Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1910-04-15
HEARING or RATE
CASE SHOWS ROADS
ERavr rain n
WHNE TAIN TnUFll
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 TAX
ing testimony in Sioux Fails in the
case between the state board of rail-
roa commissioners and the various
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 h bone Of
contention. At a hearing held in Chi
cage the railroads presented their tes-
timony in chief, and the state now Is
presenting its testimony.
1t has for some time been q gem
orally 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 a reliable physical valuation of
railroad property. Acting on this the
DRY, the legislature of South Da-
kota, at the session of 1907, APP
p%ropriated $40, 900 to be expended under
the supervision of the state board of
railroad commissioners for the purpose
of securing q valuation of the railroad
properties in the state. aa
This work was begun as soon as the
appropriation was available by c. c..
Witt, a civil engineer of IA years ex-
perience in railroad work. Naturally
the work was one of great magnitude.
= ~ wv ~ SCN AANAN W ~
The weight of the rails, the cuts and
fills, the buildings and rights of way,
the rolling stock of various kinds were
examined. Two ideas have governed
in fixing values: First, the cost of
reproduction new, and, second, the
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 ap-
preparation has been used up to the
present time. The state of Minnesota
expended for this same line of work
yer $4,000.
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
which have lesser interests in the state.
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 railway
companies so far as their lines in South
Dakota are concerned, n the rev.
enues that should be credited to the
roads as coming from this state. To
secure this later line OF information
$10,0 900 to be expended as far as neces-
sary under the direction Of the attor-
ney general of South Dakota.
When this appropriation was avail
the services Of c. w. Hillman, an
expert accountant of many years ex-
perience, were 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 $29,-
000, 900. The company made sue ap-
on its operating expenses
and receipts within the state as to show
a net profit on intra-passenger traffic
for h year ending June 80, 1908, at 8
cents per mile of $125, 486.95. The com
pany then applied the basis of the q
cent rate to its present business, which,
according to the figures presented by
the company, would show a loss.
The testimony offered by Mr.. Hill
shows that the Chicago & North
railway did carr net profits on
it's intra or local business during the
year ending Tune 80, 1908. of 1868, 7S4.5S So,
on the present rate of 8 cents per mile
for straight one-way tickets, and 2h
cents per mile On mileage books. Mr..
Hillman then reduced all tickets to a
2-cent rate and allowing for short
line competition, showed that even with
the present business at the 2-cent
rate the company would earn, as net
profits, on interstate passenger bust
above all expenses and taxes,
the sum of 1886. 662.7S This does not
take into account any stimulus to trav-
el by reduced rate, but shows from the
or the state that the COM
pany can operate it's South Dakota
lines at a profit on it's present pas
senger business with a 2-cent fare.