Cheyenne record., 1916-12-28
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Federal Regulation Should Not 60 Al
lowed 20 Exclude Exercise of State
Authority, lie Contends-Thinks Rail-
read Stocks Should Represent Actual
Value and Be Stable as Government
Bonds.
Washington, Dec H. William j.
Yryan, who startled the country ten
years ago by advocating government
ownership of railroads, appeared be-
:ore the Ncwiands Joint Committee on
Interstate Commerce last week In sup
port Of the claim that the states should
be allowed to retain authority over the
regulation Of all transportation lines
within their borders. Mr.. Bryan cx-
planned that lie had long regarded gov
ernment ownership us inevitable, .but
only because OF railroad opposition to
effective regulation.
Against Government Ownership.
PERSONALLY | cannot say that I de-
Sire government ownership he ex-
planned. "bccause l lean to the indi-
vidual idea rather than to the collec-
tive idea; that is. believe that gov
ernment ownership Is desirable only
where competition is impossible"
Alfred +. Thom. counsel to the Rail-
way Executives Advisory Committee.
previously had presented before the
members OF the Newlantls Committee
MS one of his reasons for urging a bet
ter balanced aid more systematic reg
ulntion of railroads the argument that
this is the only alternative to govern
ment ownership. Calling attention to
the restrictions imposed upon the
transportation lines by conflicting state
laws and regulations. to the practical
cessation Of new construction and to the
impossibility under existing conditions
Of securing the new capital needed for
extensions and bctterments of railway
facilities. he warned the congressman
that unless they provided Il fair and
reasonable system of regulation that
would enable the railroads TO meet the
growing needs of the country's h;lsi-
iN'>' N.iN httipiisti Wptilu
lie compelled to take over the owner
ship of the lines with all the evils at.
tendant upo.. such Il system.
Preservation of Competition.
Mr.. Bryan. on the other hand. holds
that the further extension of federal
authority over the railroads would be
I. step in the direction of government
the Capitalization OF control in the
hands OF tha national government
would impose too great IL burden upon
the regulating body, would offer stron.
temptation to railroads to Interfere in
politics and would cnco;rag. the gen
eral movement toward Capitalization
of power in the federal government at
the expense of the states. He said that
he did not object to consultations of
railroad lines so long rs the;;- did not
destroy competition, that he knew of
no complaint against great railway
systems because OF their size and that
he believed that the preservation of
competition was the test to be applied
to all consultations.
Regulation of Securities.
Mr.. Bryan declared himself in favor
Of national regulation of railway stock
and bond issues. but added that he saw
no reason why that should exclude the
states from acting on the same suh
iect os tn state corporations. Il would
like to gee the stock of a railroad, rs
long as it is t.. private hands. made as
substantial and rs unvarying as the
1,pD <,f =,
serted.
He suggested that railroad capitali-
zation he recdjnsted to elualize It with
actual valuation Of the property rep
resented, making due allowance for
equities. and that when this was done
the roads should be allowed to earn
sufficient income to keep their stock
at par and to create a surplus. The
Inter. he tentatively proposed. might
be allowed to amount to 25 per cent
of the capital.
Railway Earnings Low.
This subject of rnilroad capitalization
and the amount Of railroad earnings
received further attention from the
committee during its recent sessions.
In answer to questions by Senator
Cummins. Mr.. Thorn submitted figures
showing the net earnings of the roads
In recent years. These figures show
that during the five years from 1905
to 1910 the average net earnings were
5.25 per cent of the net capitalization.
while for the Ave years from 1910 to
1915 the average was only 4.5G per
cent The total earnings on the stock.
computed by adding to the net oper-
sting income the income from the Sc
surities owned and deslucting bond In
tercst. were for 1910. 100 per cent:
for 1911. Git per cent: for 1912. 4.87
mr. cant. fn. lN12 6lll I,er cant. for