The Mt. Sterling advocate. (Mt. Sterling, Ky.) 1890-current, 1916-12-19
Against Government Ownership.

Against Government Ownership.
personally / cannot say that l de
sire government ownership" he ex-
planned, because lean to the indi-
vidual idea rather than to the collec-
tive idea; that is, / believe that gov
eminent ownership is desirable only
where competition is impossible
Alfred F. Thorn, counsel to the Rail
way Executives Advisory Committee,
previously had presented before the
members of the Newlands Committee
as one of his reasons for urging bet
ter balanced and more systematic reg
ulation 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 betterments of railway
facilities, he warned the Congressman
that unless they provided a fair and
reasonable system of regulation that
would enable the railroads TO meet the
growing needs of the country's bust
ness the national government would
be compelled to take over the owner
ship of the lines with all the evils at
/ tendant upon such asystem.
Preservation of Competition.
Mr.. Bryan, on the other hand, holds
that the further extension of federal
authority over the railroads would be
step In the direction of government
ownership. He advanced the view that
the Capitalization of control In the
hands OF the national government
would impose too great a burden upon
the regulating body. would offer strong
temptation to railroads to interfere In
politics and would encourage the gem
eralS 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 as they did not
destroy competition, that he knew OF
no complaint against great railway
systems because Of their size and that
I 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 thatfhe saw
no reason why that should exclude the
states from acting on the same sub
ject as to state corporations. 81 would
like to see the stock of a railroad, as
long as It is in private hands, made as
substantial and as unvarying as the
value of a government bond he as
serted.
He suggested that railroad capitall-
zation be readjusted to equalize 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 surplus. The
latter, he tentatively proposed, might
be allowed to amount to 25 per cent
Of the capital. .,
Railway Earnings Low.
This subject of railroad 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 five years from 1910 TO
1915 the average was only 4.56 pei
cent The total earnings ON the stock
computed by adding TO the net oper
ating income the income from the Sc
curities owned and deductiDg bond IN
terest. were for 1910, 7O9 per cent
for 1911, GIT per cent; for 1912, 49s
per cent; for 1913. b.0f per cent; fol
1914. 400 per cent; for 1915. ga pc
cent, thus showing an almost contip
uous decrease throughout this six yea