White Pine news weekly mining review. [volume] (East Ely, Nev.) 1910-1920, 1913-07-27

that these case are comparatively
rare; certainly liberaiity of this kind
Is not conspicuous in the later de-
yelopment of existing railroads, par
tlcularly in the more populous parts
of the United States. 1t is evident
that If valuations are to be made in
conformity to this ruling of the
supreme court, a grave injustice may
be one the investor and the attitude
of the government may become
almost confscatory in character.
furthermore, We fail TO understand
en- what basis of law or equity the
court should have ruled that, in es-
timating the value of right-of-way,
the interest charges, cost of acquisi-
ton and various contingencies should
be excluded. Particularly in the
case of some of the recently built
and extremely costly roads, it can be
proved that these expenses are very
real and of large amount. Capital
Is p~royerbially timid and we can
conceive of no condition hal would
discourage the investor more effec-
tually than the realization of the fact
that at some subsequent day, in valu-
ing the property covered by his in
yestment the government might re-
fuse to recognize the large sums of
money which had to be invested in
excess of land values in the immedi-
ate neighborhood.
In its ruling on the question of de-
probation of values, the decision OF
the supreme court runs counter to
well-established accounting practice,
which has been to charge repairs
and renewals to income and not 10
capital; and it seems TO be opposed
furthermore to the previous rulings
sion. BY common consent, depreeia-
ton has been considered a liability
of the stakeholder. to be provided for
from reserve funds and current earn
ings-certainly il has never been
regarded as a wastage of capital. One
of our leading railroad men, COM
menting on the injustice of this rul-
ing. quotes, once more, the familiar
illustration of the %ferryboat. which
represents an investment. say, of
$40, coo in a craft which having a life
of 20 years is entitled to a return of
4 per cent annually for that period,
and also operating expenses and an
amount each year which. in the ag-
gregate, with interest, will amortize
the investment at the end of the
twenty years. According to the
ruling of the supreme court, at the
end of the nineteenth year the owner
of the ferryboat should be entitled to
a return on the deprecated value of
the boat only, or say $1,000 instead
of the full investment.
A savings bank investment would
be better than this.
Some day, in a more remote future
than its advocates would have US be-
lieye, government ownership of rail-
ways may receive national approval
and be made the subject of an act of
congress. We speak of the remote
future, because we believe that the
publication of our political life. of
which there are encouraging signs.
has not yet proceeded 10 the point at
which our great and costly railway
system can be safely intrusted to the
tender mercies of political appoin-
tees. A question of such vast i'm
portance as that of government con-
troll of the railroads should be APP
preached in a most conservative spirit
and with a keen sense of the high
moral obligation of the government
TO act in a fair and broad minded
spirit in the appraisal and purchase
of these vast properties.
Nathaps Try This