The Washington herald., 1908-07-29

I queries, ana issues that are brought be-
fore il for decision II ought 10 be re-
lieved OF its jurisdiction as an executive.
directing body, and its functions should
be limited 20 the Quasi-judiclal investiga-
ton OF complaints by individuals and by
Z a department OF the government charged
with the executive business Of supervis-
ing the operation Of railways
There should be classification Of that
very small percentage OF Industrial cor
porations having power and opportunity
TO effect Illegal restraints Of trade and
monopolies. and legislation either Undue
ing or compelling them 10 subject them
selves 20 registry and 70 proper publicity
regulations and supervision Of the De
partment OF Commerce and Labor
Constructive Work of Next Admins
tratIon.
The field covered by the Industrial
combinations and by the railroads is so
very extensive that the interests OF the
public and the interests Of the businesses
concerned cannot be properly su5served
except BY REORGANIZATION OF bureaus IN
the Department Of Commerce and Labor.
Of Agriculture, and the Department OF
Justice, and a change in the Jurisdiction
Of the Interstate Commerce Commission
It does not assist matters TO prescribe
new duties for the Interstate Commerce
Commission which It IS practically i'm
possible for It 10 perform. OF 10 denouuce
new O1enses with drastic punishment. I
unless subordinate and ancIllarv IegisIa-
ton shall be passed making possible the
quick enforcement IN the great variety
OF cases which are constantly arising. OF
the principles laid down by AIr. Roose-
velt and with respect 20 which only
typical instances Of prosecution with the
present machinery are possible. Such
legislation should and would greatly pro
mote legitimate business by enabling
those anxious 70 obey the Federal stat
Utes TO know just what are the bounds
OF their lawful action. The practical
constructive and difficult work there
fore, Of those who Follow aIr Roosevelt
Is 10 devise the ways and means by
which the high level OF business tnteg-
rlty and obedience TO law which ne has
established may be maintained and de-
parrures from il restrained without un-
due Interference with legitimate business
Traffic Agreements should BE valid
It is agreeable 10 note in this regard
thar the Republican platform expressly,
and the Democratic platform implicitly.
approves an Amendment TO the interstate
commerce law by which interstate rail-
roads may make useful traffic agreements
~ " 81 ~ AaAE Gl4sAlA4a-S4lLa-
. been strongly recommended BY President
Roosevelt and VIII make for the benefit
OF business
Physical Valuation of Railways.
Some Of the suggestions OF the Demo
cratic platform relate really TO this SUBJ
ordinate and anciIary machinery 10
which I have referred Take for instance
the so-caIled physical valuation Of raII-
ways" II IS clear that the sum OF all
rates OF receipts Of a railway, less proper
expenses, should be limited 70 a fair
profit upon the reasonable value OF It's
property. and that Il the sum exceeds /
this measure, il ought 70 be reduced. The
difficulty IN enforcing the principle IS IN
ascertairing what IS the reasonable value
Of the compa1y's property and in fixing
what IS a fair profit II IS clear that the
physical value OF railroad and its plant
IS an element 10 be given weight in de-
tern-nirg its fun value: but as President
Roosevelt, in his indianapolis speech. and
the Supreme Court have IN effect pointed
out, the value Of the railroad as q going
concern including its good VIII due 20
efficiency OF service and many other cir
cumstances. may be much greater than
the value Of It's tangible property. and il /
Is the former that measures the invest
---Nl--A 1A- W--4.-A AtAA ALllAL must DE al
lowed Then. TOO. the question what IS a Z
fair profit IS one involving not only the
rate OF interest usually earned on nor
Daliy safe investments. but also q suffi-
cieut allowance to make Up for the risk
Of loss both Of capital and interest IN the I
original outlay These considerations viii Z
have justified the company in imposing Z
charges high enough 10 secure 2 fair in
come on the enterprise as d whole. The
securities 1- I
passed into the hands Of subsequent pur-
chasers from the original investors Such
circumstances should properly effect the
decision OF the tribunal engaged in deter
mining whether the totality Of rates
charged IS reasonable OF excessive. To
ignore them might so seriously and IN
justly impair settled values as 20 destroy /
all hope Of restoring confidence and for
ever TO end the fnducement for invest
meut n new railroad construction which I
in returning prosperous times, IS sure 70
be essential 10 our material progress. As
Mr. Roosevelt has said in speaking OF
this very subject;
The elect Of such valuatfoa and supervision of I
securities cannot Re 7etroac-ive Existing securities
sboud be tested By laws IN existence az the time
q theIr is=ie- This nation would no more iuizre
securities whica have become an important part Of
the national wealth than It would consider rropo-
slliua 10 rsT1diate the national debt
The question Of rates and the treatment /
OF railways is one THAI has two sides /
The shippers are certainly entitled to rea- /
s0uable rates. but less is an injustice TO 1
the carriers. Good business for the rail-
roads Is essential 10 general prosperity 1
Injustice 10 them IS not alone injustice /
to stockholders and capitalists. whose
further Investments may be necessary for I
the good OF the whole country, but Il I
directly affects and reduces the wages
Of railway employees. and indeed. may
deprive them OF their places entirely.
Frcm what has been said. the proper
conclusion would seem 10 be that in at 4
tempting to determine whether the entire
schedule Of rates OF a railway IS exces- I
sive the physical valuation OF the road
is n relevant and important but not neces- !
sarily a controlling factor.
Physical Valuation Necessary.
an confident that the fixing Of rates 1
on the principles suggested above would 4
not materially impair the present mar
ket values Of railroad securities in most
cases. FOR I believe that the normal in
crease in the value Of railroad prop /
critics. especially in their terminals, will 4
more than make up for the possible over
capitalization in earlier years In some i
cases. doubtless. & viii be found that
overcapitalization is made an excuse for |
excessive rates. and then they should be i
reduced, but the consensus Of opinion 1
seems TO be that the railroad rates gen
orally IN this country are reasonably low.
This is why. doubtless. the complaints /
fled with the Interstate Commerce Com
mission against excessive rates are SO /!