The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1905-11-04
The Battle Of the Railroad Rates

An article with the above caption IN
the last Saturday Evening Post, writ
ten by William r. smythe. the well
known author OF Constructive De-
mocracy. contains some very interest
ing comments upon the futility Of the
plan now before Congress for railroad
freight rate regulation and IL is all
the more noteworthy because neither
Mr.. smythe nor the Post is by any
means blind supporter Of corpora
irons, whatever their nature may be
Mr. Smythe stated the proposition
10 be decided ms being the regulation
Of railroad rates by the Interstate Com
merce Commission subject 20 review
10y Court Of Transportation, and
speaks Of the Each Townsend measure,
designed TO bring abont this result, ar
"telltnle revelation of the pGucity Of
thought and fiabbiness OF conviction
behind the bin 50 unceremoniously
flung at the senate
He goes ON to say In SO far ar
Fsch- Townsendism would be effective
it is unnecessary because IL adds moth
ing to the force OF laws already ON the
statute book and as means Of reach
ing the deeper evils inherent in rail-
road monopoly il would be not only
r,.t,f. t.,,t ...s.nhf .,t.,,y .l,I Jauuar,,,s
Most Of the specific complaints
about railroad abuses is directed to
rebates and determinations II is an
open .ecret that the railroad managers
are themselves sincerely des,rous of
abolishing rebates and determinations
and that the drastic EIkins law was
framed and passed with their sympathy
and support
Mr. Smythe believes that II the Esch
Townsend scheme were adopted il
would lead 70 great political corrup.
ton
III commission appointed by the
President says be, can revise 10000
rates and classifcations and thereby
regulate the earnings Of billions Of dol
lars the control OF that commission
instantly becomes the greatest prize in
American politics Its decisions will
make and umnake the fortunes Of Wall
Street. and. as these decisions are
subject TO review by Court Of Trans
portation. the Court itself would be
come the object for which powerful
AID clashing interests would contend.
n early information ab0nt the condi
ton ot the cotton crop proved nm ir.
resistible temptation 10 interested
parties in Wall Street and Washington,
what sort of "A temptation would be
presented ia connection with this plan
Of regulating railroad ratesY Ii is IN
thinkable that ft-ridden nation
should deliberately open the door to
such sinister possibilities in It's efforts
20 solve the problem OF railroad
monopoly.
But assuming that we are always
10 have wise and honest presidents.
who will always appoint wise and
honest commissions and courts. would
the Esch Townsend scheme then offer a
workable solution Of the problem with
which il deals Would IL guarantee
fair treatment { tho vast capital IN.
volved and reasonable rates 10 the
shipping and travelling publicY
These questions must be answered
in the negative, for even honesty and
wisdom could not achieve such results
unless vested with control of all the
factors entering into the problem. For
example, the taxes paid upon railroad
property represent an important item
which must be taken into account In
calculating the net earnings OF the In.
vestment. The taxes are now do.
termincd 10y forty hve different states
and by thousands Of local subdivisions.
There is no common schedule Of rates,
nor even any common scheme Of valua-
tion. The tax rate Is determined by
local necessities. whereas valuation Is
sometimes based upon gross receipts,
sometimes upon extent Of track and
real and personal property, and some
times upon market value OF securities
issued. In some instances the franchise
itself IL taxed and in others u IL not.
In many states the bonds and stock in
the hands of holders are taxed in
others taxation Ia confined 20 the pro
periy Of the corporation. There IL no
uniformity or permanency. hence no
commission OF court can p,ssibly BE-
honest or wise enough to Hx railroad
rates in = war which shall DO inwicr
70 both the investor and 10 tbs public. :"