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Show FIRST BOUI IM Js BYIICOffllES Temporary Restraining Order Or-der Issued by Federal Court. Forbids Collection of Occupational Oc-cupational Tax Until the Legality Is Established. j After listening to argument , in tho I United States district court esterdny, Judge Tillman D. Johnson issued an order , temporarily restraining State Treasurer j Daniel O. I-arson from collecting the occupation tax, plus a lax; of o per cent on tho net earnings of niiping properties, land tho sale of properties on which this 1 tax has not been paid will no' take placft ' tomorrow, as advertised by Mr. 1 .vson. ' Tho order of Judge Johnson lllhi m force until tho question of iho Icgallty S'J ! the tax has been determined at a hearlnsVt to bo held before Judge Johnson and two circuit judges, or Judge Johnson and am t circuit judge and one member of the mi- ' J premo court, as mav later be decided , upon. It was suggested at the hearing yesterday that Judge Johnson at onre communicate with Judge V. II. Sanborn, f the presiding judge of this circuit, at St. -r. Paul, to arrange for the hearing. Tt Vf. thought probable that the hearing may -j held in St. Paul within the next three or ( four weeks. Pending tho decision of the higher court, Judge Johnson fixed the bond of the Utah Copper company, associated with . which in the action are nineteen othei mining corporations, at $r0,000. The bond of the Silver King Consolidated Mining J t company was fixed at $3000, and that .of ? the Judge Mining & Smelting company y and others at $2000 each. The bonds will tp-j1 be tiled not later than 111 o'clock noon to- r morrow. i Huge Savings Possible. ! If the restraining order issued hy Judse i ; Johnson yesterday is made permanent at - , ! the final hearing, and the law under which i the tax has been assessed fs declared unconstitutional un-constitutional and void, approximately $1,000,000 a year will be saved to tho mining min-ing companies in Utah. It will mean that a handicap, threatened by the imposition of the tax, wviM be removed, and thero will be an incentive for the continued mineral development of the ftate which would not otherwise exist. The tax, if declared constitutional, it is believed, would pro-re a hardship on many of the smaller mining companies and causo some of them to cease operations. If declared legal, tho occupational tax will increase the rate of taxation on all operating mining companies to about 7 per cent of the net earnings. Such A ;. high rate of taxation, it is contended, would not only discourage development of mineral lands by investment of large ( capital in this line of industry, but. would make investment in mining securities un- s profitable and bring about a depreciation i i of value in mining shares which would, j ! not bo warranted on any other gro'Cjd than excessive taxation. . Considered Unjust. Under previously existing laws the V, mining companies are now paying at the f , rate of about 2Vl per cent of their profits. I ' plus the taxes on surface grounds of their I claims, improvements and machinery. To ft add 3 per cent on the net proceeds, equal to about 4 per cent of the profits, 3 jO considered unjust. Ji Under the constitution mines and jf ing claims are taxable on a basis ol annual proceeds, and under that provision provi-sion the mining companies in the past have paid the same rate on their net proceeds pro-ceeds as that assessed against other property. This being the limit beyond which the state legislature could not po. the legislature at the last session adopted adopt-ed a resolution to submit section 4, article arti-cle 13, to a vote of the people for amend- , ment, which was adopted at tho last ' election. While watting for the general , election, the legislature passed what has been termed a "makeshift" law, called i the occupation tax, carrying with it a tax j of 3 per cent on the annual net proceeds ! of all mining companies, which would . give the state a revenue of approximate- ly $990,000. more than ?sno,000 of which is involved in the present action. This law, according to counsel for the various ( mining companies, has all the earmarks of a net proceeds tax or ad valorem lax. Solons' Powers Questioned. j The right or power of the legislature. ; under the constitution, to levy a 3 per ! cent ad valorem tax on the net proceeds of mines, under the guise of an occupation occupa-tion tax, is questioned by the attorney!, , particularly for the reason, as brought . out at the hearing yesterday, that the ; constitution provides that a tax may be , levied and assessed against mines on tho j I basis of their net annual proceeds. Tt is I neither just nor lawful, it is maintained, J that these identical net proceeds should be used again as the basis of a duplicate 1 tax scheme, and that to do so would re- 'I suit In double taxation, in violation of j I the state constitution. if In opposing the granting of a restrain- J ing order, Herbert Van Dam, Jr., assist- ant attorney general, said that if tlie taxes 1 were paid by tho mining companies under protest there was adequate and speedy remedy at law. It was admUvd by him that no action can be brougV J against the state except by permission oX J tlie legislature, which may also grant per- M mission to bring action against a state officer for recovery In a case in which the state has assumed responsibility, j Dickson Takes Exceptions. J William H. Dickson, counsel for tVj Utah Copper company, took exceptiorT5 i this, on the ground that if the tax allid j to be due is paid tlie amount goes into I the state treasury, and the only recourse, I would he an action apainst the state I treasurer for illegal collection. It was J brought out thfi L the sta to t reasurer Is I under bond to the extent of only Sof.O.npO, while the amount of taxes is $si 7,000. The difference, it was maintained hv Mr. Dickson, could not be recovered by nl' action against the state treasurer. Mr. ' Dickson declared that if t ho restraining order were not granted irreparable injury 1 would accrue to the companies involved ; and clouding of titles to mining properties proper-ties would result. j |