Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-10-24
THE FIXING OF RATES
ALLEGED MODIFICATION OF THE
PRESIDENTS ATTITUDE.
Mr.. Spencer, Head Of the Southern
Railway, Comments on the Re-
cent Raleigh Speech.

Samuel Spencer, president of the South
ern railway, made a brief stop in Washing
ton last night on his way south. In ex-
pressing his views of President Roosevelt
recent speech railroad legislation at
Raleigh. N c.. Mr.. Spencer, who has taken
prominent part in representing the rail-
roads attitude on rate Legislation, said:
THE Presidents speech indicates that he
Is not disposed now to Insist that the
power over rates which he favors should
be exercised by the interstate commerce
commission, but by AN administrative
body Again in the Raleigh speech the
President advocates that the administra-
tive body shall have power after complaint
and hearing TO fix only maximum rate,
not an absolute rate, unalterable thereafter
by the carrier as provided for in the
Esch-Townsend bill. This apparently fol.
| lows the opinion of the Attorney General
| of May D. in which 1t was held THAT Con-
gress could consututionally empower a
| commission to fix maximum rates which 1t
| regards just and reasonable.
A Vital Difference.
"The difference between these two posi-
| lions is vital. To fix absolute rates I'M
alterable by the carrier in many cases Is
| to determine definitely and arbitrarily by
| governmental tribunal the relative advan-
| tages of competing cities or regions. To
prescribe maximum rates only leaves the
| carrier free to make reductions and may,
and generally will. result in adjustments
| which will bring down whole tiers of rates,
| leaving the relation of rates as they were
| and entailing enormous losses to the rail-
| ways.
| For instance, an adjustment of rates to
| southeastern territory that would be more
favorable to Cincinnati. Chicago and st.
| Louis as compared with the rates from the
| Atlantic seaboard cities. could not be sue
| cessfully made by a governmental agency
| limited to the making Of maximum rates
| for the reason that, If 1t should be ordered
} that the rates from the middle western
cities should not exceed certain maximum,
! the railways from the eastern cities or the
water lines would still be free to lower
| their rates and they would be forced 10 do
| so in order to retain their business and
| to preserve the business OF the cities de-
| pending on them for transportation faciil-
| ties.
The result would be that substantially the
| same relative adjustment of rates that had
existed before the Issuance of the oro9
would be restored, and no one would nave
received any substantial or lasting benefit.
| 1t is true that the shippers from poth sec
lions would have somewh hat lower rates but
! they would be obtained at the price OF suc9
| inroads into the revenues of the carriers
| that deterioration in service might result.
An Important Consideration.
The Importance of this consideration, not
| only to the railways. but the shippers as
well, can be appreciated at this time, when
| there is a car shortage all over the country,
| with freight congestion at many points. De-
| spite the fact that the railways have been
| investing largely in extensions and IN
| curing enormous obligations for the pur-
| pose their facilities are not equal for the
| traffic demands upon them. These increased
| expenditures still continue, and from the
present outlook must continue for a long
time This will require large additional
sums of money, which the railroads can OBJ
| tain only through earnings and the sale or
new securities. Governmental action that
would reduce earnings would impair both
of these resources and would render still
wore difficult the task of meeting the re-
quirements of the public.
The speech at Raleigh indicates also that
the President favors giving to the railways
more leeway than he formerly suggested by
not having the rate take effect immediate
ly' but in some reasonable time. rea-
sonable time for a rate may mean time for
a review of it by judicial and not admins
trative authority If the rights of property
are found to be involved. -.
THE Esch-Townsend bill. as passed by
the House of Representatives last winter,
would not only have subjected the roads to
punishment before judicial conviction, but
| the character OF judicial review proposed
| was such that they would not have had the
benefit of equitable trial even after convic-
ton for the courts would have been pre-
cluded from considering the reasonableness
of the rate complained Of and the rate or
dered by the commission would have been
set aside onl. il 1t had been found to be
confscatory. 1t Is important, therefore. IL
legislation is to be enacted that will insure
to the roads q square DEAL that the OPP
portunity for prompt and effective review
of the whole case by the courts should be
provided for"