Omaha Daily Bee Newspaper, July 20, 1902, Page 15

— e — THE OMAHA DAILY BEE: RAILROAD TAXATION SUNDAY, IN COURT Arguments of Counsel on ‘the Issues Raised in- the Mandamus . Case Before Nebraska Supreme Courtesror X Argument for the relater by Joha D, Howe It the court please, I hold In my Mand the document, a part of which was prepared by me, which has drawn out from counsel on the other side such severs com- ment. If there were In it such things ad have been imputed and charged, I might think it was unfair, but for every word there is between the 1ids of this book that I wrole, I abate not eme jot or cittle. 1 hope now to emphasize it and underine jt. A word about the history of this case mAy be in order. The present ibsue was made up in the main, and the briét whe nearly all prepared at a time when there had beét presented to this court simply a question of law. The question arose with sounsel upon our side, “What shall we do ufidér the new order allowing an amended answer té be filed’ An order stood requiring briefs. “Has that order been abrogated per se?” Perhaps that view was permidsible, but we concluded to serve this argument upen the counsel upon the other wide and draw thelr fire that we might see their band! Two gudgeons developed that bBit at it like a trout snapping at a fly in & meuntain brook, The others were too sharp. Thé two prin- cipal companies came in herve: by their re- spective counsel and served upon ue and put upon the files of the court their briets 8o constructed and wo filled with ‘figuves of tax commissioners and the like that we had them. When they served s with those ar- sumepts and showed us their hand, I sald ““the enemy 1s delivered into our mands.” Your honors have heard severe.critiof: upon the gentlemen who stand here for this writ. 1 stand here fer no ibdividual; I stand here without mioney A&nd without price, as do my assoclates, Mr. Harrington and Mr. Simeral. Money compensation did mot have the power to induce me vo engage in a work of this magnitude, and euch as it bas been the past three weeké to me, the cost it has been to me, and that I knew it would be to me. We sl here for 1,200,- 000 people. 1 have waited here during all the suffering of these thirty years of this conduct by two of the principal companies for this hour to strike. Here and now s the center of the stor: tot ‘of ‘tne agl- tation for tax reform which 18 epreading ever this state, not exoluding the cities, thank God, where the Wworst exnibition 18 shown and the worst injustice 18 felt Thankful we are to know that there are sympathetic friends outside f the oities who are willing to suggest (as Mr. Harring- ton has done here) that the cities atso have rellef from their sufterings, since we are here urging, with all our pewers, that all the people of this commonwealth shall be relieved from the injustice of what nas been done. We see upon the other side thbse learned gentlemen with their stenographers and tax commissioners behind them, thelr audi- tors and accountants and rything that caplital can command, to help them. How s it when men step out from & community, inte an arena like this, how are they placed? Not a stenographer, not 4n accountant, no testimony furnis] by auditors, working against the very greatést of odds! We expected to recelve the abuss cf these gentlemen, We expectéd to make onemies. But we think we may rely a little én the hope that we make some friends, too, to offset these powerful enemies. '~ Your hol ors, has it occurred to you, in-making such acting 1o the name of the 8 r officers .for, mls- conduct, where those Who touch the but- ton stand? The people will it a long time before starting, but Whem two or three do start they suffer much. They are made to feel the power. ' There is a pathos in this! The people, busy .with their farms and at thelr) work, betrayed, as we say they have been betrayed by this board, and betrayed, as we say théy have been habitually in many quarters, ' b submitted, and will submit, \nless some one steps forward and undertakes. the labor and incurs the responsibility that that step 1nvolvi 1 cannot view it otherwise than suggesting something painful. As the Bcotch say—"how peetiful—how peetiful.” Now there has been insugurated in this state & movement for tax reform..It started y here, I think, and io Omaha. Ome great decislon has been already secured from this court which has shown ihat we have a constitution with a provision in it that had been forgotten or overiooked, re. gerding franchises, as we also have one regarding municipal government and municipal taxation, and all stand on the same plane, that the taxpayéers shall be treated with absolute unitormity. In the early days of the territory this present system of assessing, which ignores the statute that says the full value shall be assessod, was inaugurated and under it the greatest abuses have arisem. It has been the greatest properties thAt have gained the most and, while the people ha mot known it, they have been paying a great deal more of the burdens of gove! ment than they should. This movement has commenced at the right end; it has Dot commenced with the small property owner; we have not been pursulng him. but | dyspepsia and ach unP:i‘u allied organs of nutrition by uuu-orDLP'lrfl‘t ll:gliml - very say: “We medicines with only tem; P ‘ X, i found a complete and lasting cure.” It is undoubtedly true that Dr. ' Golden Medical holds ord for the perfect and of indigestion and other stomuch and associated organs tiom and nutrition. It is not a NIt is with pleasure that . [i.m"l Golden ltd"lfll B W ave dn;e l?r u:é:dlfl Ir‘; M l plmeirial S S e 1 ate we me o l“‘ at e Felh Ty ucnicd me ome Hed e ookl medlcuet o o AT Tl I in sk G4 renelh, aod 2an waiit” Accept no substitute for ‘Dr, Plerce's Golden Medical : Dr. Pierce's Common Adviser is sent fiee on to pay expense of ed two weeks 1 felt as K falo, N, Y. we have commenced in this case with the greatest properties in the state. Let us get them wet right and let us hope tax reform will spread out, as it probably will, in all quarters until.we redeem this state from the odium of this fraudulent method of procedure which has ob- tained here ever alnce we were a territory, doing an injustice to the state and am es- pecial injustice to the poor. Now, the foundation of the law of this case 18 found In two sentences. The law branch of our argument was prepared by Mr. Simeral and & part of it has been presented to your honors. These prinel- ples are found In the language first of Judge Brewer and secondly in the language of that other great jurist, Justice Miller. We find_ that in half a dozen or more states these questions have come up. They have lately come up in Ohio, Massachu- Pennsylvania, Illinois, Indians and where they have come up, where the question of the assessment of these great estates has come up, not before special tribunals like these, boards of equalization that are in most cases not only willing but anxious to be humbugged, but whemever the question has come up before a judicial tribunal the assessment of these properties has been doubled. In the Kentucky case the franchise alone of one corporation was ralsed as & result from $30,000,000 to $60,000,000 and unless the assessment of these roads is doubled in this state I shall feel that our work has been in part a failure. Now, what did Justice Miller eay? “The current market value of the funded debt and of the stock is the best criterion of value.” Now the market price setties the is & great. maching down Hundreds of millions of operations are done there weekly and it is right there, through that great machine, that we find out bet- ter than any ether way, says this great Juist, the value of these quasi public cor- porations with their great franchises— franchises which are truly a part of sov- ereignty and which in this state have been a very great and undue part of sov- ereignty. Justice Brower says: “What a railroad s worth for income and sale it is worth for purposes of taxation.” That is sx- fomatic; the heart of it is outside and we see it; we know it is true. This court has speken along the same line, so we have felt no doubt whatever as to what the law governing this case. is. Now, | intended to go at some length inte comparing the twe answers—one pre- pared by the attorney general and the au- thor of the othor unkmown. That first pleading says that on the 14th of March, two days befere the assessment was pro- mulgated, the board had agreed upon valua- tion of the tangible property. That was the day when they had that great heari, there, with Mr. Rosewater and Mr. Simeral protesting and expounding to them the very law which we are expounding here; quoting from your honors' decision and from Justice Brewer's, and arguing it thor- oughly, as shown by several columns of the mewspaper testimony that is here. That hearing came up, such a one had never come up before; something had oc- curred; for thirty years they have read that statute literally; reading it literally it meant the physical property. They have never ed in this stata anything but the tangible property and nobody has ever insisted they should. Most of thém didn't know of that provision of the constitution. That franchises should be assessed was em- phasized by special mention in the coustitu- tion. Recently, it was brought out, brought to this court and by this court expounded. Then what happened? Why the sun of Austerlitz arose, 8. V. P.! After that, no board had any right to do what tbe other boards had dome. Two or three weeks after that decision ‘was announced—it was read with great sat- istaction all over this state—this board sat. This proceeding was born of that decision. They had that letter which goes into the detalls of the prices of stocks and {he in- crease In value of these properties in late years, by Mr. Harrington. It was sent to the governor and read to them, petition- ing them and protesting, but, your honors, I doubt that they did anything more then to give it the laugh in the secrecy of that chamber whe: they worked; that chamber where they held that session with the representatives of these rallroads—in- sald they were in—‘executive session,” else excluded, behind «losed touch the button, they threw the doors open and all the world knew what teok place there. Whoever heard of that ineet- ig of these railroad officials, sittin| jolntly with the executive board in execu- tive session? Now, then, that is what the first answer say! “The physical property had been assessed.” The second answer “hors entirely around. Before that, the case bad been tried before the board by t(he tax commissiopers. I wouldn't say an ill- natured word against them; they were doing their duty as best they knew how, but they were mot lawyers, they were trying the issue before the board before that, and they said ‘“No, why you have no authority to assess the franchise. No, vou cacuot do that.” That was their burden. But when the matter got out from the tribunal that was ready, willing to be humbugged and before a the lawyers .sald, “for we cannot maintain any such that answer must be changed; e to go down there In a body and take them by bave got to change that.” That amended answer does show that they did not assess the franchise “separately from the physical property.” How could they have considered it any other way?! For they had al arrived at the value of the tangible prop- erty, although it was not announced; they bad not lost jurisdiction of the matter. Their record was still open. It makes no difference in the valuation of this prop- erty and 1 say it once for all, whether you plecemeal this great transportation prop- erty and assess item by it rolling stock and every pin and gvery franchise separately, or whether you say it is one property and we will assess it all together. It is just like & fur- nished house and lot. You can take aa In- ventory of all the furniture, the value of the house, the value of the lot separately or you can value them all together. There is nothing in this talk about the franchise and separation of franchise; there is nothing in it The great charter words in the act that creates this board are: They shall arrh at “the fair cash valus that is all; there are mo strings on that, mo limitations, no directions how to do it just accomplish that result in your own way, unrestricted and unlimited; you bave the whole universe of information to draw on. Plecemeal it, lump it or separate it, it doesn't amount to that (smapping the fingers). | \ | | | numbers. That is a & | bulk of proj BAlr that got in the butter? The men who dréw (hat answer knew what they were abolit; they bad to put something in there because the contrast was so great between thé first and second answer on the fran- chise Question; something bad to be said and they had forgotten (or thought we woulda't find out) that they had sald that the phymical property had already been valued. 8o wé now come to the briet of the attorndy general. That tacitly admits that the ffanchise was not assessed or inten- tlonally assesséd. Then he says, whether it Whs assesséd or mot depends upon the decislon of this court! Now, even if these franchisss are ot worth $200,000,000—sup- Posd we say they are not worth over $100,- 000,0004sn’t it & strange thing for the at- torney general of the state to say that whother that $100,000,000 is assessed or not dépends upon what this court will de- clde 48 a question of law! Why, your honors, it the franchises were assessed it must hAve been at the rate of two for & dent, for the assessment is mo higher than in past years—lower, rather; taking the in- créased mileage, it i even lower than last year, 1 believe, on a mileage basis. There is o pronounced differemce, such as $100,- 000,000 or $200,000,000 must necessarily have made in it! It is not there. Thé truth is these men just followed & rut, notwithstanding they bad been given the Isw, notwithstanding they were urged and knéw bétter, if they knew anything; ufloss they were utter imbeciles they knew better, and, knowing better, they did not do théir duty! They undertook yto straddle dutyt I #ust hurry and reach the grand sesgment roll. These tax commissioners, dojng the best they know how, brought in a gréat many statistics as to how the rail- foadls are baing treated in different places, different states, brought in the census re- tutns ‘a8d & great many statistics, which make up the body of these two great ar- gumeénits—great in bulk, I mean. They did not know anything about the principle that bound the board, binds me and every citi- zén of the #tate, which will not operate to rélieve these rallroad companies be- causs it will not relleve me and every tdzpayer in the state. They cannot bring in garbled statistics (for we know that fig- ures do Me) and put all that stuff before the board and before this court except sub- $4ct to. that principle of law. This princi- plé olérs it all off—just as I wipe all that #tuft off that table and leave a clear place. The assessment in this state is made by authotised tribunals and authorized offi- céts ‘under oath. It cannot be impeached in’aby such prooeeding as this. It binds these -reilrosd companies as it binds me. Hgw ‘would I look going before the as- sedfor and saying, “‘Here, there is a lot of propefty in Nebraska that is not on the apéebbment roll and for that reason I want my taxes reduced or my essessment re- duedd? How would any taxpayer look do- Ing'it?. That principle sweeps out all that testimony, renders it nugatory and leayes that board bound, as everybody else is bound, by that principle. Right or wrong, this asdessment must be made with ref- efénce to it as though it were right. If it is wrong we all suffer and we must all sufter in common. This tax reform I hope will relieve the people hereafter by getting these raliroads hundreds of thousands of dollats in bonds, hundreds of thousands of acres of land. No one has given me one boad or one acre of land, In addition to that we have given them the great - Nw franchise which binds all of their P Y“Ml[fll&mflu.uwll’f“l use,and a profitable use, a more profitable use than any other we have in this state. The péople have given them all of that, those lands, those bonds, those franchises, and {hey are higgling over their taxes! Two million dollars will not cover the taxes we R:'uld in our county on their account. roads must take it into acceunt that the declsions have established this, that they must take a great big lot our of thelr earnings for taxes. They must not say takes are a side issue any more, but a real burning issue! Do mot cite to us Iowa and such states as that, ratlroad ridden as their loglelatures always have been—as in Ne- braska! They want rellet over there and they ate agitating it there, and se are other Btites, the same as we are here. We, on our glde, have cited Missouri, Indlana and Katsas. They do not say anythmg about those states ahid their method of assessing this class of property! Tidesite to shy & fow words on the aver- Ageh and percentages that these gentle- mefi deal in so much. The Unien Pacific Ralltosd company necessarily wants to be averaged up with the Elkhorn and with the Grand Island & Montana. Now all I desire upon the idea of averaging the great- jperties with the little ones is this: mion Pacific says, “For heaven's sake, ook &t that Blkhorn road, see how poor it 18, ahd that road that goes away up to Mon- tafid; don't you eee how each is scruggling long tor existence? Haven't you any bowels of compassiofi? Why don’t you be sorry for as? Juét leok At these poor people—igok at thut waeherwoman over there, laboring over hér tub, her children ragged and hungry’ Haven't you any bewels of compasslon when you 100k at our property? Average us. the washerwoman and to/say st The Why, in Bgypt, on the borders of the Libyan deseft, is a great city, the eity of CAlro, with large properties in it. Now, suppose the city property over there would averaged with the acreage in the Libyan . Would that be just? dow’t bear the little roads talk about aver- Aging with the Union Pacific; it is not help- ful to their side. But the Union Pacifi¢ wants to be averaged and scaled down. This great bulk of rallroad property in | this state 18 worth $325,000,000 in round t property. That s the market value. Here is this great ty, every inch of which is edfning something, much or little; the Eréat use to which it is applied is born of born of the soverelgnty. cent, as they claim they do pay, of our You | | taxes, T say point me out 15.4 of any other property, Just as it averages in this state, that Look at it 10 that way; this property, weided to- géther by the franchise in a mass; & fran- fArmer's root cellar; that goes into every eat. Those great trdnsportation franchises are worth & great deal of mdnby, especially when they are exploited @ competition. You needn't be afrald of paralleling the Union Pacific when théy have the territory! I say t that 25 per cent 1 tate. You canmot Dér cent of property just as it 48 it averages, horses, mules, property, etc., good, bad snd that will begin to be as valu- #s this raliroad property or that could eashed for as much or that pays. any Brrevenus or anything like it. That dis- poses of their plea for uniformity and for Justice. In our cities the railroads say, “No, you cannot assess our property,” although the constitution and law say it shall be, by city asqessors. We must have that state board down there in Lincoln assess this property and you must take your assess- ment from that board’s assessment. Hence 16% per cent s the county and city as- sessment for rallroads (or less than that) for general purposes, while the cit| of Omaha for this year and of Lincoln and South Omaha must pay on a basis of 100 per cent; that is the program now in Omaba this year, meaning $6 for the citi- gen where they pay $1. As to the Unlon Pacific bridge (which earns half a million dollars every year) half of it is assessed at $1,600, and my plece of vacant ground, worth $2,600, s assessed at 48 per cent and pays more taxes than that bridge! Is that uniformity? If not, why not? Why not wipe those two lines out of the city charter, lines inserted thers by the rail- roads? Why not do ds you did with tl other section (section 32) whem, for the first time after thirty years, the assessors knew how to assess local corporations and for the first time they will know how to jess railroad property! Your honors should say that those two lines are uncon- stitutional. Give us justice all over the state; clean the platter; first give it to the state at large; demy it to us if you must, but if you can, and I think you ought, give us simlilar rellef! 1 am going fo give a few figures on the question of interest. I want to expound a little bit the mysteries of interest. I have been looking into the matter. All over this country interest is low. There was never such a time; it has continued for years and the prospect is it will comtinue in the future. Whose property is that great lowness? Is that lowness a property of these raflroad ocompanies? It is the property of 76,000,000 of people! Where do the people get anything but small rates of interest upon their savings? Let us how these profiting by the refunding process. New York Central will, this year, save $1,500,000, and from ‘this time ench year, just by stmply refunding high-rate bonds for low-rate bonds. That makes thelr property so much more valuable. That amount could be laid aside by the New York Central. It will pay interest on $45,000,000 of securities at 4 per cent. They can put that $45,000,000 of assets into their treasury. The Northwestern will save, in the same way, $650,000, equal to $15,000,000, capitalized in that way. The Burlington bas already retired some of thelrs and next year $22,000,000 ring 7 per cent mature, and they can be reduced, I take it, to 3% per cent bonds, because the Bur- lington has got out, the statistics show, 3% per c ‘bonds on the Illinois division, maturing In 1049, In the sum of over $26,- 000,000 quoted above par. So much for what money is worth, so much for what its is worth. What will the railroads do? WIIl these raiiroad 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 framd alleged. T will speak of the two principal companies. Fraud is alleged. The relator alleges actual knowledge. They did so wrong a thing as to refuse to comsider $100,000,000 or $200,000,000 worth of property, when the people of this state, by their volunteer representatives, urged them to consider it, and after this court had substantially said 1t is 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. Simeral were there. Your decision was there, and the information was all there! Why dida’t they use the infopmation unless they were willfully bliad and lame and halt—unless they had, your honors, been hypnotized, un- less they had asked to be chloroformed also, how could they escape it? What is fraud, in God’s mame, If that is not fraud? Who bas a photograph of it if that is not oné I have already mentioned that dark lan- tern meeting In executive session between the board and railroads, the rallroads being there, just as though they were members of the board, and having more influence than members of the board. The whole thing was cut and dried them, I have no doubt. What difference did it make to them that the Burlington rallroad hadn’t made any report or that half a dozen railroads badn't made any report? What do we want of reports; what do we want of t annual reports of the Q road, they must have sald? The reports should have been filed in January and April, as the constitu. tion and law require. ‘“What do we want of the tax lists or revenus returns called for by the revenue law? Why, we don't need them. They are not here, but we haven't missed them at all."” They were not asked for; they were not even missed. Then these delinquent rallroads, two or three of them, hustied around and sent down their annual reports which should have been thes in January, and they hustled together a list for assessment, &s they called them, of the Burlington's fifteen companies, mere skeleton companies, mere skeletohs, showing fifteen skeletons, not n cadavers, for their flesh had rotted off. They were lined up there in a row after ‘\u assessment was made! can finish all I have to say 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. & Q. raliroad, which oper- ates more rallroad in this state than any other company, is not assessed for one penny in the state of Nebraska! Its name is not in the list, it has returned mo list, but its suditor, under instructions, has put in fifteen skeletons, not even cadavers or stiffs, with no resemblance to a living thing. It is shown here that the Q road should be assessed on many millio of dollars, as I shall show presently, and yot it is not assessedfor one cent! Is that fraud or fsn't it fraud? We got a valuable bit of Inrormation, or, at least, it is pletu uely brought out in Unlon Pacific argument by Mr, Baldwin, which will eerve for an illustration. I can use it for my purpose. He speaks of the Burlington's so-called “main 1 to Kear- mey. If I were the rallroad and nad to pay taxes on the main line I would want it a ry short line. I would rather pay on 151 miles running out te Kearney than 450 miles running toward Denver. 1 would grub up & pretty good showing of earnings, in some way or other, so as to have some excuse for calling it the main Mne, because 191 1s less than 450. It would cost less. New that line is sssessed for §10,580 & mile, the great “main line,” and yet the gentleman tells us, with great, simple honesty, that it earns $12,661 per mile net! Assessed at less than its net earnings! How would you assess & bullding that would earn §12,551 net? For less than its net ears 000 less? Here is not ome bulldiag alone, but 191 butldinga! Iz Lincoln one bullding is shown to have earned, met, $9,000. What is that assessed for? Nigety-five thoussnd dellars! About rallroads are The JULY 20, 1902. ten times. When I tapitalise the Burling- ton's “maln I bet earnings at 4 per cent, which means par, it shows a capital- ization of $313,000 per mile for every mile of the 191; therefore that main line is as- Sessed at about one-thirtieth of what we say its value is, valuing it on a basis of 4 per cent; it i one-thirtieth and is refus- ing to pay anything to spesk of In the clties! Your honors, you cannot take the great mischief the raliroads do in our clties, and they do more in the great centers than in the country, you cannot take that and spread it out om the mileage basis! The wrongs they do In our cities we cannot spread out on a mileage basis! And yet they want to be taxed and assessed on a mileage basia! And the gentleman, the grandiloquent man, the talking man of the Union Pacific I belleve he is called, pleads for justice for the railroads! He wants your honors to keep cool and not do them an injustice, not to listen to this rab- ble, not to listen to these three disap- polnted agitators, who are full of hate, they say. Well I am full of it. I admit I am full of bate and that I am disappointed that for thirty years this wromg has been golng on! I feel encouraged now and brightened up, because it seems to me a better day has dawned and a juster ome. The arguments of counsel have been made up, as T have stated, from their tax commissioner's figures In the main. When your honors get a lMttle insight into these exhibits, you need only to glance at them and you will be amazed, as we have been, that gentlemen should bring in here betore this tribunal such arguments, such im- peachable figures, that are adapted to a board that is willlng and anxious te be humbugged, but out of place before & ju- diclal tribunall I could prove that easily, detall by detall, but fs thers any doubt in anybody's mind why these gentlemen were driven to such expedients? The rea- son s, these railroad companies and these members of the board were all standing in & hole together. The paramount prin- clple that governs rallroads, as we all know, is, “we must stand by our friends. That board has stood by us and sbove all other things we must justify their figures, oven te taking the tax commissioner's state- ments; we cannot go back on them!” That is the only excuse that can be given to justify these gentlemen in producing such figures here. Now we will glance at a few things with reference to the Union Pacific. Their own attorney has endeavored to confuse the issue, to muddle it up, by bringing in thres great transportation companies—the Union Pacific system, he says, is composed of three . separate transportation companies. That is sald for muddling purposes and nothing else. The two Oregon companies operate under their own charters and have no property in this state. We have nothing to do with them. We wHl take that ome paper in evidence, the Union Pacific state- ment, showing ‘“mileage, capital stock, earning and operating expenses” of the Union Pacific Rallroad company for the year ending December 31, and the earnings for its mileage in Nebraska alone; it can be read in two minutes. It gives gross earnings, operating expenses and net earn- ings for Nebraska. It shows its net earn- ings were 34,711 for each and every mile in, Nebraska! The Union Pacific 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 {n the market ober $120,000 per Taking, however, theso earnings only, and they equal 4.7 (nearly 5) per cent on $100,000! Now take all thelr figures, what do they amount to compared with that solitary fact? That tells the whole story. And yet the Union Pacific has part of its line, sixty-five miles and a fraction, sep- arated from the parent company as a separate concern, although it shows it is operated under the Unlon Pacific charter, and assessed at $3,000 a mile. One thou- sand seven hundred dollars less per mile than the net earnings of that same com- pany! Three thousand dollars is less than one-thirtieth of a hundred thousand dol- lars! There are 414 miles assessed at $3,500, or 3% per cent of $100,000, $1,200 less than each and every mile of it earns met! The great main line that carries the trafiic of the continent and of the occident and orient across the continental divide s as- séssed at less than 10 per cent—only 9.8 per cent on $100,000 ($9,800). Your hon ors, if that is not fraud, if that as ment is not impeachable, what is the matter with it? 1Is it full of righteous- ness or of unrighteousness? At the very lowest, their assessment should be doubls what It is on the main line, on every mile they have (n the state. And while T am on this Union Pacific question I want to say I have forgotten something. I sald in opening my argument that I have for twenty-five years wit- nessed the wrong doing of these railroads in this state. I referred to the old Union Pacific company, not the new one, and I want to do that much justice to the new one. It is four years old, it is on trial, it has a gentleman and a scholar for its president, and, 80 far as I know, it is well officered. I might have sald, to the B. & M. Company in Ne- braska, that it has been dead for twenty-two years. The concern was con- solidated with the parent company twenty- two years ago, last January, and the rec- ords of the secretary of state's office con- tain the record of it. Before leaving the Burlington, I will say that all of its lines here, its fifteen lines, are operated under the Q charter—the Q franchise, every milo of it earns an equal amount, and every mile must be assessed alike, main line and branches. So we say that property is with Jeference ures, $50,000 a mile, and its market value $55,000. Its earnings, taken from the peo- ple, some of it unfairly taken, make large interest on that; and not for one mile, but for every mile of that system. Yes, truly, we may get tion for the wrongs I think fered from that company’s presence in our for the last quarter of a century. We will not ask the court to go back and re- assess those propertios for these past years; they have had these great benefits for all those years, but we will forgive Although they have not taught us to be } generous, and they mever have shown us how to be just, we know how to be just, and we will be generous as to the past if we can get this great tax reform inmugu- rated on the right lines for the future. 1 have already said all I care to say sbout the Pullman company. About thé Sioux City & Pacific, which has been over- looked, The Sfoux City & Pacific, accord- ing to the information before this bosrd, was conveyed to the Chicago & Nortfiw ern in August last, therefore it must be operated under the Chicago & Northwest. ern charter, and not under its own charter, and it must be assessed as & part of the Chicago & Northwestern. The big bridge Is & part of the great estaie of the Chicago & Northwestern. What has made these rallrodd prope: ties so rich so suddenly? They ha farmed the people, the people have paid the freight, they have not aisessed the people, in fixing thelr tariffs, an amount sufficient to make remunerative the actusl value of their physical plants and no more; yet they ask to have their property as. sessed for tax purposes upon the value of the tangible property alone! lded the branches and main line into an entirety under their franchise, making the amall line equal to the great ene; they bave stocked aud bonded every mile alike and at an edorbitant aggregate; them they levied upon the milllons of people west of the Missisaippl river an omnibus exe- cution called a rate sheet, to take foréibly from the peopls emough to bring their stocks and bonds to par. That Is the way they have made these properties rich. The Union Pacific s stocked and bonded for $130,000, for every mile, good and bad; it taken enough from the people to | bring thelr securities in this amount ap- proximately to par. Why did they not make it $200,000 per mile and bring ¥ to par in the same way? Mr. Harrington has told us that in 1900 A common agreement was made in Chicago by the representatives of the rallroads which placed all territory west of a line running from Chicago and St. Louls and down the Mississippl to the gulf, taking| all the territory west of that line and putting it into a dlvision, and ed a rate sheet known as Clasaification No. 29, | binding upon every rallroad within that territory; this rate sheet increased the tarift 47 per cent on 240 articles In com- mon use; so, as a result, & man who pald $100 freight before had to pay $140 after 1t took effect. The cost of carrying freight had not increased a dollar: the rate sheet siniply Increased the profits of the rall. roads, says the Inters! mission. That omnibus execution! were the people despoiled in order to en- rich the few! And the people should know it! Now we over their taxes! Question of Municipal Taxation. Your honors, I now come to the question of municipal assessmest. These city charters each create a city tax commis- sloner and in each has been inserted three lines in the same language. They read thus: The tax commissioner shall take the valuation and assessment of railroad prop- erty within the city limits from the returns made by the State Board of Equalization to the county clerk. The state board takes as a basis of valua- tion one-sixth or one-seventh the real value; the city assessor this year takes as & basis 100 per cent. Hence, the general taxpayer will pay $6 or $7 where the rail- roads will pay $1 on the ‘same amount of property. Much of the rallroad property 1s not assessed anywhere. I draw attention to our petition, or re- lation, in this 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 Blkhorn company, page 4, where it is stated to be ome of the three principal complaints. The con tution says all municipal tax shall be uniform in respect to persons and property within the jurisdiction of the body imposing the same. That 1s (In Omaha, Lincoln and South Omaha) within their respective city limits. Under it the legislature has created these clties; in each it has created a oity tax commissioner to assess this property. The legislative policy is declared. The legis- lature recognized the mecessity for special government, called municipal, and for a special method of assessing city property for municipal purposes. It 1s common knowledge that municipal government is under extraordinary expense; not known to state and county goyvernment. In Omaha nearly $1,000,000 is required for gencral purposes, $500,000 for schools, another $500,000 must be raised for county pur- poses, most of which Omaha property pa: Your honors, I feel strongly om this municipal question, but I have reserved it till the last to take such rempant of time as might be left. I do not belleve it is because I am a citizen of one of these cities; I belleve it is that something in me that has made me so full of ‘‘hate” that made me a ‘“disappointed agita- tor” (as they say)—it is the love of justice; all men possess that. I hope it is true that It is accentuated a little bit more in me than in some people. I believe it is true that there are some men who suffer at the 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 very strong In them, but it is confined to a small percentage of the population, however. The common people, I want to say, 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 state and all parts of the state, whenever and wherever there is 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 baven't any blood stirring for humanity in us. That is a gross libel, if anyone says anything like that. Give to the state at large its full measure of justice, but, in- cidentally, at least, relieve us from this injustice, to exaggerate which' would be impossible. ‘Why, fsn't it a duty almost for me to urge here, appearing as I do on behalf of 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 this question by a judgment of this court. The tax assessors that have to assess local corporations under section 32 have been so instructed. Deduct indebtedness and It leaves nothing to be taxed. For thirty years that has gone on, under section 32, and other people have been wronged. Now the court has spoken and the know thelr duty. These city officers, these city assostors, dealing with the taxes of 176,000 people, T think I may ask that they should be instructed to whether part of the statute is unconstitutional; mean- ing those lines inserted by the raliroads The comstitution says citles may be created; they may have the power {o lax, but the great thing, the great limitation, is, that all taxation shall be uniform as to all property within the city limits, “‘within the jurisdiction of the taxing board,” that is the expression. Now, if the legislature has the power to whittle away that jurisdiction, if they can withdraw from the city assessor's jurisdio- tion rallroad property, . then they oan withdraw the property of all other cor- porations. If they.ean withdraw from the Jurisdiction of the taxing bady all that, they can withdraw all pérsonality. If the legislature has power to withdraw from the jurisdiction of the taxing officer all that property, they can withdraw all real os- tate. Now there is somd discussion ia our brief upon this same subject. General Manderson's brief, or Mr. Kelby's, I don't know which one prepared it-—and Mr ‘White's, have spoken of it as one of the bases of these proceedings. The board re< fused to take into account any eity prop- erty valuation. They reduced all elty property to the level of country property. They were asked to allow something for the higher valuation of oity property. To keep up a special government oalled mu- nicipal, with all its departments, means & great increase in the taxes. The peopls outside do not know what taxes are! When the board was urged to do that, they re- fused. Why did these tax commissioners drive them so hard, why didn’t they let up a little bit, why didn’t they yleld some« thing, why did they take the last drop of blood and insist on their pound of fleshi? Had they no compassion? Had they mo sense of justice? Did they not know that such things as that would lead to revolt, that the long-suffering people will at last turn? Even the worm, under ocertaln oir« cumstances, will turn and drive its fangs into its pursuer! Would to God the peopls had the spunk of the worm! That constitutional provision is & come mand that requires city property to be as« sesmed with uniformity. If the state board has jurisdiotion to make an assessment, it becomes a city assessor. How can it ase sess clty property of rallronds without comparing valuations in the city and know=~ ing what they are? It they do act In the capacity of a city assessor, it they do that, it is unconstitutional; if they do not do it, I afirm that their mction is unconstitus tional. The rule of umiformity is impera tive, as it is fundamentally just. It must ascertain the total value, divide that by the number of miles of each company and certify the ro- sult to the county clerks. It acts under section 1 of article ix of the constitutfon, which is confined to state and county taxa- tion. Under section 4 of the comstitution, municipal taxation s authorized, limited by the rule of uniformity also. Property in Omaha cannot be assessed In Cheyenne county. It is legally and morally impossi= ble to distribute the valuation of the ral road property in the citiés on & mileage basis without absolutely ignoring the cons stitutional rule of uniformity. In fact, the state board has always sunk the valuation of raliroad property in cities, so that it has pald nothing anywhere to anybody. No one has profited except the rallroads. Our county has paid as much as $2,000,« 000 in taxes on bonds donated to thess compan! and yet they say they should not be assgssed like other city propertys should pay only $1 (on what does appear on the tax roll—very little) when the general axpayer must pay $6. This is so, although the railroads receive in fact more protection from city government than any 10,000 private citizens. The Union Pacifio bridge, with its enormous revenues, is val- used as a fraction of a mile of road at about the same valuation as a vacant lot assessed at $1,600. Furthermore, railroad bridges and terminals are not subject to special taxes for sidewalks, pavemen pavement, etc., although the lot spoken of may have been taxed $500 for such things— things that a city must have. Our citizens have been assessed for these speclals from $12,000,000 to $15,000,000. Bullding a city here bas helped the rallroad more than any other interest. The evidence introduced shows that in Lincoln the basis of assessment is 100 per cent; that a bullding there, earning $9,000 net, was assessed at $95,000, Also other similar Instances were shown, yet rall- road termin: there were af by the state board at about the same figure as that ome bullding, on about s 10 per cent basis. Where is there uniformity in that? ‘Where anything but the grossest injus- tice? The three lines in the statute ai 80 clearly unconstitutional that the wonder is that the courts have mot been appealed to long ago to so declare. How should the Union Pacific bridge be assessed if treated as other city property in Omaha is to be assessed this year? Such bridges else~ where, of no greater value, are assessed at from $1,000,000 to $2,600,000. y should this one be assessed at $1,6007 In conclusion, let me say we ask, first and above all, for justice to the state at large; secondly and subject to that, we pray for justice to our municipal taxe Here is Your Chance. We fine we are long on several of our high grade and medium priced Runabouts, Buggies and Surreys, and will make special prices on everything for the balance of this month. Remember our goods are sold under the mann- facturers’ plates and fully guaranteed. We are the leaders in and Bicycles. Automobiles, Graphophones H. E. Fredrickson, Fifteenth and Capitol Ave. Omaha, Neb.