The independent., 1903-05-14
The Railroad Question

(Wrltten TOT Henry GeOrSe Edltlon
of The independently
There are three methods of solv-
ing the railroad problem, all of which
entail, practically, government OWL
ership. The source from which thes,
corporations draw their immense rev.
enues is not their capital investment.
but their monopoly of a narrow strip
of land across the country, with right
of way over the public highways. The
value of this monopoly is created by
the community and grows as 1t grows.
When corporation desires to con-
struct railway they can obtain from
private sources, with the exception OF
one thing. everything necessary for
the undertaking. That one thing is
the right of way across the country.
They must go to the government for
that. All the rest they can do alone.
At present this right of way, this
narrow strip Of land, is assessed ac-
cording to the value of the adJoln-
ing land. Evidently this is not just.
It's value is not as farm land or as
city land, but as railroad land and
should be assessed as such.
When the government grants a
right of way to a corporation they do
not grant them the value OF that
right of way. 1t is quite apparent that
they cannot for when a railway char
ter is first granted the right of way
has no very great value, but as the
community grows so does that value.
The government, of course, cannot
grant the value which does not exist
at the time. This value, then, having
been created by the community natur-
ally belongs to it. The question then
is how to get it.
The generally proposed method is
government ownership and operation.
That of course, would secure it, but
the question next arises, how is the
government to get the ownership from
the corporations? The next remedy
proposed is for the government to
own the road bed and let it out to the
highest bidder. This also would Sc
cure the right of way value or the
franchise value to the people, but is
open to the same objection as the
previous method. How are we to get
the ownership from the corporations?
The third method is to take the an
nual value of the right OF way in
taxes.
Charters have been granted to rail-
way corporations giving them rights
of way over the country for certain
length of time. These charters cam
not be broken. In all due honesty and
fairness to the corporations they must
be kept. But the annual value OF these
rights of way has not been granted
to the corporations and the govern
ment is at liberty, in fact, is moral
ly called upon to take it.
If the proposition of government
ownership and operation was resorted
to, how would we obtain possession?
Would we break our charters? We
might under the law of eminent do
main. Next, how far would we COM
pensate the owners? For the capital
invested, certainly. For the right of
way? No! The value of the right
of way is ours now and the corpora
tions have no right to 1t. So to get
government ownership and operation
it would be necessary either to break
the charters we have granted, or wait
till they expire, and to pay the cor
porations for the value of their rails,
lies, TOllluS SIOCh, UulIuluSo dAd Oil /
other tangible capital they might |
transfer to us. To get possession of |
the road beds alone and rent them |
to the highest bidder it would be
necessary either to break the charters |
or wait till they expire and to pay
the corporations the value of their !
rails, ties and other improvements in |
the road bed.
To enforce the third proposition, |
viz: to take the annual value in taxes, |
it would be necessary only to change |
our assessment laws to read that all |
railway corporations shall be assessed |
on the actual selling value of their |
right of way, exclusive of all imprc We
ments, and that the rate of taxation I
shall equal the annual rental value
thereof.
This would take away their i'm
mense income and leave them the cur
rent rate of interest on the capital
employed. But the railways all have
large quantities of watered stock.
That watered stock is the value of
the franchise. And if the government
takes the franchise value in taxes an
s, - 4ha4 |