The Connecticut labor news. (New Haven, Conn.) 1921-1925, 1921-12-30
VALUE OF RAILWAYS
IS LESS THAN DEBTS,
REPORT SHOWS
Glenn E. Plumb Amazes Congress
sional Committee With Find
ings of Experts.
PUBLIC PAYS FOR WATER
Stock Issues of "a Carriers Have
Nothing of Any Worth
Back of Them.


be the value of "a class I roads-al-
ready valued by the commission
holds good on the other roads, the
total value of all railroad property
would be $1,000, 900.
This is $Io,3 900 less than the
value fixed a year ago by the COM
mission as the basis upon which the
railroads should be entitled to earn
6 per cent. 1t is $4,000, 100000 less
than the railroads themselves claim
their property is worth.
These statements were made by
Glenn E. Plumb, general counsel for
railway employees, to the House COM
mittee on interstate and foreign com
merce, before which he gave testi-
mony supporting an amendment to
the La Toilette valuation act.
They were not his figures, Mr..
Plumb made clear, but the figures of
the Interstate Commerce Commits
sion. They had been determined by
engineering experts employed by the
commission to place a value upon the
railroads in compliance with an act
of Congress.
These engineers have been at work
for several years and have given
valuations of many roads. Twenty
four are for class I roads-roads
which have an annual gross income
in excess of $I,ooo,o 900. They are op-
Grated in all sections of the country
and may, Mr. Plumb said, be taken as
fairly representative Of conditions
that will be found to effect all car
riiers.
Values Based on War Prices
The engineers are not attempting to
state what the roads originally cost.
They decide what it would cost to re-
place them new, at prices for mate
rials prevailing when appraisals were
made. This is of great benefit to the
roads, for it makes their value much
higher than would be the case were
they held to the first cost of property,
less depreciation.
Figures made by the commission
covering these "a roads, Mr.. Plumb
informed the committee, to it's amaze
ment, disclose that there is absolute
ly nothing of value behind the $463,-
900, 900 of stock outstanding against
them.
These roads comprise 2o,o55 miles
of tracks. The commission reports
that there is outstanding against them
5000 900 of bonds, $463, 900 of
stock and approximately $4,000, 900
| of current Indebtedness
The value given them by the COM
missions engineers is $o5o,ooo, ooo
| That is $2o,ooo,ooo more than the
! bonded Indebtedness, and $4,000, 900
less than bonds and current indebt-
| edness combined. Nothing remains
for the stock issues of $463, DOC, 900
which are water"
| The per cent. guarantee of the
| Cummins-Esc bill authorizes the
roads to collect $27,78o,o 900 yearly up
on this 'watered" stock, which has
no value back of it.
|
If all roads are SO heavily water,
ed the people are paying 5000, ZOO, 600
a year as interest on stock which rep
resents nothing but water.
Eliminate this interest on WORTHLESS:
stock, Mr.. Plumb said, and the rail
roads can pay decent wages, Gu
freight rates and still have a hand
some return on actual investment.
The official figures of the commits
sion, Mr.. Plumb said, indicate that tn,
total value of railroad property is 81,
900, 900, 900 less than his estimate two
years ago, when he appeared befor
the congressional committees in be
half Of railway employees. He thel
said the roads were worth not a pen
ny more than $I2, ,ooo, 900 and wa
roundly criticized for so doing
The actual facts, he contended, ar
worse than he imagined The com
mission goes much further in p1acin;
its Valuations than he thought of do
ing.
, Analysing the commissions figures
Mr.. Plumb pointed out that for sever
of these railways, the only ones wher
the ''original cost" of lands were pro
cured by the commission, the land ap
; praised cost originally $5,o6o,451, a
average of $3.50 per mile 1t is give
a value of $o,36o,57I, and an "exces
. cost that is what it would cost to re
; acquire the land today in excess of tn
present value-of $7,I64774 on pres
ent value" and "excess cost" combine
of $I6,534,345, or an average per mil
Of $4,o42, or 326 per cent. of origins
cost
4 No Right to Higher Land Values.
= Mr.. Plumb contended that the raj
] roads have no lawful claim to this in