SPECIAL REPORT
of
Railroad Commissioner John W. Thomas.
To His Excellency, James 0. Davidson,
Governor of Wisconsin.
Sir;—Since my report submitted to your predecessor, De¬
cember 2d, 1905, of the investigation made by this department
with a view to ascertaining the correctness of the reports of
gross earnings made to the State Treasurer by the several
railway companies operating in Wisconsin which were used as
a basis for taxation, this department has extended the investi¬
gation to cover the years 1894, 1895 and 1896 on the Chicago,
Milwaukee & St. Paul, the Chicago & Northwestern, and the
Chicago, St. Paul, Minneapolis & Omaha. We were unable to
find any vouchers or records for this period on the remainder
of the roads operating in Wisconsin on which discriminations
and other irregularities had been heretofore reported.
On the C., .M. & St. P. Ry. for the years 1891,1895 and 1896,
there has been found in the form of commissions, relief
vouchers issued to agents or refunds to shippers, wrong¬
fully deducted from gross earnings, the sum of
Car mileage, credit balance not reported
Switching charges collected, not reported
Rentals of tracks and terminals, not reported
$126,315 13
66,991 .36
281,058 37
210,956 44
Total
$1,015,351 30
Od the C, & N. W. Ry. for the years 189), 1895 and 1896,
there has been found in the form of relief vouchers issued
to agents or refunds to shippers, the sum of 8'113, 591 96
Car mileage, credit balance not reported 1,12'B 31
Switching charges collected, not reported *
Rentals of tracks and terminals, not reported *
Total 8218,015 30
On the 0., St. P., M, & O. Ry. for the years 1891, 1895 and
1896, there has been found in the form of commissions or
refunds to shippers, wrongfully deducted from gross
earnings the sum of " ... 369,362 18
Car mileage, credit balance not reported 22, 110 62
Switching charges collected, not reported 16,909 13
Rentals of tracks aud terminals, not reported 18,921 73
Total 8156,337 26
Total on the three before mentioned companies 81,119,703 86
Total amount reported to your predecessor on December
2d, 1905 10,828,138 62
Making a grand total of 812,218,14-2 48
This amount at 1 per cent, would make a tax of 489,925 70
* Was uQable to get any records of the same.
This completes the work on the large roads for the period from
1903 back to 1894, inclusive. Back of 1894, we find the records
and vouchers have practically ail been destroyed and reliable
statistics are not available. We believe tiiat tlie work would be
so unsatisfactory tiiat the expense of making the investiga¬
tion would be unwarranted.
The investigation of the passenger refunds on the several
roads above reported has not been completed. When it has
been, a full and concise report will be made to you as provided
in chapter 431, laws of 1903.
In the report to Governor LaFollette, dated March 23, 1905,
attention was called to the fact that one of the large roads in
this state had paid a large amount in commissions which had
been deducted from gross earnings before tliis road made its
report to the stockholders, but before reporting to the state
treasurer, these commissions had been replaced in the gross
earnings and taxes paid on the same. From this fact it would
appear that these commissions must liave been illegal under
the laws of the state of Wisconsin and must have been paid in
the form of discriminations between shippers. The extent of
such discriminations has neyer been inquired into and the de¬
partment is ready, if you think pro])er, to take up this work
for any year advisal)le with a view of ascertaining the extent
of the practice of covering up discriminations in the form of
commissions. This department is now engaged in making an
investigation as to tlie extent of discriminations made between
shippers in violation of the laws of the state for the year 1905,
and will report the facts as soon as ascertained.
RECAPITULATION.
AMOUNTS WRONGFULLY DEDUCTED FRO.M GROSS EARNINGS BEFORE REPORTED
FOR TAXES.
Commissions and repayments to shipp^rs
Commissions and repayments on passenger traffic
Expense of operating hotels
Expense of operating sleeping cars
By refunds to skippers from Kansas City and Omaha to
Chicago, on freight which never entered the state and
no part of which was credited to the state
AMOUNTS NOT REPORTED FOR TAXES THAT ARE A PART OF
GROSS EARNINGS.
Car mileage,—Credit balance 31,070,856 11
Switching charges collected 2,314,309 02
Storage, demurrage and miscellaneous 165,304 09
Rentals of tracks and terminals 905,684 48
Total $12,248,142 48
Respectfully submitted,
JOHN W, THOMAS,
Railroad Commissioner.
Madison, Wisconsin, July 6, 1906.
36,856,988 75
872,661 70
1,600 96
13,728 91
47,008 46