Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1912-05-10
REASONABLE RAILROAD RATES.

actually (that Is, honestly invested
We must, as we believe, know the
physical value Of the railroad in QueS
tion-the cost Of duplicating the
plant. Here, again. there Is a diver
stty Of opinion that viii, some day,
Almost certainly lead to much trouble
Are franchise values to be included
Are real estate values to be included
at cost with interest) or at their
present estimated values?
1T Is mainfeStly unfair DO include
franchise values because these de-
pend upon the rates charged. Thus,
q franchise to operate a street rail
way may be very valuable II scent
fares are permitted, but worthless if
only S-eent fares may be charged,
and yet, the franchise values Of most
street railways are included in their
present capitalizations and many
stockholders would consider fares con
fiscatOry that would mot permit of
profits on these franchise values.
1T is still more difficult to deter
mine what real estate values should,
and what should not, be included in
values on which profits should be al
lowed. Thus, many important west
em roads now own millions of acres
OF valuable lands that were granted
to them years ago by the Government
Is it fair to permit the railroads to
charge rates that will yield a fair
rate Of profit ON the present values
of these lands, now worth from $40
to $1,000 an acre? We would say
No." but most railroad men would
probably say eyes" The Wall Street
Journal of April 2 assumes that, with
physical valuation, rates will be fixed
to yield a profit ON "the increment
In real estate value" that "the pub
Lc once donated to the railroads. - 1t
warns the public (the shippers and
other users of raiTOads) of the aw.
full things that will happen if the
proposition for a re-valuation of the
roads from the standpoint of their re
placement value" is carried out, as
1t tells us, was first suggested by
Theodore Roosevelt. 1t says:
Every we'll informed railroad man
investor and financier knows the sum
results of a physical revaluation oi
the roads of the United States. II
means their marking up before the
railroad commissions and the courts
Of the land by hundreds of millions
and the putting of railroad rates On
railroad investment returns beyond
the public reach or control. The
courts decree that capital Is entitled
to a fair rate of interest upon prop
erty, and that a reduction by legish
ton or rate regulation below a nor
NAL rate of interest on the property
Is confiscation, forbidden by the Con
stitution and law of the land.
"As a rule the railroads have no
marked up their real estate valua
tions. A re-valuation of railroads wi
In the aggregate mark up enormousl.
the real estate values lying dorman
under the rails Of this country, ant
there will be little offsetting value IL
marking down rails in the beginning
at high prices. Most Of the rails hay
been purchased at moderate prices
Most of the land was purchased a
early low valuations.
LET the Government once start ol
Its re-vahation program and ther
will be such am influx of capital TO
the purchase of railroad stocks il
Wall Street as was never before seeI
in the history of transportation. The
will come an issue which the publ
will wish that Theodore Roosevelt
had never raised"
Nevertheless, we predict that tn
foolish public will proceed to nav
the railroads re-vahed, at great e'
pense, and that it will then settle tn
question as to whether or not it wi
permit the railroads 10 pay dividend
on watered capital and ON the incrt
ment values Of real estate that hay
been created by the people who hav
Settled along the railroads. Ultimat
", the railroads will, in our opinion
be permitted to pay interest and div
dends only on capital invested
real estate, rOadbed and equpmer
necessary and used for tanSprtatio
purposes.
There Is no reason why railroad
should be allowed 10 include franchiS
values or other land values in th
valuation on which rates may b
based. In no competitive business an
land values allowed to enter IND
the price Of commodities. A big d
narfmanf store In the CENTER n