The Washington herald., 1920-03-23
BOOK VALUES
FACE RATEBODY
Interstate Commerce Com
mission to Use Roads Fig
ures for Quick Valuation.
NEW GROUPS ASKED
Majority, However, Are
Considering Only Old
Classi6cations.

In applying the ~ per cent rate
return guaranteed the railroads
under the new transportation act.
the Interstate Commerce commissien
win be Obliged to use q temporary
valuation for the roads based upon
their so-called book" or property
investment value.
This became evident yesterday at
. hearing called BY the commission
on the question OF grouping the
carriers for rate.msklng purposes
and determining the value to be
used for computing the perceatase
rate return. Arguments Of the
railroad executives. investors and
even representatives Of shippers
made before the commission today
all were in favor OF adopting the
property Investment value, as a
temporary valuation. Since the
commission must apply the sh per
cent return on an annual basis be-
ginning September 1, next, it was
pointed out there 10 nothing for the
commission to do but to accept tile
roads own fisures.
-CommissIon's F1eures Net Ready.
Completion of the commission's
valuation Of the Transportation sys-
TENS Of the country. authorised by
the valuation set passed several
years. ago, cannot be accomplished
In less than two years. Some basis
must be determined upon ut once 70
put return provision Of the Eseh-
Cummins act in operation.
The hearing before the commits
sion began today was called to dis
ouss two subjects:
1. Whether the rate adjustments
under the law shall be made for the
carriers as a whole, or by rate groups
or territories to be DESIGNATED by
the commission. and II the latter,
what rate groups or territories shall
be desisnstedT
q. what methods should be en-
ployed for determining the agare-
gate value OF railroad property Of
the carriers as a whole. or In each
Of such rate groups or territories.
Most railroad mon agree that
the old c1assifications should apply
under the new act. b. r. Bush. OF
the Missouri Pacific, repfesentine
the Southwestern interests. argued
for a special Southwestern ciassi-
hcation. as did Stanley johnson. Of
the Rock Island. representing some
OF the Western trunk lines.
Book vsIue Adoption Urged.
S. Davies warfeld. president, and
Forney Johnston. counsel for the Ma
tional Association OF Owners OF
Railroad Securities. urged the adop-
ton of the book value. Alfred Thorn,
counsel for the Association OF Rail-
road Executives. outlined the posi-
tion OF the railroad executives as
follows:
"The point before the commission
is to determine in a summary way
the aggregate value of all property
held or used for the purpose OF
transportation in the several States.
In considering this problem, the
property investment accouats and
the materials and supplies accounts
in a given group are, in our judg-
ment. admissible as evidence, and
the carriers believe these accounts
for the several groups are the min
imum conservative figures now sus-
ceptible of use.
'1n our judgment. the property
Investment accounts should be con-
sidered In connection with and sup
Elemental to any other available
evidence sufficiently complete and
reasonably adequate for the pur-
pose. But the basis of the value
row arrived at should not be the
incomplete data compiled in con-
ncction with the work OF the valua-
tion now in progress under the Fed
cral valuation act, as II is impor-
tant that the flna1 valuation under
that act should not be anticipated
or prejudiced in this proceeding"
Public Ledger service.)