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Rapids & Northern have fallen off $102,377.33; the Chicago, Burlington & Quincy, $89,626.94; of the Kansas City, St. Jo. & Council Bluffs, $13,296.84; the Crooked Creek, $1,006.11; the Des Moines & Fort Dodge, $3,554.45; the Dubuque & Dakota, $500.33; the Humeston & Shenandoah, $162,711.46; the Iowa Northern, $7,219.18; the Minneapolis & St. Louis, $376,009.50; the Wabash, St. Louis & Pacific, $180,357.80; the Burlington & Northwestern, $800.64. The earnings of the following roads have increased: Central Iowa, $3,530.58; the Chicago, Burlington & Kansas City, $30,516.81; St. Louis, Keokuk & Northwestern, $768.15; the Chicago, Iowa & Dakota, $1,818.20; the Chicago, Minneapolis & St. Paul, $110,212.07; the Chicago & Northwestern, $209,296.41; the Chicago, Rock Island & Pacific, $126,465.56; the Chicago, St. Paul, Minneapolis & Omaha, $46,709.83; the Illinois Central, $40,673.18; the Ottumwa & Kirkville, $23,533.61; the Prairie du Chien & McGregor, $245.33; the Sioux City & Pacific, $37,479.05; the Wisconsin, Iowa & Nebraska, $31,715.25; the Burlington & Western, $4,548.26; the St. Louis, Des Moines & Northern, $2,188.16; the Cedar Rapids & Marion, $7,689.96.

PERCENTAGE OF OPERATING EXPENSES TO EARNINGS.

The roads showing the lowest percentage of operating expenses to earnings are the Ottumwa & Kirkville, 23.60; Cedar Rapids & Marion, 53; Chicago & Northwestern, 56.96; Iowa Northern, 57.30; Chicago, Rock Island & Pacific, 59.04; Chicago, Burlington & Quincy, 59.70; Chicago, Milwaukee & St. Paul, 61.17; Chicago, St. Paul, Minneapolis & Omaha, 62.04; Illinois Central, 64; Kansas City, St. Jo & Council Bluffs, 65.40; Minneapolis & St. Louis, 67.84; Burlington, Cedar Rapids & Northern, 70.21. Six roads show an excess of expenses over earnings. The St. Louis, Des Moines & Northern reports that it costs 100.02 per cent of its earnings to operate the road; the Missouri, Iowa & Nebraska, 103.02; the Ft. Madison & Northwestern, 103.12; the Burlington & Western, 105; the Des Moines, Osceola & Southern, 107.30; the Crooked Creek, 120.

The highest percentage of net earnings to capital stock and debt was, the Ottumwa & Kirkville, 8.54; Cedar Rapids & Marion, 8.39; Chicago, Rock Island & Pacific, 8.23; Chicago, Burlington & Quincy, 8; Iowa Falls & Sioux City, 7.77; Chicago & Northwestern, 6.20 ; Chicago, Milwaukee & St. Paul, 6.17; Chicago, St. Paul, Minneap olis & Omaha, 4.69; Burlington, Cedar Rapids & Northern, 4.03.

INCOME COMPARED WITH OPERATING EXPENSES.

Seventeen roads on their entire lines show as applicable to dividends and surplus, after paying operating expenses, interest and rentals, an excess of $21,925,351.40; fifteen roads a deficit of $3,697,718.04; leaving on the entire lines of these roads an excess of $18,227,633.36 of profit on a capital of $415,010,066.52, or 4.40 per

cent.

Seventeen roads on their lines in Iowa show as applicable to dividends and surplus after paying operating expenses, interest and rentals, $6,334,885.15; fifteen roads show a deficit of $814,767.73, leaving on the entire lines in Iowa $5,520,117.42 of profit on a capital stock of $144,091,680.31, or 3.82 per cent.

PROPERTY ACCOUNTS.

Charges and credits by which the capital and debt have been increased during the year-on entire lines :

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The total amount of taxes paid by the railroads during the year the State of Iowa was $962,229.04. The taxes paid by the railroads in 1878 were $594,912.65; in 1879, $584,169.79; in 1880, $591,843.08; in 1881, $628,611.51; in 1882, $707,660.31; in 1883, $830,665.67; in 1884, 8881,149.36; in 1885, $768,274.43.

The amount of taxes reported paid for the year 1885 leads to an incorrect conclusion, as some of the railway companies availed themselves of the law allowing them to pay their taxes semi-annually

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Had the entire taxes been paid, the amount reported would have been $927,190.24. This would give the increase as $53,959.12 of 1885 over 1884, and carrying the same figures for the comparison would give the increase of 1886 over 1885 as $35,038.80.

The largest amounts paid by single corporations were by the Chicago, Rock Island & Pacific, $175,899.10; by the Chicago & Northwestern, $164,967.59; by the Chicago, Milwaukee & St. Paul, $162,363.38; by the Chicago, Burlington & Quincy, $138,108.88; by the Burlington, Cedar Rapids & Northern, $95,909.39; by the Illinois Central, $66,192.63; by the Central Iowa, $45,149.70; by the Wabash St. Louis & Pacific, $16,804.09; by the Des Moines & Fort Dodge, $14,560.18; by the Minneapolis & St. Louis, $13,737.18; by the Sioux City & Pacific, $13,003.15.

The method of assessing railroad taxes has recently been the subject of comment, and it may be well here to refer to it. The law requires that on or before the fifteenth of February of each year, the managing officer of each railway shall certify under oath to the Executive Council, the number of miles owned and operated in the State, the value thereof per mile, with a detailed statement of all property and its value; this statement to include engines, cars and all property used in operating and repairing the roads and, equipment, the return in addition to show the gross earnings of the roads. This property is to be assessed by the Executive Council at its true cash value, including road bed and track, rolling stock, stations and station grounds, repair shops, buildings and all other property used exclusively in the operation of the railroad.

It is made the duty of the Executive Council to transmit to the Auditor of each county a statement showing the length of the main line of each railway in the county, with the assessed value per mile as fixed by a pro rata distribution of the assessed value of the whole property; that the board of supervisors of each county shall make an order declaring the length of the main track and its assessed value in each city, town and township in the county, and taxes shall be levied and collected in the same manner as the taxes of individuals. Each township or city is entitled to a proportion of the value of the entire property that the length of the main line of road in such township or city bears to the entire length of road. A city containing miles of sidings, with depots, shops, round houses and where engines are stationed gets no more of value for taxation than the same length of main line of road in any township or school

district. The theory of the law seems to have based the taxation largely upon the gross earnings of the roads. An embankment or a cut that may have cost one hundred thousand dollars per mile is to be assessed no higher than a mile on which the grading cost two thousand dollars, as this mile of road for earning purposes is no more valuable than the other.

If we understand the intent of the law, it was that the Executive Council should determine the value of the lands owned and buildings used for railroad purposes, the value of the superstructure and rolling stock, and add to this a value determined by the earning capacity of the lines of road. Whether a road was very expensive or cheap to build, the amount of labor and money expended to make it fit for service was not by the law regarded as an element in its value for taxation.

It has been frequently urged that this law is unfair in its operation on municipalities. The city of Burlington, with the extensive repair shops, depots, side tracks, etc., located in that city, gets no more of value for taxing purposes than any other township in the county with an equal length of main track; in fact the double track is proportioned across the entire State. It may be a difficult matter for the Executive Council to determine exactly the correct amount at which these roads should be valued, but if the amount is the same as any other property earning the same amount in excess of the value of the realty, it is fair to assume that the law is fully complied with, and that the property bears its share of the burdens of taxation, unless it be in the municipalities above referred to.

The early roads in Iowa were built at a very large cost. Bonds were sold at great discount, interest accumulated for years unpaid, and the element of cost as reported to the Board we have never regarded as a correct criterion of value. In our judgment a percentage of the gross earnings would be the simplest and fairest method of reaching railroad taxation in the State.

The values of railway stocks in the market are determined by their earnings, and fluctuate with the abundance or scarcity of the crops that are produced along their lines. Competitive roads may also diminish business. The law which makes the gross earnings an element in determining values is, we think, based upon the correct theory. We learn from a source that we regard as entirely reliable that the reason the tax law was passed in its present form, was the determined efforts of some of the cities on the Mississippi river to

have taxed within their respective limits all the rolling stock and other property of the roads, leaving for taxation outside these cities merely the road bed and superstructure. This was thought unfair to the rural districts, and the reaction induced the passage of the present law.

TOTAL TRACK IN THE STATE.

The total number of miles of road reported in operation June 30, 1886, was 7,564.67. This is a very small increase over the report of the previous year, and does not include the Dubuque & Northwestern, the Minnesota & Northwestern, the Mason City & Fort Dodge, the Webster City and Southwestern, the Chicago, Milwaukee & St. Paul from Ottumwa southwest, and from Manilla to Sioux City, and the Chicago & Northwestern from Mapleton to Onawa and from Lake City to Lake Junction in Sac county. The close of the year will show a considerably increased mileage over this report-probably reaching near eight thousand miles.

Poor's Manual gives December, 1885, the total railway mileage in the United States as 128,966.79; the mileage of Illinois as 8,904.77; Pennsylvania, 7,667.47; Iowa, 7,503.67; New York, 7,385.13; Ohio, 7,327.52; Texas, 6,687.37; Indiana, 5,599.82; Michigan, 5,268.65; Missouri, 4,968.84; Wisconsin, 4,417.90; Minnesota, 4,331.10; Kansas, 4,441.36.

ROADS LEASED.

The Chicago, Rock Island & Pacific road reports leased the road from Keokuk to Des Moines, 162.20; the Illinois Central the roads from Dubuque to Sioux City and the line from Waterloo to Mona. The total of leased lines reported is 564.36 miles.

SIDINGS.

The total number of miles of side tracks reported is 1,155.18 miles

DOUBLE TRACK,

The total number of miles of double track reported is 73.07. Of this 68.07 miles belongs to the Chicago, Burlington & Quincy, four miles to the Chicago, Rock Island & Pacific and one mile to the Chicago, Milwaukee & St. Paul.

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