Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-06-26
REAL ISSUE N
RATE CAS[: SHOWN
WESTERN CASE DEVELOPS PLAN
OF RAILROADS TO CHANGE
VALUATION BASIS.
"BOOk VALUE" WOULD
GIVE OPENING WEDGE
Would Permit Companies to Increase
Rates to Enormous Sum Of Half Bill
lion Of Dollars-Thorne Presents
Arguments. and Brief in Behalf Of
Commission Of Iowa.
Especial Correspondence

Washington. June 26.-"Like the
thin edge of an entering wedge, these
railroads claim that the. are now
seeking only $4,000. 600. In this way
they are starting the movement up
ward. If their argument he sound to-
day it will be sound next year for s10,-
00e,o0 more.
This is the language used by Com
missioner Clifford Thorne, of Iowa, and
Representatives of other western rail-
road commissions in brief they have
filed with the interstate commerce
commission in opposition TO the ad--
vance in rates in the western advance
rate case.
In the brief and the arguments re-
enforcing the brief. which were pre-
scented TO the commission this week.
the representatives of the state com
missions sound a warning that what
the railroads now propose by way of
increase in rates is only the beginning.
They contend that If the contentions
of the roads are granted in the pres
ent case, then the public must prepare
itself for general upward movement
in freight rates for years TO come. Con-
that the present controversy IS mo
mentous and far-reaching" and that
something more is at stake than the
question of whether the roads are TO
win the increases that they seek. on
the face of things, in the case now at
issue.
Real Question at Issue.
One of the great questions involved
In the western advance case is whether
the railroads shall be allowed to take
as the basis for rates the book value.
of their properties. They maintain
that they should be allowed to take
this value that is the so-called prop
erty Investment OF road and equip
ment The carriers contend that the
book value" IS the nearest and most
accurate reflection of the values OF
railroad properties devoted to public
service obta!nable at the present time.
AS the brief fled by the carriers puts
it: The carriers in the present case
have also taken the cost of road and
equipment as shown by their books, as
, the basis upon which to compute the
rate OF return
Another proposition of the roads IL
that they are entitled to earn per
cent on the value of their property.
1t is declared by the western com.
missions that If the railroads are al
lowed to win out on these two phases
OF their position that the value of the
railroads Is their book value ano
that the commission should allow at
leas, a per cent return. then tn>
railroads OF the United States. as =
whole, are entitled to an Increase o.
more than half billion dollars an
nuaIly.
Further, IL is stated by the western
commissions. that on the basis of book
value" and return OF ! per cent. the
railroads in the western district were
entitled TO a net increase of sl9S. 0G0,.
600 last year.
The western commissions hold that
people do not expect ger cert on
total value in the railroad industry and
that this is exorbitant and commands
exorbirant prices on the market. 1t is
maintained per cent return is suf-
icient 10 make railroads securities
sell at par or above par.
AS 10 adopting certain total book
values, the western commissions say
! We believe that the commission
, viii hesitate long before it will adopt
| as a basis certain total book values,
which include: s10n.ooo,000 of the
Burlington, YOU refused to consider in
1910; ss0.o0D.0 900 in the NJ K & T., you
| refused 10 consider in the southwest
err case of 1910; book values which
include fictitious amounts yon have
previously condemned in the Frisco &
Alton; book values which exceed pres
ent values, as found by the appra;sals
of certain state commissions. by sew
erai hundred million Collars