The producers news., 1927-04-08
NORRIS SEES RAIL
IMITATION CHECKED

Washington-(FP) - Attempts of
the railroad companies of the United
states to initiate the value of their
properties, for rate-making and eth
er purposes, By S11, ,e0o. Gee. .o0e have
Deer checked by q dexisisn by 3. ma
iJorTEy OF 1.-the Interstate Conneree
CoM MiesieA. Sea. Norris Of heAras-
kay ehaiEMaA Of the Natl. Conference
on Valuation Of AmeracAn Railways;
eeslaEes that ibis decision is-tAe most
important sEer rendered by the eon-
mission, and that it saves the public
81 least ss6e0, eos, ,6oe 3 year in.
Lfeight ana passenger rates. p
r The commissions ruling, made In
I the ease Of the St. Louis 4 0'Fallon
RAILWAY, wassthat the basis of valu-
atlen must be the cost necessary to
produce a railroad in the year 1914,
when the LaFollette rail valuation
act. took effect to which sum there
must be added the amount added to
tne actual investment since that date
/ less actual depreciation since 1914.
IL swept aside the claim of the rail-
road lawyers that the true valuation
oasis must be the cost of reproduc-
ton today including present purchase
or sale value of railroad lands as or
binary real estate.
When the late Sen. LaFollette
drove through Congress in the winter
OF 1923 his measure requiring the
commission to determine the various
elements of valuation of all steam
railways for rate making and other
purposes 1t was not expected that
the task would still be under way IA
years later. Yet this decision is the
tlrst which clearly indicates what
the commission thinks is the rule for
flXlng valuation and hence for deter
mining what income the public will
be compelled to pay to the carriers
IN rail rates.
The late Glen Plumb, in the years
1892, as chief counsel to the as
sociated rail and labor organizations
III dealing with the problem of feder-
al rail legislation, showed that the
charters of most of the railroads for
bid them to claim rates based on the
unearned increase in value of the
land they occupy in operation of their
business. He showed that the rail-
roads were then worth, for purchase,
only about twelve to fourteen billion
dollars. He strongly influenced the
rail- labor organizations in their adOp-
ton of the policy of federal purchase
ownership and operation. The rail-
labor executives established a ma
tlon-wide organization known as the
Plumb Plan League, advocating fed
eral operation of railroads under a
plan in which the workers, the man
agement ana the public as stockhold-
ers would jointly determine the pol
icies Of operation.
Opponents of public ownership
within the labor movement finally
wore down the public ownership ao-
vocates, the Plumb Plan League dis
appeared after Plumb's death anc
with the collapse of this movement
the railroads began steady advance
Of valuation claims, moving from
! twenty billions to thirty and forty
/. billions. 1t is this gigantic initiation
OF ownership claims that has resulted
! at last in a definite ruling as to what
will be considered by the rate-fixine
body fair basis of collection of raj
revenue from the public.
!, at is the initial decision in one o.
the greatest legal proceedings in his
tory says Norris. "The case viii
! undoubtedly be carried to the U. S
; supreme court, but the commission
has rendered a public service in re
jecting the excessive claims of tn,
railroads. The decision represents
r splendid victory for out conference
1 1t is important to wage-earners, con
sumers, shippers and farmers. The
should join hands to sustain the com
: mission before the courts"
LaFollette organized the confer
ence in May 1923 when it was mad,
; up of progressive elements includin;
the rail labor organizations, to de
fend the public interest against tn,
I heavily financed campaign of tn,
railroads to confiscate tens of billion.
7 of dollars through excessive valua
I tiOnS.