Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-02-04

| ton was above the cost oil reprOduc
ton apprisal, the difference was calle
! the intangible or franchise value an
where 1t was below, the difference wa
: not named the more or less intangi
lie, also. The franchise value in som
cases apparently was a minus guam
| lity.
| But although tie experience o
| Michigan was obtained at n large out
| lay for securing valuation of tn
| physical elements of railroad propert,
the experiment tried there has beer
exceedingly valuable for the othe
states and therefore the outlay Shout,
| not be regretted.
The Cooley Adams apprisal of TIL
Michigan railroads has demonstrated
that however strvio cable a physica
valuation may be- in aifording an inde
pendent and scientific basis ior 1udS
ing the cost of modern railroads undel
the VARYING conditions Of the state, o'
as furnishing Il nect ssary basis for tlf
regulation Of capitalization and ser
vice rates. il is quite futile as means
of ascertaining the commercial NAiut
Of n railroad as i going concern. or MS
securing an equitable basis oi taxa
ton.
In an address before the Minnesota
academy of social science In December
1907 the Hon. Robert III. Shields. chair
man of Michigan tax. commission SAID
.In determining the amount of tax
which shall be imposed on corporate
property the question of method must
always be subordir tie to the other
nf tb.a
which follow it; and other things pc
ing equal, preference should always De
given TO the most simple and effective
method.
No hard and fast rule, or theory,
can be employed in the valuation Oh
corporate property. In deteril'ini's
the true cash value Of railroad prop
erty it is proper to- take into consfd-
Grafton the cost OF reproduction It's
value after allowing for deprecIatloii'
its location. its gross and net earnings
or the fact that it is not earning
fair profit, the permaneney and gem
etal character Of its business, the par
and market value of its stock ana
bonds. is connections and terminals
and III sA0rt every element and con-
Qition tEat ados 10 VI p'A"N' - t'
it's supposed value.
But each railroad stands alone
And ~ theory yet advanced can De
employed in fixing the
value al each and every road without
working the rankest kind of injustice
C,, some OF them,"
In obtaining valuation OF the
physical valuation of the Wisconsin
railroads in 1903 no such elaborate
and expensive methods for the state
at least was attempted. In fact the
main expense was borne by the rail-
roads themselves. Each of the rail-
road corporations in the state was
asked by the state tax commission to
make an examination of its physical
property. being furnished with blanks
TO be filed in under the same head
ings and items of cost as We're enum :
Grated in the Michigan apprisal which
was made under the direction of Prof.
Cooley. Prof. W. d. Taylor of the
University of Wisconsin as advisory
engineer of the tax commission, was
charged with the duty of going over
the appraisals Of each railroad to en-
anime and revise them.
But the physical valuation of the
Wisconsin railroads, even as revised
was at most only one factor consid-
cred by the tax commissioners and as
in the case of Michigan the valuation
OF the railroad property was deter
mined largely on other grounds from
a study Of the opera lions of the sew
eral railroad systems covering term
raI Sgi.. inn
portance to the demonstrated earning
"a pacity of the several roads.
" S. Valuation of Railroad Property.
In 1904 the department of commerce
and labor made a valuation OF all the
steam railroad properties in the
I'nited States. The value Of Pullman
cars and private cars. We're not in
Guided for want of sufficient data, this
valuation was made for the census
bureau as one step in determining the
wealth Of the nation.
The work WAS placed under the di-
rection of Prof. y. II. Meyer Of the
University Of Wisconsin who repre-
sonted Jointly the interstate COM
nIerce commission and the bureau Of
the census.
The formal report was prepared by
Prof. Henry G. Adams, who from the
beginning was held responsible for
the accuracy Of the method and the
integrity of the result" This valua-
ton was determined by method
which eliminated personal opinion and
judgment and its aim was to dis
close the commercial value Of railroad
property/as a business proposition
The value of each operating railroad
was determined by a capitalization o.
the net operating INCOME and in tht
case of interstate railroads the value:
were assigned To states upon thu
basis of gross earnings as the mos
practicable method.
| In this report of Prof. Adams which
is contained in bulletin 81 of the de
partment of commerce and labor thi
Maine railroads was given as 2021.5'
miles with Il Total value of $80,l46,000
or $4,000 per r7ila. About one yea,
ago we endeavored to secure som,
data from the department of com
merce and labor which might shov
the violations which 'rof. Adams as
signed to Maine territory of the inter
state roads which extend into thi
Sta Our request, however. wa
ipoitely refused on the ground that tn
a, =.