The Minneapolis journal., 1906-11-30
MANITOBA CHARTER
|: A VALUABLE ASSET.
GREAT NORTHERN SAVES HALF
..s MILLION IN TAXES.
Second Vicepresident Harrington in
! Commodity Rate Examination En-
! ightens Railway Commission on Cost
Of Roads Watered Stock, Bur1ing-
ton Purchase, and Comparison Of
Rates. e.

general commodity rate hearing in the
capitol that by paying only a 3 per
| cent gross. earnings tax under the char
ter Of the old St.. Paul, Minneapolis &
Manitoba company, the Great Northern
road, pays, to. the state Of Minnesota
less than half the amount annually 1T
would If assessed and taxed on an ad
valorem basis like other property. S,;;7:
! "In Wisconsin, where we have been
on both footings," said Mr.. Earring
ton in response to interrogations by
Royal A. Stone, assistant attorney
general, Sour taxes are less on gross
earnings basis than under the ad va.
loren basis.
Chow many miles of road have you
in Minnesota, - asked Mr.. Stone.
31r s2oSSd 5SPST5 sh9Hs %s 293a Wob is miles.
servative valuation. including your ex-
pensive terminals in. this state, what
would be the value of your road7"s
them Mr repad rafrnstoa fo54a9oo h9sSsea moment'
CAT the tax rate in 1905 in Mime
sofa of 26.l9 mills, what would the
tax be?''h -.
After again using his pencil Mr.. Far.
ringt2n rPspsd $l961s$19@S' lsEs g. stone
"the records show that your 1905 tax
paid in Minnesota on your 8 per cent
gross earnings basis was only $527,-
|, About Watered Stock.
Mr.. Staples asked Mr.. harrington
what he considered watered stock. to be:
watered stock would be in some of these
commercial companies where they have
capitalized the probable earnings,' - re-
piled Mr.. HARRINGTON,
"Have you any knowledge Of any
railroad in the country that has watered
T3FI have not. AS a. whole, I think
the capitalization of the railroads Of
the. country represent less than their
probable value in property.''
Mr.. Harrington explained that the
lines at: actual: cost without waterinfg;
stocks, because Of its good credit, and
the fact that stockholders are willing
to pay 100 cents on, the dollar for new
and untried stock. Mr. harrington
denied assertions made that. large
amounts of bonus stocks have .been is
sued by the railroads of the country.
etThe public seems to have this idea, -
he said, "but after twenty-four years
Of railroad experience, I do not believe
eff the time comes when the sur
plus of road has provided for re-
placement Of equipment and all other
fair profit, and that surplus still ma l.
teriallY. increases, is it not time the
transportation rates were reducedq'
asked Mr.. Stone. .
r., Great Northern Theory.
"That is the theory on which our
was the, answer and we haye a num-
bsr :;;9'f~times' reduced, rates 'volunta-
''Then en- you would answer the dues-
do not desire % to make. such a
bald answer, because I believe it would
be misunderstood.D "~.
| Mr.: harrington, questioned about
new lines, said, that money advanced
for new lines was loaned at per cent
interest. The average amount" 50 ad.
[ vanced, he assorted, greatly varies
year to year. 90 It will average some
millions; perhaps two or three,", be
I Purchase Of Burlington. =
| On the subject Of the purchase OF
the Burlington road by the Great
NGrthern tt2f and N95thern 4 Pacie aed e. the
l.
bonds were issued, bearing s per cent
Interest. Il '.. ~ '~ ~, :
"The interest On these bonds. is paid
by, the Burlingtons", ,, > ~
/ eyes, sir.' =,
ton did not really cost a cent, did It 3,
asked Mr Stone; "simp1y an issue OF
bonds. The Burlington was practically
! ..,ought for a promissory note on which
| it now pays the interest -
/ 1.-The bonds were secured by the
properties also Of the purchasing
roads said Mr: Harrington. HThe
atee ana o. takhng tae ties he
on the bonds. the Burlington pays the
interest. direct" .-,....
/ ! Mr.. harrington practically admitted
that no class Of traffic on the Great
| Northern is done at loss. He stated
that in such an event, he would prob
subject and such request had never
been made.
s.. Comparison of Rates. :S.-!'.y
Mr.. HARRINGTON was told that on q
previous occasion, he had said compari
sons of conditions. were necessary;
would he explain his meaning more
clearly2 1=:~ ~s.-.: -, - .
"On passenger traffic. he said
3Esone of the eastern roads have made
a t2.cent rate where we have Scent
rate. The New York, New Haven
Hartford has 2-cent rate. But il
these instances the roads are. doing
practically a streetcar business; are. IL
a thickly settled country: operating
many trains and carrying many passen
gers. /. Here we are operating in s
Comparatively sparsely, settled country
with few trains, and few. passengers
Therefore, 2-cent rate in New En-
gland is not fair here in the west"
:"What effect has abolition Of passes
had on eastern roads?' -.....'. .'s.,.. !.
IttI think little effect In fact, they
haven't abolished passes. They may
have abolished political passes, but
they give out the same numbers in ex
change with other roads that they al
ways have.'' ~ N.cs. 81. ~. = .s..s*: ::
Cost of Doing Business. :'5,:s
"In your former testimony, Mr.. Far.
rington, you stated that rates in Min.
nesota are lower locally than in any
other state thru which your line passes
| Is it not true that the density of popu-
lation in Minnesota in comparison to
rates must in all fairness be made tc
the density of population in the western
states9" =:
( Mr. Harrington made the adnissi on
tTBut there are also other things tt
be considered" he said "I think
for instance, rates in Minnesota shoull
be higher than, they are in Montana
| because here the business ia done iT