Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-01-11
VITAL POINT IN VALUATION
Northwestern Railroad Contends
Against Deterioration.
STATE HOLDS OPPOSITE VIEW
Line Officials Assert as Long as
Equipment Serves Purpose of
New, Its Valu els Amount
IL Originally Cost.
OFrom a staff Correspondent

F'rOm staff Correspondent
| LINCOLN, Jan. N.-tSpecisLD-Th
hearing before the state railway commits
sion on the physical valuation Of the
Chicago & Northwestern railroad has
reached a point where the differences
are not entirely Of fact, but involve a
vital principle. In making his estimate
Of the valuation of the railroad. f. c.
| Hurd, the expert employed by the state
for the purpose, took the original cost or
value of each item and deducted there
from the amount which he estimated it
had deteriorated through use. The rail-
road. through its attorney sought 10 as
certain how Mr.. Hurd arrived at this val
uation and incidental TO this line Of ques-
tionlng asserted that the value Of rail-
road property at all times was 100 per
cent Of what IL cost, regardless Of its
present condition and so long as il was in
use for the reason that it was answer
ing the purpose Of a new article.
1he railroad attorneys also contended
that even IL it were conceded that the
l:aterial itself deteriorated the labor
which it cost to put the raw material
II was q constant factor. Mr.. Hurd and
members of the commission took issue
on both Of these points. asserting that
even II the articles we're replaced when
discarded and payment made from
! company funds instead Of charging up
additional capitalization the money to
do the replacing was earned by charges
for aNWsHaa nt.A 49,
which kept he property up to its oper-
ating standard but which at no time
reached the actual physical value Of an
entirely new property. The state also
holds that Improvements and enlarge
ments are on the contrary always
charged to new capitalization.
1t Is readily apparent that the point is
one OF vast Importance in fixing the
actual value of the physical property Of
the railroad. as little of IL is actually
new, ranging from that down TO factors
which have practically served their use
fulness and ready for the scrap heap.
Roughly speaking the property OF rail-
roads viii probably average 50 per cent
worn out so far as 1t applies TO build
ings, rails, ties. rolling stock and similar
articles. while. OF course. real estate and
TENS OF a permanent nature. In many
Instances are increasing in value. based
on the theory OF reproduction cost.
II Is evident from the proceedings to-
day there is no prospect of the COM
mission and the company getting to-
gether on this proposition and therefore
In the examination OF Mr.. Hurd both
sides we're exceptionally careful in get
ting into the record the things considered
essential.
Raise In Life Rates.
The Nebraska state Mutual Life in
suranee association held its annual meet
ing at Hastings yesterday. and Auditor
Barton was present to confer with the
members. The annual report disclosed
hat the assessments permitted were bare
y sufficient to permit the company TO
meet its obligations during the past year
and II was decided TO raise the maximum
permitted to be levied. to insure the
raising of enough money to meet any
future contingencies. The plan OF the
company is somewhat complex and
figures are not available to show just
what the raise on each class OF policy
holders will be.
Land Commissioner Cowles is back
from kearney, where he went TO assist
ia putting the tuberculosis hospital In
shape for opening. The cold snap froze
up some of the radiators. and the neees-
sary repairs will delay for several days
the opening OF the hospital. He still
hopes to have II In running order by Jan
uary IS.
Overriding Prout.
The opinion OF the attorney generals
office which the county Judge OF Gosper
county overruled and characterized as
lacking in common sense, it appears was
| rendered in 1904, when n. Prout was at
tnrney general. and was written In re-