The citizen. (Honesdale, Pa.) 1908-1914, 1910-09-28
RAILWAY REGULATION.
Certain Rulings of the Interstate
Commerce Commission.


Commerce Commission.
Although there was little novelty
in the railways presentation of their
case for the advance of their rates,
there was much that was novel in
the shippers contentious. In Chi
cago it was testified by one railway
that forty million dollars of earn
ings had been put back into the
property. In this city it was testi-
fed that some thirty-five millions
of dollars of earnings had been ex-
pended upon the new Pennsylvania
terminal. This was in accord with
the formerly approved rule of prac-
tice by the roads-"a dollar for
dividends and a dollar for better
ments." 1t was this principle of
blowing the earnings back 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 counsel Joined is
sue, taking their cue, it must be
admitted, from certain rulings of
the Interstate Commerce Commits
sion. These improvements made
from earnings were regarded as
grievances, and in themselves as
proof of eXtortion. 1t was asserted
as a right that the roads should re-
duce their rates by whatever sums
of earnings they have been acCus-
toned to devote to Improvements.
Even the misfortunes of the rail-
ways were imputed to them for a
| fault. For example, it was alleged
| that because one road had lost large
! sums by equipment frauds, and had
prospered nevertheless therefore it
| had overcharged by the amount it
| had lost by embezzlement, and
| should be held to reduce it's rates
! by the amount of it's losses. The
| broad position of those assuming to
act for the general public is that
| the railways should be allowed to
| charge no more than would just pre-
vent their setting up a defense of
| confiscation. And, in estimating
their permissible income the rail-
ways are held by these spokesman
! 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 a battle and los
| ing a campaign. 1t is conceivable
that they may prevent an advance
! in rates, and come to regret the con-
! sequent lack of vitality in the rail-
ways. American railways are far
! from having attained their growth.
! They are in need not only of income
enough to sustain their life, but to
stimulate their growth. There is
| in in haN viii 9
necessary for their growth cOntribut-
| ed by those whose patronage OF the
railroads is a source of profit, rath-
er than by the general public whose
! gain from the railways is less di-
rect. If the railways are held to
capitalize their betterments, and
must borrow the money, interest
must be paid on the money borrow
! ed, and the rates must be adequate
! to pay the interest and provide a
sinking fund for the eXtinguishment
| of the debt. AS interest and sink
! ing fund must come from earnings,
| it would seem to come to the same
thing in the end.
Whatever the merit of this argu-
ment on either side, it is plain that
a new light is thrown upon what is
I thought to be regulation of rates,
| Heretofore it has been thought that
! the function of government was
| merely to assure that rates were rea-
sonable and just, that is, neither ex-
tortionate nor discriminatory, to-
ward either persons or places. II
| the position assumed on behalf of
! the shippers is sustained there is
no detail of the management of the
railways too trivial for examination
and control. 1t is not enough for
| the 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 it, and that nobody could.
However that may be, it 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.