The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-06-19

10 check industrial activity by an au-
tomato process, that Of diminished pro-
duction and lessened consumption. be-
fore the question Of increased railway
rates. and the drastic provisions Of the
amended railway bill, came as an add
tional yexaGon.
Problems of Rate Making.
1t is as difficult for Wall Street 70
shake of the influence Of the iniunc-
ton proceeding against the railways.
and the radical provisions Of the amend
ed railway bill, as IL was for Sindbsd
the Sailor 10 divest himself Of the Old
Man Of the Sea. In the speculative d.
vision OF the market one hears the
theory advanced that, with the early
adjournment Of Congress. OF the home
cunning OL MI. -1U4 Gan, Lne railway
&c ls4--.4UL ~. ~ -4-I44.-4s1JsL. - 49,
go J4l1A LdClVI, DHJ, uA4OElulateIyI O44~
.4nus 40 SUCH -7AGiL-eilt 80 LlllS IL Danz1-
.Ls ana NV U5LucuL circles, ana the
.gdtny N tue investment CIV IslOn o. the
.llaIkeL, which was intensified durIns
llIe week, Is n dIIeCL contradiction 70
me IneOTy that me matter can DC
ugnuy cast aside. rOr instance, this
- the time mat the anticipated july
re-nVeStmeut demand should show II
the bond market. DuI IL mas JAILED utter
- 10 maJeTIalze.
How long the market must wait, 10
take the measure Of the new factor
which has entered into the situation, NJ
one can determine This Is wholly nat
urdl. for the practical transfeTence OF
the rate-maklng privilege from the
owners and managers CT the corpora
lions 70 q Federal Commission into
uuCes an unknown quantity into the
equation Of railway administration. IN
~. LII
questions now under discussion are.
How long will Il take the Interstate
Commerce Commission 20 act after the
railway bill becomes q law2 And how
viii the commission determine the deli
cate matter OF adjusting rates between
a weak or overcap italiZed road and a
strong and reasonably capitalized prop
erty, both operating IN competitive ter
ritOry7
For Instance. 20 illustrate the point,
and without prejudice 20 any property,
a basis Of rates which would prove
ample for Union Pacific might seri-
ously cripple Missouri Pacific, and one
which would prove a source Of abUn-
dant revenue TO the New York Central
might drive the Erie into bankruptcy
Yet, II rates are established on a basis
which gives the weaker systems a liv-
ing chance there IS the likelihood Of a
protest from the shippers, and a posi-
blt ten months S-- pension or the rate
by the Commerce Commission, for
shippers associations have already an
nOUnced that a basis Of rates so es-
tablished would make possible the pay
ment Of dividends on watered stock
They hold that rates should be based
upon the actual values Of the transport
ing companies independent OF their nom
inal capitalizations But. again. II rates
are based solely upon basis Of physl-
cal valuations, and one road may charge
more, and another less. between given
points. 20 maintain that element 81
competition" which the Sherman Anti
Trust Act and the Interstate Commerce
Act insist upon. why the road which
has the lower rate viii get the business,
and the other viii have hard time Of
II 10 make both ends meet
The 0vershadowing Influence.
These are but a few Of the matters
which bankers and investors are dis
cUssing in connection with the rail-
way law. They are sufficient 70 fndi-
cate the enormous quantity Of work,
and the great compIeXity and serious
character Of the problems with which
the Interstate Commerce Commission
must deal Until the banker and the
investor can see the outcome more
clearly than now, II seems as though
II would be impossible for the railways
uNLECEAOIIc
capital for their undertakings, and IL
seems idle TO look for any great &C
tiyity or long sustained Improvement
In railway issues
With one great factor, like the rail-
way bill, OyeTshadOWiug all other de-
velopments and influences IN the Sc
curity market, eXertIng also a far
reaching effect on general business, il
really seems unnecessary 10 discuss
other features at any great length.
Continued dulluess is about the hest
thing that the security market can
look for under the circumstances. Il
is dishearteninR, but II is a condition
which facilitates the processes Of ad-
iustment. In this one should not lose
sight of two favorable. elemenJs-one
is that liquidation has already pro-
ceeded very far in the security market
and prices are upon a basis which
makes for stability; ard the other is
that the high cost of labor and mate
rial impelied conservatism upon the
merchant and manufactures. This
element has been nOnspeCulative, and
has proceeded cautiously In cOnse-
QuencR, stocks of merchandise are low
in manufacturers and iobbers'
hands, and this makes for a healthy
and sustained revival in general bust
ness as soon as some Of the clouds
which now obscure the future have
passed away