The Washington herald., 1914-06-25
A Bin to Strange The Railroads.

We believe that there IS thoroughly eniishteneu
public sentiment in this country in favor OF some sort
of public regulation either IN the shape of publicity
or otherwise of issues OF railroad securities We are
willing to concede all that may be properly said
against the faults of railway management in the
United States in the last twenty years. and we believe
that SOME way should be found and can be found OF
preventing such harmful results from oyereapital-
izatiou of railway properties has occurred in the
case of certain properties.
But the bill known the Rayburn bill that has pass
ed the House of Representatives having for its osensi
Bile purpose the regulation of railway security issues IS
in reality very different measure from that which
it's face purports to be- and its true character
has been recognized by the business interests OF our
country and by thoughtful people generally It IS IN
reality bill carrying to the extreme the most taiis
tastic and absurd form of socaliste regulation OF
business concerns and if it becomes law in its
present shape, it will go far toward strangng the
railroad business Of the United States.
The report of the Railway Securities Commission
on this subject, made during the administration OF
President Taft, was model document of its kind,
and was uniformly so considered at the time. The
commission was nonpartisan body, and was made
up of the most able railway students and economists
No criticism of the character of the commission or
of its report, has ever been made by Democrats Re-
is utterly no reason now why the exhaustive wotk Of
the commission and the views of the experts repre-
sented upon it should go for naught. With the
Recommendation Of this commission that there should
be complete publicity attending the issue by the rail-
way companies of stocks bonds, notes, and all and
any evidences of Indebtedness, are thoroughly in
accord. Supervision of such publicity might well be
lodged with the Interstate Commerce Commission,
and such supervision would go far to check such ex-
eesses and extravagances have cast dscredt upon
certain phases of railway management in Our country
But as we have stated the .Rayburn bill goes much
farther than this. II makes il unlawful for rail-
road company or common carrier to issue any stock
or evidence of Indebtedness, or to assume any
obligation for securities, except for some purpose
within its corporate powers necessary to its proper
service for the public unless the Interstate Com
merce Commission approves the issue as necessary
and appropriate for the purpose stated Now, it is
plain, enough that if railway company is to be
absolutely limited in issuing securities, except for
raising money for such purposes are necessary
the time the issue is made the work of the railway
company as free agent will be rendered impossible
As the president of the Union Pacific Railroad Com
PAM pointed to the committee of the Senate the
oter day. this would prevent the acquisition of lines
or property which might be cheaply acquired at
given moment and which would undoubtedly be
full and valuable to the company in the future, al
though not absolutely necessary to the service al
ready established. 1t very often happens that bar
gain is thus offered to a radroad company-which It
would be impossible to consummate if public adver
tisement was made of the fact With its hands thus
tied, railroad company might as well go out of
business Every desirable public purpose could be
cured by law compelling the railroad company to
publish after its issue of securities completed
full and accurate record of the transaction
AS to the trouble that would be caused if the
Interstate Commerce Commission were required to
investigate in advance the necessity for each and
every instance OF issue of railway securities the
country is having an emphatic illustration in the harm
full delays that already taking place in the in
vestigation by the Interstate Commerce Commission
of necessity for increased freight rates Any such
supervision of security issues is here proposed is
entirely mpracticabe 1t would require an Interstate
Commerce Commission FIVE or six times larger than
that constituted. The PRONUNCIATION of the regu-
lation would be little less than a bungIng and OBJ
noxious form of government ownership of railways
Under it. no private individual would care to own any
railroad stock whatever. The Rayburn bill not only
would enact this extreme proposal but it would also
compel application by a railroad company to the
Interstate Commerce Commission for right to issue
securities to be submitted the authorities of every
State through which the lines of the railroad COM
pany might pass, for the purpose of enabling these
authorities to make such representation to the Inter-
state Commerce Commission as they deem necessary.
This would OF course further and indefinitely delay
tthe issue of the securities
Another needless and grossly Objectionable feature
of the bill is the provision that no person shall be
an officer director of more than one railway COM
pany, all this without reference to whether the rail-
roads competitive not, and applying equally to
railway companies which are so complementary to
each other to constitute practically one system
Judge Lovett told the Senate committee the exact
truth when he said that under such an arrangement
the Union Pacific Railroad Company would have no
voice IN the management of the Oregon Short Line
and Oregon Navigation Company which it legally
controls, and which is substantially part of its
regular line at the present time Under this too the
New York Central would have to stop at Buffalo, the
Pennsylvania at Pittsburgh, and the Baltimore and
Ohio at Petersburg.
Is it possible that bill of this kind will really
pass national legislature?
Strictly Local Office.