The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-07-15
RAILROADS GIVE
THEIR RATE IDEAS
Presentation of Railway Side of
Case by Newcomb to
Senators.

| 0eudtOIS.
Chicago, July 15.-The railroad side
presented, summed up for the roads, in
the following article sent out by the
Railway News Bureau of Chicago:
At the request of Senator Foraker,
of the senate committee on interstate
commerce, H. r. Newcomb, lawyer,
peared as a witness before the commit
tee during it's recent hearings, has en-
bodied into report the results of his
investigation OF government regulation
of railways in foreign countries. This
report takes the form Of an append to
the volumes of the hearings before the
committee. Mr.. Newcombe has made
careful investigation into railway con-
ditions in both the United Kingdom and
other foreign countries, so that his re-
port will be Of especial value.
The most exhaustive investigation Of
railways and railway conditions ever
made was that of the italian commission
framing report to aid the government
rim determi ming a plan for the control
of the Italian railways. The work ex
tended over nearly three years, and the
report, In seven volumes, covers every
phase of governmental regulation, own
ership and operation Of railways.
'The remarkably varied relations be-
tween the state and the railroads that
have prevailed in Italy, says Mr.. New
comb in his report, "bive especial
weight to its conclusions, which are
summarized by President Hadley of
Yale as follows:
"The state is more apt to tax indus
try than to foster it,; and when it at
tempts to tax industry it is even less
responsible than a private company.
Second, state management is more cost
ly than private management, and
great deal of capital is thus wasted.
, Third, political Considerations are
ment in a way which is disastrous to
legitimate business and demoralizing to
,, politics.
Maximum Rates Unimportant.
In dealing with, the question of rail-
,, way regulation in the United Kingdom,
:, Mr.. Newcomb's Investigations lead him
to the conclusion that maximum rates
, have never been of any practical i'm
portance, and that it is difficult to say
how far the English system has sue
! ceeded in avoiding determinations. Re-
4 mitted, and while nominally open to all
if the specified conditions are full
= filled, they afford opportunities to very
= large shippers in competition with
Y smaller shippers.
In answering the question whether
the legislation in force in England since
), Newcomb quotes W. M. Acworth, the
q leading English writer and lecturer on
y railway problems, as follows:
1.-THE legislation of the years from
1891 to 1894 has done much to prevent
any natural and gradual lowering Of
the rates. A railway company is still
| + 70 ho
to raise. A manager may desire to low
\ er a rate, hoping thereby not only tc
, benefit trade, but also, by increasing
. largely the volume Of traffic, to in
crease his own net earnings. But it il
only a hope: A prudent manager
closely allied to certainty, lower a
rate when he must face a lawsuit be
fore he can put it back again.
1.-The truth of this conclusion,V say!
Mr.. Newcomb, els clearly shown by
official statistics. In the ten years pre-
United Kingdom, the average freigh
i. rates per ton decreased 141a per cent
n In the decade following the decrease
II was less than 215 per cent?
A. A. MIR. Newcomb's Conclusions.
After dealing with each country il
le turn, the report embodies the conclu
IN conditions. Mr.. Newcomb says:
ct Gin tracing briefly government COZ
70 troll and ownership in the leading cour
ne tries of Europe, certain conclusion
n seem unavoidable.
"FirstZ Stringent control, as in tn
al United Kingdom and France, tends t
a Eprevent reduction Of rates. Without tn
~ ability to raise rates to their former leve
bo experiments in lowering rates in order
~, build up traffic are not likely to be freel
81 made.
Wv "Second-A comparison of freight rate
~ on the railroads of Europe operated {
W. controlled by the state, with those
~ force in the United States. shows that tn
10 latter have enjoyed not only a much lowe
-, level Of rates, but a much more rapid de
- cline Low rates on the continent, as
~ the case of Russia, were accompanied +
20 rapidly diminished net earnings per mi
~ and an absence Of profits.
,al "Third-The higher charges of Europes
~ ~ railways have not, however, resulted
10 profits. Where private management pr
n0 walls, decreases in rates go hand In har
- Il greater financial success on the pa
~, of the railroad, but under state contrt
&c political, rather than economic necessi
~ frequently reduces rates, thus beneftt1
a.: Individual interests at the expense Of Il
OIL general body Of taxpayers.
Private Ownership.
'Fourth-Private ownership and oper
ca ton without excessive legislative restri
M lions appear to be necessary In order
ia obtain the utmost economy in railw;
pv management. This conclusion is su
Sc ported by the results of the exhaust
v investigation made by the Italian ra1lw;
at commission and is admitted by the gre
majority Of students of railway policy.
to "Fifth-The greatest danger, perhal
ty from state participation In ratemaki
no is the substitution Of political for &c
W nomic considerations in the determinati
y" of charges. Low freight charges on
u~ ternational traffic under all forms
- management are frequently guaranteed
"a competition between rival routes. B
M3 when the national desire to foster expo
tx trade is added, the incentive to increa
iiaaSa shipments abroad becomes too stro
and, frequently results in the, establis
t ment of unremunerative rates that CO
! stitute a burden on internal trait
4 Under general state ownership compe
~ ton as a means of determining rates
81 abrogated. With the withdrawal Of CO
a. petition as a force in determining rat
p, political pressure on the part of cert;
E& classes becomes too strong an inf1uen