Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-05-11
NAVE BEEN OPERATED IN PAST
FsoM MONEY RATHER THAN
Y UTILITY STANDPOINT.
NEED OF RATE BOOSTS
NOT GREATLY URGENT
Legislation 70 Secure Stability ~
Securities, Definite Wage Adjust
msnts and Regulation Greatest Need
81 Congress May Be Forced
toAet at Forthcoming Session.
Especial Correspondence

III
which the iterstate commerce commits
sion will hand down some time soon in
the western rate case will be fully as
important as that which it handed
down in the western rate case some
thing less than . year ago. It is true.
OF course, that the country Is not wait
ing for this decision with quite the
GREATNESS interest with which it await
ed the previous one. This is partly
because a verdict favorable to the rail-
roads is already more or less dis
counted in advance in intelligent quar-
ters and partly because the railroads
in 1915 arey not SO hard up for money
as they were in 1914. Nevertheless,
during the last twelve months the sit
uation with regard to the railroads
has materially changed and offers new
angles which must be considered and
looked into before the truth can be
known. Briefly, the question Of rail
road wages have been more pressingly
to the front within the last year, and
the necessity for railroad security leg
islation has become increasingly APP
parent.
NswIands Act Fails.
With the failure Of the Newlands act
as evidenced by the decision Of the ar
bitration board at Chicago In April.
the question Of some federal machinery
for the adjustment Of railroad wage
schedules has forced itself upon the
Washington government. 1t is more
than coincidence that while the wage
arbitration was going on In Chicago,
the western rate hearings were taking
A. 10y Ia
more than superficial connection
between railroad rate and railroad
wages, and any doubts on this point
could be settled by a glance at the ar
guments Of the roads themselves which
pleaded for an increase in rates be-
cause, in part, Of the increase In wages.
and which argued with considerable eff
feet against an increase In wages be-
cause Of their alleged poverty due to
low rates. so long as the success OF
the railroads continues that is to say,
so long as the interstate commerce
commission continues to grant increases
In rates and arbitration boards re-
fuses to grant increases in wages, the
railroads, egyedr on by their own neces-
sites and attacked by shippers. the
brotherhoods and the public, will have
no rest whatever.
Security Liquidation Necessary. e
Striking testimony was put In before
the interstate commerce commission at
Chicago to show that until there is fed
eral regulation Of railroad security is
sues, there will be no rest for the weary
but the same old circle will necessarily
be followed in the same old way, re-
minding one Of the futility Of the kit
ten in pursuit Of it's own tall One OF
tho arguments against the rate In
crease made before the commission in
the western case brought out this point
SO clearly that 1t Is worth presenting
systematically:
Rate advances in the light Of present
management and control Of western
railroads, ran this argument should
not be sanctioned by the public without
regulation Of security issues. The
fundamental reason given for this
view was that, without the kind
of supervision of railroad finances
which the interstate commerce COM
mission and more than one president
has attempted to secure from congress.
there would be no assurance that the
roads would use the increased revenues
in case the rate advances were granted.
for the purposes required. that is to
say, for the upbuilding and the im-
provement Of their properties. Looked
at in this way, what the railroads are
suffering from today is not sufficient
revenues, but from bad habits, gained
by years of financial Encouragement,
of disposing of those revenues. During
recent years 1t Is quite clear that the
perating departments OF the roads have
enormously increased revenues and
profits by reducing costs thru the in
PRODUCTION of heavier power. greater
train loads and 50 forth; but that these
revenue gains have been absorbed by
the issue OF fictitious securities. In 9th
er words, the future earning power and
the development of operating efficiency
have been capitalized in advance. and
an increase In rates would accelerate.
not retard. this process. This theory,
It should be said. was backed up with
a formidable array Of facts and fig
ures into which it il not necessary to
go at this time.
Run For Money Alone.
The answer Of the railroads, OF
course. Is that this may all be very
we'll tho they ..,!!l not aa:n.. !. except
for the sake Of argument, but the rail-
road managers are confronted by con-
dition which this theory Eliminates but
does not Immediately cure. The con-
dition Is the necessity for continuing
the long-accustomed process, which
has become part and parcel Of American
railroad policy. American railroads
have not yet been stood up on their
own feet as independent Industrial en-
terprises, operated as Industrial enter
prises, disassociated from pure finance.
whether high or low. It Is a common
place that the controlling groups who
dictate railroad policy in this country
are dominated by bankers rather than
by practical railroad men. There Is
nothing necessarily illegal about this
situation, among the natural results Of
which - the fact that the interest of
bankers subordinates that Of railroad
operators, pure and simple. It is note
worthy In this connection, that when
the eastern railroad rate case was on,
men prominent In the railroad world
were declaring every day that it did
not make very much difference wheth-
or the commission granted an increase
Of 3 per cent or i or per cent-what
the railroad world wanted was o "psy-I
chcloeical boost which would stirnu-.
late the market for railroad securities
a such way ~ to hiring capital ont