Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-02-22
Rail Valuation Cost
TO Near $12, 900, 900
c. A. Prouty, in Charge Of Task, Says 1t; Will
Take -Four to Six Years.

WASHINGTON, Feb 21.-c, A..
Prouty. formerly Interstate Commerce
Commissioner. who has charge OF me
Commissions task Of making a physi-
cal valuation of all the railroads Of
the country. giving the first authorize
tive outline Of the gigantic job under
taken by the Commission, estimate
that ii may be FIVE or six years before
the work is completed. and that il
may cost the United States Govern
ment as much as. $4,000 600.
1T should be possible said MIR.
Prouty. FOR the people to know upon
the completion OF this work what 1t
would cost to rebuild its railroads new
and to what extent these properties
have deprecated as compared TO
new"
Mr. Prouty said that the country
ought TO realize the fact at once that
the physical valuation OF railways IN
wolves something more than deter
mining the cost of reproduction with
out depreciation.
Il am not saying" he added. that i
may not finally come 80 pass that the
cost Of reproduction viii be the con-
trolling factor; many people so in
sist. others urge with equal earnest
ness that the true test of value. so lar
as it can be ascertained. is the money
invested in the property ! express
no. opinion upon any OF these PROPOSE.
tons. | simply call your attention 10
the fatt that the Commission is re
Qured not merely to ascertain the
cost of production. but to state the
value of the property. and that in att
tempting TO do so many delicate and
difficult questions may be eneoun-
tered"
OUTLAY Considered.
Mr. Prouty cited as ap instance the
San Pedro, Los Angeles and Salt Lake
Railroad which the Commission mas
already undertaken to survey in its
ply steal valuation inquiry Most Of
this road has been built in compare
lively recent times. and the circum-
stances and cost of construction are
fairly well known.
Mr.. Prouty points out that certain
section OF il was located when origl-
nalIy built where no man thought It
ever could be disturbed by floods. Yet
shortly after It was opened floods
came and carried out this portion. II
was at once reconstructed upon
new location supposed TO be safe, but
there was recurrence of the disaster.
and finally 1t was built upon third
location. Mr.. Prouty assumes that
the people who were interested in its
construction were reasonably prudent.
as prudent as the government Itself
would have been.
"It has cost a large sum. more TO
rebuild this road" said r. Prouiy,
than II would have originally cost 10
construct 1t where it is to- day. Now
In determining the value of this prpp-
erty what. If any. allowance Is to be
made for this experimental outlay?
1.-The same idea enters more or less
into the valuation Of most of the rail-
roads of this country. There has of
necessity been a certain amount of
experiment before hitting on the right
and proper thing. Does this develop
ment expense constitute an element
OF value which may be recognized to-
day or must the owners of these pub
lie utilities stand the loss OF their
mistakes in the same way that the
owner of private enterprise would
Vast sums of money are Involved in
the answer to that very simple ques-
ton"
Mr.. Prouty added that the question
OF the unearned increment presents
another most difficult problem. He
commended that the task in its final
analysis was not an engineering prob
lem but political problem"
Accurate Information Essential
at Is for the Commission" said IL.
FIRST OF all to ascertain all these facts
and from them TO deduce what in It's
opinion Is the fair value of these prop
critics. That conclusion may undoubt-
edly In some respects and TO some ex-
tent be modified by the courts. In the
final ANALYSIS it will be for the peo-
Vie to say what measure shall be
meted out to these railways. While
courts and commissions may influence
and even temporarily determine .ques-
tons of this kind. the viii or the
masses viii finally prevail and 1t $
therefore of first importance that the
body of the people should have accu-
rate information
Nr. Prouty estimated that 1t WEI
take from four to six years 10 COM
nlete the valua ton. The Commission,
he said. will In the near future have
data with respect to some Of the rat
h,,t "a a valuation Will hp