New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-12-04
Reserve Board Head Mum
as He Attacks Fed
eral Strangulation."
TALKS AT REUNION
OF N. Y. CHAMBER
Head of p. r. R. Says Interstate
Board Orders Are Close to
Confiscation.

York State Chamber or COMMERCE.
Samuel Rea, president Of the Pennsyi-
vania Railroad. yesterday afternoon de-
nounced the strangulation Of railroads
By federal and state governments.
In absolute silence on the platform
behind him, never once joining the ap-
plause, even at the end Of Mr.. Keas
gpsech. sat Charles s. HamGn, governor
Of the Federal Reserve Board. SO
marked was Mr.. Hamlin's silence,
which was made even more conspicuous
nv the applause he accorded Arthur H.
Marsh, formerly president or the New
York Cotton Exchange, also speaker,
that MANY members commented on u
reading into il the Administrators dis
approval Of the views advanced by Mt
Rea
"Failure IN the last decade TO pro-
tect the railroads and railroad lnves-
tors has at last produced lack OF con-
fdence in public regulation" said Mr'
Rsa. "and we know that through the
weakness Of the railroads the wnole
country is suffering.
"Upon this great industry, through
the operation Of too many federal ana
state laws, and by failure 10 provide
and adjust the machinery necessary
10 enforce these laws by reasonable ana
nractical methods, mistaken policy
Of renression has been imposed, which
has not permitted railroad charges TO
increase with the enforced increase In
the cost of their operations.
1.-THE inherent weakness OF the STU
alton is that we as people seem 10
have assumed that the present rail-
roads and their equipment and 1aclli-
ties are complete and are sufhclent Tor
present and future needs, and that the
rhief function of public regulation IS
"a curtail their revenues, increase their
expenses and lessen their margin OF
return.
"The Eastern railroads are at present
earnings a return Of less than per
cent on their property investment, and
thew are deprived of an appeal TO the
courts for what they CONCEIVE 10 ne
their Just rights as against the order
of the Interstate Commerce CommiS-
sion. IL this ia not approaching con-
fscation, how much less must we earn
before reaching that point! inns serl-
Gus condition is not new ne continued
"but il is now acute
Denying that increased traffic or the
rate increase already secured would
remedy the trouble. Mr.. Rea SAID 1T was
the business of government regulation
10 safeguard the interests of the roads
as we'll as that Of the public, "as other
wise investors will seek other avenues
10 utilize their capital.
"The railroads are existing under con-
ditions that breed business depres-
sions." he said, because of arbitrary,
heavy and often unjustifiable burdens
imposed on them By legislatures, state
and national, and there are still many
wasteful legislative experiments forth
coming unless the authors discover that
the public viii not willingly pay their
cost"
MIR. Rea made several suggestions
looking 10 more equitable treatment
of the roads.
"Under the existing federal law IN
creases in rates. no matter how justin
able. NAV be suspended without any
hearing for at least four months after
they would have become operative" he
said. 1.-THE commission can extend the
sugpension for six months more.
would limit the period Of suspension
and determination Of the question al
issue to sixty days.
"The Interstate Commerce Commits
.ion should be materially increased
the additional members to be chosen
because Of their railroad and business
experience, and to be placed beyond
noiitical influence by long tenure oi
Office. The regulatory power OF the
commission should be extended 10 al
rates and practices affecting inters' e
commerce even remotely. IL should
also be able to prevent unreasonaoly
low rates.
islation should be substituted for ths
repressive policy now practised. A
comprehensive valuation OF railroads
should not be attempted till the posi-
hilitv of such valuation be tested on
one road.
81 believe in regulation by commits
sion. and | urge that we do not en-
courage destruction OF such regulation
hut rather its conservation by adapting
IL as we have banking regulation and
other laws, to suit the changing neeos
Of the country"
Mr.. Hamlin, who was introduced by
Seth Low, president of the chamber
said that nothing was more injurious
20 the country. save possibly a panic
than the boarding of money by moi
viduals and banks. He expressed the
belief that the new federal banking
system would "relegate to the museum
Of antiquity the panic generated by
distrust in our banking system.
financial system had now been
established upon principles recognized
"a sound the world over, he said-mo-
bile reserves. liquid assets and q note
issue responsive to the needs OF trade
and commerce.
"Eyen under the Federal Reserve
actD he continued, "banks have 1t I'M
der their power 10 permit, II not 70
encourage, undue speculative activity,
and If they do this the inevitable result
commercial stringency-must follow
When the state banks and trust com
NAMES of the United States join the
Fedsyal Reserve system, however, even
that possibility will be greatly dimin-
ished."
Mr.. Hamlin gave warm praise to Seth
Low for his advice during the drafting
Of the at. The act itself, he said, was
chiefly due 70 the painstaking efforts
Of the President.
Arthur r Marsh, formerly president
Of the New York Cotton Exchange, said
that DESPITE the war the cotton crop
now being distributed would suffer no
more depreciation than invariably fol-
lowed the disposal Of superabundant
Among those present were J. p. Nor
Gan and Y. Fulton Cutting. Jacob II.
eehif. In a telegram regrctting his in
sbility 70 attend, praised the Federal
Reserve system. for which he gave full
credit 20 the Administration.
Astoria Bans Open Markets.
owisg to opposition from local store IRE