The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-24
PANHANDLE DIVIDENDS
WHAT THE OWNERS OF THE ROAD
DREW OUT IN 1896.
Roads Financial Condition Presented
to the State Tax BOard-Appeal
of the VnndaIia.

81 used to think said Governor Mount,
! during the session of the State Tax Board
yesterday, that the farmers were the only
ones who could complain right along about
taxes, but the railroads can give them les
sons
The railroads have complained more than
usual this year and they cite to the board
a disastrous year Of business as excellent
reason why their taxes should be reduced.
The board had before it yesterday repre-
sentatives of the Pennsylvania system, the
Vandalia, the Chicago & Erie, the Grand
Trunk and the K. & 1. Bridge Company.
The Pennsylvania system was represented
by its vice president James L. Brooks,
who, though he represented the P, c., {.
& St. L., the J., NJ & l., the Fort Wayne
and minor branches. occupied less time
than have many of the smaller roads. He
said: 1T is my intention TO detain you
not much more than sixty seconds this
morning. 1 have, I think, but two sugges-
tons to make. l think that this board is
gravitating towards the correct and the
only justihable basis for the valuation of
railroad property 1 had occasion to COM
pliment it last year on a certain phase of
it's operation and 1 wish to add to what
l said year ago, that l think more
scientific methods are now applied to the
valuation of railroad property in the State
of Indiana than in any other State of which
l have any knowledge. My knowledge of
course is restricted to five States, but
believe this board is in the right direction
and is reaching the most scientific methods
for determining what is right for railroad
companies to do.
Now, the suggestions I have to make
are these: First, we differed a little last
year in regard to the relative value of
railroad property as assessed for taxation
and other classes of property. Our inves-
LEGATIONS in that direction led US to think
that our side of the contention was right;
| that is to say, that the general property OF
| the State-farm lands, city lots, chattel
property, buildings etc, are not generally
assessed at much above IS to 20 per cent
I of their value. Now, of course l cannot put
my information on this point against that
! or the board, for you have made more eX-
tenSiVe calculations, bat railroad companies
| have no right to ask, and so far as l repre-
| sent them, they do not ask that any favor
| be shown them in that particular. They
| ought to be willing and they ought to be
made to If they are not willing, bear their
| portion of the burdens of the support of
| government on the same basis that the
! citizens of a State do.
p, c., C. & ST. L. DIVIDENDS.
Now, the value of our property is af
fected each year by its earnings, and we
! have got into such a state by reason
of the depressed condition of the country
| that our property Is worth absolutely moth
| ing in these times to its owners. A farmer
| does get something out of his farm, and
he generally makes enough to get living
for his family out of the farm. The owners
| of this railroad known as the Pittsburg,
Cincinnati Chicago & st. Louis received
a per cent dividend on nearly one-half
Of the capital stock of this company in
long -
ceived nothing, and it is uncertain when
they will. 1t seems to me that this sub
! ject ought TO be taken into consideration.
If values are fixed with reference to the
| earning capacity Of property, it seems
| to me that in a time of depression like
! this the tax board of this State ought to
| consider the condition of the railroads and
| deal with them in mercy while their earn
| ings are so far off that not only do their
! stockholders not receive a dollar of earn
| ings out of them, but it becomes a serious
| question with many whether they can save
! their property at all.
The other suggestion I wish to make is
that this board III determining the value
| or the property or the so-called Pam
! handle Railway in the State of Indiana has
not, it seems to me, dealt exactly with us
as it should in this respect. 1t has as
sumed that the gross earnings or the net
| earnings of the entire system should be
! applied per mile over the entire system
| without regard to the amount of those
| earnings that are earned in Indiana or else
! where. Now, it stands forth cOnspicuOuSly
! in our earnings that the great bulk of
! them are derived from the State of Ohio
where we have so many connecting lines
and so many feeders. Now then the result
! that is produced by the action of the board
on this subject leaves us in this plight at
present, that Indiana, taking to herself the
| mileage share of all the earnings of the
per cent. of our net earnings from the
State and applying them to the State of
case than that in the United states and
| that is the Atchison, Topeka & Santa Fe
in the State of Kansas. There they are
| made to contribute about A per cent. of
| their net earnings in that State. The net
! earnings in the State of Indiana of our sys-
| tenn calculated by the most rigorous method
| that we know Of make about 81 300,0 600 net,
| derived from business in the State of In
| diana, and that which comes from the
! State of Ohio. Now then, We pay-that is,
| the Panhandle Company pays-aoout 1854
| 900 taxes in the State. If our lead pencils
| have served US properly that means about
| q per cent. of all our net earnings. Now,
! can you think Of any other business in the
| State that is taxed so heavily as that?
| With these two suggestions without re-
| iterating except on the single point of your
| assuming to tax us in Indiana upon the
| valuations of our property outside of the
| State, in Illinois and Ohio. feel as though
| our assessment ought TO pc reduced about
| $1,000,000 but L leave the subject with you.
Just before came in we were starting
| a little calculation to show the proportion
| of the valuation railroad property in the
! State bears to the valuation of all other
property. The total valuation of all prop
erty in the State is between LOO 900, 900 and
| ST. 200, 900 600, of which the railroads are as
! sessed $156, 600 600, which | would consider a
very large percentage. 1t is between 10 and
IL per cent
PLEA OF THE VANDALIA
John G. Williams appeared for the Van
dalia, which has gone into the HANDS of a
receiver since last years assessment was
made. He declared that the receivership
had been made necessary by the burden
some leases of the Logansport, Lake Mich
igan and Peoria branches. These had at
one time been profitable, but had of late
years lost SO much money that the main
line was unable longer to carry them. Yet
the assessment was as high as in theAhgh
tide of their prosperity. He talked of
methods of arriving at the cash value of
railroads and expressed the belief that the
only proper way was to take the net re-
ceipts and capitalize them at per cent.
| This, applied to the Nandalia, would give
it a value of 81 500, 00O precisely the value
of it's bonds. 1t had paid no stock dividends
for four years. 1t was assessed last year at
IS 800, COO
MIR. Williams said the road had lost 1919
| 600 last year in operating its leased lines.
! Then the CoatesVile wreck would cost j.
at least $780, Geo. and the St Louis cyclone
| had caused great damage to its property
L. c. Stanley. of Chicago submitted a
brief in behalf of the Grand Trunk in
which he showed that the taxes of the sys-
| tenn had increased in ten years from 10 per