The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1908-07-28

prosperous times, is sure to be essen
tial to our material progress. AS Mr..
Roosevelt has said in speaking of this
very subject:
The effect of such valuation and SUI
pervision of securities can not be ret
roactive. Existing securities should
be tested by laws in existence at the
time of their issue. This nation would
no more injure securities which have
become an important part of the ma
tional wealth than it 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 it di-
rectly affects and reduces the wages of
railway employees, and indeed may de-
prive 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 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
railroad properties, especially in their
terminals, will more than make up for
the possible overcapitalizatiOn in earli-
er years. In some cases. doubtless, it
will be found that overcapitalization
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. This
is why, doubtless, the complaints filed
with the interstate commerce commits
sion against excessive rates are SO few
as compared with those against I'M
lawful discrimination in rates between
shippers and between places. OF
course, in the determination of the
question whether discrimination is I'M
lawful or not, the physical valuation
of the whole road is of little weight
Should Be Physical Valuation.
l 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 prop
erty of a railroad is proper and may
from time to time be necessary in set
Ting certain issues which may come
before them, and that no evil or injus-
tice can come from valuation in such
cases. if it be understood that the re-
suit is to be used for a 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 If
the machinery for doing so is not ade-
quate, as is probable, it should be
made so.
The republican platform recon-
mends legislation forbidding the issue
in the future of interstate railway
stocks and bonds without federal au-
thority. 1t may occur in such cases
that the full value Of the railway. and.
as an element thereof, the value of the
tangible property of the railway,
would be relevant and important fac
tor in assisting the proper authority to
determine whether the stocks and
bonds to be issued were to have prop
er security behind them, and in such
case, therefore. there should be the
right and machinery to make a valua-
ton of the physical property.
Control Of Commerce Corporation.
Another suggestion in respect to
subordinate and ancillary machinery
necessary to carry out republican poh-
cies is that of the incorporation under
national law or the licensing by ma
tional license or enforced registry of
The fact is that nearly all corpora
tons doing a commercial business are
engaged in interstate commerce. and
If they all were required to take out a
federal license or a federal charter. the
burden upon the interstate business of
the country would become intolerable.
1t 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 a very small percent
age of all engaged in interstate bust
ness.
RooseveIt's Classification.
With such classification in view Mr..
Roosevelt recommended an amend
ment to the antitrust law. known as
the Hepburn bill, which provided for
voluntary classification, and created a
strong motive therefor by granting i'm
munity from prosecution for reason
able restraints of interstate trade to
all corporations which would register
and submit themselves to the publici-
ty regulations of the department of