The Washington times., 1915-03-13

Congress appropriated $1,000, 900 to carry
along the valuation work the coming
year. This, together with a deficiency
appropriation of 100000 for the current
fiscal year. will insure the continued
expansion Of the big organization han
ding the huge task. It lis still impos-
slble TO make q very useful guess at
the time or expense involved In prcpar-
ing the valuation, because OF uncer-
ta;nty about method Of making appro-
In the coming fiscai year it is ex-
pected to make valuation of from 10000
TO 10000 miles of railroads, and the 10000
to 10000 miles Of telegraph lines. 1t
develops that the records of the tele-
graph companies are in very bad condi-
ton. 20 that there Is uncertainty how
long the work on them will require. or
whether all the data required by the
law is to be had. -"
Ono Of the big tasks which the COM
ing conference must handle Is that of
defining terminals, and deciding how
their valuations are to be ascertained.
This is easily the most complicated set
Of problems connected with the whole
task Of valuations; and 1t is the one on
whose determination will chiefly de-
pend the Significance that will attach
to the valuation after It Is finished.
Values of Terminals.
Tho work has not progressed far
enough to make 1t perfectly apparent
that, IL values of terminals ere to be
accepted as of the date Of the valuation.
then the railroads OF the country, as a
whole, are undcrcapitalized; they own
moro property than II represented by
their issues of securities.
On the other hand, II terminal prop
critics are to be listed as OF the value
which they represented when they were
taken over BY the railroads. then the
railroads may be found to have all the
capitslizations to which they are en-
entitled: pcrhaps more.
Should the cost OF acquiring the
right of way at the present time he
determined and stated as q part of
the cost OF reproducing new?" This
is one of the questions the coming
conference will discuss at length: for
IT IS now realized that the cost OF ac-
curing the right vf way at present
prohibitive. For Instance. 1t has been
estimated that IL brand new rail-
road were to lie built from Chicago
to New York: today. the land for
York Central has. would cost $780,
100000. That would be capital
charge Of 800. 900 per mile against
every mile of the road from New
minafs in ali the other cities had been
provided. and the road actually build :
ed. the capitalization would be sew
eral times that Of any road now oper-
ating in this country.
Hard Problems To Solve.
In other words. II terminal real
estate values are ITO be allowed to be
marked up as other real estate in
cities Is marked up. It will be found
that most Of the railroads are right
now greatly under-capitalized.
There is another interesting question
related to this in connection with thu
land-grant railroads Congress gave tc
these. a right-of-way through public
lands. IT did not give them fee title
to the land constituting the right of.
way: merely the right to use 1t. The
railroads don't own the land. The land
had, OF course, increased immensely tr
value. but shall the roads be permitted
to capitalize that increase? Shall tho
increase be credited to them as a prop.
erty value on the asset side Of theii
ledger? This is one Of the hardest nuts
that the valuation authorities have te
crack.
or course. the end of the matter will
be that all these various facts will bt
set forth In the report OF the commits
sion. Congress, in future legislation
and the courts in passing on that legis.
lation, will have to decide what sign!fi.
canoe shall be given to various facts
The valuation Is designed to get facts
not decide policies.