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

is from one standpoint quite as impoT
tant to know the original cost of the
building of the road as to know what
it would now cost to reproduce it;
from another standpoint the human
eQuation-that is, the management OF
the roads more important by far
! than the physical valuation; and the
physical valuation of the road in one
region may have an entirely different
relation TO the real value of the road
than in another region where the
conditions are utterly different. There
fore the physical valuation can never
be more than one of many elements
to be considered; but DIT is one ele-
ment and at times may be a very i'm
pOrtant element, wnen taken in con-
1ection with the earning power, fran
chises, original cost, character of man
agement, location, and business posi-
.bilities, in reaching an estimate on
the. property and rights of a corpora
ton as a going concern.
The effect of such valuation and su-
pervision Of securities can not be re-
troactive. Existing securities should
be tested by the laws in existence at
the time of their issue. This Nation
would no more iljure securities which
nave become an important part of the
national wealth than it would consid-
er a proposition to repudiate the pub
lie debt But the public interest re-
quires guaranty against improper mul
tiplication of securities in the future.
Reasonable regulations for their is
suance should be provided, so as to
secure as far as may be that the pro
ceeds thereof shall be devoted to leg
itimate business purposes.
In providing against overcapi-
TIA Ii z+atsi0n We shall harm mo human
being who is honest; and we shall be-
nefft many, for overcapitalization Of
ten means an imitation that invites
business panic: it always conceals the
true relation of the profit earned to
the capital invested, creating a bur-
den of interest payments which may
rebound to the loss alike of the wage
Garner and the general public, which
is concerned in the rates paid by ship
pers: it damages the small investor,
discollra ges thrift, and puts a prem
ium on gambling and business trick
cry.
There is an essential difference be-
tween private and qrasi-public proper
ty which justifies setting somewhere
limit beyond which the accumulat-
ing value in quasi-public properties,
due to the necessity Of a growing
community, shall not be capitalized.
One of the most important featur
es of the Hepburn Act is its having
given the Commission absolute con-
troll over the accounts of railways.
The Commission has just issued an
order to the effect tnat On July l next
all the railways of the country subject
to the Jurisdiction of the Commis
sion must staldardize their account
ing methods, and the Commission is
now organizing a bureau of special ex
aminers, whose duty it will be. among
other things, to see that the books OF
he carriers are kept in conformity
with the rules laid down by the Com
Thus the means are already
at hand and the machinery created
which, when perfected, will put the
public in ia position to know the facts
so that the small investor can exer-
else an Intelligent Judgment when en-
trusting his money to tine promoters
of great railway enterprises. We hope
rs one of the chief means for better
ment of conditions to secure as com
plete publicity in the affairs of rail
roads as now obtains with regard tc
banks.
There need be no fear on the part
Of investors that this movement for
national supervision and control over
will be for their detriment
If they doubt this let them study the
history of the railway-coatrol move
meat in such a State as Iowa II
would be hard to find anywhere
more prosperous Or more anteinSent
a community of thriving
farmers and thriving townspeople
Iowa did its share in the work of build
ing railroads when the business was
one that demanded men of the ut
do 81 n o-cG of II
like the gallant soldier and real cap
tain of industry, Grelvile NJ. Dodge:
men who ran risks and performed
feats for which it was difficult to
make the reward too high; men who
staked everything on the chances OF
a business which today happily in
wolves no such hazards. Iowa was at
length forced TO undertake the work
of regulating the railways within her
borders. There was great outcry
against it. 1t was proclaimed that
such effort would ruin roads already
built, and prevent building more. But
Iowa proceeded with the task, and it
resulted, not in ruin and stag1ation
but in increased safety and profit to
the honest investor. Instead of put
ting roads into the hands of receivers
It was followed by a prosperity that
rescued many of them from receiver
ships.
No state, of course. can do for the
railways what the NaticIg4l Govern
ment has already done for the banks
and tnat Government should do some
thing analogous for the railways. No
tional bank stocks are bought and
sold largely on the certificate of char
acter which the Government, as re-
suit of it's examinations and supervis-
ion, gives to them. To give another
from Iowa's experience,
when the national banking law was
amended to allow small banks to take
out national charters. great numbers
of the state banks of that State were
reorganized into national institutions.
The investing public was ready to
back with unlimited confidence the
institutions on which the Federal Gov
ernment had set the seal of its conf
dence and approval. The railways
have not been given this certificate
of character, under the seal of the Ma
tional Government, and therefore ma
nv people who invest freely in the
shares of banks are reluctant to buy
securities. Give them the
same guarantees as to railroad secu-
rites which we now give them as to
national bank shares. and we would
presently see these people investing
in railroads and TINS onening a new