Evening journal., 1916-12-29
Annual REPORT
General Executive Committee
RAILWAY Business
ASSOCIATION
The National Organization
of Manufacturers, Mer-
chant and Engineers Deal
ing with Railways
(Abstract)

Promise OF remedies applied at the
root il the railway problem is con
tanned in the memorable debate at
Washington. II has begun on state
ly plane of amity, of earnestness ana
Of intellectual dignity.
1t is now possible to focus tho ma
tional thought upon the heart OF the
problem-the rule which is given by
Congress to its regulatory arm. the
Commission. The present law de-
clares that each rate shall be just,
reasonable and non discriminatory.
It is our purpose to recommend that
two additional elements be embodied
in the statutory rule:
I. That in regulating rates total
revenues shall be permitted sufficient
for total legitimate purposes.
2. That legitimate purposes shall
I embrace the attraction OF invest
ment for improvements and extern
sions.
We yield to none IN favoring eff
fective federal supervision under
conditions advantageous TO the whole
public, while insuring that the states
may retain such Jurisdiction as local
self-government requires: but at the
same time we emphasize this aspect:
An Essential ingredients
If total revenues are not made ade-
quate to total expenses no question
will long remain as between Federal
and State authority, because sooner
or later the Federal Government, IN
der those conditions must take over
the roads. In that case the States
would lose all voice whatever and
Federal regulation. II any, would
present the grotesque spectacle OF one
political officer supervising another
whose tenure proceeds from the same
source OF power as his own. Who
ever omits from his prescription
statutory obligation upon the Com
mission 70 permit rates adequate to
carry the national business and de-
velop the country leaves out the es-
sential ingredient without which the
whole compound is futile.
Investors Still Indifferent.
Every substantial increase in ton
mage brings car shortage. Only 933
linear miles OF road were constructed
in the calendar year 1915 and appar-
emily the record for 1916 will barely
exceed that figure. although the vol
ume of industrial activity and hence
railroad earnings is considerably
greater than in any previous year.
Those who deal with investors con-
tinue as for several years 70 report
indifference OF their clients toward
railway securities except for refund
ing and for mortgage bonds. now
rarely feasible, upon unencumbered
property.
We approve abstention by legisla.
tive bodies from dealing with rates
We see no exception even in so cost
" an item as the eight-hour law. The
new legislation which we urge is thai
II at any time in any place rate ad
vances should become necessary II
the public interest authority and OBJ
Mgation to sarUt,on them will ex-
plicitly reside by statute in a specified
branch Of the government.
Hopeful Signs.
The public interest-that Is tn
yardstick proposed by the railwa!
leaders for measuring the provisions
which they advocate. Responding II
kind, members of the Newlands Com
mittee have rivalled one another II
keeping the discussion at that higl
level. Commercial organizations hav
ing Membership in as States hav
transmitted to us declarations for
unified regulation where State reg
ulation conflicts with Federal. Nor
= than so such bodies have urged tina
, the statute proclaim adequate earn
o ings the policy of the Government
9 These signs at Washington an
@ throughout the Union. we hail as
n bow of promise. as the token OF
/. factor designed to work for prosper
r ity in the future. affording in al
=, years an adequate instrument Of con-
merce and in lean years a purchasin
power tending TO mitigate industris
distress.