The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1891-02-10
TAxATIoN OF RAILROADS.
Mr.. Dennett Addresses the Young
mems Democratic Club.

Mr.. Dennett Addresses the Young
Mems Democratic Club.
Mr.. L. B. bennett addressed the Young
Mems Democratic Club on the subject of
taxation last evening. Among other things
he said:
A writer, presumably in the interest Of the
Boston g. Maine Railroad, whose statements
were copied by the Portland Advertiser Of
February 4. parades the following mIsleaa-
ing figures before the public. evidently In
tended for the legislative eye. The writer
among other things says:
The gross earnings OF the Boston & Maine
kairoad as reported to the railroad commission
the state tax the earnings per miles of road oper
ated would have tJ be ascertained.
gross eafnings per mile Of SiaHso Their Etss niis
age In Maine Is i02 and a fraction.
This gives gross earnings In Maine as computed
Sl,27Z,96O fne full limit Of state taxation Is
3iA per cent which wonld be In round numbers
$4,000: The question 20 be considered is this
aeasonaDle TAX Tor tnat road to pay, or ought the
In order to rome TO an intelligent solution Of
tne qaestion much depends upon the value OF the
and the liabilities the road is ubjecIed to. The
amount PAID IN on stock authorized by the COM
pany Is z97, 743 80. The amount Of funded
dehtis SIT 1898, 92O.31, m 4king total Of $685.
69l ,664. II, or s27 ,S44 35 for every mile. THE
.O2 miles In Maine would then show value OF
the state sac 2.eei.s5, only S@,eoi more more thsn han
would be received under the pres mt mode Of tax
2 ION, This tax would equal The average Of muni
have same report December 10. 1890.
before me. which dlscloses the fact that the
net earnings Of the Boston & Maine were
S5.642.5i7.42, or S4663 per mile. counting in
the entire system Of l, no miles.
The writer says there are 1O2 miles of the
B. & NJ. situated within this state. There
fore the net earnings Of the road 10 Maine
were S475,626, which Is six per cent on a
valuation of 81 927, 100; which is in excess of
his value Of 2.S40.l23 by the sum Of $685.
97L.
l do not contend that the Boston & Maine
railroad within this state Is worth precisely
SI627.10o perhaps not even proximately
that sum. Certainly the net earnings Of
railroad is one fact to be considered, and In
this particular instance, so far as can learn
from their reports, Is coincident with all the
other facts necessary TO De known in forming
an estimate, and perhaps discloees the prOx-
Innate value OF the main portion OF the TO d
A tax Of one and one half per cent on ST.
927, 100 would be S12S, ,906 so and not SO. COL
85. The tax which the Boston 81 Maine did
pay for the year 1889 TO the state of Maine
was S36,715 Is. The principle of taxing rail-
roads either npon their gross earnings or
act earnings Is radically wrong, as can be-
easily demonstrated. Take this case of the
Boston 81 Maine itself.
Their whole system comprises 1910 miles
which Is the division Of the gross income of
the road 10 get the per mile gross income as
an Isolated fact throws but little light upon
the question OF what tax IL should pay. The
net income OF s4,66S per mile for
a n mil
does not enlighten us fully, but Is, unques-
tlona6ly better guide than the gross in
come. That part Of the road in Maine may
earn more or less than the S4663 net per
mile. ms method OF taxing according to
the gross income is. in every respect, unset
entlnc. After all the facts in relation to any
particular road are known, so that its value
may be ascertained, then, when ascertained,
II might De determined what rate upon its
gross Income would yield the just amount of
tax. But no rule can be laid down In ad-
vance and made applicable 70 all reads In
the state, and yet that Is what our law has
attempted to do. 1t Is that law we seek to
repeal.
The article referred to states that the val
ne OF the b. q M. railroad Is S33, go, ,664 II,
and II arrives at this conclusion by adding
Sl6,297, 80, the par of its stock, 10 its
bonded debt Of SIC, 1898. .920.3l.
The b. d Nj. stock Is worth 204 today max
Ing the value OF the road over $50, 100000 ac-
cording to his mode (not mine) Of appraising
a railroad.
This would make a value Of Sal, ,322 per
mile, and not merely S27. .844 80 per mile
This would give that part OF the road In
Maine a value Of S4,3i4,S ,S44. Now rate Of
one and one.half per cent. as the writer pro-
poses, would yield tax of S64,222. 1 have
already said the tax paid for 1889 was only
S36, ,7l515.
Such figures and such reasoning as the said
writer lndulges In may well mislead those
who have not the reports of the Boston 81
Maine before them.
suggest that nothing Is so fair as fair
ness. Let the Boston Is Maine send to every
member OF our legislature copy Of the re
port last printed and 1t will throw light both
upon the question OF taxation and the expe-
diency Of allowing 1t to issue the asked for
$4,000. 900 Of new stock.
II the Boston & Maine is worth but 5000
600 then tax it for only that sum. II the
Portland & Rochester Is worth little, tax 1t
but little. And as to the new roads In the
sparsely settled parts Of the state no one ac-
qualnted with the facts would think OF tax
log them more than nominal sum.
Railroads are an important part In our in
dustrial system, and their building should be
encouraged ana new roads should be exempt
from taxation for few years.
But great and prosperous roads. whose
property in this state exceeds $50, ,OOO. 900 in
value should. in my Judgment, pay s45O, 900
Der annum into the treasury Of the state.
And the tax should be assessed according TO
their Just values and not upon gross income.
Assessed as other property is, equally with
other property.
This was once attempted In this state. The
lawyers for the railroads invoked to their aid
the constitution. But their pedantic reason
ing did not deceive the judges of our Su-
preme judicial Court, and the law was heii
constitutional.
But the law of 1880 did not exempt the
bonds of railroads from taxation, although
II did the stock. The result was an assess
ment on the market value OF its shares, aud
the Iallr9ads escaped taxation beyond the
That the bonds should be exempt and the
property taxed l believe to be philOsophic
While our railroad bonds are taxable they
are not taxed. II cannot be claimed wit
any any L4ree taat the holders OF our bonds
would pay double taxes, because they are
not found In their hands to % taxed. There
Is no class OF prosperity that escapes taxa
tlOn with such fucllity as railroad shares and
bonds. will illustrate this fact by taking
not our state, but will take the state OF
New YORK, where my friends do not live.
The railroads Of that state have shares
and bonds to the amount of 1854 600, 900.
Whlle her citizens did not hold ali ot THESE,
Yet they held those of other states to IN AXE
Iprlan up lar more tnan 1854 100000, and yet the
personal property OF all kinds in that state
lh 1891, according to Governor Hills mes
Sage, which was really taxed amounted 10
put $685., 100000. When We consider the
1--we SOCK and tools and machinery Of the
| farmers, and the merchandise of merchants
and manufacturers, which entered into that
amount, IL Is perfectly evident that none vi
the railroad securities we've taxed, or next tU
none.
To ReyIve Interest In Base Gall.
| Messrs. T. P. Lowell of Boston and Mana
ger F. J. Leonard of Lynn. were in the city
yesterday as committee representing the