The record-union., 1893-07-28
STATE BOARD OF EQUALIZATION.
The Southern Pacific Company's Day
in Court.
E. =. RYAN Appears for the Company
and Makes a Statement Regard
ing Its Property Values.

Yesterday was the day set for hearing
the statement of the Southern Pacific
representatives in relation to the assess
ment of the system of roads under It's
control. When the board opened It's ses-
sion, E. Black Ryan stated that he ap-
peared before the board on behalf OF the
company in relation to the assessment TOR
the year 1893. In this connection he
wished to call as his witnesses w. +.
Knox, practical railroad builder, and j..
T. Klink, Chief Clerk in the Controllers
office of the Southern Pacific Company.
Through Mr.. Klink he wished to show
the revenues derived from the various
railroad companies separately first, and
afterward the revenues of the whole sys-
tenn taken together, and the means OF ar
irving at values for assessment.
]. T. Klink testified that he was Chief
Clerk in the Controllers office OF the
Southern Pacific Company, and as such
all matters pertaining to the different
roads of the system were familiar to him.
The different roads of the system are all
affected by the prevailing dull times and
stagnation. The net earnings Of the Cen
tral Pacific within this State for the hrSt
five months of 1898 were about 81 100000.
AT that rate the net earnings for the
twelve months would be about S2, 100000
In answer to question by Mr.. Swan,
Mr.. Black stated that the earnings OF the
first part of the year would be about like
the last. Moving the grain crop made
the last half better in years of good crops.
Mr.. Klink resumed that he had exan-
tned the figures of the board for 1888, 1856
and 1887; was familiar with the ferry re-
ceipts for 1892; they were about SSOO,OOO,
ana are included in the estimate of
s., 400, 0CO, which included the net earn
ings from every source. This being de-
Quoted, leaves the net earnings OF the
road at 81, 100000, which, when capital
lied at 10 per cent, gives a basis OF Sl6,-
900, 900, so per cent. OF which IS Sl2, oOO,OOO
The local Assessors have assessed the
property outside of what this board
assesses at So, ,0O7, $40, which leaves Sc, 1872
$50 on the remaining property. This
would be, for the 747 miles in the State,
about 81, ,093 per mile.
With regard to the Southern Pacific
Mr.. Klink stated that the net earnings
for the first five months in 1893 were
81, ,275 900, and at that rate the net earn
ings for the year would be s., GOO, there
being no ferries to deduct in this system.
Last year il was s., 81, 900. There was
falling off in earnings of nearly half a
million dollars.
These net earnings, capitalized at 10 per
cent, gives a basis of $50, 900 900, and 50
per cent. is S24, $4,000. Deducting the
local assessments of s., So, ,260, leaves a
residue of sd ,S94, ,740 on ], l,119 miles, equals
Sl2, 737 per mile. Divided by the :, 466
miles of road in both roads, it gives an
average OF Sll, ,633, the total value being
SIS, ,6Sl, ,070.
The assessment for last year was S2S,-
100000, an average of Sll, ,765.
w. +. Knox stated that his present
business is building railroads.
Mr.. Black, in answer to question by
Mr.. MOrenOuse, stated that the object of
Mr.. knoX's testimony was to show the
cost of building the Southern Pacific.
That road and the Central Pacific were
built under Federal franchise, and he
wished to present to the board a decision
of the Supreme Court of Nevada touch
ing that question, which enunciateS the
principle that road is never worth more
than it costs to build it. He would ask
Mr.. Knox to give the board some figures
on his road building.
Mr.. Knox proceeded, saying that he
was at present building railroad at Bur-
bank, which was costing about $500 per
mile for grading, Sl,05O for ties, track
laying S2OO, steel rails at S29 per ton at
tide-water in New York, the freight be-
ing about SO per ton, and would take
about eighty tons to the mile. say So, 300
for rails per mile; spikes and straps,
about $500 per mile; culverts, 500 per
mile; right of way, Sl20 per mile, max
ing a total of s.. so per mile. The coun-
try there is quite level. He also built the
road from Tracy to Newman, about
yeight miles, for which the grading
and track-laying cost $780, 700; also, from
Napa junction to Santa Rosa, about
thirty-eight miles, costing S74, 731. The
road from Bakersfield to Asphalto, fifty
five miles long, cost $50, 900.
Mr.. Knox further stated that he thought
. - H., l.
more for grading than these side lines, and
5000 more for bridges and culverts and
Sl20 for right of way, which would make
the cost on the main line about $3.50.
There is also on the main line continual
cost of repairs for new ties and rails,
making in six years about 20 per cent.
depreciation, which, when deducted,
leaves St,696.
The rolling stock used on the Southern
Pacific road in the State is s., 76S, 900,
making an average on the ,7l9 miles OF
road of 81 $40 20 per mile. About 10 per
cent. of this is continually in the shops.
The value of the road and rolling stock is
$S,306 per mile.
Mr.. Ryan then spoke of the Federal
franchise under which the two roads are
operated, for by Act of Congress they
must be operated under the one fran
chise. Ii was made one of the elements
in former valuations, and was not sub
Ject to assessment.
The amount of the first mortgage on
that part of the subsidized line in Cali
fornia is about IS, S,500,0O0 on 30 miles.
making S3l, ,4S0 per mile. This covers the
telegraph lines, shops, station buildings.
material, roadbed right of way, sixty
acres in Mission Bay and other property
in San Francisco, and also the franchise
from the Government.
At this point Mr.. Black made applica-
ton to have the Government mortgage to
the amount of $4,000 a mile deducted
from the valuation assessed on the road
by the board.
In answer TO questions he stated that in
Nevada the road was assessed SIC, 100 per
mile; in I tab, s. 800; in Arizona So 600
aud in New Mexico, 5000. In Nevada
The road was first assessed at Sl4. 900 and
a raise of 10 per cent. made a month after
ward made it Sl6, 100. The raise was
made on all the property in all the coun-
ties through which the road ran, Orepon
assesses at less than $1,000 per mile for
road and rolling stock.
The net earnings of the California Pa
cific are about the same as last wear.
In 1856 and 1887, MIR. Black stated. the
earnings of the ferries connected with
The various roads OF the system were
added in as part of the earnings of the
road, when in fact they had nothing 10 do
with it.
He called the attention of the board to
the fact that several well informed news
papers of San Francisco who have ex-
amined into the subject have stated that
q railroad can be built from Stockton TO
bakersfield at cost of S4,OO0,0OO. The
board had assessed his road al 81, 755, ,750,
which is pretty close to those figures.
N response TO questions by Mr..
Beamer, Mr.. Knox stated that ne had