Omaha daily bee., 1907-02-28
BONUSESAND
RAILROAD TAX
How Git tSens Have Contributed TO Support
Of Railroads.
MORE THAN GENEROUS IN THEIR GIFTS
Liberal Donations of Bonds Made to
Various Companies.
INTEREST PAID EXCEEDS THE TAXES
Many Towns Pay Annual Tribute Greater
Than Tax Collections
STARTLING FIGURES FROM THE RECORDS
Millions Given in Past to Aid in Building
New Lines
RUlN0US INTEREST PAID ON ISSUES
Answer to Charge that Nebrasknna
Have Derived All the Benent and
Furnished None of the Cost OF
State Development.
Some Examples Of Bonus.
(From a Sian CorrespondentN

LINCOLN, Feb. 27.-(Specal r-Opponents
OF the proposal to tax railroad terminals
for local purposes and apologists for the
railroads never tire of pointing out what
great benefits have come to Nebraska COM
munities through the existence of the roads.
The fact that the railroads hive been to
some extent benefited seems to have es-
capped their attention entirely. During oil
the talk that has been heard of the expense
Of building, equipping and maintaining the
railroads. not word has been said about
the contributions of the public to the con-
struction of the lines in the way of bonuses
and subsidies.
The habit of voting bonds to aid rail-
roads has prevailed to a considerable ex-
tent in Nebraska, and for a long time.
Forty-five of the counties have at one time
or another voted large issues OF bonds to
assist In the construction of some one or
another of the lines. the total issue for
this purpose up r the present time being
IS 495, 1855, an avert&e of a little more than
$4,000 for each county involved. At pres
ent bonds issued for this purpose to the
amount of $2,779.40O are outstanding, or an
average of something over $4,000 for each
of the counties participating. The interest
charge on these bonds at the outset was
$447,4S1 annually, an average rate of a
trife less than per cent while the in
terest charge at present is $2Ol9sl, or about
the same at the beginning. The rate
of interest stipulated in the bonds, varies
from 10 per cent to Az
What the Records show.
The tGbulation of the bond issues printed
in connection with this article affords a
considerable amount Of interesting informa-
tion. Assuming that its figures are Sc
curate, and they are copied from the state
records at Lincoln. though there may be
minor discrepancies, they show that in a
number of cases the roads receive more In
interest payments on bonds than the local
taxes against them amounts to.
For example. the city of Beatrice in 1o0
received from all the railroads the sum
of $9O2.35. and paid on bonds issued in
favor of the Kansas City & Beatrice rail
road interest to the amount OF 5000 Ths
citizens of Beatrice further shared In a
total interest payment for railroad bonuses
voted by Gage county to the amount OF
1920.
the doubtful privilege of paying the rail-
road taxes levied in the city. and a little
more. In 1906 the total of railroad taxes
levied In Lincoln was $6,246.6S while the
total interest charges on bonds voted as
bonuses was S10500. This for the city OF
Lincoln alone; of course the city had to
bear its share of the county interest pay
ment on bonuses, which is very heavy
AS matter of fact. Lancaster county went
In for voting bonds to railroads to a much
greater extent than any OF the other coun-
ties, and has paid a larger price for SO
doing
Lancaster COunty's Experience.
In the beginning, Lancaster county voted
$4,000 at 10 per cent to aid the Atchison
& Northern, and paid in principal ana In
terest $4,000 To the Midland Pacific $780,
900 of twenty-year bonds at 10 per cent
we're voted, and on these the county paid
in principal and interest assuming the rec
ords at the state house to be correct $685.
OOO and still owes s9s00O. on which the In
terest charges since 1888, the date OF ma
turity OF the original bonds is Q27OOO
Both these lines were gobbled up by the
b. & M, after a long drawn out contest
in the courts, during the progress Of which
the constitution OF Nebraska was twisted
out OF shape in order that the Burlington
might gobble "a parallel and competing
line" A bonus of but $4,000 was voted to
the d. G. M, but this also carried 10 per
cent and run for twenty years, making the
! total payment in interest and principal on
the issue $4,000. Thus Lancaster county
]
$4,000. and is still paying interest on $685.
0O0, which will some day have TO be re-
deemed. The city of Lincoln contributes
each year In interest alone on bonuses as
follows: To the Missouri Pacific, $500; to
the Lincoln & Northern "a piece of the b.
g. M, under another name) S2.OOO 10 the
Fremont. Elkhorn & Missouri Valley (the
( Northwestern, 1850; TO the Chicago Rock
Island & Pacific, $500.
other Towns COntFibute.
| In Fairbury the same rule holds good.
1 Property owners OF the county seat OF JEFF
ferson county In 1906 paid the railroad
/ taxes and almost 1900 besides through in
terest on bonuses The taxes levied against
| the Rock Island for 1906 In Fairbury were
! $500 70. and the 81. Joe & Grand Island paid
/ sl5s.S6. The city Of Fairbury paid 81 800 in
/ interest on bonds voted 10 aid In the con-
| structiOn OF railroads
Plattsmouth almost plays even with the
railroads. but not quite; II takes a pretty
/ wideawake community TO get much the
better OF tine tax argument with a modern
/ railroad In PlattsmOuth for the year 100