History of Dakota Territory, volume III, Part 46

Author: Kingsbury, George Washington, 1837-; Smith, George Martin, 1847-1920
Publication date: 1915
Publisher: Chicago, Ill. : S.J. Clarke Publishing Company
Number of Pages: 1146

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The city in its answer denied that the company had objected to the payments of 1905 and 1906, denied that such payments had been obtained by threat or duress and declared that the payment of $159 for four years was not required, because under the ordinance No. 135, section 4, such service was to be free. The court (Judge F. B. Smith) : (1) That the city had no power to impose a franchise tax as a condition for the erection of the telephone system; (2) that that part of the ordinance No. 135 was void; (3) that the city was thus not entitled to recover in this action; (4) that payment of the tax in 1905 and 1906 . was voluntary through a mistake in the law by the company, and was not made under threats; (5) that the company was not entitled to recover the franchise tax paid in 1905 and 1906; (6) that costs should be paid by the city.

The city promptly appealed the case to the Supreme Court in January, 1910. It came up for trial in the spring of that year. The Supreme Court held, (1) that the city had full power to levy the franchise tax; (2) that the ordinance imposing such tax was valid; (3) that this ordinance was not repealed by the city resolution of April 7, 1904; (4) that the ordinance of 1898 was not repealed by the resolution of April 10, 1907; (5) that the franchise tax was in the nature of a rental for the use of the streets and was not a tax within the meaning of the law; (6) that the city was entitled to recover in this action; (7) that the ordinance of 1898 was a binding contract between the city and the company; (8) that the company had not paid under duress in 1905 and 1906. Thus the Supreme Court reversed the lower court and ordered judgment and costs for the city.

In 1912 T. J. Spangler brought suit against the City of Mitchell to enjoin it from issuing bonds with the design of constructing a telephone system of its own. The city on June 10, 1913, by the vote of 766 for to 266 against, out of a total of 1,645 voters, decided to erect a telephone system of its own at a cost of $60,000, and to issue municipal bonds to that amount. Mr. Spangler, who repre- sented the existing telephone company, fought every step of this movement. Many interesting legal problems arose and were settled. In September, 1913, the city called for bids for the purchase of the $60,000 municipal bonds and for the construction of a telephone plant or exchange. Mr. Spangler maintained (I) that the issuance of the $60,000 in bonds would increase the city debt beyond the constitutional limit; (2) that the telephone company would be unjustly taxed. He therefore asked for a temporary injunction. The city denied the two objec- tions and asked that the temporary injunction be not granted. The injunction was granted and the case came before Judge R. B. Tripp and was settled without a jury. The court dissolved the injunction and dismissed the case. This left the city free to build its own telephone line.

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Again in April, 1915, the city brought suit against the telephone company to recover the franchise tax of 1911, which amounted to $1,334.78, and the payment of which was denied by the company on the ground that the law of IgII released it from the gross earnings charge. Upon trial the court held that the city was entitled to recover the franchise tax of 1911 amounting to $1,334.78, or with costs to $1,632.40.

In 1915 the telephone company asked relief from the United States District Court, Wilbur F. Booth, judge, presiding. The company asked in equity for a permanent injunction to restrain the city from interfering with the company's lines within the city. The company claimed that the United States Court had jurisdiction, because the city had violated article I, section 10, of the Constitu- tion of the United States, and thus because the controversy arose under that instrument. The company claimed, also, that the city violated the due process clause of the fourteenth amendment to the national Constitution. Judge Booth held and so decided that the company was entitled to a permanent injunction to prevent the City of Mitchell from interfering with its property.

On September 5, 1895, the City of Vermillion passed an ordinance, No. 19, granting to the Clark Automatic Switch Company, an association, and to J. S. Tomlinson and W. A. Cotteral, a franchise or right to erect and maintain "through the streets, public grounds, ways and bridges of the city all the poles, posts and other supports, and all the wires and fixtures proper and necessary for supplying to the citizens of said city and the public communication by telephone and other improved appliances, subject, however, to all the conditions and stipulations herein set forth." This privilege was limited to ten years; the wires and poles were to be under the police supervision of the city; and the company, in con- sideration for the franchise, agreed that the city should have the right to use its poles on which to place a fire alarm system. The company built the line and operated it until July 6, 1900, when it sold out to the Northwestern Telephone Exchange Company, which assumed and continued control and management of the line.

In 1910 the city brought suit in the Circuit Court against the telephone company which had continued to operate its line beyond the ten year limit, both beyond a ten year limit from September 5, 1895, and beyond a ten year limit from the city resolution of August 16, 1897. The city asked the court for an order to have the poles and wires removed. It had served the telephone company with notice on September 12, 1907, to vacate the streets, alleys and public grounds within sixty days. The company failed or refused to do so, and claimed per- manent right to use the public ways of the city under the resolution of August 16, 1897, which placed no limit on the time. The city claimed that this resolution was to enable the company to extend its lines and did not grant the right to operate an exchange, nor to continue beyond the ten year limit. The city, therefore, asked the Circuit Court for an injunction to restrain the company from continuing business, and asked for an order for the removal of its poles, wires and other appliances.

The company on July 6, 1908, removed the case to the Circuit Court of the United States, District of South Dakota, Southern Division, and there filed its answer and cross bill to the complaint, to which the city demurred. Upon trial the court overruled the city's demurrer, whereupon the city filed an amended

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complaint and a cross bill. The city maintained that the company had never been granted the right to operate in the city a telephone exchange system; that its only right had been to extend its main line through the city streets; that such right terminated at the end of the ten year limit fixed by the ordinance of September 5, 1895, and that it now was unlawfully operating its line and its exchange system in the city.

The company maintained that the resolution of August 16, 1897, gave it the right to occupy the streets independent of the ordinance of September 5, 1895, which fixed the ten year limit. The resolution of August 16, 1897, read : "Re- solved, that the right, privilege and authority is hereby given, granted (to the company) to occupy the streets, alleys and public grounds within said city for the purpose of placing therein its poles, wires and fixtures constituting its tele- phone lines within and through said city," etc. The company further denied "that by the resolution of August 16, 1897, the city intended only to confer upon the company the right or license to extend its main lines of poles and wires through the city; and denied that the city did not intend by this resolution to confer upon the company the right to maintain or operate a telephone exchange system within the city ; but on the other hand the company alleged that it was the express purpose and intent both of the city and the company under the resolution of August 16, 1897, to give and grant to the company, under restrictions, the right to maintain a telephone exchange system and long distance toll lines in the city." The company further maintained that its above rights had never termi- nated and that under the resolution of August 16, 1897, and under the general telephone law of South Dakota it had the right to continue business in the city.

After a full hearing Judge Carland of the United States Circuit Court was of the opinion that the city (the complainant) was not entitled to the relief asked; that the company was still entitled to operate its line and its exchange in the city subject only to the police powers. The court therefore dismissed the city's complaint and authorized the company to continue to do business in the city as before.

From this decision the city appealed to the United States Court of Appeals, the appeal being filed July 2, 1910. The grounds for the appeal and for a reversal of the court's decision were as follows: (1) That the final judgment and decree of the court was contrary to the law of the case; (2) that the court erred in holding that the city had ever given any other consent to the operation of a local telephone exchange in the city than the ordinance of September 5, 1895, and in holding that the city resolution of August 16, 1897, gave the company the right to operate a local exchange in the city; (3) that the judgment and decree of the court was contrary to the evidence, because the evidence showed that the resolution of August 16, 1897, was for the purpose only of permitting the com- pany to extend its long distance line through the city and not for the purpose of granting the right to maintain a telephone exchange; (4) that the judgment and decree was contrary to the evidence which showed that since September 5, 1895, the company had operated its exchange in the city without the consent of the city authorities ; (5) that the court erred in holding that the relief prayed for by the city should be denied; and in holding that the company was entitled to main- tain and operate its telephone system within the limits of the city. The argument before the Court of Appeals was very able, elaborate and exhaustive. The Court

SOUTH DAKOTA: ITS HISTORY AND ITS PEOPLE

of Appeals'held that a resolution of a city council granting to a company en- gaged in constructing and operating through telephone lines and local exchanges the right to occupy the streets, alleys and public grounds within said city for the purpose of placing therein its poles, wires and fixtures, constituting its telephone line within and through said city, reserving to the city the free use of its poles for fire alarm and police wires, embraced the right to construct and operate a local exchange; and there being no limitation of the term of the grant, the company which afterward purchased the existing exchange was not bound by a limitation in the franchise under which such exchange was constructed. "In our judgment, therefore, the resolution of August 16, 1897, expresses the consent of the city to the construction and maintenance of a local exchange. Under its terms the appellee could have erected such an exchange. Instead of doing so, it purchased the one which was already in existence." This construction did not vest a perpetual franchise in the company. Its rights were at all times subject to legislative action. Thomas Sterling and Jason E. Payne were attorneys for the city, and Bates & Parliman were attorneys for the company.

The railroad commission late in 1902 asked the Legislature for authority to issue a schedule of rates on all shipments of stone, gravel, cinders or other road material when consigned to public officials charged with the improvement of public highways and designed for the betterment of public roads, to be carried in carload lots at one-half the rate of soft coal. It was believed that with such a law the railroad commission could do much for the improvement of public highways in portions of the state where gravel and stone were absent. They admitted that the roads needed improvement and that such material for that purpose could be secured. Not only was the improvement of public roads of great value to the farming community, argued the commission, but it likewise aided the railroads because it made access thereto much easier.

In January, 1905, the good roads commission, recently organized, urged insur- ance against fireproof buildings; the repeal of the timber culture act which, it said, was a calamity to the state ; recommended that college experts in agriculture should visit the farmers, because the farmers were unable to visit them; asked for additional legislation for good roads; congratulated the state on the improve- ment in oil brought here for disposal; asked for a state game warden; recom- mended that the inmates of the penitentiary be employed in a twine factory to be established in that institution, and asked for other important legislation.

Finally the good roads law of 1909 required specifications of operations and applications therefor to be signed by 10 per cent of the free-holders of every county. It did not limit this privilege to resident free-holders, but in most of the counties, if practically every resident farmer should sign the petitions, they might yet be short the 10 per cent of the free-holders. This made it hard to show up the required number on any of the petitions circulated, as all town-lot owners and non-resident owners of farm lands would have to be considered. The report of the good roads commission showed at this time the counties which had suspended the working of the good roads law.

In 1911 a committee appointed by the Good Roads Conference of South Dakota met at Redfield, where many changes in the laws relating to the highways were duly considered. Generally the measures passed by the last Legislature met the approval of the good roads advocates, because they no doubt would enable

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the counties and townships to build and repair county roads by contract and under competent supervision. The new bill proposed to abolish the road over- seer and make the township supervisor directly responsible for the roads in each township. Another feature of the new law was the payment of the fall taxes in cash instead of in labor. It also provided that the building and repair of roads in each township should be made by contract.

The proposed Meridian Road was planned to enter the state at Yankton. There were three option routes thence across the state. The first and most direct passed directly north of Yankton and thence to Fargo and Winnipeg. The second extended from Yankton to Watertown almost in a bee line, but varying somewhat to the east in order to take in Sioux Falls, thence on to Watertown, crossing the North Dakota line west of Lake Big Stone and Lake Traverse. The third route passed up the James River Valley through Mitchell, Huron, Redfield and Aberdeen and thence on to Fargo. At the same time, the fall of 1911, high- ways in Minnesota were projected from the twin cities to Fargo, Watertown and Sioux Falls. Topographical surveys were made of these routes in October.

Late in 1912 the good roads advocates of the state met and rejoiced over the outcome of the election held in the eighteen different counties of the state which had carried the law of two years before to a successful finality under the local option provision of the law. Every county in which a test vote was taken approved the law by a substantial majority, and this expression of the public will was therefore used before the Legislature of 1913 for a greater advance and improvement in the road laws of the state. The counties in which the votes favored the local option provision of the law were the following: Brookings, Brown, Buffalo, Clark, Codington, Clay, Grant, Hamlin, Hutchinson, Minnehaha, Moody, McPherson, Myer, Lincoln, Spink, Stanley, Union and one other.

In the spring of 1913 a large convention of good road enthusiasts assembled at Deadwood for the consideration of important road problems. The meeting adopted strong resolutions demanding federal aid for the construction of from two to five transcontinental highways and changing the name of the organization to the Chicago, Black Hills & Yellowstone Park Highway. It was determined to ask each county through which the road was projected to appropriate $100 with which to complete and maintain the road. It was further determined to continue on through Idaho and down the Columbia River through Portland and up to Seattle and to adopt a black and yellow marking on poles along the route. This marking was planned to be twelve inches of yellow between two twelve-inch layers of black. It was provided that path-finding car should run from Chicago through to Yellowstone Park in July, 1913, and at this time money to cover this expense was being raised. Ben M. Wood, secretary of the South Dakota Good Roads Association, and Gus Holm, of Wyoming, were appointed a com- mittee to engineer and accompany the car. This meeting demanded the opening of the southern part of the Yellowstone National Park for automobiles. Present at this convention were delegates from Wyoming and South Dakota. All were enthusiastic, and representatives present from many counties declared that their commissioners would no doubt aid the movement with appropriations as requested. The convention was addressed by Gov. F. M. Byrne, Immigration Commissioner Deets and other speakers from both South Dakota and Wyoming. The following permanent officers were chosen: N. E. Franklin, Deadwood, president; James

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D. Gallup, Buffalo, Wyo., and Coler Campbell, of Huron, vice presidents; H. W. Troth, Deadwood, secretary; Bert Cummings, Pierre, treasurer.

The good roads movement was advanced in 1913 more than ever before. This was mainly due to the support which the movement received from farmers who were buying automobiles. As long as the farmer did not own the auto- mobile, and as long as he thought those vehicles were the pets and pleasure crafts of the idle rich, he saw no necessity of building good roads; but when he owned an automobile it was an altogether different matter. It made all the difference in the world whose ox was gored. Governor Byrne fixed June 17 for Good Roads Day and advised all to meet and consider that important problem; all were ad- vised to foster and encourage the construction and maintenance of good roads. He suggested that all citizens should form co-operative groups and work all day on the roads.

In July, 1913, Governor Byrne appointed as members of the state road com- mission, Ben M. Wood, C. E. Isenhuth and one other. Mr. Wood had begun road work in March, 1912, when he was sent as a delegate to the good roads convention in Mitchell. On that occasion he was elected secretary of the convention. It was at this convention that the first permanent good roads movement in the state was formed and was called the Scenic Highway Association. Mr. Wood, as secretary, began work at once to make the movement a success. A little later this organization was merged into the South Dakota Good Roads Association, of which Mr. Wood was continued as secretary. Mainly through his efforts the good roads law of 1913 was compiled. At this time he was chairman of the black and yellow trail committee which was planning to mark in August the contemplated highway from Chicago to Yellowstone Park via the Black Hills.

The best way for the state to give aid in the construction of highways with- out abolishing the constitutional prohibition of state aid to internal improvements, brought out suggestions at the legislative session of 1913 for the submission of a constitutional amendment which allowed the state to give such aid. It was proposed that this could be done when putting in irrigation systems, developing coal mines, building water power plants, etc. From these sources came the greatest demands for state aid at this time and it was therefore hoped that some such amendment would pass both houses and thus the matter would be presented to the voters.

In 1915 the dirt roads of South Dakota, the continued wet weather considered, were generally in fair condition. However, Huron newspapers declared that the roads approaching that city were so bad that any person traveling over them would arrive at an altogether different conclusion; but it was a fact that the good roads movement had already secured a firm hold upon the older counties where organizations had often been effected even in townships. Generally the roads were first treated by the road grader, after which the road drag was employed to maintain a sloping and smooth surface. It was used as soon as convenient after each rain, but never upon dry roads. Where the moisture was considerable the drag was hauled upon the surface at least twice. This left the surface crowned and covered with a smooth layer of puddled and densely packed soil.

The need for good roads was never so badly felt in South Dakota as in 1915. Even the dry districts of the state received so much rain that the roads were in

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bad condition during much of the spring and the summer. The eastern and particularly the southeastern parts never had much worse roads. The heavy and continuous rains kept them in bad condition in spite of the work of township and county officials. The new law which required 40 per cent of the township road fund to be used in dragging roads was not of much use because it was difficult to use the drag and it was useless in mud.

The contention of the Wells Fargo Express Company and the American Express Company that the assessment and levy of taxes made against them by the state in 1910 was unconstitutional came up in the United States District Court in 1913. The court ruled against the express companies and declared the law constitutional, and the injunctions which the company had secured were dis- solved. Both companies were required to pay the taxes which had been assessed against them.

An important river terminal conference was held at St. Louis for two days in February, 1915. The call for this conference was signed by the governors of Minnesota, Illinois and Missouri and by the chairman of several business clubs. The object was to prepare a comprehensive plan for river terminals to be ready for the navigation of the various water courses of the West. Four years before this date Congress adopted the policy of spending $200,000,000 for the improve- ment of the navigable streams in the Mississippi Valley, and of this sum $20,000,- 000 was to be spent on the Missouri River during a period of ten years. The Panama Canal having been completed the country was free to undertake this system which had been under consideration for many years. Commercial clubs and business organizations throughout the West had encouraged this movement.

The first wireless telegraph apparatus of size sufficient for successful opera- tion and use was installed in Aberdeen early in the spring of 1915 by the Aber- deen Wireless Club, which had a machine with a receiving radius of 3,000 miles. For some time he had been picking up messages from all over the United States. At this time they secured a commercial set which had a receiving radius of 5,000 miles. About the same time three young men at Eureka put up a station with a powerful receiving apparatus and received regularly the daily time from the Government abservatory at Arlington, Va. Several young men at Selby about the same time established two stations of sufficient power to reach over the coast line of both oceans and receive the time of day regularly from Arlington. Mr. W. D. Nelson, a jeweler and watchmaker of Aberdeen, took considerable interest in securing the right time from the Government observatories.

CHAPTER VIII

ASSESSMENT AND TAXATION

The state constitution adopted as a basis of taxation "all real and personal property according to its value in money," and provided that all taxes to be raised should be uniform on all such property. The Legislature was empowered by the constitution to exempt property used exclusively for agricultural and horti- cultural societies, schools, religious, cemetery and charitable purposes, and per- sonal property to any amount not exceeding in value two hundred dollars for each individual liable to taxation. The constitution also provided that all laws exempting property from taxation other than that enumerated in sections 5 and 6 of the same article should be void. Section 18 of the new revenue law of 1891 allowed no deduction for indebtedness from the value of real estate, but attempted to authorize such deductions from credits and possibly from other kinds of personal property. The Supreme Court made no distinction as a basis of taxation between different forms of real estate. It at least impliedly forbade such distinction. This gave a discrimination against real estate and in favor of credits and perhaps other personal property, and was contrary to the constitu- tion. This was the decision of the Supreme Court in May, 1891.

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History of Dakota Territory, volume III, Part 46

Author: Kingsbury, George Washington, 1837-; Smith, George Martin, 1847-1920 Publication date: 1915 Publisher: Chicago, Ill. : S.J. Clarke Publishing Company Number of Pages: 1146

Author: Kingsbury, George Washington, 1837-; Smith, George Martin, 1847-1920
Publication date: 1915
Publisher: Chicago, Ill. : S.J. Clarke Publishing Company
Number of Pages: 1146