Daily Kennebec journal., 1914-02-12

ing from San Pedro. California, to Salt
Lake City, Utah, some 500 miles. The
course of the road is for the most part
through an arid desert. A certain section
of 1t, when built was located where no
man thought it could ever be disturbed
by floods, yet shortly after 1t was opened
for operation the floods came and carried
out this portion. 1t was at once recon-
structed upon a new location supposed
to be beyond all possible danger from
recurrence of the previous disaster, never
theless the waters again came and
washed away this same section; where
upon it was rebuilt upon third location.
beyond all possible reach of future trou-
BILE from this source. Now in determin-
ing the value of this property what IL
any allowance is to be made for this ex-
perirnental outlay?
THE Northern Pacific Railroad runs
through the city of Spokane. When the
road was built that city was of small ac-
count but it has come to be of much ac-
count, and in the process of development
it has grown up on both sides of this
railroad. The Northern Pacific claimed.
and it may very well have been true,
that the cost of acquiring its right of way
through the heart of the city of Spokane
at the time of the hearing would be at
least 5000 900. The original cost to the
railroad was nothing, the right OF way
having been entirely donated either by
the government or by private benefaction.
Now to whom belongs this s5,oo9ooo? Has
the Northern Pacific the right to tax the
public for a return upon that amount?
What finally" asked Mr.. Prouty, rs
the purpose of and the benefit to be de-
rived from all this outlay of money and OF
energy? When any investor can know
from reliable sources the exact charac-
ter of his investment how much it would
cost to reproduce the property; in what
state of efficiency that property is being
maintained; above all, what is the value
of that property for use as railroad,
there has been injected into railroad Sc
curities an element of certainty and OF
permanency which does not now exist 1t
seems to me therefore that this work of
valuation will be of incidental benefit to
the railway investor and so to the general
public While this has not been gem
orally, perhaps not at all remarked up
on as an advantage, it will turn out to be
substantial one.
ITO the general apprehension the object
of this valuation is to determine what
rates our railways should be allowed to
charge for their services to the public.
While the property invested in our
railroads and other public utilities Is
private property, the government has, IN
consideration of the nature of the ser
vice rendered, the right to impose upon
this property the terms and conditions
under which it shall be used.
''It is impossible to shake single rail-
road free from every other and nix Its
charges upon the basis of a fair return
upon its fair value as you would In case
of a gas or water plant. The rate es-
tablished for one of necessity influences
and frequently absolutely determines
the rate of ALL fact which must never
be forgotten in discussing this subject
Now it is evident that if the Commits
sion should select that road most advan-
tageously situated, THAT road whose busi-
ness is the largest and upon which the
conditions of operation are the most fav-
ora BILE, and should SO adjust its rates as
to yield return of six per cent. upon its
value, every other railroad standing in
competition with it would receive less
than a six per cent. return and some rail-
roads might receive nothing whatever.
while. however. 1 wish to make it
perfectly plain that the problem OF es-
tablishing railway rates will not be
solved by this valuation, desire to say
with even greater emphasis that that
problem will be enormously stmplihed. 1t
can be known with certainty whether the
general level of rates is or is not too
high, and in establishing the charge TO
zt, ~ i'm
fixing the rate upon single commodity,
it will be of much benefit TO know the
value of the property involved
While this valuation will be OF Incl
dental benefit to the investor. while 1t is
essential to the work of the rate-makins
tribunal. it seems to me that Its greatest
immediate value is political The state of
the public mind towards our railways in
such that this information is absolutely
necessary.
Consider the developments of the in
vestigation into the affairs of the st.
Louis & San Francisco System, conduct
ed by the Interstate Commerce Comnis-
sion. Consider conditions in New England
today, where the fate of both of the Bos-
ton & Maine and the New haven systems
is trembling in the balance. None OF
these questions can be answered; none OF
these situations can be justly dealt with
until we know the actual value of these
properties This Is the question which
arises before the students OF this rail-
way problem at every angle. This is the
question which must be answered before
this problem can be intelligently dis
cussed. For this reason. above all. 1t is
important that this work stpuldp be
pressed to completion In the most ex-
petitions and the most trustworthy
manner possible"