The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-12-04
THE RAILROADS. CRISIS.
Past Sins OF Management DO Not Count
win Country's Prosperity at stake.

with COuntry's Prosperity at stake.
To THE EDITOR or THE SUN-Sir: 1r
any discussion of the reopening Of the
New York Stock Exchange the unavoid-
able premise Is that railroad securities
are attractive to neither foreign MOI
home investors. To reopen the ex-
change in present conditions would he
to invite sellers from Europe to a mar
Ret barren Of American buyers The
| consequence, whether immediate or de-
ferred for short time, would be dis
/ astrous
The railroads have been commission
| regulated, taxed and labor unonized to
| the point of poverty. They are at the
| halfway house to bankruptcy. The com
| paneS which are earning a surplus that
gives stakeholder sense Of security
| in his div dends can be counted on the
! fingers OF ones hands. There are more
than few that will not be able to pass
| through another such fiscal year as that
of 1894 without default on some
part of their interest payments. 1t
would be invidious and contributory to
no good to specify these roads. 1t re-
quires no expert skill with merely a
glance into any OF the statistical man
uals To determine for yourself the mar
gin OF protection for bondholder or
stakeholder. The shred left OF the sur
plus which is fundamental 10 an invi-
tation To investment or speculative pur-
chases is maintained only at the cost OF
tens Of thousands Of idle employees and
by keeping buying OF rails cars. loco
motives, bridge materials, fuel. &c.
down to an amount which barely sup
plies enough to cover railroad naked
ness And this absolutely necessary
parslmony EXTEND the paralysis of Idle
ness and unprort likeness directly To "A
large part of the IRON and steel railway
equipment, railway supplies and collat-
crdl Industries. and indirectly to the
other business interests.
The transportation industry IS re-
preached by men Of the Brandeis-
Thornc type with having economical"
N everything hat dividends II Is too
probable that tbs economy" cannot he
STAYED off long But when Il is adopted.
not tu permit expansion Of facilities
lu. 90 prolong solvcncy and the ability
to- operate. wat becomes OF the mar
kctlhle value 81 railroad securities in
bank loans IN trust funds, and in the
portfolios Of private and corporate .n-
VeSturs'
OF what avail would IL he that war
in the next six months should bring the
United States favorable merchandise
trade balance of half a billion II Eu-
rope should seek To cancel IL with sales
~ securities that lacked magnetism to
the home investor? How futile would
Ice the Federal reserve or any other
banking system to breed buyers for
shares and hords the return on which
rested IN the qu.cksands OF precarious-
ness How can healthy life be kept in
the business body when So large part
of the Country's investment funds is
menac.d with atrpphy or paralysis?
Yes & - true that the final buyer Of
sacrificed securities might reap future
profit. but no amount of argument can
make the Shorm's red tag a Turing
leader To the primrose paths Of pros
pcrity.
The public in general Is lamentably
blind to the seriousness OF the railroad
crisis /; matters not what sns have
been committed by railroad managers
or railroad bankers in thr past, were
they ulArkcr than thu most hig"ted
populst could paint them. Il * proiti-
less th use hNdromctcrs upon railroad
capitalization or 20 try to bail It out
w.th physical valuation processes.
condition not "A theory. ConfrpnLs MS.
Tho question, pressing with more in
s!stepce daily upon Government and
people. is this: Are You going To give
the railroads rates that Will restore
their prosperitv or allow the present
situation To drift t. The. rocks that Will
destroy railroad cred; tterly and leave
a wreck against which o. craft Of tho
entire country's prosperity Will 90 down
in ruin and panic?
President Wilson apparently appre-
ciates AZ least measurahiY, the vital
significance Of prevailing railroad Condi-
ions and prospects Has he the courage
to turn Congress to measures ~ relief.
regardless " the impOtent course az the
Interstate Commerce Commission If
he neClccts the opportunity the entire
question inevitably Will become poiiu-
cal ono. And freed from the incubus
4 Rn. scvcltism. the Republican party
may add To its laurels a. savior Of the
country from tho hcres!es of green
backiSm. populism and free silver the
new achievement in 1916 OF rchahilta-
ton 81 the industry whose well he ne -
as essential as that Of agriculture To
general prosperity and progress.
But. alas. IN that case 1, may he only
through such stress as that of 1898 tie
business cruchXon which was pre'e-
dent To Mckinley's victory in 1896, that
we shall attain To sane railroad regula-
ton and investment safety. An awaken
Ing Of the people now To the ineNorable
facts and the necessities OF action can
spare us disaster.
JAMES 6. n CMsTED.