New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-10-02
&C., Would Have Railroad Lions and Lambs Lie Down Toeeth

g'ons which are the basis Of rate max
ing by the Interstate Commerce Com
mission, the Trunk Line region shows
only one earning 6 per cent, the New
York Central; one earning 5.42 per
cent, the Baltimore & Ohio Reading;
one earning $50 per cent, the Penn
ssyivanIa; one earning 4.39 per cent.
the Lackawanna- Nickel Plete, and one
earning 1923 per cent, the Erie-Lchigh
Valley Wabash.
The Western transcontinental region
shows up the best. The Union Pac;6c
Northwestern System would have
earne5 b.5o per cent return on the in
vestment; the st. Paul Great North
ern b.62, the Santa Fo 5.64, the Bur
lington Northern Pacific $50 and thc
Rock Island Southern Pacific 400. On
the other hand, the Southwestern gulf
region shows the Frisco group earning
only $50 per cent return on the invest
ment and the Missouri Pacific earned
3.7o per cent
AS an offset to this obvious fact Pro-
lessor Ripley goes back of the invest
ment III road and equipment as shown
IN the companies statements and takes
the results that have been obtained so
lar IN valuation proceedings. About
twenty roads have been valued bv the
commission so far and these are taken
as straws, showing how the final valun-
ton will work out. Professor Rinlcv
says this valuation table includes the
Two most prosperous prone rites in the
territory Southwestern Gulf region
FOR the ST Louis Southwestern the
present value as determined By the
| commission is only So per cent ~
recorded investment; for the Kansas
City Southern is only 80 per cent
IN view Of long record of bankrupt
cles and reorganizations for most. of
the roads whereabouts the conclusion
IS unacceptable that an excessive prop
erty valuation will have to be dealt
Professor Ripley mentions specid-
caily the case of the St. Louis-South-
western and Kansas City Southern. but
whereas IN earning power he treats the
Kansas CITY Southern as 4 strong road
apparently and the Missouri Pacific as
q weak road, in the valuation table
the Kansas City Southern system il
hsted as having an actual value of
only $500 per cent OF its Valuation as
! SHOWN by the property investm &C
count on its books. On the other hand.
the Missouri Pacific is not shown. but
otner weak roads are. such for in
stance, as the New York New Have. &
hartford, and the valuation OF the New
VI n, ANS" maven q hartford IS 10
per cent OF the Investment as carried
on the conpany's own books. In fact
IN the investment table which PROBES
sor Ripley gives, the three roads be-
sides the New Haven on which the val
uation commission put higher value
than shown by their own books are the
Boston & Maine, with valuation of
1903 per cent; the Central of Georgia,
with valuation Of LOG per cent, and
the Maine Central, with a valuation of
1902 per cent. All Of these are weak
roads. needing, according TO Professor
Ripley's plan, linking up with strong
roads. Professor Ripley, however,
finds that the somewhat disquieting
returns for these roads four Eastern
trunk lines therefore need not neccs-
sarily shake ones confidence in full
valuation or even an excess for the
first class road, as the Pennsylvania
and the New York Central.'
Apparently the argument runs some
what as follows: There are roads
/ that are oveYcapi talized, but that have
high earning power, and there are
roads that are conservatively CAPT