Univ.of 111. Library 
 
 51 
 
 3¥£7 
 
 ARGUMENT 
 
 OF 
 
 ! Hon. John M. Hall, 
 
 BEFORE THE 
 
 Judiciary Committee of the General Assembly 
 
 OF CONNECTICUT, 
 
 February SOtlr, 1895, 
 
 IN BEHALF OF 
 
 THE NEW YORK, NEW HAVEN AND 
 HARTFORD RAILROAD. 
 
 AGAINST 
 
 DOUBLB TAXATION. 
 
ARGUMENT 
 
 Hon. John M. Hall, 
 
 BEFORE THE 
 
 Judiciary Committee of the General Assembly 
 
 OF CONNECTICUT, 
 
 February 20th, 1895, 
 
 IN BEHALF OF 
 
 THE NEW YORK, NEW HAVEN AND 
 HARTFORD RAILROAD, 
 
 AGAINST 
 
 double: taxation. 
 
Mr. Chairman and Gentlemen of the Committee : 
 
 In presenting to you such suggestions as occur to me 
 in favor of the petition which has just been read, I con- 
 gratulate myself that I have the honor of addressing a 
 Committee composed entirely of lawyers, and especially 
 this Committee where the atmosphere is not entirely un- 
 familiar to me, for I believe that on the six occasions 
 when I have served in one branch or the other of the 
 General Assembly, it was my privilege to sit as a member 
 of this Committee at least five’times. 
 
 Representing the supreme power of the State, making 
 and unmaking Courts and Judges, administering both law 
 and equity in the broadest sense, it is peculiarly the Com- 
 mittee to investigate and determine the case we have in 
 hand here to-day. The question involves the principles 
 upon which the State levies its taxes upon railroad cor- 
 porations, the laws which govern the administration of 
 those principles, and the equities which should control the 
 State in the exercise of its wide powers of taxation. The 
 subject of railroad taxation, I venture to suggest, is one of 
 those by-paths in legal lore to which the practicing lawyer 
 seldom has his attention called. It hardly ever comes to 
 the attention of the lawyer' in active practice, unless for 
 some special reason his attention may have been inci- 
 dentally called to it. 
 
 While sitting as a member of this distinguished Com- 
 mittee in 1881, which Committee was composed of such men 
 as ex-Chief Justice Seymour, Judges Brewster, Harrison, 
 ex-Gov. Morris, Hon. Charles E. Mitchell, David Booth, 
 Judge Merriman, of Meriden, and Judge Northrop, of Mid- 
 dletown, my attention was specially directed to this subject 
 by a case which came before the Committee at that time, 
 to which I desire to call your attention immediately, but 
 before that I wish to say at the threshold of this discussion 
 
 3 
 
that the basic principle underlying all taxation in Con- 
 necticut has been from an immemorial past this: That 
 Connecticut does not intend to exact from any person or 
 corporation in this State, a tax upon property which lies 
 wholly without its territorial limits, and this principle is 
 embodied in Section 3830 of the General Statutes, which 
 reads as follows: 
 
 “ The list of any person need not include any property 
 situated in another State, when it can be made satisfac- 
 torily to appear to the Assessors that the same is fully 
 assessed and taxed in such State, to the same extent as 
 other like property owned by its citizens.” 
 
 This was the principle before the days of steam rail- 
 roads and has never been changed. It is grounded on 
 justice and equity. The whole system of railroad taxation 
 proceeds upon this same theory, that the State will tax 
 only such portion of the property of a railroad as lies 
 wholly within this State. In the language of Chief 
 Justice Park in the case of the State of Connecticut vs. The 
 Housatonic Railroad Company, found in 48 Conn., p. 53, 
 “ These statutes seek to ascertain the value of the property 
 of the railroad companies ‘lying wholly within this State 
 devoted to railroad purposes, and to tax that value.’ ” 
 
 When all the property of the railroad lies wholly 
 within this State, the market value of all its capital stock 
 and the par value of its funded and floating indebtedness 
 represent the amount of the value of the railroad upon 
 which taxation is levied. See Sections 3919 to 3933, 
 inclusive, of the General Statutes, for the whole subject of 
 railroad taxation. 
 
 Now, in case a railroad lies partly within the State and 
 partly without the State, Section 3921 provides that a tax 
 of one per cent, upon the valuation shall be assessed only 
 upon such portion of the whole valuation as the length of 
 the road lying in the State bears to the entire length of the 
 road, showing conclusively that the whole idea and purpose 
 of the statutes upon this subject has been from the begin- 
 ning to tax only such portion of the property as lies within 
 the State. 
 
 4 
 
In the year 1880, the case of the State of Connecticut 
 vs. The Housatonic Railroad Company, to which I have 
 referred, and which was a case where the Housatonic Rail- 
 road leased certain roads in Massachusetts and operated 
 them by the Connecticut corporation, and claimed under the 
 law then existing that it had the right to deduct for the pur- 
 poses of taxation the value of these roads on the ground 
 that they owned them, which was not literally true, 
 because in fact they leased them, the Court held that 
 in the absence of any statute whatever affecting leased 
 lines out of the State they could not be regarded as the 
 owners of the property, although in equity they ought not 
 to pay the tax and, therefore, at the end of the decision 
 they say : 
 
 “ So far as the defendants’ stock has been increased in 
 value by their interest in the Massachusetts roads, and so 
 far as their floating debt has been increased by the making 
 of permanent improvements along these roads, they ought 
 to have the benefit of these facts in a proportional reduc- 
 tion of their tax; and no doubt, if the matter was brought 
 to the attention of the Legislature, a proper reduction 
 would be made. But the Courts have no power to do equity 
 in the matter.” See 48 Conn., p. 57. 
 
 Here we have an express direction of the Supreme Court 
 of Errors to the railroad company, defendant in that case, 
 to bring their petition to this tribunal for a remedy and 
 an abatement of the inequitable tax complained of. In 
 1881, therefore, acting upon the advice of the Supreme 
 Court, the Housatonic Railroad Company brought their 
 petition to the General Assembly for an abatement and 
 remission of the taxes in question, and I had the honor, as 
 a member of the Judiciary Committee, to hear that case, 
 and it was unanimously determined by the Committee that 
 the State of Connecticut could not, in honor, exact that 
 tax from the Housatonic Railroad Company, and upon 
 report of the Committee the judgment of the Court was 
 set aside and the tax was remitted by the Legislature, 
 and to prevent any further question of that kind, Section 
 3923 of the General Statutes was framed by that Committee 
 and became a part of the General Statutes of the State. 
 Section 3923 is as follows: 
 
 5 
 
“ Every railroad company in this State, which holds by . 
 lease or otherwise, a railroad in another State, which is 
 not a part of its own road, shall state in its annual return, 
 for the purposes of taxation, how much of its funded and 
 floating debt was occasioned by, and how much of its 
 capital stock was issued for any amount which has been 
 expended by it in the construction or permanent improve- 
 ment of such railroad in another State, or in the purchase 
 of equipment for exclusive use thereon; and in computing 
 the amount of tax to be paid by said company to this State, 
 the amount of such funded or floating debt, and of 
 such stock so occasioned or issued as aforesaid, shall be 
 first deducted from the total amount of its funded and 
 floating debt and stock.” 
 
 I beg your careful examination of this statute, for 
 under its provisions we claim, both as a matter of law and 
 equity, that the prayer of our petition should be granted. 
 This brings me at once to the consideration of the exact 
 state of facts upon which our claim is based. On March 
 i, 1893, The New York, New Haven and Hartford Railroad 
 Company found its interests suddenly and dangerously 
 confronted by the machinations of a railroad wrecker who 
 had obtained control of certain large corporations in 
 another state and threatened to control the Old Colony 
 Railroad, which, as a terminal of the great New Haven 
 system in Boston, had become an important factor to the 
 prosperity of this great property. The danger was met as 
 soon as it was thoroughly understood and as a result the 
 Old Colony Railroad Company, lying within the states of 
 Rhode Island and Massachusetts, leased itself to the Con- 
 solidated Road on .the 1st day of March, 1893, and on the 
 1st day of July, 1893, the New Haven road took possession 
 of this property and has ever since operated and now 
 operates said railroad lying principally within the States 
 of Rhode Island and Massachusetts, a very small 
 portion being in Rhode Island, which lease was 
 almost unanimously approved by the stockholders of both 
 companies, as provided by the statute. No portion 
 of said Old Colony Railroad lies in the State of Connecti- 
 
 6 
 
cut and all the property of said Old Colony Railroad Com- 
 pany is taxed in the States of Rhode Island and Massachu- 
 setts under the statutes of those states, and since July i, 
 1893, under the provision of the lease of said Old Colony 
 Railroad, the Consolidated Railroad has paid all the taxes 
 levied upon said property by said States of Rhode Island 
 and Massachusetts, and, while said lease is in force, is 
 under a continuing obligation to pay all said taxes. In the 
 State of Massachusetts where the stock is taxed, all the 
 stock of the Old Colony Railroad is taxed. In the State of 
 Rhode Island, which taxes the property locally in every 
 town, all the property of the Old Colony Railroad lying in 
 that State has been taxed and paid in full. To confirm 
 these facts, if the Committee desires proof, we have with 
 us to-day our Treasurer and Comptroller with the docu- 
 ments to show this fact which is a very important one in 
 the consideration of this case. So that every item of 
 property belonging to the Old Colony Railroad Company 
 is fully taxed in the States of Rhode Island and Massachu- 
 setts, within which states it is wholly located, and under 
 the obligations of the lease of the Old Colony Railroad Com- 
 pany these taxes have been paid by The New York, New 
 Haven and Hartford Railroad Company as they became 
 due. 
 
 Now, under the provision of the General Statutes of 
 this State previous to 1889, The New York, New Haven 
 and Hartford Railroad Company acquired by lease several 
 railroad properties in this State and in 1889 the Legislature 
 granted an amendment to its Charter whereby it might 
 exchange its stock for the stock of said several leased 
 lines in certain proportions to be determined by a commit- 
 tee appointed by the Governor. This amendment affected 
 lines wholly or partly within this State. In 1893 another 
 amendment was made to the Charter allowing the same 
 exchange of its stock for the stock of any lease line loca- 
 ted wholly in an adjoining state. Acting under this 
 authority The New York, New Haven and Hartford Rail- 
 road Company exchanged before September 30, 1893, 34,515 
 shares of its stock for 38,350 shares of Old Colony stock in 
 
 7 
 
the proportion of ten shares of Old Colony stock for nine 
 shares of New York, New Haven and Hartford stock. 
 These shares of stock so issued by the New York, New 
 Haven and Hartford Railroad Company in exchange 
 for Old Colony stock were issued solely for the prop- 
 erty of a leased road lying wholly without this State and 
 said New York, New Haven and Hartford Railroad became 
 thereby an equitable tenant in common or joint owner 
 with the other stockholders of the Old Colony Railroad 
 after payment of its debts, and its interest and owner- 
 ship in that property is represented by said 34,5 15 shares 
 of its capital stock so issued in exchange for the stock of 
 the Old Colony Railroad. 
 
 Among the earliest of the duties which were assigned 
 me after my official connection with the Consolidated 
 Road was the supervision of making up its returns for 
 taxation, and the question at once arose as to what dis- 
 position should be made of the 34,515 shares issued in 
 exchange for Old Colony Stock. It was a new question, 
 for it was the first return to be made under the lease of the 
 Old Colony Road. Upon consulting the Massachusetts 
 statutes and by correspondence with the Tax Department 
 of that State it appeared that the whole stock of the Old 
 Colony Road must be taxed in Massachusetts. The 
 authorities there claimed, and justly, that no abatement 
 could or would be made by Massachusetts on account of 
 the Old Colony stock exchanged for New York, New 
 Haven and Hartford stock, because the stock still existed 
 and under the laws of Massachusetts was still taxable in 
 that State, and that Connecticut ought to abate the tax on 
 the New York, New Haven and Hartford stock which had 
 been issued only in exchange for the Old Colony stock. 
 We made our returns therefore to the Board of Equaliza- 
 tion, claiming an exemption of these shares, but the Board 
 said that, while they considered that our claim was just 
 and equitable and that we were evidently the victims of 
 double taxation, and it was unjust for the State to exact 
 this tax, yet under the strict letter of the statute, they 
 could not relieve us. In taking this position, I believe the 
 
Board was mistaken. I am confident that any fair con- 
 struction of Section 3923 clearly exempts these shares 
 from taxation. May I be pardoned for turning the atten- 
 tion of the Committee for a moment to a few familiar 
 principles which should govern in the construction of 
 statutes of this character ? 
 
 1st. To arrive at the true meaning of a statute, it is 
 necessary to take a broad, general view of the whole act 
 so as to get an exact conception of its aim, scope and 
 object. Endlich on Interpretation of Statutes Sec. 27. 
 The true meaning of a statute is discerned not merely 
 from its words but also by comparison with other parts of 
 the act, by reference to previous legislation upon the same 
 subject, and by ascertaining the cause and occasion of the 
 passage of the act and the purpose intended to be accom- 
 plished. City of Middletown vs. N. Y., N. H. & H. R. R. 
 Co., 62 Conn., p. 496. 
 
 Applying these standards of interpretation, can anyone 
 doubt for a moment the object and purpose of the Legis- 
 lature in passing the act of i88r, now Section 3923 of the 
 General Statutes? Its sole object and purpose was to 
 exempt from taxation all railroad property lying in 
 another State leased and operated by any railroad com- 
 pany in this State. It admits of no other interpreta- 
 tion and the history of the statute and the cause and occa- 
 sion of its passage was solely and only to protect from 
 double taxation any railroad company in this State which 
 operated under lease a railroad company in another State. 
 While I am aware that in a few jurisdictions in the United 
 States and elsewhere, it is held that statutes imposing 
 public burdens in the form of taxes are to be strictly con- 
 strued, yet, in many more cases the decisions of the United 
 States Courts hold clearly that a liberal construction should 
 be given to such statutes, but whatever may be the rule in 
 other jurisdictions, nowhere has the law upon this subject 
 been more fairly and justly expounded than by our 
 Supreme Court. In the case of Hubbard vs. Brainard, 35 
 Conn., p. 568, a Middletown case involving a pure question 
 of taxes, with which, doubtless, the House Chairman is 
 
 9 
 
familiar, Chief Justice Butler in giving the opinion of the 
 Court, laid down the rule for the construction of acts of 
 this character as follows : 
 
 “ The parties are at- issue in respect to the rule of con- 
 struction which should be applied to the act under which 
 the assessment is made. We have no difficulty as to the 
 rule applicable in such cases. 
 
 “A law imposing a tax is not to be construed strictly, 
 because it takes money or property in invitum (although its 
 provisions are for that reason to be strictly executed), for 
 it is taken as a share of a necessary public burden; not 
 liberally like laws intended to effect directly some great 
 public object; but ‘ fairly ’ for the Government and ‘justly ’ 
 for the citizens; and so as to carry out the intention of the 
 Legislature, gathered from the language used, read in con- 
 nection with the general purpose of the law, and the nature 
 of the property on which the tax is imposed, and of the 
 legal relation of the tax payer to it.” 
 
 “A construction of a statute which subjects property to 
 double taxation should always be avoided if practicable.” 
 
 Osborn vs. Railroad, 40 Conn., p. 491. 
 
 See also Savings Bank vs. Nashua, 46 N. H., p. 389. 
 
 “ It is a fundamental principle in taxation that the 
 same property shall not be subject to a double tax payable 
 by the same party either directly or indirectly.” 
 
 Applying these righteous rules of construction, laid down 
 by our own Supreme Court, to Section 3923, it seems to me 
 that the Committee must find that our claims for exemp- 
 tion under the provision of this section are clearly within 
 the intention of the Legislature when it passed the act of 
 1881. We have here a railroad company, holding by lease 
 a railroad in another State which is not part of its own 
 road. We find that it has issued stock expressly and only 
 for the purpose of exchanging such stock for the stock of 
 said leased road. Under this statute it is perfectly clear 
 that if the 34,515 shares so issued had been issued 
 for the express purpose of constructing the Old 
 Colony Railroad, or any part thereof, no question 
 
 10 
 
could be raised under the most strict construction of 
 the statute. It is true that the shares of stock in question 
 were not issued for the direct purpose of constructing the 
 Old Colony Railroad in Massachusetts, but what differ- 
 ence can it make in ascertaining whether the property 
 taxed is within or without State lines, whether the com- 
 pany paid the contractors who made the improvements or 
 the stockholders who paid the contractors ? This stock so 
 issued represents money expended on a leased railroad in 
 Massachusetts and represents nothing else. If that por- 
 tion of the property of the Old Colony Railroad is not 
 represented in this issue of the New York, New Haven 
 and Hartford stock, it is represented in nothing. It 
 comes, therefore, as it seems to me, clearly within the 
 intent and purpose of this statute under any fair and rea- 
 sonable construction that can be given. The petitioners 
 therefore should have the benefit of their investment in 
 untaxable property out of the State whereby its invest- 
 ment may be treated as capital stock issued for the con- 
 struction of a leased line. The Board of Equalization 
 should have so construed this statute as to carry out the 
 fair intent and purpose of the Legislature that passed it, 
 and, in failing so to do, in my judgment, committed an 
 error. The construction for which I contend, can alone 
 prevent a gross injustice to the largest revenue producing 
 corporation the State posesses. 
 
 The State of Connecticut, in 1881, when it passed Sec- 
 tion 3923 of the statutes, practically decided this case, by 
 holding that stock or bonds of a railroad corporation in 
 this State, which represented and stood for railroad 
 property in another State, ought not to be taxed. It is 
 only a peculiar, technical omission in the letter of the 
 statute of 1881 which gives the State Board of Equaliza- 
 tion an excuse for saying that the letter of the statute 
 calls for the payment of the tax in this case. 
 
 But what is the legal position of the State? Can it 
 maintain a suit successfully against the Railroad Com- 
 pany in our own Supreme Court, or in the Supreme Court 
 of the United States ? 
 
 11 
 
 ♦ 
 
 U, OF lit U& 
 
Railroads are real estate, and should be taxed in 
 accordance with the rules governing taxation of real 
 estate, provided the law taxes the property, and there is 
 no doubt that in Connecticut our railroad tax is a tax on 
 property and not a tax on the corporation as such, or its 
 franchises. 
 
 Property of corporations, if taxed as property, should 
 be taxed the same as the property of private individuals, 
 and therefore its real property should be taxable where 
 it lies. 
 
 See Cooley on Taxation, 2d Edition, p. 377. 
 
 Baldwin vs. Trustees, 37 Mass., 369. 
 
 People vs. McLean, 80 New York, 254. 
 
 Real estate within the State taxed under local laws must 
 be taxed as a general rule only in the town for town pur- 
 poses, county for county purposes, school district for school 
 purposes, in which the real estate lies. By the same rule 
 the real estate of an individual or corporation can only be 
 taxed for such purposes in the State where it lies. 
 
 See Ham vs. Sawyer, 36 Me., 37. 
 
 Rowe vs. Blakeslee, n Conn. 479. 
 
 People vs. Pearis, et al, 37 Cal., 259. 
 
 The General Assembly of the State cannot authorize 
 a municipal corporation to tax for its own local purposes, 
 lands lying beyond the property limits of such munici- 
 pality. 
 
 Wells vs. City of Weston. 22 Mo., 385. 
 
 Cooley on Taxation, 2d Edition, pp. 159-163. 
 
 Cooley on Constitutional Limitations, page 500. 
 
 It is clear that if a State cannot authorize a municipal 
 corporation to tax for its own purpose, lands beyond the 
 limits of the municipality, then the State itself cannot tax 
 lands or real estate outside of its jurisdiction for such 
 purposes. 
 
 The Supreme Court of the United States almost invari- 
 ably holds that the construction which the highest Court 
 of the State puts upon its own constitution or laws, will be 
 
 12 
 
followed by the Supreme Court of the United States in 
 determining what construction should be put upon the same 
 constitution or laws. If the Supreme Court of Connecti- 
 cut had treated our steam railroad tax as a tax upon fran- 
 chise returned upon property, then the State of Connecti- 
 cut might possibly maintain a suit against the New York 
 and New Haven Railroad for the Old Colony taxes. 
 
 But our Court has settled this action in the case of 
 Nichols vs. The New Haven & Northampton Co., 42 Conn., 
 pp. 103, 1 19, where it holds in the strongest terms that our 
 steam railroad tax is a tax upon property. This decision 
 was strongly re-affirmed in the case of the State vs. The 
 Housatonic Railroad Co., 48 Conn., pp. 44 and 53. So far 
 as our Court is concerned, Connecticut is tied up to the 
 doctrine that this is a property tax. 
 
 The foregoing doctrine, is fully supported by the fol- 
 lowing cases : 
 
 Northern Central Railroad Co. vs. Jackson, 7 Wallace, 262, 
 267, 268. 
 
 The State Tax on Foreign Bond, 15 Wallace, 300, 318, 320, 
 etc. 
 
 Home Insurance Co. vs. New York, 134 U. S., 594, 601, 602, 
 606. 
 
 State vs. Stonewall, Insurance Co., 89 Ala., 335. 
 
 Commonwealth vs. Standard Oil Co., 101 Pa. St. Reports, 
 U9, 147. 
 
 It is apparent from these authorities that the State of 
 Connecticut can be thoroughly beaten upon the legal issue 
 in the Supreme Court of the United States, unless the 
 Court is prepared to reverse the whole current of its deci- 
 sions for the last thirty years. If, therefore, the State 
 should refuse to correct the mistake in its laws at the 
 present time, or should attempt to push the suit now pend- 
 ing against the Railroad Company to collect this illegal 
 and unconstitutional tax, I am confident it will meet defeat 
 in the Courts, and incur large costs and expenses of litiga- 
 tion. 
 
 But, even if the Committee should adopt a different con- 
 struction of the statute and the law, from that which I claim 
 
 13 
 
to be proper and reasonable, there is yet another method 
 by which the injustice of double taxation may still be 
 avoided under the provisions of the company’s Charter, 
 which gave the company power to exchange these shares 
 for the shares of leased lines. The amendment of the 
 company’s Charter, passed in 1889, shows clearly that the 
 Legislature intended to guard against double taxation of 
 exchanged shares by relieving the company from taxation 
 of the stock of its leased lines. See Special Laws, Vol. X. 
 p. 1298, par. 3. 
 
 This section then applied only to leased lines wholly or 
 partly within this State, but in 1893, the provision of that 
 amendment was made to apply to leased lines located 
 wholly in adjoining States. See Special Laws 1893, p. 343. 
 
 Now if the company cannot get from the State the ben- 
 efit which it gets from the exemption of the property of 
 its leased lines in the State out of the exchange of its 
 shares for shares of a leased line in an adjacent State, 
 because those lines do not pay taxes here at all, is it not 
 perfectly clear that the benefit should be given to the com- 
 pany in the way indicated by treating the shares of its 
 capital stock issued to represent property in Massachusetts 
 as shares to be deducted from its capital stock to be valued 
 for taxation of property in Connecticut? The company, 
 as I have said before, is virtually an equitable owner of 
 one- third of the property of the Old Colony Railroad, 
 after paying debts and the muniment of its title to that 
 property is these exchanged shares, and they make a title 
 as good as the title made by a deed, and the issue of the 
 company’s own stock for them represents the title which 
 these exchanged shares of the Old Colony represented 
 and nothing else. Unless the Consolidated road is relieved, 
 the inevitable result follows that it is forced to pay taxes 
 on its property out of the State, as it cannot include its 
 leased line mileage or a part of the mileage of its road in 
 getting at the proportion of its property which Connec- 
 ticut may tax. No fair-minded citizen of Connecticut 
 would approve such an injustice to any corporation or 
 individual. So that under the provisions of our Charter 
 
 14 
 
we claim a guarantee of immunity from taxation upon 
 such shares of our stock as were issued exclusively for the 
 shares of the stock of any leased line out of the State. 
 
 If the Committee should still disagree with me, which I 
 cannot conceive, as to the effect of the chartered rights of 
 this company in protecting them from this proposed taxa- 
 tion, it is still in the power of this Committee to exercise 
 the equitable powers, which from our earliest history has 
 reposed in this General Court, to protect the petitioner 
 from the injustice and unconstitutionality of double taxa- 
 tion. Previous to the adoption of our Constitution this 
 was the General Court wherein all equitable remedies were 
 administered. Under our Constitution, the power of the 
 General Assembly to administer equity still remains and has 
 always been freely exercised to prevent irreparable wrong. 
 No other provision exists for an appeal to any other tri- 
 bunal from the doings of the Board of Equalization. Here 
 and here alone relief can be granted. That the wrong 
 exists is admitted. The Board of Equalization, to which 
 this matter came in their official capacity, agree that this 
 proposed tax upon these shares in question is inequitable 
 and unjust. They are here to-day to say that it is a tax 
 that, in justice and equity, ought not to be enforced. The 
 recently elected Board of Equalization, who have also had 
 their attention called to this matter, and with their counsel 
 have carefully examined it, are also here to say to you that 
 the enforcement of this tax would be a wrong and an 
 injustice. Can a clearer case, therefore, be made before 
 any tribunal for equitable relief, than that which is now 
 presented for your consideration ? 
 
 Can you hesitate for a moment in granting the relief 
 the petitioner demands ? The great corporation, with 
 whose management I have the honor to be identified, is 
 not here asking for a donation from the State. It is here 
 as the humblest citizen of Connecticut might come asking 
 from the sovereign power relief from an injustice. It 
 makes no claim to the fact that, in 1893, it paid into the 
 Treasury of this State by .itself and the lines it controls, 
 the sum of $537,39 8 -°4, and, in 1894, the sum of $551,140.06, 
 
 15 
 
exclusive of the taxes now in question. It makes no claim 
 to the fact that it pays one-third of the entire taxes of the 
 State, and soon will pay much more, for it pays these 
 taxes willing^ because they are just under the law. It 
 recognizes and acts upon the principle that whatever min- 
 isters to the prosperity of the State and its people minis- 
 ters to its own prosperity, but it does and it will protest 
 against and will resist by all lawful means the imposition 
 of any tax imposing upon it a tax not levied upon any 
 other individual or corporation in the State. It cannot 
 believe that the State of Connecticut will deal so un- 
 fairly with its largest tax payer. This good old 
 State cannot afford to be niggardly and oppressive 
 in its exactions and, in honor and justice, cannot 
 touch one penny of this tax in question. Did you ever 
 think that the so-called Consolidated Road is but a private 
 corporation so far as its ownership and internal manage- 
 ment is concerned? That its stock is held by our great 
 charitable and educational institutions, by your savings 
 banks and-trust companies, by your life and fire insurance 
 companies and is the sole income of thousands of widows 
 and orphans and that the administration of its affairs is a 
 sacred trust, and that whenever and wherever the State 
 lays its burden upon this corporation it is casting it 
 directly upon these stockholders whose interests must 
 suffer precisely as the burden is increased? 
 
 But not only that, it is bad policy for the State, for it 
 tends to lessen the market value of the stock and thus 
 decreases the amount upon which the State can levy its 
 tax and therefore to lessen the amount the State will 
 receive from this company in taxes. Let the farmers and 
 business men of this Legislature remember that if no 
 town in Connecticut is taxed to-day it is because the large 
 corporations of the State are bearing the entire expense 
 of the State government. It is a homely adage but a very 
 wise precaution “not to kill the goose that lays the golden 
 egg.” 
 
 Let them further remember that our Supreme Court 
 has expressly found that the taxes upon the property of 
 
 16 
 
steam railroads is already higher than that upon other 
 property, and I believe higher in proportion than upon 
 other corporations.. In Osborn vs. R. R. Co. 40 Conn. p. 
 494, Carpenter J. says: 
 
 “The tax imposed upon the railroad company is a 
 searching one. Nothing escapes its grasp. The market 
 value of the stock includes not only all its property but all 
 its rights and franchises, including all its advantages and 
 facilities for earning money. To that value is added the 
 amount of its funded and floating debt, with no deduction 
 except the amount of cash on hand. On the other hand, 
 we cannot shut our eyes to the fact — and presumptively 
 the Legislature did not — that real estate pretty uniformly 
 goes into the tax list at much less than its real value. 
 The same is true to a considerable extent of personal 
 property, while a large amount of personal property 
 escapes taxation altogether. No man’s faculty is taxed 
 directly or indirectly, and deductions are allowed on 
 account of indebtedness. We think therefore it is safe to assume 
 that taxation upon railroad property is considerably above the aver- 
 age rate of taxation throughout the State. We do not complain of 
 this as unjust , but surely courts should not be eager to adopt a con- 
 struction which will increase rather than diminish , the inequality of 
 taxation .” 
 
 The imposition of this tax impairs to its extent the future 
 prosperity of this great company. It is a severe reflection 
 upon the policy of the company in acquiring the control of 
 the Old Colony Railroad under its lease. The Old Colony 
 lease was a lease most beneficial to the State of Connecticut 
 It has steadied and strengthened our own corporation so 
 that it will always be able to command a business which 
 will keep it in such order as to afford first class facilities 
 to all the people of Connecticut, for Connecticut is and al 
 ways will be, while the prosperity of this corporation con- 
 tinues and its broad policy is enforced, the great highway 
 over which must travel the additional volume of business 
 which that lease has forever insured. Better and more 
 frequent train service, cheaper rates of freight and fare, 
 better facilities for the merchant and manufacturer, are 
 
 7 
 
made possible only by the vast volume of business which 
 this lease has insured. Coal, iron and raw materials, and 
 the products of the West and South are brought to the 
 doors of every citizen of Connecticut over the best con- 
 structed railway on this continent, at a cheaper rate than 
 ever before. Can it be the policy of Connecticut to place 
 a single obstacle in the way of the broad policy of a cor- 
 poration which directly and indirectly, is bringing pros- 
 perity to the hundreds of towns and cities that have 
 sprung into existence along its lines and to the people of 
 the entire State whether traversed by its lines or not ? 
 
 In transportation the price at which freight and passen- 
 gers can be reasonably transported, depends largely upon 
 the volume dealt with. The more certain the future busi- 
 ness of any road can be made by its control of connections 
 the greater the volume of business which can be controlled, 
 and the cheaper or better or both, will be the facilities that 
 can be furnished the public. All this has been accom- 
 plished by the policy heretofore adopted and still pursued 
 by the New York, New Haven and Hartford Railroad Com- 
 pany. Marvellous as has been the growth of this great 
 corporation, the child of Connecticut, it is far from that 
 stalwart growth that awaits it, if Connecticut is wise 
 in its legislation and policy towards it. The imposition 
 of this tax is a menace to its future progress and it 
 seems to me cannot be justified by any intelligent man 
 who examines this question. The press of the State so far 
 as I have observed, are unanimous in advocating the relief 
 which the petitioner asks here to-day. It may be suggested 
 to this Committee, and it is a fact which I ought in fairness 
 to bring to their attention, that a suit was commenced by 
 the late Treasurer against this petitioner, to collect the 
 tax in question. It is fair, however, to say that before that 
 suit was begun, this petition was brought to this, the 
 highest tribunal in the State, in pursuance of the recom- 
 mendation of the Supreme Court in the Housatonic 
 case for relief, so that this Committee cannot fairly wave 
 off the petitioner and say that this case is pending in 
 court, because this General Assembly had original jurisdic- 
 
 18 
 
tion in this case before any suit was brought in the Supe- 
 rior Court, and I trust that no such suggestion as this will 
 be entertained by this Committee. 
 
 It may be suggested that the Treasury of the State 
 is in such condition that this amount, which is very 
 small in comparison to the large tax this company 
 yearly pays into the State Treasury, ought to be col- 
 lected even though it may not be equitable and 
 just. Such a suggestion as that, I am sure every 
 man on this Committee would spurn with indignation. 
 The State of Connecticut can never be so poor as know- 
 ingly to levy and collect an unjust, inequitable and illegal 
 tax from any of its citizens or corporations. It never has 
 been guilty of such gross injustice, and it never inten- 
 tionally will be. 
 
 In reading the petition you will observe that it 
 calls for an amendment to Section 3923 of the Gen- 
 eral Statutes, in order that this question may not arise 
 again with any future Board of Equalization. I have pre- 
 pared a bill which I now submit to you, adding two or three 
 lines to the General Statutes, and providing that this 
 statute shall apply to the returns of any railroad company 
 heretofore made for the years 1893 and 1894, which I 
 believe, if you accept, will cover the claims of our petition. 
 
 The remission of the tax asked for affects only the tax 
 for 1893 and 1894 upon the shares of stock issued by the 
 petitioner solely for the stock of the old Colony road 
 before December 19th, 1893, when the time for such ex- 
 change expired. 
 
 In closing, allow me to Thank you, gentlemen, for your 
 patience in listening so long to this somewhat dry discus- 
 sion. I assure you that nothing but the importance of the 
 question to the corporation I represent, would excuse or 
 justify it, but considered from our standpoint it is to us a 
 most important matter. I am confident that your examin- 
 ation of this question will convince each of you as it has 
 every other intelligent person to whom it has been pre- 
 sented, so far as I am aware, of the absolute justice and 
 integrity of the claim we make for a remission of the 
 tax involved. 
 
 19 
 

Hall, K Joha Manning 
 
 Argument before the Judiciary 
 committee of the general assembly 
 of Connecticut, February 20th, 1895, 
 in behalf of the New York, New ^aven 
 and Hartford railroad against double 
 taxation. 
 
3457 
 
 New York Central & Hudson River R.R 
 
 / 
 
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