Waterbury evening Democrat., 1908-07-28

mally. safe investments, but also a sufficient allowance to make up for the risk of loss both of capital and interest in the original outlay. These consid- erations will have justified the com pany in imposing charges high enough to secure a fair 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. Such cir cumstances should properly affect the decision of the tribunal engaged in de- termining whether the totality of rates charged is reasonable or excessive. To ignore them might so seriously and un- justly impair settled values as to de- stroy all hope of restoring confidence and forever to end the inducement for investment in new railroad construc- tion which, in returning prosperous times, is sure to be essential to our material progress. AS MT. Roosevelt has said in speaking of this very sub ject:
 '"The effect of such valuation and su-' pervision of securities can not be retro active. Existing securities should be test ed by laws in existence at the time Of their issue. This Nation would no more inture securities which have become an important part of the National wealth than 1t would consider proposition to repudiate the National debt"
 The question of rates and the treat ment of railways is one that has two sides. The shippers are certainly en- titled to reasonable rates: but less is an injustice to the carriers. Good business for the railroads is essential to general prosperity. Injustice to them is not alone injustice to stock holders and capitalists, whose further investments may be necessary for the good of the whole country, but 1t di- rectly affects and reduces the wages of railway employees. and indeed may deprive them of their places entirely. From what has been said. the proper conclusion 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 controlling factor. Physical Valuation Properly Used Will Not Generally Impair Securities.
 I 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 l believe that the normal increase in the value Of railroad properties. especially in their terminals, will more than make up for the possible overcapitalization in ear Tier years. In some cases, doubtless, 1t will be found that overcapitalization is made an excuse for excessive rates. 1 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. This is why, doubtless. the complaints filed with the Interstate Commerce Com mission against excessive rates are so few as compared with those against unlawful discrimination in rates be- tween shippers and between places. Of course. in the determination of the question whether discrimination is un- lawful or not, the physical valuation of the whole road is of little weight.
 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 a 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 injustice can come from valuation in such cases, If 1t be understood that the
 result is to be used for just purpose,
 and the right to fair profit under all
 the circumstances of the investment is
 recognized. The Interstate Commerce
 Commission has now the power to as
 certain the value of the physical rail
 road property, If necessary, in deter
 mining the reasonableness of rates. Ii
 the machinery for doing so is not ade
 quate, as is probable. it should bs
 made so.
 The Republican platform recon
 mends legislation forbidding the issue
 in the future of interstate railway
 stocks and bonds without Federal au thority. It may occur in such easel
 that the full value of the railway. and as an element thereof. the value of th' tangible property of the railway. woult be a relevant md important factor fl , assisting the proper authority to de termine whether the stocks and bond 10 be issued were to have proper SC , rurity behind them. and in such case therefore. there should be the right an'
 machinery to make a valuation of tn ] physical property.
 National Control of Interstate Com l rneree Corporation.
 Another suggestion in respect to sut F ordinate and ancillary machinery net essary to carry out Republican DO 2 icies is that of the incorporation UT ! der National law or the licensing b National license or enforced registr of companies engaged in interstai trade. The fact Is that nearly all col noraeons doing a commercial bushes
 are engaged in interstate conmerc
 and if they all were required to tak ,- out Federal license or Federal cha 8 ter, the burden upon the Interstate bus ' ness of the country would become il r tolerable.