The Mathews journal. (Mathews C.H. [Court House]) 1903-1937, 1910-10-13

sion. Or. ID s. - o,,t "a,
following statement - Iornine
The question OF the value OF the
physical properties OF the railroad is
one OF vital Importance in Virginia
and one which must receive atten-
ton by the Tax Commission. since the
constitution require that the physical
properly OF the railroads be assessed
apart rom their franchise value. and
Iurther supuiates that after 1919 the
General Assembly may provide a nevv
method Tor the taxation of this prom
erty. Economists and tax experts all
over the country have been much puz-
zled as to the best method of arriv-
ing at the value of the railroad prom
erty. and have not as yet reached any
satisfactory plan. In a number OF
the Western States the State taxing
authorities have made a full survey
OF the railroads and have valued them
at their actual cost of construction
T as FAR as this can be judged. ard have
then considered the franchise value
on different basis. In other States
the value Of the stocks and bonds IN.
various devices has been taken as the
value OF the property, with due allow
ance for the franchise value: in West
virginia the Tax Commissioner of the
State valued the railroads as a com
mercial proposition"
80 Tar as our study has gone and
from what we have learned bv confer
ence with railroad men and tax ex-
PSrls OF Other states. not one of these
pans mas Deen satisfactory, and conse-
quenuy we have endeavOred to work
from new basis, namely. the cost OF
reconstruction. While this plan ha <
not yet been worked on i'm detafI tbe
other members of the commission have
approved It's general outlines and have
directed me TO make the report which
am now preparing. We have taken
the reconstruction cost as our base be-
cause we think that the State has a right
TO share I'm the increas ed value of rail
ROAD property over and above the ac-
tual original cost OF construction since
the value or the reconstructed property.
over and above the original CONSTRUCTION
cost. is due in large measure to the
privileges which the railroad has en-
mas increased since many Of the lines
We're built. but as the State shares in
tate when improved, we think it but
right and proper that the State should
share in increased value of railroad
l do not think. however. that the cost
OF reconstruction is in Itself a salts
factory basis for the taxation of rail-
roads, even when the franchise is not
taken into consideration. Some rail-
roads, for instance, are worth apart
from their franchise, a great deal more
| than what ii would cost TO rebuild
them, owing to condition OF the coun-
special advantages of location which
they enjoy. Some railroads. on the 9TH
were taxed on what it would cost TO
| reconstruct them, they could not be
operated except at a loss. These two
| elements. therefore, of advantageous
location and OF limited traffic play a
| large part in the actual value Of the
| railroad property even when the fran
| chise value is not taken into considera-
| ton. Our report on the subject will
show just how these principles operate
in the case Of particular railroads.
| In the report which will be sub
mitted by me to the full commission
| the physical valuation of the railroads
on the basis OF the cost of reconstruc-
| ton, under the conditions mentioned
| above, will be regarded as an alto
| gether different thing from the value OF
| the railroad franchises.