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ICC Valuation
CBarkan@...
Until the previous discussion on valuation I had always assumed that it
started after 1913. However, upon hearing Tony's and others' reference to
earlier instances of valuation activity, it piqued my curiosity so I checked
into some of my references. Valuation was part of the effort to establish
what a "fair rate of return" for railroads' investment was. According to
Locklin (Economics of Transportation 1972) in 1898 the Supreme Court stated
that rate reasonableness should be based on property value. In 1903 the ICC
recommended that a valuation of the railroads be made. Presumably neither of
these had the force of law and Locklin states that initially the RRs were
opposed. However, in 1910 RRs some railroad requests for rate increases were
turned down because of a lack of proof from the RRs regarding the
reasonableness of the propsed increase and this was partly due to lack of
valuation data. So the RRs became motivated to pursue valuation and
according to Locklin their opposition to it had ceased by 1913. I recall
reading somewhere else that the result of the ensuing valuations was the
finding that RR assets were worth more than had generally been presumed, so
thay ended up having an even stronger case for rate increases.
Chris
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started after 1913. However, upon hearing Tony's and others' reference to
earlier instances of valuation activity, it piqued my curiosity so I checked
into some of my references. Valuation was part of the effort to establish
what a "fair rate of return" for railroads' investment was. According to
Locklin (Economics of Transportation 1972) in 1898 the Supreme Court stated
that rate reasonableness should be based on property value. In 1903 the ICC
recommended that a valuation of the railroads be made. Presumably neither of
these had the force of law and Locklin states that initially the RRs were
opposed. However, in 1910 RRs some railroad requests for rate increases were
turned down because of a lack of proof from the RRs regarding the
reasonableness of the propsed increase and this was partly due to lack of
valuation data. So the RRs became motivated to pursue valuation and
according to Locklin their opposition to it had ceased by 1913. I recall
reading somewhere else that the result of the ensuing valuations was the
finding that RR assets were worth more than had generally been presumed, so
thay ended up having an even stronger case for rate increases.
Chris
In a message dated 10/17/02 6:31:16 AM, thompson@... writes:
<< Henry Bender recently sent me the facts, as he understands them (having
worked in SP's Valuation Dept.) about the origins of the valuation: the
1913 Railroad Valuation Act directed the ICC to oversee the compilation of
information, to describe all railroad properties as of June, 1916. Thus it
is understandable that valuation work commenced well before 1916 on many
roads.
>>
<< Henry Bender recently sent me the facts, as he understands them (having
worked in SP's Valuation Dept.) about the origins of the valuation: the
1913 Railroad Valuation Act directed the ICC to oversee the compilation of
information, to describe all railroad properties as of June, 1916. Thus it
is understandable that valuation work commenced well before 1916 on many
roads.
>>
Anthony Thompson <thompson@...>
Henry Bender recently sent me the facts, as he understands them (having
worked in SP's Valuation Dept.) about the origins of the valuation: the
1913 Railroad Valuation Act directed the ICC to oversee the compilation of
information, to describe all railroad properties as of June, 1916. Thus it
is understandable that valuation work commenced well before 1916 on many
roads.
Tony Thompson Editor, Signature Press, Berkeley, CA
2942 Linden Ave., Berkeley, CA 94705 http://www.signaturepress.com
(510) 540-6538; fax, (510) 540-1937; e-mail, thompson@...
Publishers of books on railroads and on Western history
worked in SP's Valuation Dept.) about the origins of the valuation: the
1913 Railroad Valuation Act directed the ICC to oversee the compilation of
information, to describe all railroad properties as of June, 1916. Thus it
is understandable that valuation work commenced well before 1916 on many
roads.
Tony Thompson Editor, Signature Press, Berkeley, CA
2942 Linden Ave., Berkeley, CA 94705 http://www.signaturepress.com
(510) 540-6538; fax, (510) 540-1937; e-mail, thompson@...
Publishers of books on railroads and on Western history
Don Strack <donstrack@...>
Tony,
Here are some more factoids about the ICC valuation effort, all from
"Interstate Commerce Acts Annotated", pages 2508-2510:
Don Strack
======================================
INTERSTATE COMMERCE COMMISSION
Valuation Orders Background
"Map Order" January 12, 1914
Containing specifications for the preparation of maps and profiles to be
filed with the commission to support the valuation of the property of the
railway carriers. Effective February 1, 1914. Modified by Valuation Order
Nos. 5, 6, and 23.
No. 2 May 12, 1914
Requiring the filing of complete and detailed schedules of all fixed
physical property abandoned prior to June 30, 1914. Modified by Valuation
Order No. 10.
No. 3 June 25, 1914
Regulations to govern the recording and reporting of all extensions and
improvements or other changes in the physical property of every common
carrier. Effective July 1, 1914.
Revised June 28, 1917, effective July 1, 1917.
Revised March 31, 1919, effective January 1, 1919.
Supplement No. 1, July 27, 1920, effective September 1, 1920.
Supplement No. 2, September 27, 1920.
Supplement No. 3, February 12, 1923.
Supplement No. 4, June 12, 1928, effective January 1, 1928.
Supplement No. 5, June 12, 1928, effective July 1, 1928.
No. 4 June 25, 1914
Inventory of materials and supplies. Modified by Valuation Order No. 22.
No. 5 November 21, 1914
Modifying and supplementing the so-called map order and requiring the
preparation and filing of maps and profiles of extensions and improvements
or other changes made after valuation date.
No. 6 November 21, 1914
Modifying and supplementing the so-called map order, as amended by Valuation
Order No. 5, with relation to details required.
No. 7 November 21, 1914
Instructions and forms pertaining to schedules of land to be filed with the
commission by common carriers. Supplemental instructions issued November 1,
1916.
No. 8 November 21, 1914
Regulations and sample forms to govern the recording and reporting of
register of equipment and original cost to date. Supplemental instructions,
pertaining to original cost of machinery and equipment, issued september 23,
1916.
No. 9 December 14, 1914
Transportation of valuation division employees, supplies and cars.
Supplement No. 1, June 2, 1915, transportation of valuation division outfit
cars.
Revised April 4, 1916.
No. 10 December 23, 1914
Modifying and supplementing Valuation Order No. 2.
No. 11 January 21, 1915
Instructions and forms pertaining to an inventory of records.
No. 12 January 21, 1915
Requiring the preparation and filing of schedules of industrial tracks.
No. 13 February 9, 1915
Requiring the preparation and filing of a complete inventory of the
quantities, units and classes or kinds of all fixed property except lands
and equipment included in Valuation Order Nos. 7 and 8.
No. 14 February 9, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
common carriers owning or operating a steam railroad, whose property is
subject to the act.
No. 15 March 8, 1915
Instructions and form pertaining to privileges given and leases made by
steam railroads.
No. 16 March 30, 1915
Requiring a report as to every aid, gift, donation, or grant of land made to
every common carrier subject to the act. Supplemental instructions issued
May 10, 1917.
No. 17 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
telegraph companies.
No. 18 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
Class A and Class B telephone companies.
No. 19 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, pertaining to telegraph and
telephone property, to be filed with the commission by steam railway common
carriers.
No. 20 May 13, 1915
Requiring the preparation and filing of a statement relative to corporate
history.
No. 21 July 6, 1917
Specifications for maps, charts, and schedules of telegraph and telephone
properties owned by railroad, telegraph, cable, and telephone companies.
Effective August 1, 1917.
No. 22 July 26, 1918
Modifying and supplementing Valuation Order No. 4
No. 23 March 9, 1920
Modifying and supplementing the so-called map order, as modified and
supplemented by Valuation Order Nos. 5 and 6, relieving carriers of the
requirement of filing tracings or reproductions of tracings of maps and
profiles with the commission, but requiring carriers to preserve the
original tracings and keep the same subject to inspection of the commission.
No. 24 April 2, 1928
Regulations and instructions relating to the recording and reporting of
changes in physical property of every common carrier subject to the
provisions of the act, whenever such changes occur in connection with
construction, transfer, lease, or abandonment of property. Effective May 15,
1928.
No. 25 June 12, 1928
Regulations and instructions to govern the reporting of data required to
revise and extend to a new valuation date or dates the accounting reports
made in the several basic valuations. Effective July 1, 1928.
Here are some more factoids about the ICC valuation effort, all from
"Interstate Commerce Acts Annotated", pages 2508-2510:
Don Strack
======================================
INTERSTATE COMMERCE COMMISSION
Valuation Orders Background
"Map Order" January 12, 1914
Containing specifications for the preparation of maps and profiles to be
filed with the commission to support the valuation of the property of the
railway carriers. Effective February 1, 1914. Modified by Valuation Order
Nos. 5, 6, and 23.
No. 2 May 12, 1914
Requiring the filing of complete and detailed schedules of all fixed
physical property abandoned prior to June 30, 1914. Modified by Valuation
Order No. 10.
No. 3 June 25, 1914
Regulations to govern the recording and reporting of all extensions and
improvements or other changes in the physical property of every common
carrier. Effective July 1, 1914.
Revised June 28, 1917, effective July 1, 1917.
Revised March 31, 1919, effective January 1, 1919.
Supplement No. 1, July 27, 1920, effective September 1, 1920.
Supplement No. 2, September 27, 1920.
Supplement No. 3, February 12, 1923.
Supplement No. 4, June 12, 1928, effective January 1, 1928.
Supplement No. 5, June 12, 1928, effective July 1, 1928.
No. 4 June 25, 1914
Inventory of materials and supplies. Modified by Valuation Order No. 22.
No. 5 November 21, 1914
Modifying and supplementing the so-called map order and requiring the
preparation and filing of maps and profiles of extensions and improvements
or other changes made after valuation date.
No. 6 November 21, 1914
Modifying and supplementing the so-called map order, as amended by Valuation
Order No. 5, with relation to details required.
No. 7 November 21, 1914
Instructions and forms pertaining to schedules of land to be filed with the
commission by common carriers. Supplemental instructions issued November 1,
1916.
No. 8 November 21, 1914
Regulations and sample forms to govern the recording and reporting of
register of equipment and original cost to date. Supplemental instructions,
pertaining to original cost of machinery and equipment, issued september 23,
1916.
No. 9 December 14, 1914
Transportation of valuation division employees, supplies and cars.
Supplement No. 1, June 2, 1915, transportation of valuation division outfit
cars.
Revised April 4, 1916.
No. 10 December 23, 1914
Modifying and supplementing Valuation Order No. 2.
No. 11 January 21, 1915
Instructions and forms pertaining to an inventory of records.
No. 12 January 21, 1915
Requiring the preparation and filing of schedules of industrial tracks.
No. 13 February 9, 1915
Requiring the preparation and filing of a complete inventory of the
quantities, units and classes or kinds of all fixed property except lands
and equipment included in Valuation Order Nos. 7 and 8.
No. 14 February 9, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
common carriers owning or operating a steam railroad, whose property is
subject to the act.
No. 15 March 8, 1915
Instructions and form pertaining to privileges given and leases made by
steam railroads.
No. 16 March 30, 1915
Requiring a report as to every aid, gift, donation, or grant of land made to
every common carrier subject to the act. Supplemental instructions issued
May 10, 1917.
No. 17 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
telegraph companies.
No. 18 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, to be filed with the commission by
Class A and Class B telephone companies.
No. 19 May 5, 1915
Instructions and forms pertaining to purchases of materials, prices paid,
and rates of compensation paid for labor, pertaining to telegraph and
telephone property, to be filed with the commission by steam railway common
carriers.
No. 20 May 13, 1915
Requiring the preparation and filing of a statement relative to corporate
history.
No. 21 July 6, 1917
Specifications for maps, charts, and schedules of telegraph and telephone
properties owned by railroad, telegraph, cable, and telephone companies.
Effective August 1, 1917.
No. 22 July 26, 1918
Modifying and supplementing Valuation Order No. 4
No. 23 March 9, 1920
Modifying and supplementing the so-called map order, as modified and
supplemented by Valuation Order Nos. 5 and 6, relieving carriers of the
requirement of filing tracings or reproductions of tracings of maps and
profiles with the commission, but requiring carriers to preserve the
original tracings and keep the same subject to inspection of the commission.
No. 24 April 2, 1928
Regulations and instructions relating to the recording and reporting of
changes in physical property of every common carrier subject to the
provisions of the act, whenever such changes occur in connection with
construction, transfer, lease, or abandonment of property. Effective May 15,
1928.
No. 25 June 12, 1928
Regulations and instructions to govern the reporting of data required to
revise and extend to a new valuation date or dates the accounting reports
made in the several basic valuations. Effective July 1, 1928.