Evening star., 1916-11-23

goods to market" He cited the pres
ent car shortage, the embargoes last
spring caused by inadequate terminai
facilities, and added:
1.-The present systems of regulation
are entirely adequate to protect the
public against exorbitant rates, but are
sufficient facilities for its present and
future requirements.
Less than 1,000 miles of new rail-
roads have been constructed in the
United States during the past year" m he
said. less than in any year since 1S4s.
except the period of the civil war. and
vet the cost of living is daily advancing
owing to a shortage of supplies, which
might be reme,iied by securing access
10 new areas of production"
As illustrating the inequality OF
transportation facilities at a time when
new railroad building has nearly
stopped. Mr.. Thorn showed that, while
New Jersey has thirty-one miles of
railroad per 100 square miles of terri
tory the average for the United States
is only 1888 miles. and in Idaho, where
there are only 3.35 miles per 100 square
miles. less than 33 per cent of the
natural resources have railroad facil-
tiles.
Railroads Must Have Credit
will the undeveloped states be sat
isfied to stop railroad construction un-
der such a condition of ineauality?" Mr..
Thorn asked. ut is impossible for rail-
roads to earn enough to supply the nee
essary new facilities from current rev.
enue They must be provided from
credit. Investors cannot be coerced.
.ut must be attracted
Among the conditions affecting rail-
road credit which deter investors MIR.
Thorn mentioned the following:
Railroad revenues are not controlled
by investors, but are fixed and limited
by governmental authority and not by
one, but by several, governmental au-
thorities. which do not recognize re
sponsibility for assured results to in
vestors and are entirely unco-ordi-
mated.
Railroads cannot control and the
government cannot and does not limit
the expense account.
"The present system of regulation is
based on a policy of regulation and
correction and not on policy of help
fulness and encouragement.
The outstanding obligation of the
railroads have already exceeded the
financial rule of safety and involve a
disproportionate amount of obliga-
tions bearing fixed charges.
Better Security in Other Lines
THE investor must accept subor-
dinate obligation or security with no
assurance of a surplus of earnings to
support it.
Other competitive lines of invest
ment present superior attractions.
I'VE may debate about what has
caused the present conditions, said
Mr.. Thorn. but we cannot debate about
what the people need. The view held
by some that the present situation of
the carriers was brought about by mis-
management and wrongdoing in the
past totally ignores the needs of the
public in the present and the future.
The abuses have practically ceased and
are no more prevalent in the railroad
business today than in any other bust
ness humanely conducted.
Let us get fair view of the prob
lem now under consideration. Let us
attempt to define an issue that will be
accepted by all as the issue between
those who advocate some change in the
existing system and those who oppose
any change. Those who oppose any
change must make their appeal on the
ground that the present system assures
the public of the continued adequacy
of transportation facilities. If they do
not. no argument based on the desir-
ability of the present dual system of
regulation will be accepted by public
Judgment.
IF the public is not assured of ade-
quate railroad service, the question of
what are sometimes termed think
mproperly-'states rights are not in
volved. for such a situation would
necessarily mean either large and bet
ter national regulation or government
ownership. If the regulation of trans
portation facilities privately owned
should fall. government ownership must
follow. and then all power of the states
over the railroads would disappear"