The labor world. [volume] (Duluth, Minn.) 1896-current, 1917-02-17
RATES BASED ON
80. "..~,."f go. .....~.
INFLATED VALUATION |.|||||
Nine Billions of Total Capitaliza-
ton Represent Unearned In
creases in Land Values,
By DANTE BARTON.

A determined drive is to be made
bv national organizations to prevent
a continuance of one of the biggest
burdens that the railroads of the
country are now putting on the pub
lie. This is to value their land hold
ings at billions of dollars more than
their investment in the land. A ma
tional committee on valuation of rail-
roads, with John J. Hopper. register
of New York county, as president,
and Benjamin c. Marsh as executive
secretary has been formed and is now
actively at: work to secure proper
and fair capitalization of railroads
and to hold the land values at what
they are actually worth to the rail-
roads. This is in line with resolu-
ton adopted by the National Grange,
urging that the original cost of lands
should he made the basis for determ-
lining rates charged by the railroads.
The effort will he to have congress
and the interstate commerce commits
sion and the Newlands senate COM
mittee establish the principle that
railroads have no right to charge
shi4. ers and the public with rates
based on the unearned increases in
the value of lands.
The railroads have received from
the country more than $4,000 square
miles of land as bounties. That is
more than the total area of Texas. In
the estimates Of their own property.
they have added to the original value
Of these gifts the increase in the value
which has been brought about
through the Increase in population. in
settling the country and the growth
Of great cities and towns around their
terminals, etc. They have added to
their own investment in land the
same increase in value brought about
through no effort of their own. hut
resulting from increase in popula-
ton, etc.
Commenting upon this prevailing
tee on valuation of railroads. JUS is
o. the interstate commerce commits
sion has made valuation of several
important railroads, although lot vet
of all the most important lines. It Is
significant that the bureau has found
that the cost OF reproduction of the
Kansasx City Southern railway COM
pany. less depreciation. including the
value of land. is s2J.257.SS0: while it's
capitalization is s99.O52.o00. A SIM
liar discrepancy obtains for the other
railroads of which valuation has been
completed.. with the exception Of the
Texas Midland railway company. Tt.
is conservativelv estimated that 1T. the"
total capitalization of the railroads.
amountin" in round figures t. S21.-
12S.0OO.O0O. $4,000, 100000. at least.
represents increases in the value of
land. over and above what the COM
panies paid therefor. and issues Of
stock without actual or prudent in
vestrent"
Rates Based on SurpluS Values.
Examples of how all the railroad s
everywhere are CHARGING the people
on surplus values which the people
themselves have created were given
in a statement made som etime ago
to Senator Kenyon at WASHINGTON by
Clifford ThOrne. at the time railroad
commissioner of Iowa: "The total
original cost Of the lands Of the
Northern Pacific at the Terminals in
st. Paul. Minneapolis and Duluth in-
cludin" nUrchase SOS to April 30. 1908.
was s4.527 .22S.7f. The master al
lowed as their value. apart from the
! improvements made by the company.
which. as we have said. were en-
hraced in the other items Of rcnro-
'nction cost. the sum Of s17.215.-
S69,45. In 1910. the Chica go. Burl-
:rcton e. Quincy railroad co",nonv
insisted that the law entitled them to
= retnrn unon present value estimated
1T s530.O0o.nOO. out Of the difference
between the original investment Of
s23S. 100000. and tho estimated pres
ont value of $4,000. 900. it has been
estir: ated that the increase in land
. value amounts to approximately
$4,000. 900 And this propertv rem
rcsents less than one-fortieth Of the
railway capitalize ton in the country"
! Whether a legitimate and fair valu-
"t;on is to he made the basis Of rate
,, m aking or is to he the basis of p,r-
! chase or condemnation of the rail-
! roads for government ownership and
! operation. the question of valuation is
an Immediate and vital one. If the
country is to he defrauded Of nine
billions of dollars in cash with con-
slant increase of that hurdcn) tho
! neople. the committee declares. at
least should know it,