Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1897-02-04
Railroads and Their Earnings.

The manner in which the states
finances are dependent upon the sue
cess of the railroads is shown on a
comparison of the states revenues for
the past few years from that source.
Under the law which requires the rail
roads to pay into the state treasury
four per cent Of their gross earnings, in
lieu Of all other taxes, the state
virtually becomes a partner in the
railroad business without assuming any
of the bother of their management or
any of the liabilities for their operation.
AS the governor we'll says in his
message, this is a very simple arrange
ment, but it IS an arrangement whereby
it becomes the states interest to make
the gross earnings Of the railroads as
large as possible. OF course the four
per cent tax must come from the
people through their patronage of the
railroads, but coming so indirectly, the
people do not realize that it is tax
upon themselves. Moreover as it
comes mostly from those who can afford
to travel and pay railroad fare, and
those who pay railroad freights it
touches principally the more well-to-do
and relieves to that extent the poorer
classes. The amount of taxes re-
ceived from the railroads for the fiscal
year ending Dec. 3d. 1896, was 81 ,172,-
1872. This was more that One-haif of
the states total expenditures for the
year. Generally speaking the taxes
from railroads, telegraph and tele-
phone companies and sleeping car
companies have usually furnished
enough revenue to meet the ordinary
expenses of the state government.
The receipts from these sources have
naturally decreased considerably in
the past three years owing to the de-
preston of the times and the falling off
of the gross receipts of these corpora
tons. For the fiscal year Of 1894 the
taxes from the railroad amounted to
81, 43S, 758, or about $266,00O more than
for the past fiscal year. The state of
Illinois derives its entire revenue from
this source, and it is a very large one.
The interest which that state has in
keeping up the gross receipts of rail
roads is shown in a recent report of the
railroad commissioners of that state in
reply to a resolution of the state grange
asking the commissioners to reduce the
passenger rates in that state to two
cents a mile. 1t transpires from the
reports of the roads IN that state, that
although the roads have a legal right to
charge as high as three cents a mile,
the Communication rates, excursion rates
and reduced rates for specified occasions
reduced the actual fares paid in that
state during the past year to p cents
mile which was only quarter Of cent
higher than the state grange demanded
should be established by law. In their
reply to this demand of the grangers
the commissioners say that this is a
bad time to ask them to enforce lower
passenger rates upon the railroads,
hard struggle to keep out of receivers
hands. The reduction, the commits
sioners say, might be borne by some of
the stronger trunk lines, but it would
be great hardship on the smaller ones
and branch lines that have paid no
dividends to stockholders, and can with
difficulty pay interest on their bonds,
because of the decrease of travel and
business. The commissioners say any
reduction in the rates of many of the
roads would bring disaster to them
without good to the public. 1t appears
from the railroad reports of Illinois
that only is of the Is roads operating
in that state paid any dividends on
their stock and that as whole there
was deficit of nearly eight million
dollars in their business in the state.
Receipts of passenger departments fell
off 24.6G per cent. In the whole
United States for the year ending June
so, 1895, there was a total loss in the
operation of railroads amounting to
500, S45, 241. That is, receipts were that
much less than operating expenses.
Seventy-fve per cent of all the roads
in the United States failed to pay any
dividends at all, and there was de-
fault in the payment of interest on II
per cent of outstanding bonds. So it
does not look as though the railroads
were doing any better, or even as well,
as other branches of business. And it
does not seem as though this was a
proper time to jump on the railroads,
when so many of them are in re-
ceivers' hands and are having a hard
struggle to keep up their accommoda-
lions to the public. North
western.