Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-11-19

per cent upon their value and the
supporters Of this claim generally
cite the supreme courts decision in
the New York Gas case Perhaps
y9n Will be surprised when l tell You
that neither in thts case nor in any
other case has the supreme court
ever decided any such thing. on the
contrary, all that the court sug-
gestcd In that case was that the leg
I islafure could not constitutionnlly re-
duce the rates Of the Gas company SO
as TO produce less earnings than s
per cent upon the value Of the gas
eofnpany.s property
Now. there Is al the difference In
the world Between saying that the
rates must not be forced rs law to
less than 6 per cert (which IS what
the supreme court did suggestl and
saying that rates cen not lawfully be
more than 6 per cent (Which the gu
preme court has never suggested in.
that or any other easel.
Regarding s Per Cent Earnings.
! can say to YOU. without any quail
fication, tina there is no law and no
decision og the supreme court of the
United States that declares or sug-
gests that Il is unlawful for railroad
companies to earn more than 9 per
htAAN ulIii liif A0tAF tA AliFll BiUi~
ertS. and 1t is of the highest import
ance that this fact should be recog-
nized and that thc erroneous assertion
10 the contrary should be denied and
rejected.
Moreover. as a practical PROPOSE
ton. II must be plain upon consider
alton that no such principle would be
Just as feasible. For the government
% say that persons investing money
In a railroad must never earn more
than . per cent would he wholly I'M
reasonable In yieN of the fact thai
the government does NOT guarantee
that they shall carr 9 per cent. Such
q one-sided rule wonld limit railroad
investors To a return Of 8 per cent In
good years and would leave them to
get along with "a much less return
OF with no return. in bad years.
Clearly, the general average return
under the operation OF any such one
sided rule would be materially less
than s per cent.
II would not be unreasonable If
the government Should limit the re-
turn to 6 per cent and. at the same
time, Should guarantee n return of
that amount. But the government |
a no idea OF making such guaranty, |
and therefore IL must be evident that
the people on full consideration would |
not be SO unfair as to make the ne
sided rule which has been suggested. |
Welfare OF Public and Roads.
The truth Is that when the COM
mission comes TO decide upon reason
able rates II must take into consider
alton all the conditions and must con-
slider the welfare of the general pub
lie and welfare of the railroad. and
what Is fair and reasonable under all
"a from ~ CT unrfu AMI f1ag ram ~, ipufan !
Is not bound and can not be bound
BY any such one-sided unreasonable |
principle as that earnings must not
exceed 6 per cent upon value.
The mex point 10 which ! wish to
call you attention is that the public
can not afford TO overlook the fact
that a railroad company has an inn
p%ortant work to do besides using its
property for the public benefit and
O proper return upon its ex-
lsting capital. This additional work
the railroad company must dc
Is the work of continually charging
and improving it's property so as to
meet the needs and requirements OF
the public and promote the public
convenience and safety. This work
demands the expenditure of enormous
sums of nen money on the property
and this new money can not be raised
unless the law will give opportunity
% enjoy liberal returns If business
conditions VIII permit such returns,
IF. when Mr.. Ripley took charge OF
he Santa Re fifteen years ago, it had
)ecn possible and proper for him to
continue the property Just as IT was
u that time without extending it or
improving it. without doing ANYTHING
more for the convenience or safety %
he public than was done al that
line. il would doubtless nave been
'ufficitnt for tho conf un TO earn
ust barely enough 10 pay q proper
On its existing stock and 10 .
accumulate just enough surplus 10
.naintnin its dividend i'm years 81 de
'rcssiou. But such a condition was
wholly out OF the question. 10 would
Sc difficult to imagine the santa Pc
Il operating today with the same
.haracter ~ track. equipment. build.
ngs, etc, as q had fifteen years ago
10000 900 Annually In Improve
nnettt~ Needed.
The santa he has had to keep :
breast OF the times and IN doing SO Z
had 70 spend aboul two hundred I
ln extensions and improve ,
nents al MS system and it ought to !
pend in the future from Twenty-Five T
- thirty millions 8 year Tor these
'NA i'FfTf -NNNt AAf fAAftAf NifAfNAA
.hich the Sinta Fe is paying out IN I
iYidends on an ITS stock. both pre- Y
opd common. * about fifteen
= Year.. 80 that what IL ought
+, spend Apun ifs property every year
about twice what il paws out in q,
iVidcnds I'd
The Santa Fe has no WAY to raise e.
his money except by the use of it. ,
earnings and by inducing the !
Co invest their money In new +
uf stock or bonds. The santa y
e can not compel anybody 70 invest .
j its securities. the government docs .
ct compel anybody To invest In Z
anita Fe securities. and the govern y
Itself does not invest In those !,
-curitics. ~
Every such Investment is a purely =
o%luntarv act upon the part Of the .
aud he will not invest unless !,
e feels reasonably SURF or ca proper ~
upon his money. ~
Now. experience has convinced all ~
ersons familiar with financial affairs ;,
nat investors are not willing to in .
EST their money In an enterprise .
hitch makes just barely enough
To- pay dividends on its exist u'
u stock and has 10 surplus 10 spend :,
} tho Improvement of Its property. -
= the conclusion OF the directors 81 g.
b. santa Re that. in order TO spend ''
iirty millions Of dollars a year I'm ~
h. Improvement and extension OF the u
81. "a y. meet Rnshff4 ssa- VA