New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-06-15
FEDERAL PARTNERSHIP
II. r. PRESIDENTS PLAN
Belicres 1t Ultimate ISOLATION of DIFF
fcult Railroad Problem.

! dent of q large Western railroad corporation. to
/ whom Tribune reporter talked in this city yes
! terday He has broached his idea to other lead
| ing railroad men. and It has been seriously dis
! cussed by them. This goes to show how ear
nestly the heads of these great corporations are
hguIlng on some settlement of the differences
/ between them and the people which the rail-
! road man calls Crude and barbaric conflicts"
/ Perhaps something OF this kind is what Mr..
/ Hill. of the Great Northern had in his mind -
said the railroad man, when he said that ult-
| mately the government would have to lend its
/ credlt TO the railroads. It is beyond dispute
| that governments have the right to fix rates of
| tariff but the situation has worked out so now
| investors are unwilling to risk their money when
/ the government fixes the tariffs and takes no
share of the responsibility. You would not think
! 1t right for the customers of a grocery store TO
! demand the right to fix the prices, they should
! pay for groceries. That IS private ENTERPRISE
| and the railroads i'm sense public enter
| prises, it may be said; but If the railroads are
! half private and half public enterprises should
! not the responsibility he shared by the people
| through the government with the stockholders
! of the railroads.
! OPPOSED TO GOVERNMENT OWNERSHIP.
! The railroad official said he was much op-
| posed TO government ownership and then added;
/ am more and more inclined to the convic-
! ton that the ultimate solution of the railroad
! problems of this country will be reached
through some kind of partnership between Sc
| curity holders and the government under which
| the government will guarantee a fixed return
on certain valuations allowing the stockholders
! to retain all the net income up to a certain
! point (say per cent, by way of illustration
| and require them to divide with the government
the surplus, some established basis
"Of course. it might be said that the govern
ments might fix the rates so low that there
would he no surplus but this could be obvated.
/ as It has been in the contracts of the city
/ Of Chicago with its traction companies. that is,
the city has the right to fix the fares low
! It likes. but when II comes to figuring up the
! surplus ii must ne figured ON the basis of the
i old fare.
! SURPLUS FOR PUBLIC WORKS
| The governments part Of the surplus could
! 10 devoted to public works; for example, the
| Panama Canal In addition to the solution Of
! the street railway tangle In Chicago by profit
/ sharing contract with the city. the Grand Trunk
! Railway Company. in Canada, has some such
! ARRANGEMENT with the Canadian government in
I connection with new construction. For instance
! the Canadian government has guaranteed nrst
+ mortgage 3 per cent bonds for a. per cent of the
2 cost of construction Of the extension from Win
:
cent bonds arc financed 10y the Grand Trunk
/ Railway Company All of the capital stock is
owned by the Grand Trunk under agreement
/ always TO retain control of the stock
/ "Of course such a solution as suggest would
/ involve government representatives sitting IN
our boards as directors. but would 1t not be bet
( ter to have them inside and friendly, rather
! than outside and hostile?
III private investors are TO he continually sub
tected to the menace of reductions in rates. or
! other limitations as to what return they are to
/ receive on their investments, how are the roads
/ 10 get fresh money for improvements 70 say
/ nothing of new construction?
we will soon have one hundred million peO-
! pie il, this country and their necessities must
i tc taken care Of The people will insist on this,
! but we can't make h:icks without straw. and
! the question then is How most quickly
! and smoothly adjust theories of regulation
/ to the machinery of government?
/ RAILROAD CONFLICTS BARBARIC.
! I'VE seem to have pretty we'll behind
| bates. rate wars. labor conflicts etc. which
! fected crude and barbaric conditions. Can
! not also get rid of these crude and barbarjc
! conflicts between the railroads. on the one hand.
! and the federal and state authorities on the
| other so that they may work together instead
! of against each other? Each generation has its
| own problems to settle; perhaps this particular
| problem is the responsibility and privilege Of
| this generation and not cause of discourage
| nent"
Financiers and bankers in general not
! inclined to discuss Mr. Hrs suggestion that
! railroads would have to fall back on the credi.
| of the government. and that might mean gov
| ernment ownership. member of a well known
| banking house said
Il suppose what Mr.. Hill meant that il
| the government continued the 1t had
! started that Is. II nothing done to restor.
! public confidence and the people continued 10
| think that the government was going 10 make it
| hot for tho railroads. the latter could get
more credit The people will demand proper
| service and In that the government which
! was responsible for the lack of confidence would
| have to step in and assist the railroads In all
| except one case which l have i'm mind tho
money the railroads now seeking Is needed
| for actual improvements We in Wall Street d,
! not realize sometimes how rapidly the country
has grown in the West. and the roads have got
! to have money To meet these conditions
| Henry Clews. the banker. usual, opt-
| mistic and expressed the belief that the rail-
| roads would not have to seek aid of the govern
| ment He said
| Il think that part of Mr.. Hills remarks s
| nonsense The railroads going he able to
| take care of themselves without being thrust
! on the government. suggested by Mr.. Hill.
So long as our vast resources hold out and
constantly being developed by the energy of the
| American people there is no danger.
eff there should be any possibility of
! sources giving out and the energy of the people
| being impaired, then such a condition Mr..
Hill prognosticates would be likely. In the
mean time the railroads safe from being
owned by the government. All the government