The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1929-05-21
REPEAL Of RAIL
MEASURE NOW
SOUGHT
By WILLIAM 8. NEAL
International News Service

The Supreme Courts decision IN
the O'Fallon railroad valuation case
may be followed by congressional
fight for repeal OF the Esch.Cum-
minis act under which the Interstate
Commerce Commission was directed
to fix rates to yield all railroads a
fair return on their valuation.
While the effect Of the decision
In the so-called fifteen lillion
dollar law suit" was still being
debated by lawyers today, Con.
gressional insurgents voiced their
alarm lest the decision should ulti.
mately send railroad rates sky
roeketing.
Government Ownership
Senator Brookhart Htl OF Iowa,
q member OF the ''insurgent bloc,
declared that demands for Govern.
ment ownership of railroads will
follow pushing up Of railroad
valuations under the decision.
While tie high court failed to
lay down a rule Of thumb method
for valuing the Nations railroads
the commissions valuation Of the
o'Fallon railroad being overturned
because Il gave no weight 70 repro
ductien new cost--the decision was
hailed in railroad circles a.
tremendous victory.
ReVisl0n Necessary
The commission must now revise
its valuation methods, ana the only
way II can do 20 In considering re-
production costs Is to revise them
upward, It was declared. This view
was taken by Justice Stone in his
opinion dissenting from the major
ity of the court.
The railroads great victory was
in the firm declaration OF the
court that the commission must
consider the cost Of reproduction.
and the cost now 10 far greater than
when the railroads originally were
built, II was pointed out.
The aspect Of the decision which
has aroused the fears Of congress
sional progressives IL the statement
Of the Interstate Commerce Com.
mission, pointed out by Justice
Stone, that valuation on a reproduc-
ton new basis In 1919 would have
pushed the total value of all rail.
roads from $4,000. 100000 to $40.
900, 900, 900.
II the commission fixed rates on
the higher valuation to yield Sh 10
5% per cent the public would pay
two billion dollars more In freight
rates annually. The public could
not bear rates which would give .
fair return on this valuation. Justice
Stone said
Raise Certain
Even IL the commission IL not
forced to give entire weight to
reproduction cost new--which was
conceded by railroad attorneys In
arguing the case--the valuation
might be pushed up $4,000, 00O-O goo
from the figure contemplated by
Congress in passage of the Esch.
,Cummins act, some experts de-
clared.
IF there IL a way to amend the
Esch- Cummins act I'm for it..
said Senator Brookhart. voicing the
insurgent view. If not. I'm for
its repeal II the decision ,Enee ms
a pushing up OF railroad valuations
it means Government ownership,
and the levying Of taxes on Lig
incomes to keep them going at
rates which the public can pay
"The decision will promote
movement to modify or repeal the
rule OF rate making laid down In
the Esch. Cummins law" said Rep
resentative Hoch R) OF Kansas.
author Of the Hoch.Smith resolu.
ton He declared for repeal OF
the recapture provisions OF the
Esch- Cummins law.
Defines Ruling
Judge w. e. Brantley. ex.Georgia
Representative and authority on
valuation. construed the Supreme
Court decision to mean that rail-
roads must be valued chiefly upon
reproduction cost as of December 81,
1927. under the decision and order OF
the commission to bring all valua'
lions to that date.