Five Mile Beach weekly journal., 1916-12-08
new POLICY NEEDED
IN G0VERNM ME MT
RAILWAY CONTROL.
H0lpfuInGss and Encouragement
Urged by Alfred P. Thorn.
CREDIT MUST Be IMPROVED
Increase of Transportation Facilities.
Necessary to Secure Relief From
High Cost of Living May Thus Be
Provided For by the Railroads.

TToVIueo TOR py the naiIroaoss
Washington, Nov. 2S.-A new policy
Of government railroad regulation,
based on constructive principles of
helpfulness and encouragement instead
of upon principles of repression and
punishment, was urged by Alfred P.
Thorn, ounsel for the Railway Execu-
tives' Advisory Committee, the first
witness on behalf of the railroads be-
fore the Newlands Joint Committee on
Interstate Commerce, which has insti-
tuted a general inquiry into the prob
ems of railroad regulation.
at is proposed by the joint resolu-
ton of Congress-" said Mr.. Thorn, ito
go into a comprehensive study of the
whole subject Of transportation, to-
make a new assessment, after 20 years.
of experiment, of its history, its pres
ent conditions and its future needs.
The railroads accept the view that reg
ulation is a permanent n enduring
part of government In America and
that the first duty of the carriers is to
the public. That duty is to afford
reasonable facilities on reasonable
terms and at reasonable rates, and this
must be done before any private inter-
ests can be considered"
Certainty, Safety and Sufficiency.
Mr.. Thorn contended that the real in
terest of the public is in being assured
of certainty, safety and 'sufficiency Of
transportation facilities, rather than In
rates. The first consideration of the
public Is to obtain transportation facili-
ties. What the cost Is, is in reality O.
second consideration, he said.
Mr.. Thorn proposed IN increase Sc
transportation facilities as a method
of securing relief from the high cost
of living. There have been less than
1000 miles of new railroad construct
ed in the United States during the past
year." he said, "less than in any year
since 1949, except the period of the
Civil War, and yet the cost of living is
daily advancing owing to a shortage of
supplies which might be remedied by
securing access to new areas of pro-
duction.
Credit Must Be Improved.
"This leads to the consideration as to-
whether railroad credit is as good as
the public interest requires. 1t is i'm
possible for railroads to earn enough
to supply the necessary new facilities.
from current revenue. They must be-
provided from credit. Investors can
not be coerced, but must be attracted"
Among the conditions affecting rail-
road credit which deter investors he
mentioned the following:
First, Railroad revenues are not
controlled by investors, but are fixed
and limited by governmental authority
and not by one but by several govern
mental authorities, which do not recog-
nize responsibility for assured results
to investors and are uncoordinated.
Second, Railroads cannot control
and the government cannot and does
not limit the expense account.
Third, The present system of regu-
lation is based on a policy Of regulation
and correction and not on a policy of
h%elpfulness and encouragement.
Fourth, The outstanding obligations
of the railroads have already exceeded
the financial rule of safety and involve.
a disproportionate amount of obliga-
tons bearing fixed charges.
Fifth, The investor must accept a
subordinate obligation or security with
no assurance of a surplus of earnings
to support it.
sixth, Other competitive lines of in
vestment present superior attractions.
Seventh, The railroad business is.
largely controlled by political instead
of business considerations.
Look Forward, Not Back.
1--WE may debate about what has
caused the present conditions" said
Mr.. Thorn, but we cannot debate about
what the people need. The President
has taken the view that we must look
forward in this matter and make a
fresh assessment Of circumstances in
order to deal helpfully and intelligent
ly with the problem. Abuses are
no more prevalent in the railroad bust
ness today than in any other business.
humanely conducted. The great ques-
ton now is whether the existing sys-
tenn of regulation gives the public re-
liable assurance of sufficient present
and future railroad facilities.
Those who oppose any change must
make their appeal on the ground that
the present systems assure the public
OF the continued adequacy of trans
| portation facilities. If they do not, no,
argument based on the desirability of
the present dual system Of regulation
will be accepted by public judgment.
The question OF states rights is not
involved. If the regulation of transpor-
tation facilities privately owned should
fail government ownership must fol-
low, and then all power of the states
over the railroads would disappear.
Let US debate this question, then,
not upon any mere theory or jealousy