The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-08-29

Dinerencf~ of OptEiOn nS To the Es-
fect OF Community of Interc>t-Ar-
Rument~ Against the Granting OF
Ship Subsidy-'Ehc Nicaragua Canal
The Industrial Commission has issued
pamphl.t containing "a partial review of
the evidence aJIGced E,fur, that body
boariu= on railroads. the ship subsidy
question. and IN. Nicaragua Canal The
matter contained is iu plr as follows.
Tho subject OF pooling appeared 20 Do.
OF less interest 10 railroad men and 9TH
cts iu 1871 than ii was two or three years
earlier. when the Industrial Commission
first TOOK testimony regarding H. Tho
tendency toward community of interest rs
said hy several Witnesses Co have made
pooling less an object TO Dee sought De- the
railroads Two or three Ispreeeutativ
Of the railroads. however. think that the
legaiiziuE OF pooling, and especially of
agreements as 10 rates, is still desirable.
and two rcpres, natives Of chambers Of
commerce. as well as the secretary OF the
Minnesota Railroad Commission. agree
on this point. Though they would favor
proper regulation OF rates II pooling Were
permitted. Prof. Ripley also drinks that
pooling and rate agreements might BE-
desirable in order 10 make rates more
steady and more free from discTImiua-
tious. but that regulation by the Inter
State Commerce Comrriss would GER
tainiy be necessary il pooling were per
mitted.
Prof. Ripley and Prof. Parsons assert
that American railroads are in many in
stances largely ovorcapitalizod While
some roads, especially prior TO recent
consultations. have kept their capital
down 20 the basis of actual investment
or even less in the case Of a few lines
which had been largely improved out Of
earnings. in many other cases the capital
has been repeatedly swelled without cor
responding increase in the plant invest
ment The recent increase la the capitaIi-
cation of the Chicago and Alton Railroad
from S20.o10.oo0 TO nearly Sl00O5oOo) is in
stancod as an illustration II is held by
Prof Parsons that the constant motive
OF privately owned railways is to conceal
their true earnings by increasing capt
alton, and ne considers this one ar
Eumeut IN favor of Government owner
ship.
MI WoodIocI1. railroad editor Of the
Wall Street Journal and several wit
nssses representing railroad companies
deny that American railways in general
are overcapitalizCd. They compare the
Sc
which is said TO average about 81. COO per
mile, with that Of the British railroads
which averages from $4,000 TO $4,000 per
mile. To is asserted that the British rail
roads Systematically add 10 capital every
possible expenditure for Improvement
however slight. These witnesses say also
that the increase in capitalization Of
American roads has In many cases been
justified by the Improvement of the roads
out Of earnings. Some Of them are also
inclined to maintain that earning capaci-
ty IS the proper basis Of capitalization.
Those who take this position add that
the fan in the prevailing rate of interest
has made IL possible 10 issue larger
amounts Of bonds on a given earning ca
pacity than before. and that the issue Of
stocks is a comparatively uuimportant
matter, because they do not create a fix
ed charge. Mr. Woodlock, however. ad-
mits that there have been instances Of the
abuse OF capitalization in recent years: he
refers particularly 20 the Kansas City.
Pittsburg. and Gulf Railroad. and APP
parently thinks also that the Chicago and
Alton is now OveTcapitalized. This wit
ness, as well as Mr.. Thomas Of the Erie
Railroad. are disposed to think that some
regulation Of capitalization by the Gov
eminent would be perhaps desirable as
a protection 10 investors
Prof. Ripley speaks especially with ap-
prevail OF the Massachusetts, law. which
requires that stocks and bonds Of rail-
roads and street railroads shall Ee ISSUED
only on the basis OF actual investment
and subject 20 the approval of the State
Railroad Commission. He asserts that this
provision has greatly Increased the power
Of the railroad commission as regards
rates and other matters. since the railroad
companies have frequently 20 come 10 il
for privileges.
Prof Ripley Prof Parsons. Mr. VII
son. Of the Cincinnati Board OF Trade
and two or three other witnesses assert
that the practice Of granting personal
Determinations Of various kinds in favor
or certain shippers still exists I'm many
cases. although they admit that the evil
is less serious than formerly. Prof Par
sons considers the practice Of granting
DETERMINATIONS as 2 strong argument in
favor Of Government ownership. and as
serts that IL does not exist in countries
where the Government operates the
railroads This witness aIIudes especially
TO the recent Investigation bv the Mas
saChusetts Railroad Commission regard
ing ClScr limitations on the road IN that
State. particularly in local traffic not sub
eJct 70 The Interstate Commerce law. He
asserts that il was shown that secret re-
hates and reductions In rates ranging
from le 90 . per cent had been made. and
that the practice was almost universal
AliuslDn is also made 20 the evidence as
70 determinations IN favor 81 the Stan
dard on Company by undertaking Of cars.
by liking rates from points where that
company has refneries lower than those
from tho refneries Of independent com
ways
. IrpI- Ripley declares that rates on
thIoCga shipments from New England 10
the West We're being cut very heavily
during 1877 and 1871. i'm part because Of me
tendency toward the accumulation Of
empty cars AZ the sea board Mr. Wilson
asserts that railway Determinations are