It is not, as Mr. Delano says, a case of put your money in with your eyes wide open; it is an effort on the part of the people to safeguard this form of corporate security in such a way that it can be treated as any other form of sound investment. It should not be necessary to require that all investors in corporate securities be financial experts. It is the writer's opinion, based on his observation and professional practice, that the railroads are not generally open to charges of over-capitalization. While there are flagrant instances, the chief culprits are among other classes of corporations. If such be the fact, it would seem that the interests of the great railway corporations would be in no wise jeopardized by sane and reasonable control.
The theory of taxation is that every one shall bear his proportionate burden of the cost of maintaining the government.
Regardless of any opinions that may be held as to the propriety of the methods adopted in the Interstate Commerce Commission's commercial valuation of railroad properties, it will be conceded that the results gave a set of figures for all the States of the Union, secured by a uniform method of computation and distribution. Table 1, which is a compilation from Tables 1 to 11 of Bulletin 21, shows clearly why, in certain States, corporate taxation is a live issue, and if (as suggested by Mr. Williams in his article, elsewhere referred to) amendment of the Constitutions of some of the States is necessary, it is safe to assume that the condition of inequality shown by this table is such as to compel these changes.
It is needless to cite further instances; enough has been said to indicate:
First.—That the corporations and the public have such intimate business relations that a blow at either must necessarily injure the other seriously;
Second.—That the Courts have defined quite clearly the legal relation existing between the two interests;
Third.—That there is lacking a proper spirit of mutual confidence, and the two interests at the present time are generally hostile;
Fourth.—That there have been errors and abuses on the part of both corporations and public; and
Fifth.—That capital invested in corporations is, and should be, the money of the people, and should be safeguarded so as to prevent its loss by manipulation, and insure a fair return.
TABLE 1.—Comparison of Assessed Valuation and Commercial Value of Railway Properties.