The Birmingham age-herald., 1905-12-09
From the Richmond Times-Dispatch


 m R. ALBERT s. BoLLEs' ,,s n lsetu- Npv Ter in Haverford college, Penn sylvania, contributes an article to the December number of the North American Review on Difficulties and Dangers of Government Rate-Making." MT Bolles starts out by saying that If the federal commission is to make and establish rates the government ought to furnish 1t with some basic standard for guidance. Suppose" says he, 'it should define a reasonable rate as one whereby a fair remuneration may be gained or expected on the capital invested; or, per- haps a more concrete standard, that div idends should not exceed 5, 6, or other per cent, all. we think, will admit that investors ought to have fair return on their capital for if they did not expect to receive such returns these enterprises would not have been undertaken" As suming that per cent would be an ade- quate return. the question then arises as to how much actual money is invested in the road. It may be contended that half the capitalization is water and that the true basis is the sum originally in vested. But that" says MT. Bolles, ''is in most cases only part. Many of our railroads, when first completed, were in the crudest condition, more capital was invested, for years no dividends were made, and all the net earnings were ems ployed to improve the road, stations bridges, remove curves. lessen grades, ac- uuire rolling stock. and make other need fui Improvements"
 That is peculiarly the case with South ern roads. For long time no dividends whatever were paid, and all the net earn ings, after paying fixed charges, were used in betterments. The stockholders waited patiently, knowing that they were turning their dividends into capital, and of late years they have been getting some returns upon their investment. A Rich mond financier, who Is thoroughly in formed on this subject recently remarked in our hearing that in his opinion there was not railroad in the south which could be replaced as 1t now exists for a sum of money equal to It's bonded debt and capitalization. However that may be if would be a most difficult and delicate task for the government to undertake t. determine how much. If any. the rail- reads in the country are over-capitalized.
 The government should not undertake to say what a railroad corporation or any other corporation shall earn. Whenever any such restrictions are placed upon hu- man endeaver the effect must necessarily be to destroy initiative and discourage enterprise. Why should a railroad com pany branch out and develop and improve its business if the government takes away from it all hope of increasing It's pronts' No man is more enterprising than ms ambition. and ambition is the child or desire Take away these incentives and> there will be an end of all progress.
 The government should exercise cer- tain superyision and control over all pub uc service corporations. The railroads owe an obligation to the public. and they sbou,d he made to discharge 1t. They shou,d not be allowed to discriminate in such A way as to destroy that equality oc opportunity which the government guarantees to it's citizens. But when the railroads are hauled up for any offense, they too, should be given equal rights before the law It would be travesty upon justice to arraign them in court for