Bluefield evening leader. [volume] (Bluefield, W. Va.) 1906-1911, 1908-07-28

ne pressed 10 passage the pure food
Inv and the meat inspection law In the
interest OF the health OF the public.
clean business methods and great ulti-
mate benefit to the trades themselves.
He recommended the passage OF law.
which the Republican convention has
since specifically approved. restricting
the future issue OF stocks and bonds by
Interstate railways to such as may be
authorized by Federal authority.
Chief Function Of Next Administration
The chief function OF the next Ad-
mtnistation. In my judgment. Is dis
tinct from. and progressive develop
nent Of TINT which has been performed
by President Roosevelt. The chief
function OF the next Administration is
to complete and perfect the machinery
by which these standards may be main
tained. by which the lawbreakers may
DO promptly restrained and punished.
but which shall operate with sufficient
accuracy and dispatch TO interfere with
legitimate business as little as possible.
Such machinery Is not now adequate.
Physical Valuation Of Railways.
DphAo VI thC ouBbtStiOho VI tht i'tihO
cratic platform relate really 10 this
subordinate and ancillary machinery
to which have referred. Take for in
stance the socalled physical valuation
OF railways" 1t is clear that the sum
OF all rates or receipts OF q railway.
less proper expenses, should be limited
to fair profit upon the reasonable
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 aScertaining what is
the reasonable value OF the company's
property. ard In fixing what Is n fnir
profit. 1t il clear that the physical
value of railroad and It's plant is an
mining its full value; but as President
Roosevelt I'm his Indianapolis speech
and the Supreme Court have In effect
pointed out, the value OF the railroad
as going concern, including It's good
will, due to efficiency OF service ana
many other circumstances. may h.
much greater than the value OF its tar
gible property. and IL Is the former that
measures the investment on which n
fair profit must be allowed. Then, too.
the question what is a fair profit Is one
involving not only the rate OF interest
usually earned on normally safe inves,
ments, but also q sufficient allowance
to make up for the risk of loss both
oc capital and interest in the original
outlay. Tsese considerations will have
Justihed the company In imposing
charges high enough to secure fair
Income on the enterprise as n whole
The securities at market prices will
have passed into the hands of sebse
quent purchasers from the original I'm.
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 so seriously and unjustly i'm
pair settled values as to destroy all
hope or 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 ir
attempting to determine whether tn,
entire schedule OF rates OF railway
excessive, the physical valuation of the
road Is relevant and important but
not necessarily 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 l believe that
the normal increase I'm the value OF
railroad properties, especially I'm their
terminals, Will more than make I'D for
the possible overcapitalization I'm ear.
Her years. In some cases. doubtless
1t VIII be found that overcapitallzatlon
Is made an excuse for excessive rates
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.
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 injus
tice can come from valuation I'm such
cases. II It be understood that the re.
suit Is to be used for n just purpose.
and the right to fair profit under all
the circumstances of the Investment e.
recognized
National Control of interstate Com.
nneree Corporation.
Another suggestion in respect TO sub
ordinate and ancillary machinery nee.
essary to carry out Republican policies
Is 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 nll corporations do
ing commercial business are engaged
I'm Interstate commerce. and IL they all
were required TO take out n Federal.
license or Federal charter the bur.
den upon the Interstate business OF the
country would become intolerable.
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