The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-04-20
Made from Grape
Cream of Tartar.
ROYAL BAKING POWDER CO.. NEW YORK


and that such railroad was not completed
until these points were connected by IL,
and IT was in full operation between them
My next duty is 10 ascertain exactly
upon the basis and in accordance with the
legal and equitable principles which have
indicated the amount Of the investment by
the corporation in its plant and property
The State introduced in evidence the books
and official reports of the officers of the
corporation, and these were practically all
the evidence in the case. They do not con-
tain any account between the corporation
and the State, or any account OF the full
sum invested go nomine. a court OF
equity is not bound by the mode or form
in which these books and the accounts
i'm them are kept, any more than it is
bound by the nominal amount OF capital
stock in ascertaining the full sum inves-
ted The nominal amount OF capital
stock may fairly represent the value Of
the plant and property of railroad cor
poration without being indicative of the
amount Of money which has been actually
invested In them. The value of the plant
and property, and the full sum invested
in them. are two different things, and while
they may coincide there may be a great
account is ordinarily an index OF the
amount of investment, but II is not con-
elusive. Operating expenses are not any
part OF an investment, but the fact that
items of expenditure for the permanent i'm
provement and betterment of railroad
have been charged as operating expenses
does not change the real character OF these
items. AS an admission by the corporation,
IL simply admits the fact that such an item
has been charged and paid in that way.
but IL does not admit that the nature OF
the fact or item has been changed there-
by. Where the nature of fact Is salts
facforily shown by entries on the books
OF the corporation / do not consider my
self as precluded by the mode or form In
which il is entered thereon from finding
what its real nature Is, and under what
description IL Is properly classifiable; as IT
is the statement of an account of the full
81 "A
of the construction account OF the corpora
ton which is required of me.
LARGE EXPENDITURES MADE.
'Tt appears from these entries that large
expenditures upon the plant and property
OF the corporation, amounting in the aggre-
gate to the sum of 81. 439. 1927. were made
between 1856 and 1869 and were charged as
operating expenses A portion of these ex-
penditures was obviously required for re-
newals and repairs. and renewals and re-
pairs properly a part of operating ex-
penses; while the difference between that
portion of these expenditures and the whole
of them is fairly chargeable as a part of the
full sum invested. 1t sufficiently appears that
the sum of $3.50. 1914. which is included in
these expenditures. was for permanent i'm
provements or betterments. and was an ad-
dition the investment as follows: In
1851. extension of depot at Indianapolis,
$S.Ss6.s9; additional real estate, 1896; two
passenger coaches, Si.5l47S- In 1860 freight
cars. $5459.0s- In 1863. freight cars, s42-
105.02; three locomotives. $37.343.50. In 1864.
three passenger coaches, SO. $50. 50. In 1866,
three locomotives, $43. 455; three passenger
coaches. Sl526. In 1868, freight cars. ST.
S77-16: one locomotive. $4,000; north branch.
$S.517.3s. And the total of S259, 1914 is in
cluded in my statement of the full sum in
vested. But the remainder of sl.17s. $50: 10
has not been divided in that way the
books, and the books do not furnish any
data for such division of IL; and, as the
burden is on the corporation TO show what
portion of these expenditures is an addition
10 the investment, and IL has not done so,
the whole amount of the remainder of these
expenditures is excluded from the full sum
invested and Will be regarded as operating
expenses in the present accounting, they
are charged in the accounts of the corpora
ton.
count of the full sum invested an item of
interest and discounts amounting to the
sum OF S49.5H.5s. and cites in support of it's
action In doing so the case OF Union Pacific
Railroad Company VS.. United States, [99
u. s. 400. 422-42s-424l. which is not ap-
plicable TO the precise question that arises
upon the present item The question con-
corning the present item is whether the
cost OF obtaining the money which was in
vested ought TO be considered as a part of
the investment. IL Is not a part of the in
vestment under the definition of that word
which | have adopted as a basis for the
present accounting. and the item of sl49-
ment of the full sum invested.
las the special contract was between the
State and the corporation. IL must be con-
sideTed as having exclusive reference to
the full sum invested by the corporation
from it's own funds. 1t does not include
the sums invested by other parties who
loaned money 10 the corporation upon its
mortgage bonds which was invested in the
corporate property, until these sums were
converted into shares OF stock in the cor
poration. or paid by II and thereby became
its own investment. While IL is prOper for
railroad corporal on TO include the money
which Is borrowed upon its mortgage bonds
such an account, upon which all drafts for
the construction and equipment Of its rail-
road are made until It is opened for bust
does not change the fact that borrowed
money is the capital and investment of the
lender instead OF the borrower. and there
Is nothing in the contract which indicates
that II meant the capital and investment
or both. or more than the capital and in
vestment of the corporation only. II can
hardly be supposed that in any settlement
with the State under the contract the
Legislature intended that the corporation
should have 10 per centum per annum on all
4. borrowed money which was invested in the
corporate property. I'm addition TO the in
terest which II paid thereon. The terms OF
the contract as they have been defined by
me as basis for my finding and report
expressly reject that view of the contract
IT appears from the evidence that the sums
invested by the corporation in the con-
tween Terre Haute and a point on the
western line OF the State, in the years 1862
1870. lS71 and 1872. amounting to the total
sum OF 1913. 163 19. were borrowed by IL upon
fits mortgage bonds. and that item of ex-
penditure Is accordingly excluded from my
statement OF the full sum invested.
The contract requires that 10 per centum
per annum upon the full sum invested
shall be added thereto. 1t has been urged
upon me by the State that interest at the
rate or 10 per centum per annum is meant.
An adoption OF that view would require
the Interpolation Of more words I'm the con-
tract IL Is unnecessary to depart from the
plain letter OF the contract I'm any way.
BY describing IL as a contract for the pay
nent OF interest faliacious analogy is
substituted for the real contract itself.
which Is simply contract for 10 per cent
UNI per annum on the full sum Invested.
As an inference from that analogy the
State contends that the rule or partial
payments I'm the calculation of interest be-
tween creditor and his debtor should be
applied In taking this account In my
opinion the rule OF partial payments Is
not required by the contract. and is in
applicable thereto.
I'm accordance with these views / find
and report that the full sum invested with
10 per centum per annufn thereon upon the
completion OF the railroad and at the time
when the corporation surrendered It's spe-
cial charter on Jan. IL. 1878. was 81 66s 63S so
Ny next duty Is TO ascertain the aggregate
amount OF dividends that were declared OF