Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1912-12-10

h,iently low to induce traffic to move,
water competition competition of mar
kets etc
suppose. for instance, there are two
parallel lines. one runs through coastal
or level country, while the other runs
through mountainous section, the first
costing $50. 600 per mile, while the second
costs 100000 per mile. The second must
make it's competitive rates the same as
the first despite the disparity in CAPT
talizatlon
The principal influence Of physical
valuation lies in the fact that under the
fourteenth amendment to the Federal
constitution property can not be confis-
Gated. so rates can not legally be so re-
duced by the railroad commissions below
a point which will yield enough profit
TO pay fair return on the value Of the
railroad
Tell Limit Has Been Reached.
Briefly stated, the advocates of strin-
gent regulation of the railroads want to
know Just what is the lowest limit to
which they can reduce rates or pile on
burdens, and this limit is the value Of the
property, and physical valuation governs
largely the total valuation OF course,
their belief and argument is that the low
est limit is below that represented by
outstanding capitalization.
ION the other hand, regulation has
proceeded so far already that the rail-
roads feel that the lowest limit has al
ready been reached in many cases, and
therefore they believe they have nothing
to lose and everything to gain from
physical valuation which will be much
larger than is generally thought.
Another feature. not generally under
stood, is the fact that a physical valua
ton soon goes out of date In other
words, if a physical valuation were made
now, real estate would probably continue
to rise in value from year to year, so that
city terminal values at $1,000, 900 now
might be worth $1,000 900 in 1915.
Cost Of Maintenance Greater.
''The cost Of labor and material has
been on the rise for years. A mile of
track which would cost 600 now, might
cost $4,000 in 1915, and so on.
''Anti-railroad sentiment probably would
declare that after once fixing the valuation
it should not be allowed to change. but
the country isn't yet committed to the
doctrine that its citizens shall not enjoy
rises in values, and it would not be con
sututional to say to a railroad that its
right-of-way shall forever be valued at
only SO per acre. while the adjoining land
owned by a farmer has been increased in
value to 500 per acre because of the rail-
road being built close by.
Nor iss it a fair proposition for Sam
Jones to be allowed to invest his money
in a stove factory enjoy 10 per cent divi-
dends and also a large increase in the
value of his plant and land. while his
brother, VIII Jones. who puts an equal
amount of money into a railroad plant.
Is only allowed to enjoy a dividend of
per cent and not allowed to profit by the
increase in the value of the railroad plant
and land
Cites First Hand Facts.
Should this discrimination ever be en-
bodied in our constitution, Will Jones will
take his money out of the railroad and
no one else will offer theirs, so the gov
eminent will have to finance public serv-
ice facilities, and thus we would have gov
eminent ownership, with it's attendant
dangers
Speaking Of the companies | represent,
might point out the interesting fact
that the state OF Georgia assesses the
value of the Atlanta and West Point
at practically $4,000 600, while our capt.
talization is only S2464, 400, and we pay
dividends of only 6 per cent on said cap
italization
Also, the Western Railway of Ala
bama rate case, a valuation of $7,237ll5,
while its capitalization is only $4,543 900,
on which dividends of only 5 per cent
are paid"