Omaha daily bee., 1902-05-18

An6 NON0TuOIs NJ" JOu btdtSu tuS ObhOA
day that in your opinion the railroads
ought to pay one-sixth Of the total tax
Of the state"
share of the Railroads.
Mr.. Rosewater: THAT is a mistake. I
think you misunderstood me. What /
said was this. that they did pay that now;
that is, the railroads assessed heretofore
paid about one-sixth, that is, when there
was one hundred and eighty millions Of
property returned in this state-they had
about thirty millions Of assessment, Of
s29, 1854. 900. That represented about one
sixth Of the total value at that time; five
sixths Of the property is not railroad and
one-sixth railroad. Now the question is, Is
that the correct average between the prop
critics; that is the only question. II that
twenty-nine million, or whatever 1t may
be. is the correct ratio to all the other
property, then the railroads are not pay
ing too much or too little. 1t is about
right. But II the railroads are not paying
In proportion to the other properties-that
Is, II they have a larger amount, taking
the whole property Just as It comes in
that is, supposing Douglas county brings in
here, outside Of all railroad property,
SOS, 900, 900. assessed at 1873 per cent, and
another county brings In &c., 00, 900 and
another $1,000. 900. etc. When you have
got It all sized up you will know how
much property there is in the state at
large and It's pro rata to each other. Then
It would be easy enough to find out. II you
knew the cash value of the road-that is
what you have to ascertain ffrst-then you
can divide the cash value by the aggre-
gate pro rata to the other and you will
know whether or not the roads are doing
the fair thing. II, for instance, we only
had hines that were incorporated in Ne
braska, and their capital stock was all in
Nebraska. and its bonds were all known,
II would not take very long to find out
Just what that road was worth, or all the
roads together. Assuming that one hun
dred and fifty millions Is now the returns
OF. the state, that is, outside Of the rail-
roads. and II it is assessed at one-seventh,
that would man that the actual value OF
property in this state Is 81, 900, 900, 900. That
would be 81. 1000 for every man, woman and
child IN the state. Now, then, we would
want to know how much these railroads
represent. This entire road, the Union
Pacific, is bonded at Just about 800, 900, :
900. The Burlington is nothing like that;
they have a very much lower valuation in
their stocks and bonds. They do not get
up to much more than sixty-odd thousand
to the mile. Now, the Burlington has
twice the mileage and 1t is worth about
$3.50, O00. 900, and the Burlington. with
gregate about $500. 900, 900. Now, that would
only be one-hfth Of the total"
Taxes and Earnings.
Mr.. tAger: Suppose a new road. or
take the Union Pacific today. suppose II
was earning Just exactly B per cent on itt
actual stock. Would you then take a fran
chise In at 4 per cent, or whatever may be
considered as a low rate or reasonable
rate OF interest, would you then tax it,
franchise in the same ratio as other prop
erty. Where would you begin to tar
them?"
Mr.. Rosewater: II will show you. A
the present time railroads are bonded
usually for pretty nearly what II cost Il
build them, that is. very nearly so, and 4
they pay interest on their bonds. that IL
what they call the fixed charges, and pa!
the operating expenses and then have
residue or surplus after that paying inter
est say Of 8 per cent on e given amour
Of stock. whatever that represents would
be in excess OF the cost of the road. Tha
is the franchise. In other words. II tn,
DOuun represent the cObL OF tue TOdus IN
stock would represent the franchise"
Mr.. Ager: You do not understand me
Suppose a new road was built and it cos
Just exactly 2 5000 a mile to build an
equip 1t. and place 1t in a position read.
to start. Now. after they have paid thei
taxes their tangible property is taxed a
the same ratio as other property. Nov
after they have paid their taxes and tibet
operating expenses they have lef
an Interest say OF 5 per cent
Now, with a road that did that would 20
then tax their franchise or would you wal
|. until they had earned 6 per cent? You sa
II it was losing money you would not ia
. its franchise. Now at what rate Of interes
would you begin to tax their franchise?
No Call for Hair-spIittinE.
Mr.. Rosewater: well. Of course. that
not so material. l don't suppose ther
would be any hair-eplittlng whether
would be 5 OF 6 per cent. because you ar
not going to the very last penny in thi
taxation. / suppose there will be a broa
margin allowed the railroads. and ! Al
willing to see that. Now II the road Is
sued its stock and the people who bougf
the stock paid the money and the road wa
built with that money, the stocks woul
only represent the cost Of the road an
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