The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-01-17
THE TRANSPORTATION @ QUESTION.

In diecussing the Mathews bill the
other day wa pointed out that no plan
had got bsea adopted which protected
the people against Oppressive charges
for railway trsnsportasion; that the
common law and prescribing maximum
rates by 1sgisfgsivs -aut, and railroad
commissions had all proved inadsquass.
We also pointed out that the two causes
Of high ratsa are excessive capitalization
and un reasonable expenses in operating
ths roads.
As all msthods thus far tried have
bsen insfii oAoious. the plan OF govern
meat ownsrship and management, and
.he plan Of consolidating all roads into
management, with regulation of
ratss and salaries OF officials by
the government. have been suggested
and have advocates. The consolidation
plan involves Limitation OF income to 8
per cent upon actual and drst oApisali-
cation, and setting aside q sufficient
sum to make necessary Improvements
aud extensions, after paying operating
expenses. The rates are to be such nc
will produce the necessary revenue for
those purposes. and to be equal per mile
in every part Of the nation. Under the
consolidation plan it would make no
difference what ths earnings would be
on a particular branch. the governing
principle being iI making rates 90 that
the syatem aa whole shall yield the
revenue required. Ths reason why the
consolidation plan is better than the
government ownership plan is that it
removes the management from political
control or influence, which might be
serious danger, az the aggregate force
now employed on tho railroads 10 little
short of 1000 900, aud the bulk OF the
employees are voters. 1t is we'll known
4, that men In private employment are
more independent in politics than those
in public employment.
In the matter of capitalization the 70"
cult under both plans would be the same
"a it would be upon the basis OF cost oil
present reproduction OF the properties,
which is q fair rule OF aluation, ana it
would be just to capital. Present CAPT.
talization lie certainly double the aggre-
gate valusa of the properties, measured
by the cost OF reproduction. That is all
| a mans house 10 worth, or any other
property that is taken for public use or
is destroyed, and which can practie-
aoly be reproduced. Thsrs would be
some who would lose on actual invest
msnt. bat it would be their misfortune.
Because one has made an unfortunate
venture in railroad stocks or bonds there
id no reason why the public should
make up the loss any more than il the
venture had bssn made in other prop
erty. II, under this rule, capitalization
ia reduced to one-half. say to IS. 00O,-
900 000, instead OF 10000, 900 900, and
the intsres. or dividends is tixsd at 3;
per cent, there would be saving at
least OF $3.50, 0o0, 900 annually to the PEG.
pie. Three per cent is enough on per-
/ petual Investment when it ia practically
assured by the government, for in fixing
rates thsre is an implied pledge that
they shall be sufficient to produce such
an income.
The reduction of expensea of operating
would be the same under both plans. t.
20 into minute details to show whsre
expenses could be curtsiled would be
tedious to the readers, but the mention
of few items will givs soma idea of the
immense economies that would result.
There are ak hundred railroad presi.
dsn.s who receive salaries which aggre-
gate from nine to eleven million dollars.
This item Of expense under either Of the
plans proposed Gould bs reduced to
10000 for that il enough for a cabinet
officer OR railroad president, however
long tho system. for he would have no
worry about paying interest and divi-
dends, nor any racking OF brains in de-
vising how to outwit competitors or to
get the largest possible earnings.
Tbs general mansgera could bs 70.
ducsd one half an the division superin.
tendents, by enlarging their divisions.
ons-fourth at least, it bsing understood
that the management would be less
complicated than it ia under multiform
ownership. The number OF chat en-
ginsers could be reduced. The salaries
and fees OF attorneys would be immense
ly less. as much OF their work il done
10 connection with contest, with rival
roads.
The whole traffic department would
be- dispensed with, snd IL ia ona OF the
most expensive in sailroad business.
The force in the auditors office coIld be
reduced ons-half ~ more, for very
large part OF the work ia in keeping &C.
counte and making division OF earnings
between the roads which participate in
through traffic. Thare would be none
employed in keeping accounts of tie
arrival snd departure OF forsigu cars
and Of wheelAgs. Traffic associations.
both passenger and freight, would hava
no occupation, and thay are oostly in i.
stitwtione.
In cities of moderate siss shere vonld
mead be but ons freight and ons ticket
ofiag vhors there are now many, and
sha VII ,ls troop of general agents and
freight aud passenger solicitors could go
inso ether busiIesB.
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