ACTUAL PRESENT CASH VALUE OF ROADS AND EQUIPMENT. In the detail reports of the several roads it will be seen that the blank for the item of" present cash value" is in many cases not filled out. A circular letter addressed by the Commissioners to the General Managers of the roads not reporting, requesting a compliance with the law as to this item brought responses which are published herewith. The roads having thus thrown upon the Commissioners the entire responsibility of fixing this value, two plans have been adopted as a basis from which to make estimates, viz.: the average market value for the year of the bonds and stock in localities where railroad property is continuously bought and sold, and a valuation of which the net earnings for the year would be six per cent. A comparison of the results reached by the two methods will probably furnish a correct valuation for all practical purposes. In arriving at the selling price of the bonds and stock the average of twelve months was taken to eliminate as far as possible any speculative fluctuations. The value of such of the roads as have no stock and bond quotations and such as have no net earnings has been taken from the assessment made last spring by the Executive Council for purposes of taxation. As the market value of the bonds and stock covers the entire mileage of the roads on roads extending through or into other states, where the greater business is done outside of Iowa, a per cent should be deducted in fixing the value in Iowa, and where the greater business is done in Iowa a per cent should be added. Valuation per mile, on basis of quotations, of the roads whose stocks and bonds were actively quoted during the year 1886: Valuation of roads per mile on basis of net earnings for Iowa for year end ing June 30, 1887: The valuation of the following roads is the assessed valuation of the Executive Council, in its report dated March 7, 1887. The assessment was made on a basis of about twenty-five per cent of the value and four times the figures given quoted below would give the value as per this method of computation: The following circular was addressed to General Managers of the different roads, and their replies are given on subsequent pages: DES MOINES, Iowa, October 26, 1887. General Manager: DEAR SIR-The fifth division of section 4, chapter 77, laws of the Twentieth General Assembly, makes it the duty of the Railroad Commissioners to report to the Governor each year, "the cost and actual present cash value of each railroad and its equipment, including permanent way, buildings and rolling stock, and all fixtures and conveniences for transacting its business." The attention of the Commissioners has been drawn by the Governor to their neglect in former reports to report the cost and present cash value of the railroads in the State. Will you kindly furnish them at as early a date as practicable, the cost and present cash value of each of your lines in the State, or, if you prefer it, of the property in the aggregate. You will observe that in division ten of the same section (number 4) that they are to report such statistics of the read and its transportation business, as in the judgment of the Commissioners may be necessary and proper for the information of the General Assembly or as may be required by the Governor." By order of the Board. W. W. AINSWORTH, Secretary. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY CO., To the Honorable Board of Railroad Commissioners of the State of Iowa, Des Moines, Iowa: GENTLEMEN-In reply to yours of the 26th ult., requesting this company to show "the cost and present cash value of its railway and its equipment, including its permanent way, buildings and rolling stock and fixtures and conveniences for transacting its business:" I respectfully submit: 1. As to the cost of the property. The greater portion of its railway in Iowa was built by other corporations, whose books and accounts never came into the possession of this company, and it has no other sources from which such information can be secured. 2. As to the present value of the property mentioned. The information called for consists in opinions based upon facts as accessible to your honorable Board as to any officer of this company. These opinions fluctuate constantly because of cross-prospects, the financial condition of the country and the possibility of legislation which may materially affect such value. I am advised that the "present cash value" of property is measured by the price which it would command if offered at public sale to the highest bidder for cash in hand. What price the railways of this company in Iowa would command at such a sale cannot, in my judgment, be approximately conjectured. If such conjectures were feasible the communication of them to your honorable Board would not answer your questions. To both, we say, respectfully, we do not know. Yours truly, E. ST. JOHN, General Manager. CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY CO., W. W. AINSWORTH, ESQ., Secretary State Board of Commissioners, Des Moines, Iowa: DEAR SIR-In accordance with your circular letter of October 26, and in answer to question No. 28, on page 6 of the Iowa report for the year ending June 30, 1887, I would say that we would estimate the present cash value of the road and equipment in Iowa, as follows: Main line, including equipment, buildings, etc., $1,143,845.10; Rock River Branch, including equipment, buildings, etc., $161,860.64. Trusting that the delay in answering your question has caused you no inconvenience, and that the estimate given above is satisfactory to you, I remain, Yours very truly, L. A. ROBINSON, Auditor. |