Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-11-03
Current Business Conditions
By GEORGE E. ROBERTS
Letter Issued by The National City Bank Of New York

box car. piece Of track or anything else.
figures on the basis OF the valuation estab-
lished, say, OF June 80. 1918, We then,
computed the value of what the railroad
had at that time. All that had been put
in since that time. added, has been computed
on its COST
Senator Jones: "Thc valuation which you
have put Upon the railroads is based more
largely on cost than on present value Is 1t
mott!
Mr.. Clark: eyes, sir. 1t is based on
First, the cost OF reproduction as OF the
date OF valuation, then upon the cost OF
reproduction less depreciation. which repre-
sents the deprecated condition OF the prop
erty, as Of that date. and then the actual cost
TO date"
Senator Pomerene: ISIS oo, 900. 900 was
the best judgment of the Commission after
going through all the data that had been
gathered during during ALI al these e> years..
Senator Pomerenc: "That should set at
rest the charge that there is So, 900, 00o,o00
OF water in the railroads now"
That statement should be conclusive
as TO the basis OF the valuations, par
ticularly so far as the brotherhoods
are concerned, for Mr.. Clark formerly
was head of the Order of Railway
Conductors, resigning to become a
member OF the Interstate Commerce
Commission, to which he was APP
pointed by President Roosevelt. He
amply demonstrated his qualifications
for the position by his service on the
Board, where he rose to the Chairman
ship, which he held at the time the
valuation was adopted Probably no
member OF the body has been more
influential in recent years than Mr..
Clark. 1t does not reflect, therefore,
in any way upon the original appoint
ment to surmise that in making it
President Roosevelt was influenced in
some degree by desire TO have man
on the Board who would understand
the point of'view of the employees, and
in whom they would have confidence.
The opinion is often expressed that
employers should continue to operate
even though they are not finding sale
for their products, in order to give
employment for labor. The prac-
ticability OF this policy may be judged
from the following figures given out
by the General Electric Company,
showing the distribution of its income
over period OF three years, and those
the most prosperous years OF its his
tory. The figures show the average
distribution OF each dollar OF gross
receipts in the years 19lS-19-20:
:, Cents
Wages and salaries (paid to an aver.
age OF $4,000 employees ....... Az
Materials. supplies, depreciation, oper.
ating charges and losses. 4o.6
Taxes ..................... So
Surplus tuscd for charging plants.
inventories and working capital /. ~
Dividends TO all stockholders average
number, l,46D ....... 40
Transportation, telephone and tele-
graph ............. ........... IS
Interest on borrowed capital. ........ IL
Total NEUTRALITY-SUSPICIOUS.. 10000
This statement will show the neces-
sitv Tor continuous inflow of money
to keep the business in funds to oper-
ate. The costs of operation took over
u per cent of the gross receipts as
fast as they came, and the gross
receipts aggregated hundreds Of mil
lions Of dollars 1t is impossible for
such an organization to operate long
without selling its products. The
figures also show how small is the
possibility of increasing wages at the
expense OF profits, even if all of the
latter were devoted to that purpose
in the case OF one d the most pros
porous companies liz ;he country.