The Hartford republican. (Hartford, Ky.) 18??-1926, 1908-07-31
good In actual performance.


force its provisions against the most
powerful Of the industrial corporations.
He pressed to passage the pure food
law and the meat inspection law in the
interest of the health of the public.
clean business methods and great ultl.
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 Admin stration
The chief function OF the next Ad-
ministration. in my judgment, is dis
tinct from, and progressive develop
ment Of that 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
tanned, BY which the lawbreakers may
be 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.
Some of the suggestions of the Demo
cratic platform relate really TO this
subordinate and ancillary machinery
to which have referred. Take for In
stance the so-called physical valuation
OF railways" 1t is clear that the sum
of all rates or receipts of railway,
less proper expenses, should be limited
to a fair profit upon the reasonable
value. of its property. and that if the
sum exceeds this measure. 1t ought to
be reduced. The difficulty In enforcing
the principle Is In ascertalning what Is
the reasonable value of the company's
property. and In fixing what Is fair
profit. 1t is clear that the physical
value Of a railroad and its plant is an
element to be given weight in deter.
mining its full value: but Is President
Roosevelt In his indianapolis speech
and the Supreme Court have In effect
pointed out. the value of the railroad
as going concern. including its goo
will. due TO efficiency of service AID
many other circumstances. may be
much greater than the value of Its ia"
gible property. and ii Is the former that
measures the investment on which
fair profit must be allowed. Then, too.
the question what is a fair profit is one
IN nl hn 70 Of fDtn
usually earned on normally safe invest.
ments. but also a sufficient allowance
to make up for the risk of loss both
of capital and interest in the original
outlay. These considerations will have
Justified the company In imposing
charges high enough to secure fair
income on the enterprise as a whole.
The securities at market prices will
have passed into the hands of subse-
quent purchasers from the original in
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
pair settled values as to destroy all
hope of 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 In
attempting to determine whether the
entire schedule Of rates of railway Is
excessive. the physical valuation of the
road Is relevant and important but
not necessarily controlling factor
/ am corhcent that the fixing of
rates on the principles SUE gested above
would not materially impair the pres
emit market values OF railroad securi- |
ties In most cases. for | believe the
the normal increase In the value of
railroad properties. especially in their
terminals. will more than make up for
the possible overcapitaliZation In ear /
Her years. In some cases. doubtless |
It will be found that overcapitaization |
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.
l have discussed this. with some de-
,ree Of detail, merely to point out that
he valuation by the Interstate Com
nerce Commission of the tangible
property Of railroad Is proper and
nay from time to time be necessary in
settling certain i&iues which may come
before them. and that no evil or injus-
ice can come from valuation in such
'ases, If 1t be understood that the re-
'ult is to be used for just purpose.
Ind the right to fair profit under all
he circumstances Of the investment is