The labor journal. [volume] (Everett, Wash.) 1909-1976, 1917-02-16
BURDEN OF NINE
BILLION DOLLARS
ON THE PUBLIC
by Dante Barton.)

A determined drive is to be made
by national organizations to prevent
a continuance of one of the biggest
burdens that the railroads of the
country are now putting on the pub
lie. This is to value their land hold
ings at billions of dollars more than
their investment in the land. A Ma
tional Committee on Valuation of
Railroads, with John J. Hopper, Reg
lister of New York county, as Presi-
dent, and Benjamin G. Marsh as Ex-
ecutive Secretary, has been formed
and is now actively at work to secure
railroads and to hold the land values
proper and fair capitalization of
at what they are actually worth to
the railroads. This is in line with
resolution adopted by the National
Grange, urging that the original cost
of lands should be made the basis for
determining rates charged by the
railroads. The effort will be to have
Congress and the Interstate Com
merce Commission and the Newlands
Senate Committee establish the prin-
ciples that railroads have no right
to charge shippers and the public
with rates based on the unearned in
creases in the value of lands.
The railroads have received from
the country more than 243,OOO square
miles of land as bounties. That is
more than the total area of Texas.
In the estimates of their own prop
erty, they have added to the original
value of these gifts the increase in
the value which has been brought
about through the increase in popu-
lation, in settling the country and
the growth of great cities and towns
around their terminals, etc. They
have added to their own investment
in land the same increase in value
brought about through no effort of
their own, but resulting from in
crease in population, etc.
Commenting upon this prevailing
injustice, statement Of the Com
mittee on Valuation of Railroads,
just issued, says: "The Bureau of
Valuation of the Interstate Com
mission has made valuation of sew
eral important railroads, although
not yet of all the most important
lines. 1t is significant that the Bu-
reau has found that the cost of re-
production of the Kansas City South
ern Railway Co., less depreciation,
including the value of land, is $685.
257 $50; while it's capitalization is
S99,052,000. A similar discrepancy
obtains for the other railroads of
which valuation has been completed,
with the exception of the Texas Mid
land Railway Co. 1t is conservative
ly estimated that of the total capt.
talization of the railroads, amounting
in round figures to lips, 100000,
S9,000,0 100000 at least, represents in
creases in the value of land, over
and above what the companies paid
therefor, and issues of stock without
actual or prudent investment"
Examples of how all the railroads
everywhere are charging the people
on surplus values which the people
themselves have created, were given
in statement made sometime ago
to Senator Kenyon at Washington
by Clifford Thorne, at the time
Railroad Commissioner of Iowa:
"The total original cost of the
lands of the Northern Pacific at the
terminals in St. Paul, Minneapolis
and Duluth, including purchases to
April 80, 1908, was $4,527, 228.76.
The master allowed as their value,
apart from the improvements made
by the company, which, as we have
said, were embraced in the other
items of reproduction cost, the sum
of $17,315,869.45. In 1910, the Chi
cago, Burlington & Quincy Railroad
Co., insisted that the law entitled
them to a return upon present value
estimated at $53O,OOO,0OO. Out Of
the difference between the original
investment of $258,OOO,O0O, and the
estimated present value of $530,00O,-
900, it has been estimated that the
increase in land value amounts to
approximately $15O,OOO,OOO. And this
property represents less than one
fortieth of the railway capitalization
in the country"
Whether legitimate and fair val
uation is to be made the basis of
rate making or is to be the basis of
purchase or condemnation of the rail
roads for government ownership and
operation, the question of valuation
is an immediate and vital one. If
tho country ic RI ha dofrordaJ of