The record-union., 1894-08-01
STATE BOARD OF EQUALIZATION.
The Southern Pacific Has Its Day in
Court.
e. Black Ryan illustrates the Small
Margin of Profit in
Railroading.

meeting yesterday, it being the DAY set
apart for the hearing OF the Soutnerh d
cific system assessment.
L. Black Ryan appeared on behalf OF
the company and presented statement
of the reasons urged for reduction.
He said it was not necessary to go INTO
details as to the causes which have pro
duced certain effects, as they have adected
all branches of business as well as that OF
railroads. He thought that men OF capl-
tai would be very wary of investing IN
enterprises hereafter which would be
liable to damage and interruption from
periodical disturbances like the late one.
There is a very material reduction IN
: the values of the property of the system
which he represented in comparison with
1what it was in 1893. There has been
general reduction in the assessment rolls
of all the counties, which viii amount 10
from to II per cent. less than those OF
last year. AS this affects properly il
general, so it necessarily affects the rail-
road system. and he felt certain that the
good Judgment of the board would take
these facts into consideration when equal
iZing the values of property, railroad ana
otherwise, throughout the State.
As all are aware, many OF the news
papers in the State have SAID that the
( railroad did not pay its taxes, but he
thought that ii the matter were lnYestl-
= gated there might be reason to look at
the assessments of these same papers. Ii
asked the commercial value OF their
plants. experts would state it In some IN
stances as high as S400, 900 or S45O, 900, but
if the assessment rolls are examined they
will generally be found TO be put down at
$4,000 to S20,0 ,000 They claim that large
proportion of value in their plants con-
slsts in the value of the good will, but
they are unwilling that the railroad COM
pany should claim exemption for Its
Federal franchise, which amounts TO the
same thing as good will. They also ad-
vocate that the Government should take
possession and control OF the railroads.
as they do not pay their taxes and inter-
sest. but they do not seem TO realize
that if the Government did so the rail-
roads would not be taxed at all and the
taxpayers would have just so much more
of taxes to raise, when the complaint
is now that they are overburdened. Ii
would simply deduct $50, ,000, 900 from the
assessment roll.
The depreciation in the value of all
other property has produced corre-
spending depression OF value in the prop
erty of the roads. When the farmers
crops are very low in price, in order to
allow them to get them to market, the
railroad has to reduce the freight to, IN
many instances, less than living rate,
in order that the farmer might be enabled
to get something out of them.
George Klink, Chief Clerk to the Sec
retary and Controller, testified that all
the figures of the company'S reports
passed through his hands.
He presented a statement of the eX-
penditures and receipts of the Southern
Pacific system for the year 1893. The
total earnings of the calendar year were
$23, ,579, ,S47 5o. The total expenditures for
operating the road were 81, ,S02 0Sl IS; the
fixed charges were: United States sink
ing fund, 1854, 175 Is; Central Pacific
Company's sinking fund, SlS5, 900; South
ern Pacific sinking fund. 100000; North
ern Railway, $40, 900; California Pacific,
SIS, 900; interest on bonds, 50, SIC, ,074 IL,
covering all lines; taxes, 81, ,I23, ,707 06.
The balance. after deducting these, is ST.
oil, ,525 40. as the net earnings OF 1893. The
net earnings of the road are from IL to 15
per cent. less than those of the year be-
fore, and the first six months Of the pres
ent year show continued additional in
crease of like per cent. The Worlds
Fair travel showed a large increase OF
business. but at lower rates.
Mr.. Klink was asked what, in his opin-
ion, had been the loss of the Southern
dcIuC Dy I0dSOu Oh Tie IdU6
strike aud It's attendant damage.
: The question provoked considerable
discussion, and Mr.. Colgan held that as
it occurred subsequently to the 1st
of March, when the assessment was
made, it should not be considered.
Mr.. Ryan said that the matter showed
that the railroads were peculiarly stu
ated, being liable at any time to such
VicisSitudes, and that they affected the
value of its property. There are also
causes additional to those affecting farm
ers and business men. The washouts at
Soledad, for instance. forced the company
TO build a portion Of its road twice over.
Mr.. Ryan said, in relation to the re-
assessment of the road for 1856 and
1887, that in one OF the San Francisco
papers, in speaking of the taxes for
+, 1888 and 1884, there appeared some items
worthy of attention. One of them was
an addition of per cent. and also the
addition of per cent month, under
Section 1903 of the Political Code. There
is no such section, it having been re-
pealed years ago, in the early eighties
and when in operation only applied to a
party who had no property in sight. II
did not apply to the railroad company.
BY adding few more such items and in
.creasing the attorneys fees it could be
made TO appear that the delinQuencies
amounted to millions. As a matter oi
fact that section has no relation to the re-
assessment, which was not made under
it He recalled the fact that in these
years, 1880 and afterward, the local assess
Inents all over the State increased in nc
instance more than 10 to 20 per cent.
while the railroad assessment was in
creased over 100 per cent. There is nc
other property that is so closely in
aspected or so closely assessed as that Of
the railroad. The amount OF other prop
erty that escapes assessment annually in
this State exceeds the total value OF the
railroad. In Arizona $50 miles of road is
assessed in five counties at $500 pei
mile; in New Mexico l6S miles is as
sessed for less than $1,000 mile for all
the tracks; in Utah there is proportion
ate assessment. This. is done by Terri
torial Boards of Equalization. In Ne
vada the Central Pacific road is assessed
at $4,000 to $4,000 per mile. Oregon as
fornia for less than $4,000 per mile, and
branches at $4,000 to $1,000. Lands are
assessed at 49 cents per acre.
He had no suggestions to make with re-
gard TO the assessments for 1856 and 1887.
The taxes of 1856 are outlawed. and oi
1887 are in the Supreme Court. He
thought the position of the latter taxes
would be no bar to reassessment by the
board. He called the attention OF the
board TO Section 1049 of the Code of Civi
Procedure, also to Is Cal 635, 81 Cal. $50
and IS Cal. Co., holding that where a cast
is on appeal to the Supreme Court judg
ment of the court below is suspended fol
ali purposes. He thought that under
those decisions the board could assess fol
that year.
Ii, said he. the board concludes that i
has a right to make the reassessment fol
1887, and the company pays under such
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Food raised with Cleveland's