The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-02-17
THE RAILROADS. PROBLEM,
Thsy Need $1,000. 100000 . Year
How Can They Get II?

10 rus EDIroR OF The SUN-Sir:
Howard Elliott. president Of the New
Haven railroad. said at Washington on
February 8. 1916. that the railroads
need $1,000. o0o, 900 a year for new
facilities, and that without those facili-
ties the railroads cannot carry the
growing traffic and will break down.
with disastrous results to the whole
country. Senator Underwood at Chi
cago on February 4 said that practi-
cally no 4 per cent. railroad bonds
can now he sold: hat the railroads
must pay 81 per cent. up to IN per
cent. and that even the best railroads
have great dihiculty in renewing old
loans or placing new loans. This IL
true and Ia known to every railroad
%ffnancier. The New York Central
Railroad Company recently issued
500, 000. 900 In debentures bearing 8
per cent. interest. Capital has turned
to industrial securities and foreign
loans. Railroad stocks and bonds are
no longer considered safe and the
investor Is afraid.
Why? Because commission rule.
State and Interstate. has put AN iron
hand on railroad rates and no hand
~ all on railroad expenses.
How. then. IL the 81 1000. 900, 900 a
year to be had? Certainly the rail-
roads cannot raise IL. Their credit is
seriously impaired. Nor will they be
allowed to raise their rates sufficiently
to reestablish their old credit. The
railroads are face to face with the
primeval question: How a I man
see to live?" And there Is no answer.
but . speech and IN echo.
There II only one way OF raising
the 81. 900. 900 900 a year, and that Is
the use Of the Governments credit.
We are moving toward that swiftly.
Such use Of Government credit would
strain that credit. but at any rate II
would produce the $1,000. 0Oo. 900 a
year. and would produce 1t at a lower
rate OF interest than he railroads
themselves would have to pay.
When the Governments credit Is
called In 1t will respond, but on one
condition only. namely, that the Gov
eminent shall control the railroads,
not merely regulate. but control. Then
will arise the vital question of the
form OF that control. 1t may IN Gov
eminent ownership. The whole cuun-
try. however. liz against that and
seeks some other way out. II may be-
the Federal reserve system applied
to the railroads. That Is the purpose
of Senator Thomas's bill.
Meantime all sort. of nostrums are
being prescribed. Some would abolish
the power Of state commissions over
the railroads and turn that power
over to the Interstate Commerce Com
mission. Has that commission proved
Itself ca pable of assuming still greater
powers? Or is il. IN the contrary, a
failure in theory and practice" II
certainly is power without responsible
ny. and that is foredoomed To failure.
II IL a combination 81 executive. legis-
iat!vc and Judicial pJwers-something
un-American. despotic and altogether
intolerabie. Kent. Cooley and all Of
the great writer's have warned US
against IL. Senator Borah in the
United states senate. speaking of COM
missions on September 80. 1914. said:
We mo-, only place in the hands Of
these few men the ordinary reins %:
government. bu; We clothe them with
an unlimited and underlined discretion.
which amounts to the Judgment Of arr
bitrary power" CTirAs.
New YorY, February Is.