Audubon County Republican. [volume] (Audubon, Audubon Co., Iowa) 1885-1894, 1888-03-01

build the Pennsylvania system as the Michi
gan Central but am giving you what the
bonds and stock amount to. The Illinois
Central, $40, GA per mile. On the Illinois
Central there is not one dollar of fictitious
capital, and there has been since | was APP
pointed Superintendent ten or eleven years
ago in the neighborhOod Of S7,000,000 put
into that property TO better its condition
This sum was put into those items hereto
fore enumerated which make it a safer road,
and this amount is not included in the Si2,-
GA per mile.
Chairman: Terminal facilities are in
cluded in that?
Mr. Jeffrey: That is the stock and bonds
per mile. The value Of the property to-day
is much greater. The probabilities are that
the first fourteen miles out of Chicago, with
the terminal facilities there is worth half
tie capital stock; is worth $50, 600, 000
mention this TO show that the capitalization
of the Iowa roads at SIS, 600 per mile, COM
pared with the capitalization of roads in
other States, is not excessive, but, on the
contrary, it is a low one.
Member of Committee: What is the basis
upon which you establish the actual value
OF these roads?
Mr. JefTery: That, if / may make a small
DEPRESSION, is a difficult thing to determine.
The value Of a road depends upon its earn
ing capacity its ncome-prOducing power.
l suppose six per cent upon the property
is a reasonable showing Of its incOme-pro-
duCing power and is fair test.
Member of Committee: The rates, then,
are The value Of the roadP
Nj Jeilcry: They make or destroy the
value Of a road; SSs,OO0 a mile is low fig
UTC for cost of road. Due consideration
should be given to the proposition that il
tic stock and bonds of railroads were TO
,,,1, Ea a,,t IN,
construction, it is doubtful if we would have
4 mile of railroad in the United States to-
day. This would hold true Of Iowa, as well
as Of other States. Capitalists and small III
ye,tors cannot be fouHd who are willing 70
risk their money in railroad ventures with
tECr uncertainties as to rates, volume of
traffic, competition pTejudicial pub
lie opinion and hostile legislation,
unless there is some strong in
ducCmcnt offered TO them. Bonds
and stock must be offered at low prices.
That is a self-evident proposition If you,
Mr.. Chairman, have $1,000 to invest ana
Senator Finn the same, and it is proposed to
construct a railroad and you and he are So
lcited TO invest you estimate the traffic will
yield six per cent on the securities you
think the project will be a successful road in
the future. The projectors sell you $1,000
bonds at so. You each pay 81 600; YOU
both pay the money, take the bonds and put
them away You take your risk and may
lose your "a, 600. The property may go into
the hands of a receiver as soon as it is built.
Who can tell? You are entitled to consider
alton for taking these chances. You are en-
titled TO make some money for taking them.
Senator Finn: What do you say as to the
justice of fixing rates so that it will pay
fair remuneration upon the actual cost of the
read?
Mir. Jeffrey: | say, first, insist through
the Railroad Commission that the roads
shall be put in frst-claSs physical condition
and that accommodations shall be furnished
for the public; second, that there shall be
10 unjust discrimination and the decision Of
the commission shall govern unless reversed
by your courts; third, that the revenues in
Iowa shall be restricted to earning six per
cent upon the money actually invested in
railway construction and Improvements, and
il would not then be an unjust thing if you
would compel these corporations to improve
their properties. If, after yielding six per
cent they had surplus earnings, they should
be spent in Improvements.
You must make these Iowa roads what
they ought TO be. Give stability and perma-
nence to railway rates and revenues, and
bonds and stocks at the inception of the road
will command higher prices railways can be
y
them will be constructed. In proportion 70
lie risk and uncertainty Of profits on the in
NGStmcnt, the nominal value Of a railroad
will exceed the actual cost, and as a cOnsc-
QuCncC, it must not be expected that rail-
read built through 4 new country, sparseiy
settled, with no prospect Of giving immedi
ate returns on the outlay, must represent by
its stock and bonds only the actual cash cost
of construction. Indeed, it is the exception
Il. e. Ii
sold at or near par, the stock being some
times offered at a nominal price as an induce
mCnt for the capitalist to risk his money in
buying the bonds. Nor is il fair to say that
because the bonds and stock were bought at
a low figure the holders thereof should only
receive q reasonable return on the actual
outlay IT, by the investment Of the money
whereby the railroad was built, the country
is developed, the products of the farms
are afforded markets, the mines are
opened, cities are built industries of all
kinds spring mp, atfording occupation for a
large immigration and growing population;
and if, under these favoring conditions, the
increment of value to all property has been
very great, why, in the name of common
sense, reason, and equity, should not the
railroad investor, the maker, l might say, of
all ths-the party who risks his means in an
enterprise which has proved highly adyan-
tagGous TO others who have not a dollar at
stake in the result why should he not share
in the general prosperity which his capital
was instrumental in creating, and be allowed
the benefits arising from the mutual increase
Of value to his property, the same as others
are allowed at which inures TO theirs? Is he
not a part of the community, doing his share
daily toward the general advancement?
Why is it not rs reasonable TO say that the
farmer, the merchant, or manufacturer shall
be confined to reasonable return on his
original investment as that the railroad
builder shall be, with whom it may be
tuthfully said the farmer merchant and
manufacturer are allied and identified in a
mutually of interests
The Iowa tonnage reported by the Com
missionCrs for the year ending June 30, 1886,
is Il, Gas, 3G4, of which about $3.50, 900 was
grain and flour; 1,1G0. 600 was animals;
512, eco other agricultural products making
about 30 per cent products of the farm. OF
the remaining 60 per cent about % per cent
was coal and IA per cent general merchan-
disc, the balance, 81 per cent, miscellaae-
Gus.
The last report Of the Commissioners at
hand, that for the year ending June 80, 1886,
shows that the gross earnings in Iowa of all
traffic, including that carried within and
through the State, were $50, DIS. 100, a de-
crease from the previous year of sos, $50.
The operation expenses in Iowa, including
So62,229 paid to the State for taxes, were
S2S, 500, 784, or CO 1-3 per cent of the gross,
so that for every 500 received by the rail-
reads for transportation of traffic in AMI
through the State of Iowa, they paid out
$66.33, which flowed directly back into the