The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-09-13
RAIL POLICY Of
|. {. c. STARTS
BATTLE
la Toilette Certain to Fight
Rulings, Both in Court
and Congress.
By WILLIAM HARD.


began to rise over the horizon
for Washington today.
The full meanings and full re-
suits of the Interstate Commerce
Commissions two current historic
decisions on railroad valuation
began to appear.
Stand Is Opposed.
Those decisions, it is seen, are
epoch-making in the development:
of the railroad problem in the
United States. They represent ten
years of valuation agitation out
side the commission in the country
at large.
They prophesy an ultimate val
uation of the whole American rail
road system at figure which will
be legally perfectly defensible but
which will be politically open to
unending radical attack.
The political acumen of Senator
Robert Marion la Toilette, of Wis
consin, in choosing railroad val
uaIlOuS dS SpOCLdlly Va ItAC NAV
Congress is indicated.
Court Supports Policy.
The commission has committed it.
self to a valuation theory apparently
demanded by the United States Su-
preme Court and to a valuation prac-
tice which it believes to be demand
ed by necessity; but in so doing it
has let loose the dogs of radical
war.
The theory is called the ''judg-
ment" method of valuation. The
practice is the practice of frequently
getting along without finding or
estimating the element of Original
cost" in railroads value"
Donald Richberg of Chicago, at
torney for the La Toilette Railroad
Valuation Conference, when inter
viewed by this writer by telephone
today, said:
Our petition to the commission
for an order to its valuation bureau
to find or estimate the Original
costs of all railroads has not yet
been answered. If it is answered
courts to compel the commission TO
issue that order under the present
railroad transportation law.
II further have advised the La
Toilette Railroad Valuation Confer
ence to introduce legislation into the
next Congress ordering the Inter
state Commerce Commission to find
all original costs, and. if it cannot
find them, to estimate them.
Plans Court Battle.
Meanwhile, if the current de-
cision by the commission in the
San Pedro, Los Angeles and Salt
Lake case is taken into court by
the San Pedro railroad, as 1 sup
pose it will be, I will intervene in
the court proceedings from the
standpoint Of the general public
interest and will endeavor to have
the commissions San Pedro deci-
sion set aside"
In that decision the commission
declares that it was impossible to
find the original cost" of the
road and 1t proceeds accordingly 10
apply its Judgment" method with
out having any Original cost" fig
ure to go on.
The Judgment" method is as
follows:
You make a list Of all the things
that could legally be supposed to
throw light on the value of the
road. Among these things are IRE.
construction cost" and 'reconstruc-
ton cost minus depreciation"
Among these things also is 'orig-
inal COST" according to Section 19A
OF the present Transportation Law.
Having put these things into a
list, you look at them, and you
consider" each of them, and you
give to each of them it's proper
weight
The original cost" may be
100000. The reconstruction cost"
may be 81 ,O00;e 600. The "reconstruc-
ton cost minus depreciation" may
be $4,000.
You consider" and you weigh"
these facts and figures, these "ele-
ments'' Of value Then, by an
act Of Judgment" you say that
the final value"-the decision
value-is 100000, or you say that
It is 100000, and you absolutely
refuse to say why you said seven
instead OF eight or eight instead of
seven.
I'VE are not obliged" says Com.
HIASSlOHcE DdHl6IS, TO describe, or
even to attempt to describe, with
nicely and detail, the various con-
siderattons upon which we reach
our verdict"
Policy Is Opposed.
This method Of inscrutabIe "judg-
ment" flows directly from Supreme
Court decisions and in part it flows
also from the necessities of COM
mon sense; but 1t is admitted that
1t will find itself trying to flow
uphill when it tries to be popular
on the political stump.
1t will especially find itself irving
to go straight up a perpendicular
precipice there when Senator La
Toilette eXclaims, as he has told
this writer that he will exc!aim:
"They used a definite figure for
reproduction cost They estimated
that cost and got a figure for it
and used it. They had no figure
for the lower original cost Tiey
refused to estimate the Original
cost and they had no figure for it
to use. The reproduction cost WIS
before them as a definite figure.
The original cost was before them
as an empty blank. Which 10 YOU
suppose they considered most?
Which do you suppose influenced
them most? My friends, demand
the figure of the Original cost l
demand the figure of what the in
Vestors actually put in"
Such is the prospect created by
this Judgment" method and by
ct