The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1907-05-30

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 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 stand
point of the business of the commits
sion, to have such a physical valuation
as soon as possible.
At the outset let it be understood
that physical valuation is no panacea.
1t is no sufficient measurement of
rate; but it will be ultimately needed
as an essential instrument in admins
trative supervision. 1t will be of use
to the commission in connection with
the duty of determining the reason
ableness of future capitalization, both
as one element to enable such a body
to come to 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
conclusion; though of course capt
talization must be determined in large
measure by further need than past in
vestment. How important physical
valuation will prove as one of the fac
tors to assist in fixing equitable rates
| am not able to judge; but that it will
be of certain Importance can be safe
ly assumed because of the opinions of
the interstate commerce commission
and of the courts. and because of the
recent action of the Northern Pacific
railroad in advancing such physical
valuation as decisive on its side in a
rate controversy. Such a valuation
would necessarily help to protect the
railroads against the making of made
quate and unjust rates. and would
therefore be as important from the
standpoint of the protection of the
railroads as from the standpoint of the
protection Of the public; and of course
1t is necessary to the enduring pros
perity and development OF the country
that the railroads shall yield reason
able profits to investors 1t is from
one standpoint quite as important to
of the road as to know what it would
now cost to reproduce it: from another
the human equation-that
is, the management of the roads
more important by far than the phys
ical valuation; and the physical val
uation of the road in one region may
have an entirely different relation TO
the real value of the road than i'll an
other region where the conditions are
different. Therefore the phys +
zeal valuation can never be more than
one of many elements to be consider /
ed: but it is one element. and at times I
may be very important element. /
when taken in connection with the
cost. character of management. Local
ton and business possibilities. in t
reaching an estimate on the property t
and rights of a corporation as a going /
concern.
Should Test Securities.
The effect of such valuation and su-
pervision OF securities can not be re-
Iroactive. Existing securities should
be tested by the laws in existence at
he time of their issue. This nation
would no more iniure securities which +
have become an important part Of the f
national wealth than it would consider
1 proposition TO repudiate the public
debt But the public interest requires
guaranty against improper snulfipiIca-I
ion OF securities IL the future. Rea- /.
sonable regulations for their issuance s