Union Pacific ICC Valuation

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This page was last updated on June 1, 2019.

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Taking Account

(This article was first published on the UtahRails.net blog on June 27, 2014)

Like all railroads, Union Pacific keeps track of what it owns and what it uses. This includes the track itself, along with all the locomotives, cars, and bridges and buildings that the railroad owns.

Keeping an account of railroad property is an important activity, and began as soon as construction started in 1865 in Omaha, Nebraska. Keeping accurate accounts became doubly important in March 1913 when the Interstate Commerce Act was amended to allow the federal Interstate Commerce Commission to investigate, ascertain, and report the value of all the property owned by, or used by common carriers, as provided by section 19a of the Interstate Commerce Act, commonly known as the Valuation Act. (37 Stat. L. 701) With this new administrative power, the ICC ordered that every railroad in the nation provide an accounting of their tracks, rolling stock, and other assets for the purposes of establishing each company's value, for the further purposes of establishing fair and equitable shipping rates.

Between 1914 and 1928, the ICC issued 25 separate valuation orders that provided for the nation's railroads to document their assets and property, using a narrow set of definitions that were seemingly constantly being challenged in the courts. The valuation of the nation's railroads was a tremendous workload for the railroads themselves because each building, bridge, piece of rolling stock, and rail and crosstie was to be documented, valued, and kept track of throughout its existence. Like the valuation orders, the ICC Valuation Act was itself regularly amended to address issues and concerns, and to balance the valuation requirement with the cost of providing the valuation.

The valuation of the nation's railroads began in the 1914-1916 time period, and continued for another 20 years. In their 1976 book, "The History of the ICC: from Panacea to Palliative," Ari and Olive Hoogenboom wrote that the valuation program cost the U. S. taxpayers millions of dollars, and that the Bureau of Valuation department expenditure on this exercise became greater than all other expenditure within the rest of the ICC. By the time the final valuation was complete in the mid 1930s, the resulting value of the nation's railroads was inconclusive concerning the railroads' return on investment and whether or not railroad rates were excessive.

The ICC Valuation resulted in an equally tremendous boon for railroad historians, for the same reason; it documented every part of the physical side of what it took to build and operate a railroad. For historians, the important valuation orders are:

No. 1 -- Maps
No. 2 -- Physical property
No. 3 -- Improvements to physical property
No. 8 -- Equipment and rolling stock
No. 20 -- Corporate histories

Each railroad maintained a Valuation Department, or some similar organization, usually as part of the company accounting department. On Union Pacific and its subsidiaries, the parent road and its subsidiaries were already well documented due to the strict accounting practices put in place by E. H. Harriman and his associates when they took control in 1898-1899. A limited amount of research suggests that many existing Union Pacific forms were changed to match the required ICC format and actual forms.

The valuation of the railroads was always the subject of contention between the railroad companies and the government. This resulted in the railroads, including Union Pacific, keeping duplicate records to support their side of each contested valuation. These were all internal documents. Union Pacific's accounting department maintained an internal document known as a Form 70, "List of Agencies, Stations, Equipment, Etc.", which held a great deal of summary information.

UP Valuation

Volume 44, ICC Valuation Reports -- Link to the archived HathiTrust edition of the Union Pacific valuation, completed in June 1933, and published in Volume 44 of the ICC Valuation Reports; pages 1 to 440. Includes extensive corporate history of Union Pacific and its predecessor and subsidiary railroads.

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