The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1912-09-20
PITY THE POOR RAILWAYS!
CAN'T EARN ENOUGH TO
PAY INTEREST ON BONDS
They Groan Under Taxation
Burden in Michigan, o. q.
Bolt Tells Conference
STATE EXPENSES HIGHER
Increase in Tax Collections Near
ly Three Times Boost in
Assessed Valuations

The Thursday morning session OF
the tax conference which is meeting
in Detroit was a bit less contro-
versial than the Wednesday evening
session, though there was plenty OF
discussion on both sides OF the mort
gage tax law.
The session was opened with a
paper by Orrin G. Bolt, of Grand
Rapids. taxation expert OF the @.
n. & I. railway, on The taxa
ton of railroads" Mr.. Bolt re-
viewed the course OF railroad
taxation in Michigan, beginning
with 1902, when the gross earnings
tax was repealed and the ad valorem
tax substituted. He presented sta
tistics which showed that the rail-
roads paid three and half per cent
on their gross earnings previous to
1902, while they now pay 6.S per
cent on their gross earnings, and
l39.7 per cent on their net earnings.
The net earnings Of the railroads OF
Michigan before paying interest
charges was $11,161,000 in 1911,
and the taxes paid by them was So
l372,144. The railroads are earning
only 81 per cent on their assessed
valuation in Michigan, after paying
their taxes, and this is hardly
enough to pay the interest charges
on their bonds, said Mr.. Bolt.
Continuing, he stated that many
of the laws which were passed by
Legislators whom he characterized as
ignorant OF all principles Of taxa
ton and government and who he
said, gained office by following the
example of Gov. Pingree and jump
ing on the railroads, amounted to
indirect taxation upon the railroads.
He claimed the two-cent fare law is
such tax, by limiting the income
which may be drawn by railroads.
The railroads cannot distribute
the increased cost OF labor, materials
and taxation among those who use It's
service because the rate they are al
lowed to charge is fixed by law" he
said. Investors cannot be induced
to put their money into railroads to
business men because there Is no Sc
eurity against further hostile legislar
ton. They cannot be blamed for
seeking some form OF Investment In
which they will not be sandbagged.
by hostile legislation the people
OF Michigan have killed every incen
tive for new. railroad construction In
the state. : II is now time to apply 9
remedy, not for the benefit OF the rafl
roads. but on behalf Of the best in
terests OF the people Of the state"
Following Mr.. Bolt, o. B. Fuller
state auditor-general, discussed The
increase in state and local taxation
as compared with the Increase In as
sessed valuations
Mr.. Fuller stated that the assessed
valuation of the property In the state
had increased 142 per cent In ten
years, while the expenditures OF state
and local taxes had increased 3l3 per
cent. He pointed out the increased
cost OF all public buildings and works,
and the more expensive structures de-
manded for public service throughout
the state to explain the increase. He
suggested that assessing officers
should be appointed in each assess
ment district by either the governor
or the state tax commission so tnat
assessment might be uniform through
out the state under the supervision OF
central body.
"The present law is adequate so far
as assessment Is concerned" said Mr.
Fuller, "and think II would be
grave mistake to change 1t. While
there Is machinery, IL Is not compli'
Gated. and 1t enables the assessing o..
ficer to find and tax every dollar CT
property that Is owned in the state "
Mr.. Fuller expressed himself as op.
posed to the mortgage registration
law, saying that 1t imposed as much
of tax on the man who lends his
money for one year as 1t does on the
man who lets IL. out for 10 years. lie
also found fault with the specific tax
OH steam vessels, which he said ala
not produce enough revenue for the
taxing districts in which the vessels
are owned.
There was considerable discussion
of the mortgage tax following Mr.,
FulIer's paper. and a number OF the
delegates expressed themselves III
Opposition to the exemption oil
mortgages from taxation under the
present system.
Dallas Boudeman, OF Kalamazoo, In
the course Of the discussion stated
that there should be limit upon the
expenditures OF the legislature, 81
that the tax rate could not be raise
to an unreasonable limit II the sys
tenn OF assessing property at full
valuation should go into effect.
Judge ,Claudius b. Grant, OF De
troit. former justice OF the supreme
court. read the closing paper OF tie
session on Constitutional restrictions
ON the power OF taxation" explaining
the clauses OF the constitution which