, 1921-11-07
By GEORGE E. ROBERTS

what is fair in both OF these cases?
Obviously, it must be done through
some public agcncy-a body of men
representing the public. 1t is neces-
sary to have acknowledgements
in order to carry out all social aims,
and to put confidence in the agencies
of government and Sustain them.
They are not infalijhlc, and they are
answerable to the public for the man.
ner III which they discharge their re-
sponsibilities, but criticism of them
should be wcll-infofmed and directed
10 specific faults of administration. 1t
is a symptom of social incompetcncy
for people to raise a great outcry
against a court or an administrative
body simply because its decisions or
actions run counter to what is popu-
larry desired at the time. II is like the
ortcry of schoolboys against an I'M
p;rc.
Two such Boards have been cstab-
lished to deal with the railroads and
railroad cmployes-onc the Interstate
Commerce Commission and the other
the Railroad Labor Board.
In 1918 because of the differences
of opinion existing about the actual
value of the railroad property, Con-
gress directed the Interstate Com
merce Commission to undertake a de-
tailed survey and valuation. 1t
proceeded to organize a subordinate
body of engineers, accountants. etc,
for the purpose and up to June so,
1920, approximately So1,34o,410 had
been expended on the work. now far
advanced. The data thus gathered was
taken by the Commission as the basis
OF the tentative valuation required by
the Esch-C ummins act.
It should be understood that this
valuation for rate-making purposes is
not based upon the amount of bonds
and stocks outstanding, and therefore
that the talk of "watered stock" in
this connection has no foundation
This was definitely set forth by Mr..
Edgar Z. Clark, then chairman of the
!. Interstate Commerce Commission, be.
. fore the Senate Committee on Manu-.
features last year when it had under
consideration the Calder bill for the
regulation of the coal industry. Ths
) question Of railroad rates being up
, the valuation of the railroads adopted
by the Commission became a subjecl
! of inquiry by members OF the Com
. mittce, as follows:
Senator Reed: How did you get at th
. value of the property What is the ger
| ersl bzsis, Is. it stocks and hcndss is
} physical vaiuc:"
, Mr.. Clark: Stocks and bonds were NO
: considered at all. The question OF capitaiirs
: ton was not thought of. Ii is the fair valu
I as closely a. could be estimated and approx
! mated al that time of the physical rropert
which was devoted TO tie trsnsporaticl
service. We had a mass of ;nformatio
: gathered in cur valuation work. which
: rot in ofN,lcte form to be given out in ,tb
form Of reports and findings, and the tran,
: pcrtation act specifically authorized us /
avaii ourselves Of that Information W
Z avsiled ourselves Of all the information W
!, could"
Senator Jones Of New Mexico: "Doe
I, that figure ISIS. 800. ooo. ooo) include Ii
] percentage aririrg from the increase in th
E value al materials and property in reeer
+, years. since the roads were eonstructedi"
c Nj. Clark: "No, n does not attempt +,
5 eqrate the values. The principal hgur,
c thst we used IN our values are as of i9i
/, and 1914. We fixed the price units on
given railroad valuation as Of June 30, 1911.
Those price units We think We're aecurst
\ and they were based on experience Of
. acres OF yszis in the past up to that dat
aud the prices then prevailing. for Il
I. determination Of what was up 10 that tin
c The normal price icI hxlns the valas Of