New-York tribune., 1910-12-22
NONE FOR STATE Control
.eoaers in Railway World Before
HadIey Commission.
ilncELOVETT ON VALUATION
savs Basis OF Computation
Should Be Roads Income
UntermyeT a Witness.

robert s Lovett, president of the Union
psciac and Southern Pacific railroads;
-,-srss- n. Hines chairman OF the execu-
.,,,e committee and general counsel OF the
.+cb.son Topeka * Santa Fe. and Samuel
r-n,srrnver. the lawyer. mere witnesses yes
.s-isx before President Taffs commission
:, -ailroad securities. under the chairman
cain Of President Hadley of Yale. at the
.ecss Of J. q II. Seiigman & Co.. No. 3
v1Ifarn street
NJ Hines said :hat he had no doubt
rhs+erer Of the power Of Congress 10 reg
,,;a.s the operation OF railroads engaged III
t-,e-stste trade. lie added that stase regu-
,.,iau was inadequate TO meet the demand
- ,he Public for control. Some states reg
,isred too much and Others too little, and
stsrefore he was heartily in favor Of fed
srsl regulation. Besides. ie said. he en-
.e-.a;ned no doubt OF the constitutionality
Of snch regulation.
The witness was quite optimistic over
-allroad conditions in this country, and
said they were improving all the time. He
attributed il % the scrutiny by the Inter
state Commerce Commission. public OF
scisls and t3le public at large. Stiil, he
added. there were many things 10 be
core, and the question of financing rail-
roads was one OF the most important
Drastic regulation, he argued. would make
i mere lilbcuit TO raise money, while new
roads would fro il almost Impossible TO
get started. but he favored efficient and
reasonable regulation.
Judge Lovett replied to a list OF questions
~ Il ,ss--s> Ia
100. favored federal rather than state regu-
Iatioa. bGt questioned the legality Of con-
.rol of rates b. Congress.
4 ConSl ess had such power. he sai6, it
should be exercised in such manner as TO
bring about uniformity OF rates in all
states. Such power should also be ex-
elusive. he added. otherwise he would OBJ
,ect TO any federal regulation al all.
Judge LCvett objected 10 the metcod OF
sdsteImining tie value q a railroad on the
basis Of tbs cost OF reproduction.
1t is not Eha; a road owns,' he said,
that makes its value. bat what it gets
He adoed that tae theory of valuation On
seproductiCC cost was exceedingly mischieT-
Gus.
samuel Unternyer said there was no
country OIL earth where the rights Of mi
,lority stockholders in corporations were SO
little projected as in the United States, and
.le expressed the belief that the govern
1uent could Go much for their protection.
-5e blamed holding companies for most or
tie abuses OF 1his nature. he said he could
mention fifteen cases CT injustice TO minor
/. !-y Stockholders caused 10y such companies
When a railroad gets a controlling inter
esr Ia another road, he said, the purchaser
should be compelled to buy tie entire capt.
"a stock. When shree-fourths Of the stock
holders are willing TO sell. the others should
ue compelled to do so and their stock should
be appraised.
For the reorganization OF railroad COM
fsnies he recommended the adoption of the
English reconstruction act. There should
also be a judicial review. be said, as is pro-
Tided for Ia the English act In reply to d
question by cne of the commissioners, Mir.
rnternyer said he did not believe this
iwUasid lead 10 any charge OF Judicial scan
cal