Evening journal., 1909-02-12
LONG DISCUSSION OF
TAXES ON RAILROADS

Representative MofflsOn thought the
earning capacity ought to be considered
as that enters into the taxation OF other
properties
Senator Drexler said license for the
privilege OF doing business in the state
might be required, too.
Mr.. Ridgely said the Commission had
looked into the subject of taxation Of
physical valuation, but had found the OK
pense for experts would be too enormous
for Delaware. He thought if the state had
plenty Of money the basing Of tax by ply
steal valuation would be good thing for
Delaware Two Western States have tried
this method and the cost for experts has
been very great.
Mr.. Ridgely stated that the railroads
are worth just what their stocks and
bonds are WORTH their market value
Senator Sparks Explains.
Senator Sparks said the Commission
had done Just what Senator DreNler had
lust suggested. He read from statements
made by Lawson Purdy, tax expert of
New York. who said the best method was
to strike the tax rate upon the base of
stock and bonds OF the companies. Mr..
Sparks said the rate proposed in Della
Topeka and Santa Te Railroad, one Of
the highest found. and on par with the
tax rate upon farm lands in Delaware at
tho present assessment and tax rate. one
railroad. he said, was paying at the rate
OF $500 mile.
John Biggs. counsel for the r. B. and
W. Railroad Company. was given the
privilege OF the floor. lie said the COM
pany pays $4,000 taxes upon it's road bed
Of % miles from Claymont to Iron Hill, at
tho rate Of $500 a mile. The tax upon the
buildings Of the company arc TO be added
to this. The Delaware Railroad pays So
OOO a wear on its road bed, and tho p.
3. and W. Railroad and its operating
branches pay S97 600 year in taxes.
Speaking of the D., NJ. and V. Railroad
Company Mr.. Biges said the stockholders
have never received a dividend. have
never received a cent on their Investment.
The road is heavily mortgaged and the
state took the bonds. The T., b. and w.
Railroad Company guarantees the inter-
est on these bonds, which the d. NJ ana
v Company Is unable to pay.
Mr.. Biggs said it would be a pretty
hard matter to fix a physical valuation OF
a railroad that is not earning anything.
Nobody could afford to operate the d.. NJ.
and V. If it we're given to him. he said.
Mr.. Biggs sid the stock has no market
value.
/ No Opposition Here.
Mr. Biggs then took up the subject OF
the NJ. d. and " Railroad. formerly the
| Queen Anne's Railroad. Mr. Biggs sad
that road never earned operating eN-
penses. lie added that tho Revenue Com.
mission had given very Careful attention
to the subject. and fair consideration
lie believed they were trying to do what
is right. Having reached their conclusion
Mr.. Biggs said the figures would not b'
opposed
Senator Drexler asked what assessor 60
ing around takes into consideration tho
mortgage on a house. or the bonds out
standing on It in making his assessment
He believed that every railroad could b'
taxed properly on its property basis. ever
If that hands them into the clutches of thu
sheriff the next day. He said he was no
opposed to railroads. but believed in then
ana the good they do, but he thought tina
the best basis and most uniform metho'
OF arr ring at a tax is upon the physica
valuation Of all its property. Mr. Drex
led said the assessors come TO his hous'
and assess his dwelling, his horse. calf
automobile and any other property the,
can find. lie believed IT would be monel
well npent II 10000 were spent for ex
perts to make a physical valuation Of al
railroads in the state as taxable basis
Tax Upon Earnings.
Mr.. Ridgely said personally he helieve'
"a -. - ID
upon the earnings. but the earnings some
times cannot be ascertained. He asserte
that the Commission did not act arbitra
rily in fixing the taxes upon the D., NJ
and v, or tho A.. D. and V. railroads
but the Commission thought It should pa
the amount set forth on its road bed.
Senator Sparks said the methods SUE
gosted by Senator Drexler and Repre-
sentative Connolly were both included /
the calculations made by the Revenu
Commission. Mr.. Sparks then quoted froi
the Commissions report and from III
minutes Of the commission to bear out III
statement
Representative Connolly asked no
; many miles the F., d. and w. Railroa
has within the state. and Senator SPARK
= read from the report that It has about
q miles of single ira.
Mr. Biggs said the right Of way is hl
% miles long from Claymont to Iron iii
u and IS feet wide.
c Senator DrcNler questioned that muC
n that enters into the physical valuation
?. a railroad had been taken into calculate
d by the Revenue Commission.
2 Mr. Ridgely said that physical valuatiC
II ! rs,nvnfr- frtrnpf fhr artfa1 F.afnp n II
property. and its productiyeness just as
meant the actual value OF farm, and /
e productiveness. After ALL there was b
n one thing 10 be found out-what co
r poration would be worth Il NV up