Arizona republican., 1907-05-31

policy henceforth to allow railroads to devote their capital to anything but the transportation business; certainly not to the hazards of speculation. For the very reason that we desire to favor the honest railroad manager We should seek to discourage the activl- ties of the man whose only concern with railroads is to manipulate their stocks. The business of railroad or ganiZation and management shoald be kept entirely distinct from investment or brokerage business. especially of 1he speculative type. and the credit and property of the corporation should be devoted To the extension and bet terment of the country naturally trib utary to the lines. These principles are fundamental. Railroads should hot be prohibited from acquiring con- meeting lines. by acquiring stocks, bonds. or other securities of such lines; but it is already we'll settled as con trary to public policy to allow rail- roads to acquire control over parallel and competing lines of transportation Subject 10 first giving to the govern ment the power of supervision and control which l have advocated above, the law should be amended so that railroads may be permitted and en- couraged to make traffic agreements when these are in the interest of the general public as well as of the rail- road corporations making them. These agreements should of course be made public in the minutest detail. and should be subject to securing the pre- Vious assent of the Interstate Com merce Commission.
 The movement to regulate railways by law has come to stay. The people Of this country have made up their minds-and wisely made up their minds-to exercise a closer control over all kinds of public service corpo- rations. including railways. Every honestly managed railway will gain and not lose by the policy. The men more anxious to manipulate. stocks than To make the management of their roads efficient and honest are the only ones who have cause to oppose it.
 Ample provision should be made by congress to enable the Interstate Com merce Commission. by the employment of a sufficient force of experts. to un- dertake the physical valuation Of each and any road in the country. whenever and so soon as in the opinion of the Commission such a valuation of any road would be of value to the com mission in its work. There are un- doubtedly some roads as to which it would be an advantage. from the standpoint of the business of the com mission. to have such a physical val uation as soon as possible.
 At the outset let it be understood that physical valuation is no panacea: it is no sufficient measurement of a rate: but it will be ultimately needed as an essential instrument in admin istrative supervision. It will be Of use 10 the commission in connection with the duty of determining the reason ableness of future cantalizaticn. both as one element to enable such body to come to a right conclusion. in the matter. and also as an element to be placed before the investing public. to enable this public in its turn to reach a conclusion; though of course. cap italiZation must be determined in large measure by future need rather than past investment. How important phy- sical valuation will prove as one of the factors to assist in fixing equitable rates I am not able to judge: but that it will he Of a certain importance can be safely assumed because of the opin- ions of the Interstate Commerce Com mission and of the courts. and because of the recent action of the Northern Pacific Railroad in advancing such a physical valuation as decisive on its side in a rate controversy. Such a valuation would necessarily help to protect the railroads against the 'mak- ing of inadequate and unjust rates. and would therefore be as important from the standpoint of the protection of the railroads as frOns the standpoint of the protection of the public: and of course it is necessary to the enduring prosperity and development of the country that the railroads shall yield reasonable profits to investors. IL is from one standpoint quite as import ant to know the original cost of the building of the road as to know what it would now cost to reproduce it; from another standpoint the human
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