The objections to the use of any valuation for rate-making which have been cited are valid, and should be convincing, but they are insignificant by the side of the fundamental objection that, as Mr. Riggs says, "as a business proposition, the value of any property depends on its earnings," while those who would thus utilize a valuation are attempting to reverse the fact and make earnings depend on the value. Such a reversal is impossible. Ascertain real value and you have a consequence of earnings, past, present, and prospective, nothing else; use this as a basis for a rate schedule and you get, as a mathematical result, the present rates. The only way to derive any other result from this method would be to use as the basis some figure other than the real value, a method which would only be resorted to through moral turpitude or intellectual incapacity. One might almost assume that Mr. Riggs knows this, for he says: "Value is given to a property, either by reason of the fact that it is an instrument for earning profit, or that it does earn profit or gives promise of profit." The substance of Mr. Riggs' argument on capitalization control is that American railways are not often over-capitalized, but such evils do obtain in other industries, and therefore railway issues of capital securities ought to be restricted.[39] Unfortunately, he gives no clue to the methods he would have applied, nor as to how far he would go in interference with the normal action and interaction of commercial forces in determining what securities can and ought to be issued. Railways are not over-capitalized. Table 9, a comparison of official valuations and capitalization, originally compiled by Mr. Slason Thompson, is instructive. TABLE 9. ═════════════╤═════╤═══════════════════════╤════════════════════ State. │Year.│Valuation by commission│State proportion of │ │ or tax board. │ capitalization. ─────────────┼─────┼───────────────────────┼──────────────────── Minnesota │1907 │ $411,735,194│ $334,979,691 South Dakota │1909 │ 106,494,503│ 108,911,000 Wisconsin │1909 │ 284,066,000│ 249,299,060 Texas │1909 │ 413,000,000│ 412,465,743 Washington │1908 │ 186,007,490│ 153,493,940 ─────────────┼─────┼───────────────────────┼──────────────────── Total │ │ $1,401,303,187│ $1,259,049,434 ─────────────┴─────┴───────────────────────┴──────────────────── ──────────────────────────────────────────────────────────────── Excess of total valuation over total capitalization $142,253,753 ════════════════════════════════════════════════════════════════