El Paso herald. (El Paso, Tex.) 1901-1931, 1913-03-25
Spend Millions For Probe
Government Experts VIII Devote
Several Years to Ascertain
Value Of Railroads.

BY Frederic J. Haskin =
w AsHINGTON. D. C, March %.


state commerce commission
viii begin preliminary work on the
gigantic task imposed on il by what
Is popularity known as the AdamSOu
act providing for the physical valua-
tlon OF railways 1t will be the great
est task OF the kind ever attempted By
any government The work involves
property more valuable in a broad
sense than the Panama canal and fully
80 times as valuable as the cOnstruc-
ton cost Of the big ditch, besides
bidding fair to equal the canal pr1J-
ect IN Importance to the nation.
VIII Cost SO,OOO,OOO.
The bill fathered by representative,
William C. AdamsOn, of Georgia, char
man OF the house committee on inter-
state and foreign commerce, and
pushed in the senate Dy senator Rob
ert NJ. La Toilette which became q
|. law March l last. calls for the actual
and potential valuation of every mile
OF the railway, telephone and tele-
graph companies of this country. 1t
viii appraise property now estimated
at fully $40, 600, 600, OOO inasmuch as
the railroads alone are held at $4,000
100000 The project will take from
three to five years to complete and
wiz itself cost the government about
SS,OOO,OOO.
The corporations, in cooperating
with the government, will spend an
equal sum, according to the estimate
of Frank Trumbun, chairman of the
board Of directors OF the Chesapeake
q ohio Railway company. chairman
of the board of directors Of the Mis-
souri,, Kansas & Texas Railway COM
pany and a director in the Union Pa
cific Railway company and other cor
pOrations.
Work VIII Start On May 1.
The act puts the entire investiga-
ton under the interstate commerce
commission and stipulates that work
shall begin by May !. Beginning with
a collection OF such data as now IS
at hand. and a tentative outline Cf
procedure the group Of men at present
preparing to carry out the law viii
form the nucleus Of the most eXten-
slye investigating and research DU-
reau in the history Of the world Not
only that. the army of engineers. ac-
countants, lawyers, experts, exam
liners. writer's advisers and clerks
which will be recruited Is the scope
enlarges will make it one Of the great
est departments in the federal govern
ment.
First Of all. the commission must
face the manner Of procedure One
plan suggested is the designation Of
one Of the commission TO direct the
investigation. Should this be done the
duty probably will devOlVe upon COM
missioner, who once was a member Of
the Wisconsin industrial commission,
which has made a complete appraisal
Of common carriers in that state The
other plan would be the appointment
Of a board composed Of officials CT
Value Property In Detail
In determining the actual value Of
every common carrier in the country,
three great facts Will be brought
out
The value Of each piece Of prop
erty owned and used by each and all
OF the railway. telephone and telegraph
companies This includes everything
in detail. terminals, rights Of way,
land holdings. rolling stock. shops.
etc For the railways alone this means
25O.0O miles to be inveutOried, 222j,-
GOO freight cars. $4,000 locomotives AMI
millions Of miscellaneous property.
VIII Ascertain Original Cost.
Z--The original cost to date This
means the history OF every common
carrier concern in the United States,
in itself a tremendous undertaking.
The workers viii have to go back as
far as 20 years IN some instances.
Some historical data viii never be OBJ
tanned owing to natural causes The
Baltimore & Ohio line lost valuable
records in the great Baltimore fire and
the same is true Of the Southern Pa
cific in the San Francisco disaster.
This line Of research was insisted upon
by senator La Toilette and others de-,
spite the protests Of the railways and
the opinion Of president Hadley Of
tale university that the facts ad-
duced would not justify the money and
time taken 70 ascertain them.
VIII show Land Donations.
This was deemed important how
ever. as II will lay bare the methods,
not always the most honorable, en-
ployed in the organization and coll
ding OF the pioneer railroads. and
for the first time viii let the people
know Just how many millions OF bill
lions Of their domain has gone to tne
railroads in the form of land grants,
concessions, aids" etc. On the other
hand, 1t will show whatever benefits
the government has derived by reel
prOciLy from the railroads in fulfilling
of Tr~h
they were assisted The stock manipu-
lauOns, In fact every financial act IN
the history OF every common carrier
from one end OF the country to the
other also viii be revealed by the
proposed historical delving.
Reproduction and Depreciation.
3-The cost Of reproduction new, .
the cost Of reproduction less depreCid- !
ton, and an analysis Of the methods +
by which these several costs are OBJ !
tanned, and the reason for their diff /
ferences, If any By the cost OF re- /
production new is meant exactly what I
the outlOy would be il the lines now 4
in operation had to De puilt all over /
again today at the prevailing scale .
of material. wages. land values etc. /
Depreciation viii be considered not l
only from the standpoint of wear ami (
tear but will take into account OBJ
solescence, that is, good, workable ma
chinery rendered suddenly archaic by /
new Inventions.
Contingencies Elastic.
Merely the skeleton of the task /
facing the interstate commerce COM
mission and its army of valuation ex- /
perts impresses its magnitude upon the !
mind. There must be investigated,
tabulated and summarized such ele- /
ments as rates, capitalization. earn
ing power commercial value market !
value, cost accounts or book accounts !
OF the carriers, cost Of reproduction I
and original investment engineering,
franchises discounts on stocks and /
bonds, adaptation and qualification Of I
roadbed, unit prices, land values. n /
tangible values, working capital. I'M
earned increment, depreciation. gen
eral expenditures and contingencies.
This one clause of CONTINGENCIES is
momentOus- Michigan officials esti-
mate 10 percent for contingencies but 1
the railroads consider it unjust Wash |
ington allows five. Nebraska four, and |
many others two Accepting percent. I
this allows for variation of $3.50
OOO,O 900 alone in finding the total value
of railroads now roughly estimated 10
be worth S14.OO0.OOO 900. The inter
state commerce commission estimates
the stock market valuation AT $4,000
OOO, 900. The railways now are paying
$4,000, 600 in annual taxes whereas
10 years ago they paid only $4,000