The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-06
FINANCIAL REVIEW
OF THE PAST WEEK
Why Railroad Rate Case Is I'M
portant Factor in the
Situation.
IT'S INFLUENCE DOMINANT
Unfavorable Outcome May Have
Greater Effect Than a
Decision for Roads.
IT'S INFLUENCE DOMINANT

| ness situation.
All the indications are thnt the cours,
OF values and the development OF trad,
and Industry IN the near future are 60
Ing to be determined largely by the In
terstate Commerce. Commissions de
cision on the petitlon which tho Eastern
carriers have addressed to u and have
supported by such q wealth of convincing
evidence demonstrating the necessity ol
including an expansive principle In rate
making.
According to the outcomes OF the case II
G-"'ns TO be quite clear now that capital
will la encouraged to undertake new en-
terpriso or receive discouraging shock
which can hardly fail to have disastrous
consequences for the hope of an early
restoration OF prosperous activity.
The treatment which Is measured out
to the railroads will not only be taken
as proof OF public attitudes toward one
o. the greatest OF American industries
but an a token OF the popular apprecla-
ton politically expressed OF the extcn,
to which prosperity depends on the con-
iidepcs frlt by capital In the security OF
an adequate reward for enterprising en-
desvor.
About four months ago Sir William
Yah Horne. one Of Canada's great rail-
road men. delivered an address nj Toronto
In which he paid particular attention to
tho railroad crisis that was then impend.
ing in the United States and has since
become manifest beyond dispute.
What he had to say about the situation
In this country was not open to the poi
sonous suspicious with which political
demagogues have sought to faint the i'm
pressions made by railroad men in the
United states in their energetic efforts TO
t..t> I'll 70 ek.I-
care. Speaking from the position OF an
outsider exceedingly well informed on
affairs here and making certain patriotic
reservations In favor OF the Canadian rail-.
roads. he uttered the following truths
the verify OF which Is 50 much NOR |,
evident to-day:
you all know that the railways Of the
United States have for long time been
under attack. At every legislative SEES.
sion new laws have been levelled against
them. laws often arising out of political
jobbing. The public has supported these
laws without giving them much thought
and rs result the railroads Of the United
States pre- struggling almost for their
worry existence. many OF them standing
on the edge OF bankruptcy.
az am quite unable to account for this
spirit of hostility. for the service OF the
railways OF the United States Is the best
in tie word their rates are much lower
than in any other country in the world :
they are Operated with intelligence and
public spirit that you do not find any
where ,.se in the world and there 10
greater regard for public interest than in
any other country in tho world-alwuys
save Canada.
These prolonged attacks have created
dangerous situation. II IL the precari-
Gus situation OF the American railways
that ~ the great cloud ovcrshadOvlng
business conditions in North America to-
DAY"
What is signihed by the Eastern rate
case Is simply that the public mas at last
been asked and compelled TO give thought
to the laws which have brought American
10! roads TO their present pass and 10 de-
terIninc the future OF tho railroads under
Government regulation. Upon the de-
termination to be made seems to depend
now the Immediate prospect for general
business and financial Improvement.
For more than n quarter of a century
this country has been engaged In the gi-
eant.c experiment Of assuming and eNer-
cisine increasing authority over property
used for public purposes but dependent
On . steady supply OF private capital to
enable It 10 serve the public needs,
" the experiment OF Government rcgu-
lation Of the railroads IL to end In failure
the only alternative IL Government owner
ship. Do the American people welcome
that alternative? II they do not II must
b- recognized that the great experiment.
which has never been worked to a success
full conclusion In any land rs yet. IL work.
ing badly here. where 1t has been tried
on far more enormous scale than In any
other country.
Yet II the event OF tho Eastern rate
case Is propitious the experiment can lie
continued with more optimistic promise OF
ultimate success than II contains now.
What has vitiated tho undertaking OF
progressive regulation so far has been
political inability TO understand that capt.
tai will not only refuse 10 go into enter
prise which does not offer fair chance
OF proat but It will retreat therefrom.
Railroad enterprise has been practically
deprived under progressive reguia ton OF
any fair promise OF profit. and unless the
Government Is Foing to take over railroad
maintenance and expansion on tho basis
afforded by the taxing power there must
be such assurance OF reasonable profit to
capital as can be afforded by ruling In
favor Of the railroads in the Eastern rate
case.
There has been an assumption IN
politics that as tho railroads are here
they will have to carry goods and passcn-
gers satisfactorily. but this assumes that
private capital will on any terms main
tain the railroads and provide for the con-
tinuai enlargement or tho railroad sys-
tenn required by tho country's growth in
population. The assumption IL preposter-
GUS unless railroad Investment pays. There
Ia another notion that the railroads will
be kept up rebuilt and enlarged. that
equipment viii be replaced and Increased
and additional facilities continually sum
Piled even IL the roads go into bank.
runtcv.
1f either OF these notions eyer he.
comes ooNcrctHl" embodied In statutory
declaration Of public policy the Govern
ment VIII have 10 take over tho rai!roa ia
for there VIII be no private funds forth
coming for them except MS the Govern
ment can command its provision by tax
levles aud by such degree Of credit az the
Government itself enjoys.
Ia serving the good OF tho railroads the
country serves itself. The railroads mus,
furnish transportation for passengers
with safety, comfort and punctuallty
They must provide for growth OF popu-
tatlon and general business. They must
meet all manner OF conflicting demands
from authority walch can enforce de-
mauis.
IL seems TO 10 the unalterabc rule that
they must maintain wage scales at sue
ceaS'ye advances. They must meet
taXcr, which are always rising, like
wage6 and they must, IL they can. meet
the end they must mako q return 10
stoch'oldcrs. II they can. but this IN sup
posed to BE- the last Of their OBLIGATIONS,
some nonchalant dreamcrs have even
suggested that the solution OF the rail-
lAn, -