The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-12-26
Ready to Concede Additional
Power to the /. C. C.
II They Be Granted Right to
Increase the Rates,
CAN'T SERVE TWO MASTERS
Says H. u. Nudge, President of
the Rock Island.
Federal Control May Supersede
That of the States.


Chicago, Dec. ga great addition
to the powers Of the interstate COM
merce commission-author that
body to supervise not only the opera
ton but the financing of the railway
trunk lines of the country-has be-
come imminent.
1t is believed this extension Of power
is a condition for the grant by the
commission Of the freight increase
asked by the roads, although. of
course, only new legislation would
make this possible.
The Tribune has sent inquiries to
the heads of the principal railroads of
the country. The first installment of
answers received indicates fairly
general willingness on the part of the
roads to cede their long held freedom
of financial control to the federal
government.
1t is the first considerable conces-
sion they have made since they ac-
cepted the rate regulation. That,
moreover. was compulsory. This Is
voluntary, and the more notable.
The railroad presidents make no at
tempt to conceal the reason for the
concession. In the last three or four
years there have been passed in sew
eIdl STATES pubic UTILITIES laws, "a dht-
ing local control Of the companies
operation and financing. Adjoining
states have ruled in different ways.
The result Is that the roads operating
in such states have been placed In the
difficult position of meeting both
states orders, giving way before the
directions of the federal interstate
commerce commission, satisfying Gus
toners and emplOyees-and on top of
that meeting the demands OF bond
holders and stockholders.
Railway Chief Explains Reason.
Here is our position" one railroad
man explained. I'm the last ten years
our gross revenue has increased tre-
mendously. Our net revenue has
grown almost nothing. The reason
of course is the steady growth OF ex-
penses. This applies to wages, to fuel.
to equipment.
Each of these increases is due to
causes beyond cur control. There is
almost no chance OF q decrease. hence
only a continued industrial movement
can help us. Any trade recession
would bring disaster, for such an
event cuts down gross revenue much
more than it lowers expense.
This Is not the worst. The greater
part of existing railroad securities
was issued some years ago when the
investing public was satisfied with
low return on good security. We
were able to sell our 3 " and per
cent bonds at par or better. Suppose
we had to refund them now. We
would have to offer 5 per cent. per-
haps more. 1t is only a few years be-
fore the time when we will have to
refund, whether we want to or not.
When that time comes a new expense
will be added-the increase OF per
cent or more to our interest payments
alone.
a~x .v1A - q
is an immediate permission to in
crease gross revenue. whether through
freight or passenger rates. If a con-
dition to that be still closer govern
ment supervision, we must bow to
that 1t is not a matter Of policy. 1t
is one of necessity"
Bankers Are Not Opposed.
1t is also known that farsighted bank
ers are not opposed to the plan Gov
ernment supervision Of financing plans
is looked on as something of a guaran-
tee of security The recent collapse O.
Frisco. New Haven. Rock Island. and
Illinois Central values has not helped
the position of other American stocks
and bonds in foreign markets, and the
bankers are concerned.
There has been no action by congress
to commit it to such a program, but
there have been distinct overtures lat
terly from the administration. notably
the suggestion of government control In
the Alaskan railroads. 1t is surmised
though this is guesswork-that the
extension of the interstate commerce
commissions powers would not be OPP
posed by the White House.
The Tribune asked various railroad
presidents what they thought of "the
suggestion made in connection with the
railroads desire for permission to in
crease freight rates. that the powers of
the Interstate commerce commission be
extended to give the commission SUI
pervision over railroad bond and stock
Issues
Replies by Rail Presidents
Among the early replies received
was one from H. u. Nudge. Of the
Rock Island road. He said: THE rail-
roads cannot go on serving so many
masters and at the same time continue
to give the public the kind Of service
1t requires and deserves. Since the
federal government is now regulating
our rates or revenue and to a large
extent il deciding our wage disputes.
1t certainly IL no more than just that
the authority for the regulation of
railway securities shall also be placed
in the hands of the, federal board.
constitution would have included rail-
had such means Of transportation been
in existence at that time. This was
certainly indicated by its actions on
waterways"
EVRfv-Ssw NJ,