Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1914-11-17
y0AKUM EXPLAINS
POSITION AS TO
FEDERAL CONTROL
Ne Fayors a Form of Government CO.
partnership as Distinguished from Gov
eminent 0wnership-WOuld Operate
Under Special Federal Charters.
SAYS RAILROADS WILL NEED
$3.50, 900 900 A YEAR
Great Amount of Money is Necessary 10
be Expended in Ten Years in Extending
and Improving the Quarter OF a Million
Miles of Rail Lines.

~ " - 1890
Regarding the statement frequently ap-
pcaring III the pres, that B. r. loakum J.
a government railroad ownership advocate,
the following letter from Mr.. Yoakum 10
Judge .Jud~un 4. Clements Of the Inter
state commerce commission, shows that
the ~taicmcm J. somewhat erroneous, and
also presents . plan for public copar'ner-
ship, which will BE- Of interest t. AL.
Dear Judge Clements:
While tc~tifying before YOU a few days
ago. Governor Folk asked me III ! thought
the remedy for existing conditions to be
governmental control Of securities, or some
other close relation between the govern
ment and the railroad. J sand that wa~
getting into 4 biz question but ii ~ wanted
my views | would give them briefly, which
! did.
Newspaper comment and personal let
tiers indicate that my position ~ 10 the re-
lations between the government and the
railroads appears to be misunderstood !
am IN favor uf 4 form If government CO.
partnership, a. distinguished from govern
ment ownership.
] believe that 60 partnership arrange
ments under special federal charters 10 be
granted to railroads DESTROYS Of operating
under 4 federal license. would b. the wl,eSt
solution of the present unsettled condi-
tions.
Taking all the requirements of the 2j0,-
600 miles Of railroads in the United States
for the next ten years. including larger
and better facilities necessary To satisfy
the public, purchase Of new equipment. cx-
tension Of terminal facilities, double
tracks, safety signal appliances. educ
tion Of grades. payment ~ ear trust Ger
tlticates, taking care of note maturitic~.
bond rciundine purposes. etc. the railroad
will need not less than S750.00O 600 4
year. This does not include new construc-
tion. When the general situation improves
the railroad will hc able "a borrow some
of this needed money 40 from -ay , per
cent a. q IL per cent per annnm.
The cost of money = Just a. much IA
expense o. Transportation a- ihc cost M
coal, ties, rails ~ other material used IL
the construction. maintenance aud opera
tion III railroad, and indeed rs one MI the
largest items of expense The railroads have
TO contend with.
The government pays only 3 per cent ! Y
the money used n the construction Of the
Panama canal. which wv rapidly becoming
an important factor M transportation. The
canal would never have been built withuu.
government credit aud consequent cheap
money. The United Statc~ has also au
thorized and u now preparing .ur thr rln-
etruction Of a railroad IN Alaska. recos
nize that the canal II a good aud wise IN
ycstmcnl. and that ihr Alaskan railroad
will be- equally a. good Ton The development
of that new country. H. these two enter
priscs the government lrud- it- credit tor
the construction work. and shoulder tina
deficit until they bcrum -cli sustaining.
Regardlcs> OF any lo~~v~. the public T. the
gamer. The J per cent bonds sold tor the
construction VA the Panama canal. and IN
be- sold for the con ,uuction of the Alaskan
railroad. furnish ruud luw race ~rrurt,
Tor small investor. savings bank anal lhy
institution.
The federal government; - nuN r|ceulat
ing the expense and revenues ot railroads.
IL should - 4 step further aud safely aid
them IN future financing uud WV cou~idcra
tion thereof ENJOY q share al the profit.
with representation ou thr board W. dir.r
tors.
In thi~ letter ! shall nut attempt ~ 70
into detail a~ NJ thr-, special charters. bat
there are no real difficulties IN making
hem absolutely safe for tho government.
profitable for ihc people ana advantageous
10 the railroads. The change oi securities
should hc gradual through Tow creation WI
a low interest hearing coycmn-i; railroad
bond ~ take the plac, ni tht underlying
higher interest bearing railroad bonds a-
they mature. or they could be- exchanged
under \ %rriundiue process. Zach trans
action should ~ approved IN the Interstate
Commerce Commission. always provided
that the net earning ui thv railroad must
be- at least two and ouc-halt times the iu-
trrr~t On the government railroad hond-
exchanged for tie present underlying.
bonds. These new bonds should hc a. .r~t
hen ~ thr property. All iuuiur mort
GAGE hond> aud stock would hc subject ~
these new bonds. ~ which the Government
would not ~ responsible hot would under
equitable terms {" he agreed upon. share
m he profits with the stockholders. Al \
rnnch estimate. III the course al 4 few
wears. onc-half Of the present underlying
bonds. or about $4,000, GOO .0e0. would ~