Williams, W: Letter to the Railroad Securities Commission

Excerpt from Letter to the Railroad Securities Commission: In Reply to Their Request for Information and Opinions Upon Questions Pertaining to the Issuance of Stocks and Bonds of American Railways

The original Cost of material in place on any one railway, must be a definite sum although it is Seldom ascertainable with accuracy. While the aggregate cost may increase or decrease as ma terial is added or withdrawn, the original cost of any quantity or unit of material in place is per manent. It does not follow, however, that the original cost of material in place represents the cost to the present Owners of the property. They may have purchased the property from another company, and paid either more or less than the cost of material in place. The price paid in such a case is the resultant of many con ditions, including the necessities of the seller and the respective estimates Of the value tothemselves of the property made by both parties to the transaction; but the original cost can never be one of the controlling conditions. There are few existing railway companies (and these only the smaller ones) that do not' rep resent reorganizations following receiverships, or to a large extent the purchases Of properties of other companies and their subsequent merger or consolidation with the purchasing company; In view of these facts it is plain that there is no fixed necessary or common relation between the cost of material in place and the cost of the property to the present holders thereof.

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