Los Angeles herald., 1908-07-29
G. o. p. Platform Held as Being All
That Is Good and That of
Democrats All That
Is Bad
Continued from Page one,

unmindful of the common rules OF
business honesty and fidelity and OF the
limitations imposed by law upon their
action. This became known.
The revelations of the breaches or
trust, the disclosures as to rebates and
discrimination by railways, the ac-
cumulating evidence of the violation
of the antitrust law by number of
corporations, the over-issue of stocks
and bonds on interstate railways Tor
the unlawful enriching of directors and
for the purpose Of concentrating control
of railways in one management, all
quickened the conscience of the people
and brought moral awakening among
them that boded well for the future of
the country.
The chief function OF the next admin
istration in my judgment is distinct
from and a progressive development
which has been performed by President
Roosevelt. The chief function of the
next administration is to perfect the
machinery by which these standards
may be maintained, by which the law
breaker may be promptly restrained
and punished, but which shall operate
with sufficient accuracy and dispatch
to interfere with the great business as
little as possible.
Machinery Now Inadequate
SuCn machinery IS uOl HOW duSqudlS.
Under the present rate bill and under
all it's amendments the burdens
of the interstate commerce COM
mission in supervising and regu-
lating the operation of the rail-
roads of this country have grown
so heavy that it Is utterly impossible
for that tribunal to hear and dispose of
in any reasonable time the many
complaints, queries and issues of its
,V.iesI irfi q wa o.
body, and it's functions should be linn
tied to the quasi-judicial investigation
of complaints by individuals and by a
department of the government charged
with the executive business of super
vising the operation of railways.
There should be a classification of
that very small percentage of indus
trial corporations having power and
opportunity to effect illegal restraints
of trades and monopolies and legisla-
tion either inducing or compelling them
to subject themselves to registry and
to proper publicity regulations and su-
pervisions of the department of COM
| merce and labor.
1t. is agreeable to note in this re-
gard that the Republican platform ex-
pressly and the Democratic platform
explicitly approve an amendment to
the interstate commerce law by which
interstate railways may make useful
traffic agreements If approved by the
commission. This has been strongly
recommended by President Roosevelt
and will make for the benefit of the
business.
Some of the suggestions of the Dem
ocratic platform relate really to this
subordinate and ancillary machinery to
which l have referred. Take for in
stance the so-called physical valuation
of the railways. 1t Is clear that the
sum of all rates or receipts of a rail-
road, less proper expenses, should be
limited to a fair profit upon the rea-
sonable value of its property, and that
if the sum exceeds this measure 1t
ought to be reduced.
Value Difficult to Determine
The difficulty in enforcing the prin-
ciple is in ascertaining what is the
reasonable value of the company's
property and in fixing what is a fair
profit. 1t is clear that the physical
value of a railroad and it's plant is
an element to be given weight in deter
mining it's full value; but as Presi-
dent Roosevelt, in his Indianapolis
speech and the supreme court have
pointed out, the value of railroads as
a going concern, including its good will,
due to efficiency of service and many
other circumstances may be greater
than the value Of its tangible property,
and it is the former that measures the
investment on which fair profit must
be allowed.
Then too, the question what is 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 i'm
posing charges high enough to secure
a fair income on the enterprise as a
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
tribunal engaged in determining
whether the total of rates charged Is
reasonable or excessive.
To ignore them might so seriously
and unjustly impair settled values as
to destroy all hope of restoring conf
dence and forever end inducement for
investment in new railroad construc-
tion which in returning prosperous
times is sure to be essential to our ma
terial progress. AS Mr.. Roosevelt has
said in speaking of this very subject:
THE effect of such valuation and
troactive. Existing securities should be
tested by laws in existence at the time
of their issue. This nation would no
more injure securities which have be-
come an important part of the national
wealth than it would consider
proposition to repudiate the national
debt"
Question Has Two Sides
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 in
vestments by the railways is essential
to general prosperity. Injustice to them
is not alone injustice to stockholders
and capitalists whose further invest
ments may be necessary for the good
of the whole country, but 1t directly
affects and reduces the wages of rail-
way 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