Mohave County miner and our mineral wealth., 1922-05-12
DIFFERING IDEAS
 OF RAILROAD VALUE

The Railway Age, In an edltoflal III its current issue, discusses some of the impromptu valuations of the rail roads made by such critics of the companies as Clifford Thorne and the labor leaders to show that the public should not be unduly influenced by them because they diff fer among themselves and at differ ent times as to the value of the roads by almost as much as the amounts by which they claim the tentative val uation made by the Interstate Com merce Commission exceeds the true valuation" says the Railway Age. "They did not. Their spokesmen. al- ways contended that valuation was not the right basis for making rates. The agitation for legislation to re- quire the Interstate Commerce Com mission to make a valuation was car ried on mainly by those who alleged that the railways were grossly over capitalized. They seemed confident that a valuation would justify whole sale reductions of rates.
 "The sequel seems to show that they did not so much want to find the true value of the railways as to cause confiscation of large part of it. When the transportation act of 1920 was passed, the commission had been working on the valuation over six years. It had inventoried the phy- sical properties of most of the rail ways and had the records in its of flee. The transportation act direct ed it in regulating rates to take into consideration < the information it had gathered. The commission for the purpose of the rate case of 1920 plac- ed upon the railways a tentative val uation of eighteen billion nine hun dred million dollars. Its members re- peatedly have told members of Con- gressional committees that this was based mainly upon the results of their investigation under the valuation law.
 Nevertheless, the very people who got the valuation law passed have been among the loudest and most ac- tive in disseminating propaganda to discredit the commissions tentative valuation as grossly excessive. Will liam H. Johnston, president of the International Association of Machin- ists, took a few minutes from other duties one day and made a valuation of $S,610,000,000. President Markham of the Illinois Central showed that MT. Johnston's valuation defied the ordin- ary rules of arithmetic and that if it had conformed to those rules it would have been $4,640, ,000,0 bigger. Glenn E. Plumb then rushed to the rescue and offered for consideration one valuation of $9,400,000,000 and another of $10,100,000,0O0. Meantime an anonymous eminent economist contributed to the Firemen's Magazine a valuation of $13,0O0,0OO,0O0 These labor leaders differed among themsel- yes to the extent of $4,400, 100000.
 Most astonishing, however, has been the attitude of such men as Sen ator LaFollette and Clifford Thorne, who were among the most earnest ad- vocates of the valuation legislation passed in 1913. They both advocated having the valuation made by the In- terstate Commerce Commission and both now indignantly repudiate the commissions findings.
 "Mr. Thorne's inconsistencies are the most glaring of all. They cannot be ignored because he has been coun- sel of the American Farm Bureau Federation, and his views are widely circulated among the farmers. Soon after the commissions tentative val. uation was made he got the American Farm Bureau Federation to adopt 8 resolution setting forth that it was five billion dollars too large. This apparently was based upon computa- tions by which he had ascertained that the total value of railway secur- ities measured by their market prices in 1920 was less than SIS, ,Q00, ,000, ,000 In the recent rate hearings he put an accountant on the stand before the Interstate Commerce Commission to present an estimate that, based on the valuations of individual railways al ready made public, the total valuation of all the railways should not exceed sixteen billion dollars.
 "Mr. Thorne seems to have forgot ten, or to think other people have forgotten, that he began making val nations of railways some years ago Over eight years ago, in a public ad- dress, he gave the results of a com putation regarding the value of the railways which he had based upon the market prices of their securities as indicated by stock exchange quota tions in October, 1913. His estimate of the valuation of the railways then was exactly $13,969,173,3s3. The new capital which has been invested in the railways since 1913 exceeds four and one-half million dollars. Therefore. if