The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-02-25
RAILROAD NEWS.
Values of All Lines in the United
States to BE Determined.
Investigation Proposed by the
Interstate Commission.
HOW MUCH WATER !?
capitalization IA Billions
Calculate Actual Worth.
Gossip and Matters of Interest
in Railroad Circles.
HOW MUCH WATER !?

Plans are taking shape in Washing
ton for a complete investigation of the
actual value of the railroads of the
United States. SO that basis may be
obtained for a fair decision of the
question as to what rates of transpor-
| tation are just TO the public and to the
railroads.
1t is understood that in this ,investi-
CATION little attention will be given to
| capitalization and the market value of
| stocks and bonds, but the effort will
! be to learn the actual worth of the
| property possessed by the railroads.
! Such an inquiry will give the public
water is in the present capitalization
/ OF the railroads.
Capitalization $4,000 a Mile.
The latest available statistics
those of Poor's Manual-give the total
capitalization. the average per mile
and interest of the railroads in 1904
embracing 211.O74 miles-as follows:
Capital stock. $6,447,O45,374; aver
ave per mile $3O.554; average annual
O,203; average per mile, $35,246;
average annual per cent, 1913; floating
debt $172,619. 537; average per mile,
$500; total capitalization and debt
$14, .505,114; average per mile.
$66.61S; average annual per cent, 3.55.
The popular view is that many hum
dred millions of railroad capitalization
is water. Some men who possess
knowledge of railroad building declare
that the average capitalization per
mile-over $66, 0OO-is at least one.
third too large; that $4,000 a mile
would probably reproduce the entire
railroad system of the United States,
including right of way, equipment,
terminals, and every other possession.
Commercial Value of Railroads.
The census bureau recently issued a
report on the commercial value of
railroads. The figures published in
on the average market value of securi-
ties during the first six months of
1904, and therefore they are of no
practical use as an evidence of actual
valuation. The census estimate of the
commercial value of railroads in 1904
is 11A billion dollars, or 80 per cent
of the face value of the total capitali-
cation The average quotations OF
railway stocks now are about 20 points
higher than three years ago. and
bonds are probably worth about the
same now as at that time. The adj
vanced prices for stocks in the past
three years would probably raise the
commercial value of the railroads to
90 per cent of the face value of their
outstanding stock and bonds.
Earning Power as a Basis.
If the value of railroads should be cal
of ten years, ending in 1904. on the basis
of per cent per annum on the bonded
for capital stock, with per cent reserved
for surplus after allowing for the usual
deductions for depreciation the total value
of the railroads in 1904 would have been
about II billion dollars, or slightly less
than the commercial valuation placed on
them by the census bureau
Much Capital Is Duplicated.
In any estimate which is attempted of
the commercial valuation OF railroads,
based on the market prices of their Sc
curities, due allowance must be made Tor
duplication in the form of security issues
by one company for the purchase of the
stocks end bonds of another company;
The Union Pacific, for example, owns us
purchase of which it issued about a cor
amount of securities: 10 count
both in estimating the value of the rail
to Poor's Manual, the statements or the
railroads of the. United States showed
IL 664 millions and ''other investments,
q 712 million dallors. The larger part of
the securities of other companies, and de-
auctions of about 212 billions should pc
billions to ascertain the net aggregate |
of the railroads.
Great Increase Since 1904.
Since 1904 there have been large increases
in capitalization and earnings of the rail- |
roads. The proportionate Increase has
been much greater in the earnings than in |
should be made on the basis of the earn |
ings of 1906 the figures would be several
basis of the tenyear average, ending with |
1904
VIII the Water Be Squeezed Out?
If the coming investigation. of the inter |
strate that the actual value of the rail
roads in the United States is only about /
mile, as they are now capitalized, the fig
ures would indicate that about billion of /
the Tbe o1gasfen thenp @oud arises
Is it fair to legislate on railroad rates |
so as to practically render worthless sew
now in the hands of people who bought |
them in good faith and who have unques-
tionably a fractional ownership Of all the |
property of the. railroad of which they
hold stocks and bonds? ,.o,,*,o :.
the railroad companies was put there |
when the roads were built, when the com
panies were reorganized, when they alb
ssorbed other railroads or constructed ex-
tensions, and practically all of it was Gre
ated so many years ago that little OF 1t re
who orof1ted from the issue of it.
Bonds for Rock Island Frisco Outlay. |
Presidents Winchel of the Rock Is
land and Davidson of the Frisco at
tended last week at st. Louis a meet /
ing of the Rock Island-Frisco Terni-
nal company of st. Louis. The direc
tors authorized the issue of bonds of
outlay in ST. Louis, sufficient at this
time to cover the cost of the north /
end freight terminal purchase of
ground for yards, rails, etc. The |
freight terminal is in operation.
Bevington Makes Appointment
Atchison Kan, Feb. &c. H. Bev-
ngton the new superintendent of this
of the Missouri Pacific. who is
still in Little Rock hospital, has is
sued circular appointing W. H
Clark assistant trainmaster with
headquarters in Omaha. Clark is now
chief dispatcher at Omaha, and is to
be j. J. SINNERS assistant