Kansas City daily journal., 1897-01-04

Railroads and Kansas.
From the Chicago Chronicle.
Unless 1t be true, as generally charged,
that the people of Kansas are unfriendiy
to capital it is difficult to believe that the
incoming legislature of that state will Sc
riously consider any radical measure
aimed at railroad companies. To one ac-
quainted with the history of railroad COM
panies in Kansas it would seem that those
who have invested their money in the
cGriues of such companies have suffered
Sufficiently in consequence of past legisla-
tion and the present hard times. They
ought not to suffer still more. Kansas may
lave all the railroads it wants, but it has
not all the capital it will require if the
once great promise of that state is 20 be
fulfilled. The centers to which the state
went for money in the past are the mar
kets it must seek again, and capital will
judge how its future investments will fare
by how its present ones are treated. The
reasonable regulation of railroads is d
matter of interest to every citizen, but
cCrfiscation is not regulation, and it is as
wrcng to confiscate part as it is to de-
Stroy the whole, for one case differs from
the other only in its extent and not in the
nature of the offense. 1t is but justice TO
those who are advocating severe measures
to say that there has been so much mis-
representation concerning the profits of
railroading without any efforts at denial
by those whose particular duty 1t should
have been to contend for the truth that
the public is not to be blamed if errors
have come to be accepted as facts.
\ careful review of the last published
report of the Kansas railroad commission
ers will dsabuse the mind of laborinS
under the false impression that the rail-
roads of Kansas can afford q reduction in
rates. From this report it appears that
all the railroads in the state but two re-
porr their earnings and expenses within
thu state. The aggregate earnings for the
year from all sources, including business
that passed through the state, as well as
business done wholly within the same,
were Sl1 131 22I while the operating eX-
Fenses incidental to the performance of
such business were sl3,43T,624, leaving for
the payment of rentals. taxes, interest and
dividends a balance of $3,693,603, or only
$55i for each of the 6,662 miles of railroad
included in such report. 1t hardly need
be stated that after the first two items
were taken care of there was nothing left
for dividends and not sufficient for inter-
est. What the rentals in Kansas amount
ed to is not shown, but 1t is possible to
ascertain the amount required for tTNes.
From the report of the state board of
railroad assessors for the same year it
appears that the average assessed value
| of railroads in Kansas was ,I39 per mile
| and from the report of the Atchison Of
iic:als to the stockholders of that company
| it appears that the average rate of tax
l
that it may be fairly assumed that the
| amount required for taxes was equivalent
/ to $227 per mile. Thus it will be seen that
| if the railroads were not required to pay
| any rentals for depots, terminals and
| tracks of other companies there would
| have remained for the stockholders and
bcndholders the sum of 1927 per mile, a
| sum that is Just equivalent to per cent
| interest on s5,450. 1t is not supposed that
| even the widest advocate of reduced rates
| will assert that the sum of 1927 per mile
| is 4 sufficient return for the large invest
| merits of capital made by the railroad
| companies.
| 1t has been popular in some quarters to
| charge that the railroads escape their fair
| share of the burden of taxation. This is
| certainly not the case in Kansas. 1t ap-
| pears that of every $554 remaining after
| the payments to labor and for materials
| $227 went to the state and its municipali-
| ties for taxes. This Is astonishing, and not
| only completely answers the false charge
| that the railroads do not pay their just
| share of the taxes in Kansas, but shows
| that they are compelled to bear a portion
of the burden that is altogether unusual
and very unjust During the year 1895 more
| than 80 per cent of the net earnings in
| Kansas of the railroads went to the state
and its municipalities. What would an in
| vestor in any other kind of property, a
| manufacturer, merchant or banker. think
if he was compelled to pay almost one-half
| of his entire income for taxes? 1t Is not
| too much to say that he would not en-
| dure it.
That the condition existing in Kansas is
| an abnormal one we find proven by the
statistics promulgated by the interstate
commerce commission. The net income OF
the railroads of the United States amounts
to about $3.50 100000 a year, while the ag-
gregate amount paid in taxes is but $685.
10000, or per cent of the total income
while in Kansas, as we have seen, 10 per
cent of the total income Is required for
such payments. OF course the great diff
ference between the average throughout
the Union and the average in Kansas is
not wholly due to difference in either the
assessments or the rates of taxation. II
means that the railroads in Kansas are
singularly Improbable and that their op,
| Grafton produces but little net revenue
that they are hardly able to pay for the la,
bor and materials required in their opera
tion and that when they have done so. but
little remains for the state. the bondhold
ers or the stockholders. Such condition:
require great frugality in expenditures fol
labor and materials and such practice mus
mean much to those who are dependen
upon railroads for support. 1t would, there
fore, seem that self-interest, If not justice
would prompt the people of Kansas t
deal literally and not seriously with rail
roads.
Another cry frequently made Is tina
shippers and consumers are required t.
pay large dividends on the "watered'
stocks of railroad companies. This is tru
elsewhere, but that 1t is not true in Kan
, | sas we have already seen. for there tn
/ railroads do not earn interest on theI
, bonded Indebtedness, much less dividend
of any kind. 1t can make but little differ
renee to the people of Kansas how mucl
stock its corporations may have issued 1
such corporations neither earn nor pa,
dividends on any issue. 1t is true tina
the Rock Island a dividend paying prop
erty, operates in Kansas, and it is tn
only one of its kind, but no one will hav
the hardihood to claim that its dividend
are earned in that state. So far are th
roads from earning dividends on their stoc
that for the year 1895 it appears they fel
r short S. ,325 of the amount required t
2 ray interest on their bonded Indebtedness
The railroads that are operating In Kansa
5 and are able TO meet their obligations d
l so from income earned elsewhere. The
2 are earning now barely sufficient to pa
I their expenses and taxes, with little there
l after remaining for the bondholdcrs an
stockholders. and that little would be en-
tirely wiped out by very slight reduction
1 in rates.
e 1t remains to be seen whether the legis
e | lature of Kansas will justify the prediC
e tions of its evil intentions or display
t | spirit of fairness.
r A Street Car Decision.
= From the Chicago Times-Herald.
: A decision of great and general interes
= on a point never before raised has jus
been made by the New York court of aI