The herald-advance. (Milbank, S.D.) 1890-1922, 1910-11-11
THE ATFHfAR|NC
ATTORNEYS FOR THE RAILROADS
FIGHTING TWO-CENT RATE
BEFORE MASTER
VALUATION In THE STATE
Present Arguments on Valuation and
Claim Railroads Cannot Afford
to Garry Passengers at
Two-Cent Rate

road passenger rate hearing before
Master in Chancery Howard Gates is
10Y or in the United States court
room in this city.
This phase of the hearing is for the
purpose Of allowing the attorneys for
the railroads and the attorneys re re
sentlng the state, an opportunity to
present arguments touching upon the
facts adduced at the previous SIS ion
in Chicago, at which testimony was
introduced showing the valuation Of
the railroad property in So til Dakota,
it having been oontenued by the is
that the establishment Of a two-ce1t
per mile passenger rate in South Da-
kota would be confiscato'y CT the
property of roads, because they can
not afford to carry passe gers for two
cents per mile in this state.
Samuel w. Lynde, counsel for and
vice president Of the Chicago and
Northwestern railway, tegnn the ar
guments for the rail cad which he is
interested in, at 2 o'clo k and had not
finished a very exhaustive and thor
ough presentation of his side of the
question. at $50 o'clock, when the
hearing adjourned until this forenoon.
Mr.. Lynde laid the basis for his argu
ment by stating three points of view
or propositions, as the premises upon
which his road opposes the introduce
ton of the two-cent rate.
Those propositions are:
What would be the cost Of repro
ducing the Northwestern railroad
lines in this state, or what IS their
tangible value at the present time?
What is the value Of it's intangible
assets, or its value as a go'rg rail-
road, something which is IN actual OPP
Grafton at the present time?
What is it's value based ON its
stocks and bonds?
Mr.. Lvnde admitted that the physi-
cal valuation of the read as mae BY
State Engineer G. C. Witt "a a fair
valuation and that the road &C e@ted
it as all RIGHT when it wa;
made but he said that the rcad was
entitled to a fair estimate Of its va
uation at the present time and in 1t;
present condition.
That it should be valued as a g.
ing railroad and not at tie figu es
which represent its original cost.
That the road must he REGARDED as q
whole and not in its various parts.
He maintained that the exre"se of
keeping the road Up to it's preTe7t
standard which is required by tn d S
patch of public business and safety to
the public, more than offs is tie &c
preciation of the road ply lea ly hv
IL: ~ ~ tho NV ~ pn6 tnar on
the road bed and track and on the Ma
chinerv and the BUILDINGS and cthe :
property with is necessary to t e
operation of the road.
He stated hat in bis opinion thu
value of a railroad increases as 1t
grows older for the reason that there
is constant OUTLAY 70 BIT e ment'
and higher standards of eQu pment
and service all of which have to be
paid for out of the earnings OF the
road.
Mr.. Lyndes argument NAV he sum
med up in the statement that the
Northwestern believes that it re-
turns from this state should be at
least 7 per cent per annum upon a
sum which it would actually cost to
reproduoe new. it's lines in South Da-
kota. He contends that tie resent
volume Of business in this state does
not return to the road Z per ce t,
which statement he seets to pr9ve
by a series of tables taken from the
books of the company.
The attorneys for the state VII pre-
sent their arguments when the rail-
road attorneys have fnisEed.