The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-09-27

Property on His Hands - Has
Had to Struggle Along, Paying
Fixed Charges and Operating
Expenses.
If any one believed that the Twin
City Rapid Transit company was max
ing any money from the operation Of
it's various local and interurban lines
in st. Paul and Minneapolis, he would
have been fully convinced OF his err
ror yesterday had he heard the pa
thetic story of financial loss which was
reeled off to the state board Of equal1-
zation by M. D. Mum, general counsel
to the company. 1t was the worst
hard luck story that the members Of
the board had heard in many days, and
several Of them were Visibly affected
by it. Mr. Mum told how President
Lowry had invested all his money in
street railways in order that the Twin
Cities might have adequate means OF
travel; how he had sunk fortunes in a
hopeless effort to make the enterprise
pay; how deficit after deficit has re-
Warded his efforts, and how he is still
struggling along with fifty-year fran
chiSe that isn't worth a cent, anxious
to sell out to the first man who will
offer fifteen millions for the property.
1t was only by the exercise of Won
derful self-control that the board was
prevented from taking off all the COM
pany's taxation and Offering 1t a sub
sidy for running it's cars.
The street railway matter was the
special order for the day. Nearly all
the members of the board were pres
ent, and the railway company was rep
resented by Lawyer Mum and Auditor
Calderwood. City Auditor Gibbons, of
N1Is oIr.@ #
Helm was also present as counsel for
the st. Paul Trades and Labor assem-
bly,, which has been conspicuously &C
tive in the agitation of the question of
the railway company's taxes.
Commissioner Alexander Fiddes read
to the board the petition of the ex-
ecutive committee Of the trades and
yesterday in The G L o b e. Chairman
Potter then invited Mr.. Mum to make
statement in reply to It,
MIR. MUNN'S STORY.
''My reply" said Mr.. Mum, "shall
be very brief. In 1870 the Twin Cities
found themselves on the verge of a
boom. There were a number of horse
car lines in the two cities, but their
earnings were insufficient to pay their
running expenses, nor could they Dor
AOW CllOuSu. AZ lIldI IlIIlS MT. Lowry
invested his money In the street car
systems Of the two cities. In 1880 Mr.
Lowry found it necessary to extend the
system, and he gave his personal guar
antee for the payment of the expense
involved. In 1887 it was decided that
the two cities needed Increased rail-
way facilities. Electricity was then
just beginning to be considered as a.
motive power, but it was not thought
possible to operate electric lines in the
Northwest. But the city council or
dered cable lines constructed, and thew
were built at an enormous cost. Thew
cost double what they could be con-
structed for now. Similar conditions
prevailed in Minneapolis Meantime
1t had been demonstrated in the East
that electric roads were successful. and
IN 1888 electric power was introduced
mere. Within year the Thomson
houston system was introduced and
was adopted by this company. Then
came the Sprague system and another
change, and since then we have had
the Westinghouse system. which neces-
states further expense Then cleo
here.
The cable company put $1,000. 900 to
$1,5OO,OOO in the ground. and II never
VIII come up. The ST. Paul system has
cost $5,OO0,O00 and the Minneapolis svs
tenn $5,29S,OOO, and every cent has been
spent as stated. What could be mt
in today for $4,000, 900 cost the com
pany S1O,500,000. The two companies
were separate, and so a new issue of
STOCK was made and the two companies
were consolidated as the Twin Civ
Rapid Transit company under tbe laws
VI New Jersey. The stock represents
WHAT was put in the ground.
FrloT to last year the assessments
I'D the TWO cities were the same. but
laSt year the assessment was raisad
from 100000 to $4,000 There were
e. NUMBER or men in the council who
favored the Broadway loon and there
was a committee appointed by the
council to eQUalize the assessment of
the railway company. The COMMITTEES
IXed the assessment at 50, 500. O00-so
much Tor franchise, so much for stock.
so much for rails and equipment and
olneT property without regard to their
Values. Ihen the committee decided
II had made mistake and it met again
ana reduced the assessment to 81, 900 OOC
and later to $500, 0CO and again +hnv
met and liked the amount at 81 OOO OO6
The taxable valuation of prOnertv
as decided by the supreme court. is
what it would cost to reproduce the
property. That is the basis which
should be employed here 1t has cost
between $1O,O00,GC0 and $11, 900 coo to CON
struct. 1t could be replaced TODAY for
less than $3,000,000 Cars that cost So.
200 five years ago can be got now for
$500. Wiring that cost thousands of
dollars several years ago, can be bought
now for as many hundreds. And we
are assessed for so per cent of it's value
The matter of our taxes was taken
before the grand jury. for it was claim
ed that we were evading taxes The
grand jury looked carefully at our
books and decided that we were pay
ing all that we should pay. We are
perfectly willing to bring our books
here for your inspection"
ASKED SOME QUESTIONS.
DO you mean," asked Attorney Cen
cral Chlds, chat all the visible prop
erty of'the company could be reproduce
ed for $4,000 OOO?"
Il mean" replied Mr.. Mum, that
if not rail was laid, or building con-
st1ucted, or piece of land bought. the
entire system could be reproduced for
$4,000 900"
DO you mean that the tax should
be estimated on what is put in the sys-
TEN, or on the value of the nronertv
after construction"
I'VE have to pay per cent of our
gross earnings to the cities and a
license on each car. We pay the cities
all the time for that-$25 in st. Paul.
and $40 in Minneapolis"
Your gross earnings in 1897 were
$2,009120.9S and net earnings SlO07.-
O4OGO. The surplus earnings were $685.
1894. That is about 4 per cent of
S5,OOO,OOO. Would not you get at the
real taxable value of the property by
assuming that to be the case % asked
Mr.. Childs.
Not exactly" replied Mr. Mum. at
is necessary for the company to Dor
row money every year. Last year if