PER CURIAM.
The contention of complainant is that the Illinois revenue act is in, violation of the fourteenth amendment to the constitution of the United States, in that it denies to complainant the equal protection of the law, and that the administration of that act takes complainant’s property without due process of law. The lack of equality is argued from the law itself, because, by the proviso, certain corporations are exempt from assessment, and the lack of-uniformity because, as shown by affidavits, the property of complainant' is proposed to be taxed at a higher proportion to its value than other taxables of the state. A further contention is that when the board of equalization, in igoo, made an assessment of complainant’s capital stock, it had no statutory power, in 1901, after such assessment had been levied and the tax paid,' to make a fur[611]*611ther, heavier, or additional assessment. Where a tax is threatened under a law obnoxious to the constitution of the United States, or so discriminative between taxpayers of the same class as to be obviously the result of fraud, and therefore unequal, within the meaning of the fourteenth amendment to the constitution of' the United States, resort may be had to the federal courts in the first instance, where the remedy asked .is the restraint of a ministerial act, and especially so where no issues are involved except those that arise under the constitution or laws of the United States. The case under consideration presents, at the present time, no such situation. The laws of Illinois have erected, for the purposes of laying its taxes, a certain administrative machinery. It begins with the local assessor, who fixes in the first instance the assessable value of tjie largest portion of the property subject to taxation. It rises then to the local boards of review, whose function is to raise upon notice, or lower, at their own judgment, the respective returns of the assessor. It culminates in the state board of equalization, whose function, prior to the statute of 1898, was to readjust the several county assessments by raising or lowering, but always with a view to the same general aggregate. Under the statute of 1898 the authority of this board is enlarged, so that in the general adjustment the aggregate itself may be either raised or lowered. It will thus be .seen that the board of equalization is the last resort in the fixing oí taxable values. It is, and always has been held to be, a- quasi judicial body. It is elected, one member from each congressional district of the state, and it holds in its hands the interests both of the taxpayer and of the state. These interests invoke the supposed superior information of the board individually, and as a body, upon tax matters, and their judgment and integrity in the application of that information to the questions arising. In contemplation of law, the board rises to the dignity of an independent assembly or court, in whose keeping lie some of the fundamental interests of the state. That a different conception of its function may sometime have arisen is due not to any change in the law of its creation, but to the suspicion that certain boards have made alliances with taxpayers, or have acted without that impartiality and independence that ought to characterize every public tribunal. The revenue act provides that the capital stock of corporations shall be so valued by the state board as to ascertain and determine, respectively, the fair cash value of such capital stock, including the franchise, over and above the assessed value of its tangible property; and that the board shall, in the performance of that duty, adopt such rules and principles for ascertaining the fair cash value of such capital stock "as to it (the board) may seem equitable and just. It is obvious from this section of the statute that the thing to be ascertained—the objective of the investigation—is the fair cash value of the capital stock, including the franchise. Capital stock means, not the individual shares of stock, or blocks of such shares, but the stock as an entirety,—the beneficial ownership of everything that enters into the property of the corporation. The object of the state is to reach, for the purposes of taxation, the property, tangible and intangible, [612]*612of each corporation; if it be a railroad, its tracks, station houses, terminal facilities, real estate, rolling stock, as also the opportunities, inherent in the corporation and its franchise, of creating earnings; such as the region it taps, the tonnage such region affords, the mhrket' it reaches, the advantageousness of its terminals, its capacities and prospects,—in short, every consideration that gives it an inherent present or prospective value. It is evident that the problem thus presented to the board is not an easy one. In some states it has been met by fixing upon the gross earnings of- the railroad, deducting therefrom the percentage of operating expenses that experience shows to be usual and reasonable, and capitalizing the net earnings, thus resulting at a reasonable ratio, such as 5 or 6 per cent. In. other states the result is attained by a fixed percentage upon the gross earnings. But -whatever method is adopted the purpose is to arrive approximately at the fair cash value of the property as an entirety, and in consideration of its substantial permanency. The. supreme court of Illinois, in the mandamus proceedings, has stated that in arriving at a fair cash value of the capital stock it is proper to take into consideration the indebtedness of such corporation, other than that for current expenses, and the sales upon the stock exchange of the shares of such stock. About this there can be no doubt. The rule has the approval of the supreme court of the United States in the State Railroad Tax Cases, 92 U. S. 604, 23 E. Ed. 669. But the adoption of this suggestion does not make it a fast rule, by which the board is bound to be governed. It was meant, .in our opinion, to be pointed out as one of the indicia of value, or, in the language of Justice Miller, a criteria,— not the ultimate measure. Unquestionably the indebtedness is a valuable indicia. It represents what men accustomed to loan money regard the property as permanently worth as a security; and such men, though occasionally, are not frequently, deceived. But while the capital stock is what might be called the equity over and above the indebtedness, it has a stock-market quotation not measured solely by its intrinsic value. The court knows by experience and observation that railroad properties when sold as an entirety, almost without exception, jdeld nothing to the stockholder, although the stock may have been sold in share lots upon the stock exchange for years previously at advanced figures. The court knows, also, from observation, that these stock quotations are frequently advanced by contending interests for control, or by short interests in the market, such as ran the Northern Pacific within a year to quotations almost tenfold its real value. The court also knows from observation that the'speculative public, dealing in stock sales, and making its quotations, are governed largely by the prospect of present dividends, and not by any general conception of permanent earning capacity. These, and other considerations that could be mentioned, make stock quotations an indicia, but an unstable indicia, of the real value of the capital stock as an entirety. In the case of nondividend paying stocks, the above and, perhaps, other considerations are pertinent. In the case of dividend paying stocks, the market quotations of -capital stock, averaged fpr a reasonable period of time, say five [613]
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PER CURIAM.
The contention of complainant is that the Illinois revenue act is in, violation of the fourteenth amendment to the constitution of the United States, in that it denies to complainant the equal protection of the law, and that the administration of that act takes complainant’s property without due process of law. The lack of equality is argued from the law itself, because, by the proviso, certain corporations are exempt from assessment, and the lack of-uniformity because, as shown by affidavits, the property of complainant' is proposed to be taxed at a higher proportion to its value than other taxables of the state. A further contention is that when the board of equalization, in igoo, made an assessment of complainant’s capital stock, it had no statutory power, in 1901, after such assessment had been levied and the tax paid,' to make a fur[611]*611ther, heavier, or additional assessment. Where a tax is threatened under a law obnoxious to the constitution of the United States, or so discriminative between taxpayers of the same class as to be obviously the result of fraud, and therefore unequal, within the meaning of the fourteenth amendment to the constitution of' the United States, resort may be had to the federal courts in the first instance, where the remedy asked .is the restraint of a ministerial act, and especially so where no issues are involved except those that arise under the constitution or laws of the United States. The case under consideration presents, at the present time, no such situation. The laws of Illinois have erected, for the purposes of laying its taxes, a certain administrative machinery. It begins with the local assessor, who fixes in the first instance the assessable value of tjie largest portion of the property subject to taxation. It rises then to the local boards of review, whose function is to raise upon notice, or lower, at their own judgment, the respective returns of the assessor. It culminates in the state board of equalization, whose function, prior to the statute of 1898, was to readjust the several county assessments by raising or lowering, but always with a view to the same general aggregate. Under the statute of 1898 the authority of this board is enlarged, so that in the general adjustment the aggregate itself may be either raised or lowered. It will thus be .seen that the board of equalization is the last resort in the fixing oí taxable values. It is, and always has been held to be, a- quasi judicial body. It is elected, one member from each congressional district of the state, and it holds in its hands the interests both of the taxpayer and of the state. These interests invoke the supposed superior information of the board individually, and as a body, upon tax matters, and their judgment and integrity in the application of that information to the questions arising. In contemplation of law, the board rises to the dignity of an independent assembly or court, in whose keeping lie some of the fundamental interests of the state. That a different conception of its function may sometime have arisen is due not to any change in the law of its creation, but to the suspicion that certain boards have made alliances with taxpayers, or have acted without that impartiality and independence that ought to characterize every public tribunal. The revenue act provides that the capital stock of corporations shall be so valued by the state board as to ascertain and determine, respectively, the fair cash value of such capital stock, including the franchise, over and above the assessed value of its tangible property; and that the board shall, in the performance of that duty, adopt such rules and principles for ascertaining the fair cash value of such capital stock "as to it (the board) may seem equitable and just. It is obvious from this section of the statute that the thing to be ascertained—the objective of the investigation—is the fair cash value of the capital stock, including the franchise. Capital stock means, not the individual shares of stock, or blocks of such shares, but the stock as an entirety,—the beneficial ownership of everything that enters into the property of the corporation. The object of the state is to reach, for the purposes of taxation, the property, tangible and intangible, [612]*612of each corporation; if it be a railroad, its tracks, station houses, terminal facilities, real estate, rolling stock, as also the opportunities, inherent in the corporation and its franchise, of creating earnings; such as the region it taps, the tonnage such region affords, the mhrket' it reaches, the advantageousness of its terminals, its capacities and prospects,—in short, every consideration that gives it an inherent present or prospective value. It is evident that the problem thus presented to the board is not an easy one. In some states it has been met by fixing upon the gross earnings of- the railroad, deducting therefrom the percentage of operating expenses that experience shows to be usual and reasonable, and capitalizing the net earnings, thus resulting at a reasonable ratio, such as 5 or 6 per cent. In. other states the result is attained by a fixed percentage upon the gross earnings. But -whatever method is adopted the purpose is to arrive approximately at the fair cash value of the property as an entirety, and in consideration of its substantial permanency. The. supreme court of Illinois, in the mandamus proceedings, has stated that in arriving at a fair cash value of the capital stock it is proper to take into consideration the indebtedness of such corporation, other than that for current expenses, and the sales upon the stock exchange of the shares of such stock. About this there can be no doubt. The rule has the approval of the supreme court of the United States in the State Railroad Tax Cases, 92 U. S. 604, 23 E. Ed. 669. But the adoption of this suggestion does not make it a fast rule, by which the board is bound to be governed. It was meant, .in our opinion, to be pointed out as one of the indicia of value, or, in the language of Justice Miller, a criteria,— not the ultimate measure. Unquestionably the indebtedness is a valuable indicia. It represents what men accustomed to loan money regard the property as permanently worth as a security; and such men, though occasionally, are not frequently, deceived. But while the capital stock is what might be called the equity over and above the indebtedness, it has a stock-market quotation not measured solely by its intrinsic value. The court knows by experience and observation that railroad properties when sold as an entirety, almost without exception, jdeld nothing to the stockholder, although the stock may have been sold in share lots upon the stock exchange for years previously at advanced figures. The court knows, also, from observation, that these stock quotations are frequently advanced by contending interests for control, or by short interests in the market, such as ran the Northern Pacific within a year to quotations almost tenfold its real value. The court also knows from observation that the'speculative public, dealing in stock sales, and making its quotations, are governed largely by the prospect of present dividends, and not by any general conception of permanent earning capacity. These, and other considerations that could be mentioned, make stock quotations an indicia, but an unstable indicia, of the real value of the capital stock as an entirety. In the case of nondividend paying stocks, the above and, perhaps, other considerations are pertinent. In the case of dividend paying stocks, the market quotations of -capital stock, averaged fpr a reasonable period of time, say five [613]*613years, and during normal business conditions, would afford a fair measure of value, and should be a strong consideration in fixing the same. Earning capacity too, for the time being, may be the result of exceptional management or frugality. The state does not mean to tax this, but only the inherent value of the property itself. Two sons may inherit from a father, each a quarter section of land of equal value and prospective earning capacity. At the end of a short period one son is burdened with debt, while the other has earned a large percentage upon the value of his inheritance. The state in its taxing function neither exempts the improvident son on account of his improvidence from paying his just proportion of the public obligations, nor imposes upon the provident son a penalty for his frugality and faculty of getting on. The state looks alone to the thing upon which the two sons have exercised their opportunities. With this expression of view respecting the meaning of the law and the function of the board of equalization, we proceed to the mandamus case.
The facts brought to our attention show that in the year 1900 the predecessor of the present board assessed against the companies constituting the present Union Traction Company, on account of its capital stock over and above tangible property, the sum of about $600,000, which would indicate a fair cash value of about $3,000,000. The facts also show that the bonded indebtedness of the several companies assumed by the Union Traction Company, and their capital stock upon which permanent dividends were guarantied by the Union Traction Company, amounted, as near as we can ascertain from the record, to about $60,000,000. In the proceedings for mandamus in the Sangamon circuit court, these facts were brought to the attention of the court. No countervailing facts relating to fair cash value of the capital stock were submitted. Why the case was permitted to go to judgment upon such a showing is not explained. The probability is that the traction company felt that it could defeat the mandamus proceedings upon other considerations, and did not choose to present the facts that would show the real cash value of its capital stock. It was found by the circuit court that the discrepancy thus indicated between the assessment spread upon the books and the only criteria of real value brought to the attention of the court was so wide and abrupt as to, indicate fraud; and the assessment of 1900 was therefore set aside as fraudulent, and a new assessment commanded. In this state of proofs the mandamus case was-taken to the supreme court, and the findings and ruling of the circuit judge were affirmed. 61 N. -E. 339. It is difficult to see how the ruling could have been different. On the record presented there was a clear attempt to escape a just proportion of taxation, and the court could not easily have escaped the obligation to set aside so unfair a finding. This brings us to the present status of the assessment of 1900. That question is now before the board of equalization as if no assessment had been made, the fraudulent assessment being' equal to no assessment. The duty of the present board, under sections 276, 277, Hurd’s Rev. St. 1899, is plain. That duty is to ascertain the fair cash value of the capital stock as an entirety, and on that [614]*614basis ascertain and assess the arrearage of taxes, with io per cent, interest thereon, and, in the language of the mandamus, to arrive at such valuation from the best information obtainable, taking into consideration, among other things, the market value of its shares of stoqk and the total amount of its indebtedness, except for. current expenses, as of April i,.i9O0. We do not understand that as a command on the part of the circuit court ór the supreme court to make such assessment according to the criteria of the market value alone. The work of the board is not that of the mere mathematician. It implies what the predecessor board disregarded, the market value of the shares as a consideration, but it implies also the inquiry into all other facts and means of knowledge that will bring the board to a fair finding of the fair market value of the capital stock as an entirety. The board is not shorn of its judicial powers, nor is it justified by the mandamus writ in any disregard of its own best information and judgment. It remains still the final reviewing taxing body of-the state, to whom the taxpayer and the state may alike look for a fair ascertainment of value according to every pathway that leads to a just result. The bill in this case assumes that the board will not now exercise its independent judicial function, but will confine itself to the mere arithmetic of -adding together the indebtedness and stock exchange quotations of the capital stock. We are not at liberty to concur in this assumption. We believe, and are bound to believe, that the board will exercise its function as contemplated by the law. This would exclude the supposed danger of gross discrepancy and the supposed danger of overvaluation. If it transpires that the board of equalization, through pique, or under the lash and spur of some external power, or through personal fear, or moved by any other consideration than the impartial and independent discharge of its own duty, attempts to certify an assessed valuation that in its effect would' be a fraud upon any taxpayer, the courts still remain open to the injured taxpayer. The board should be just, as the state wishes it to be, irrespective of the past, and without partiality, and this we will assume until the contrary appears. As to the contention that the law of Illinois and its administration show gross inequality and lack of uniformity, we regard that question settled by the supreme court of the United States in the State Railroad Tax Cases, supra.
The motion for preliminary injunction will be overruled, and the temporary restraining order dissolved.