166





Record  and  Guide.





February d, IBM





legiglation of the several States, The second Committee has just
issued its preliminary report on "Valuation, taxation and exemp¬
tion in the Commonwealth of Pennsylvania." This Committee, of
which Joseph D. Weeks, of Pittsburgh, is chairman, has accom¬
plished a great amount of work in a very short time and at a very
small expense. To take a census of all property in the State would
possibly have cost a million dollars. The amount of property has
been computed with great apparent care, at a total cost of $J,300.
A careful examination of the report shows that its results are based
on a computation and not on a series of guesses.

The assessed valuation of property in Pennsylvania has been
about two billions and a-half. The report of tbis committee indi¬
cates tbat its real value is about $9,693,000,000. This includes all
property, real, personal and mixed, and .no deduction is made of
the $300,000,000 of property which has been specifically exempted
from taxation by legislative enactment. The total taxes paid,
including State, county and local taxes, are $49,383,000. It thus
appears that if all property could be reached and assessed at_its real
value a tax of one-half of 1 per cent would be adequate for all the
public expenditures.

One result of the general confidence with which the Conference
seems to be regarded is an imusual willingness on the part of the
various interests to answer the questions put to them. The rail¬
roads and tbe manufacturing corporations seem especially willing
to give whatever information is needed.

The committee appointed to formulate the principles on which a
system of taxation should be based has not yet reported, but should
they be able to formulate conclusions having the practically unani¬
mous approval of tbe Conference it cannot be doubted that such
conclusions would be speedily crystalized into legislation. The
interests behind tbem would be too strong to be ignored. Unlike
tbe wandering "thoughts on taxation" which the average tax
commission promulgates, the conclusions of this conference will
have behind them the powerful influence of six of the greatest
interests of the State,

Bad as are the present provisions of the Pennsylvania law on
the subject of taxation they are yet better than those of many
States, Especially in the matter of taxing corporations, experts
are of the opinion tbat the Pennsylvania system is as good as any
yet devised. All interested in the promotion of good citizenship
must wish that ber present encouraging experiment may result in
giving her a tax system which it will he worth the while of other
States to copy.





Investments.—&ood and Bad.

The reports for last year of the three most prominent coal roads whose
stocks are actively dealt in on the New York Stock Exchange—Reading,
Lackawanna and Delaware & Hudson—have all appeared within a few
weeks;and have been critically examined wiih the view of findiDg;the extent
to which each was benefited by the Coal Combination, Delaware & Hudson
acknowledges an increase of $1,294,333 in its coal business for the year.
Reading and Lackawanna are not so outspoken, though they caDnot al¬
together deny that they have profited by the increased price the consumer
is compelled to pay as a result of Pres. McLeod's policy. Last year the
amount of anthracite mined was nearly 12.(00,000 tons, and the price was
increased on most sizes of the product at different times in the year until
the increase amounted to from 75c. to §1 a ton. Supposing even that the
amount marketed did not equal that mined, and as no increase was i n force
in the first quarter of the yoar. it would still most probably be fair to say that
the cash resu.tsoE the increasa was equal to 3Jc. per ton on the mined
tinnage. Oa 43,000,OOO.tons this would be equal to $13,60 J.OCO to be distrib-
utod among the coal producers. Reading and Lehigh Valley ruiued
685,953 tons less than in 1891, yet au advance of 30 cents per ton on the
15, l,i&,581 tous that they did mine would be equal to about Si.5LO,00 , or very
much more thau the gross loss by tbe reduction in the amount mined.
Even Jei-sey Central with au output of 5,271,131 tons and a reduction of
,7^6,837 tons from the output of the previous year would be more than com¬
pensated by an all round increase of 30 cents perton on the amount actually
produced for the reductiou in tounage, the market price and the cost of
producton being taken into account. Ihis very clearly illustrates the
power put into tbe bands of thecoai-companies by tills combination. They
may very easily limit production and compensate themselves by increased
prices. For icstance, an agreement to limit the production of the current
year to tbe amount produced last year aud to increase the price twenty-five
cents would put §10,100,100 into the treasuries of the agi-eeing companies.
With a fmther limitation of the supply the price might he still further
in advanced to tbe greater enrichment,

The annual reports of the Reading and Lackawanna make showings
which might at first sight be attributed to the natural growth of such
large enterprises without any combination to restrict tbe production of
coal or to increase its price. Reading, owing to tbe Coal and Iron Lom.
pany having paid its own way last year instead of calling on the con¬
trolling company to make good a deficiency, as has been tho habit of that
institution, was able to pay full intei'est on all its three issues of income
bonds. But the amount of money this called for in excess of tbe interest
paid on incomes for the year 1S91 was only about $1,500 000. Actually
the net earnings as reported did not increase last year so much bs they
did in the preceding year, the increase being $i,fi33,2i3, as compared
with ¥3,303,039 in 1891, when the combiaation-did-aot exist This is no
more than should be -especited under or^iiiMy cirCumsttoces from a great
property like Reading in th'e '^nde of coni^l^t m^'na'eer*. Lacki^waniia





reports even more modest results. Its increase of net earnings in 1P93
was ODly ?489,218; interest and rentals decreased $51,630; consequently
tbe balance available for the stock was only ?5il.05S greater than in
1891. Of this increase $343,085 was offset by additional expenditures for
betterments. Tbe actual earnings on the stock were reported as 9,93 per
cent, as against 9 31 per cent in 1891, but also compared with 10 per cent in
1&9', so that the results for ]893 do not appear to be more than the
ordinary ones for this magnificent property. But Lackawanna in¬
creased its antln-acite output by 33i,6Ul tons in 1S93 and had a
total output of 6,539,649 tons from which it received a very
largely increased income, not only by reason of tbe growth of
the output but also from its increased price. Reading and Lackawanna
made large expenditures on their properties last year, evidently
preferably to carrying forward to the credit of their stocks such results as
would strengthen the opposition that has arisen to the coal companies in
consequence of the combination made among them last spi'ing. Gross
eamhigs of the Reading Coal and Iron Company increated 815,346 0"0 and
its operating expenses $14,455,^47, leaving net earnings only just sufficient
to pay fixed charges and carjy forward a small sm-plus of ?31-',319. This
company is. of course, always operated iu the inLerest of the Reading
Railroad Company, so that large results are not to be expected in its show¬
ing, but the increase in operating expenses is so enormous as to leave ooly
one conclusion. In the same way Lackawanna increasel gross earnings by
S;4,376,'^3y acd net by only $146,174, so tbat tbe cost of operation increased
by $l,3J0,35o. Tbe average increase for some jears prior would be from
§1,000,000 to $1,330,000. In the report of Delaware Sc Hu'Ison, the
results of its coal businessaremore apparent and arc carried through the
accounts to the surplus for the stock. It reports an increase of coal busi-
ue.-s of $1,294,333 and an increase of the earnings on stock of ?1,Oil,411.

Ibe importance of these figm'esis in tbeir bearing on the value of the coal
road secm-ities. Tbey unquestionably show that if the coal companies
can continue to act in unison not only are tbe coal secuiiiies already
in demaud still more desirable, but those which have had only a
speculative value may be expected to take on a new character and have
greater esteem. If Lackawanna can continue to spend such large sums as
it did last year on the improvement of its property and still add something
to its surplus, wMch already amounts to over 60 jier cent, of the face of its
capital stock, its stock is not dear from an investment point of view even
if docs se 1 on a i}4 per cent, basis. It is not likely either that Reading
will continue to spend all its increased income on improvements It has
b;eu seen what a large increase to its income a small increase iu tbe ton
price of anthracite will produce, and this fact takeninto consideration witb
another, tbat about $2,i 0 ',000 would pay 5 per cent on tbe capital stock, is
very significant. Of course, there is also a cold douche to be taken witb
this glowing showing. The Coal Combination may be said so far to
have emerged very succcessfully from the legal attacks made upon it. If
Reading has been compelled to make a formal surrender of Jersey Central,
it still holds Lehigh Valley and there is nowhere any intimation^of the
coal companies reducing prices. There is, however, still a good deal of
litigation to be disposed of, and it is yet to be seen whether the bill intro¬
duced into the New York Legislature can pass, and if it passes whether its
provisions can be rauintained in tbe courts Hitherto it hasbeen the form of
trade combinations that have bsen attacked, here it isproposed to control the
prices of tbe commodity dealt in. It is very doubtful if Kew York cau as¬
sert this principle for itself. Tbe courts have been successful in breaking
up objectionable forms of combinations to put up prices, but they ba\e not
succeeded in preventing the results which those combioatious were made
to produce. A long step toward the adoption of the Socialistic programme
must be made before tbat is possible, and that step is not likely to be taken
just yet. Legislation which can fix the price of coa! can also fix tbe price
of every commodity subject to trade. This is a principle that has but com¬
paratively few supporters Experiments were made in its direction from
tbe days of antiquity, aud always failed.





Slow Progress in Eapid Transit Matters.

A MEEIING OF THE GENERiL COMMITTEE AT THE EBAL   ESTATE  EXCBANGB

TO-DAY.

Rapid transit matters have not progressed very hopefully tbia week.
Assemblyman Percival Farquhar last week telegraphed to Chairman Ricb¬
ard V. Harnett, of tbe General Committee on Rapid Transit, saying : " I
heartily favor city building Rapid Tranit road, fcjhall introduce bill next
week to that effect. Could I confer with your committee in Hew York
to-morrow." So valuable an ally as thia telegram promised the committee
was entitled to the highest eonsideration, it was thought, and accordingly
two conferences were held oo Friday and Saturday, at both of which Mr.
Faiqubar's ideas were ia everyway consistent with bis telegram.

But on Sunday he conferred with Mr. Croker and Mayor Gilroy, and on
Monday when he resumed the conference with the Committee, although
without a draft of his proposed bill present, he had modified his ideas so
greatly that the Committee could not agree with him. His bill made no
provision for city ownership beyond limiting the period of sale of the pro¬
posed franchise to 150 years. It made no provision for city constmction,
but removed many of the restrictions contained in the present act upon
tbe corporation purchasing the franchise, and was designed to make the
franchise more attractive bo private capital.

The main feature of the new bill, however, was the provision calling for
tbe appointment of a new Commission by Mayor Gilroy. This was a
direct slap at tbe present Commission. Tbe Oommittee felt that it could
not decide upou so important a matter off-hand, and has called a meeting
of the full committee for to-day at one o'clock, at the Real Estate
Exchange. There is a general sentiment in favor of preparing a separate
bill empoydicg the provision for city owaersbip and construction and
pressing it upon tbe LegiBlatiire by popular agitation and petition.

Before the Rapid Transit CommlsEion the only events of importance
were tbe answer of the Mianattan Elevated Railroad Company's Special
Cotnmittfis of Conference, refusing tocoostruct estcJnsToliE olth^lr roada