Evening star., 1924-01-11
SMITH SEEKS AID
IN CUTTING RATES
New Commerce Chairman of
Senate Issues First Formal
Statement.

4 plea to the effect that ALI inter
ested should cooperate to provide re-
lief from the burden of excessive
freight rates" is contained In a
statement issued today by Senator
Smith of South Carolina. democrat.
newly elected chairman OF the inter
state commerce committee.
Senator Smith pointed out that
there is widespread demand for a
reduction in freight rates. particu-
larly on agricultural products. Sena-
tor Smith made no prediction as to
what legislation, If any. his commit
tee would bring forth on the railroad
situation. His statement follows:
AS result Of unusual conditions,
I, democrat, have been elected
chairman OF the committee on inter-
state commerce at time when my
party is in a minority In the Senate.
1t is not possible at this time to an
ticipate what action the committee
will take touching the important
measures which it is expected will
DO brought before it,
There is a widespread demand for
substantial reduction in freight
rates. All interested should CO.
operate to provide relief from the
burden OF excessive freight rates.
This applies with a special empha-
sis to the intolerabie burden imposed
under present rates on agriculture
think all fair-minded persons
realize that i am not in a position to
the committee on interstate COM
merce."
It is expected that Chairman Smith
will call the committee together at
posals which have been made looking
TO the amendment Of the transporta-
tion act.
Would Amend Transportation Act.
Senator La Toilette OF Wisconsin,
leader Of the republican progressive
bloc, who was largely responsible for
the election of Senator Smith, demo-
commerce committee. yesterday pro-
posed drastic amendments to the
transportation and railroad valua-
tfon acts.
Under the amendments proposed by
Senator La Toilette railroad rates
cost OF service. Mr.. La Toilette ex-
plained in a statement that by cost
OF service he meant operating ex-
penses, plus actual capital cost, such
as interest on PONDS, plus fair divf-
dends for stock that represents money
invested.
Il reject the theory" Senator La
Follette said. that public utilities
have any right to earn profits on in
fated and fictitious values"
Senator La Foilette's amendment to
the valuation act would direct the In
terstate Commerce Commission to as
certain the original costs Of railroad
properties, SO as TO determine the
amount Of money actually and pru-
IDENTIFY invested"
Referred to Committse.
1t also would provide that where
reliable records have not been pre-
served by the railroads, original cost
shall be estimated from the ample
data which are available" The
amendments were referred to the in
terstate commerce committee.
These amendments. IL enacted"
Senator La Toilette said. wifi fix as
the rate base the amount of money
prudently invested in the properties
by the owners and will outlaw for
rate making purposes the inflated and
fraudulent claims of alleged values
now put forward by the railroads.
THE highest courts have held re-
peatedly that rate regulation is the
function not Of the courts. but Of the
legislature. 1t is. therefore, the un-
doubted right Of Congress to define
what are reasonable rates I pro-
pose that Congress shall adequately
perform this long neglected duty"