The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1904-07-07
Mar. Shaw, for Seaboard,
Will Ask New Assess
ment.
Claims that in Accordance With Aci
Assessment Should be Lower in
View Of Great Shrinkage in
Roads Securities.

! poration Commission with the view OF
arguing to them the propriety of re-
ducing the assessment of the Seaboard
Air Line property within North Caro-
lima from the figures at which it was
last year determined by the Commits
sion,
Neither of the Commissioners were
| in. however. when Major Shaw called.
| Captain Mcneil was out of the city;
| Mr.. Rogers has gone to ST. Louis for
| the Fair and the convention. and Mr..
| Beddingfeld was not at the office.
Major Shaw. Chief Clerk Brown and
/. therefore gathered in executive ses-
sion and discussed the matter with
| the airy lightneSS of care-free souls
whose decisions are of no moment in
relation to results.
| Major ShaW'S serious purpose, how
| ever, is to argue to the Commission as
soon as it is gathered again for bust
| ness that, on account of the great
| reduction in the price of the roads
| securities, the assessment should, ac-
| cording to law, be proportionately, or
| radically diminished While the law
! as passed by the last Legislatu ere
atlng the Corporation Commission
gives the Commission the power to
assess railroads for taxation and in
the method prescribed for arriving
at the value of the properties, stip-
ulateS that the price of the stocks and
bonds of the Corporation shall be con-
sidered, the powers of the Commission
are apparently still left broad enough
to permit them to make this assess
ment in accordance, with other views
of the value of the properties than
those expressed by the market value
as reflected from Wall Street.
icst ILL.,, l..
scented by Major Shaw. and the Com
mission split. The Commission, ac-
cording to Major Shaw. is bound by
the letter of the act as to the market
value of bonds, and. disregarding
that. cannot properly assess on the
basis of the gross earnings of the road,
Independent of market conditions.
The Commission, it is understood,
has shown by its decisions in the past
that it considers the earnings the
real test of franchise value, rather
than the vague and more changing
standard of the price of stocks and
bonds as they appear on the daily
tickers of the brokers office
TO show the extreme variability
of the securities of standard road
in times of financial panic or unrest,
it will be instructive to contemplate
the price changes in Seaboard stocks
during the past year or fifteen
months, during which the price of
the preferred stock has fallen from
$4S to SIS per share and the common
from $24 to less than SIS.
This Shrinkage of rs per cent Ma
jor Shaw points out is a fair criterion
on which to proceed in the matter of
| assessing for taxation and constitutes
the real practical value of the road
as it stands today--the worth of Il
thing being, in any sense, never any
more than it can be sold for.
The policy of the Commission, how
ever would seem to be that, as earn
ings have not decreased in proportion
to the market value of securities and
as the rolling stock is continually
being added to and physical condi-
tons improved, the real test lies in
what the road consists of and what
it makes rather than in what the
speculative public is willing to pay
for it.
The Commission will be in session
again on Tuesday for the transaction
of business and Major Shaw will prob
ably be heard either on that or some
early date, and the argument will be
full of interest.
It will be remembered that last
year practically every road in the
State filed exceptions, to the Commits
sion's assessment which they after
wards withdrew without contest.
While no litigation is expected to fol-
low this year, that is a question that
is still in some degree problematical.
The sections of the law giving the
Commission the power to assess are
in part as follows:
Section 55. ca The said Commits
sion shall first determine the value of
the tangible property of each divi-
sion or branch of such railroad, of
| rolling stock and all other physical
or tangible property. This value
| shall be determined by a due con-
| sideration Of the actual cost to re-
| place the property, with a just allow
| ance for depreciation on rolling stock.
and also of other conditions, to be
| considered as in the case of private
| property.
(b.) They shall then assess the
value of the franchise. which shall
be determined by due consideration
of the gross earnings as compared
with the operating expenses; and par
ticularly by consideration of the value
placed upon the whole property by
the public (this value of the physical
property being deducted), as evil
denced by the market value of all
capital stock, certificates of indebted
ness bonds or any other securities,
the value of which is based upon the
earning capacity of the property.
Co. The aggregate value of the
physical or tangible property and the
franchise, as thus determined, shall
be the true value of the property for
the purpose of an ad Valorem taxa
| ton and shall be apDortioned in the
same proportion that the length of
such road in each county bears to
| the entire length of such division or
! branch thereof and the Corporation
| Commission shall certify to the chair
| man of the County Commissioners
| and the mayor Oh each city or incor-
porated town the amount apportioned
| to his county. city or town, and the
said Commission shall make and for
| ward q like certificate to the Auditor
| of the State.
Section Sc When any railroad
1 has part of it's road in this State and
| part thereof in any other State, the
| said Commission shall ascertain the
value of railroad track, rolling stock.
| and all other property liable to as
sessment by the Corporation Commits
sion. of such company, as provided
| in the next preceding section, and di-
| vide it in the proportion to the length
of such main line of road in this
| State hears tn the whole length Of