Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1889-10-01
OUR RAILROADS.
Pithy Report from The United
States Commissioners.
Too Many Niles Of Railroad fof Pfessn
Needs Of franc.
He Says the 6ubsidized Roads cannot
Discharge Obligations to the Cover a.
msnt on Maturity.


| WAsHfsGros, Sept. 30.
| in his annual report. Horace A. TAYLOR
railroad commissioner, says | believe in
many sections Of the west. conspieuousiy
in Iowa and Kansas, the mileage Of railroads
il greatly in excess of the legitimate needs OF
| the carrying trade. II this 10 true, mAGy
Investments in railroad properties there must
fail to yield remunerafive dividends or the
schedule rates are fixed so high as TO prove
| ruinuousiy burdenseme to traffic. People
have encouraged railroad construction
wherever it could be secured, regardless of
existing necessities or future con plications
| The railroad companies are unduly eager to
control trade by building new lines AMI
feeders for established ones where the vol
! ume of traffic is not sufficient to support
| them.
Relief can only come through the increased
settlement, stimulating business, developing
the natural resources. Interests of railroads
and public suffer from railroad managers de-
voting energies too largely to securing trade
from competing centres, and do no suff
ciently encourage the development of local
traffic. Questions involved are serious and
important. am sf the opinion the time has
arrived FOX some positive legislation estab-
fishing sinking fund and providing for pay
ment certain Ler cent. net earnings of roads
into It, will not realize the payment of accru-
| ing interest and the final extinguishment of
debts due the government. Should funding
bill be presented Congress it should be care
! fully guarded 30 as 10 protect fully the in
terests of the government, and impose no
personal obligations or undue hardships up
on railroad companies. There should be All
extension of time and reduction in rate of
interest.
| am not thoroughly convinced that the
end sought will be best attained by the pas
sage of funding bill providing for regular
fixed payments. Successive crop failures OF
years business depression might render the
companies urabe to meet the obligations
Should Congress impose arbitrary conditions
in regard to fixed payments as might render
the compliance upon the part of the COM
panies practically impossible, it might be
nee ssary for the government TO pay off all
liens, priJr to its own, and take possession of
the roads, condt on that is certainly desir-
able to avoid have come to the conclu
sion that the most feasible plan 10 be adopted
is to grant reasonable extension of time,
with reduced rate of interest. and to re-
quire the payment of a certain per cent. of
the gross earnings of the roads, to be sp-
piled in the liquidation of their Indebtedness
to the government To require payments
made from per centage of the gross, rather
than the net earnings of the roads, will avoid
macy seriou. complications in determining
the exact amounts to be paid All tie rail
road companies Indebted to the government,
own or lease and operate various lines and
branches in addition to those subsidized, and
the government has no claim upon any part
of the earnings Of these non-snbsidized
lines
The traffic may be diverted either naturally
or with purpose, from aided TO non aided
lines and various charges in the expense sc
counts may he entered up as against aided
portions of the road that rightfull. should be
chargsble to uon-aded portions. L. il sp
paf ent beyond controversy that subsidized
roads cannot discharge their obligations to
the government at maturity. The existing
laws are wholly inadequate to secure the
pa meut of ebts due and shortly to become
due, 1t is imperative that Congress shoul1
provide some measure of relief. Ii would
be wise TO pass an act requiring that the
earnings from all government transportation
by subsidized companies on all lines operated
by them, aided or non. aided, be applied to
the payment of any interest or principal due.
Prohibiting the payment of any dividends by
either sub .idized companies unless such COM
psny shall have paid all interest on bonded
dc tt having lien prior to the government,
and all matured Indebtedness and interest
then due. and of such percentage of the gross
earnings of the subsidized lines as would
realize sums sufficient to pay the accruing
.n-erest and raise sinking fund to meet the
p.inc pal OF the debts at maturity. Said
companies should be permitted to refund the
first mortgage bonds under such provisions
as would prevent any increase in the debt,
and allowed priority over the debt to the
United States.