The Washington herald., 1915-05-12
The Railroad Valuation Craze.

1t seems that time within the next month
there is to be meeting in this city OF many OF
the experts and engineers who have been en-
gagged for long time past in the work OF making
valuation OF the property OF the railroad COM
panies. This work, it will be remembered, was
authorized by Congress. and Mr.. Prouty, for
mer member OF the Interstate Commerce Com
mission, has been in charge OF it. AS we under
stand it, several million dollars have already been
expended in the progress OF the undertaking, and
the job has really only just been begun We shall
be very much surprised if at the conference Of
these experts and engineers there should not be
some outspoken comment regarding the now OBJ
viouS fact that the operation of valuing the
try's railways is not turning out in the way that
was expected of it, and that the whole work has
been labor spent upon a barren and prohtless
scheme.
This, at any rate, is the expressed opinion of
the general public, and the private opinion OF a
good many OF those who drawing salaries
from the government for the part they are per-
forming in the enterprise. 1t has been found, in
the first place. that the work is very costly. As
far as we can judge. as much as $5o,oooooo is
likely to be spent on it before it is completed. A
generation probably will clapse before the work
is done, and then the figures collated would be
practically useless because out OF date. But the
main point is that the idea once SO fervently
urged by the Progressive and Populist parties,
that the value of railway affords fair bS~s
for fixing freight passenger rates, has been
proved to be unsound. What people demand is
uniformity of railway rates. but the cost Of con-
structing railways differ very widely. Certain
railroads built cheapy than others
because they built at various times char
acterized by widely differing cost of labor, of
general supplies, and of borrowed money. One
railroad property may have had an economical
and wise management so that it take care OF
transportation service at less cost than another.
1t has an advantage its less efficiently man
aged competitors that no railroad valuation
scheme can in any way appreciate. Other rail-
way companies would be driven out of business it
they were asked to put the charge for their
service down to the levels OF the best-managed
railway corporations.
Moreover, although the official railway APP
praisers have merely scratched the ground thus
far in their work, they have discovered enough to
show that, in general, railways are not heavily
overcaptazed but heavily undercaptalized. When
they get through spending the governments
money on the work. if they live long enough,
they will find out that the railways ought justly
to be allowed a great deal higher rate OF charges
than is now permitted to them. In all proba-
bty this will become apparent to everybody
five or ten years hence, and radical programs will
be cast down accordingly. So directly along these
lines is the work proceeding that the mcm-
bers of the Interstate Commerce Commission
themselves arc obviously paying very little attcn-
ton to the railroad valuations that have already
been made. The Supreme Court, in its important
recent decisions in the West Virginia and North
Dakota railway cases. did not take railway valua-
ton results, so far ascertain. into con-
sideration at all
The sooner the railway valuation program is
abandoned. the better it will be. We predict that
at the next session of Congress the difficult
financial problems before the government will
compel the REIMBURSEMENT of the railway valua-
ton project