He died upon October 6, 1905.

A fitting eulogy was pronounced in an editorial of the Omaha Bee, as follows:

"The death of former Lieutenant-Governor H. H. Shedd signalized the removal of another eminent Nebraskan who was for many years conspicuous in public life. (And after a summary of his career) His life was an example of conscientious devotion to duty, which must have been a greater satisfaction to him than would have been the accumulation of colossal wealth."

RAILROAD TAXATION IN NEBRASKA.

ADDRESS BEFORE THE NEBRASKA STATE HISTORICAL SOCIETY ON THE EVENING OF JANUARY 18, 1906.

BY HON. NORRIS BROWN, ATTORNEY GENERAL OF NEBRASKA. Ladies and Gentlemen:

The right of the state to tax railroads at all is obtained from the same authority that the right to tax other property is. Under the Constitution of Nebraska every item of property within its boundaries is subject to taxation except that which is used exclusively for church, charitable, and educational purposes. The warrant for that authority is found in the 9th clause of the Constitution, and one feature of that I would like to call your attention to specifically, and, for fear I may misquote it, permit me to read it to you:

"The legislature shall provide such revenue as may be needed by levying a tax by valuation so that every person and every corporation shall pay a tax in propertion to the value of his, or her, or its property and franchise, the value to be ascertained in such manner as the legislature shall direct."

It is clear to start with that the property, whether it is physical-in sight, or whether it is tangible-out of sight, is taxable, assessed according to its valuation.

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Under the second proposition it is equally clear that the value shall be ascertained in the method provided by the legislature. Now those two propositions, I take it, are settled by the Constitution. In obedience to that authority the legislature when it first met in this state passed a revenue law. For the purposes of this discussion it is sufficient to call your attention to the fact that in the year 1903 the legislature wiped it off the statute book from the first to the last section, and in its place they put what is now known as the new revenue act. It was an act not to tax part of the property in this state, but an act to tax all of the property in this state--personal, real, tangible, and intangible. It also provided a detailed list by which the assessor became an inquisitor. It was his duty to put on paper and get the signature of the man who owned the property, every item of the property, whether little or big item. The attempt of this new law was the purpose, which is well known by everybody, of the legislature to raise more money for the state. This was the purpose of it. And you could not raise more money for the state unless you increased the taxes in the state, could you? That was the purpose of the act. And the reason for that purpose was that under the old law it was not only full of inequalities and iniquities, but it didn't raise enough money to pay the expenses of the government. And it didn't matter much which party was running the government; the government was running behind every year under the old law. That was the object of the new law-to increase the taxes. Now to observe generally that that law was partially successful, is the fact that the total assessment roll of this state, under the old revenue act, had never exceeded $180,000,000. All property-railroads' and common folks', all of it-never had exceeded the sum of $180,000,000. Railroad property in the state had never been taxed to exceed $26,000,000; that was the sum and the highest mark it ever reached. Under the new law the assessment roll increased to almost $300,000,000, and the railroads from $26,000,000 to about $46,000,000 in round numbers. That gives

us an idea of these two laws as to their operation and also a comparison of the corporation property with other property.

I am here to discuss particularly railroad taxation in this state and under this law. This law undertook to provide the method, as the Constitution provided, by which you might ascertain the valuation of the railroad for taxation purposes. My good friend, the professor [E. A. Ross], has told you about the difficulties that confront any assessor undertaking to assess a railroad. You must remember that the railroad doesn't just lie within our state; it passes through many states. It therefore becomes the duty of the assessor in this state to find the valuation, not of the entire railroad, but just of a piece of it, just a part of it. Those difficulties the legislature undertook to minimize, to reduce to the lowest possible degree, and to do that they went to great length in declaring the method by which the state board of equalization and assessment might investigate that question. I want to talk to you a little while about that method.

In the first place, that law said that every railroad corporation doing business in this state should make a return to the state board of all of its property, its physical propertynothing about its stocks and bonds-but its physical property, its miles of right of way; its depots, their cost; its bridges, their cost; its trackage; every item of physical property that it owned in the state must be returned to the state board, and that the value of that physical property should be returned to the state board and sworn to by the agent of the railroad making the return. Now, my friend discusses quite clearly how insufficient and unsatisfactory that method would be, to assess it at that rate; just take the physical property at what it is returned and assess it. That would be unfair. Let us apply the test to a railroad system in this state. Here is a railroad that has a thousand miles within Nebraska, in round numbers. The total system has 3,000 miles operating in several different states. They make a return of their cars and physical property in Nebraska, and the officer swears that it is worth on an average $20,000 a mile, making the re

turn that is sworn to. The legislature that passed the law thought that that would not be a safe test upon which to base the taxation of a railroad, and they provided that the value of its physical property as returned by the railroad agent should not bind the state board making the assessment, and yet that was one of the tests the law did provide the board must examine. Under the law the state board had followed the injunction of the law and applied that test, that is, they had examined these returns and found that they were worth $20,000 a mile as returned by a statement,--and this of a railroad that you could not buy in the markets of the world for $60,000 a mile. Do you know of anybody whom you are satisfied is fair, that would argue that a railroad should be assessed, then, according to its physical property?

braska, under this law, it can not be assessed by the physical test alone. Why? Because this same act provides further on that the railroad must make an additional and further return to the state board. It provides what that return and the schedules shall contain. And what is it? The total capital stock issued by the corporation. What else? The market value of that capital stock. What else? The dividend that has been paid by that corporation on its stock during the preceding year. What else? The total issue of its bonded indebtedness outstanding against the corporation, and its value and rate of interest, and whether paid or not. Now we have a second test provided for here by the legislature under this provision of the Constitution that authorizes it; a test that permits the assessing board to investigate the stock and bond values that my friend talked to you about. He said that was an unsatisfactory test, in a measure. I agree with him, in a measure. Any test is unsatisfactory that undertakes to fix the valuation of a corporation that is doing a business in a number of states when you can not fully, exactly, and accurately fix a value on that part of the system in this state. But let me tell you, the courts of this country have been dealing as often as legislatures have with the question of how to tax railroads, and the courts in this country, ever since 1875,

when Chief Justice Miller laid down the rule that no fairer method has ever been devised by the legislature to fix the value of a railroad than to find the value of its stocks and bonds, and from them to ascertain the value of a part of the system, have sustained the rule. Why is it fair? Because when you buy the stocks and bonds of a railroad you have bought all the railroad. You haven't bought anything else. And when you own the stocks and bonds of a road you own it all,-every mile of it, every car, every asset that it holds, whether assessed in connection with the company or something else, you are the owner of that railroad system, depots and all. The difficulty with the stock and bond test, and the reason why it is unsatisfactory is this, that you can not find out what the value of the stocks is. That is the trouble. It is easy to find the value of a bond because it has a reasonably staple value on the market. But when you come to the value of the stock which is issued whenever the directers make up their minds they want more stock outstanding, that is a different proposition, because it is subject to manipulation sometimes. But who manipulates it? The fellow who owns it, and the fellow who knows what it is worth. The fellow who has to pay the taxes on it. The fellow who is dealing in those kinds of securities, he is the fellow who manipulates it. And if he does it to his own disadvantage he can not complain of the assessing board, because it is his act, and not the act of the assessor. But the board is not bound by any market value anyhow. It is the duty of the board under the second provision to investigate and ascertain the actual value of the stocks and bonds, and it is the duty of the company to return actual value if it knows it, as well as the market value. In this state in 1904, there were returns made of a railroad operating in eleven states that had outstanding $208,000,000 of stock, who swore to the state board of this state that they did not know what their capital stock was worth. It did not have any market value because its owners had taken it off the market. It was not quoted since 1901. Now it had no market value. They swore under oath that they did not know what it was