The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1908-07-29

what is a fair profit 1t is clear that
! the physical value of railroad ana
| its plant Is an element 10 be given
weight in determining its full value;
but as President Roosevelt in his In.
dianapolis speech and the supreme
Court have in effect pointed out, the
value of the railroad as a going con
cern, inducing its good will, due 10
efficiency of service and many other
circumstances. may be much greater
than the value OF its tangible property
and 1t Is til former that measures the
investment on which fair profit must
be allowed. Then. too. the question
what is a fair profit is one involving
not only the rate of interest usually
earned on normally safe investments
but also sufficient allowance to
make up for the risk of loss both Of
capital and interest in the original
outlay. These considerations Will
have justified the company in impos-
ing charges high enough to secure
fair income on the enterprise as
whole. The securities at market
prices viii have passed into the hands
uf subsequent purchasers from the
original investors, Such circumstance
should properly affect the decision of
the tribunal engaged in determining
whether the 'totality Of rates charged
is reasonable or excessive, To ignore
them might So seriously and unjustIy
impair settled values as todestroy all
hope of Restoring confidence and for
ever TO end the m,ucement for invest.
mont i'm new railroad construction
which, in returning prosperous times
is sure to be essential TO our material
progIe ss, As Mr. Roosevelt has sal
in speaking of this very subject:
The effect of such valuation and
supervision of securities can not be Pc
.raactiyc. Existing securities should
81 tested by laws meNisrence at the
ime Of their issue. This nation would
10 more miare securities which hayh
5ocomc au important part of the na
,ional wealth than it would consider q
10 repudiafe the national
labr."
The question of rates and the treat
neut OF railways is one that has two
sides, The shippers are certainly eu-
titled TO reasonable ratrs bat less is
N Injustice To- he carriers. Good
business for te railroads is essential
% general prosperity Injustice to
.hem is rot alone injustice TO stock
a8ldprs and capitalists. whose further
Investments may be necessary for the
soad Of the whole country, but it III
.catly affects and reduces the wages
IF railway employees, and indeed may
deprive them of their places intirely
From what has been said. the prop
ar conclusion would seem to be that
IN IN attempting to determine whethe:
the entire schedule of rate, of raj.
say is excessive. the physical yalua.
.-ou of the road is relevant and i'm
3 taat bUt net necessarily q CONTROL
u @cto.
viii Not Impair Securities.
an confident that the fixing "a
.aps on the principles suggestel
Fo,e would not materially impair
.ha present market values Of railroad
scuiti,s IN most cases. for / be
ieve that the normal increase in the
value of railroad properties, especially
lu their terminals. will more than
make up for the possible ovcrcapita!
I2alion in earlier years. In some eases
doubtless, it will be found that over
capitalization is made an excuse for
excessive rates, and then they should
be reduced but the consensus OF OpiH
len seems to be that the railroad rates
generally in this country are reason.
ably low This is why. doubtless, the
complaints filed with the Interstate
Commerce Commission against eX-
ressiye rates are $50 few as compared
with those against unlawful discrim-
nation in rates between shippers ana
between places. OF course In the de-
termination OF the question whether
discrimination is unlawful or not, the
physical valuation Of The whole road
IS Of little weight
There Should Be Physical Valuation.
] have discussed this with some de-
gree Of detail merely to point out that
the valuation by the Interstate Com
mcrce Commission Of the tangibl'
property Of a railroad is prper ami
may from time to time be necessary in
setting certain issues which may come
before them. and that no evil or in
justice can come from valuation IN
such eases. if it be- understood that tn"
result Is 10 be used for a just purpose,
aud the light 10 a fair profit under all
tho circumstances of the investment Is
recognized The Interstate Commerce