Daily Kennebec journal., 1914-02-12
COMMISSIONER PRoUTY REVIEWS
CARRIERS PROPERTY VALUATION
CONTINUED from Page one)

this view a railroad has been selected
in each district upon which these sur
veys will proceed with deliberation
and in such manner as to AFFORD
kind of instruction school to all en-
ployees. This preliminary work viii
occupy three or four months, which
means that we shall not be in position
to rapidly develop our organization
until about July l. Beginning then,
or slightly before, our force can be
rapidly increased.
while 1t is somewhat hazardous
to make an estimate of the time re-
quired without more experience than
we have had, it is my opinion that the
field surveys ought to be concludeo III
from four to six years from July 1st
next. 1t is hoped that the accounting
and other work will keep pace with
our field surveys. The putting TO-
gether of these facts, that is, the actual
valuation will necessarily lag some
what behind the obtaining of the facts
themselves. The Commission will IN
the near future have all the data with
respect to some railroads, but Whether
valuation will be at once announced
in such cases must depend upon the
method which the Commission selects
for determining the various questions
which will arise and to which refer
ence has been made.
ANY estimate of the expense must
be even more unreliable than tnat OF
tbe time. Railroads have been valued
both by public authority and by them
selves. and the cost Of these Valua-
tions has run all the way from two
dollars to seventy dollars per
mile. Knowing what must be done
the methods which must be followed
the rate of accomplishment which has
been attainable in other places,
should say, basing my estimate upon
the experience of state commissions
that fifteen dollars per mile would De
sufficient to cover the engineering par'
of the work and ten dollars per mile
the accounting and other features
This would aggregate for the entire
250.0OO miles between six and seven
million dollars.
Evidently, before it can be deter
mined what it would cost to build d
particular railroad as it today exists
we must know exactly where and what
that railroad is. This means that as
a preliminary to the work of valuation
every railroad must furnish the Com
mission with maps and plans Whlch
will identify it's property. When TINS
work is completed, there will be founo
in the office of the Commission al
Washington an accurate map and in
ventory of the property of every rail-
road engaged in interstate business as
of June 80, 1914, together with other
maps and plans showing all subse-
ouent additions to the property. TINS
of itself is work of great magnitude
which must be done by the carriers as
a part of the general undertaking.
when the Commission has been
furnished with this complete inventory
bv a railroad it must proceed to verify
it; that is, it must ascertain whether
the facts stated in the inventory are
true. 1t must determine the NUMBER
of wards of earthwork, the number OF
wards of rock. the culverts, the tun-
nels. the bridges. together with the
character and cost of construction IL
has been decided that this information
cannot properly be obtained without
sending a surveying party over every
mile of the railroad.
'rFhis work is often referred to as a
.physical valuation of railways, ana
most people probably understand that
this cost of reproduction, with or with
ont depreciation determines the value
of the railway so that, having ascer-
thnGn facts the
duty of the Commission has been dis
charged. But this is by no means
true Up to the present time the mold
ing of the Supreme Court of the
United States is that cost of repro
duction new, or cost of reproduction
less depreciation, are only factors en-
tering into the final question of value.
Many other things have been enumer-
ated by that court as bearing upon the
value of the property. The valuation
act itself requires the Commission TO
ascertain and report the cost or con-
struction, the amount of money which
has been invested in the property, and
the sources from which that money has
been derived: to give, in short, a COM
plete corporate and financial history of
these properties; to take note OF the
earnings of the property, and having
all these facts before it to determine
from a Just consideration what is the
value of the property itself. l am not
saying that 1t may not finally come to
pass that the cost of reproduction Will
be the controlling factor; many people
so insist. Others urge with equal
earnestness that the true test of value,
so far as it can be ascertained, is the
money invested in the property.
1.-THE first railroad which the commits
sion is proceeding to survey in what is
knoxn aS the Pacific District Is the San