Omaha daily bee., 1902-05-21

IDEAL EQUITY IN RAILROAD TAXATION.
DR.. william B. Ely of University
Place, who claims to have grappled
the problem of railroad assessment,
ventures through the Lincoln Journal
to assure the taxpayers Of Nebraska that
d~ispassionate consideration Of the
subject ought to convince any fair
minded man that the assessment Of Ne
braska railroads inst made is as good
approximation to ideal equity as Is
possible"
DIR. Ely has reached this conclusion
by an examination of the records Of
several counties In the state, which he
says show that the assessment varies
all the way from one-thirteenth to one
twentieth Of actual value. Taking the
state altogether, DR.. Ely insists he is
entirely on the safe side in assuming
the assessment to average one-thirteenth
of actual market value, although in his
Judgment one-twentieth would probably
be nearer the truth. Taking one
thirteenth as the average assessed val
uatIon makes the following summary
of the actual value Of Nebraska's rail-
roads:
Per Mile.
Union Pacific .S127, 400
Burlington q Missouri.............. 1877 $40
Pacific .120, 200
Chicago, Rock Island a Paci1c....,. $4,000
Omaha q Southwestern ............ $4,000
Fremont, Elkhorn q Missouri Valley. 46,soO
Total actual value Of all rail-
roads k346 b64,bSo
This aggregate DR.. Ely computes to
be the valuation of the tangible, visible,
material properties Of the railroads."
and while he admits hat 1.-THE fran
chlses have real value which perhaps
are quite equal to that Of their material
property" he their exemption
from taxation or the ground that "the
statute for the assessment of railroads
contains no provision for assessing their
invisible property In their franchises"
The trouble with DR.. Ely Is that his
mathematics are not as good as his sur.
gerry. In his calculations he seems un-
willingly to adopt the logic of the State
Board of Equalization, which enter
tanned the confused notion that 10 per
cent and one-hfteenth are the one and
the same thing, when as a matter OF
fact there is as much difference as be-
tween a horse chestnut and a chestnut
horse. One-ffteenth, instead of being
10 per cent, is less than 7 per cent.
There is not a single county in Ne
braska that lists property at Z per cent
or anything near it. Only one county
out Of the ninety goes as low as 10 per
cent. and the average will range from
one-sixth to ~one-seventh, instead of
from one-thirteenth to one-twentieth.
The Union Pacific is now assessed at
$4,000 per mile. If this represents one
seventh of the value Of Its tangible
property its actual value would be
$e8,6O0 per mile. But the return Of the
Union Pacific is for 1920 miles. while
the assessment at $4,000 Is on only 467
miles of it's main line, while the re
mainder Of its mileage is assessed al
$500 per mile. Where does the idea
equity come in?
The same discrepancies between DR.
Ely's estimate and the real thing are
found throughout his computations
Take, for example. the Fremont, Elk
horn & Missouri Valley railroad, which
he values on a standard of $46,S00 pei
mile. At ~one-seventh Of that amount
the assessment would be $6,6S5 pei
mile, but 1t is assessed at only $500 &
mile. In 1890 1t was assessed at $500
per mile and that assessment seemed t.
be satisfactory to the managers Of thu
road.
The assumption that the franchises o.
the railroads are not to be assessed TO
taxation because the statute makes M
special provision is in fat contradiction
to the express provision Of the statute
which requires the roads to return witt
their list of tangible property an ex
hibit of their capitalization In stock
and bonds as we'll as their earnings. l
the assessment was intended to cove
only the tangible or material propert,
1t would not matter to the state boar
what they were capitalized for or wha
they were earning, any more than
would concern the assessor how niue
rent a man gets from tenants or hoy
much the liveryman gets for the hire o
his horses.