Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-02-10
Maine Steam Roads
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this great railroad system State
concern responsive to the demands
Of the people of the State, and free
from the influences of speculative
interests. The result has been ac-l
complished because its record has
been that Of safe, consistent Garner
of fair return without unusual fiuc-
iuations, a record which inspires
public condolences and attracts small
investors who are dependent upon
the regularity of the return and re-
lsponstve to public sentiment. The
average holdings of stockholders in
icluding Savings Banks and Trust
accompanies having savings depart
ments, on January rs, 1921, was 81
shares. The stock ownership is scat
tered over every County in the State
and represents 1874 cities and towns.
whose stability the people of the
state are just as truly dependent as
inpon any other business in the State.
IT there is failure in its ability to
continue its regular returns it is just
as truly calamity as the failure of
ANY agricultural, mercantile or man
Nfacturing business"
while no account was taken in the
Language Of the statute, of the rela-
ton of the rate or amount of the tax
10 the net earnings, it is fair to assume
that this fact was taken into consid-
GRAFTON. and the tax was not an I'M
overtaken by the present abnormal
conditions. In 1851, the first year
under the present law, the State tax
was 49, of the net railway revenue,
and 10 years later in 1891, it was $50.
Ten years later the ratio doubled, and
in the next 10 years it doubled again.
AS the volume OF business in
creased, rates. both passenger and
freight, were decreased. so that while
the net earnings were greater, they did
rot increase in proportion to the VOL
nme of business. A tax based on
gross transportation receipts therefore
increased out Of proportion to the net
revenue, but the company was able to
earn it and paid it cheerfully as its
contribution to the needs Of the State.
This condition prevailed until the
end of 1917 with no substantial change
in the ratio of State tax to net rail-
way earnings. ranging from 15.9% in
1911 to 1850 in 1917
Then the war conditions caused a
complete reversal. In 1913. the net
railway earnings were s355,1s040, and
the State tax was 1880 of that sum.
or 1886, S61.55. III 1919, on an cperat-
,4Rz o IN
was $740.2s3.16. AS already stated, in
1920 on an operating deficit of ST, 147.
255.o4. it IS $795. 90S.So."
The State tax in 1920 was $685.
306.S0. Do you realize what rate that
means in place of the original 1aeo? It
is precisely 2e3 or 265 mills on the
dollar. Without making the deduction
for municipal tax values, it, is 1914 "a
of the present cash value OF the stock.
IF the State tax paid by this Com
pany is put back to that paid in 1917.
ii will still ,be go Of the full present
cash value of all the outstanding stock
without any deductions for municipal
taxes,-from two to three times that
paid on the assessed value of any
other class Of property in the State.
II will be 1876 of the net value after
making the deductions contemplated
by the original law.
1T is not expected that present con-
ditions will continue indefinitely. That
being the case, it would not be wise to
predicate any substantial revision of
the tax law upon them. and the rail-
roads do not now ask for such re-
vision. If they return to a state
where the railroads can meet their OBJ
legations to the public. which can be
done only by restoring and maintain
ing their credit and pay the taxes i'm
posed by the present law, they expect
and are willing to do so.
1T is, however. apparent that they
must have some substantial present
relief. They hope to get some through
the gradual reduction of prices, some
through a more favorable division of
interline rates with roads outside of
New England ana some through oper-
ating economies. They can do no
more.
The most that can be expected from
all OF these sources, cannot restore the
railroads to an earning basis that will
enable them to maintain the standard
of service which the public interest re-
auires and do any degree Of justice to
their investors. Without prompt res
toration of their financial standing 1t
will be many years before they can re-
cover that degree of public confidence
which has enabled the Maine Central
Railroad Company to obtain capital on
the most favorable terms, terms which
Lave been reflected in it's ability to
give good service at rates as reas on
able as those charged by the greatest
railroad systems in the most densely
populated sections of the country.
To accomplish this. we feel that
the State must give some immediate
relief in the rsatter of taxation. We
cannot foretell what the conditions
may be two or four years hence, bu,
we do not now ask for any permanent
change. or any present change in the
basic law. Nor does the Maine Cen.
trail Railroad Company ask even tenn
perarily for complete relief from tax.
alton. Even though it now operates
at loss. it realizes that it owns Q
franchise which has been valuable
and will again be valuable If there is