VOL. 4 No. 3, Whole Number 39

Twenty-five Cents a Copy

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HE statutes of New York and New Jersey relating to the Port Authority refer thereto as "a joint or common agency" and "the municipal corporate instrumentality of the two States". Congress has by appropriate resolution given its consent to the carrying out and effectuation of the plan of the Port of New York Authority and authorizes and empowers said body to carry out and effectuate the same. Counsel for the Port Authority has declared that decisions of the higher courts manifest that the powers and duties of the Port Authority as defined in the statutes of the two States and he Act of Congress are imperative and mandatory. I am of the opinion that said counsel will contend in behalf of the Port Authority whenever occasion requires him to assert his opinion in regard thereto that property acquired and held by said body is exempt from municipal taxation, and to appease the City of Hoboken and other municpalities wherein lands acquired and held by the Port Authority are situated will endeavor to effect an agreement between the Port Authority and the governing bodies of such municipalities whereby the Port Authority will "waive" its "rights" to exemption of its property from municipal taxation and agree to pay to such municipalities a stated sum annually, in lieu of taxes, and hold property free of assessment for taxes.

Aside from the question as to the right of a municipality to except from assessment for taxes property of the Port Authority and accept from said body a stipulated sum annually in lieu of taxes which may be legally assessable against same, I question the right of the Port Authority to make an enduring and enforcible contract to effectuate the aforesaid purpose. While I am of the impression that if the Port Authority merely acquires the capital stock of the Hoboken Manufacturers' Railroad Company, said company, a corporation of New Jersey, may be lawfully taxed as heretofore, nevertheless, there are numerous decisions of our Federal Courts which hold that property acquired and held by a Federal agency is not subject to taxation, and, relying upon such decisions, the Port Authority, claiming to be a Federal agency, may endeavor to obtain an adjudication which will relieve it from municipal taxation on property owned and acquired by it.

The taxpayers of the City of Hoboken, as you know, are already bearing an inequitable and onerous tax burden, occasioned by the withdrawal from taxation of the piers, etc., formerly owned by North German Lloyd and Hamburg American Steamship Companies and now owned by the United States of America, and dread the idea of having the property of the Hoboken Manufacturers' Railroad Company situated within the City declared exempt from taxation. The idea of the City of Hoboken purchasing from the Secretary of War the capital stock of the Koboken Manufacturers' Railroad Company was conceived by the desire of the Board of

Commissioners of the City of Hoboken to obviate the sale thereof to such body as may be able to effectuate a claim of exemption of such property from taxation. Suggestions to Secretary of War Weeks

I have written to Hon. John W. Weeks, Secretary of War, urging, in behalf of the City of Hoboken, that he do not avail himself of the authority conferred upon him by the Wadsworth-Mills Bill, recently enacted, to make sale of the capital stock of the Hoboken Manufacturers' Railroad Company to the Port Authority, at least until the committees recently appointed by the Legislatures of the States of New York and New Jersey to investigate the tax situation as applicable to property acquired by the Port Authority have completed their investigation and made report thereof to the New York and New Jersey Legislatures. I mentioned that the principal contention of the Port Authority has been that it would be inimical to the interest of the general public if the Hoboken Shore Road should be sold to the Delaware Lackawanna & Western Railroad Company or other quasipublic interests. I mentioned also that there is no good reason why the lands of the Hoboken Manufacturers' Railroad Company, (110 vacant lots) situated in the northwestern part of the City of Hoboken, and lands, (including piers) running from Hudson Street to the Hudson River, should be transferred to the Port Authority, as none of said lands are necessary for the operation of said railroad or necessary appurtenances thereto, and I stated that it would effectually serve the purpose of the Port Authority and also the City of Hoboken if he would:

(1) Make sale of the 110 vacant lots aforesaid for the best prices which he may be able to obtain therefor.

(2) Make sale of the lands (including pier) running from Hudson Street to the Hudson River for the best price he may be able to obtain there for at public sale.

(3) Dispose of all other property of the Hoboken Manufacturers' Railroad Company, other than the physical railroad property such as locomotives, cars, tracks, etc., and

(4) After disposing of the aforesaid property make sale of the capital stock of the Hoboken Manufacturers' Railroad Company to Port Authority, thus enabling said body to obtain that which it has been seeking, to wit: the railroad franchise, locomotives, cars, railway tracks, equipment, etc., for such price as he may determine to be adequate therefor, having in mind the estimate value thereof as indicated by the ninth annual report of the New Jersey State Board of Taxes and Assessments for the year ending June 30, 1924, which, though not representing the full value of said railroad, is nevertheless fairly indicative of the full value thereof.

If the Secretary of War would dispose of the property of the Hoboken Manufacturers' Railroad Company as aforesaid it would be equitable to all interests concerned.

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'N view of the public interest that has been manifested in the disposition of the Hoboken Manufacturers' Railroad by the United States Government, I have been requested to submit for publication a brief history of this waterfront terminal railroad, a statement of the service it performs, its relation to rail and water carriers, and the conditions under which it operates.

The trade name of the Hoboken Manufacturers' Railroad is "Hoboken Shore Road", and has its origin in the parent company, the Hoboken Railroad, Warehouse & Steamship Connecting Company, the lessor and owner in fact of practically all of the railroad property operated by the Hoboken Manufacturers' Railroad Company. The Hoboken Railroad, Warehouse & Steamship Connecting Company was incorporated in the State of New Jersey on September 17, 1895, and the road was opened for freight traffic only in 1897. A single track line, of second-hand, light rail was first constructed, skirting the waterfront from Fifth Street north to a point of connection with the Erie Railroad, a distance of slightly more than a mile, all within the corporate limits of the City of Hoboken. During the following six or eight years several spur tracks and sidings, of light second hand rail, were added, but in 1906 the total trackage was less than three miles.

The Hoboken Manufacturers' Railroad Company was organized and incorporated in the State of New Jersey on July 21, 1902. This company built less than a fourth of a mile of track, connecting with the original "Hoboken Shore Road" near Fifteenth Street in Hoboken, and extending in a westerly direction, but did not become an operating concern until June 19, 1906.

In 1905 the American Warehouse & Trading Company was organized and incorporated in New Jersey to act as a holding company for the Hoboken Manufacturers' Railroad, and for other purposes.

Owns Real Estate, Buildings and Waterfront On June 19, 1906, the Hoboken Manufacturers' Railroad Company leased from the Hoboken Railroad Warehouse & Steamship Connecting Company, for a period of ninety-nine years, all of the property holdings, railroad facilities and equipment of the latter company. A minimum rental, based on a minimum tonnage, was specified, but provision was made for the payment of increased rental as tonnage increased. The Hoboken Manufacturers' Railroad Company also leased for ninety-nine years from June 19, 1906, certain property belonging to the Hoboken Land & Improvement Company, consisting of real estate, buildings and waterfront property, to be used for railroad purposes.

As indicated, the stock of the Hoboken Manufacturers' Railroad Company was held by the American Warehouse & Trading Company, who also owned a strip of waterfront property, 190 feet in width, at Twelfth and Hudson Streets in Hoboken, with several buildings and a small open pier of wood construction, used for commercial purposes. In this property the railroad company had no interest other than to serve it in the same manner as other industries located along the line of road on the waterfront.

The original intention of the Hoboken Manufacturers' Railroad Company had been to construct a line westerly and southerly through the Hoboken meadows from the

connection with the original Hoboken Shore Road to a point of connection with the Lackawanna Railroad in Jersey City, and for this purpose the American Warehouse & Trading Company had acquired rights of way for main line and yard purposes, consisting of more than five hundred city lots. It was hoped that the meadow property could thus be developed for industrial purposes. Many plans were drawn and estimates prepared, but the estimated cost was considered too high for the tonnage that could be produced within a reasonable time, and, therefore, the projected extension was not made. It has now been determined that this extension should never be made first, because the revenue from tonnage that might result would never be sufficient to warrant the expense of construction, and, second, to do so would burden the waterfront railroad with tonnage it should not handle; but that tracks to develop this property should enter from the other side.

Uncle Sam Buys It

The Hoboken Manufacturers' Railroad continued to operate under control of the American Warehouse & Trading Company until July 1, 1917, when the stock was purchased by the United States Government. At that time the Government had already seized the German piers in Hoboken, and in establishing the Port of Embarkation in Hoboken it also took over all other piers and docks along the Hoboken waterfront. In acquiring the stock of the railroad company the Government also purchased all other holdings of the American Warehouse & Trading Company, which included the waterfront property at Twelfth Street as well as the "back lands" west of Willow Avenue, on which no tracks were con structed, incorporating the entire property under the Hoboken Manufacturers' Railroad Company. The American Warehouse & Trading Company was later dissolved. Now Has Eleven Miles of Trackage

From time to time after the lease of June 19, 1906, additions were made to the trackage on leased property, and when taken ove: by the Government on July 1, 1917, the total trackage along the waterfront was about seven miles. The Government immediately set about improving the property-additional yard tracks were laid, the yard at the north end was rearranged and considerably enlarged, heavier rail was laid throughout, and south of Fifth Street, and extending on the property of the seized German piers, about three thousand feet of track were constructed. This southerly extension was beyond the property either owned or controlled by the railroad com pany. Further additions have since been made, and the total trackage today slightly exceeds eleven miles, including private sidings.

During the period of the war, and for about a year thereafter, the major portion of the tonnage handled by the road was for the Government. However, all operations were carried on commercially, the same as before. The status of the road as a common carrier was not changed, and the Government paid full freight charges for all tonnage handled for its account, the same as any other patron of the road. other patron of the road. When the activities of the Port of Embarkation waned, and all piers except the seized German piers were restored to their owners, ordinary commercial business was gradually resumed.

The Hoboken Manufacturers' Railroad, as now exist

Plan of Tracks and Property of Hoboken Manufacturers Railroad, of Hoboken, N. J.

ing, consists of approximately eleven miles of main track, yard tracks,sidings and spurs, extending from a point at about Second Street in the City of Hoboken, on property controlled by the United States Shipping Board, northwardly along the waterfront to a point of connection with the Erie Railroad at the corporate line dividing the municipalities of Hoboken and Weehawken, a distance of about a mile and a half. From Fifth Street northwardly practically the entire trackage is on leased property, with the exception of a few private sidings. The tracks South of Fifth Street do not belong to the railroad company, but to the United States Government. At Twelfth Street, the waterfront property, 190 feet in width, with several buildings thereon, is owned outright by the company, as well as the so-called "back lands", now consisting of only 110 lots west of Willow Avenue. Due to their unproductiveness and the heavy carrying charges thereon the greater portion of the back lands were sold during the past two years.

The road is fully equipped with both steam and electric power, station and office buildings, freight sheds, machine shop, motor house, fuel station, electric trucks for handling freight between cars and steamship piers and warehouses, and a float bridge for interchange by water as well as by rail, as well as other miscellaneous equipment. The company does not own any rolling stock for interchange, but uses the freight equipment of other roads.

Business Handled

The business handled is not more than twenty-five per cent of the capacity of the road. It was demonstrated during the war that the road could efficiently handle more than three times the amount of freight handled at any peak period during the past four years. No additions to trackage would be required to handle such maximum tonnage, but only a few more units of equipment and the necessary labor. With increased trackage, of which there could be added at least three miles on present leased and owned property, and with the addition of other equipment required to handle the tonnage, and the further development of waterfront property that is possible the road could handle more than eight times its present tonnage.

The Hoboken Shore Road is a connecting link for direct rail interchange between ocean carriers and trunk line railroads, and more than sixty per cent of its tonnage consists of export and import freight-even so, less than twenty per cent of the export and import business over the Hoboken piers is transported by this road. The service performed by this company is largely in lieu of lighterage, therefore, lighterage conditions must be met, requiring the unloading of cars and delivery to shipside on eastbound movements, and the taking from shipside and loading of cars on westbound freight-a very expensive operation. At the same time an even greater quantity of export and import freight is delivered to and taken from ships and piers by lighter and truck. A much larger proportion of the total import and export business in carloads should be handled by the railroad instead of by lighter, and steamship operators have stated they would like to take from one-third to one-half their cargo by direct rail delivery.

The remaining forty per cent of the total tonnage of this road is made up of coal and other domestic freight, principally for large shippers and receivers of freight located along the waterfront of Hoboken and served by the rails of this company.

Sources of Revenue

The principal source of revenue is from divisions or allowances granted by the trunk lines for the terminal switching services performed by this company for their account, which, it might be mentioned, are inadequate at the present time to meet the cost of the service. However, the matter of securing an increase in allowances is now before the Interstate Commerce Commission for consideration. The company does not carry on a warehousing business, but it has been receiving some revenue from rental of waterfront and other property not devoted to railroad purposes.

There are twelve steamship piers on the Hoboken. waterfront today at which are served the following steamship lines: On the four Shipping Board piers, the United States Lines, American Merchant, Cosmopolitan, and Pan-American (Munson). All other piers, with one exception, are owned by the Hoboken Land & Improvement Company, and accommodate the Holland-America Line, North German Lloyd Steamship Company, Wilson Line, Ellerman Lines, City Lines, Lamport & Holt, and the Scandinavian-American Line. There is room on the Hoboken waterfront for the development of steamship terminals to the extent of at least six more modern steamship piers. Such development with proper track connections for rail delivery would largely increase the business of the Hoboken Shore Road.

In addition to the steamship terminals, there are a number of large warehouse, industrial, and manufacturing enterprises situated on the waterfront and served by this road, among which are Campbell Stores, Elasticap Storage Warehouses, Independent Warehouses, Lipton's Tea, Jewel Tea, Franklin Baker, Jagels & Bellis (coal), Thatcher & Barnum (hay and grain), and Schultz Bakery.

Potentially Great

The value of the Hoboken Shore Road as an agency of public service has been proved. For more than a quarter of a century it has been a factor in the industrial life along the waterfront of Hoboken, and it has contributed its share to the upbuilding of the business of this community and the facilitating of the commerce of helped to increase the value of waterfront property, therethe nation through the great Port of New York. It has by adding to the ratables of the city and the State, and its value as an intermediary for putting the wheels and the keels together was never more forcefully demonstrated than during the war, when millions of tons of war supplies and materials and hundreds of thousands of troops were delivered over its rails to the army transports at the Port of Embarkation.

The inference has been drawn, because the stock of the Hoboken Manufacturers' Railroad belongs to the United States Government, that the road does not pay taxes. It has always paid taxes, by virtue of the fact that it is a corporation of the State of New Jersey, and a common carrier, operating commercially and not as a Government agency.

It will be realized that time and space prevent any detailed description of the property or the character of the service, and this article must of necessity barely touch upon generalities. However, the Hoboken Shore Road is not only on the map, but it will stay there, and, like the brook, will go on forever, or until railroads are no longer needed.