The record-union., 1895-08-01

miles. Then there is the line from Lath-
rop, through Stanislaus, MERGED, MADEIRA,
Fresno and Tulare Counties TO Goshen.
to the junction with the Southern Pacific,
| there are 146 miles of railroad belonging
to the Central Pacific. From Roseville
through Marysville, Red Bluff and Red
ding to the south line of Oregon is 275
miles. These lines comprise the Central
Pacific road, a total of 746. rs miles.
Independent of the franchise, the total
valuation Of these lines for roadway, road
bed, rails, ties and rolling stock. say for
portion from San Jose to the Nevada line
is operated under a Federal franchise.
which is not taxable by the State.
Mr.. Ryan read from the decision of
Chief Justice Beatty of Nevada, in the
Tenth Nevada Reports, on the proper
method of assessing railroads.
q. Il. Klink testified that he was the
Chief Clerk TO the Secretary and Control
Ter of the Southern Pacific Company,
and that il was his business to assist in
formulating the annual reports of the di-
rectors to the stockholders. The gross
earnings of the road last year were &c.
5S4, $50 %; gross expenses, 50. lS5, 266 7S,
leaving balance of 81 ,399. 543 81 as the
net earnings Of the road. Deducting all
fixed charges and expenses of the whole
Central Pacific system, both inside and
outside of the State, there was detici-
ency of Sill, $40 SO in 1894 in operating the
whole ,367.7S miles of the road, and Of
course prOpOrtionate deficit of over one
half for the portion III this State as against
its net earnings.
Mr.. Ryan said that as interest had not
been reckoned in the net earnings. he
thought the board should not consider
that there had been any net earnings for
the year on the portion of the road In
this State. He had made an aggregate
estimate of all gross expenses and earn
ings of the entire system of roads Oper-
ated by the Southern Pacific Company in
California, which showed that the gross
earnings were Sl9,964, 3l8 S., and the
gross expenses were Sl4, 652. 405 10. leav-
ing net surplus of 1871 ,9l3 20, without
deducting interest on bonds, Government
sinking fund, company's sinking fund or
land expenses, which would reduce the
amount So. 800, SS7 30. leaviug a deficit of
SS7, 973 So.
Mr.. Ryan stated that the Assessors of
many counties had told him that the
company returned better values to them
on its property than private persons do
on their property. There are two stand
ards Of values to be considered-the COM
merclal worth and the worth Of property
for assessment; that is, what it would be
taken for on payment OF a solvent debt.
Its commercial value depends on the re-
turns received for it in the shape of earn
ings, after paying It's operating and liked
expenses. That is the way investors fig
ure on values. In his opinion, the prop
erty of the company was generally
assessed by the Assessors at from 10 to TO
per cont. OF its full value, and that the
State Board of Equalization assessed it
much higher, say 100 per cent.
In answer to question by Mr.. Arnold
as to the value of the road, he asked in
" hich Mr. Arnold IynpId talxa IF
the Government owed him $40. 900, 900 and
gave him mis- choice of receiving the cash
or the Central Pacific railroad. Mr.. Ar
mold said he would want to ride over the
line before answering the question. but
the other Inemb ers thought they would
prefer the cash.
Continuing, Mr.. Ryan said that the
South Pacific Coast Railway was assessed
at Sl3.5l9 per mile. and he asked the
board to compare that amount with the
assessment OF other narrow-gauge roads.
If compared with the assessed value of
other property in the same counties, be
thought the board assessment should be
reduced 20 per cent, and the cOunty's as
sessment deducted from the remainder.
He considered the net earnings of a road
to be a fair basis on which to compute its
value, and, if figured on the basis be
spoke OF, the road should be 2S,204 per
mile.
There was a portion of the Northern
Railway that he considered the most
valuable of the system, and that was the
portions from Oakland to Port Costa. Be-
nicia to Suisun and from Woodland TO
Iehama, as the system was made up by
consolidation of the San Joaquin and
Sierra Nevada Narrow-Gauge, the ANA
dor branch, the West Side and Mendo-
elmo. Capay Valley ana other roads,
In answer TO a question by Mr.. More
house as to his opinion of the deprecia-
ton of railroad property as compared
with other property. he said that he
thought the depreciation had been far
greater in the case of the railroads, which
are the first to feel business depression.
In answer to a question as to the loss
experienced through the strike. Mr..
Klnk estimated it at SI,000,000, but
thought it might amount to more.
The members of the board having no
more questions to ask concerning the
road, the board adjourned till to-day.