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Appendix to the Journals of the Senate and Assembly of the ... session of the Legislature of the State of California (Volume 1885v.1) online

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$92,000



6 per cent.
6 per cent.

6 per cent.

7 per cent.

6 per cent.
10 per cent,

7 per cent.

8 per cent.



18



During the same time the following bonds were purchased:



Date of
Purchase.



Title of Bonds.



Rate of
Interest.



Oct. 16, 1882-_
Dec. 8, 1882 -
Aug. 31, 1883-
Aug. 31,1883__
Aug.31, 1883—



Merced County Bonds of 1874
Marin County Bonds of 1876 -
Marin County Bonds of 1876 .
Kern County Bonds of 1880„.
Tehama County Bonds of 1883

Total amount purchased



$12,000

16,000

34,000

9.000

37,000

$108,000



10 per cent.
7 per cent.
7 per cent.
7 per cent.
5 per cent.



The interest upon bonds on deposit in the State Treasury, to the
credit of the Consolidated Perpetual Endowment Fund, for the thirty-
fourth fiscal year, amounted to $78,069 08, and for the thirty-fifth
fiscal year to $81,550 70, which was, by order of the Board of Regents,
paid to the Treasurer of the University for its support.

Pursuant to appropriations made by the Legislature, warrants were
also drawn upon the General Fund, for purposes appertaining to the
University, aggregating $15,368 86 for the* thirty-fourth fiscal year,
and $35,398 36 for the thirty-fifth fiscal year, as shown bj^ the follow-
ing:



Thirty-fourth
Fiscal Tear. I



Thirty-nfth
Fiscal Tear.



For furnishing Bacon Art and Library Building

For continuing operations and instructions in Mechanical and Min-
ing Arts College

For continuing special investigations and operations of Agricult-
ural Department.

For annual reimbursement of the University

For Physical Laboratory of University

For continuing and completing work of Department of Viticulture.

For continuing work of Agricultural Laboratory

For protection and improvement of buildings and grounds

For rent of rooms, Hastings Law College

For payment of annual intei-est on $100,000, for Hastings College
of Law



$2,130 41

5,472 48

2,980 97
4,785 00



Total



3,300 00
3,500 00



$22,168 86



$1,203 35

1,959 50

7,500 00

4,785 00

2,535 74

776 15

750 00

11,000 00



$30,509 74



STATE DRAINAGE CONSTRUCTION FUND.



The condition of the fund for the thirty-fourth fiscal year was as
follows:

Receipts.

Received from taxes $2,416 09

Balance... 10,271 76

Total .$12,687 85

Diahxirsements.
Balance overdrawn .^ $12,687 85

Thirty-fifth Fiscal Year.
Receipts.

Received from taxes $6,734 88

Balance overdrawn 3,536 88

Total ^ $10,271 76



19

For particulars relative to the state of this fund, attention is directed
to the last report of my immediate predecessor. Therein will be found
the anomalous conditions imposed upon the fund by the law, under
which a Board of Directors, created by the law, were authorized to
estimate the revenue to be received during the year, audit claims
upon it, and directed the Controller to draw his warrants for the
amount. By this means it is no wonder that the fund was overdrawn.
But as this law has been held to be void by the Supreme Court, it is
the province of the Legislature to make such disposition of the money
remaining in the fund as it may deem proper.

STATE DEBT.



At the beginning of the thirty-fourth fiscal year (July 1, 1882) the
funded debt of the State amounted to $3,303,000; since that time it
has been reduced $99,500. Of this amount, $95,500 was paid on final
redemption of soldiers' relief bonds, and $4,000 funded debt bonds of
1873, the interest upon which ceased September 1, 1881.

This leaves the State debt $8,203,500, classified as follows:



Rate of
Interest.



State Funded Debt Bonds of 1857.
State Funded Debt Bonds of 1860.

State Capitol Bonds of 1870

State Capitol Bonds of 1872

State Funded Debt Bonds of 1873.



$5,000 00

500 00

250,000 00

250,000 00

2,698,000 00



Total $3,203,500 00



Interest
ceased.
7 per cent.
7 per cent.
6 per cent.



The funded debt is as follows:



Bonds in private hands

Bonds held in trust for the State School Fund
Bonds held in trust for the University

Total



$513,500 00

1,737,500 00

952,500 00

$3,203,500 00



The interest-bearing debt consists of :



Bonds held in private hands $508,000 00

Bonds held in trust for the State School Fund j 1,737,500 00

Bonds held in trust for the University 952,500 00



Total $3,198,000 00



The bonds held in private hands, bearing interest at this date, are:



Series.



Kate of
Interest.



State Capitol Bonds of 1870..
State Bonds of 1873 (funded)

Total



$14,000 00
494,000 00

$508,000 00



7 per cent.
6 per cent.



20

The Funded Debt Bonds of 1857 were issued under the Act of April
28, 1857. The amount of bonds issued was $3,900,000, all of which,
except bonds amounting to $5,000, have been redeemed or re-funded,
and upon which interest has ceased.

The bonds of 1860, amounting to $198,500, were issued under the
Act of April 30, 1860. These bonds have all been redeemed or re-
funded, excepting bonds amounting to $500. These latter were called
in July 31, 1875, but have not yet been surrendered, although interest
ceased from date of notice.

The Soldiers' Relief Bonds were issued under the Act of April 27,
1863, amounting to $600,000. The amount outstanding at the begin-
ning of the thirty -fourth fiscal year was $95,500. They matured July
1, 1883, and have since all been paid.

The State Capitol Bonds of 1870 were issued under the Act of April
4, 1870. The amount issued was $250,000. They are all outstanding,
and will become due July 1, 1885. With the exception of $14,000 (in
the hands of private parties), all these bonds are held by the State,
for the benefit of common schools.

The State Capitol Bonds of 1872 were issued under the Act of
March 28, 1872, and amount to $250,000. They are all outstanding,
and become due Julv 1, 1887.

Of the $3,203,500 outstanding bonds of the State, $2,690,000 are held
by the State for the benefit of the School and University Funds,
leaving but $513,500 in private hands. Of this amount, $5,500 have
been called in, there being money in the treasury to pay them.

TRANSPORTATION OF CONVICTS AND INSANE.

The cost to the State for conveying convicts to the State prisons,
and insane patients to the asylums, forms no inconsiderable item in
the annual expenses of the State; and, under the present laws, will
require an appropriation of about $100,000 for the ensuing two fiscal
years.

This cost seems unreasonably large. If so, it should be lessened.
It is, therefore, a subject for the Legislature in its wisdom to act upon.

The State, through her laws munificently aiding in the construc-
tion of the Central Pacific Railroad, by paying $105,000 per annum
interest on its bonds, wisely provided, as the conditions of such aid,
that the railroad company "should carry all public messengers, con-
victs, and lunatics, over its roads free of charge. Also, materials for
the construction of the State Capitol building, articles intended for
public exhibition at the Fair of the State Agricultural Society, and,
in case of war, invasion, or insurrection, as well as at all other times,
also transport and carry over their said railroad, all troops and muni-
tions of war belonging to the State of California, free of charge,
and without any other compensation than as herein provided. And,
also, agreeing therein, that said company shall, within ninety days
after receiving a patent therefor, from the United States, execute,
acknowledge, and deliver to the State of California, a deed in fee
simple for the conveyance of the south half of section nineteen,
Township eleven north. Range seven east. Mount Diablo meridian,
excepting and reserving therefrom, however, a tract or strip of land
four hundred feet wide and running across said half section, each
one half thereof lying on each side of the line running along the
center of the main railroad track of said company."



21

For nineteen years the State complied fully with the law requiring
it to pay this interest upon the honds of the railroad, and had, up to
the time of my refusal to make further payment, paid 81,995,000 in
accordance with the law; yet, during all this time, the railroad com-
l)any has failed to comply with the conditions imposed upon it by the
same law.

For these reasons, impelled by a sense of duty to the State, I refused
to authorize further payment of interest on the bonds of the com-
pany. Suit was therefore begun to compel me to issue warrants for
this money. This suit was recently decided by the Supreme Court
of this State, which held that the State must pay this interest.

In this connection, I desire to express my deep obligation to Hon.
•J. H. McKune and Hon. W. W. Foote, both of whom volunteered
their services in defense of the State, in this case.

The Attorney-General is prosecuting an action against this railroad
company for the recovery of the money paid it by the State. I respect-
fully suggest that the Legislature take such action as shall compel the
railroad company to perform the conditions of this contract.

RAILEOAD TAXES.

For four years there has been, and now is, a heavy deficiency in the
receipts to the General Fund, School Fund, and Interest and Sinking
Fund, owing to the refusal of the Central and Southern Pacific and
other railroad companies to pay the taxes levied upon them by the law.

The assessed value of all the taxable property in the State for 1880
was S666,202,674, of which the assessment against all railroads amounted
to $31,174,120, being 4.68 per cent of the whole assessment.

In 1881, after equalization bv the State Board, the assessment was
§658,691,059; and the assessment of railroads was §34,829,668, being 5.29
per cent of the whole amount.

For 1882 the assessed value of the whole property was fixed at $607,-
472,762, whilst the assessment upon railroads was §27,602,313, being 4.54
per cent of the.->whole.

In 1883 the entire assessment of property amounted to $764,763,559,
whilst the value put upon railroads operated in more than one county
aggregated $40,017,000, which is 5.23 per cent of the whole.

Recapitulating, these assessments for the several years are as follows :





Years.


Total 1
Assessments, j


Kailroad
-issessmeuts.


For 1880




$666,202,674
658,691,059
607,472.762 :
764,763,559
821,078,767


$31,174,141


For 1881 .


34.829.668


For 1882


27,602,313


For 1883


40,017,000


For 1884 _ _ _


50,746,500









Commencing with 1880, with an assessment of $666,000,000, drop-
ping to $658,000,000 in 1881, and to $607,000,000 in 1882, the railroad
assessments, beginning with $31,000,000, in 1880, rose to $34,000,000 in
1881, but fell back to $27,000,000 in 1882. These reported, but unfounded
decreases in values, should attract the earnest attention of the public.
Whilst nearly all branches of business were prosperous, the hum of
enterprise heard in active chorus everywhere, crops abundant, and



22

prices remunerative, land enhancing rapidly in value, labor for the
most part employed at fairly good prices, and improvements of all
kinds driven forward vigorously, assessed values were constantly les-
sening.

The total valuation upon the Central Pacific, the Southern Pacific
and branches, the State rate and the State tax for 1880, 1881, 1882,
1883, and 1884, are presented here:



Bate on
each 5100.



1880 i $28,338,265 66

1881 I 32,429,519 00

1882 i 25,476,751 00

1883 ! 36,644,000 00

1884 i 47,481,000 00



64 cents.

65.5 cents.

59.6 cents.

49.7 cents.
45.2 cents.



$181,364 90
212,413 34
151,871 53
182,120 07
214,616 38



It will thus be seen that the State rate for 1880, was 64 cents on the
$100; that it rose to 65.5 in 1881; fell to 59.6 cents in 1882; to 49.7
cents in 1883; and to 45.2 cents in 1884. In other words, the rate for
1884 is 4.5 cents less on the $100 than it was in 1883; 14.4 less than
for 1882; 20.3 cents less than for 1881; and 18.8 less than for 1880.

The effect of this will be seen by comparing the tax on these roads
for 1884 with that of 1881. In the latter year, on a valuation of but
$32,429,519, the State tax is $212,413 34. In the former, at a valua-
tion of $47,481,500 — an increase over the assessment of 1881 of $15,-
051,981— the tax is $214,616 38, which is but $2,203 04 more than for
1881. And in like manner for other years, the amount of tax de-
creasing with the increase of assessment.

The following tables give in concise form the condition of each
railroad in the State, with respect to taxation, for the years 1880, 1881,
and 1882, as shown by the reports of various County Auditors fur-
nished to this office; and for 1883, as computed by this office. They
give the assessed value of each road, the tax levied for^ State purposes,
and the amount of delinquency for State purposes against each road,
for each year. Also the total delinquency for all the roads for those
years, as follows :

1880.



Names of Kailroads.



Total Assessment.



Am't of Tax for
State Purposes.



Deliuqiieut

Tax for

State Purposes.



Amador Branch

California Northern

California Pacific

Central Pacific

Northern Railway

Sacramento and Placerville

San Francisco and North Pacific

San Pablo and Tulare

Southern Pacific

Stockton and Copperopolis

Vaca Valley and Clear Lake

Nevada County Narrow Gauge..

North Pacific Coast "_..

Santa Cruz

South Pacific Coa-st

Totals



$283,500 00


$1,814 40


197,003 00


1,260 82


1.801,300 00


• 11,528 32


12.2.39,456 00


78,332 52


1,492,758 00


9,553 65


539,098 50


3,450 23


1,274,300 00


8,155 52


492,800 00


3,153 92


10,483,518 00


67,094 62


597,632 00


3,824 84


249,725 00


1,598 24


226,230 00


1,447 87


633,517 25


4,054 51


168,478 16


1,014 26


604,825 30


3,234 88



$31,174,141 21



$199,518 50



$1,084 67

Paid

9,505 65

67,566 64

8,287 30

1,284 85

8,165 62

3,163 92

49,764 45

3,824 84

1,092 21

4 79

Paid

958 43

3,234 80



$157,916 37



23

1881.



Names of Railroads.



Total Assessment.



,,.„_, , I DHliiiiiueiit
Am t of Tax for Tax for

State Purposes. | state Purposes.



Amador Branch

California Northern

California Pacific

Central Pacific

Northern Raihvay

Sacramento and Placerville

San Francisco and North Pacific

San Pablo and Tulare

Southern Pacific

Stockton and Copperopolis

Vaca Valley and Clear Lake

Nevada County Narrow Gauge..

North Pacific Coast

Santa Cruz

South Pacific Coast

Totals



$275
159

1,866
15,065

1,543
485

1,302
662
11,739
580
246
202
419
95
317,



,400 00

053 00

,250 00

,500 00

060 00

048 00

000 00

000 00

916 00

190 00

925 00

500 00

451 00

241 00

145 00



$34,829,668 00



$1,803 87

1,041 80

12,158 44

98,613 53

10,106 98

3,177 06

8,528 10

3,615 60

76,896 44

3,800 24

1,617 35

1,326 37

2,747 40

623 83

2,077 30



$228,134 31



$1,056 93

Paid

10,178 15

85,336 79

8,981 69

960 94

Paid

3,615 60

62,176 26

3,800 24

1,078 94

4 39

Paid

Paid

Paid



$177,189 93



1882.



Names of Railroads.


Total Assessment.


Am't of Tax for
State Purposes.


Deliuqueut

Tax for

State Purposes.


Amador Branch _.


$162,027 00
119,276 00

1,462,500 00
13,010,620 00

1,143,000 00
291,048 00

1,110,000 00
460,000 00

8,226,135 00
379,355 00
246,925 00
168,750 00
419,451 00
95,241 00
308,085 00


$965 61

710 88

8,716 50

77,642 70
6,812 28
1,734 65
6,615 60
2,741 60

49,027 74
2,260 95
1,471 67
1,005 77
2,499 93
567 63
1,836 18


Paid


California Northern.


710 88


California Pacific ._ .-


6,275 88


Central Pacific


69.459 64


Northern Railway _.


5,675 58


Sacramento and Placerville .


Paid


San Francisco and North Pacific. _


14 28


San Pablo and Tulare .


2,658 16


Southern Pacific _ _.


29,276 96


Stockton and Copperopolis ._


2,227 51


Vaca Valley and Clear Lake


840 96


Nevada County Narrow Gauge


3 33


North Pacific Coast.


22 43


Santa Cruz


Paid


South Pacific Coast


Paid






Totals


$27,602,313 00


$164,509 69


$117,065 51





24

1883.



Naues of Railroads.



Total Assessment.



Am't of Tax for
State Purposes.



Delinquent

Tax for

State Par]K>8es.



Amador Branch ' .$164,000 00

California Northern. - 118,000 CO

California Pacific 1,800,000 00

Central Pacific 18,000,000 00

Northern Railway | 2,000,000 00

Sacramento and Placervi lie 290,000 00

San Francisco and Xorth Pacific 1.115,000 00

San Pablo and Tulare 700,000 00

Southern Pacific 13,000,000 00

Stockton and Copperopolis 400,000 00

Vaca Vallej' and Clear Lake 190,000 00

Nevada County Narrow Gauge 150,000 00

North Pacific Coast ' l. 425.000 00

Santa Cruz 100,000 00

South Pacific Coast 500,000 00

San Joaquin and Sierra Nevada Railroad Co 125,000 00

California Southern Railroad Company ' 600,000 00

Pacific Coast Railway I , 340,000 00

Totals i $40,017,000 00



$815 OS

58fi 46

8,946 00

89,460 OO

9,940 00

1,441 30

5,541 55

3,479 00

64,610 00

1,988 00

944 30

745 50

2,112 25

497 00

2,486 00

621 25

2,982 00

1,689 80



$198,884 49



Paid

Paid

$8,946 00

89,460 00

9,940 00
Paid
Paid

3,479 00
64,610 00

1,988 00
Paid
Paid

2,112 25
Paid
Paid
Paid
Paid
Paid



$180,535 25



RECAPITULATION.

Delinquency of railroads, for State purposes, for 1880 -SI.}", 016 37

Delinquency of railroads, for State purposes, for 1881 177,189 93

Delinquency of railroads, for State purposes, for 1882 117,065 51

Delinquency of railroads, for State purposes, for 1883 180,535 25

Grand total of delinquency to State $631,807 06

Of this delinquency there is clue :

To the General Fund 8323,183 45

To the School Fund 235,950 76

To the Interest and Sinking Fund 60,405 95

To the State Drainage Construction Fund 12,266 90

Total .$631,807 06



These figures represent only the face amount of the tax due, and
omit all penalty, interest, costs, etc. As reported to you by this office,
February 12, 1884, these latter amounted to $397,868 51 — making a
total at that date of $1,029,675 57. Upon that date there was due the
State and the several counties, from the Central and Southern Pacific
Railroads, the sum of $2,730,303 39. A few delinquencies, represent-
ing inconsiderable sums, were due from other railroads, which would
add something to the amount given; but the Central and Southern
Pacific system is the source from which springs nearly all of this
heavy delinquency.

For the year 1883, with the single exception of the North Pacific
Coast Railway, every railroad in the State, other than the Central
and Southern Pacific systems, paid its taxes in full. And in addition,
the Central Pacific paid in full for that year upon these branches :
Amador Branch ; Sacramento and Placerville ; Vaca Valley and
Clear Lake ; and the Santa Cruz Railroad Company (owned by the
Pacific Improvement Company) — amounting, for State purposes, to
$3,697 68, leaving a delinquency against the Central and Southern
Pacific systems, for State purposes, for that year, of $178,423, and



25

for JStiXte and county purposes, $555,628 46, on tlie face of the tax. To
this must be added tive per cent penalty, two per cent per month
interest, together with costs and attorneys' fees.

It is unnecessary for me to recount the struggles made by the State
in earnest endeavors to collect these taxes. It is history that must
be fresh in the mind of every one. Nor is it necessary here to reca-
pitulate the various proposals put forward by these corporations, in
the way of propositions to evade the payment of their taxes.

For details relating to the assessment, amount of tax paid, and
amount delinquent, see Statements 10, 11, 12, and 13 of the Appendix.

Transactions called compromises have been entered into between
these corporations and certain ofhcials, whereby a sum less than that
due has been accepted as payment of the taxes levied. But I have
refused to accept the payments thus made. I did so because I
l)elieved that, as an officer of the State, I had no right to accept less
than the whole amount due the State.

Acting upon this conviction, I notified the Treasurers of the various
counties interested that this office would not make settlements of
these taxes for less than the full amount due. I also advised the
Auditor and Treasurer of Contra Costa County to refvise to accept
the taxes tendered them by the Attorney-General, Avho thereupon
began suit to compel acceptance. At my instance, Hon. W. W. Foote
represented the Contra Costa officials in the Courts; the case is as yet
undecided. The heavy hand of the laAv is laid upon the house and
home of the farmer, and the owner of city and town homesteads, for
delinquency, and the property is sold at tax sale; and is there any
good reason why railroacl property should be exempted from the
severe penalties imposed upon other classes of property for delin-
(luency? Is it of loftier or holier character than the homes and
firesides of families? Let the certainty be established that legal
clouds will fall upon the title to this class of property through sale
on account of delinciuency, and that redemption profits such as
accrue to purchasers of other kinds of property will ensue, and rail-
road delinquency and obstinacy will end together.

I heartily concur in the recommendation of my predecessor that
the commencement and control of all suits against railroad corpora-
tions for taxes, be put in the hands of the Controller. The attor-
neys' fees provided for by law are ample, thus saving the State against
any expense whatever, and the great time, labor, and careful research
required in the preparation and presentation of these cases, will
occupy more time than can be devoted to them by officials having all
the other great interests of the State to protect.

ESTIMATE OF EXPENDITURES.

Under the provisions of Section 483 of the Political Code, the Con-
troller is required to accompany his biennial report with a detailed
estimate of expenditures to be defrayed from the treasury for the
ensuing two fiscal years, specifying therein each object of expendi-
ture, and suggesting the means from which such expenditures are to
be defrayed.



26

GENERAL FUND.

In Appendix, Statement No. 31, will be found enumerated the
particular purposes for which appropriations are necessary for the
ordinary expenses of the State government, as required by law.

The amount required for salaries, and per diem of Senators and
Assemblymen, is tixed by law. It is impossible to determine the
exact amount necessary to maintain the State Prisons, Insane Asy-
lums, Mormal Schools, and other public institutions under the control
of the State. But the increase in criminals and insane will require
appropriations in excess of those made in previous years. Protection
to society in the one instance, and mercy to the poor unfortunates in
the other, require that sufficient means be provided for both classes.
In arriving at the amounts necessary for other appropriations, I
have, in inost part, been governed by the expenditures of the past
year. The allowance for the support and maintenance of orphans,
half orphans, abandoned children, foundlings, and aged persons in
indigent circumstances, is fixed by law (see Statutes of 1880, page 13;
also. Statutes of 1883, pages 55 and 380) at $100 per annum for each
whole orphan; S75 for each half orphan; S75 for each abandoned
child; S12 50 per month for each foundling; and SlOO for each aged
person in indigent circumstances. The number of these, as shown
by the disbursements for the last six months of the thirty-fifth fiscal
year, is as follows: Orphans, 678; half orphans, 2,204; abandoned
children, 196; foundlings, 128; aged persons in indigent circum-
stances, 195. No definite sum can be given as the amount necessary
to meet these demands. As an approximate, I estimate the sum nec-
essary for these worthy objects for the next two years at $415,000.

Besides the foregoing, inmates of the Veterans' Home receive aid
to the extent of $150 per annum each, but the amount to be used is
limited to $15,000 per year. The number at the Home during the
last fiscal year, was 40.

SCHOOL FUND.

The total number of census children entitled to receive school
money, as shown by the last apportionment made by the State Super-
intendent of Public Instruction, August 9, 1884, is 235,672, which, at
$7 per child — the amount required by law to be levied — aggregates
the sum of $1,649,704 to be raised for school purposes for the coming



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