The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1907-05-31

LII EVef.== III vi
against only the man who cares moth
ing for the property after his specu
lative deal in its securities has beer
| closed. We favor the railway man
ager who keeps in close touch witt
| the people along his line rather thai
| in close touch with the speculativ,
market; who operates his line with {
view to the advantage he can legiti
mately get out of the railway as a PEI
| manent investment by giving "a fail
return to the stockholders and to the
public good service with reasonable
| rates; who does not operate his roa6
with a view to the temporary Specu
lative advantage which will follow car
italizing an uncertain future and un
loading the securities on the public
We wish to make it to the interest oi
the investor to put his money into the
honest development of the railroads
and therefore we wish to diScrimin ate
against the man who while enrichins
himself lays upon the future owners
and patrons of the road and above
all upon the honest men whose duty
it may become to operate the road
burden of additional debt without
adding correspoldingly to its actua
worth. Much is said about the inab
ility of railway presidents to agree
among themselves as to what policy
should be advocated and what plans
followed in the effort to work out the
problems which now present themselv
es. In so far as the law is concerned
all l ask of them is a willingness to
comply fully with it's spirits, and a
readiness to move along the lines in
dicated by those who are charged with
administering it. Our policy is built
upon experience, and our primary pur
pose is to insure the future against
the mistakes and delnqu1encies of the
past.
There has been much wild talk as
to the extent of the overcapitahzation
of our railroads. The census reports
on the commercial value of the rail
roads of the country, together with
the reports made to the Interstate
Commerce Commission by the rail
roads on their cost of construction.
tend to show that as whole the rail
road property of the country is worth
as much as the securities represent
ing it, and that in the consensus of op
inion of investors the total value of
stock and bonds is greater than their
total face value Notwithstanding the
water that has been injected in par
ticular places. The huge value of ter
minals the immense expenditures in
recent years in double tracking, i'm
proving grades, roadbeds, and struc-
lures have brought the total invest
ments to a point where the opinion
that the real value is greater than
the face value is probably true. No
general statement such as this can
be accepted as having more than a
general value; there are many excep-
tions: but the evidence seems ample
that the great mass of our railroad
securities rest upon safe and solid
foundations; if they fail in any degree
to command complete public conf
dence, it is because isolated instances
of unconscionable stock-Waterfng and
kindred offenses arouse suspicion,
which naturally extends to all other
corporate securities SO long as similar
practices are possible and the tenden-
CIV to resort to them is unrestrained
by law. While there nave been many
instances of gross and fragrant stock
initiation, and while, of course, there
remain cases of overca apitalizatlon,
yet when the statistics of the weaker
roads, the overcapitalized roads. are
combined with those of the stronger
roads. and considered in the aggregate
in my Judgment they will not be found
to impair the wholesome financial
standing and position of the railroads
as a whole; and while those railway
owners and managers who have enrich
ed themselves by loading their proper
ties with securities representing little
or NO value deserve our strongest con
demnation, ON the other hand our
hearty commentator is due those ow
ners and neutrality-suspicious. L
believe, the large majority-who have
year after year worked faithfully, pa
tiently, and honestly in building up
our great system of railways, which
have knitted together in close COM
mercial and social intercourse widely
removed sections of the country and
stand second only to the great busl-
ness of agriculture itself in contr1bu-
ton to national growth and develop
ment
Ample provision should be made by
congress to enable the Interstate Com
merce Commission, by the employ
ment of a sufficient force of experts,
to undertake the physical valuation of
each and any road in the country,
whenever and so soon as in the opfn-
ion of the Commission such a valu9-
ton of any road would be of value
to the Commission in its work. There
are undoubtedly some roads as to
which it would be an advantage, from
the standpoint of the business of the
Commission, to have such physical
valuation as sooa as possible
At the outset let it be understood
that physical valuation is no panacea;
ii is no sufficient measurement OF a
rate. but it will be ultimately needed
as an essential instrument II admins
trative supervision. 1t will be of use
to the Commission in connection with
the duty of determining the reason
ableaess of future capitalization, botn
as one element to enable such a 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
capitalization must be determined in
large measure by future need rather
than past investment. How impor-
tant physical valuation will prove as
one of the factors to assist IN fixing
equitable rates am not able to Judge;
but that it will be of a certain inn
portance can be safely assumed be-
cause of the opinions of the Interstate
Commerce Commission and Of the
courts, and because of the recent ac-