Omaha daily bee., 1902-07-17

the value OF railroad property In this state,
No rate case which has ever been tried,
that l know of, has considered the value
OF franchises separate and apart from the
use Of the tangible property. When the
value of a railroad company Is testified to
In these rate cases II is reproduced at its
value with reference to its physical con-
structlon, use and operation, which includes
everything.
The stock and bond and net earning theory
Is no better for the purpose Of fixing tax
able values than IL is for the purpose OF
fixing rates and II IL Just as proper for the
purpose OF fixing rates az 1t is for the pur-
pose Of taxation. But II is not proper In
either case. In all the cases that have ever
been tried. either with reference 70 rates
or taxation, It has never been determined
that the valuation OF stocks and bonds or
net earnings capitalized should be ex-
elusive items Of evidence upon which rates
may be fixed or valuations for taxation de-
termined.
A multitude Of items are to be consld-
cred by a court In arriving at a conclusion
as to the value Of railroad property. II
should not be confined to stocks and bonds
alone nor earnings alone. Allowance must
be made for the part which labor plays in
fixing the value of stocks and bonds and in
producing net earnings. You must consider
the condition of the country through which
the railroad passes, the physical condition
OF the railroad property and its connec-
lions. II the valuations for the purposes OF
taxation were fixed by the stock and bond or
net earnings theory. then to be logical one
should say when stocks and bonds are be-
low par or there are no net earnings, that
then the property ought not to be taxed,
but these extreme advocates would never
consent to this. If It is unfair to value It
this way when the stocks and bonds are
below par or there are no net earnings, It
ought not to be recognized as the method
when stocks and bonds are above par or
there are net earnings. II 1t Is the value
of the physical property as used In case the
property is operated at a loss II ought to
be the value Of that property which should
control for the purpose Of fixing the value
for taxation when the property is operated
at a profit. The truth is. you arrive at the
value Of railroad property as you do IN the
case OF any other enterprise-the same as
you would arrive at the value of a manu-
featuring plant that may employ 1000 men
and has invested millions Of dollars. The
property Is valued as property for the pur-
pose Of taxation and that Is the only way
that the fair value can be arrived AZ.
II you simply take the one item OF stocks
ana Donos or net earnings, you VIII arrive
at an erroneous value Of the property. You
will adopt q method that Is not recognized
or authorized by the constitution. 1t may
be that there are constitutions and statutes
in some Of the states In this union in which
this method is recognized. however wrong
It may be. OF this / do not know. But in
this state the assessment for taxation must
be made upon a property valuation. II can
not be upon the value Of intellectual or
physical labor.
This item of stocks and bonds and net
earnings is about all that has been intro
duced here before this court for the purpose
OF proving that the members Of this board
ectod fraudulently. How uncertain and
a." i've 1t is must be plain. Courts have
DC Jared time and time again that 1t is only
one i.em OF evidence to be considered, and
some have said that 1t is the most unsat-
is~factory and uncertain, as it is in fact.