Daily capital journal. (Salem, Oregon) 1903-1919, 1911-09-04
Salem, Or, Aug. 30.

To the Editor Capital Journal.
Governor Vests remarks at AS
toria concerning the speech of Mr..
Farrar will doubtless be hailed by
the people of oregon as a good omen
However, he seems to do the subject
less than justice. He Is quoted as
saying, In part: "The Oregon laws
are lame in not restricting corpora
tions from issuing watered stock, and
In other ways also"
While the issuance of watered
stock is wrong In practice, and should
be prohibited 1t Is not the source of
as much harm as the people usually
presume. Water In stock Is not en-
titled to any interest or dividend re-
turns, and, consequent, no burden
to the patron, though q great many
people think 1t Is.
In the regulation OF our public
service companies we need only per-
NIT reasonable interest or dividend
return on the actual value Of the
property alone, and we have a per-
feet right to exclude all water in
stock, and make such rates for SER
vice on our railway lines, and for
all companies serving the public as
public utilities, as will give these
companies a reasonable return on the
actual value, exclusive Of water In
stock. This being the case, water
In stock Is not of very great import
ance. But the people of Oregon
are in many instances paying ten to
twenty times as much as is reason
able TO some OF these institutions.
One Of the most fragrant instances Of
this character is noted In the So
called Portland rate case, decided by
the Railway Commission OF Oregon
when Governor West was a member
Of that commission.
Complaint was filed In this case
before the commission by Portland's
Jobbers, and reasonable rates were
asked for on shipments out of Port
land on the o. r. & N. lines from
Portland to other points In Oregon.
The owners OF this line we're receiv-
ing on the main line from Portland
to Huntington and for all service per-
formed In the transportation of
freight between these points about
$50 per cent per year on the capital
employed In this service.
To Illustrate this fully we will
take the rates from Portland to La
Grande. The lowest carload class
rate from Portland to La Grande at
time complaint was fled, 26c per
100, and was paying its proportion
OF 66.24 per cent year to stock
holders OF the line. The commission
reduced this rate three cents per 100,
since which time It has only returned
54.4S per cent year.
The highest railroad rate was 64c
per 100, and was returning its por-
ton of 210 per cent year to the
owners OF the property.
The commission reduced the rate
TO 5Sc, which will return its proper
tlon in the future 1918 per cent q
year to stock holders. There was six
of these carload class ratios returning
TO the owners Of the property about
an average OF $50 per cent year.
When this case was tried, and the
Railroad Commission of Oregon re-
duced them 10 an extent that the av-
arage return In future will only be
1925 per cent year.
This is too extreme for credence,
but the matter can be verified by any
one who will take the trouble to ex-
anime into the fact.
This company Is not entitled Ia
127 per cent year for their capital
employed, but six per cent is held to
bo cample. Consequently they are get
ting mre than twenty tlmes as much
Interest return as they are entitled
TO for this service. Hundreds OF In
stances OF this kind can be found In
many parts OF the state. and their
prevalence Is not due to stock water
ing, faulty laws or the need Of any
new laws, but to the neglect OF our
officers in not enforcing the laws we
have
IL may be OF some Importance to
prohibit Watering stock, but it Il a
thousand times more important to
prevail uDon our state administration
to properly enforce the laws. IL may
be good OF our governor TO advise us
as to our lame laws, and suggest Inn
provement but what about the 1877
per cent a year paid by many. OF the
poorest people Of the state to among
the richest (people of the world
Why have we been sold into slavery
TO these people? Whenever the peo-
pie of Oregon get wise enough to
stop corrupt political deals between
corporations and politicians, who are
more ambitious than iudiclous, such
abuses will be stopped,
Very truly yours,
r. w. GAINS.