Omaha Daily Bee Newspaper, July 13, 1902, Page 16

ILROAD TAXATION IN COURT THE DAILY BEE: SBUNDAY, Full Stenographic Report of Hearing in Mandamus Case by Nebraska Supreme Courte=rur 111 Continuation of testimony of State Audi- tor Charles Weston, member of the Sta Board of Transportation, under redirect ex- amination by Mr. Harrington: Q.—That is, you mean from the way they returned it to you and the way it had been returned In the past you considered you Bad to follow on the same lines? A.~It is ncorporated that way, and 1 don't under- stand that we can make an assessment any difterent. Q.—How 414 you know It was your right and dity to aesess all of this property to the Chicago, Burlington & Quincy as the owner of the road? Judge Baldwin—I object, as {ncompetent and immaterial and asking a witness to state what the law prescribes to be his duty. (Overruled.) A~ didn't know that. The property schedules of these difterent corporations were returned to us by the B. & M. and certified to by the suditor of the B. & M. in Nebraska. Q—Now you had befors you a state- ment from the Union Pacific raliroad as to the amount of mileage It owned in Ne- braska, hadn't you?. A.—Yes, sir. there showing that 1,020 miles in Nebraska., With that knowl- edge how many miles belonging to the Union Pacific did you assess in Nebraska? A.~We assessed that mileage under the respective corporation. It s returned to us under the heading of @ifferent corpora- tions and that is the way we ed it. Q.—But you had before you the state- ment of the Union Pacific showing that the entire road, 1,020 miles, belonged to that oompany, didn’t you? A.—That includes the mileage of the different corporations and our judgment was that we had to ai wess separately and Independently the mileage returned by each corporation, and that is what we did. Q.—That Is to say you assessed the main line of the Union Pacific and you assessed the physical property of these branch lines which it owns, In the name of these de- funct companies? A.~The Omaba & Republican Valley, the Kearney & Black Hills, ete. Q.~—These dead roads? A.—We assessed them under the names of the corporations as 1t hds been done for twenty-five years past. Q.~You knew, didn't you, that the earn- ings from these 1020 miles all went straight to the treasury of the Unlon Pacific company? A.—I didn’t know that, but I presumed it to be the fact. Q~—But the statement they made out showed that the earnings went there, and that in the preceding year the Unlon Pacific raliroad, after paying operating ex- penses and everything el had earned $4,800,000 of net earnings Nebraska on this 1,020 miles, didn't 1t? A.~I don’t re- member the figures mow. Q—DId you figure out what that made the road worth on the Unlon Pacific’'s own basis? A.--No, sir. Q.—Did you know that the Union Pacific road was based upon 4 per cent for its bonds? A.~No, sir. Q.—Or 4 per cent for its preferred stock? A.—No, sir. Q~~And that it was paying 4 per cent on its common stock? A.~We did not take the stocks and bonds into consideration im Tespect to any of the reads. _Q—Do you think you could at this time, f are you prepared to state to the court this Unfon Pacific raiiroad is worth a mile? A.—No, sir, T don't think I can. QDo you know how you could figure it out 5o as to tell the court what it is worth per mile? A.—I suppose I might make an approximate estimate of the cost in a few, moments if I had some way to get the in- formation, Q.—Now, aking of the main line of the Burlington, r. Weston, you have been over the Burlington rallroad pretty well, have you mot? A.—~I have been over it considerable; yes, sir. Q~—Now, you assessed 181 miles of main line, didn't you? A.—I think it is 191, Q—Don't you know the mafn line ex- tends more than 400 miles across the s A.—Well, it depends on what you call the main line, y Q.—Well, the line running from Chicago to Denver? A.—The line doing the through B. & M. busli from Chicago to Denver probably extends over 400 miles across the state. Q.—And yet you.take that portion of it running from Plattsmouth to Hastings and that little branch running off to Kearney and you call that the main line, and then you take the balance of the line from Hast- ings to Denver and treat that as a sort of A side line, do you? A.—I understand we assessed the different portions of the sys- tem under the original Incorporation. Q.—Without any reference to whether it ‘was main line or side line? A.—Yes, sir. Q.~Don’t you know that the B. & M. in Nebraska, as we call it, has been out of existence twenty-two years? A.—No, sir; 1 do not. Q~—You didn't know that that was fu- @lclally determined here that it was dead ty-two years ago? A. sir. ~WHll you take all this mass of tes. timony and tell us what the earnings of the Oxford and Kansas line have been for the Burlington system that the accounts of the road were kept by divisions and not by the separate incorporations and that for tbe last year or two, or for the last year, at ‘ any rate, that )y could mot return the g8 except by divisions. I think that statement made at the th ACT QUICKLY Delay Has Bean Dangerous In Omaha. Do the right thing at the right time. + Act quickly in tjmes of danger. he is kidney danger. Doan's Kiduey Pllls act quickly. Cure all distressing, dangerous Ms. Pitaty of evidence to prove this. Mr. H. J. Bprag of 1424 South 18th street, upholsterer and cabinet maker by trade, kidney tell. Many & time my wife had to help me out of bed. Onee en my feet, I did not feel it so bad. In additien to this, @ificulty with the kidney secretions, which greatly disturbed my rest nights. Proo Doan's Kidney Pills at Kuhn & Co. firug store, corner 15th and Douglas streets. 1t cured 1 cannot pra‘se this course of the treatment. Price, 50 cents. made this assessment you didn’t either have the earnings of the entire system or the earnings of & single one 6f these dead A.~As far as the Burling- erned, we didn't, but we had published in the last bien- nial report of the auditor. Q—And that was all? A.—Yes, #ir, I think that was all. Q.—Now can you tell us what the Omaha & Republican Vall raflroad earned n the last year? A.~—I think that can be flgured out probably from that financial report, but I cannot state positively, be- cause I haven't examined it carefully. Q.—At least you kmow of no way by which the court mow could get at the ley raflroad? A. figured out from that financial statement, and that was filed after the adjournment of the board, I belleve. Q—That was about the way you daid it with reference to all the roads, didn’t you; that is, all the Burlington roads? A.—Yes. sir. Q.—Did any of the other members of the board seem to have any more information about this question than you did? A.—l can answer that again the same as I did before, as to myself, but I cannot answer it as to them. Q.—Well, as far as you eould tell, did any of them seem to have any knowledge about the values of any of these properties? A.— 1 think they did, probably. Q—The value? A.—They had an opinion as to the assessable value. Q—You mean the cost of reproducing the property, the physical property? A.— Yes, sir. 4 Q—Now In arriving at this assessment of the Unfon Pacific, did you know that, ac. cording te the report of their own chief englneer, that the Union Pacific in Ne- braska can be duplicated in Nebraska for $30,000 per mile, and yet you can cash it in the market for $100,000 per mile? A.—~ I know the cost of reduplication is con tained in one of those doouments there. Q—Did you know that the franchise or intangible property of the Union Pacifie in Nebraska was worth more than $70,000 per mile? A.—No, sir, I didn't know it. Q—The tax agents didn’t tell you that you were exempting $70,000 & mile of their property in this state? A.—No, sir. Q.—Does the governor claim there should be any advancement of any of the rell- road assessments in thjs state? AT thipk he did. Q.—At the time of the assessment? A.— While the board was in session; yes, sir. Q—Now, when Mr. Scribner was befors you was that a public hearing or was it behind closed doors? A.—I think it was a public hearing. There were a good many gentlemen in there at the time. Q—~Where was it? A.—In my offic Q.—Your private office? A.—Yes, sir, my priva office. Well, I think Mr. Grandon of the Northwestern and 3 of the Blkhorn, Mr. Soribner of the Union Pacific, Mr. Pollard of the Burlington, Mr. ‘Wood- man of the Chicago, Milwaukee, St. Paul & Omaha, and possibly Mr. Benton, repre- senting the Pullman company. Whether there were others or mot I cannot say at the present time. Q~Was there any public announcement of the meeting? A.—No, sir; 1 think not. Q—Was it behind closed doors? A—T think the doors of the office were shut, but they were not locked; they never were on any occasion. Q. —Was there ybody there except some one representing these ratiread com- panfes. A.—No, sir; I think not. Q.—Was there any information given to the public that there was any hearing to be had to ascertaln these values? AT don't know whether there was or not. Q.—You were informed about the values of these roads per mile, were you not given some information? A.—By ‘whom? Q—Didn't 1 send you some information as to what the Union Pacific was worth? A.—The information was sent to the gov- ernor and he read 0 the board. Q.—It was addre: to you three as & board, was it not? A.~—Yes, sir. Q.—Informing you as to the value of the property of the company? A.—Yes, sir. Q.—And as to the Burlington also? A.— Yes, sir. Q.—I"also told you, didn’t I, that the stock of the Missour! Pacific was selling a few years ago at $20 a share and now it was selling at $110 per share? A.—I don't remember the contents of that let- ter. Q.—You learned from it anyway that stocks had gone up anywhere from two to five fold on these railroads in the past three years? A.—I think that was the general tenor of the letter. Q—The fact that they had gome up fo that extent was given no consideration by you gentlemen? A.—We didn't take the stocks of the roads into consideration, as I sald before. Q.—Apd slthough the Missouri Pacific raliroad stock would sell in market for five times as much as it would four or five years ago, yet you assessed it even lower than you assessed it five years ago? A.~Possibly that is true. Q. jow as to the other roads? Now the Burlington ten years ago; do you know what Its stock was worth? A.—I do mot. Q.—~Do you know what the Rock Island stock was worth, back, say In 1895, 1896 and 18971 A.—I do met. Q.—Did I inform you that that stock was selling for $40 and $54 at that time and had trebled in value in the last few years? A~I can't say. Q.—At any rate, you didn't increase the value of that road? A.—I don't remember Q.—In fact, when you got dome you had made this year the very lowest assessment per mile—not in the aggregate—but the lowest assessment per mile since the year mitted into the union, dida't you? A.—I don't know that. Q.—You haven't figured it up to see? A. ~—No, sir. Q.—~DId you know when you made that at this time for less than one-half what they were assessed for in 18747 A.—I did not know that; ne, sir. Q.—Now, when Mr, Rosewater went there he asked you to assess the franchises of Q.—And that was the open meeting on the 14th of May, wasn't it? A.—I belleve that wes the date. Q.—Did Mr. Rosewater and Mr. Simeral ask you to make a record of the fact that you were not assessing these franchises? r; 1 belleve Mr. Simeral did. whatever in regard to the franchises and, cousequently, made no record. Q—Did Mr, Slmeral ssk you to make record that you did not assess the fran- chises, so that he could go inte sottle it aa & question of law s t deslers. Os.. Buftale, N. Y. sole | you were bout Simeral Q.4-DId you make a record of that kind? A.—No, sir. Q.~You didn't make any kind of a record showing the amount of this railroad prop- erty that you had exempted from rallroad taxation? A. made no record what- ever In reference to the franchises. Q~—Or other intangible property? No, sir. Q~—~Did4 Mr. Rosewater and Mr. Simeral ipsist that you should take into comsidera- tion the rate of assessment in the cities of Omaha and Lincoln? A.—My recollee- tion is that they sald something about that; yes, sir. Q.~And the board refused to do so? A.— ‘Why, 1 belleve so; yes, sir, Q.—8o that the property in the citles was assessed upon the baeis of county properties throughout the state? A.—The city properties were assesed on the same basis as county properties. Q.—As a part of the county properties? A.~Yes, sir; throughout the state. Q.—Now, then, in view of your testimony before the caurt, I would like to know what you mean by saylng in your last answer here that you d4id not assess the franchises separately and apart from the physical properties? A.—What I t by the amended answer was that the facts that are set forth there were simply taken into consideration for the purpose of ascer- taining the value of the tangible property and the idea of the franchises did not enter into our consideration at the time at all. Q.—And you didn’t mean by amended answer to say to the court that you had assessed or attempted to assess the fran- chises? A.—No, sir. Q~Now how did that second answer come to be filed? Attorney General Prout—I object, as in- competent, irrelevant and immaterial. (Sustained). Re-Cross-Examination by Judge Baldwin ~Now, at the time this board met and made ite assessments, you had before you the statutory returns or schedules from the rafiroads, didn’t you? A.—Those that were introduced in evidence; yes, sir. Q—Well, those were the reports that were made in accordance with the pro- visions of section 39 chapter Ixxvil? A.~So 1 understand. Q~—That is, you had befere you at that time the number of miles of railroad, didn't you? A.—Yes, sir, ~The total in the state, didn’t you? A. air. ~You had the road bed? A.—Yes, sir. ~The right-of-way? A.—Yes, sir. Q.—The superstructure thereon? Yes, sir. Q~You had the main and sidetracks, dldn’t you. A.~Yes, sir. Q—And the depot bufldings? A.—Yes. Q.—And the depot grounds? A.~Yes, sir. Q.—Section and tool houses? A.—Yes. Q.—Rolling stock? A.—Yes, sir. ~And personal property mecessary for the construction, repairs and operation of the rallroad, didn’t you? A.—Yes, Q.—They were in these statements, were they not? A.—Yes, sir; I think so. Q.—These statements, Exhibits 37 and 38, ‘were the reports of the Unlon Pacific, were they not? A.—Yes, sir. Q—They were sworn to and filed before the board? A.—Yes, sir. Q—Showing its equipment? A.—Yes, Q—And all of the rolling stock and equipments that the Unlon Pacific owned April 1, 19037 A.—~Yes, sir. | Qr—~And they made it as a sworn report to you? A.—Yes, sir. Q.~-And that was all the report that the statute required? A.~I a0 understood it; yes, sir. Q.—There was no proof before you that the terminal facilities of the Union Pacific at Omaha .were worth $10,000,000 were there? A.—No, sir. Q.—No proof of that kind? A.~None ‘whatever. Q.—So when you say that you didn't know it was worth $10,000,000 you meant you had no information about it, didn’t you? A.—Yes, sir, Q.—And npobody had the hardihood to swear before you that they were worth $10,000,000, did they? A.—Nobody did. jow you had that Information as to what {s called the physical properties of the road, didn’t you? A.—Yes, sir. Q.~~Now I epeak of the Union Pacific par- ticularly, but that was applicable to all of the roads, was it mot, Mr. Weston? A.—I thing so; yes, sir. Q—~They all had these statements? A.— sir, they all had these statements. Q.—Now, then, you knew at that time, didn’t you, that they were raflroad prop ties? A.—I knew that; certainly; yes, sir. Q~—And that they belonged to raliroads? A.—Yes, sir. Q.—Belonged to & moving, road? A.—Yes, sir. Q.—In operation? A.—Yaee, Q-~~Doing business? A.—Yes, sir. Q—A going concern? A.—Well, that is the way I understood it. Q.—~Well, you knew that, didn't Yyou? Outside of yoilr general knowledge you had obtained from t| ports themselves? A.— Yes, sir; I knew that. Q: d they we) erties as a rallroad? derstood at the time. Q.—You had that before you and you took that (oto consideration, didn't you?! A.— Yes, sir. Q.—And you took Inte consideration the earnings of these roads, didn't you?! A.— That was dope unanimously by the board; ves, sir. Q.—You considered these earnings as an item of evidence bearing upon the value that you should place upon these proper- tles? A.—Yes, sir. Q.—And you assessed the physical properties hown in the repfrts and took into consideration the fact that they were rallroads, the fact that they were belng rallroads, the fact that they A A— Mving rail- operating these prop- A—All of that I un- entirety? A.— Q.—And you sssessed it as one and in- separable? A.—Yes, sir. Q.~Now I understand that you toek into consideration the fact of the earning ca- pacity, usabllity of these rafiroads, and that they were livi ing concerns? A. ~—Yes, sir. Q.—~You meant to say when you said you didn't assess the franchises that if these were franchises you asssesed them, but if they were not franchises you did not? A.— , 1 supposed that would be a comclu- alon. Q—You i t & lawyer? A.~I don't profess to be & lawyer; no, sir. Q.—Were you ever & lawyer? A.—Yes, #ir; I have been admitted to the bar. Q. ~BExeuse me, 1 & not kunow that. Anyway, you supposed that these were not franchises? A.—~Yea, sir. Q.—But you say to the court, and were therefore willing te put in the amended an- swer, that you 414 take these things iuto consideration? A.—Well, that was the upanimous view of the board. I think the board will all swear to that. Q.~Well, you were willing to put in these facta? A.~Yes sir; so far as I was con- cerned. Q.—And et the court determine whether they wers frauchises or mot? A.~Yes, sir, Q.—Now, after yor had all of these prop- erties, Lsa's 6 & fact that you considered of the things thkt.I have enumerated and then you exercised your best judgment a8 to the valuation? A.~Yea, sir; we dld, Q. —You exercised your best judgment s a board as to the valuation to bs placed ) 1t? AT exercised miy best judgment in the matter. Q.~You did the best you could and acted upon 1t, dldn't you? A.—~Yes, sir. Q.—And that was Judgment? Ao~ Yes, sir. ¥ Q.—And you made (he assessment ac- cordingly? A1 44, yes, sif. Q.—Now as bearing upon your good faith in the transaction, you téok fnto o eration, didn’t you, the standard of valua: tion of other properties other than rall- in this state? A.~Yes, sir; 1 did. Q~You had information upon that sub- Ject? A~ 4id; yes, #ir, Q.—And you found that all property other than raflroads, was sed on & ratio or valuation of about one-tenth? A.— Well, there was a difference In the board in regard to that, but that was my esti- mate, that it was probably about one- tenth. Q—~And you arrived at a standard of valuation of the properties of the raliroad at between one-sixth and ome-seventh, did you not? A.~I1 think that was the view of the board; yes, sir. Re-Direct Examination by Mr. Howe— You say that you considered the earnings of thess companies? How dld you got at the earnings of the Omaha & Southwest- ern? A.—The earnings of the Omaha & South ern, T think, are reported in the auditor’'s biennial report. My recollection is we 414 not have the earnings for the present year. Judge Baldwin—Your attention was called to one of these statements by Mr. Harrington in reference to the fact of the miles owned and miles operated by the Union Pacific in this state, one is 047 miles, and the other is 1,020 miles; the report shows that the 947 are the miles owned by the Union Pacific in this state, and the 1,020 miles operated by the Unlon Pacific? A.—Yes sir. Q. ~That is the line from Norfolk to Sloux City? A.—Yes, sir. Q.—~Which it doesn't own, but operates and is therefore returned by some other company. Mr. Howe—Now go on and tell us how you arrived at the earnings of each of these fifteen companies called the B. & M. company? A.—The financial report of the B. & M. not being before us at the time the board was In session, the most that we could do was to refer to their earn- ings in previous ¥« we found them in the biennial reports of my predecessor fn office. Q.—Did you look at more than onme bien- nial report of you predecessor? A.—I think not. I think we considered his last bien- nlal report, which inciuded the assessment of the raliways for 1898 and 1899. Q.—Do you mean to say that you can turn to the page in the report that shows the earnings of each of these fifteen com- panies? A.—I think so. I think that it is on page 130 of that report, if I am not mistak Q—When did you ses it last? don’t remember. Q.~—8o you think by looking back into formers years' trapsactions you can as- certaln what the earnings or expense ac- count was of these fifteen different com- panies for those years? A.—Yes, sir. Q—Then you say you assessed the prop~ erty as an entirety? do you mean by that? Did you assess thg Q. rosd as an entirety? A.—I mean all the property, the rolling stock, depots, sidetracks, right-of- way and everything was added together. Q~That is, the physical property? A.— Yes, sir; the physical property added to- gether, And then that aggregated and divided by the total mileage of the corpora- tion and distributed to the different coun- tles in proportion to the mileage in those counties. Q.—Was not the property of the Omaha thwestern, that fifty and eighty-eig] of it is north of us and part south of us at the present time? A.—That is my recollection, I don't re- member positively the number of miles contalned in that part of the road. Q.—Do you know where Saline and Gage counties are? A.—Ye: 3 Q~—The Omaha & Southwestern road le in all of those counties, is it. mot? A.—I don't know positively. I know there is a break in the.line somewhere. Q~—How far are they separated? A.— :;:H. 1 can't say positively, for I don't w. A~1 Q.—In speaking of an ‘“entirety,” you n that the franchise stated here. Q~—Now, taking the Union Pacific, taking that as an entirety, do you mean the entire property of the main line and branch lines; do you call that the entirety, or do you made by the roads; that le, assess the prop- erty of each incorporation separately. Q.~Then as an entirety you did not con- sider that part of the Union Pacific that is outside of Nebraska® A.—No, sir, we did not. We simply included the property in the state of Nebraska. Q.—Now you say this answer was unani- mously agreed upon by the members of the board? A.~I so understood it at the time. Q.—Where was it agreed upon? Objected to as incompetent, (Irrelevant and Immaterial. Witness excused. Mr. Simeral—The plaintiff offers in evi- dence the fourth annual report of the Unlon Pacific Rallroad company for the year end- ing June 30, 1901, marked Exhibit 42. Mr. Harrington—We offer in evidence the twenty-first annual report of the Missouri Pacific Rallway company for the year end- log December 31, 1901, marked exhibit 43; the annual report of the Northern Pacific Railroad company for the year ending Juno 80, 1901, marked exhibit 44; the twelfth an- nual report of the Great Northern Rallroad company, marked exhibit 45; the annual re- port of the Chicago & Northwestern Rail- road company for its forty-second fiscal year, marked exhibit 46; the twenty-first annual report of the OChicago, St. Paul, Minneapolis & Omaha rallroad, marked ex- hibit 47; tire annual reports of the Inter- state Commerce commission for the years 1900 snd 1901, marked exhibits 48 and 49, apd the preliminary report of the income account of the railways as published by the statistician of the Interst: Commerce commission under an act of congress for the year ending June 30, 1901, marked ex- hibit 0. Willlam Stuefer, state treasurer, being duly sworn, testifies as follows, examined by Mr. Harrington: Q—In assessing the raliroad property of the Chicago, Burlfngton & Quincy Rallroad company, you take into consideration the franchise or value of the franchise of the corporatio A.—No. Q—In making any of these assessments, did you take into consideration the value of the franchise of any ratirosd corporation dolag business within the state? (Overruled.) A~No, sir; I really don't know what & franchise is. Q—At the time you made this assess- ment, or participated in making it, did you kuow, or do you mew kuow, the Value per ka? A.—No, sir. ~You t know now, & know how to find out, do you, the value by any information you have Access to, or ever have had access to; you don't know how to find out the value per mile, cash value, of any rafiroad in the state of Nebraska? A.— Only from the reports that have boen filed with the auditor here by the different rafl- road companies. QDo you know mew, and can you tell us the value of the Union Pacific raliroad in this state per mile? Can you figure I8 out? A.—No, sir, I couldn't do it. Q—~How ald you get at the value of it? A~Well, by looking at the former assers- ir assessments and sta ments we kind of formed a basis on which t on to make the assessment. ~Do you know the amount of stook per mile against any road In the state? A.— Not the steck. Q~—Do you know the market valué of any A. 0, sir. Q.—Do you know the amount of bonds per n:(le againet any road in the state? A.—No, sir, ‘Q—Or the value of its bonde? A.—No, ir. Q~You don't know any of those thing: A.—No, sir. Q.—Nou simply did the best you could with the physical property and looked for the prior assessment to find that out the best you could? A.—I also took inte a count the earnings of the road; we consid- ered that. Q—Did you take into account the earn- | A ings of the Chicago, Burlington & Quincy? A.—~Well, anyhow, for 1899 and 1900. Q.—You mean you took into account the reports in the auditor's office of what the railroads themselves claimed were the earn- ings apportioned to these fifteen different; corporations? A.—Yes, sir; I suppose. They were sworn statemen s & matter of , you do mot find anywhere in the auditor's report any state- ment of what the C., B..& Q rallway earned in Nebraska, do you? A.—No, sir; not the C,B &Q ~All you got was alleged estimates of what was i by these dead corpora- tlons that haven't run & road for twenty years? A.—No, I don’t know about that. Q.~Did you know there was a railroad in Nebraska known as the O, B. & Q., & live concern and doing business and ca ing passengers? A.—Not the C., B. & Q. but the Burlington & Missour! river line. Q.—Do you carry a pass on the O, B. & Q. in Nebraska, yourself. A.—Not in Nebraska, that I know of. The Burlington & Missouri River railroad. Q.—Get your pass and see If it is not the C,B. &Q Mr. Kelby objects. Q.~Your pass didn’t tell you that? A.— T don’t know whether I looked at the pass. I never traveled on the C., B. & Q. pass. T have on but I haven't traveled on it and I have never looked at it. Q.—Did you ever know of a railroad: in Nebraska known as the Oxford & Kansas? A.~Yes, sir; that is somewhere out west here, Q.—~You don't know where It 1s? A.—No, sir; not exactly. ‘You never knew that road to issue a pass? Attorney General Prout objects as fin- competent, immaterial and improper. (Sustained). Q.—How many miles of raliroad known as the Burlington railroad do you know of there being In Nebraska? A.—That I couldn’t tell. I mever added it together. There are quite a few companies that be- long to the same company. Q.—You know it is all one great sys- tem of ratiroads, didn't you? A.—No, gir; I didn’t know that elther. Q.—Did you know that the whole Bur- lington system had b merged into one corporation and all of its stock, or Jeast 98 per cent of it, sold to the Northern Pacific and Great Northern railrosd? A.— No, sir. Q~You didn’t know that that occurred about a year ago, and yet it was of such importance that it stirred the whole coun- try? A.—No, sir. I have heard of some kind of a merger, but I dldn't take asny interest in it. Q.—You never heard of that merger? A.~1I heard of It. Q.—You knew Jim Hill, as they call him, had gotten control of the whole Burling- stem of rallroads? A.—No, sir; I didn't know that, homestly. Q.—Are you not a banker? A.—Yes, sir. Q.—Didn’t you find that in your financial publications that the whole of the Burling- ton system had been turned over to tho Northern Pacific and Great Northern rafl- roads? A.—I haven't seen any such reperts for the last two years, so I don't know. Q.—Then what you want the court to un- derstand is that you don’t know whether the "Q.” road runs and operates train fot in Nebraska? A.—No, sir; I t know that. I know the Burlington is run- ning & road. Q.—The B. & M., you mean? A.—Yes, sir. Q.—You don't e any report of the earnings of the B. & M.? A.—No, sir; not in 1902, I don't think I had. Q—Out of the 2,400 miles of the Bur- lington road in Nebraska you assessed only 191 miles of it, then, to the B. & M., didn't you? A.—We assessed it to the different corporations as given to the auditor he id you get at the main line in and what is the main line? A.— From Plattsmouth to Kearney, I guess. Q.—Do you mean that that is the main line now? A.—Well, 1 don’t know, I could not tell you. Q—You didn’t inform yourself on that subject? A.—No, sir. Q.—Do you know what name that portion of the road from Hastings to Denver s known as—what different corporations? A. ~—Well, sir; I couldn’t tell unless I referred to the report. Q~—Now refer to the report and see if you cannot tell us the name of the road that runs from Hastings to Denver, or roads? A.~It will take some time to do that. Q.—The tact of the matter is you couldn't tell thai, even by looking at the reports, could you? A.—If I could tell what coun- ties it runs through I could tell then. Q—Did you ever in your life knew the names of the corporations or in whosg pames you assessed this property from Hastings to the of the state, to Arapa- boe county? A.—No, sir; I couldn't tell you because there is no such county in the state as Arapahoe county. Q.—DId you learn the earnings of the & M. In Nebraska even? A.—No, sir; 1 don't think the last earnings I did, but the earnings before I did. Q.—Do you or 4o you not know that the l:.lr' How 414 you get at the earnings? | handed you contain substantially & correct ell, those were f Q.—You do not mean the O, B. & Q. were ever flled with the auditor? A.—No, sir, I don't say that. with the auditor. statements covering these fifteen different defunct corporations? A.—I don't wanmt to y “defunct. You don't know of A railroad that is operated in this state known as the Atchi- Nebrasks, 8t. Joseph & Grand Island, Kansas Clty & Omaha—none of these run a ralirond {n Nebraska, do they, that you know anything about? A.—They aré run, 1 guess, by the Burlington people or the B. & M. road, I gue Q-~You knew that these roads had no franchise of any value because they were using another franchise, these fifteen cor- porations? A.—~We didn't consider the franchise. Q.—You tried to assess the physical prop- erty at one-seventh of the value; fs that right, now? A.—Yes, sir. Cross-examination by White—In ar- riving at the value of these different rail- roads in the state of Nebraska, did you take into coneideration the question of thelr operation? A.—Yes, sir. Q—~Did you consider them as operated lnes? A.—Yes, sir. .—You do not mean to say, then, that you considered the rails and the tfes, the roadbed and the right-of-way as dead, un- used materials? A.—No, sir, we did not. Q.—You considered the folling stock as being moved upon the track? A.—Y Q—And you coneldered the ~Yes, sir. had a right to move trafic in this state un- der the law? A.—Yes, sir. Q-—DId you consider the same facts with reference to all roads that you did in refer- ence to any one of them? A.—Yes, sir, and all of them. Q.—How Is the value of these roads ar- d at? A.—We took into consideration the countles through which the roads run and also the net earnings of the different roads. Did you take Into consideration the assessment of other properties generally throughout the state? A.—Well, I aid. Q.—DId you ascertain what the general standard of value was of property through- out the state for assessment purposes? A. entire earnings go to the C., B. & Q.7 A~ Well, that I canpot tell. Q.—And yet you attempted to assess this property without knowing whether it went to the C., B. & Q. or pot? A.~Well, we assessed it. Q.—Assessed what? the rallroad property. Q.—The physical property? A.—We con- sidered it physical property; yes, air. Q.—That is all you know? A.—Yes, sir. Q.—You don't knéw anything sbout the C., B. & Q. franchise being assossed; no- body talked of its being assessed, did they? A.—Well, I can’t say that. The conclusion 1 formed was by taking the road and the former assessment and former earnings for former years. Q—And on what basis did you estimate the earnings? A.—Well, about op th of what ot Prop: had been 5 Now 1 know what property was as- sessed 2t Q—What do you mean by the “earn- A—~The property; ~Yes, sir; 1 did. Q.—~What w tained? tenth. Q.—How did you arvive at the standard? A.—Because of property that had been sold and ] know what it has been as: a at and what it has been sold at, t s the only way I couls irve at it. For instance, if it wi sessed at $5 and sold at $50 it was one-tenth, Q.—DIid you ascertain that value gener- ally throughout the state? A.—No, sir o:ll'y through our part of the country is all. Q~How did you come to assess the raflroad property at one-seventh, when you had assessed the other property at one-tenth—to what portion of the state are you referring to? A.—I said in our section of the country. Q.—You say you ascertained that prop- erty generally throughout the state, or in your section of the state at least, was as- Sessed at one-tenth? A.—Yes, sir. Q. —Knowing that, how did you come to 88 the raill company at one-sev- enth of its value? A.—~Well, we kind of djdn’t like to lower the assessment ‘of former years. It had been assessed at that and we left it as it was assessed last year. That is the way I figured it. Q—Was it your general opinion that if exact justice had been dome that railroad property should have been lowered for as- sessment purposes? Mr. Harrington—I object as incompetent, irrelevant and immaterial. (Overruled.) A.—My judgment was it should have been lowered a little. Q.—Taking Into consideration all of the matters that you bave referred to, did-the assessments made express your best judg- ment as to the value of rallroad properties’ A.—Yes, sir; that was the best I could find and I used my best judgment in assessing them. Re-direct examination by Mr. Simeral: You took the Union Pacific at about $45,- 000 a mile, didn’t you? Wasn't that atout what you took it at on an averags? A.— Yes, air; I think that was about it. I think the ‘road could be reproduced for that. Q.—Now supposing it had been shown to you that the Union Pacific was worth §100,- 000 a mile, including the franchise, that is the tangible property ,and intangible prop- erty, would you bave thought the assess- ment you put upon it just and right? A.— There never was such a showing made. Q.—No, but suppose that there had been & showing that it was worth $100,000 a mile, ‘would you have thought or believed that the assessment you put upom it was just? Attorney General Prout objects as incom- irrelevant and immaterial. (Sus- tained.) Q.—Why 414 you assess the Burlington or B, & M. main line higher than the Union Pacific? A.—Because, if I am not mistaken, the earnings of that road were higher than the Union Pacific per mile. Q.—~Where did you get the earnings of that road? Was it from Plattsmouth to Kearney—is that it? A.—I think it was from Plattsmouth to Kearney, Q—Now did you have the earnings of the B, & M. at that time for this year? A.~No, sir; I don't think we did have them tor this year. Q.—For last year? A.—No, sir; I think it was in the last report. Q~—That was some years ago, wasn't jt? A.—Yes, sir. Q.~Now, you %ad the éarnings of the Union Pacific for this year? A.—I think ‘we did have. Q.—And that showed $4,711 a mile, didn't 1t? A—Yes, sir, It was less than it was last year. Q.—That was pet? A.—Yes, sir. It was less than last year—the earnings were. Q.—You didn't lower the Union Pacific on that account? A.—No, sir. Q.80 the reason you assessed the B. & that standard you as A.~From one-elghth to one- Did you consider that the railroad | statement of what was sald by yourself exhibit No. 51, the purpose being to show that the board Itully violated the cor- rect rule of valueing this property after their attention was specifically directed to it, 50 that they did not mct in ignorance. (No objection), Mr. Simeral—We will offer in evidence the files of The Omaha Daily Bee marked Exhibit 61% for the purpose of showing the market value of the stocks and homds of the raliroad corporations hereln im- volved. Mr. Baldwin—To which the respondents object as incompetent, immaterial and ir« relevant. Chiet Justice Sulllvan—1I think it is ade missable, and same is recelved In evidence, Mr. Simeral—The tax commissioner of the city of Omaha, and of the city of South Omaha, being absent from the court, it is agreed that it they were present that the tax commissioner of Omaha would testify that the valuation of property in the ity of Omaha for municipal taxation is at th rate of 40 per cent of {ts actual value and that the tax commiseloner of South Omaba would testify that the sesessment of 1903 of property in South Omaha is valued st 60 per cent or upward of the true cash value thereof. Mr. Kelby—So far as I am concerned and have anything to eay in this matter, I shall certainly not permit that. In the first place, because the testimony is incompetent |and immaterfal; and second, because it s not the fact. Mr. Baldwin—This {s all subject to the obection that it is incompetent and imma. terial, and also subject to the right to re- but it. ¢ Mr. Simeral—It is agreed that the tax commissioner of the city of Lineoln, It present, would testify that for munficipal purposes here all property is assessed at its —This fs subject to the same objection that it is incompetent and {mma- terfal, with the right to rebut it Chiet Justice Sulllvan—The evidence wil} be recelved subject to the objection. Mr. M. I Altken, tax commissioner of Lincoln, being duly aworn, testifies as fol- lows, examined by Mr. Harrington: Mr, Aitken, are you the tax commissioner of the city of Lincoln? A.—Yes, sir. Y Q—Upon what basis as compared with the actual value ls property assessed for municipal purposes In Lincoln for the year 10027 A.—I assessed the property’at full, fair cash value. Cross-examined by Mr. Kelby: When did your duty as tax commissioner of this city begin? A.—April 10, 1901. Q.—This is the first term of office that you served? A.—This Is the first term, yes, sir; the second year. Q.—Do you know about the of property for 10017 A.—Yes, Q.—Where they assessed at their actual cash value for 19017 A.—Yes, sir. Q—What is the relative difference be- tween the assessment of 1901 and 19027 A~But little. I ralsed them a little for 1902. Made them a little higher. Q.—Did you personally make the aasess- ment in each of the wards in the elty of Lincoln? A.—T assessed all of the real es- tate myself, and the personal I superin- tended somewhat. / Q—You procured it to be done through deputies regularly appointed by you? A~ No, sir; I did all of the real estate by obe servation and personally. Q.—And personality? A.—~The persomal- ity was done by the deputies. I after- wards looked at the schedule and ad- vanced a number of the larger assess- ments. Q~What do you mean by “falr, cash value?"’ A.—Well, what I considered it worth. Q—~What you considersd it worth? A Yes, sir. ell, from what consideration was your judgment based as to its worth? A.— Well, the selling price and the rental value, and a part of it, of course, was assessed with the view of making it falr and equitable with other property. Q.—Take the Richards block, on O and Eleventh streets, do you remember what the assessed value of that was for this year? A.—Yes, sir; $95,000, Q—Do you consider that as its actual value? A.—Yes, sir, and more than It cot Q—Do you mean to say that bdullding cost less than $95,0007 A.—Yes, sir. Q. —What is the ground worth? A.~The ground I valued at $35,000. Q-—What did the bullding cost? A.— That bullding cost $56,000 and I valued it at_ $60,000. Q.—You ' trom the contractor, and there was a com- plaint filed before the Board of Equaliza- tion this year and the attorneys mad statements of the cost of the bullding of the property, giving those figures, Q—Do you know what the aggregate rentals are that are derived from that building? A 11, I only have the state- ments of the attorneys in the c ~—Did you make any investigation to Sent Fres 10 Men. Free Tria kage of this New Dise covery Mailed to Every Man Sending Name and Address— Quickly Restores Strength and Vigor, Free trial packages of able remed: el Write the Btate M our 80 many men wi zors Tymark, i A M. higher was because the net earniogs were higher than the Union Pacific? A.— We took that Into consideration. . Witness excused. Adjournment taken until Wednesday at 9:30 a. m. On Wednesday, July 9, at the morning sesslon Mr. B. W. Simeral was sworn and examined by Mr, Harringtos Mr. Simeral, did you appear before the State Board of Equalization on the 14th of May op behalf of The Bee Building company. A.—Yes, sir; 1 did. Q.—Did you make an srgument before them with reference to the assessment of railroad property in this state? A.—I did; any remarks made by members of the board during the course of the argument there? A. Q~—You may state wi report of what occurred there was taken down at that time on bebalf of The Omaha Bee? A.—Yes sir; and I think that the rallroads also had one; there were two stenographers there—the gentleman we have, here now is ome of them. Q—Calling your attention to the article entitled, “Taxing Rallroad Frapchises,” I The Omaha Bee of May 16th, I will ask you whether you bave read that article through recently? A.—Yes, I bave read it through recently. Q.—Was it the 14th or 15th of May, you were there? A.—It was on the 14th. Q.1 see the article fis dated the 15th? A~Yes, sir; it had Dot been transcribed by the reporters. - Later it appeared in the datly Bes of the 16th. Q.—Does this article which I have just A. E ROBINSON, M. D., C. M.. Medical Directos Ry 2, e et 2 b G BN R . Tt il men who suffer ual w Tesull ure loss of an back, mlv«la. o an, o8 | can now cure The remed; feot of wa t desir oites N Ne selves ai ploved” Eu’a. " Any ear o (X" 1