The Kennewick courier. [volume] (Kennewick, Wash.) 1905-1914, 1908-08-21
Physical Valuation Of Railways.

4 railways" 1t is clear that the sum
4 all rates or receipts Of a railway,
ess proper expenses. should be limited
o a fair profit upon the reasonable
'alue Of its property, and that II the
um exceeds this measure. 1t ought to
,e reduced. The difficulty In enforcing
he principle Is In ascertaining what Is
he reasonable value Of the company's
property. and In fixing what 10 fair
profit. It Is clear that the physical
,alue of q railroad and its plant u an
clement to he given weight in deter
mining its full value; but as President
Roosevelt in his indianapolis speech
ind the Supreme Court have In eject
pointed out, the value OF the railroad
u q going concern, including Its good
will, due to efficiency Of service and
many other circumstances. may De
much greater than the value OF Its tan
zible property, and it Is the former that
measures the Investment on which
fair profit must he allowed. Then, too,
the question what is fair profit Is one
involving not only the rate OF interest
usually earned on normally safe invest.
ments, but also a 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 imp0siue
charges high enough to secure a fair
income on the enterprise as q whole
The securities at market prices will
have passed into the hands Of subse-
quent purchasers from the original in
vestors. Such circumstances should
properly affect the decision Of the tri
bunal engaged in determining whether
the totality Of rates charged Is reason
able or excessive. To ignore them
might 50 seriously and unjustly i'm
pair settled values as to destroy all
hope Of restoring confidence and for
ever end the inducement for invest
ment in new railroad construction
which, in returning prosperous times.
Is sure to be essential to our material
progress.
From what has been said, the proper
conclusions would seem to be that In
attempting to determine whether the
entire schedule Of rates Of railway Is
excessive, the physical valuation Of the
road Is a relevant and important but
not necessarily a controlling factor.
am confident that the fixing OF
rates on the principles suggested above
would not materially impair the pres.
ent market values Of railroad securi.
ties in most cases, for believe that
the normal increase in the value OF
railroasaa properties, especially in their
viii more The aAe i;a.;e % fol
the possible overcapitalizatioh in ear
lier years. In some cases, doubtless.
It will be found that overcapitaiization
IL made an excuse for excessive .ratesyr
and then they should be reduced; but
the consensus Of opinion seems TO be
that the railroad rates generally IN this
country are reasonably low. 'a
Conclusion That 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
merce Commission of the tangible
property Of railroad is proper and
may from time to time be necessary In
settling certain Issues which may come
before them, and that no evil or injus-
tice can come from valuation In such
cases. II 1t be understood that the re-
suit Is to be used for a just purpose,
and the right to a fair profit under all
the circumstances Of the investment II
recognized.
National Control Of Interstate Com.
meres Corporation.
Another suggestion in respect to sub
and ancillary machinery nee
essary to carry out Republican policies
IL that Of the Incorporation under Ma.
tional law or the licensing by National
license or enforced registry Of compa-
MES engaged in interstate trade. The
fact Is that nearly all corporations do
Ing a commercial business are engaged
In interstate commerce, and II they all
were required to take out a Federal
license or Federal charter, the bur-
den upon the interstate business Of the
country would become into1erable.
It is necessary. therefore, to devise
some means for classifying and insur-
Ing Federal supervision Of such cor
porations as have the power and temp
tation to effect restraints Of interstate
trade and monopolies. Such corpora
lions constitute very small percent
age Of all engaged in interstate bust
ness.
Construction Of Anti Trust Law.
The possible operation Of the anti
trust law under existing rulings Of the
Supreme Court has given rise to sug-
gestions for Its necessary amendment
to prevent its application to cases
which 1t Is believed were never in the
Of the trainers Of the
statute. Take two instances: A mer-
chant or manufacturer engaged In q
legitimate business that covers certain
States, wishes to sell his business and
his good will. and 30 in the terms Of
the sale obligates himself to the pur-
chaser not to 90 into the same bust
ness In those States. Such a restraint
II trade has always been enforced at
common law. Again, the employees Of
IN interstate railway combine and en-
Ter upon a peaceable and lawful strike
70 secure better wages. At common
aW this was not q restraint Of trade