Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-01-14
not attempt to make 1t source of any
considerable net earning.

mileage proportion upon all interstate
traffic. 1t is not safe to accept the re-
port OF any particular railway COM
pny respecting the amount expended
for maintenance and operation, mas
much as the variety in the methods OF
bookkeepin destroys the value of any
one report 1t is fair, however, to re-
sort to averages according to the COM
putations made by the interstate
commerce commission The average
percentage of gross earnings for main
flamenco and operation turnout the I'm
tied States is little less than 6S per
cent If we assume 6S per cent as
fair proportion (and l am of the opin-
ion that the assumption wilA do the
railroads no injustlce) the net earn
ings of our railroads upon business
done in Iowa for the year 1905, were
500, 09353S.24 This sum will pay
per cent interest upon 1894 92,304. 1t
will pay per cent interest upon $751;
050,546. The last assessment fixed the
actual value of the railroads of the
state at $249.348,7S0 The executive
council, however, chose to apply the
same proportion of value as it believes
1t had been applied to farm property,
namely, about four-fifths, increasing
the value by the addition of one-fifth
the result Is an actual value of $685.
21S536 1t will be remembered, how
ever that in reaching this value the
executive council was largely influence
ed by the gross and net earnings, and
in less degree by the amount which
had been expended in the construction
OF the properties. 1t is manifest that
when you come to determine whether
the net earnings are too great you can
not take as basis a valuation found
ed upon such earnings, but must adopt
some other method. If 1t be asserted
that 1t is unfair to take the gross and
net earnings of a single year 1T may be
of interest to inquire what these earn
ings have been during the last five
years.
In 1901 the gross earnings were $685.
o79.943; in 1902, s56,456,303; in 1903,
s5s, 466.34O; in 1904, s57,496,S4s; and in
1905 as before stated, $62,792,3O7 The
average gross earnings for these five
years are $5S,240,34S. Using the per-
centage for ascertaining net earnings
heretofore mentioned, the result is $751;
636,911.36, for the average net earnings
per year for the dast five years. This
sum will pay 6 per cent interest upon
$310,615 1S9 1t will pay per cent in
terest upon $266241, sol. These rates
of interest are sufficiently liberal when
you take into consideration the fact
that practically one-half the capitals
cation of railway properties is repre-
scented in bonds, the average interest
upon which is about per cent
l submit these suggestions to you to
be reviewed by your mature judgment,
and to be used for the purpose of be-
ginning an inquiry as to the justice
or injustice of any action that you may
take that will lessen the income of the
railway companies, whether from the
passenger or the freight service. 1t Is
a subject which invokes a high sense
of responsibility. and it demands for
its consideration all the obligations of
an official oath, l know that you will
examine it and act upon it without
fear, favor. prejudice or oppression.
For my own part l am deeply con-
WINGED that reduction in the pas
senger rate is fully warranted, and I
therefore earnestly recommend the
substitution of two cent rate for the
existing three cent rate.
Freight Rates.
What have already said is sufficient
insofar as the income Of railroads is
concerned. The railroad commission is
already adequate power to fix sched-
ules of maximum freight rates. The
schedule and classifications announced
IN, y, nhoOoad NJ
TALLY during the eighteen years that
have since interviewed. In the mean
while the manufacturers and commerce
of the country has been revolutioniz-
ed; and I believe it to be true that the
present adjustment of rates is grossly
unfair to the manufacturers, farmers,
stock producers, and distributors of the
state They do not have fair and
even chance in the struggle for bust
ness 1t may be worth while to insti-
tute an investigation, which, with your
plenary powers might develop many
things which the railroad commission
cannot discover, and which would
greatly aid in readiustment of rates.
AS you know, it is, the almost invari-
able custom of railway companies, in
bringing shipments of any kind into the
state, to make rates to the state line,
and then add the rate of the IOWA dis
lance tariff to the point of destination.
This practice results in great hard
ship to our manufacturers and distrib-
utors in their effort to compete with
their rivals situated beyond the state.
/ understand perfectly that nothing
that YOU could do would affect a thor
ough rate but if it is to be settled pol
icy of the railroads to make the inter-
state rate so far as Iowa people are con-
cerned by adding the local distance tar
if from the state line to the point of
destination, it is possible to so adjust
our rates that less injustice would fol-
low their application in that manner.
AT the present time there are no
joint rates upon local traffic. The law
gives to the railroad commission the
authority upon specific application to
establish joint rate, but there is no
authority to prescribe a general sched-
ule of joint rates. The constitutional
ity of the existing statutes was at one
time questioned but the case in which
issue. and therefore the validity of the
law is still undecided. l recommend
the subject to you as one worthy OF the
most careful consideration. 1t is be-
lieyed by very many of our manufact-
urers as well as by large portion OF
our general shippers that the law
should be amended so as to confer upon
the commission as complete power to
esta blish a schedule of joint rates, en-
bracing all railroads and all traffic, as