FIFTEENTH ANNUAL YEAR BOOK — PART IX. 603 



mendations of the board of directors of the Northern Pacific Railroad 

 Company, which I have filed witli you. And it is contrary to their own 

 voluntary actions, when apportioning earnings to branch lines or feeders, 

 when operated by independent companies, as evidenced by the "division 

 sheets" which you can find in the general offices of every railroad com- 

 pany operating in Iowa. 



This objection alone is fatal to basing the computations on net profits. 

 But in addition thereto, it may be added that it is extremely difficult to 

 arrive at the net profits from farms. In the computations, cash rentals 

 were preferred to grain rentals, partnerships, or personal management, 

 because of the difficulty in determining the profits with any degree of 

 accuracy. The grain may not have been sold; it may be cribbed for 

 several years, or fed to stock; the labor of the land owner and his family 

 must be estimated in case of personal management of the farm, etc., 

 etc. The owner of a railroad exercises none of the duties or responsibili- 

 ties of the partner. 



Comparisons on the basis of gross earnings have their objections. But, 

 on the whole, I believe it can fairly be stated that gross earnings represent 

 the business done, and to that extent represent the portions of the "ex- 

 pense of government" which should be borne by the various industries. 



I do not attempt to state what factor I believe should be controlling. 

 I merely offer this as additional evidence that the land owners of Iowa 

 are today bearing more than their fair share of the taxes in this state, 

 compared to those paid by the railroads. 



This work has been done at the request and at the expense of Mr. Frank 

 Pierce, secretary of the Iowa League of Municipalities. 



Most respectfully yours, 



CLIFFORD THORNE. 



In the final makeup of the executive council, they increased the actual 

 value of farms over the previous year $60,000,000; of town lots, $111,- 

 000,000; of railroads, $48,000,000. They increased the actual tax paid, in- 

 cluding millage increased directed by the state legislature for state insti- 

 tutions and capitol extension, on farms, $1,089,000, and on railroad, $121,- 

 000. They increased the taxes on farms nine times as much as on the 

 railroads. They increased the state tax, exclusive of the millage increase 

 directed by the state legislature for capitol extension and state institu- 

 tions, on farms, $227,000, and on railroads, $1,500. 



The only deduction I make from those figures is that it will pay you 

 to have a decent overhauling of the Iowa taxes, and it will pay you 

 gentlemen to be on hand — not 4,000 members of the Corn Belt Association, 

 but your representatives. I state no conclusions. 



I had intended to talk to you about the public utilities. There was a 

 public utility measure pending before the last state legislature. The 

 main features of it, concerning the franchise, were practically duplicates 

 of a model utility law prepared by Professor John H. Gray, of the Uni- 

 versity of Minnesota, while in the employ of the National Civic Federa- 

 tion. At the time that he was in your employ, the executive committee 

 of the National Civic Federation included such familiar names as August 

 Belmont, chairman of the board of directors of the Interborough Rapid 



