Evening Star Newspaper, May 11, 1930, Page 35

h EDITORIAL SECTION Part 2—-8 Pages NAVAL EXPERTS SEE PARITY SURRENDER IN 6-INCH GUNS Think Only 8-Inch Caliber for Cruisers Would Offset Britain’s Merchantmen. Huge Expenditure Believed Waste. the © BY FRANK H. SIMONDS. the the ITH the submission of treaty of London to United States Senate question of ratification be- comes the most considerable of pending political issues in the United States, Moreover, in recent days it has become clear that the main opposition to ratification will come from naval quarters—from Senators and Repre- sentatives who as members of the naval committees of the two branches of Congress have acquired a detailed knowledge of the requirements of na- tional defense, and from the great body of officers of the Navy. ‘The Navy, it is clear, despite certain not very significant exceptions, is op- posed to the treaty. But, oddly enough, this opposition does not arise from any hostility to the portions of the treaty that entail reductions. The case of the Navy against the treaty is not founded upon the belief that national defense been weakened by any of the scrapping program. In fact, the “big Navy group,” to use the opprobrious ferm, is opposed to the London docu- sent only at the point where it s relatively considerable ‘expansion. The issue can be briefly stated. Naval craft have been djvided into five categories: Capital ships, airplane car- Tiers, 's, destroyeers and subs marines. At London it was agreed that there should be reduction in three of these categories, namely, capital ships, destroyers and submarines. And it was similarly agreed that at the ter- mination of the period of scrapping there should be actual mathematical rity in these categories between the ritish and American fleets. 170,000-Ton Reduction. The sum total of this reduction is approximately 170,000 tons, 70,000 in capital ships, 78,000 in destroyers and 22,000 in submarines. And the Navy, without exception, has accepted these reductions without, question. No issue arises over the categories in which re- duction takes place. And the same is true in a fou category, that of air- lane carriers where the figure of glnhmm X tons—has been maintained at London. The case of the Navy against the treaty, then, comes down to an almost universal opposition to the arrange- ments covering cruisers. At the mo- ment when the London conference was called the United States had 200,000 tons of cruisers, built and building, and of these President Hoover discontinued tempora.ily . the building of three, amounting to 30,000 tons, as a sort of good-will gesture. Now, under the terms of the London treaty the United States is to have either 330,000 tons or hooses, to distribute ever, the famous 18-cruiser law call for the expansion of the American Navy to contain 33 crulsers, 23 of 10,000 tons carrying 8-inch guns and 10 of 7,000 tons mounting 6-inch ‘(uxu ‘The Lon- don treaty calls for 36 cruisers at the least, but at most, and. only eventually, but 18 of these will have 8-inch guns. The United States is, then, going to have three more ships and 24,000 larger tonnage as a result of the London con- ference than she would have had under the existing law. But she is going to have five fewer crulsers carrying 8-inch ns. ha position of the Navy rests simply wu une statement that it prefers the old arrangement; that it is opposed to substituting eight 9,500-ton boats carry- ing 6-inch guns for five 10,000-ton craft mounting 8-inch guns. It holds that the expansion in tonnage is a waste of money, since it regards the proposed type as far less valuable for our na- tional needs. It would prefer three less in ships, thus combining a large saving of money with an alleged advantage in natignal defense. And if the treaty is Tatified it will still oppose building the 6-inch gunned craft, and thus wasting $109,000,000. Insurance of Parity. As between the 8-inch and 6-inch ed cruisers the view of Admiral fones, who was the American naval ad- viser at London, of the General Board, ‘which is the expert body of the United States, and of the chairmen of the naval committee of the House and Sen- ate, are well known. All agree that since the British possess a vast superior- ity in merchant marine, capable of be- ing transformed into warships in time of conflict and equipped with 6-inch guns, only a marked advantage in boats carrying 8-inch guns will insure parity for the United States. ‘The 15-cruiser law, giving the United Btates 23 8-inch gunned ships against 15 for the British satisfied the naval experts. When the President at the Rapidan agreed with Macdonald to re- duce this number to 21, American naval authorities were disturbed and dissat- isfied. When suddenly there emerged from secret sessions at London the statement of Secretary Stimson, unac- companied by any reasons, that the American delegation had further agreed to cut down her ships to 18, the Navy ‘was aroused. When finally as a result of the Japanese negotiations it was fur- ther agreed that the American construc- tion program should be so retarded that no more than 16 8-inch gunned cruisers would be completed before the termination of the treaty of London. & struggle in the Senate was assured. In a word, while the objectives of the American delegation to the Naval Con- ference were parity with Great Britain and the maintenance of the 60 per cent ratio of Washington with the Japanese, it is the view of American naval au- thorities that both policies have been abandoned. In the case of the British, although in return for an allotment of 18 8-inch cruisers against 15, the United States has surrendered more than 25,- 000 tons—the totals now being 339,000 and just short of 324,000—by arrange- ment with the Japanese, America has abandoned the employment of the right to complete two of the three big boats before 1936. No Reason for Surrender. As far as the Navy and the general public know, no reason exists for either surrender. In consenting to reduce the number of 8-inch gunned crulsers which fulfill the requirements of Amer- ican naval experts and &t the same time to increase the number and aggre- gate tonnage of 6-inch gunned boats, which the British experts have at all times tried to impose upon the United States, the American delegation broke alike with the advice of her General Board and the policy of the Coolidge administration as indicated at Geneva in 1927. In capitulating to Japanese insistence upon an increased ratio over the Washington conference the United Btates has paid again for what was supposed to have been paid for in full in 1922. For at Washington the Japa- nese accepted the 60 per cent ratio only after the United States had surrendered the right further to fortify all insular possessions west of the longitude Hawail Armed bodyguards are tmng of | ommended and merchnnu.m Yd cruiser. ‘The President, Ambassador Gibson and_Admiral Jones stood fast behind the General Board of the Navy. But rather than permit the United States to have these ships to the num- ber desired the British broke :J’r the conference. Now, at London, without any explanation, the American delega- tion has abandoned the American posi- tion of Geneva and ad the British. ‘Why? Although publicly unexplained, the reasons were privately told in Lon- don. If the United States had adhered to the 21-ship program of the Rapi- dan conversations, the Japanese insist- ence upon a 70 per cent ratio would have ven them 18 t-inch gunned boats gl‘%&imt 15 for.lgl British. But the British dominions were unwilling to listen to an arrangement which gave Japan mathematical parity and strate- gic superiority in the Far East. As a result Stimson was told flatly that he must revise American figures downward or the Rapidan totals would have to be revised upward. And as success at London had come to be viewed as con- ditional upon the maintenance of the Rapidan figures Stimson perforce yielded. Japanese Demand Encountered. ‘When the United States had got down to 18 big gunned boats, as a result of British tence, then the American delegation encountered a Japanese de- mand for 70% of the smaller number. At the moment Japan had 12 eight-inch gunned cruisers, but only eight were of the Washington type—that is of 10,000 tons. The other four were of 7,100 tons. Japanese demand, there- fore, involved adding two more 10,000 boats. To prevent this the American delegates agreed that the United States ‘would not lay down one big boat until 1933, another until 193¢ and the third until 1935. Japan stipulated that ac- ceptance of this agreement should not - her from demanding full 70% in 6. There, broadly speaking, is of the Navy against the treaty. It is true that the Navy is not absolutely united. One sailor of prominence, Adm! Pratt, chief of operations, backed the delegation at London and is to be their chief advocate before the Senate. Nevertheless Admiral Pratt's testimory loses a measure of value since, before he set out for London, he was on record, in testimony before the Senate committee, in favor of the 8-inch as contrasted with the 6-inch cruiser. In fact, his testimony was re- gard&d in naval circles as the most ef- iective con statement of the views of the General Board. Why did Admiral Pratt _change front at Lon- don? Did the British naval authorities persuade him that he had been mi taken in his former technical views, or did he come to see the moral valye of a treaty above the material consid- erations of national defense? This is the question which will be asked at the led | Senate hearings where Admiral Pratt will be the star witness of the delega- iton against the Navy. (Copyright, 1930.) Hawaii May Get Goast Guard Crew An effort to break up the far-flung organization engaged in smuggling opium into Hawaii will probably result in the establishment of a Coast Guard station here. Ralph Reed, supervising agent and co-ordinator of the United States Prohibition Bureau, has gone to the islands from Washington look glpe‘x the fleld u;l. !I:derw(oreembfnn lum smugg] a T problem in Hawall than importation of bootleg y00ze. Clever gangs operating out of Jriental g:m succeed in getting a good deal of ti ?oppy drug into the islands spite of ceaseless watching both aboard ships and by Federal and local officials. Tens of thousands of dollars’ worth occasionally are slipped in, and not infrequently even larger amounts wlllllfnunfigvered ex"‘h raids conducted in arriving ers. e proposed Coast Guard staff here wo\llg operate inde- bendently of other law-enforcement bureaus. . Invasion of Snakes Clears African Jail Snakes have taken a strange liking to the jail in Hoopstad, Orange Free State, which was vacated for several nights recently owing to the invasion of hundreds of yellow cobras. When a convict found & cobra curled up on his bunk nobody thought much of the in- cident, which was regarded as just an- other of the disadvantages of jail life in South Africa, but when a couple of cobras decided that the head warder's bed would suit them very well, the offi- clal telephones began to buzz. Almost before the report of this incident had been made known there was a tremen- dous outcry among the prisoners, who were in a state of panic over the dan- ieruus visitation. Several snakes were illed, but the jail staff had to give in to superior forces, and while a poison fas outfit was dispatched to Hoofstad, convicts had to seek other quarters, Canadian Legation Is Opened in Tokio By opening a legation in Tokio with the arrival of a charge d'affaires, who will act, pending the coming of an ac- credited Minister, Canada has estab- lished its third legation, the other two being in Paris and Washington. At a formal rece;pflon at the legation most of the Canadian residents of Tokio and Yokohama were seen together, as well as a number of prominent Japanese. The significance of the establishment of this new diplomatic mission in Tokio | has been the subject of a number of speeches and & great many articles in vernacular and foreign papers here. It Is expected that a great increase in the amount of trade between Japan and Canada will result. The first Japanese Minister to Canada will be Iyemasa Tokugawa. son of the president of the House of Peers. . Kidnapers Threaten Merchants in China Is the medieval vogue for armed reti- nues coming back to Shanghai? In- | structions issued by an organization of | Chinese merchants to their members indicate it is. Many wealthy Chinese merchants, de- apite rigorous police methods, are fall- ng into the hands of kidnapers. This is @ threat that ever hangs over most merchants’ heads, with the result that 8 code of 10 rules has been issued to prevent the kidnaping of merchants, rec- not to leave their homes and offices at fixed > At the Coolidge conference of 1927 all ‘the struggle turned upon the 8-inch times or along fixed | e, n: Toutes, 5o a to foll ‘WASHINGTO. D.<0; 3 SUNDAY MORNING, MAY 11, ¢ Suntwy Star, 1930. Poland—Phoenix of War Reborn Land, Now One of Europe’s Great Nations, Remains Steadfast Friend of U. S. A MIRROR.LIKE LAKE REFLECTS THE CLASSIC WHITE PILLARS AND REFINED DETAILS OF THE SUMMER PALACE. —Drawn for The Sunday Star by E. H. Suydam. BY COUNTESS HELENE SKARZYNSKA. UR modern innocents abroad would be delighted with the country of my adoption if they could visit it. I mean those Americans, the best people of the land, who are surprised and hurt at the cynical comments and ca of the European press which have greeted American policies closest to their own heart—the Kellogg pact and naval disarmament. Of course, these Americans are mis- taken in thinking that these natural expressions of European politics mean that the European countries from which they emanate distrust America and dis- like Americans. Cartoon and criticism are partisan protests. But not even partisan expressions would hurt the patriotism of the most sensitive Amer- ican visiting in Poland. For this new old Poland, the armared knight among nations where, until its downfall, the last Tose of chivalry bloomed, is too old not to appreciate assistance and too young to be cynical. BY GASTON NERVAL. MALL countries always take more interest in large countries than the latter do in their smaller neighbors. This is historical, and perfectly logical. Besides, the standards of modern progress come from the North, and it is not difficult to see why the South takes more interest in knowing the North than does the North in knowing the South. This might be the explanation of why there is now in the Latin American republics a preponderant desire to know and umfersnnd North American matters and men, while in this country, in spite of the all but heroic efforts of a few scholars and idealists, there is complete indifference and lack of knowledge re- garding the nations south of the Rio Grande. Nevertheless, even if the Latin American nations may not have achieved as yet any extraordinary ma- terial development, they have, on the other hand, much to offer in matters of culture and intellectual maturity. Know Life in US. In the Latin American countries there is, in general, an adequate conception of the nature of the “great nation of the North,” as they call the United States, of its enormous and constantly increasing importance, and of the role it plays in the world. And even of the daily life in the United States, of its activities day by day, the Latin Ameri- can has a fairly exact knowledge, thanks to the progress of the radio, the cable, moving pictures, publicity agencies, and to his eager liking for the manufactured products, the sports, the “movies,” the automobiles, the dances and the fash- fons of Uncle Sam. That which is not known, because not yet studled, are the spiritual characteristics of this country. But everybody: in Latin America, even if he does not understand all about the States, Is right up-to-date on what is happening every day in this country, and knows familiarly the most prom- inent figures of North American life. Fondness for American sports has intro- duced not only Saxon customs among the Latins, but even words and whole phrases of English—technical terms used in sports—have been incorporated into their native language. The names of American manufactured products and implements a%b as current as they are here. The names of automobiles “made in the U. 8. A.” are heard every day from the lips of the Latins. The idols of the American screen have as many Sdmirers there as Tre, {0 uhnflg‘h‘“‘ of prize-fighters! The who does not dance the steps originated in the North may not be classed as entlregl civilized or in }10\;/“ th, they doing ashion. In truth, are of things in American fashion. this has its influence, of course, and great influence, in making known the United States and the of the United States to the Latin America. Lack Knowledge of Latin America. On_ the other hand, how few people in this country can speak with luthm:‘ ity, not of the political or lnmlm:ul;l life of the republics south of “"umfl Grande, but even of just their mal condition, their physical resources, or their standards of life. One of the editors them was inhabitants of | in I wish those Americans who uncon- sclously long to have their country appreciated abroad could come to War- szawa (Warsaw) in July. What a thrill would be theirs to see the school chil- dren, the little girls all dressed in white as for first communion or confirma- tion, parading with little American and Polish fiags. It would bring them & keener appreciation of America’s greatest holiday to realize that these children were celebrating an event of 150 years before, that took place in & country 5,000 miles away—the signing of the world’s greatest document of human liberties. The Polish schools never miss a Fourth of July observance, and the children know why they are parading, for American history is taught there in great detail. Cites Rare Experience. I wish some Americans could have shared with ‘me my experience at the ‘Warszawa opera on April 6, 1922. It almost’ overcame me. You see, I was about the only American in the audi- ence and all eyes seemed fixed on me. pelitico-social problems of the United! INDEPENDENCE SQUARE wrong, because you do not see any more sombreros in South America than you do in this country. They are only worn for fancy dances on the stage. And there are only two or three countries in South America where you can still get the thrills of a bullfight. This “old Spanish custom” is almost entirely a thing of the past for Latin Americans. Many of the Latin governments have prohibited bullfights. and their citizens spend their holidays on the foot ball flelds or around the boxing rings. And 50 it goes, Little or nothing is. known here of the cultural activities and achievements of the Latin Ameri- cans or of the ideals that inspire them working out their material and po- litical progress. Let us take the Republic of Ecuador, for instance. About all the average American citizen knows about Ecuador is that it is located somewhere around the Equator, and that only because it happens that the English word for that [eofimpmcnl line had almost the same spelling. And yet Ecuador, in spite of her smal¥ territorial extension, po- litically speaking, one of the most ad- vanced countries in the New World. Strange to say, in Latin America the smaller countries are ing the greater It had occurred to me while dressing that it was the fifth anniversary of America’s entry into the war, and, knowing my Polish friends, I pur- posely arrived late. ‘The Warszawa opera house is almost as large as the Metropolitan in New York, d, ith the aristocracy and diplomatic corps out in full force, it often seems to hold a grander audi- ence. Late as we were, the curtain was not up. But the moment thaf my husband and I stepped into our box 1 discovered that it was for me that they had been waiting. The orchestra burst into “Oh, say can you see?” Now, “The Star Spangled Banner,” heard in far-off places, does terrible things to me. My fingernails almost went through my palms. My husband knew how I felt, and his relief was almost as great 8s mine when we finally sat down. He mopped his forehead. “Whew, I am glad that is over with,” he said. Liké New York, Warssaws has its Cathedral of St. John the Divine—ex- cept that it is Roman Cotholic, of course—and if the American tourist has AT QUITO, ECUADOR. try know that that small and far-away Latin republic is undertaking today certain’ politico-social changes of such importance as to be only comparable to the reforms that European statesmen are trying out in some of the most progressive nations of the Old World. By the new_constitution, approved last year, the, Republic of Ecuador is to have a legislative system similar in certain degree to that in practice in, Fascist Italy, where non-political bodies composed of representatives of profes- slonal classes, public organizations, in- dustrial organizations, workers’ unions, etc, have substituted = the traditional chambers of so-called “representatives of the mpu"' ‘The Ecuadorean Senate, accord! to the new constitution, hereafter consist of members chosen partly by the provincial councils and artly by the various callings, as fol- ws: One representative versities, one of teachers of normal schools, one of teachers and special schools, one of the press and scientific academies and societies, two of farmers, two of commerce, one of industries, two of workingmen, two the good fortune to be in Poland in May it would be only right for him to attend mass there on the 30th. For the American Memorial day is observed with & solemn high requiem mass America’s war dead, few of whom knew that they were fighting also for the freedom of Poland. Basis of Poland'’s Attitude. ‘Why all this touching friendliness for America and Americans? Because, although it has long since repaid in gold, Poland has not forgotten America’s loan,of food in 1920. That was the year that famine seemed a certainty. Then thirty million persons, but recently left to their own devices, gazed hope lessly on their burned fields, where they And then food—not only loaned it but delivered and ted it through the services of Herbert Hoover and his commission. No foreign ruler, not even those of ! have already taken up some of the most ! interesting Latin American _nations. | el A0 of the rural national social and political e Undoubtedly few people in this coun-| fessional gr and one of the|! immediate neighbors, is as well known (Continued on Fourth Page.) Ecuador Moves Ahead Latin- American Country Making Changes of Far-Reaching Importarice to the People Senators in Ecuador. In this way the control of one-half of the Legislature will be shifted from the hands of poli- ticlans to those of technical and pro- fessional men. ‘The new Ecuadorean constitution, which provides for this legislative re- forn now in operation is the thirteenth to be adopted since Ecuador became an independent state in 1830 upon her separation from the Republic of Great Colombia, founded by the liberator Bollvar when Spanish domination ceased in South America. All the g:vlmn Ecuadorean constitutions have n liberal and advanced. As long ago as the middle of the last century the fundamental charter of Ecuador tained precepts which ‘only - recently have been included in those of other can and European nations, Other Reforms Established. Among other outstanding reforms which the new constitution establishes it is interest to note the following: Property right are recognized as “gocial utilities,” which not only afford benefits and rights, but also impose duties and obligatiohs toward ers, thus tending toward the subordination of individual liberty to higher needs of a social character. Ecuadorean women are granted all the liberties and privi- leges of the “stronger sex,” possessing political and civil rights, the right to vote, and being protected by the most advanced legal provisions for “sex equality.” Divorce laws are sanctioned in their most absolute and liberal sense, provision being made for the consent divorce, simply upon petition of the two parties, without formal proceedings of any kind, the sole requisite being that the consent of both be declared before the courts of first, second and third instance. These are but a few of the many important steps in advance that Ecuador is taking in the field of poli- tics and social legislation. In previous articles of this series we We have seen how romantic Peru, the ancient Inca empire, is being converted into one of the strongest Latin Ameri- can states, how aviation is bringing the wings of to Colombia, how pic- turesque Bolivia is developing her mar- veloys mineral resources, how s Uruguay is giving an example of politi- cal stability and orgamization to the world, how in. Cuba two distinct civili- zations, the Latin and the Saxon, are meeting and combining, as in a chemi- cal process, Ecuador geographically is one of the smallest states of South America. It is hard to state exactly her territorial ex- tension, use the boundaries with Colombia and Peru; her 'wOJ’HnCm“ neighbors, have not been settled defi- nitely. The controversy over the boun- dary with Peru especially involves some hundred thousand square miles of ter- ritory. Official Unif States figures credit -the country with an area of ,000 square miles, that of Italy and a little less than that of New co in country. According to unofficial figures, more or less two million people form the population of Ecuador, of which a large centage is of Indian blood or mix ndian and Spanish descent. litical control of the country, however, remains in the hands of the white an of a amall portion of the mestizo popu- con- | effe Be Significant BY MARK SULLIVAN. AT there is a row on about the Supreme Court, everybody knows. Into the subject mat- ter of this row Gov. Roosevelt of New York has thrust a belligerent fist. For this reason the controversy about the court is going to play a large part in the presidential situation in 1932. Any controversy about the Su- preme Court is sufficlently important itself; when coupled with a presidential situation it becomes major politics de- cidedly. Indeed, I add nothing to cur- about the Supreme Court is major politics. It is a question involving national policy on an exalted plane. The heart of the Supreme Court con- troversy is public utilities, and every- body knows that public utilities—in- cluding especially electricity generated from waterpower, valuation and rates —compose a present political issue, both nationally and in many local ramifica- tions. The principal element in it is a line of decisions handed down by the Supreme Court, having to do with the valuation to be placed upon public utilities. This controversy about the Supreme Court is made interesting and also acute by the relation of President Hoover to it The court contains several justices who are much older than the age at which they may retire. to say that Mr. Hoover, if he should be President for eight years, may be called upon to name as many as seven of the nine members of the court. Already, within a little more than a year after his inauguration, he has had occasion to name two. Decision on Utilities. Stated very briefly and very roughly, the Supreme Court as constituted dur- ing four or five years past has handed down a line of decisions about the valu- ation of public utilities and railroads. These valuations, in turn, determine or largely influence the rates which the public utilities may charge the public for service. In members of the court, including the late Chief Justice Taft, have usually taken one line; three dissenting justices —Holmes, Brandeis and Stone—have usually taken another line. rent knowledge when I say this conflict | ¢; It is common | POLITICAL RESULT IS SEEN IN SUPREME COURT FIGHT Issue Based on Utilities Rulings May In Next Presi- dential Election. robability is that the presidential elec- &m of 1932 may be fought on the same issue. Over the issues involved in these two theories, millions of voters will get as excited as men 30 years ago were about the railroad issues or the trust issue. Over these two phrases, Senators —some of them, like Norris of Ne- braska, occasionally described as “livid with rage”—will argue or rant or both, every time a new appointment is made to_the Supreme Court. It seems safe to say already, based on the experience with Chief Justice Hughes, that the Senate as now con- stituted, will never confirm the ap- pointment of a justice of the Supreme Court who is known to hold the “pres- e‘x;; reproduction cost” theory of valua- Meantime a few folks—a very few, indeed—will prefer to keep themselves uninfected by the pervading excite- ment. For such, the remainder of this article is written. ‘This political issue and these theories of valuation are merely one phase of a thing that is very old, indeed, and very productive of political commotion— namely, the changing value of the dollar. Dollar Value Changes. Everybody who is as much as 35 years old knows by experience, and every fairly well read person knows as a matter of history, that the dollar varies in value from time to time. To achieve simplicity, at the expense of exactness, let us say that sometimes the dollar is worth a hundred cents; other times it is worth only 50 cents. For convenience, let us say that some- dollars,” some- %eumple. in 1914, when the Great broke out, the dollar was worth a hundred cents —*“big dollars”; by 1917 it had fallen to 50 cents or less—*“little dollars.” Since about 1919 the dollar has besn in the dirse- Anc an incident and effect of the changing size of the dollar—with vice and virtue these decisions, six | PO The difference between the two lines | 12 of thought is very great—so great that it ought to be easy to put intc words. Actually, however, it is far from easy, because the question involved is ex- tremely complex. Inundertaking to pic- ture for non-legal readers, the differ- ence between the two lines of one is obliged to begin with apology in the nature of estoppel against criti- cism from lawyers. What is here said about the decisions of the Supreme Court must be expressed only in gen- eral phrases conveying broad meanings. ‘The legal refinements, the technical terms which provide the occasion of tens of thousands of words of dissent between the two groups of justices, can- not be explained in an article of lim- ited length designed for popular, non- lexsll md:ers. peaking broadly, the controversy is between two theorics or princi lr::o( valuation. One, which is sustained in the court by a majority of six, is called “present reproduction’ cost”—that is, what it would cost to reproduce the property today. The other theory, held by the three dissenting justices, is is, acutal cost at the time the =~ erty was created. L Hllustration of Difference. ‘The distinction may be illustrated by describing the typical way in whi ?uemons involving valuation come be- ore the court. .In Indiana or New York or Maryland or elsewhere a body of State officials decrees that the rate to be charged the public for service by a public utility—a gas company or an electric company or a telephone com- pany or a street railway —shall be a certain sum. As an example, the State officials decree that a street rail- way company shall charge a fare of 5 cenis and no more. ‘Thereupon the public utility says, in fect: “That rate is too ; 1t do 4 ioes not give us a sufficient profit on the value of our property.” The public utility goes into court. Ultimately the case comes to Washington, before the Supreme Court. The Supreme Court is obliged to pass upon what is a fair valuation of the public utility’s prop- erty. In passing upon what is a fair valuation for one public utility the court must lay down and follow certain E:mclp]es governing the valuation to hpub upon all public utilities, every- where. ‘The majority of six in the court holds —I speak broadly, omitting important qualifications which the court itself is careful to use—“The value of a prop- erty is what it would cost to reproduce it now, as of today.” This is the “pres- ent reproduction cost” theory of valua- tion. The three dissenting justices, on the other hand—Holmes, Brandeis and Stone—hold, in effect: “The value of a property is the amount of money -the ¢ | company actually paid out to build it, assuming they spent the money pru- dently.” This is the “prudent invest- ment cost” theory of valuation. Not a Stark Contrast. Perhaps I should say that the dis- tinction between the position of the two groups of justices is not a stark contrast between these two theories. It Wight be expressed more accurately by saying that the majority lays most em- phasis on “present reproduction cost,” while the dissenting three lay most em- phasis on “prudent investment cost.” Also, there is not space here to re- cite any of the arguments in behalf of the respective theories, arguments which already have filled hundreds of pages of law books and of the Con- gressional Record and of newspapers— and will fill more, It is sufficient to point out that both theories have many strong and sincere adherents, highly placed. Between two positions, held respec- tively by a majority of six justices and a minority of three, there can hardly be a guesw:m of superiority, Two deaths and two appointments of new justices could transfer the sanctity of majority from the present six to the present ree. In any event, between these two g.hrues of three words each, political ttle is ”mf!em rage. They will be- come in a little while slogans, symbols. They or other slogans arising from them will become as potent to cause men's wattles to redden and their back hair to raise, as was “Sixteen-to-One” in 1896 or “free silver” or “greenback” or I ed | Other politically provocative phrases of a generation ago. Issue In New York. Over these two theories of associat lation. The principal natural resources of Ecuador ‘The of weall (Continued 4h Fourth major Tates t_has been ver these con- for Governor of New York will be carried on this Fall. And the spparent called “prudent investment cost”—that his (810,000 & mile is taken as a convenient unit; actually, at all times cost more than $10,000 a mile), Nebraska Appraisal. By about 1897 the doliar was to & hundred cents . In thnwmr the %lfixo'f‘lflem \mmlm to set an offici luation upon railroads within the State—as an incident of fix~ ing rates which it should be fair for the raflroads to ci derstand the whole problem—that & railroad which was built originally in 1870 with 10,000 50-cent dollars could be reproduced in 1897 with 5,000 100- o sl arose the of the pi t controversy and lwl’::': suit which every lawyer knows as Smyth vs. Ames—Smyth being the attorney general of Nebraska. Into this lawsnit and into the controversy galloped Wil~ liam Jennings Bryan, then beginning career as an outstanding antagonist of railroads, public utilities and other corporations. Bryan asked and secured germis;u;lm to act uu: l:;ryer in the roces: 3 resen e le of o l.l, rep! g peop] In this lawsult the railroads said, in effect: “We want to be valued at the number of dollars we actually paid to lay the track, namely, $10,000.” That is, the railroads—at that time—wanted “prudent investment cost.” Bryan and e State of Nebraska said, in effect: “Not s0; you must be valued at as many dollars as it will cost to build the track now, namely, $5,000.” That is, Bryan and all the liberals and radicals wanted at that time “present reproduction cost.” What Bryan Wanted. In other words, Bryan wanted the theory which would at that time, in a period of “big dollars,” give the rail- roads the smallest valuation. The rail- roads wanted the theory give the took the “prudent investment cost" theory because that, in a time of “big dollars,” would enable them to charge the higher rates. In exactly the same spirit of self-interest, Bryan, as well as La Follette and all the other radicals and liberals, took the “present repro- duction cost” theory because that, at that time, would give the railroads the lowest valuation and rates—and woul give Bryan favor with the populace, Which was to Bryan the same thing that mon¢y Was to the railroads. Bryan and the State of For once Bryan and the radicals rals and other volunteer friends of man had no cause to complain of the Supreme Court. The court adopted the “present reproduction cost” theory of valuation. And it is that decision, that precedent, Smyth vs. Ames, is determining the position of the ma- court, as expressed right where it was won., and has taken a nose- the “big dollar” of 1897 hu.boenmeat}:é “little dollar” of the 20s. And by that ‘To them self-interest is side of the g:;sunn.no" T e ot ,un “little dollar” condi- tions, the “prudent investment cost" theory—whic] ty the arden! wanted in 1897—would now give them the lower valuation and the lower rates.’ Consequently the and public utilities now reverse their position; now they take the position that Bryan took in 1897; now they want the "“presen reproduction cost” theory. Conversely, it for the pesiion.that she TalEe: for the lon ces. ul that the phrase * 1t- - should norbe taken in Neither Sees Irony. ‘When one looks at this tro in the ligi g