The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-26
Adverse Possibilities Of the Rate
GnsE.

One wishes that il could he said that
the aspects of the railroad problem IN this
country We're more favorable th1n they
appeared during the hearings before III"
Interstate Commerce Commission last
week. Although tho concessions which
the commission made to the Eastern rail-
roads IN its decision handed down on
the eve OF the war were inconslderable,
they were sufficient 20 suggest that a
realization OF the war emergency would
impel tho regulators of freight rates TO
recognize the imperative Importance Of
sustaining railroad credit IN tho eNiGnn-
cies OF the war. Recognition OF thu sort
can only be expressed IN a reasonable
willingness to grant the carriers cmer-
gency relief from the financial restr,c-
lions TO which they have been subjected
bv extremely rigid regulation. From the
start OF the proceedings last weel; tho
commission seemed 10 indicate to at
tentlve observers an utter failure To APP
prcciate that the position of the railroads
had been made materially worse by the
war and that with their position was
complicated many momeutous considera-
lions relating 10 tho railroad capital and
credit values which have become hcor-
porated I'm tho couutry's financial Struc-
ture.
There Is 10 need Ia detail here the
argument.ttive facts that have been
presented TO the commission. especially
by bankers, going to show tho probable
consequences OF "A rejection Of the pres
ent railroad petition or a crudgiug al
lownnce of Inadequate relief Il sur
fees TO sly that financial interests viii
be greatly handicapped In trying to
facilitate the readJustmcnt OF American
business to the conditions Of the war
II the Interstate Commerce Commission
refuses TO extend tho protection within
! Ito IN la NlrgII invest
ment. II must also Se remembered here
that the commission is dealing not only
| with American investors but with Eu-
Iopcan investors whose provision of cupl-
| tai has done so much to mako our pres
am railroad system possible, thereby
promoting the country's marvellous trade
| and Industrial development, and has year
| by year been Of Immense general flnou-
! cial benefit in accommodating the settle
neut Of our extra trade debit balance
No ono can predict that the recovery
| of railroad ana other values win ho
| stimulated directly and considerably by
official sanction for a relatively small
percentage Of inCrt ase in freight rates
F, IT can be predicted that the maintenance
! OF American values generally will b,
aided by evidence that public policy f.
tho regulation OF railroad rates include,
the protection OF railroad credit,
II can also he predicted that ~ m
vestmeN conhdep'e Is not fortified lbs
the Interstate Commerce Commission
concession 20 public necessity more dlvl
dends will be reduced or passed thar
would have otherwise been tho case
There will ba moro defaults and bank
ruptcies In a widening circle spreading
from railroad iuaolvencics There WIN n
less employment for labor rs force
economies are intensified, ana there vii
be lower wages loss buying of materil
and Curtailed transportation service
There will DO less willingness 10 hold o
buy railroad securities and there VIII y
moro liquidation, especially from forclg
sources. with all its Corolarles ~ disturb
log Influences on fnanC.a, institution
ana the money market. No ono can sa
that II the Interstate Commerce Comm!s
sion gives an encouraging interpretatio
I Va public policy the situation which W
all have to deal with will be strkiugl
improved. but tho conjecture may lie ven
0 tured that II tho commission fails /
see how circumstances have been change
for the whole country by the war IN