The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1898-08-27

ing Post, has declared editorially that the
company will take hand in the politics Of
the present campaign, asserting that it is
obliged to do so by reason Of the promises
Of legislation and other action for the re-
duction Of railroad freights and forces con-
tanned in the platforms Of the fusion par
ties. We have, therefore, an official an
nouncement from the company itself
through Its own organ that 1t will take part
in the campaign against the fusion candi-
dates. The people having been SO notified
will find better opportunity than ever be-
fore for choosing between railroad domina-
ton, and the curbing of the arrogance and
power and injustice Of these great crea-
lures Of the state that have SO long, with
but rare and brief exceptions, been masters
of the state which gave them their privi-
leges of monopoly.
1.-THE particular proposition they propose
to contend against Is that of putting a stop
10 the allowance Of interest on the value
of privileges given to such companies by
the state in fixing the rate Of freight and
fare charges. The franchise, which Is
now frequently estimated at three, four
or five times the value Of all actual invest
merits In construction, equipment. and use,
Is merely the value Of privileges given by
the state to the companies enjoying them
"This valuation Of franchises has hereto
fore been treated as part of the Investment,
and interest has been allowed upon It in
fixing freight and fare rates. That Is
manifestly unjust. 1t Is, in effect, max
ing the people pay interest on the value Of
privileges they have given to individuals
and companies. Such thing would not
be tolerated for a moment in dealings be-
tween private individuals. No man re-
ceiving privilege from another would
ask the giver to pay him interest on Its
value; yet the people, who in the last
analysis constitute the state. have for gen.
eratlons and throughout the whole period
OF state regulation of freights and fares,
been compelled 10 pay interest on the values
of privileges given by them.
"This must be stopped, or state regula-
ton Of freights and fares must forever be
failure. Our proposition on this question
simply constitutes another step in the great
fight for effective limitation of corporate
extortion commenced twenty-five years
ago. when the right of the state to regulate
frelghts and fares was absolutely denied
and resisted by all railroad companies This
right has been established by the courts,
and has finally been admitted by railroad
companies everywhere, but all attempts at
regulation have been failures. except in the
state of Texas, where substantially the
proposition for which we stand was at
last embodied in the laws Of the state. In
Texas every road IL appraised by the rail-
road commissioners at a valuation meas
ured by the actual and substantial invest
ments in construction and equipment; and
its right to interest upon its capital in fix
ing freights and fares Is limited to interest
on this valuation.
mo company is permitted to issue bonds
or stocks TO a par value greater than that
valuation. and any company which Grip
pies Of impairs Its power to perform the
public functions for which franchises are
given to railroad corporations, by over
bonding or otherwise increasing axed
charges beyond the legitimate earning ca
pacity, Is either deprived of its franchise or
sued by the state, and its road sold to those
who can and will operate II for reasonable
and legitimate freight and fare charges,
Welding interest on the true valuation Of
the road only.
"rn the recent attempt Of the California
railroad commission to reduce freight
rates. the United States circuit court. on
preliminary hearing Of a petition for writ
of injunction to restrain the commission
from executing Its order, held that the rail-
road company is entitled in fixing Of
freights and fares substantially to the fol-
lowing allowances:
"F'irst-Operating expenses, including
maintenance Of road bed and other prop
srty.