The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-01-25
RAILROAD NEWS.
American Roads Far From Their
Limit of Growth.
Claimed That Money Is Needed
for Stimulation.
CAN'T TELL HOW MUCH
Railways Say 1t Is Impossible to
BE Definite.
Other Items Of GounroI Tn4or
CAN'T TELL HOW MUCH
Other Items of General Inter.
est in Traffic World.

A new light on the railway ree1ll1-
ton by the New York Times is printed
below:
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 ship
pers' contentious. In Chicago it was
testified by one railway that forty
million dollars of earnings had been
put back into the property. In this
city it was testified that some thirty
five millions of dollars of earnings had
been expended upon the new Pennsyl-
vania terminal. This was in accord
with the formerly approved rule Of
practice by the best roads, dollar
for dividends and a dollar for better
ments." 1t was this principle of plow-
ing 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 principle
the shippers counsel joined issue, tax
ing their cue. it must be admitted,
from certain rulings of the Interstate
commerce commission. These improve
ments made from earnings were re-
garded as grievances, and in them
selves as proof of extortion. It was as
serted as a right that the roads should
reduce their rates by whatever sums of
earnings they have been accustomed to
devote to improvements. Even the
misfortunes Of the railways were i'm
puted to them for fault. For ex-
ample, 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 its 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 prevent their setting
up a. defense of confiscation. And, in
estimating their permissible income the
railways are held by these spokesman
to be entitled to no more than a rea-
sonable income upon the amount Of
their own funds which they have de-
voted to the public use.
These gentlemen seem in some dan
ger of winning a battle and losing a
campaign. 1t is conceivable that they
may prevent an advance in rates, and
come to regret the consequent lack of
vitality in the railways. American rail-
ways 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 certain justice in having the
funds necessary for their growth con-
ITlDuIoQ Dy those whose patronage GI
the railroads is q. source of profit,
rather than by the general public
whose gain from the railways is less
direct. If the railways are held to cap
italize their betterments, and must
borrow the money, interest must be
paid on the money borrowed, and the
rates must be adequate to pay the in
terest and provide a sinking fund for
the punishment of the debt. AS in
terest and sinking fund must come
from earnings, it would seem to come
to the same thing in the end.
Whatever the merit of this argument
on either side, it is plain that a new
light is thrown upon what is thought
to be regulation of rates Heretofore
it has been thought that the function
of government was merely to assure
that rates were reasonable and just,
that is, neither eXtortionate nor Gis-
crin1inatory. toward either persons or
places. If the position assumed on be-
half 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 de-
tail 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 cannot
do it. and that nobody could. How
ever that may be. it is evident that the
success of the contention would estab
lish a new definition of railway regu-
lation, and one not in accord with the
present law.