The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1910-04-07
SOME RAILROAD
RATE FIGURES
PHYSICAL VALUATION OF ROADS
SHOWN.
TWO CENT FARE Is FAIR
RAILROADS CAN EARN PROFITS
ON LOWER PASSENGER RATE.

the state.
1t has been, for some time, a gener-
ally accepted fundamental proposition
that no intelligent basis for rate max
ing and taxation for railroad property
could be laid until there had been Sc
cured, by some means, a reliable physi-
cal valuation of railroad property.
The people are very willing to- allow
the owners of railroad properties a
fair revenue on their real investments
but have suspected that there was a
design on the part of the railroads to
secure a revenue on watered stock.
Acting on this theory, the legisla-
ture of South Dakota, in the session
of 1907, appropriated $4,000, to-
be expended under the supervision of
the Board of Railway Commissioners,
for the purpose of securing a valua-
ton of the railroad properties in
this state.
The work was begun as soon as the
appropriation "a available, by c. c.
Witt, a civil engineer of IA years ex-
~perience in railroad work. A novice
can easily judge that this was a
work of great magnitude. Every rod
of road had to be inspected. The
weight of the rails; the cuts and
the rolling stock of all various kinds
were examined. Two ideas governed
in fixing values; First, the cost of
reproduction new; and, second, the
present value of tie roads as they
stand.
The South Dakota commissioners
have already secured the completion
of this work over the c. NJ. & CT. P.
and the C. & N. w. roads and about
S5 per cent of the balance of the sys-
TENS who nave lesser interests in the
state.
A second important line of infor-
nation, essential to the prosecution
of the state cases, was the securing
of reliable information showing the
cost Of operations, properly charge
able to the state of South Dakota,
and the revenue that should be
credited to the roads as coming from
this state. To secure this latter line
of information, the legislature in 1909
appropriated $4,000 to- be expend-
ed, so far as necessary, under the
direction of the attorney general.
When this appropriation was avail
able, the services of c. H. Hillman,
an expert accountant of many years,
were secured. Mr.. Hillman has been
employed for like services by the
states of Minnesota, Florida, Ken
lucky, North Carolina, Alabama, Ohio,
Illinois and Indiana. The state was
especially fortunate in securing his
services. owing to his large eXpe-
rience in this line, and whatever the
issue may be in the cases now pend
ing, the information secured by him,
which is now the property of the
state. and presented in this case, will
afford quite a revelation.
It will be remembered that the rail
roads secured injunctions to restrain
the state from enforcing the rate law.
In their affidavits, ON which they
based the request for a restraining
order. they claimed that the roads
were running at a loss. However,
knowing, from past experience, the
force OF the figures which Mr.. Hill
man, and his large force OF assistants,
could and would secure, they finally
presented figures in the hearing Oh
the case by which they retracted
from the position taken in their am
davits and admitted that they had
been making a small profit; but, or
course. are not willing to allow the
amount of profit shown by Mr.. Hill
man, and will bitterly attack his fig
ures.
According to the testimony or the
C. & N. w, road. their present valua
ton of property in this state Is
$29,0 900, 00O. co.. They made such APP
%portionment on their operating expen-
ses and receipts within the state as
to show a net profit on intra-passen-
ger traffic, for the year ending June
Both, 1908, at three cents per mile OF
1 25,4S6.95. They then applied the
two cent rate to their present busi-
ness, which, according to their ng'
ures, would show a loss.
Mr.. Rillman was first put upon the
stand by the state, and during the
past week has been examined by the
assistant attorney general, Dougherty'
His testimony 10 not yet completed
but thus far shows that the c. 4 n.