The Washington times., 1923-09-17
RAIL VALUATION
FIGHT GETS.
START
Eastman Challenges Methods
of |. c..c.-7oo Millions T
Yearly at Stake.
BY JOHN T. LAMBERT
Cosmopolitan News Service.

cosmopolitan NEWS 6eTVlCes
ssThe man who rides on the train
and the merchant who ships his
freight may have to dig into their
pockets for another S747,O00, 900
every year as the result of the new
valuation decision of the Interstate
Commerce Commission.
How the new scheme of valua-
ton can enrich the roads at the
expense of the patrons is set forth
in the vigorous protest of 10000
w or DIS filed by Commissioners
Joseph b. Eastman, of Massachu-
sets.
The first fight on this most i'm,
portant of all railroad issues-a
fight which Senator La Toilette lis
certain to searry; to the floor of
CongresS-came on the valuation
Of the Atlanta, Birmingham and
Atlantic railroad. which was All.
legged to. have been financed by the
Old Colony Trust Company Of Bos.
ton, and the, San Pedro, Los Ange.
les and Salt Lake. which negotiates
the arid stretch between Salt Lake
City and Southern California.
Valuation Methods.
Commissioners Eastman declared
in his minority decision that the
only proper method Of valuing the
railroads, on which to base pts
senger and freight rates which the
public must pay is to- include the
honest and prudent" Investments
made by the security holders,
minus the sums which the rail.
road managers neglected to experld
for the upkeep of the roads.
The majority of the commission
say they considered the original cost
of the roads, the cost of reprodJic.
ing them, plus the present value OF
the land, and the reproduction cost
less depreciation but plus the present
value of the land. and then gave
their Judgment.
Eastman sdeclares that on thai
"fanciful and uncertain and arbf
trary' theory, any commission could
in the future base the value Of tho
road solely on its judgment of what
II would cost to reproduce the roads
today. He said the cost OF reproduc.
ton is estimated to be at least 65
per cent in excess of the book value
of the roads.
The railroads SAY in their official
returns to. the commission that the
III
railroads of this country Is $50, O40..
572 GIL Sixty-five per cent OF that
amount is $13, 000, 900 900.
Exacts Huge Toll.
The roads are allowed to charge
passenger and freight rates that
will net them q profit Of 5A per
cent. That profit on 13,00O, 900, O0C
would take an additional toll of S747 !,
100000 from the passengers and
freight shippers every; year.
Senator La Toilette and other
progressive Senators, INCLUDING
Democrats as web as Republicans
will throw the weight of their on
position against the scheme of valu
alton when it reaches Congress-
The recent Chicago conference OF
the progressive forces of the c0un
try was called for just that pur
pose. It is not unlikely that the
independent leaders will wage d
contest at the polls against any
candidate for President who does
not commit himself definitely
against that policy.
President Coolidge and 5Conlnis
sioner Eastman are felIow-gradu
ates at Amherst. They served or
railway committees when the Presi
dent was lieutenant governor OF
Massachusetts and Eastman was d
member of the Massachusetts pub
lie service commission. 1t is ex
pected that the President will al
least hear Eastman's viewpoint be
for taking up with any valuation
scheme.