The Washington times., 1907-03-25
Great Northern Will Fol-
low Action of North
ern Pacific.
To Send to Interstate
Commission
Data.
Spokane Rate Hearings
Will Decide Future
Rates.

The action of the Northern Pacific
road in presenting t. the Interstate
Commerce Commission a complete, item
lied appraisal Of the present physical
values of its property, as proof that
instead of being OveTcapitalized it is
really underCapitaliZed. and therefore,
not amenable to a reduction of its rates
IS 10 be followed by a Ike showing by
the Great Northern. The Hill system
in short proposes 10 raise the whole
question of capitalization, and to make
for itself a showing Of character on this
point.
1t is suspected that in doing this the
Hill managers have in mind TO force
into public attention a contrast between
their alleged moderate capitalization and
the comparative excuses Of some other
systems, notably the Hartman roads.
From this time forth the hearings in
the Spokane rate case will have a new
concern 10 the public. The Northern
Pacific has presented figures TO show
that it represents actual present physi-
cal values Of 1890, 100000. with capital
ization of only S325 900, 900. The analysis
Of this total value presents some inter
esting things. For instance, this total
is made up of the present worth of an
immense acreage Of lands given to the
road by the Government.
Sold S3o,OOo,ooO in Lands.
The Northern Pacific admits that it
has sold about $50 100000 worth OF lands
which we're given it by the Government
1t was not possible to get at the value
of lands it still holds, but they include
very large area, some Of them very
valuable. Last year, according to the
testimony of the officials of the rail-
roads land department. the average price
received for lands sold was $S25 per
acre. Therefore il is concluded that the
company. capitalization covers a good
many millions Of value in lands
Brooks Adams, counsel for the DeoDle
OF Spokane who are demanding reduc-
ton of rates, Is getting ready for a
magnificent assault on this statement
he VIII snow that of $4,000, 900 appraised
value Of terminal real estate in nine
cities, very large proportion was given
10 the company; that most OF the re-
naming rgnt-ot-Way was received
srdLlS from the Government, though It
IS now listed as worth $50, 0OO 600 He will
show that when the reorganization of
1871 was erected there was wiped out
about SS7.000O0O OF book capitalization
OF the former company, and will deny
that the new company is entitled 10 go
back Of that reorganization, in figuring
Up investment tn the property. He will
demand that the present stockholders
are not entitled TO earn returns on the
values which the minority held. and
from which the minority were frozen
OUT in that reorganization; and he will
undertake TO show that this is exactly
what the present appraisal assumes to
do.
Great Northern Paid For.
The Great Northern's appraisal will he
based on vastly different conditions from
those surrounding that or the North, -,
Pacific. The Great Northern is not a
land grant road. Everything that was
put into il was bought and paid for.
Every railroad rate west of the Mis-
sissippi river is intimately concerned
with the broad policy that shall he laid
down in deciding the Spokane case. on
the decision viii depend the rates az
tWO-thirds of the cOuntry's area and
the values OF billions OF railroad secu-
rites.