Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-07
PUbl|CUTL|T|ES'
VALUATIONS HIT
Prof. Ryan issues Pamphlet
Referring to Proposed
Merger Here.

Of particular interest Is Wast.c gtan
IS 3 pamphlet made public ro6ay or
.'.ras Ethics Of PUBLIC Ut-.tty Valua-
ter" by Ok John A. EyaG, professor
Of Industrial ethics at cataouc UriVer-
SOY. A.tapVg: tie G.scuSs.nn IS gen.
s.a, Il character, = refers specifically
% ti.a valIat.en 81 tnA CAPITAL T~ac-
t!or Co af iris nitv sno nv inference
o ira oronosro street. Csr 'rne ne:gsT
as veil ss ne ntonossl o. ne Wash
ns On Ga ih2hg Co. !oi ;ns anYiica-
tion OF tie i4ew co1tV rG.lng IN lie
valuation Of It's property. Both OF these
projects are mentioned in connection
with the pamphlet in a statement issued
by the National Popular Government
League.
Or. Ryan refers to ''hocus- pocus"
valuations of public utilities. His in
quiry. he says, was suggested by a de-
ciSion of the United States Supreme
Court two years ago in the Indianapo-
lis Water Co. case1 which in effect.
"compels the Public Service Commits
sion of the State of Indiana TO increase
the rates paid by the users of water
in the City Of indianapolis.
Gamblers Argument"
Attacking the reproduction cost"
theory of valuation he says the only
ethical argument in Its favor is "a
sort OF gamblers argument"
This discussion" says the National
Popular Government League, though
not written In view of any particular
situation. Is OF special interest just now,
when the so-called O'Fallon railroad
case is before the country This case,
called the greatest law suit in history
has just been argued before the United
States Supreme Court. The Interstate
Commerce Commission on February is,
1927. repudiated the reproduction cost
theory. claimed by the railroads"
DR.. Ryan says that the issue Is much
broader than railroad valuation, declar-
ing that the principle Of reproduction
cost, if established, will be universal APP
plying to street railways. gas and cleo
trio light and power companies. "all OF
which will doubtless apply the rule so
far as practically possible.
The Court of Appeals of the District
of Columbia, Dr. Ryan points out. al
lowed the Capital Traction Co. Febru-
airy Z. 1927. "a valuation which is 30
per cent above the value of the property
in terms OF 1914 prices and is probably
at least that much in excess OF the
actual investment"
Apparently this court" continues
DR.. Ryan. gave the company the fun
benefit of the present reproduction cost.
If this valuation Is sustained by the
Supreme Court OF the United States, 1t
will authorize the traction company To
raise car fares from to Q cents.
SILVER Lining" Seen.
THE only bit of silver lining TO the
clouds is the hope that il the rule of
the Indianapolis case receives general
to the public utilities. the
people will be compelled to recognize
definitely that the policy OF regulation
has failed. They will realize that the
only remedy Is In public ownership and
operation.
when that day comes it will wit
ness such deep and widespread re-
sentiment that the people will not toier-
ate proposal to buy out the utilities
at the inflated value"
Dr. Ryan adds that public utility
will be well advised If they
refrain from carrying their demands
for increased valuation so far as to
provoke this measure of popular indig-
nation"
He points out that in this country
the opposition to capital and fair rate
Of interest is insignificant" and that
the average man is willing to concede
to the owners of capital that rate OF
annual return which he himself re-
ceives or would like to obtain" 1t is
only special privilege" to certain EN-
forms of capital and invest
ment" that the average man resentS,
according to DR.. Ryan.