Today's Robber Barons; K. F. Schumacher

Now, philosophy is not woman's forte, but Evelyn Underhill is top rank in her specialty, and women like Susan Stebbing and Dorothy Emmet are sounder than certain popular male philosophers who shall remain nameless. It would be pleasant to conclude by saying that the things Adam MODERN robber baron state tax assessors are more ruthlessly pred atory than their medieval counter parts who looted commerce on the River Rhine. Ancient commerce was not restricted to one unim proved waterway or primitive overland route. It was free to se lect the route least subject to Though long retired, Mr. Schumacher con tinues "workin' on the railroad" through his one-man "FreeLance Society for Prevention of Cruelty to the Iron Horse." Gifford exemplified in his life and tried to perpetuate in his will things like personal piety, individ ual self-reliance and hard work, the validity of reason and the power of philosophy - were stronger now than in 1887. Alas, they are weaker. But they are not lost! The old landmarks are still there for those-who would search them out, and old Lord Gifford's legacy is the fountainhead of an end uring series of them. ~ K. FRITZ SCHUMACHER depredation by local "tax col lectors."

In this respect, modern inter state commerce by railroad is less fortunate. It is chained to its pri vately owned and improved right of-way, inhibited by government regulation in all matters, including re-routing. State property tax as sessors take advantage of out-of state owned corporations with no local vote. They assess railroad 1966 TODAy'S ROBBER BARONS 43 property at a higher percentage of market value than similar lo cally owned property. Thus, they appropriate the inherent economy of railroad transportation for tax purposes. Local taxpayers, so re lieved of part of their burden, naturally do not object. The indulgent North American taxpayer has been thoroughly brainwashed to believe the fable of railroad obsolescence. This fa ble offers a convenient smoke screen behind which politicians cannibalize railroads for the bene fit of subsidized nonrail transport, spawned in political pork barrels.

The ability of self-reliant rail roads to withstand political abuse is their weakness. They offer no opportunity for waterway - style pork barrel rolling. Discriminatory taxation levied against railroad property began innocently enough in the early days of the industry. Railroads then had little or no competition and taxes were moderate. A tax on railroad transportation could be evaded only by resort to horse drawn vehicles. Railroads, then as now, leaned over backward to dem onstrate good citizenship in states which, then as now, searched fran tically for sources of additional tax revenue. Many state constitutions spec ify uniform property tax rates, but do not prohibit nonuniform assessment values. Resourceful as sessors take full advantage of this loophole. They assess railroad property at a higher percentage of market value than other compa rable commercial property. Every property owner is painfully aware of skyrocketing property taxes due to reckless political spendocracy.

Taxes on punitively evaluated railroad property, raised in pro portion, have reached ruinously confiscatory levels. Self-preserva tion dictates firm resistance to further political attempts to kill the goose that lays the golden railroad tax egg. In 1961 the railroad property overassessment ranged from 1lf3 times that on other private prop erty in Virginia to 6lf4 times in Arizona. The table below shows the relative overassessment of railroad property in 24 states, listed in descending order of mag nitude, and computed from figures published in Railway Age for De cember 9, 1963. The overtax in dollars appears in the same ar ticle. Instances are on record in which railroad property, placed on the market, sold for less than the yearly tax take. This, according to Railway Age, happened in Hudson County, New Jersey: Pennsylvania Railroad un loaded property of assessed value of $621,000 for a selling price of $19,471 and thereby shed a yearly 44 THE FREEMAN March 1961 COMPARABLE PRIVATE COMMERCIAL AND RAILROAD PROPERTY TAX Rail Overtax State Commercial Railroad (Estimated) Arizona $100 $627 $6,348,366 Wyoming 100 490 2,592,636 Montana 100 473 5,764,795 New Mexico 100 446 1,787,999 Idaho 100 382 3,293,139 New Jersey 100 343 11,874,423 Tennessee 100 299 4,597,737 Kansas 100 290 8,472,279 Oklahoma 100 259 3,927,851 California 100 258 14,150,498 Mississippi 100 250 1,974,756 Iowa 100 245 4,464,561 South Dakota 100 236 797,271 IlIinois l 100 217 20,725,603 Kentucky2 100 217 3,127,387 North Dakota 100 210 2,884,610 Alabama 100 198 1,557,587 Louisiana 100 196 2,039,064 Missouri 100 194 4,571,649 Utah 100 193 1,919,882 North Carolina 100 154 791,270 Nevada 100 151 808,960 West Virginia 100 148 2,487,902 Virginia 100 137 2,019,192 Total 1961 Railroad Overtax: $112,979,417 1 In 1963 Illinois enacted a law (SB 946, approved August 26, 1963) re quiring assessments of railroads at the same percentage of full value as local property is assessed. However, a number of Illinois lines contested the 1963 assessments, claiming that arbitrarily increased values offset equalization.

2 In recent years, the State of Kentucky has made a substantial effort to bring railroad property assessments into line with the assessment of local property and hopes to accomplish this objective in 1966.

1966 TODAy'S ROBBER BARONS 45 tax load of $52,226. Another road sold land assessed at $857,000 with annual taxes of $66,000 for only $40,000. Examples of flagrant overassessment of railroad prop erty, given in Railway Age, are not limited to the 24 states tabu lated. New York Central's dis continued West Albany car repair shops were sold for $500,000. As sessed value for railroad taxes was $1,500,000. The new owner, not in railroad business, enjoyed a miraculous depreciation to a mere $300,000! The "Doyle Report" on trans portation policy to the United States Senate gives the experience of the Pullman Company at Rich mond, California, in 1960. Prop erty, sold by the company and carried on the tax rolls at $342,830, was reassessed for the new private owner at $190,000. Tax proceeds in most states are used indiscriminately for high ways, airports, waterways, and other indirect subsidies to rail road competitors. Thus, bureau crats are in a position to re-allo cate railroad traffic to subsidized, pro per t y -t a x -exem pt, non 1'" a iI transport. The results of arbitrary, political traffic redistribution are all too evident. A new public high way is immediately congested by long-haul truck traffic. A tax-pay ing parallel railway line loses traf fie, to operate far below capacity.

It is high time that adminis trators of Mid-Victorian railroad taxing and regulating policies un derstand that railroads were built in good faith to provide vital transportation service. State tax looting practices severely hamper railroad ability to serve customers and invite long overdue congres sional action to stop depredations on interstate commerce. Robber baron tax collectors for 24 states are looting travelers and shippers residing in all 50 states. + Lincoln, Today PAUL FISHER, of Redondo Beach, California, suggests, that if Lincoln were commenting today, his statement might have been: "We cannot use the law to favor some of the people some of the time without endangering the freedom of all of our people, for all time."