The Washington herald., 1908-02-14

That the fight which Senator La
Toilette. Of Wisconsin, made during the
consideration of the rate law in the Fifty
ninth Congress for the valuation of the
physical property of the railroads Of the
country, with view to determining pas
senger and freight rates by a fair return
upon the investment, viii be repeated in
the present Congress during the pendency
OF the Aldrlch financial bill, Is now the
expectation Of those who are Informed
concerning the plans of the Senator.
on Tuesday Senator la Toilette intro
duced two proposed amendments to the
currency bin.
one provides that no mortgage bonds OF
any railroad company shall be accepted
as basis for the emergency currency pro-
posed by the Aldrich bill unless the fair
value and cost Of reproduction Of the ply
sical property Of the railroad shall have
been ascertained by the Interstate Com
merce Commission and certified to the
Secretary of the Treasury
Only Their Real Value.
The other provides that in lieu Of the
words now contained in the bill. limiting
the amount Of currency that may be
issued upon railroad bonds to 70 per cent
Of the market value of the bonds. the
following shall be inserted:
Seveuty-dEe per esntum Of the par value Of any
railroad bonds. but not more than 5 per ceutum 0f
the value Of the physical property upon which such
bonds are secured. such value % be asestained and
determined hy Tie Interstate Commerce Commission.
1t IS understood that the Senator from
Wisconsin Will press his amendments Wig
orously in the Senate and also that
number OF other Republican Senators are
with him in the fight. That the majority
of the Democratic Senators will favor
such amendments is assured by the atti-
tude of their party upon the question in
volved. and by their vote upon practically
the same amendments during the rate
bulls pendency.
Would stop Imitation.
The cumulative effect of these two
amendments would be to do away with
the imitation of railroad securities to
large extent if not altogether. Under the
present provision of the Aldrich bin for
the issue of notes to the amount of 70
per cent of the market value of the bonds.
and Republican Senators alike upon the
floor of the Senate. a bond that was
worth 500 par might he the basis for the
issue Of $50 in bank notes. provided the (
bonds were selling I'm the market as the /
result OF speculative manipulation, az 5000 /
10 take an extreme ease
The result Of the use Of railroad bonds /
for currency security under such "a pro
vision, say careful students of the prob /
lem. would simply be 10 provide an addi- /
Jional incentive for the imitation of the /
value OF railroad securities, and put /
money in the pockets Of the holders of /
the bonds. One who has studied the sub (
Ject carefully estimates that the passage I
of The bin, with this provision intact. I
would simply add $780, 0000 20 the wealth 1
Of the holders Of the railroad bonds sub /
Ject to the provision of the bill. which /
Senator Aldrich estimated in his speech /
or Monday to be worth now about /
5000 100000
Aims at Speculation.
The passage of Senator la FolIette's /
amendments as part Of the AIdrich bin /
would in time put an end 10 speculation |
in railroad bonds, and, it is believed. /
would stop dealing in futures all along |
the line, reducing Wall street and the /
speculative marts of other cities from
their present status as great gambling
centers 10 their proper sphere of useful (
ness as markets wherein the actual
stocks and bonds would he dealt In as
other merchantable property is bought
and sold.
Senator Ia Toilette lost his fight in the
last Congress. although he had the back
ing OF number of prominent Senator'S
The vote was 45 against the amendment
TO 2S for it, with sixteen Senators not
voting. In the interim some conditions
bearing upon the proposition Of the Sen
ator from Wisconsin have changed.
President FavOrs Valuation.
The President of the United States. who
is at least in name the head and front
Of the Republican party. had declared
strongly for the plan which Senator La
Foilette's amendments embody.
The personnel OF the Senate has changed
10 some degree. There is new blood in its
body. Several Of the Republican Senators
who voted for the amendment before are
still members Of that body. Several who
voted against it are no longer members.
In several cases their successors are ex-
pected 70 vote aye" when the amend
ment is put to the final test Several Of
those who failed 20 vote before have de-
cIared against the railroad bond section
OF the Aldrich bill
on the whole the friends of the amend
ments proposed by Mr.. La Toilette be-
lieve that the outlook for success this
time is brighter than it was when the
rate bHl was pending and an attempt was
made 20 weld the amendments upon ill.,