The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-12-05
TOPEKA STATE JOURNAL
Information Bureau
EREDERIC ,. HAsKIN. Dirececr.
Wastin9ton. d. O.
VALUATION OF THE RAILROADS

railroads This work, begun a decAQe
ago, rapidly is nearing completion and
its end will bring together vast FUND
of information concerning the rail-
roads 1t has been prepared with pa
tient toll. The valuation viii be a de-
tailed statement of the actual cost OF
country, the value of all the land
owned, together with building of all
kinds, rights of way and of all cars,
locomotives and other equipment down
to the last hammer or wrench. the
figures will show. further, the cost OF
reproduction new. That means, what
it would cost to build the same rail-
road now.
The first American railroads were
built nearly a hundred years ago. Since
then they have been added to nearly
every year All this cost is added in.
The cost of reproduction new is what
it would cost in present times to duph-
cate the property which has been ac-
cumulated over so many years.
a third figure is given in this CO.
lossal inventory. 1t is cost less depre-
citation. Cars wear out. tracks become
impaired and there is general wear
and tear on any physical property. 1t
is not worth as much as it was when
it was new. Therefore, the deprecia-
ton is figured with mathematical pre-
cision- With this depreciation de-
Quoted. the commission arrives at the
value of the RAILROAD property.
For decade, surveying parties,
many other kinds of experts have been
tediously going over all the railroad
property in the United States to as
semble these figures and now they are
near the end of the task. Another
year will wind up the job, according
to present indications, and within less
time, complete figures will be ready
on some of the roads.
The purpose 0f this tremendous in
ventory is to find a basis for making
rates. The theory is that railroads
should be permitted to earn fair re-
turn-say 6 per cent-on the value
of property employed in the trans
portation service.
Everybody has heard the phrase
''watered stock" 1t is a catch-phrase
meaning stock given an artificial
value which does not have real prop
erty assets back of it Its origin is in
the adulteration of liquid products
with water The dishonest milkman
pours water into a gallon of milk and
makes two gallons of watered milk.
The charge has long been that dis
honest corporations took $1,o00,OOO
worth of property and sold to the
public S2.0O0.00O worth of stock in
stock.
Inventory May Prove Surprise.
- This has doubtless been true of
many railroads but the preliminary
indications are that the public Is to be
much surprised in what the inventory
OF Lne lnINESIAl6 COIlIllSICS
sion will find. Work is well along
on many lines, far enough along to
give an indication of how high the
final value will pc placed.
Newspaper readers will remember
how a few years ago there was much
publicity attending an investigation OF
the financial affairs of the Chicago,
Rock Island & Pacific railroad The
Indication seemed to show that the
stock of that company was thoroly
Now. however, the commits
sion's valuation work reveals that this
railroad actually owns property which |
Is worth every dollar of the par value
Of the stock The same is true of
other roads whose stock has been at
lacked as watered and, by the same |
token, it is expected that the valua- |
ion will reveal that there are some |
roads with less property than has
been actually supposed and that water |
Exists where none was suspected.
These are just the facts which the |
congress of the United States wants to |
have as a basis for laws governing |
rates to be charged for the transporta- |
ion of persons and property.
The commission has progressed far |
enough with its work to be able to 1
make a fair estimate of what the final |
lalue of the entire transportation sys- |
.em of the nation will be. This figure 1
s given as SIS, 100000 600 as of Sep |
.ember, 1920. Since that time some /
100000 has been added to the |
7alue to approximately $19, 400, 600, 900.
The bureau of railway economies /
has been making some figures on the /
of the railroads and has /
ZIG, 10000, 900. Contrasting these fig |
Tres it appears that the physical |
of the railroads is more than
2, 900, 000, 900 in excess of the stock |
ssued against them
The bureau of railway economies
has some figures to show the eff
cheney of American railroad building
compared with that of foreign coun-
tries The bureau has worked out the
capitalization of the roads on a mile
age basis; that means how much stock
Is issued against each mile of rail-
road. These comparative figures
show that American railroads have a
lower capitalization per mile than the
railroads of the great countries of the
world Some other countries have
lower capitalization, but it is pointed
put many of these have inferior rail-
road facilities.
Dur Roads Worth More Than Any
Others.N
The American figure per mile is
s6S.7S7. The lowest figure in the
world is for Western AustraIia-S24.-
s279.427. It is claimed that excel
ence of service and equipment and
general condition are more nearly
similar between such countries as
treat 6TlIalns france ana
he United States than they are be-
ween such countries as Australia,
China. India and the United States.
rhe per mile capitalization in Great
Britain is s274.6o5 and in France.
;1S6,394.
The American railways are worth
ar more than those of any other ma
ion Figures on the physical value
# the various railroads of the world
ire not available, but the capitaliza-
ion forms a fair index, as it can be
airly presumed that it amounts to
bout the sama thing. For instance
Is against an american capitalized