The Washington herald., 1908-03-18

company within the purview OF this
statute 10 maintain the position OF its
bonds within the favored class, and every
other railway company to qualify at the
earliest possible moment for admission 20
the forward class.
Additional Bonds Not Security.
1T is no answer 70 say. as did the
Senator from Rhode Island In attempted
reply to the junior Senator from Wis
consin. that the government can demand
additional securities whenever railway
bonds are discrediteG for any reason.
The railway lobby. always powerful IN
maintaining its interest in legislation,
would be further reinforced BY a law
All holders OF railway bonds. the prices
Of which, would be enhanced by the op.
Grafton Of such a law, and holders Of
railway bonds seeking admission TO the
favored markets which such a law would
make for the bonds OF roads paying 4 per
cent on fictitious as well as legitimate
capitalization. would with added In
centive, mass their power and influence
against any legislation seeking 70 regu-
late railway rates upon the basis OF the
actual value Of railway property rather
than upon the basis recognized by this
bill.
IF the property is greatly overcaFi-
taliZed, the dividend upon the establish
ment Of a reasonable rate may fan be-
low 4 per cent. Without the value OF the
physical property OF the railway the com
mission and court are. alike. powerless
20 determine the reasonable rate, the law
ful rate. A road which maintains ex-
cessive rates may thus wrongfully pay
per cent dividends and more. upon hc-
utious capitalization. and the government.
/ by way Of rewarding its extortion, places
/ its bonds in the favored class Of securi-
/ ties accepted for issue OF currency un-
/ der this bill.
Would Stop Valuation Plan.
What do Senators think is the real
purpose of working railway bonds into
the currency system Of the government
What Go Senators think will be the ef-
( feet Of naming railway bonds in the
law as security OF currency circulation.
! Gould any plan be devised which would
be more effective in blocking the way OF
! legislation for valuation Of the physical
/ properties Of railways and defeating the
{ tnal reduction Of rates 10 just and rea-
/ sonable basis? Coming as they do IN
! the guise Of q reinforcement TO falling
| credit. these bonds are made to appear
/ as promoters OF public interest. Let ne
Senator be deceived. The public will not
be misled. There are many and moving
reasons back Of this railway bond PROPOSE
/ ton
The public had grown insistent FOR
legislation that should not only recognize
= ~
proclaim the right 70 reasonable rates as
the amended interstate commerce act
does. but legislation which should clothe
a commission with authority 10 ascertain
the true value OF railway property, as
the only means Of determining rates. and
( then direct the commission to base rates
upon the value so ascertained. which the
amended interstate commerce act wholly
fails to do
Long Fight for Valuation.
The public had grown insistent. Legis.
lation for more than a quarter Of a cen.
tury had judged this question. 1t is op-
portune for US TO remember that tho
struggle 10 secure reasonable rates start.
ed thirty-four years ago. A generation
OF men have gone 20 their graves since
this contest began. and yet there is nC
Federal law ,nder which a reasonable
rate can be determined to-day. 1t /,
unnecessary 10 comment upon the inhu.
ences which have baffied all efforts e
secure legislation necessary % determine
the gross overcapitalization OF the rail.
ways Of the country.
A False Alarm.
"a false alarm was sounded The CT,
went abroad over the land that the rail
ways were being crippled.
1T was threatened that railway buildin,
would come 10 a standstill.
''The railroads we're prepared TO accep
any temporary loss If in the end they
might thereby save the thousands of mil
lions of overeapitalization.
''They acted with decision and dispatch
Train Service was everywhere curtailed
Freight was sidetracked.
Passengers were compelled to suffer de
lay, inconvenience, and discomfort fl
travel. while railroad officials were pro
testing through interviews and addresse.
against the great injuries inflicted upor
transportation and all other business b.
hostile and irrational legislation.
The little groups of men who own anc
I N4S A'''-''e'S > WI aiiAVu AOI bnt
other interests with which they were
likewise identified. Fear seized upon theil
co-associates in copper and steel anC
coal and all allied and consolidated OF.
CARNATIONS.
What would happen 10 other over.
capitalized monopolies II the railway
earnings were based upon the true valu,
OF the railway property?
Would not the public further insis-
that 1t was no more just to require It tc
pay excessive rates for iron and steel fl
order to pay dividends on 200 or 800 Del
cent Of water than to require 1t to pay
Transportation charges 10 support ex-
travagant overcapitalization OF rail-
roads?"
Adjournment Of Congress.
In an interview with +ba p~a.fso..