Court Opinion

ID: 8902450
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:19:20.320939+00
Date Added: 2024-06-11T17:07:57.439451
License: Public Domain

Vaesoite, President.
(Dissenting.) The complaint filed in these appeals by the trustees of the, property of The Central Eailroad Company of New Jersey (hereinafter referred to as The Central Eailroad) is from the assessment of the 1943 tax computed on the valuation of the property used for railroad purposes as re-determined and finally fixed by the State Tax Commissioner on February 4th, 1943. The property of The Central Eailroad used for railroad purposes in the State of New Jersey was valued by the State Tax Commissioner on February 4th, 1943, in the total amount, of $78,187,344. The trustees maintain that the true value of said property is not in excess of $50,000,000. On the hearing, the testimony on the value of the land in railroad use was confined to the land o£ The Central Eailroad located in Jersey City and Bayonne.
The State Tax Commissioner originally valued and assessed the property of The Central Eailroad in railroad use in New Jersey as of January 1st, 1942, in November, 1942, in the total amount of $70,943,696, and he certified this value to The Central Eailroad and to the County Boards of Taxation on December 10th, 1942. On January 27th, 1943, he canceled the valuation made in November, 1942, and re-valued the property on February 4th, 1943.
The valuations and assessments levied on the land in Jersey City which are under review in these appeals cover the same parcels of land that were before this Board on appeal from the State Tax Commissioner’s assessments of taxes for the year 1942. The decision of this Board in the 1942 ease was rendered on November 4th, 1942, and the opinion is printed in 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660.
The complaint filed in these appeals by Jersey City complains against the valuations on which the tax for the year 1943 was computed by the State Tax Commissioner and assessed on the same land covered by the appeal of The Central Eailroad, and also some additional properties of The Central Eailroad in railroad use located in Jersey City. The petitioner, Jersey City, asks for an increase over the valuations fixed by the State Tax Commissioner.
By consent the two appeals were heard together.
*434The land under appeal lying within the Jersey City terminal of The Central Eailroad is described as to its size, location, condition and use in the opinion of this Board in the 1942 appeal, which is printed in 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660. I refer to the description of the property in that opinion rather than repeat it here; in fact, this opinion will supplement the opinion in the 1942 case, and the two opinions should be read together, as my opinion in these 1943 appeals. The character, condition and use of the property on January 1st, 1941, were the same as on January 1st, 1942, the respective assessing dates for the taxing years 1942 and 1943.
The trustees of The Central Eailroad were appointed by the District Court of the United States for. the District of New Jersey on November 28th, 1939, pursuant to the provisions of section 77 of the Bankruptcy Act, 11 U. S. A. A., § 205.
On October 18th, 1939, The Central Eailroad owed matured and unpaid interest for the year 1939 on its general mortgage bonds in the amount of $1,536,867.50. On October 18th, 1939, there was due the State of New Jersey for unpaid taxes for the years 1932 to 1938, both inclusive, the principal amount of $11,651,081.86; and there was also due and unpaid local taxes in the principal amount of $2,339,173. On December 1st, 1939, taxes levied by the State of New Jersey for the year 1939 came due in the amount of $3,415,922.05. To meet these aforesaid obligations, which total the sum of $18,943,044.41, The Central Eailroad had an available cash balance on October 18th, 1939, of only $4,822,781.
Each year from 1935 to 1940, both inclusive, the income account of The Central Eailroad from the operation of all its properties showed a large deficit after charging off the payment of New Jersey state taxes and interest on indebtedness. The net corporate income of The Central Eailroad for the year 1941, as reported to the Interstate Commerce Commission, was $539,306; and for the j'ear 1942, due to the war, the net corporate income as reported to the Interstate Commerce Commission was $5,046,665.
*435The United States Supreme Court held in the ease of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U. S. 523; 63 S. Ct. 727, 739; 87 L. Ed. -, that the earning power is the primary criterion of the value to be assigned to the property of a railroad company in a reorganization proceeding under the Bankruptcy Act. In its opinion the court said:
“Late in 1939 the Commission (I. C. C.) had occasion to say, ‘We know from past experience that the upswing in business which war brings is temporary and likely to be followed by an aftermath in which conditions may be worse than before.’ 53d Annual Report, page 5. * * * We cannot assume that the figures of war earnings could serve as a reliable criterion for that ‘indefinite future.’ As some of the bondholders point out, the bulge of war earnings per se is unreliable for use as a norm unless history is to be ignored.”
The par value of The Central Railroad stock issued and outstanding at the present time is $27,436,800, and the par value of its bonded indebtedness is $50,002,277.67. If the property leased by The Central Railroad from the Lehigh Coal and Navigation Company is valued at $46,688,140, which figure is arrived at by a straight capitalization at five per cent, of the rent of $2,334,407 paid for this leased property for the year 1939, and if to that capitalized value is added the par value of The Central Railroad stock and bonded indebtedness, a figure of $124,127,217 is arrived at. This sum might be said to fairly represent the total investment in all the properties owned and operated by The Central Railroad. The Bureau of Yaluation of the Interstate Commerce Commission valued the property of The Central Railroad as of January 1st, 1937, at the total amount of $164,077,313. By taking either figure, that is, either $124,127,217 or $164,077,313, as representing the total investment in The Central Railroad, the profits for the year 1941 represented a return of less than one-half of one per cent, on the investment; and the war profits for the year 1942 represented a return of only four per cent, on the investment. As previously pointed out, for six years prior to 1941, The Central Railroad operated at a deficit.
*436As mentioned above, The Central Railroad leases from the Lehigh Coal and Navigation Company substantially all of the railroad lines it operates west of the Delaware River; that is, the lines between Wilkes-Barre, Pennsylvania, and Phillipsburg, New Jersey.
In January, 1940, the trustees of The Central Railroad engaged Mr. William Wyer to make a study of the operating revenues and expenses of the lines in Pennsylvania, in order that they might determine whether or not to continue the lease of these properties. Mr. Wyer’s appointment by the trustees was authorized by order of the United States District Court dated January 29th, 1940.
Mr. Wyer is a graduate of Yale College and Massachusetts Institute of Technology. He also studied at the Harvard Graduate School of Business Administration, where he took all of the railroad courses offered by that school. For two years he studied law at Cleveland Law School. While in the army as first lieutenant during the first Word War, he was engaged in the construction of the government-owned railroad serving Camp Humphries, Virginia, and, later, he was occupied in helping to operate this railroad. After leaving the army, he was employed by the United States Railroad Administration. He resigned his position with the government to become assistant superintendent of transportation with the Norfolk Southern Railroad. In 1921 he accepted a position as statistician to the president of the Denver and Rio Grande Western Railroad, and, later, he became operating assistant to the president. In 1929, tie was appointed first assistant to the board of directors of the Missouri Pacific Railroad and, later, he became its secretary and treasurer. He left the Missouri Pacific in 1938 and went into business for himself. Since 1938, he has been engaged to make extensive studies of railroad operations in connection with the valuation of railroad properties, and also in connection with plans for reorganization. He has made such studies for the New York, New Haven and Hartford; the Erie; Delaware, Lackawanna and Western; New York, Ontario and Western; New York, Susquehanna and Western; Seaboard Air Line; Florida East Coast; Central of Georgia; Chicago and North*437■western; Denver and Bio Grande Western; Chicago and Alton; The Central Eailroad of New Jersey, and several other railroads.
Mr. Wyer made a study of the income of The Central Eailroad for the years 1934 to 1942, inclusive, for the purpose of determining what part of that income was earned by the operations over the lines in Pennsylvania leased from the Lehigh Coal and Navigation Company. In making this study, he also had to determine the income from the operation of The Central Eailroad lines in New Jersey separate from the lines under lease in Pennsylvania. His original study was confined to the year 1939. His report for the year 1939 was submitted to the trustees of The Central Eailroad in May, 1941, and they, in turn, submitted it to the United States District Court. This report was marked in evidence in this case as Exhibit CTi-lfS, and is known as a segregation study.
According to the study made by Mr. Wyer, the New Jersey lines of The Central Eailroad were operated at a deficit for the years 1934 to 1940, inclusive. According to the results of Mr. Wyer’s studies, it would appear obvious that under normal conditions the Jersey City terminal and waterfront facilities of The Central Eailroad, in so far as they are used for railroad purposes in connection with the operation of the New Jersey lines of The Central Eailroad, are part of an unprofitable railroad operation.
Mr. Wyer also made a study to determine the reasons for the losses sirffered by The Central Eailroad in the movement of traffic over its New Jersey lines in and out of its Jersey City terminal. He found that the coal business was handled at a profit, but that all the other principal classes of business were handled at a substantial loss. He studied the movements of freight that produced the greatest volume of revenue. The most important movement of lighterage freight over The Central Eailroad is between Allentown and New York. The lighterage freight that was received from the Beading and Lehigh Yalley Bailroads moving from Allentown to New York produced an average revenue per car, in 1939, of $49.33. Lighterage freight moving from New York *438to Allentown over The Central Railroad for delivery to the Reading and Lehigh Valley Railroads at Allentown produced an average revenue per car, in 1939, of $58.16. The average cost per car for road haul between Allentown and the Jersey City terminal of The Central Railroad, in 1939, was $14.46. The average cost per ear for handling this freight in the Jersey City terminal of The Central Railroad and putting it onto lighters or onto railroad cars at the Jersey City waterfront was $47.38. The average cost per ear for floating this freight across the Hudson River was $16.92. Thus the total costs of the Jersey City terminal and waterfront facilities of The Central Railroad to deliver this freight from the Jersey City terminal to Hew York, or vice versa, were $64.30 per car, in 1939, which amount is in excess of the revenue per ear received for transporting this freight from Allentown to Hew York, or vice versa. It is, therefore, obvious that if it were not for these large terminal and floating costs this lighterage freight could be handled at a substantial profit to The Central Railroad. The lighterage freight originating at Allentown for Hew York on the tracks of The Central Railroad, and from which The Central Railroad received the entire revenue, was handled at practically the same total loss per car as the lighterage freight received at Allentown from the Reading and Lehigh Valley Railroads.
Mr. Wyer analyzed other movements of freight through the Jersey City terminal, and found that the costs for handling all freight, except coal, from the Jersey City terminal to Hew York, or vice versa, exceeded all- other costs for handling such freight, and were the primary cause for the large loss which resulted from the handling of such freight.
Mr. Wyer also analyzed the income account of The Central Railroad in connection with the handling of the passenger traffic through the Jersey City terminal. He found that this business is also operated at a loss and, in all probability, will continue indefinitely to be,operated at a loss.
As a result of his studies, Mr. Wyer stated his conclusions as to the value of the land in the Jersey City terminal in railroad use as follows:
“I have shown in my testimony up to now that except for *439coal, all of tlie principal classes of traffic handled at the Jersey City terminal are either ■without profit or are handled at a heavy loss. I have also shown that even including coal and on the freight revenue basis most favorable to the New Jersey lines, these lines as a whole operate at a deficit in normal times. Now, it therefore follows that if The Jersey Central makes any money at all on business handled at Jersey City, it must make this money on the lines in Pennsylvania, because we have shown that it makes no money as a whole on the New Jersey lines. So I have prepared this exhibit, CB-,-50, to show the distribution of the Jersey Central’s freight revenue as between New Jersey and Pennsylvania in our 1942 study, and as between coal and other freight, and as between business that uses the Jersey City terminal and business that does not use the Jersey City, terminal, in order to arrive at the measure of the profit which The Jersey Central malees on its Pennsylvania lines on business using the Jersey City terminal, other than coal.
“Now, you will notice in the first place that 65.6 per cent, of all of the Jersey Central’s freight revenue is allocated to New Jersey, under our study. That is the last figure in the second column. So that leaves, moving over to the total figure for Pennsylvania, 34.4 per cent, of the Jersey Central’s freight revenue allocable to Pennsylvania in 1942, and of that 34.4 per cent., which is found at the foot of the fourth column from the right, you will notice that 15.7 per cent, represents coal and 18.7 represents freight other than coal.
“So that at that point I have arrived at this conclusion, that on 65-6/1 Oths per cent, of the business handled in New Jersey, no profit is made. On the other 34-4/10ths per cent, handled in Pennsylvania, profit is made upon the coal, leaving 18-7/lOths per cent, other than coal, as representing possibilities of profit in Pennsylvania on Jersey City business.
“Now, that 18-7/10ths per cent, is the fourth figure in the fourth column from the right, and the detail of that is found to the right of that figure and the next three figures.
“Of the 18-7/1 Oths per cent, which the Jersey Central earns in Pennsylvania, 7-8/10ths per cent.' never gets into New Jersey at all: that is. it is handled exclusively in Pennsylvania, and never crosses the river into New Jersey.
*440“Two per cent, of the lS-T/lOths per cent, represents business that actually finally reaches Jersey City terminal, and 8-9/1 Oths per cent, represents business handled in Pennsylvania but which does not come as far east as the Jersey City terminal. That is mainly business to places like Bayonne and Newark and the Perth Amboy Branch and other local points on the Jersey Central west of Jersey City.
“So you come down to this astounding fact, that of all the freight revenue of The Jersey Central Railroad, leaving out coal, which we admit is carried at a profit, only two per cent, of it is earned in Pennsylvania on business that enters the Jersey City terminal.
“Now, I have analyzed the business that enters the Jersey City terminal and showed that the lighterage and the pier freight is handled at a loss, a heavy loss, and that included in the two per cent, to the extent that it is handled in Pennsylvania, and, leaving out for the moment the interchange rate, some of which is handled at a loss and some at a profit, and assuming for the moment that that is profitable freight, over half of that two per cent, earned in Pennsylvania represents gross revenues on lighterage and pier freight, which is handled at a loss, and unquestionably a heavy loss.
“If you take out the lighterage and the pier freight which is over half of the two per cent., you have left actually less than one per cent, of the Jersey Central’s total freight revenue, outside of coal, which earns any money for it in Pennsylvania on business in and out of the Jersey City terminal. I mean allocated to Pennsylvania under our method of dividing revenues between Pennsylvania and New Jersey.
“Now, then, if you go a little further, Jersey Central’s total freight revenue in 1940, which is the last normal year, was about $35,900,000 and one per cent, of that would be $359,000.
“Now, that $359,000 represents the Pennsylvania gross revenue, without any deductions for expenses earned in Pennsylvania on profitable business, other than coal, which gets into Jersey City.
“In that year, in Pennsylvania, the Jersey Central carried 35 per cent, of its gross revenue down to net railway operat*441ing income, so that its net railway operating income, applying at' 35 per cent, ratio on this business we are talking about, was only $125,000, and that was earned in Pennsylvania.
“Now, if therefore you gave the Jersey City terminal the benefit of all of the earnings of the railroad on Jersey City business, other than coal, in normal times, it would amount to less than $125,000 a year, and this is giving it all to Jersey City and not allocating any of it to the rest of the railroad, which helped to earn that money.
“I therefore reached the conclusion, as a result of this showing, that except for the handling of coal, Jersey City terminal is of no practical value to The Jersey Central Eailroad from an earnings standpoint and that if a new coal terminal could be developed at Elizabethport, we will say, to take the coal and Jersey City terminal abandoned completely, The Jersey Central Eailroad would be definitely much better olí without Jersey City terminal.”
It is not disputed that The Central Eailroad passenger service is operated at a loss and in all probability will continue to be operated at a loss. Land devoted almost exclusively io passenger service in the Jersey City terminal is the northerly part of the terminal. This part fronts on the main channel of the Hudson Eiver and has the greatest depth of upland extending back from the waterfront. All the real estate experts agree that this is the most valuable land in the terminal.
The Jersey City terminal of The Central Eailroad comprises about 670 acres. About 40 per cent, of this area is used in connection with passenger, float bridge, lighterage and marine repair operations. According to Mr. Wyer’s testimony, none of these functions produce a profit.
Mr. George H. Burgess, a witness produced by the railroad, expressed the opinion that the value of the entire tract of 670 acres for railroad purposes was not greater than 60 per cent, of its value for the highest and best use to which it could he put. He also said that in his opinion in no event would the land in the Jersey City terminal be inore valuable for railroad use than it would be for some other use.
Mr. Burgess graduated from the University of Wisconsin *442as a civil engineer in 1895. Erom 1904 to 1909, lie was employed by the Erie Eailroad on design and construction of terminal improvements, principally in the Hew York Harbor. Erom 1909 to 1913, he was chief engineer of the Delaware and Hudson Eailroad. Erom 1913 to 1925, he had charge of the valuation department of the Delaware and Hudson. In 1920 he was appointed its real estate agent and had charge of the sale and leasing of land and of tax assessments. Since 1925 he has been employed by Coverdale & Colpitts, a well known firm of consulting engineers specializing in railroad work. , In connection with his work with Coverdale & Colpitts, Mr. Burgess has had a great deal of experience valuing railroad properties.
Mr. Louis Eo-dit, director and chief engineer in. the division of engineering and railroad taxes of the State Tax Department, testified that about half of the railroad companies that have terminal yards in Hudson County fronting on the Hudson Eiver or Upper Hew York Bay have been in bankruptcy or near bankruptcy during the past ten years.
Mr. Patrick B. McGinnis was called as a witness for the State of Hew Jersey by the Deputy Attorney-General of Hew Jersey. Mr. McGinnis is associated with the Hew York Stock Exchange firm of Pflugfelder, Bampton and Eust, who specialize in railroad securities, at 61 Broadway, Hew York City. He is a specialist on railroad securities, railroad credit, railroad valuation, and railroad capitalization and finance. According to Mr. McGinnis’ testimony, 53 railroads in the United States do about 93 per cent, of the railroad business in the United States. Of these 53 railroads, about 26 are or have been in bankruptcy in recent years; about 12 were near bankruptcy; and only about 18 retained their credit standing. 'Those railroads that retained their credit standing did only about 38 per cent, of all the railroad business in the United States. Mr. McGinnis expressed the opinion that the rate of return on investments in industrial property other than railroads was greater than the rate of return on investments in railroad properties. He also said that the taxes due the State of Hew Jersey were the cause, directly or indirectly, for The Central Eailroad filing its petition for reorganization *443under section 77 of the Bankruptcy Act, 11 U. 8. G. A., § 205.
Messrs. George J. Daly and Arlyn W. Coffin, real estate experts, valued the land in these appeals at its highest and best use which they said was railroad and steamship use. They valued that part of the upland in The Central Railroad terminal which is used almost exclusively for passenger service and the waterfront facilities used for ferry slips and a few lighterage piers as the most valuable part of the terminal, because they said, it is the best adaptable to railroad use and steamship use. Not only does the evidence in these appeals' strongly tend to prove that no increment of value can be attributed to the land in The Central Railroad terminal in Jersey City for railroad or steamship use but these witnesses have absolutely no knowledge of the productive or economic value of any part of the terminal in either railroad or steamship use. They have no knowledge of any sales of comparable land in railroad use or steamship use. They testified in the 1942 hearing of appeals before the State Board of Tax Appeals from the valuations and assessments levied by the State Tax Commissioner on these same properties for the tax year 1942. The values they gave in their testimony in the 1942 hearing on the land in the Jersey City terminal of The Central Railroad were the same as the values they gave on these appeals. The values they gave on the aforesaid 1942 appeals were rejected by the State Board of Tax Appeals for the reasons set forth in the opinion of the Board, printed in 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660.
For the reasons set forth in the opinion in the 1942 case, and also for the further reasons set forth in this opinion, it is obvious that their valuations of the land in the Jersey City terminal of The Central Railroad are purely speculative and should not be considered by this Board in determining the true value of the land here under appeal.
For the same fundamental reasons that the Board should not consider the appraised values placed by the witnesses Messrs. Daly and Coffin on the land in the Jersey City terminal of The Central Railroad, the Board should not consider the appraised values placed upon this land by the witnesses Messrs. William C. Stewart and John J. Mantell.
*444Mr. Thomas A. Ryer testified as a real estate expert. He has been a resident of Jersey City all his life and, for the past 42 years, he has been in the real estate Dusiness in Jersey City. He has been intimately familiar with the land, water facilities and improvements along the west shore of the Hudson River, New York Bay and Kill von Hull for the past thirty-five years. He appraised all of the lands owned by the Hoboken Manufacturers Railroad, and all of the lands located in Hudson and Bergen Counties owned by the New York Central Railroad; Delaware, Lackawanna and Western Railroad; Erie Railroad; Pennsylvania Railroad; Lehigh Valley Railroad, and The Central Railroad of New Jersey. He has appraised at various times all the lands fronting on the Hudson River, New York Bay, Kill von Kull, Passaic River and Hackensack River located in Hudson, Essex and Bergen Counties. In fact, Mr. Ryer has been generally recognized for many years as one of the best qualified experts on the value of waterfront properties in Hudson County. His qualifications and experiences are very extensive. He valued the property here under appeal in the Jersey City terminal of The Central Railroad as follows :

Area

Description Acres Value

1. Watér Front Passenger Depot and Piers 1-2-5-6-7 .......................... 99.621 $3,486,735
2. Water Front Pier 9 & Port Liberty Yard, 20.950 314,250
3. Water Front Piers 10 & 12 ............■ 71.300 1,069,500
4. Water Front Piers 13 & 14 ............ 84.724 1,016,685
5. Water Front Coai Pier Basin .......... 71.503 715,030
6. Water Front Pier 18 .................. 95.587 1,529,392
7. Water Front Marine Repair Yard ...... 31.346 282,114
8. South of M. S. bet. Passenger Depot tract & Jersey Avenue produced .......... 28.718 430,770
9. North of M. S. bet. Passenger Depot tract & Jersey Avenue produced ........... 25.014 375,210-
10. North of U. S., N. E. of Round House .. 3.120 37,440
11. Engine Terminal plot .................. 20.423 204,230-
13. Strip bet. Phillip St. & Phillip St. Branch ............................ 5.610 44,880-
14. Old Round House plot, north of M. S., east of Communipaw Ave.......... 3.755 30,040-

*445
Area

Description Acres Value

15. Strip south of M. S., east of Oommunipaw Ave........................... 0.326 2,608
16. Claremont Yard, North of M. S., west of Oommunipaw Ave.................. 15.212 121,696
17. South of M. S., west of Oommunipaw Ave., 6.680 53,440
18. South of M. S., east & west of Caven Point Road ........................ 9.897 79,176
19. South of Phillip St. Branch, west of former L. Y. crossing ................ 1.557 6,228
19A. Outside M. S. roadway approach to Marine Yard & Lighterage pier ......... 0.781 6,248
20. North of PI Hip St. Branch, west of former L. V. crossing................. 2.580 12,900
21. North of 1. V. R. R. west of Caven Point Road (Claremont Material Yd.) ..... 8.620 68,960
22. Yan Nostrand Place Station Grounds . . . 0.297 1,782
23. East & west of M. S. bet. L. V. R. R. crossing at “Point of Rocks” and Chapel Ave............................... 1.408 8,448
Totals ......................... 609.029 $9,897,762
Mr. Charles W. Morrison testified as a real estate expert. In 1908 Mr. Morrison graduated as a civil engineer from the Massachusetts Institute of Technology. He has been an industrial realtor since 1912 and has made a careful and thorough study of the value of waterfront properties in New York Harbor since that time. He has been a licensed real estate broker of New Jersey since 1923. From 1917 to 1919 he was land appraiser for the Bureau of Valuations of the Interstate Commerce Commission. From 1923 to 1936 he was in the appraisal department of Joseph P. Day, Inc. Since 1937 he has been a vice-president of Cross & Brown, Inc., a large and highly reputable real estate firm in New York City, and is in charge of their appraisal work. His knowledge of sales and leases and also his direct contact with transactions involving waterfront property in New York Harbor, including the New Jersey side, has been very extensive. Mr. Morrison valued the land in The Central Bailroad Terminal in Jersey City as follows:

*446
Index Area

No. Description Acres Total

1. Water front passenger depot and Piers No. 1, 2, 5, 6 and 7 .................... 99.621 $3,486,735
2. Water front—Pier 9 .................. 20.95 282,825
3. Water front—Piers 10 to 12 ........... 71.3 891,250
•4. Water front—Piers 13 and 14 .......... 84.724 1,059,050
5. Water front—Coal pier basin .........'. 71.503 572,024
6. Water front—Pier 18 ................. 95.587 1,433,805
7. Water front—Marine Yard Tract ...... 31.346 470,190
8. South of main stem between passenger depot tract & Jersey Ave. extended .... 28.718 358,975
9. North of. main stem between passenger depot tract & Jersey Ave. extended .... 25.014 312,675
10. North of main stem, N. E. of round house, 3.12 31,200
11. Engine terminal plot .................. 20.423 163,384
13. Strip between Phillip St. and Phillip St. Branch ........................... 5.610 44,880
14. Old round house plot, north of main stem, 3.755 30,040
15. Strip south of main stem .............. .326 2,608
16. Claremont Yard, north of main stem .... 15.212 91,272
17. South of main stem, W. of. Oommunipaw Ave............................... 6.680 40,080
18. South of main stem, east & west of Caven Point Road ........................ 9.897 59,382
19. South of Phillip St. Branch, west of former Lehigh Valley crossing ............. 1.557 6,228
19a. Outside main stem, roadway approach to marine yard & lighterage pier ....... .781 3,124
20. North of Phillip St. Branch, west of former Lehigh Valley R. R. crossing ........ 2.580 10,320
21. North of Lehigh Valley R. R., west side of Caven Pcint Road .................. 8.62 68,960 ■
22. Van Nostrand Place Station grounds ... .297 1,782
23. East and west of main stem between Le-high Valley R. R. crossing at “Point of Rocks” and Chapel Ave............. 1.408 7,040
Totals ......................... 609.029 $9,427,829
Mr. Morrison was cross-examined at great length, but at no time was his direct testimony injured by the cross-examination. In fact, on cross-examination, he materially strengthened the testimony of appraisals he gave on direct examination by supplementing and explaining his direct testimony by sound and logical reasoning.
Mr. Ealph E. Thompson téstified as a real estate expert. Mr. Thompson is assistant tax agent of The Central Eail*447road. On direct examination lie gave a very complete analysis of the sales of waterfront properties along the Hudson River, Hew York Bay and Kill von Kull. He also analyzed thoroughly the abandonment of about 1,500 acres of waterfront and back land property in the vicinity of the Jersey City terminal of The Central Railroad. He valued the land in the Jersey City terminal as follows:

Indent Area Total

No. General Location Acres Value

(1) (2) (3) (5)
1. Water Front, passenger depot and Piers 1, 2, 5, 6 & 7 ...................... 99.621 $1,992,420
2. Water Front, Pier 9 .................. 20.950 314,250
3. Water Front, Piers 10 to 12 ........... 71.300 570,400
4. Water Front, Piers 13 & 14 ............ 84.724 677,792
5. Water Front, Coal Pier Basin ......... 71.503 572,024
6. Water Front, Pier 18 ................. 95.587 955,870
7. Water Front, Marine Yard Tract ...... 31.346 250,768
8. South of Main Stem, between passenger depot tract and Jersey Aye. produced . . 28.718 172,308
9. North of Main Stem, between passenger depot tract and Jersey Aye. produced . . 25.014 150,084
10. North of Main Stem, northeast of round houses ........................... 3.120 18,720
11. Engine Terminal plot .................. 20.423 122,538
13. Strip between Phillip St. and Phillip St. Branch ...................... 5.610 33,660
14. Old Round House plot, north of Main Stem, east of Communipaw Ave..... 3.755 22,530
15. Strip south of Main Stem, east of Communipaw Ave..................... 0.326 1,956
16. Claremont Yard, north of Main Stem, west of Communipaw Ave............... 15.212 60,848
17. South of Main Stem, west of Communipaw Ave..................... 6.680 26,720
18. South of Main Stem, east and west of Caven Point Road .................. 9.897 39,588
19. South of Phillip St. Branch, west of former L. V. crossing.................. 1.557 3,114
19A. Outside Main Stem, roadway approach to Marine Yard and Lighterage pier..... 0.781 1,562
20. North of Phillip St. Branch, west of former L. V. crossing.............. 2.580 5,160
21. North of L. V. R. R., west of Caven Point Road (Claremont Material Yard), 8.620 43,100
22. Van Nostrand Place station grounds .... 0.297 1,188

*448
Index Area Total

No. General Location Acres Value

(D (2) (S) (5)
23. East and west of Main Stem between L. V. R. R. crossing at “Point of Rocks” and Chapel Ave........................ 1.408 5,632
Totals 609.029 $6,042,232
Mr. Thompson was cross-examined for over two days, but at no time did the cross-examination tend to damage the very illuminating analytical and logical testimony of the transactions involving comparable land that he gave in support of the appraisals he made of the land under appeal.
Messrs. Byer, Morrison and Thompson were able to support their opinions of the value of the land under appeal by references to sales of comparable property in the vicinity of the land under appeal and at times reasonably close to the assessing date.
The record and date of a large number of recent sales of both waterfront and back land property in the vicinity of the Jersey. City terminal of The Central Eailroad and comparable thereto were put into evidence. I will now discuss a few of those sales in this opinion.
In June, 1938, the Hudson Eealty Company, a subsidiary of the Delaware, Lackawanna and Western Eailroad, sold to the General Foods Company 10.413 acres of Hudson Eiver waterfront property with railroad connections located at the foot of Eleventh and Twelfth Streets, Hoboken. This property has a frontage of 478 feet on Hudson Street. The depth of the upland portion of the property extending from Hudson Street to the water line is from 700 to 923 feet. The waterfront is about 203 feet wide along the bulkhead line. The land under water from the bulkhead line to the pierhead line is from about 327 feet to 355 feet. The selling price for this property was $285,000. The purchaser also agreed to pay $10,000 toward the payment of any broker’s commissions. If the sales price is considered to be the sum of these two amounts to wit, $295,000, and the full amount attributed to land value only, the property sold at the rate of $28,330 per acre. The contract of sale describes this land as “a tract of *449land in the City of Hoboken * * * which is adaptable for development as a rail and water terminal, and which the Poods Corporation wishes to purchase as a site for manufacturing, warehousing and other purposes.” Therefore, the price paid for this property of $28,330 per acre is a good indication of the value of Hudson Eiver waterfront facilities, having both railroad connections and convenient improved city street approaches to the upland.
A piece of land of the same size and dimensions as the above General Poods property in Hoboken carved out of the Jersey City terminal oí The Central Eailroad at The Central Eailroad ferry slips (which is the most valuable part of the Central Eailroad terminal waterfront) would have the same waterfront facilities and waterfront advantages as the Hobo-ken property. They both front on the main channel of the Hudson Eiver. The principal difference between the General Poods property in Hoboken and a similar piece of land located at The Central Eailroad ferry slips in Jersey City lies in the upland. The upland part of the Hoboken property fronts on a principal city street, and Is easily accessible from the land side of the property, wliereas the property located at the ferry slips of The Central Eailroad in Jersey City is separated from the downtown area and water front sections of Jersey City by a tidewater basin and the freight terminal yards of the Lehigh Valley Railroad, and it is not accessible from the land side of the property except through the terminal yards of The Central Eailroad. The nearest city street is about a mile away from the ferry slips.
In May, 1941, the Standard Oil Company of New Jersey sold to the Marine Maintenance Corporation 28.09 acres of waterfront and rail terminal property on the Kill von Kull in the Constable Hook section of Bayonne. This property had on it at the time of the sale an old timber pier, a hollow tile and concrete warehouse containing 17,000 square feet of floor space, a railroad siding, and some other minor structures. The sales price was $200,000, which is at the rate of $7,120 per acre. In considering this sale in connection with the appraisal of the property here under appeal, I have attributed the entire selling price to the value of the land. *450The water front facilities and waterfront advantages of this property with its railroad connections are as good or even better than the waterfront facilities and waterfront advantages of the Jersey City terminal of The Central Railroad, except that portion of The Central Railroad terminal fronting on the main channel of the Hudson River. The price paid for this property is a good indication of the value of waterfront facilities with railroad connections on the Hew Jersey side rf the Upper Hew York Bay.
In December, 1937, the Socony-Yacuum Company sold to the Asiatic Petroleum Company 11.61 acres of waterfront and rail terminal property on the Kill von Kull in the Constable Hook section of Bayonne for $212,500. This property is located about 1,000 feet east of the property sold by the Standard Oil Company above mentioned. The sale of the Socony-Yacuum Company property included two double decked piers and a four-story re-enforced concrete factory building containing approximately 40,000 square feet of floor space. The waterfront facilities and waterfront advantages of this property with its railroad connections are as good or even better than the waterfrpnt facilities and waterfront advantages of the Jersey City terminal of The Central Railroad except that portion of The Central Railroad terminal fronting on the main channel of the Hudson River.
The three sales heretofore mentioned of waterfront property with railroad connections; to wit, the sale of the property in Hoboken to the General Poods Company, and the two sales of the two parcels in Bayonne, provide the Board with splendid guideposts to the value of the waterfront facilities with railroad connections of The Central Railroad terminal properties in Jersey City.
In Hovember, 1941, the City of Jersey City sold to the United States government 329.537 acres of undeveloped land, mostly under water, located in Jersey City on the northerly side of the Claremont terminal of the Lehigh Yalley Railroad. Jersey City acquired this property from the Lehigh Yalley Railroad. The property was purchased by the Lehigh Yalley Railroad some twenty to twenty-five years ago for development as a railroad terminal in connection with its present *451Claremont terminal. Taxes were allowed to lapse on this property so that by August 11th, 1941, Jersey City had acquired a lion on this property for unpaid taxes, interest and penalties in the total amount of $2,547,122.44, or about $7,742 per acre. Prior to August 11th, 1941, the Lehigh Yalley Eaiiroad had been 'negotiating with the United States government for the sale of this property to the United States government for nse as an army supply base for the shipment of supplies over seas. The United States government refused to buy the property from the Lehigh Yalley Eaiiroad because of the large amount of tax liens which had accumulated against the property. By mutual understanding, the Lehigh Yalley Eaiiroad turned this property over to Jersey City by deed dated August 11th, 1941, in lieu of the aforesaid tax liens. Jersey City accepted the deed for the property, and then sold the property to the United States government for $2,000,000, which is at the rate of $6,070 per acre. In order to enlarge this tract, the United States government purchased from the Lehigh Yalley Eaiiroad on August 14th, 1942, two adjoining parcels of unimproved land. One of these two parcels contains 2.597 acres of upland along the railroad tracks of the Lehigh Yalley Eaiiroad, and the other parcel contains 8.212 acres of land under water lying between the bulkhead line and the pierhead line. The purchase price for both parcels was $63,500, which is at the rate of $5,874 per acre. In these two purchases, the one from Jersey City and the other from the Lehigh Yalley Eaiiroad, the United Slates army acquired about 90 acres of unimproved upland with railroad connections and about 250 acres of abutting unimproved land under water at an average cost of $6,062 per acre. The United States army filled in part of this land under water hack of the bulkhead line at a cost of about $5,000 per acre. This would, therefore, indicate a selling price of about $11,000 per acre for filled land. This filled property now has on it a railroad track and some government buildings. At its waterfront the United States army now loads ocean-going steam vessels with ammunition and other supplies for the United States armed forces over seas. In many respects this army supply base is highly comparable *452to the land in the southerly part of The Central Railroad terminal in Jersey City which is here under appeal.
In July, 1937, the City of Bayonne purchased from the State of Hew Jersey (Board of Commerce and navigation) 200 acres of land under water lying between the bulkhead line and the pierhead line on the main channel in the Upper Hew York Bay north of Constable Hook in the City of Bayonne. This land was purchased for the purpose of developing a marine terminal. It is now part of the development under construction by the United States navy as a navy yard. The purchase price was $600,000, which is at the rate of $3,000 per acre.
In March, 1940, the Trebor Realty Corporation, a subsidiary of the Standard Oil Company of Hew Jersey, sold to the American Wax Refining Company 2.079 acres of. upland on Caven Point Road in Jersey City for $20,000, which is at the rate of $9,620 per acre. This property had erected on it at the time of the sale a hollow tile industrial building and some tanks which were included in the sale price of $20,000.
In March, 1938, the Standard Oil Company sold to Tank-port Terminals, Inc., 17 acres of upland on Caven Point Road in Jersey City for $170,000, which is at the rate of $10,000 per acre. There were some structures on this land at the time of the sale, but the parties to the sale did not take them into consideration in determining the selling price. The property was sold at the price of $170,000 as the value of the land only. These 17 acres were a part of a larger tract of Upper Hew York Bay waterfront property owned by the seller at the time of the sale. Simultaneously with the sale, the purchaser entered into a lease with the Lehigh Valley Railroad for the right to berth ships in the Lehigh Valley’s Claremont terminal channel, and also the right to lay and maintain a pipeline from said berthing place to the land purchased from the Standard Oil Company.
The properties involved in the two sales just above mentioned are in very close proximity to each other, and are 'within 3,000 feet of the southerly boundary of The Central Railroad terminal land here under appeal. They are com*453parable in a high degree to the rear of those waterfront tracts of The Central Railroad terminal land here under appeal which front on the Upper Hew York Bay. The prices paid for them per acre are a good indication of the value of the land in the rear of the waterfront tracts in the southerly portion of the Central Railroad terminal in Jersey City.
In these several sales of land heretofore mentioned, all of which took place near the assessing date of the assessments here under appeal, the Board can find important data to help guide it in making an appraisal of the land in The Central Railroad terminal in Jersey City. The sales of waterfront properties in Hoboken, Jersey City and Bayonne are an indication of the value of waterfront facilities with railroad connections along the Hudson River and Upper Hew York Bay; the sales of land under water in Bayonne and Jersey City are an indication of the value of land under water or the value of riparian rights; the two sales in Jersey City of upland properties are an indication of the value of the back land portions of the large tracts of waterfront property here under appeal; and the sale of the large tract in Jersey City containing 3*9.537 acres is an indication of the value of a largo parcel of land which is capable of being developed into a railroad freight terminal with waterfront facilities on the Upper Hew York Bay. In these several sales can be found many of the elements of value which would enter into an appraisal of the land in The Central Railroad terminal in Jersey City.
I have examined the economic or productive value of the land in The Central Railroad terminal in Jersey City as railroad terminal property separated from the rest of The Central Railroad system, and also as an integral part of that system. I 1 ave examined its economic or productive value as the terminal of a larger railroad system with a longer road haul. I have examined the economic or productive value of the other terminal railroad yards in Hudson County, Hew Jersey, fronting on the Hudson River or Upper Hew York Bay. I have examined the economic or productive value of railroad property in the United States generally. The evi*454dence of the future income which may be reasonably expected from using the land in The Central Railroad Terminal in Jersey City for railroad purposes rejects any contention that such use of the land would be more profitable than any other use to which it might be put. The costs incurred at the water front in transferring the freight from rail to lighter or vice versa and the cost of floating the freight across the Hudson River are costs of necessary railroad terminal operations which cannot be eliminated by any efficient management of the terminal property. The natural condition of the harbor makes such railroad terminal operations necessary and the water front property used for these operations is not required for any other railroad purpose.
Even if it is conceded, for the sake of argument, that the land in The Central Railroad terminal used for railroad purposes is being put to its highest and best use, still it cannot be given the high value claimed for it by some of the real estate experts because its use for railroad purposes does not produce a profit, but instead, a heavy loss. The only basis for land value is the profit derived from its use. If there is a large return from the use of a particular tract or parcel, the value would be high. If the result of use is a loss rather than a profit, the value would be zero except for the possibility that future developments may bring a change in this situation. But the Board is not justified in assessing land at high value merely on the basis of indefinite and uncertain future prospects when the result of current use is a deficit, with no prospect of its early transformation into a surplus.
The United States Supreme Court said in the Minnesota rate cases, Simpson v. Shepard, 230 U. S. 352; 33 S. Ct. 729; 57 L. Ed. 1511, that:
“It is not. admissible to attribute to the property owned by the carriers a speculative increment of value, over the amount invested in it and beyond the value of similar property owned by others solely by reason of the fact that it is used in the public service. That would be to disregard the essential conditions of the public use, and to make the public use destructive of the public right.”
*455The court then went on to say that the value of the property in railroad use “cannot properly extend heyond the fair average of the normal market value of land in the vicinity having a similar character. We therefore hold that it was error to base the estimates of value of the right of way, yards, and terminals upon the so-called ‘railway value’ of the property.”
It is reasonable to assume that the purchaser of land has expectations of putting it to a higher and better use than the seller could. Otherwise there would be very few sales of land. There are no recent sales of waterfront land for railroad use along the Jersey shore of the Hudson Eiver or Hew York Bay. There are, however, sales of such waterfront property both by railroads and other owners of such waterfront land for uses other than railroad use. There are also abandonments of such waterfront property by railroads, and this abandoned property will unquestionably be used for some purpose other than railroad use. As a matter of fact, a substantial amount of such water front acreage has been recently sold for uses other than railroad use.
I conclude that the prices paid for water front properties provide a fair indication of the value of those properties in the highest and best use to which they can presently be put. I conclude that these prices, together with the evidence of loss resulting from the use of similar waterfront properties by the railroad, refute the contention that a higher value should be imputed to those properties simply because they are owned and used by a railroad rather than by someone else.
Together with the sales heretobefore mentioned, I have also carefully examined the record and data of all sales and abandonments of property that have been put into evidence. I have also taken into consideration the appraisals of the land under appeal as testified to by the real estate experts. Prom a very careful examination and consideration of all the evidence, which is far too voluminous to analyze in this opinion (the typewritten record contains 3,144 pages and, in addition, there are 118 exhibits), I have found and determined the true value of the second class railroad property under appeal to be as follows:
*456Item : ' Area in

No. Description of Property Acres True Value

1. Land outside main stem, Terminal Tract at Jersey City, tract extend- . . ing from southerly line of Lehigh Valley R. 'R., on the north to the northerly line of land, formerly 1 "leased to the North River Coal & Wharf Co., on the south and from a line about 160' west of the west line of Van Vorst St. produced, eastwardly to the exterior line for piers, exclusive of main stem, Block 2145, Plot 49, 47-A, and portion of Plot . 51, inch value of Plot 49-E, under water ........................ 99.621 $3,984,840.00
2. Land outside main stem, excess Block 2145, Plot 48-E (formerly North River Coal & Wharf Co.) ....... 20.950 523,750.00
3. Land outside main stem, extending from Phillips St. to the exterior line for piers, Block 2145, Plot 48-D, including value of Plot 48-G-, under water ......................... 71.300 1.782.500.00
4. Land outside main stem, extending from Phillips St. Branch to exterior line for piers, Block 2154, Plot 22-G-, including value of Plot 22-H, under water .......................... 84.724 1.948.652.00
5. Land outside main stem, excess Block 2154, part of Plot 22-J North ____ 71.503 1.430.060.00
6. ■ Land outside main stem, coal pier No. 18 and approach extending from Junction of Phillips St. Branch and Communipaw Branch, L. V. R. R. to pierhead line, being a strip of land, formerly part of 22-J, 800' wide with an average length of about 5,477', exclusive of portion of Steers lease ................. 95.587 1,911,740.00
7. Land outside main stem, Marine Repair Yard Tract, 475' wide, extending from pierhead line on the east to L. V. R. R. Co. and Phillips St. on the west formerly part of Plot 22-J south, exclusive of portion of Steers lease .................... 31.346 626,920.00
8. Land outside main stem, excess south of main stem, between a line about 160' west of west line of Van *457Item Area in
Ho. Description of Property Acres Vorst St., produced, and center line of Jersey Ave., exclusive of land leased by the North River Coal & Wharf Co., and tract south thereof, Blk. 2145, portion of Plot 51..... 28.718 True Value 574,360.00
9. Land outside main stem, excess north of main stem, between a line about 160' west of the west line of Yan Vorst St., produced to the center line of Jersey Ave. (to the west line grant) Block 1245, Plot 50 ... 25.014 500,280.00
10. Land outside main stem, excess width in Block 2048, Plot H .......... 3.120 56,160.00
11. Land outside main stem, Block 2048, bounded on the north by Wilson Ave., on the south by Phillips St., on the west by Communipaw Ave., and on the east by center line of Jersey Ave., produced ........... 20.423 367,614.00
13. Land outside main stem, excess width in Block 2154, Plot 22 1) ........ 5.610 84.150.00
14. Land outside main stem, excess width in Block 2048, Plot P ........... 3.755 56.325.00
15. Land outside main stem, excess width in Block 2048, Plot N............ 0.326 4,890.00
16. Land outside main stem, excess between C. R. R. of N. J. and L. V. R. R. of N. J. at Claremont, Block 2020, Plot 4; Block 2033, Plots 8 and 22-D (Graded) ............ 15.212 182.544.00
17. Land outside main stem, excess in Claremont Yard, Block 2154, Plot 7 and 7-B ....................... 6.680 80,160.00
18. Land outside main stem, excess between C. R. R. of N. J. and National Docks Railway at Claremont .......................... 9.897 118.764.00
19. Land outside main stem, excess between Phillips St. Branch and Communipaw Branch, L. V. R. R., Block 2154, Plot 17-A .......... 1.557 18.684.00
20. Land outside main stem, excess between Phillips St. Branch and National Docks Railway, at Claremont, Block 2154, Plot 12-A .......... 2.580 30.960.00
19A. Land outside main stem, roadway approach to Marine Yard and Lighterage pier ...................... 0.781 9,372.00 *458Item Area in

No. Description of Property Acres True Value

21. Land outside main stem, excess north of main stem, at Caven Point Road, between L. V. R. R. Co. and Morris Canal, Block 1491, Plot 1 .... 8.620 86,200.00
22. Land outside main stem, excess Van Nostrand Place station grounds . .. 0.297 2,970.00
23. Land outside main stem, excess east and west of main stem, between L. V. R. R. Crossing and Chapel Ave............................ 1.408 14,080.00
Totals 609.029 $14,395,975.00
I have found and determined that the true value of the land located in the main stem of The Central Eailroad and known as Class I property, which is here under appeal, is as follows:

Item, Area in True

No. General Location Acres Value

Phillips Street Branch, Jersey City
1. From beginning of Branch at junction with T .in Line to Caven Point Road . . 0.815 $9,780.00
2. To National Docks Ry............... 0.964 11,568.00
3. To Communipaw Branch, L. V. R. R. ... 1.696 20,352.00
4. To end of Branch at Jet. with main Line, 10.152 152,280.00
Sub-Total, Phillips Street Branch .... 13.627 $193,980.00
Main Line, Jersey City
1. From bulkhead line to line 160' west of Van Vorst St. produced ............. 5.464 $191,240.00
2. To Jersey Ave. produced .............. 6.302 126,040.00
3. To center line of National Docks Ry. ... 2.181 39,258.00
'4. To center line of Communipaw Ave. ... 1.768 26,520.00
5. To Caven Point Road ................. 3.358 100,296.00
6. To Linden Ave......... 15.452 139,068.00
7. To Gates Ave......................... 4.595 41,355.00
8. To North Edge of Canal............... 4.467 40,203.00
Sub-Total, Main Line, Jersey City .. . 48.587 $703,980.00
Main Line, Bayonne
1. From Morris Canal to Center Line of Center Street ..................'.... 3.624 $32,616.00
2. To Center Line of East 32nd Street .... 8.898 80,082.00

*459
Item Area in True

No. General Location Acres Value

3. To Center Line of East 30th Street 1.889 17.001.00
4. To East 22nd Street ............. 5.841 52.569.00
5. To East 21st Street .............. 0.773 6.957.00
6. To Linnet Street 26.100.00
7. To Avenue “D” (Broadway) .......... 0.851 7.659.00
8. To Avenue “0” ...................... 1.448 13.032.00
9. To Hudson County Boulevard .......... 2.879 25.911.00
10. To Avenue “A” ...................... 0.888 8.002.00
11. To exterior line for solid filling, Newark Bay ............................. 3.191 28.719.00
Sub-Total, Maine Line, Bayonne...... 37.775 $339,985.00
Newark and New York Branch, Jersey City
1. 1.018 $12,216.00 Prom Communipaw “Y” to Main Line .
2. 10,500.00 Prom Ely Line of Communipaw Ave. to Jet. with M. L..................... 0.700
3. Triangle Jet. M. L. to Ely Line Communipaw Ave........................... 0.216 2,592.00
4. Prom Main Stem of M. L. to point east of Suydam Ave..................... 0.920 11,040.00
5. To Pacific Ave........................ 2.350 28,200.00
6. To Halladay Street ................... 0.546 6,552.00
North of Center Line between Van Horn and Woodward Sts................. 0.208 2,496.00
7. To Garfield Ave....................... 1.981 23,772.00
9. To Randolph Ave..................... 0.597 7,164.00
10. To Clerk Street ....................... 1.600 24,000.00
11. To East Side of Jackson Ave........... 2.300 34,500.00
12. To Hudson Boulevard ................ 3.610 54,150.00
13. To West Side Ave.................... 3.327 39,924.00
14. To Mallory Ave...................... 2.350 18,800.00
15. To Morris Canal ..................... 2.201 17,608.00
16. To Hackensack River ................. 1.753 8,765.00
Sub-Total, Newark and New York Branch, Jersey City 25.677 $302,279.00
On December 10th, 1942, the State Tax Commissioner delivered to The Central Eailroad and to the County Boards of Taxation a detailed statement of his valuation as of January 1st, 1942, of the property of The Central Eailroad used for railroad purposes which he made in November, 1942. Together with this detailed statement of his valuation of The Central Eailroad property, the State Tax Commissioner *460delivered to The Central Eailroad a letter addressed to. The Central Eailroad and signed by him in his official capacity, in which he said:
“Pursuant to the provisions of chapter 291, Pamph. L. 1941, as amended [N. J. S. A. 54:29A-1, et seq.~\, designated as the Eailroad Tax Law of 1941, the State Tax Commissioner herewith transmits to you a statement of the valuation as of January 1st last, of your property subject to taxation for State and local uses, as tentatively fixed. * * *
“Chapter 291, Pamph. L. 1941, provides that the State Tax Commissioner shall complete his valuations by the 1st day of November and on or before December 10th next following he shall serve upon each taxpayer a detailed statement of the assessed valuation of the property of such taxpayer in the State, including the several classes of property.
“Any railroad or the Attorney-General on behalf of the State and of the taxing districts, claiming that error has been made in the assessment of property may, on or before the third Monday in January following, file a petition for review specifying the grounds of complaint and the relief sought.”
The State Tax Commissioner testified that the valuation of The Central Eailroad property contained in the aforesaid detailed statement was made on November 16th, 1942.
On January 27th, 1943, the State Tax Commissioner canceled the above-mentioned valuation of The Central Eailroad property.
On February 4th, 1943, the State Tax Commissioner made a new valuation of The Central Eailroad property without having held any hearing on his previous valuation.
On February 4th, 1943, the State Tax Commissioner addressed another letter to The Central Eailroad, in which he said:
“The primary valuations as of January 1st, 1942, of property in railroad use of The Central Eailroad Company of New Jersey for the tax year 1943, fixed by me on November 1st, 1942, a detailed statement of which was delivered to you before December 10th, 1942, were the same valuations determined by the judgment entered by the State Board of Tax *461Appeals, in the matter of the appeal of Shelton Pitney and Walter P. Gardner, as Trustees of The Central Railroad Company of ISTew Jersey, from the 1942 assessment of railroad taxes against said company. * * *
“Therefore, you are hereby notified that I did, under date of January 27th, 1943, cancel the primary valuation of the property in railroad use of The Central Railroad Company of Sew Jersey for the year 1943, as heretofore made by me, and I did, under date of February 4th, 1943, re-value said property, using my best judgment as to the true value thereof as of January 1st, 1942, in the aggregate sum of $81,798,671, a detailed statement of which is hereto attached and delivered to you herewith.”
There is nothing in the statutes which permits the State Tax Commissioner to cancel his valuation of property in railroad use after it is once made. The statutes permit the State Tax Commissioner to correct his valuation. The law also provides for an appeal to the State Board of Tax Appeals from the State Tax Commissioner’s assessment of the tax, and such an appeal permits this Board to review the State Tax Commissioner’s valuation as corrected. These are the only legal methods for changing the valuation of the State Tax Commissioner after it has been made.
The “Railroad Tax Law of 1941” expressly provides that the tax assessed on property used for railroad purposes shall be assessed by the State Tax Commissioner in the manner therein provided. (Sections 7 and 12, chapter 291, Pamph. L. 1941; N. J. S. A. 54:29A-7, 54:29A-12.) The State Tax Commissioner is a special statutory officer and has no authority except that expressly given him by the statute.' Hoboken v. Kelly, 21 N. J. Mis. R. 193; 32 Atl. Rep. (2d) 710.
Section 17 of the “Railroad Tax Law of 1941” (chapter 291) provides that:
“On or before FTovember first in each year the commissioner shall determine the true value, as of the preceding January first, of all property used for railroad purposes in this State. * * *
“Upon completion of his valuation of property used for *462railroad purposes, but not later than December tenth in each year, the commissioner shall deliver a detailed statement thereof, including, the several classes of property, to each taxpayer. On or before January tenth, in each year, the commissioner shall certify to the' county boards of taxation in the several counties the value of Class II property, situate in each taxing district in the county.”
Section 18 of the “Railroad Tax Law of 1941,” as amended by chapter 337, Pamph. L. 1943; N. J. S. A. 54:29A-18, provides that:
“Any taxpayer or the Attorney-General on behalf of the State and of the taxing districts claiming that error has been made in the commissioner’s valuations may, on or before the second Monday of January following the completion of such valuations, file a petition for review specifying the grounds of complaint and the relief sought.”
' Section 19 of the “Railroad Tax Law of 1941,” as amended by chapter 337, Pamph. L. 1942; N. J. S. A. 54:29A—19, provides that:
“On or before April tenth in each year the commissioner shall compute the tax upon property used for railroad purposes and assess the amount thereof to each taxpayer according to his valuations of the preceding year as corrected.” Section 31 of the “Railroad Tax Law of 1941,” as amended by chapter 337, Pamph. L. 1942; N. J. S. A. 54:29A—31, provides that:
“Any taxpayer, the Attorney-General on behalf of the State, or the authorities of a taxing district, desiring to contest the validity or amount of any assessment * * * of property * * * made by the commissioner under this act, may, as to the assessment * * * of property tax, on or before the third Monday of May following the assessment * * * thereof, * * * file a written complaint with the State Board of Tax Appeals, * *
The statute is clear and specific on the procedure the State Tax Commissioner must follow in computing and assessing taxes upon property used for railroad purposes. He is directed by the statute to compute and assess the tax in the following manner:
*4631. On or before November 1st he shall determine the true value of the property as of the preceding January 1st;
2. Not later than December 10th, following the completion of his valuation, he shall deliver a detailed statement thereof to each taxpayer and to the County Boards of Taxation, not later than January 10th following the completion of his valuation;
3. Upon any petition for review being filed by any taxpayer, the Attorney-General, or any taxing district before the second Monday of January, following the completion of Ms valuations, the State Tax Commissioner shall conduct a hearing upon such petition and shall review the valuations of which it complains and correct the same as shall appear just;
4. On or before April 10th he shall compute and assess the tax according to his valuations of the preceding year as corrected.
It is obvious that the cancellation by the State Tax Commissioner on January 27th, 1943, of his valuation of The Central Railroad property made in November, 1942, and the making of a new valuation on February 4th, 1943, is not authorized by law. On the contrary, both the cancellation and the new valuation are direct violations of the express provisions of the law. The re-valuation made on February 4th, 1943, could not be served on the taxpayer prior to December 10th, 1942, as the law requires, and, if valid, would deny the legal right of The Central Railroad, the Attorney-General on behalf of the State, or any taxing district to file with the State Tax Commissioner a petition for review of his valuation, because such a petition must be filed before the second Monday in January, 1943. The law says that the valuation shall be made as of the preceding January 1st. Therefore, if the valuation made February 4th, 1943, is valid, the property must be valued as of January 1st, 1943. Whereas, the 1943 tax is based on the value of the property on January 1st, 1942. Moreover, the law says that the tax is to be computed according to the State Tax Commissioner’s valuation made the preceding year as corrected. If there was no valuation of The Central Railroad property made in 1942, there can be *464no tax in 1943. In order to levy a tax, the provisions of the law must be followed. Hoboken v. Kelly, supra; Sea Isle City v. Cape May, 50 N. J. L. 50; 12 Atl. Rep. 771; 61 C. J. 557, § 683; 61 C. J. 560, § 687.
It is obvious that the State Tax Commissioner’s valuation made on February 4th, 1943, cannot be considered as a re-assessment of the tax such as is authorized by article 5 of the “Eailroad Tax Law of 1941,” N. J. S. A. 54:29A—25, et seq. That provision of the statute authorizes a re-assessment of the tax. It does not authorize a re-valuation of the property. The tax is computed and assessed on the valuation made the preceding year. The tax for the year 1943 is computed and assessed in 1943 on the property valuation made in 1942. Furthermore, any re-assessment of the tax is expressly limited by the statute to the “period of five years next preceding the year in which the re-assessment” is made. In other words, it is clear that the tax cannot be re-assessed the same year it is computed and assessed. To re-assess the tax the same year it is assessed would be nonsense, since the tax assessment is made on or before April 10th and an appeal to the State Board of Tax Appeals from such assessment must be taken before the third Monday in May following the assessment.
Therefore, the valuation made by the State Tax Commissioner of The Central Eailroad property in railroad use on February 4th, 1943, is ultra vires, void, and of no effect. The cancellation on January 27th, 1943, of the valuation of The Central Eailroad property in railroad use made by the Commissioner in November, 1942, is likewise ultra vires, void, and of no effect. City of Newark v. Weyerhaeuser Timber Co., 18 N. J. Mis. R. 560; 15 Atl. Rep. (2d) 224; New Jersey Tax Reports 1934-1939, p. 530.
The State Tax Commissioner on his own initiative and on bis own judgment re-valued the property of The Central Eailroad on February 4th, 1943. He testified that he gave no consideration whatever to the fact that the State Board of Tax Appeals had held a hearing and determined the true value of The Central Eailroad property in railroad use as of January 1st, 1941. He also testified that he did not know *465whether the property of The Central Eailroad in railroad use had changed either in value or character between January 1st, 1941, and January 1st, 1942. In fact, he testified that he did not know anything about The Central Eailroad property upon which he placed a value on February 4th, 1943, and that he did nothing in the actual appraisal of the property. He explained his re-valuation of the property on February 4th, 1943, by saying that some correspondence he had with the Attorney-General of New Jersey induced him to make the re-valuation. Since there is nothing to justify the action of the State Tax Commissioner in increasing the valuation of The Central Eailroad property in railroad use as of January 1st, 1942, over the value fixed by the State Board of Tax Appeals as of January 1st, 1941, the increases in value made by the State Tax Commissioner were wrongfully made, even if he had the power to make the re-valuation. Skouras Theatres v. State Board of Tax Appeals, 123 N. J. L. 52; 8 Atl. Rep. (2d) 72.
The valuation of The Central Eailroad property used for railroad pur_ oses, made by the State Tax Commissioner in November, 1942, and delivered to The Central Eailroad and County Boards of Taxation on December 10th, 1942, is the valid and lawful valuation upon which the tax for the year 1943 should be computed and assessed except as modified by this opinion, if any.
In my opinion, the decision of the State Board of Tax Appeals made in the 1942 appeals on the question of grade crossing elimination and on the question of overhead bridges supporting public highways is dispositive of those same questions raised on these appeals. The opinion in the 1942 appeals is reported in 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660.