Evening star., 1934-12-18

years and dropping in recent years to
approximately one-third OF that
amount. Annual expenditures for
maintenance, in order to keep 1t In q
safe and efficient state Of operation,
have ranged from $4,000, 100000 to
81, l,250, 100000 per year during the
last IS years. Many millions Of dol
lars are required annually to offset
the losses resulting from physical |
and functional depreciation.
Privately Owned Profit.
Though dedicated to public use this
property Is privately owned, with a
vast army of people holding long-term
fixed obligations and another vast
number holding equities therein. While
the public does not guarantee the sue
cess of such enterprises, nevertheless,
under the Constitution, the owners
and operators Of these properties are
entitled. If they can earn it under
just and reasonable rates and honest
and efficient operation, to reasonable
compensation in return for the serv-
ices performed by them.
The valuation act directed the COM
mission to investigate, ascertain and
report, among other things, the origi-
nal cost, investment, cost of repro
duction and cost Of reproduction less
depreciation of all physical property:
present value of lands; amount and
value of aids, gifts, grants and dona-
tons; results of corporate operations;
full and complete financial and cor
porate histories Of existing and prede-
ceSsor companies. In compliance
with this requirement, the property
was inventoried in the field by our
engineers by measuring the grading
and ballast in cubic yards, counting
and observing the condition of the
ties and rails, motive power and roll
ing stock. No piece Of property Of
any significance was neglected. Cor
porate records were examined, all per-
tinent financial transactions were re-
viewed. The mandate Of Congress
was obeyed. Today there is available
in public reports in concise form a
veritable encyclopedia Of the property
of the railroads, their corporate and
financial affairs from dates of con-
struction to dates of valuation. 1t has
been referred to as the greatest scien-
tific valuation of property ever un-
dertaken.
These railroad properties do not
remain static. 1t is evident, there
fore, that unless some method was
devised of keeping current the data.
on which valuation reports are based,
our valuation records would soon be-
come only of academic and historical
interest. Foreseeing this, Congress
directed that, upon the completion of
the original valuations, we should
thereafter keep ourselves informed OF
the changes occurring in these prop
critics in order that the original inven-
tories and valuations might be revised
and corrected from time to time. Car
riers are, therefore, required to fur
nish detailed records of all property
changes by units and cost. These rec
ords are checked in the field by our
employees and the changes are carried
into the inventories.
In addition to keeping the basic in
ventories current, it Is necessary for
us to keep abreast of fluctuating costs
of construction and materials. These
price studies are used as data for the
development Of price indices," which
enables us to determine, in short Or
der, the present reproduction cost Of
these properties.
Money Not Wasted.
Finally on the subject of valuation,
I want to leave with my listeners the
assurance that money spent In the
valuation of the railroads has not been
wasted 1t is fortunate, however, at a
time when the Nation is confronted
with the complicated problem Of the
future of the railroads and the extent
to which they must be reorganized or
supported by the Government that
the Congress, the commission and the
public have available current in
ventory or record not only Of the prop
erty itself, with its physical and
functional depreciation recorded, but
data from which may be determined,
among other things, the original cost,
the amount of money invested, as well
as the cost of reproduction Of the
properties in their present condition.
These afford far-reaching light either
in penetrating the question what is
the matter with the railroads" or what
must be done in treating individual
cases.
In conclusion, I would like to say
a word with reference to the lack
of regulation of transportation
agencies which compete with those
under regulation. With no require
ment that the rates and charges
of these unregulated transportation
agencies be published and strictly adj
hered to, shippers using these forms
of transportation encounter the same
character of discrimination as pre-
vailed among railroad users before the
act to regulate commerce was passed.
AS a further Justification for regula-
tion there should be such co-ordina-
ton between all forms Of tranSporta-
tion that each may be utilized in the
sphere where it can best and most
economically serve the public. This is
impossible under present conditions
The result is much wasteful transpor-
tation and the public does not get the
maximum of service at a minimum
cost. The existing unregulated COM
petition has played havoc with many
rate structures. With particular ref