The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1910-10-05
Railway Regulation.

tne railways presentation OF their
case for the advance OF their rates,
there was much that was novel in the
shippers contention. In Chicago II
was testified by one railway that
forty million dollars OF earnings had
been put back into the property. In
this city II was testified that some
thirty-five millions OF dollars Of earn
ings had been expended upon the
new Pennsylvania terminal. This was
In accord with the formerly approx
ed rule OF practice by the best roads
IA dollar for dividends and a dol
lar for betterments." 1t was this
principal of plowing the earnings
into the property which has kept
down the capitalization of American,
railways. at the same time that their
rates have not risen with other prices
for services and goods.
On this formerly approved princi-
pie the shippers council Joined issue
taking thir cue. 1t must be admitted,
from certain rulings Of the Inter-
State Commerce Commission. These
improvements made from earnings
were regarded as grievances, and In
themselves as proof OF extortion. II
was asserted as a right that the roads
should reduce their rates by what
ever sums of earnings they have been
accustomed TO devote to improve
ments. Even the misfortunes of the
railways were imputed to them for
n fault For example. it was alleged
that because one road had lost large
sums by equipment frauds. and had
prospered nevertheless. therefore 1t
had overcharged by tho amount Il
had lost by embezzlement, and
should be held TO reduce It's rates by
tho amount OF It's losses. The broad
position OF those assuming to act for
the general public Is that the rail-
ways should be allowed to charge no
more than would just prevent their
setting up a defense OF conflscation.
and. In estimating their permissible
income the railways are held by these
spokesmen TO be entitled to no more
than a reasonable income upon the
amount OF their own funds which
they have devoted to the public use.
These gentlemen seem In some
danger Of winning battle and losing
a campaign. II Is conceivable that
they may prevent an advance I'm
rates. and come to regret the conse-
auent lack OF vitality In the rail-
wrvs American railways are far
firm having attained their growth.
They are In need not only Of income
enough To sustain their life. but TO
stimulate their growth. There is a
certain justice In having the funds
necessary for their growth contribut-
ed by those whose patronage Of the
railroads Is source of profit. rather
than by the general public whose
gain from the railway Is less direct.
III the railways are held to capitalize
their betterments. and must borrow
money. interest must be paid on the
money borrowed. and the rates must
be- adequate TO pay the interest and
provide a sinking fund for the ex-
tinsuishment Of the debt. AS inter-
est must come from earnings, II
would seem to come to the same
thing In the end.
Whatever the merit of this argu-
ment on either side. II Is plain that
a new light Is thrown upon what Is
thought TO be regulation OF rates.
Heretofore II has been thought that
the function of government was
merely to assure that rates were
reasonable and just. that Is. neither
extortionate nor discriminatory, to-
ward either persons or places. III the
position assumed on behalf OF the
shippers Is sustained there is no de-
tail OF the management Of the rail
ways 20 trivial for examination and
railways TO sustain their claim that
they need more money. They cannot
justify on totals. but must prove in
detail just how much they want for
terminals. just how much they want
for wages, how much for interest.
and so on indefinitely.
The railways plead that they can
not DO Il. and that nobody could.
However that may he. IL Is evident
that the success of the contention
would establish new definition OF
railway regulation, and one not In
accord with the present law.-New
York Times Editorial.