The Washington herald., 1907-10-20
New DeveIOpmsnt in Federal Control.


In the report on rates and rate-making
presented 20 the National Association Of
Railway Commissioners, at their recent
meeting here, it was pointed out that
such reductions as had been made in
railway charges, by public authority, had
been effected by State commissions, and
that no general reduction had been or
dered by the Interstate Commerce Com
mission. If this was intended as a criu-
cism Of the Federal commission, It is
somewhat beside the mark. for the COM
mission has no authority to order a gen.
eral rate reduction except upon complaint
and hearing as 70 the reasonableness of
the rate. The view of the State commits
sioners. however, reflects the exagger-
ated popular impression that the chief
function Of government regulation Of rail-
ways is TO reduce rates Yet. so far as
the Federal commission is concerned,
power to regulate rates by no means rep
resents the whole power OF control over
the railways. Hardly less important is
its authority TO prescribe and supervise
the accounts of the roads, with a view to
securing uniformity, accuracy, and hon
esty in railway reports.
Prof Henry c. Adams, statistician Of
the commission, pointed out the signih-
canoe OF government supervision Of rail-
way accounts in an interesting talk the
other evening TO the local association of
government accountants. II amounts to
great deal more than merely the stand
ardization of accounting methods Il is
an entering wedge, in fact, to that ad-
ministrative supervision Of the railroads
which Commissioner Prouty said. in his
paper before the American Bar Associa-
ton, would be the next step taken by
the commission. In its order promulgating
the rules for the keeping Of railway ac-
counts the commission holds the princi-
pal accounting officer Of each railroad
personally responsible for the correct
application of the rules. The effect
Of this is to make the railroad ac-
countant practically a representative Of
the government in the Office of every
railway company Under this arrange
ment it VIII be difficult, If not impos-
sible, and I'm any event. dangerous, TO
conceal any improper item Of revenue, or
expenditure. Rebating and all forms Of
rate discrimination. it is expected, wifi
become extinct when evidence Of it is
bound to appear in accounts kept un-
der the commissions rules In short.
supervision Of railway accounts will be
an effective check upon the use of funds
for any improper purpose, and when it is
carried still further. to supervision of
balance sheets, so that they win show
precisely what the assets and liabilities
Of railroad are, it is hoped TO make
such an episode as the. looting of the
Alton impracticable for the future.
The Hepburn act gave the commission
control over railway accounts for the
purpose Of placing the public in a posi-
tion TO obtain the facts concerning rail-
way enterprises. 1t was hoped, as the
President said In his Indianapolis speech,
Ito secure as complete publicity In the
affairs of railroads Pas now obtains with
regard to national banks" But the su-
/ pervision Of railway accounts, as Prof.
Adams shows Is ukely to have an in
fiuence over She uauagement Of com
mon carriers that could hardly have been
attained otherwise short Of actual govern
ment Operatica. The ADVENT Of the Fed
eral commission into this new field Of