Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-12-03

~ %O"F
American people are within sight of
the finish of the biggest auditing and
inyentorying job which ever has been
undertaken by any COVE FlInent IN the
world-the physical valuation of the
railroads. This work, begun a decade
ago, rapidly is nearing completion II
its end will bring together q vast fund
of information concerning the rail
roads. 1t has been prepared with pa
tient toll. The valuation will be q de
tailed statement of the actual cost OF
constructing every railroad IN the
country, the value Of all the land
owned, together with buildings 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 q hundred years ago Since
her 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 dup
licate the property which has been ac-
cumulated DER SO many years.
y IillTO ltSuEE 10 given HI tAiS to
lossal inventory. 1t Is cost less de
probation. Cars wear out, tracks be-
come impaired and there is general
wear and tear on any physical prop
erty. 1t is not worth as much rs 1t
was when it was new. Therefore, the
depreciation is figured with mathe-
matical precision With this deprecIa-
ton deducted, the commission arrives
ut the value of the railroad property.
For a decade. surveying parties.
engineers. auditors. appraisers, and
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
viii wind mp the job. according TO pres
ent indications. and within less time.
complete figures will be ready on some
of the roads.
The purpose of this tremendous in
| ventory is 10 find a basis for making
| rates. The theory is that railroads
should be permitted to earn Il fair re-
turn-say & per cent-on the value of
property employed in the transporta-
ton service.
Everybody has heard the phrase
.twatered stock 1t is Il catch phrase
meaning stock given an artificial value
which does not have real property as
sets back of it. Its origin is in the
adulterarion 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 dishonest
/ corporations took S1.tO0,0U worth of
property and sold to the public 81
600, 900 worth of stock in that prop
erty. thus watering the stock.
inventory May Prove Surprise.
This has doubtless been true of
many railroads but the preliminary in
dications are that the public is to be
much surprised in what the inventory
Of the Interstate Commerce Commits
sion will find. Work is well along on
many lines, far enough along to give
an Indication of how high the final
value will be 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 and Pacific railroad. The
! Indication seemed to show that the
stock Of that company was thoroughly
wateredt Now, however. the com
| missions valuation work reveals that
this railroad actually owns property
which is worth every dollar of the
! par value Of the stock. The sam is
true of other roads whose stock has
been attacked as watered and. by tbs
! same token. it is expected that the
valuation viii reveal that there are
i some other roads with less property
than has beer actually supposed ant
that water exists where none was sus
pected.
These are just the facts which tn,
congress of tho United States wants
to have as a basis for laws governing
rates to be charged for the transporta
ton of persons and property.
The commission has progressed fa
enough with its work TO be able t