The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1910-03-31
HEARING OF RATE
CASE SHOWS ROADS
MAKE FAIR PROFIT
State Is Fortified With Fig.
ures Showing Physical
Valuation of Roads.

Sioux Falls. S. D., March 29.-Prog-
ress is being made in the work of talk
ing testimony iE Sioux Falls in the
case between she state board of rail-
great railroad corporations having lines
In South Dakota, with the reduction Of
passenger fares in South Dakota from
3 to 2 cents per mile as the bone OF
contention. AT a hearing held In Chi
cago the railroads presented their tes-
timony in chief. and the state now ia
presenting its testimony.
1t has for some time been n gen
orally accepted fundamental proposition
that no intelligent basis for rate maxi
ing and taxation or railroad property
could be laid until there had been Sc
cured a reliable physical valuation Of
railroad property. Acting on this the
DRY, he legislature of South Da-
kota, at the session of 1907. APP
p%ropriated $4,000 to be expended under
the supervision of the state board of
railroad commissioners for the purpose
of securing a valuation of the railroad
properties in the state.
This work was begun as soon as the
appropriation was available by c. c..
perience in railroad work. Naturally
the work was n of great magnitude.
Every rod of road had to be inspected.
The weight of the rails. the cuts and
fills. the buildings and rights of way,
the rolling stock of various kinds We're
examined. Two ideas have governed
in fixing values: First. the cost OF
present value Of the roads as they
stand. This work has been continued
by another appropriation of $25, 900,
made by the legislature in 1909. How
ever, only about $1,000 of the second APP
preparation has been used up to the
,>.~,,% <s,~o Tl,~
expended for this same line OF work
over 500, 900.
Know Physical Value.
The South Dakota board of railroad
commissioners already has secured the
completion of this work so far as
the Chicago, Milwaukee & st. Paul
and the Chicago & Northwestern rail-
ways are concerned, and about IS per
cent of the balance of the systems
A second important line of information,
essential to the prosecution by the state
of the present passenger rate case, was
the securing of figures showing the cost
OF operating on the part of the railwa.y
companies so far Is their lines in South
Dakota are concerned. and the rev.
enues that should be credited to the
roads as coming from this state. To
secure this later line Of information
the legislature in 1909 appropriated
$40, 900 to be expended as far as neces-
sary under the direction of the attor-
ney general of South Dakota.
When this appropriation was avail
able the services of G. w. Hillman, an
expert accountant of many years ex-
%perience, We're secured.
Roads Make Profit.
According to the testimony offered
by the Chicago & Northwestern rail-
way, the present value of the COM
pany's property in South Dakota is $780,
900, 900. The company made such APP
portionment on it's operating expenses
and receipts within the state as to show
a net profit OF intra-passenger traffic
for the year ending June 80, 1908. at 8
cents per mile of 1925, 1865 The COM
pany then applied the basis of the 3
cent rate to it's present business, which.
according to the figures presented by
the company, would show a loss.
The testimony offered by Mr.. Hill
man shows that the Chicago & North
western railway did earn net profits on
Its intra or local business during the
year ending June 80, 1908. of 1859, 7S4. 5S,
on the present rate Of 3 cents per mile
for straight one-way tickets, and 21a
cents per mile OF mileage books. Mr..
Hillman then reduced all tickets to r
2-cent rate n allowing for short
line competition, showed that ever with
the present business at the 2-cent
rate the company would earn, as net
profits, on intrastate passenger bust
ness, above all expenses and taxes.
the sum of 1886. 662.7S. This Ices not
take into account any stimulus to trav-
ell by reduced rate, but shows from the
viewpoint Of the state that the com
lines at a profit on its present pas.
SenGer business with q 2-coct for