Omaha daily bee., 1902-05-16

The governor: "It is not necessary to
pass on that at this time. is It. Mr.. Sim
eral7r
Mr.. sImeraI: no. l would not think SO
today. No. sir"
The governor: I'VE can do it this after
noon or tomorrow
Mr.. simeral: Yes. sir"
The auditor: ut is not necessary to pass
on that before your argument. is it,"
Mr.. simeral: mo, sir. II you wish me
to present my argument I will give you
such law upon 1t as I have. I do not desire
to take any snap judgment upon 1t, Of
course"
The governor: Very we'll"
Mr.. simoral: Il will say, in order that
we may proceed with some definite idea,
that l will file objections by The Bee Build
ing company against the FIVE systems. /
will designate them as systems, for in
stance. the Union Pacific. l will file these
objections during the day. 1 have one
here with me now; the Union Pacific is
the only one / have the data for. II you
wish me to read this now l will do so, and
then Mr.. Roeewater can proceed with his
argument"
Text of the Argument.
Mr.. simerai proceeded with his argu-
ment as follows:
'In presenting to you this question OF
the intangible property or the franchise
OF railroads for taxation l desire to preface
my remarks by saying that ! am aware
OF the fact that It would be a new de-
parture In the action Of this board in the
state OF Nebraska. But we are living in
a progressive age and we have to meet
the varied conditions Of business and OF
ro-ar q, az. p,anEfold nnndftIona M fhpv
arise. Fifty years ago corporations were
small, comparatively speaking, and there
was no value In stocks. Today the vast
wealth Of this country Is In the hands Of
corporations; the stocks and bonds Of cor
poratIons are worth millions upon millions.
while fifty years ago they were worth
thousands. The property Of corporations
Is largely In their franchisest rather than
in the physical or tangible properties
which are visible to the naked eye. 1t
has therefore become a question that h
being agitated from the Atlantic to the
Pacific, not only as an economic question,
but also In its political phase, and l be-
lieve that II Is the duty of Nebraska, under
our law and under our constitution, to
keep in the foreground, rather than lag
behind, in the assessment Of the fran
chises Of the great corporations. 1t was
RAAkGoN1u htA0 lhlo AAcA Al NAaN aAAAN
eur statutes there was no provision made
for the assessment Of the franchises. Be-
fore / go into the law on this question I
desire to read you some letters that Mr..
Rosewater has received from some states
In the west. First, l will read you a letter
from the secretary of state at Lansing,
Mich, upon this question Of the taxation
OF the franchises OF railroads. He says,
among other things: While the constitu-
ton or laws Of this state do not provide
for the assessment Of the franchise Of
railroad companies definitely. the value OF
the franchises are taken into consideration
In determining the total value of taxable
property That is from Mr.. Warner, Sec
rotary Of state OF the state Of Michigan.
Now here is what the auditor OF the state
of Indiana says: The state board. In
making the assessment on railroad prop
erty, is governed by all the information
that 1t can obtain relative to such property.
1t is the intention OF the board to assess
these properties at their cash value, having
always In mind that such assessment be
equalized and in conformity with the as
sessmen made by the local authorities
against other classes Of property. The
franchises of railroad corporations are In,
cluded in the assessment made by the
board against such property, franchises,
tangible property. earning capacity. ex-
penses Of operation, ETC., all enter into
the consideration OF the board in fixing
the cash value of property
Conditions In Town.
"You have undoubtedly heard Of the low
taxation Of railroads in Iowa, and here Is
what the governor Of Iowa says in a letter
addressed to Mr.. Rosewnter OF date May 8:
\ A. 49, 49, -.. -. a..
require the council to take into considera-
tion the value Of the franchise, but It has
always been assumed In this state that the
value of the intangible property Of railway
corporations should be considered. This Is
made plain by the following extracts from
the statute which controls the executive
council in making up the assessment: "In
assessing said railway and its equipment
said council should take into consideration
the gross earnings per mile for the year
ending January / preceding and any and all
other matters necessary to enable said coun-
Gil to make a Just and equitable assessment
Of such railway property II will be seen
that under this language Il is the plain
duty Of the executive council to consider
every element Of value which the properly
may have. and the fact that gross earnings
are emphasized indicates that the earning
capacity OF the railway shall be one OF the
influential factors of the problem. 1t goes
without saying that the gross earnings and
che net earnings. II used to determine the
yalue Of property, include the intangible
Talue or franchise value. Without reflect
ing In any sense upon the past action of
he executive council In Iowa 1t may be
said with truth that the work OF assessing
railroad property has not proceeded along
logical lines. and / do not wonder that the
representatives OF railway companies use
the Iowa assessment as an argument for
keeping down the rates OF assessment in
other states. / believe that the railway
companies themselves recognize that the
valuation upon the railway lines In Iowa
heretofore has been very much below as
compared to the real value Of other proper
lies. and the only argument with them is
that they were assessed as high as other
taxable property. l do not forecast VIVA.
the executive council will do this year, but
/ think there is a general belief that the
railway assessment will be materially in
creased.
Franchises Assessed Elsewhere.
'The extracts that I have read from these