Omaha daily bee., 1909-05-21
Nebraska
TAX AGENTS ARGUE WARMLY
Expert Polleys Presents a Method
Full Of Possibilities.
SOME EXAMPLES WORKED OUT
Expert MulliEan of IA Rock Island
Says Deacit IL Not taxable
and shows His Road IL.
Loser.
From a staff Correspondentl

(From a staff Corr%espondent)
LINCOLN, May 20.-(Special.)-It is very
evident that the State Board Of Assessment
is going to get some valuable information
from the various tax agents of the rail-
roads who are here. or have been here.
making arguments for a decrease in the
assessment Of the roads. And, incidentally.
If other states are on the lookout, they
will be able to get some information which
will be of value to them. T. A. Polleys of
the Chicago. Milwaukee, Minneapolis 4
Omaha has started the ball by proposing
to the State Board Of Assessment a COM
posite, or Automatic theory for the as
sessment Of all railroad property.
BY three methods which he used Mr.. Pol
legs was able 70 reach a valuation OF his
line in the neighborhood of the figures Of
the census bureau. He then proposed a
plan evolved from the three methods. Tn
der this plan his road would be reduced in
Nebraska from an actual value of 1850 a
mile to SS7,a2 a mile.
Should Mr.. Polleys use his same plan IN
his argument to the Iowa State Board Of
Assessment his road would be increased
from $4,000 to $l21, $40. The gross earnings
Of SIS, 1857 per mile, capitalized at 1910
per cent, would make the value Of his road
in Iowa S1l0, 40. The net earnings of
81, 5S9 As a mile. capitalized at SIS per cent,
would make the line worth $l33, 200. Adding
the two values and dividing by two, would
make the value Of the road in Iowa 1921, $40.
This calculation does not include a small
branch line in Iowa. which would make
very little difference in the result. IL being
some sixteen miles in length and valued at
S25,o 900 a mile.
what state Figures show.
According to the reports of the state
auditor. this road. which is a part of the
| Northwestern system, has got off easier
than any of the ether roads in the matter
of having it's assessment increased. In
1903 the auditors report shows the Mime
apolis & Omaha road was assessed at $500
a mile. 1t was increased in 1904, when the
big raise was made in all railway property,
to $500, or 54la per cent. Since that time
the assessment of this road has not been
changed. although the assessment of other
property and other railroads has been
largely increased
During the same time the Burlington
main line has been increased 60 per cent
and it's branch lines 95 per cent, the Union
Pacific main line has been increased III
per cent and the Omaha & Republican val
ley branch 1eS per cent and the Kearney
branch 119 per cent. In the four years
following the big increase the Burlington
main line has been increased, according TO
the auditors report, 10 per cent. the branch
lines 5K per cent and the Union Pacific
main line 34iA per cent, the Omaha & Re
publican Valley branch Az and the Kear-
ney branch 80 per cent. The Northwestern
proper in the five years was increased 81
per cent and in the last four years 8 Per
cent.
Three years ago Peter Mortensen, then
state treasurer. made an effort TO increase
the valuation of the Northwestern, but he
was unable 20 get the majority OF the
board to stand with him.
MuIIiEan Argues warmly.
]. w. Mulligan, assistant tax agent of
the Rock island, made a plea for his road
to the board this morning and he attacked
the right of the board to place a value
upon the franchise of his company. Not
withstanding the law requires the board
to do this. MIR. Mulligan said there was a
possibility of franchise values but not
under conditions which surround a railroad
the stocks and bonds of which are below
par and where there Is a deficit instead OF
a net earning, as is the case with the
Rock Island.
The best evidence that the franchise
Of a railroad has no value except what il
cost" Mr.. Mulligan said, land Is not a
legitimate subject of taxation, is the fact
that nobody has ever been able to put a
value on a franchise and then give a SEN
sible. logical or coherent reason for his
conclusion"
The tax agent said the state practically
admitted that the physical value Of his
line was 500, 2s253 a mile, but it permitted
the road to earn only $3.50. 40 a mile, which
on the basis of the net earnings would
make the value of the line only SIS, BAL 81
a mile.
The Rock Island in Nebraska earned In
1907 $1,521 40 net per mile and in 1908 il
earned s1,22s.5 net per mile, according tC
the statement of the tax agent.
Hope for Royal "ChEuHer."
1he state board of secretaries OF the
state board Of health, retiring, is very