpect the statute in question is ‘wholly silent. The provisions of ‘section ‘175 ‘of the state constitution are clear ‘and unambiguous and the y the house ‘through committee = report ‘of “Loan Company Taxed It ‘remains to identify those ‘who ‘had to-do with the settling of the lature ‘and, ‘hence we are compelled -says “throws its dark s do ‘to ‘hold ‘that ‘the statute is repug- segtion 4 of the hill.” ek e m}‘!‘lt to the constitution.’ : “An attempt was made by the ases- “Every ‘word .quoted above applies igors of Ward county to tax ‘moneys with equal force to chapter 255 and credits of the ‘State Loan. com.- (house-bill No. 331) ;as mutulated by - pany of Kenmere, which started a its enemies, ‘There is no doubt that Farm loaning ‘business in North Pako- sthe author 'of “the :amendments was ta about 1900 and i -familiar ‘with said decision and de-: ! TR ‘a branch of a Minnesota corporation, ; 1 private law’ suit through the rider - _Same are mandatory upon the legis- on the bill, which the supreme court The Supreme Court Exposes Legislative Trickery This company’s moneys and credits ‘were valued for taxation purposes in 1913 at about $60,000 and in 1914 at about $60,000, under the old law, mostly a dead letter in the state, which taxes this kind of property on the personal property schedule. The tax due for these years was -about $12,000, under the total levy in that county of 92 mills. The company refused to pay the tax and took the matter into court. , Steele Company’s Lawyer One of the attorneys for ithe loan .company was H. H. Steele, who was. also a banker, connected with the First National bank of Mohall, Ren- ville county. The other attorneys for the company were H. M. Peck and L. J. Palda, Jr. Besides starting ‘the law suit to prevent the collection .of the $12,000 tax, the attorneys in- cluding Steele, appeared ‘“for the company before the state tax com- mission .at a meeting of the latter at Valley City, but failed to have the tax wiped out or reduced. ‘When the legislature -of 1915 met, while the suit was still pending, iSteele ‘was-among those who apgeared in the interests of the State Loan «company and -succeeded in having the rider referred to by the supreme court attached to house bill 331, the moneys and credits bill. This rider is section 4 of the bill and was at- tached, in ‘the interests of ‘the loan company, by the . senate tax law committee. It was as follows .as drafted by this committee: -~ Rider is Quoted ; “Any ‘assessment of money- and credits heretofore made, the legality of which has ‘been placed in litiga- tion and the collection of the ‘tax thereon has been :enjoined and is-now ppending in the court, may be :com- promised and settled by payment ‘at the rate of taxation as provided .in Section 1 .of this act.” 2 - There was only one law suit of -the kind mentioned in this rider pending in North Dakota at the time, and that was the suit involving taxes -of the State Loan company. At the ‘compromise ‘rate first provided in the rider the $12,000 tax of the loan:com- - any would have been -settled for 300.. ‘The ‘house and 'senate confer- ence committee, howeéver, raised,_the proposed compromise to $3000.- “Whether 'the author :6f*the amend- ments,” says the supreme court in :its decision on 'this bill, “succeeded :in . settling the law suit which throws its dark shadow over section4 of the bill as passed, we do not knqw.” Suit is Settled It is a matter of record, however, in Ward county that he did succeed. The "state’s attorney of the -county accepted $3000 in “compromise :and the suit was dropped. This seftle- ment was made ‘before the supreme court declared the ‘bill unconstitu- tional and Chairman Packard of the state tax .commission says it would not stand :should the case be reopen- ed. Tt is understood ‘he is making endeavors to have the case reopened, in order that the full tax of $12;000 can be collected from the loan com- pany. . This chaFter concerning the rider in the bill would not be complete without a statement as to what “be- came of H. H. Steele. He was .ap- Eomted in March, 1915, by Governor L. B. Hanna as a.member of the state tax commission. . It remains, also, to identify the leg- islators of ‘the -conference .committee which .approved ‘the amendments and Jet stand ‘the rider. These were,Sen- :ators H. P." Jacobsen, J. E. ‘Davis, E. H. Sikes and Representatives-C, ‘Ness, F. Wolfer and H. M. Erickson. it s true ‘this conference committee raised the -consideration for the settlement -of the loan company suit from :$300 to .$3000, but all ‘the amendments of the senate making the 'bill as a :whole ‘unconstitutional were adopted by the cconference committee. S _Marion Sentinel: "There is no ques- ‘tion but what the farmers of ‘this state are well able to carry out their gres_ent plans. What the results will e is too early to surmise, but we are ‘satisfied that there -are plenty man, Woman and child in ‘the “state. who if nominated and elected, will see that no legislation detrimental to any line of legitimate businesg will 'be passed and we ‘are glad to see them coming into their ‘own, 'Wil‘dr(.)se Plainsman: The - people livilng ‘in the far off western _ dis- tricts should feel particularly glad of this splendid (Nonpartisan League) movement through which the farm- ers will be able to get accommoda- tions for:themselves instead. of “them thrusting favors upon a few. * 8 -1 ——— R sy s s i i i {