Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1925-04-13


common stock during this past year
in spite of the very serious financial
difficulties OF the region that it
serves. Meanwhile the older system
serving the most populace and con-
gested section of our state with
the largest industrial development
claims inadequate earnings to give
II a reasonable return, although it's
earnings during 1928 showed S2.33S.
00O available for it's capital invest
ment or S6O,O00,V00 ON a net return Of
percent. During the last year its
earnings improved by over $4OO. 600.
during the present year it's earnings
| nave shown a steady improvement
! and there are other increases in it's
net earnings certain to accrue dur
ing the present year.
over 100000 will be saved for
| the railroads as result of the more
advantageous contract for it's coal.
| The Western trunk lines have offer
ed this railroad an increase in di-
vision of $4,000 year which it has
thus lar refused holding out for an
| increase of 100000 year. The di-
VISIONS between the two chief lines
serving this state are also claimed
to operate to tie disadvantage of
| what is now the weaker road and
its representatives claim the GER
tainty of an increase of $4,000 to
| $4,000 at least in these divisions
| when the existing contract expires
| during the year 1926.
Certain holders of common stock
| in lines forming a part of the NJ. c.
K. Il. are regularly paid a dividend
| of s percent upon their stock in a
line that is capitalized rs percent
| higher than the average capitaliza-
| ton of the entire system. This
| branch line does not show any such
earnings as this but apparently i'm
provident contracts have fastened
| this burden upon the road. This
| means a return to these common
share holders in excess of 10 per-
cent upon a fair investment in their
line and accounts to a substantial
extent for the failure of other share
| holders to receive dividends on their
stock. 1t is not al aren't why ship
| pers or other ia, payers in the
state of Maine should supply the de-
! iiciency that thus results.
The railroads of the state pos
! sessed a very great influence in the
! legislature when this law was first
! enacted some forty years ago and
! its immediate effect was to tighten
the tax burden that they bore. Lat
er the rate was raised with the APP
! prevail of the railroad executives to
! the present rate. This haS contin-
| ued in effect ever since that time.
IF the chief railroad involved in
| this State should pay taxes upon
! its property valuation upon the same
/ basis as other citizens it would pay
| u tax of twice that which is levied
| upon it at the present time. This
| is upon its valuation as shown by
| its book investments"
IF the tax were based upon its VAL
uation for rate making purposes 1t
would pay nearly three times the tax
which. at present pays and it's rates
are fixed on the basis of yielding SO
on it's highest valuation. There are
many pieces of property within tina
State of Maine valued at their market
value which arc compelled to pay the
municipal rate without regard to
whether or not they earn their owner
any return upon the Investment.
"on any basis of valuation that
could reasonably be fixed comparable
with the general practice throughout
the State of Maine il is not conceiv-
able that the tax upon this railroad
would he appreciably less than the tax
that is now imposed. These compare
sons seem of Importance AS illustrat-
ing the burden that it bears in COM
parison with the burden of taxation
resting upon the property of other
citizens of our State and of many pub
lie utilities as well. No other citi-
zen is excused from taxes because his
property does not pay.
The chief argument for relief is
based on the showing in 1928, but in
this year, according TO the annual re-
port. maintenance of equipment alone
required over $S00,0n0 more than in
the preceding year upon practically
/ the same volume of traffic, or an in
crease of over esq. This was a re-
suit of changes of over 100000 in
the charges that We're originally made
as a result of items disallowed by the
interstate commerce commission as not
properly allocated by the railroad in
the preceding year, and illustrates the
very wide fiuctuaton that may be
brought about in the net earnings as a
result of bookkeeping entries that are
made. This enormous increase is GER
| tain not to recur.
The president of the NJ. c. r. r.
by order of the board of directors in
the spring of last year stated that the
operating results in prospect should
make it possible to resume dividend
payments on preferred stock regular
ly beginning Dec. ], 1924, as they be-
come payable and we believe will
make it possible to resume dividends
on the common stock at a much earlier
date (now expected in the early part
of the year 1920 than would be other
wise possible
dividends on the preferred stock
have already been resumed and the
earnings for the present year are
showing steady increase.
Meanwhile the management of the
railroad has done an extremely serious
injury to the interests of this State by
filing in Washington a proposal for
rate changes which would practically
stiie the industries in the central and
eastern part of the state of Maine
This proposal was not required by fed
eral authorities, contrary to reports
that have been rather generally circu-
lated in this case, but were calculated
solely to increase its revenues in car
rying out policy which inevitably
would kill the goose that laid the gol-
den egg because the industries of
Maine could not possibly survive under
such a burden.
while those proposals are pending
it would be so much the more difficult
to persuade an industry to locate in
the State of Maine and any industries
that were thinking of moving would
have that much less argument to re-
maine. The unfortunate effects of this
i'll comedy ed proposal of the railroad
cannot be calculated at this time. IL
shows a disregard of the interest of
our citizens and our industries and OF
the interest of the railroad as well
that must give serious concern to any
citizen devoted to the welfare of our