Pierce Butler

“ No intangible element of substantial amount over and above the value of its physical parts inheres in a railroad that cannot earn a reasonable rate of return on its bare bones-as the mere tangible elements properly may be called. ”

“ Plaintiffs in error insist that the enforcement of the taxes on these amounts, as measuring the additional values of intangible properties inhering in the lines of the Southern Railway Company in Kentucky, operates to tax the property of the Virginia company located beyond the borders of Kentucky, and that such amounts are arbitrarily excessive.
The value of the physical elements of a railroad-whether that value be deemed actual cost, cost of reproduction new, cost of reproduction, less depreciation or some other figure-is not the sole measure of or guide to its value in operation. ”

“ The mere statement of the figures is sufficient to show that the amount added as a basis for franchise taxes is so excessive and unreasonable that it cannot be sustained; and such an application of the system earnings amounts to an attempt to tax property outside the state. And, as the direct earnings per mile of the lines of that company are so much less than the average for the system, it is plain that the amount adjudged to have been omitted was arbitrarily excessive and included values of system property beyond the limits of Kentucky. ”