The Washington times., 1907-03-31
FOR PHYSICAL" VALUATION.

Whitney, of Massachusetts. type OF
conservative Democracy, and Bryan OF
Nebraska, exemplar of radical Democ-
racy. seem agreed that physical" valu-
alton of railroads should be the basis.
They use that phrase in the highly i'm
teresting correspondence that bas just
been made public, and that has caused
a distinct political sensation in certain
circles ir the Capital Mr.. Whitney
asked Mr. Bryan:
Whether. in your judgment there is
any danger of regulation being carried
20 a point preventing a reasonable re-
turn on money Invested i'm the railroads
OF the country and whether in case OF
adoption of Government ownership, by
the nation or by the several States, the
stockholders could expect to receive a
price equIl 10 the value of the physical
railroad properties
Bryan's Reply 20 Wlitney.
And Mr. Bryan replied 10 Mr.. Whitney
that the stockholders may cX-
ueet to receive q price at least equal 10
he value of tEe physical properties Of
the ~oad: bus no such assurance ought
10 be necessary. because the public has
shown no disposition to reduce railroad
earnings 10 "a point which would deny
a reasonable return.
II appears, then that neither AR
Bryan nor Mr.. Whitney has i'm mind
10 pay the railroads on a higher basis
than their physical value True. Ar
Bryan talks OF buying them at that
value. and Mr.. Whitney talks of per
hitting them 10 earn returns on that
value. But the difference is not half
so wide as the chasm between their
agreement on the term physical value"
and the united inslstence Of Republicans
on the other term, Commercial value"
Stand for Fair Return.
The Democrats viii stand for letting
the railroads earn a fair return on the
physical value OF taeir properties. They
viii not press Government ownership 20
an issue, but will promise such rate reg
ulation as will conhne earnings to a
fair return on physical valuation.
The Republicans will under the lead
of Roosevelt OF the candidate whom
ROOsevelt's followers viii nominate. de-
clare for the policy of giving the rail-
roads fair return on commercial val
uation
The Democratic proposal IS to squeeze
out the difference between physical and
commercial valuation That difference Is
stated by different students Of the prob
lem at all the way up rom two TO six
or seven billions of dollars. Hoke
Smith recently declared il was probably
seven billions. Senator La Toilette had
put il at probably five billions. The In
terstste Commerce Commission cousid-
ers it much less than either of these hg-
ures, but admits there is probably
considerable difference.
Protect Innocent Holders.
The Republican policy, as it has been
outlined by President Roosevelt, viii he
to argue that the innocent holder Of Sc
curiues must be protected; that to wipe
out this great margin of difference
would be equivalent 20 an immense ma
tiCnal reputation. The Democrats will
reply that there is no moral reason why
in perpetuity the nation should go on
paying returns on inflated values
There is the issue as politicians say
the Bryan-Whitney correspondence on
the orc hand. and the attitude of the
President, his Cabinet. and the great
majority Of Republican leaders, on the
other, has outlined it. II is n tremen-
dous issue, they add, big enough 10 en-
FDHRLN 1T u0DT0IU