, 1908-07-28

DtVlSt DatAAtAr
vision OF the department of commerce
ana labor.
Some Constructive Tasks.
The constructive work of the next
administration Is to organize subordi-
nate and ancillary machinery to main.
tain the standards on one hand, and
not to interfere with business on the
other. The field covered by the indus
trial combinations and by the railroads
Is so very extensive that the interests
of the public and the interests OF the
business concerned cannot be proper
" subserved except bv reorganization
of bureaus in the department OF com,
merce and labor. OF agriculture, II
the department of justice. and n change
In the Jurisdiction OF the interstate
commerce commission.
Some Plans That Fall.
1t does not assist matters to pre-
scribe new duties for the interstate
commission which 1t is prac
tically impossible for it to perform, or
to denounce new ~offenses with drastic
punishment. unless subordinate and
ancillary legislation shall be passed
making possible the quick enforcement
in the great variety OF cases which
are constantly arising, OF the princi-
pies laid down by Mr. Roosevelt. and
with respect to which only typical in
stances of prosecution with the pres
ent machinery are possible. Such leg
islation should and would greatly pro-
mote legitimate business by enabling
those anxious TO obey the Federal
statutes to know Just what are the
-...I. - .I..g. 10 urf.I antfAn
Hlah Level Of Integrity.
The practical constructive and diff
fcult work, therefore, of those who
follow Mr.. Roosevelt is to devise the
WAYS and means by which the high
level of business integrity and obedi-
ence to law which he has established
nav be maintained and departures
from II restrained without undue inter
ference with legitimate business.
Valid Traffic Agreements.
It is agreeable to note in this regard
that the republican platform expressly
and the democratic platform implicitly,
pprov on amendment to the Inter
state Commerce law, by which inter
state railroads may make useful traffic
agreements II approved by the Com
mission. This has been strongly re
commended by President Roosevelt
and will make for the benefit of the
business.
Physical Valuation Of Railroads.
Some OF the suggestions of the dem.
ocratic platform relate really to this
subordinate and ancillary machinery
to which | have referred. Take for
instance the so-called physical valua
ton of railways" II Is clear that the
sum of all rates or receipts OF a rail
limited to a fair profit upon the reason.
able value of its property, and that II
the sum exceeds this measure, II
ought to be reduced. The difficulty
In enforcing the principle Is in ascer-
tanning what is the reasonable value
of the company's property, and In fix.
ing what ID a fair profit.
Weight az an Element.
1T Is clear that the physical value
OF a railr DAD and its plant is an ele
ment to be given weight in determin.
ing its full value; but as President
Roosevelt in his Indianapolis speech
and the Supreme Court have in effect
pointed out, the value of the railroad
as a going concern, including its good
will, due to efficiency of service and
many other circumstances, may be
much greater than the value Of its
tangible property, and it Is the former
that measures the investment on
which a fair profit must be allowed,
What is a Fair Profita
Then, too, the question what Is II fair
profit is one involving not only the
rate of interest usually earned on nor.
mally safe investments, but also a suf.
ficient allowance to make up for the
risk of loss of both capital and inter
est in the original outlay. These con.
siderations will have justified the com.
pany in imposing charges high enough
to secure a far income on the enter,
prise as a whole. The securities at
market prices will have passed into
the hands of subsequent purchasers
from the original investors.
Impair Settled Values.
Such circumstances should properly
affect the decision of the tribunal en-
gagged in determining whether the
totally of rates charged is reasonable
or excessive. To ignore them might
so seriously and uniustlv impair set
tied values as to DESTROY all hope of
restoring confidence and forever to
end the inducement for investment in
new railroad construction which, in re.
turning times. Is sure to be
essential to our material
As Mr.. Roosevelt has said in speaking
of this very subject.
No Retroaction.