The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-06-27

sa6fAs45s SATURDAY sIUNG -, l9US.
ID DEMOCRATIC PLATFORM POSSID1LI.
T1ES-RAILROAD PHYSICAL
VALUATION.
The Democratic platform Will prob.
ably declare for the valuation OF rail-
roads by the government.
The motive leading to sucpra declara.
ton Is a belief held By many that the
railroads are largely oycrcapitalized
that rates are arranged so that interest
and dividends can be paid on this en-
cessive capitalization; that their actual
value should be ascertained. and the
rates be based to yield a fair return
ON this value. This belief in the over
capitalization OF American railroads
should be either confirmed or dlsproved
In its present state Of uncertainty II
keeps alive the spirit of distrnst and
hostility against the roads on the one
hand, and on the other, the apprehen-
sion OF railroad managers and the in
Svesting public that more adverse legis-
lation may be forthcoming.
The Investigation will be trouble
GONE and complicated, and it is hardly
possible that its results will be COM
apletely accurate; but they can he
made sufficiently accurate to settle the
4 disturbing issue. 1t is only necessary
for the work to be done by men Of
ability and special knowledge, who are
capable OF weighing sthe many factors
that must be considered, and whose aim
to the truth possible.
The cost or capital of railroad is
not. indeed, the controlling factor in
fluencing rates. This is demonstrated
from the fact that while the gross
capitalization of American railways in
creased s11.43S per mile from 1888 to
1906, their average passenger receipts
declined more than third of a cent a
mile. and their freight earnings per
ton were less by more than a quarter
of a cent per mile. There are roads
whose proportion Of assets to capital
Is far below that of other roads, yet
whose rates per mile charged are less.
Moreover. the freight rates on Ameri-
can railroads are the lowest in the
world: the passenger rates on American
railroads are also the lowest.
II many of our railways We're over
ynif, II In 10 trst or, fr.r
balance has been redressed in the policy
followed BY American managers of d.
verting a large portion of net earn
ings to betterments and improvements,
exclusive of maintenance. This policy
has resulted in millions of dollars be-
ing put back into the property that it
might give more efficient service.
Ali these considerations cause the as
sertion of Senator La Toilette that
seven billions of American railroad Sc
curities are pure water to appear due
either TO Ignorance or to zeal of the
reformer. 1t is probably due to both
deficiencies. But actual figures show
how misleading and incomplete is the
estimate of the. Wisconsin Senator.
According to the figures of the Inter-
state Commerce Commission, the net
capitalization of our railroads for 1906
is s11,67l.94o.6i9. BY the same au-
thority the estimated cost of construc-
ton and equipment for tho year 1905
of 2os,4oo miles is Sl1.95l,34s,94o. This
estimate was based on incomplete
records. which cannot be made COM
plete. but the following is an estimate
made by a competent authority:
Cost of 22o.os6 miles operated in 1906:
Cost OF road Q6s,4as
miles, owned ....... ss.S74,6al.S9S
Cost of road COAT
miles) leased ...1...... 1,l6l ,949,7SO
Cost Of road Q3,066
miles, unreportcd ... 9l,9Sn,0O0
Cost of equipment e,I5S,6ll,6oo
s1s,1s7.2S2,77S
TO value the railroads on the cost
3of reproducing them would be an equi-
table method, but impossible of accu-
rate accomplishment, Probably not
far from the real facts is this esti-
mate:
Cost Of reproduction as of June 80.
"a sos:
Cost OF construction.
214.475 miles, at S35.-
600 per mile. ........ ST,5o6,635,0O0
4 Cost Of construction,
q a. m fIee 3