The Washington times., 1908-05-10
Railroads Seize Slack Period
For Fight Upon Rate Regulation
Tariffs That Are RernGneratve in Active Times
Yield No~Proflt- Government to Have
Hard Time Proving It's Case

Il is now practically certain that the
allied railroad interests OF the country.
after waiting long and patiently. are
making final preparations for the great,
determinatlve contest ID fix the iimita-
tions OF the power Of Government CON
trol.
If possible they propose 10 secure
court decisions which viii put an end
/ TO the Government professions 10 the
power or rate-making II they fan OF
/ this they viii aim at least 10 ger that
power SO limited as 40 make it met
fective.
The railroad managers and nnanciers
realized. when they were highly pros
porous. dividends large. and SURPRISES
growing by leaps and bounds. that II
vas NJ time 10 so 10 court with their
fight against the WhCle proposition CT
Government control. They must show.
whenever they make that night thar Gov
ernment control and rate-nlaking men
ace their properties With such uncer-
tainty about their revenues. and threat
en- the possibility II cOnhscati9n TO such
grave extent, that 20 leave that power
in the Government places their entire
and vast Investment in a precarIous sit
uation.
Slack Period Time to Fight.
The time for such a showing as this
obviously is a time OF slack business,
limited revenue, and close operation.
This for the reason that the general
principle OF the Government right and
power 10 take a hand in rate-making is
not now open TO serious and effective
question. unless Indirectly. The courts
viii not deny the right OF the Govern
meut 20 tx rate; but they VIII Insist
that the rate must be fair. reasonable
and romunerative. There IS a wide range
OF possible definition and application OF
those words. For example, IL is well
known that among the vast number Of
items which go 20 make UP the revenue
OF railroad. the question Of whether
single specific rate IS compensatory
practically can not be answered
When a road is offered all the tonnage
Il can handle. and gets IL in solid train
loads 10 be hauled long distances, A
very, low rate might be found. when ap-
piled 20 the entire volume Of business.
10 be compensatory and even highly
profitable But II the volume OF BUSH
ness should be greatly reduced IN a
time OF depression, then the same rate.
applied 10 the lesseucd volume. might
be found By the court 20 be unremunefa-
tive. and even conhscatory.
Must Make Money All Time.
Now. II is pointed out by the railroIo
people. railroad rates must De colECen-
satory in bad times as wei as good.
There are many rates which. II attacked
a year ago On the ground that th y
were not high enough TO be compeE- a.
toy. would have been sustained on Jbs
general ground that the roads involved
were in fact profitable and prosperous.
Yet the same rates. attacked today, in
a time when the volume Of trafdc IS
vastly less. might be held by the sane
court 10 be unreasonab.y Low.
Penalty Public Pays.
II is part OF the penalty which the
public pays for it's Hghz 10 supervise
these rates OF public service corpora
tIons. that Ct must, on the other hand.
provide enough revenue. in bad times as
well as good. 90 keep the properties
going.
That is the reason & - explained,
why the present Is the euspiciGCs time
for railroads 10 undertake Increases OF
rates The road which IS not earning
its dividend has a good prima facie
case or needing more revenue II IL
raises It's rates in order 10 get that
revenue an IS then stopped by in
junction from enforcing the new rate.
II can make q showing before the court
tha- il needs the money. On tae pres
ant x-ol1irne Of traffic and In pre- ent
business situation. many a road could
sustain the increased rates
once litigated 10 the conclusion that
it was fair and reasonable, an increased