The sun., 1916-11-30
U. s. OWNERSHIP OF
ROADS DISCUSSED
Federal Guarantee Of Interest
Also Suggested at New
lands Hearing.
THOM AND SIMS IN TILT
Congressman Insists Carriers
Of Country Arc Returning
Large Dividends.

wAsHINGroN Nov. 2s.-The feasible
ity Of Government ownership Of rail-
roads and the probability Of Government
regulation Of stock issues. with a guar
antec OF minimum returns on the invest.
ment. were the subjects uppermost In the
hearings to-day before the Newlands
Joint committee. Alfred p. Thorn. gen.
srai counsel for the Southern. who APP
pears for the railway executives advis-
ory committee. was the witness again
to-day and Representative Sims wa the
inQuisitor.
Mr.. Sims. who has appeared at times
In the hearings to favor Government
ownership. admitted to-day that It had
been "A failure the only times II had ever
been tried In the United States. He did
not appear to have any definite remedy.
n insisted that the railroads were re-
turning large dividends.
you paid $1,000. 900 In dividends last
year" he suggested to Mr.. Thorn.
But you forget that many Of the
roads. a large number OF them. paid no
oividends." Mr.. Thorn replied.
do you think the railroads ought to
continue to pay dividends ut the expense
81 proper equipment for handling traf-
49, f.fs st'ft" btN'es
"You cannot get new money for the
roads unless you pay something once In
Q while on the money already invested
rstorted Mr.. Thorn.
Sims shows Tact.
Mr.. Sims refused to admit that he IA
vorcd Government ownership. He kept
coming back to direct questions concern
inE his attitude with the statement that
Mr.. Thorn and the railways had said that
Government ownership would Inevitably
result IL the relief asked were not given.
And the railroad owners will not sell
to the Government at . fair value,' said
Mr.. Sim How are we to have Gov
eminent ownership under such circum-
otances?'
You do not have to get the consent
o. the owners Of the railroads in order
to get Government ownership" sug-
gested Mr.. Thorn. limiting at the cxer-
else Of the right OF eminent domain.
80 long as the business 10 20 profit
able the railroad owners will continue In
the business and find q way to prevent
the Government acquiring the property
said Mr.. Sims.
Il am not 30 sure about that" replied
Mr.. Thorn. "1f conditions continue a.
: they are I believe q time will come when
the most earnest advocates OF Govern-
/. ment ownership will be the owners OF
the roads themselves"
I Near the close Of the hearing there
. was a sharp and interesting colloquy
between Representative Sims and Mr.
' Thorn. The latter had referred in one Of
his statements to the d~esirability Of
having railway legislation settled on a
broad. patriotic groond.
How are you going to get men in
Congress who will disregard the local
sentiment Of the districts they repre-
oentT' said Mr.. Sims. "Fo II the men,
Der win not regard local sentiment his
constituents will send some man who
will"
For state Rights.
"I trust we have men now in Con-
gress who are b<S enough to rise above
local sentiment and act out Of regard
for the interests Of the whole country"
replied Mr.. Thorn.
Mr.. Thorn insisted that his Congress
sional questioner from the South was
going further in the direction Of extln-
Guishing State rights h Mr.. Thorn
, and his railway associates had proposed
IN their programme for legislation. I'VE
are asking Federal regulation In the in
terest OF the States to preserve the
rights of all the States from the burdens
which some OF the States might wish to
impose" said Mr.. Thorn. but you
are advocating Government ownership.
thereby c~xtinguishing all Of the rights
Of the state"
Mr.. Sims seemed uncomfortable under
these suggestions M insisted on COM
pairing the Federal ownership Of rail-
ways with the rural free delivery SER
vice. which he averred was popular with
Southern farmers.
. A letter was read from Benjamin
: Strong Of the New York reserve bank.
, written from Colorado. In which Mr..
Strong suggested that interest rates
, following the war would go upward. and
that II would be more difficult for the
railroads to command capital. He sug-
gested that the Joint committee might
very probably look into the effect of
the close of the war on higher rates of
interest and on railway investments at
home and abroad.
Mr.. Sims asked Mr.. Thorn what he
thought Of a government guaranty OF
railway issues for q period. say, of
thirty or forty years. insuring a mini
mum return On the investment OF 4
per cent. the Government TO have a
frst lien on the earnings Of the road
to reimburse itself. Mr.. Thorn said 1t
would help tremendously"
u. 8. Guaranty Suggested.
out 1 HdNo HcNcT Ielt tnat tnere
would be any guaranty of dividends by
the Government do you think Con-
gress would ever authorize q guaranty
Of dividends?"
"I do not" was Mr.. Sims's reply. 81
simply suggested IL as one possible
measure OF relief II everything else
failed"
Mt. Thom insisted the best way was
20 give . more helpful policy to private
ownership.
"You cannot Judge a system of pri.
vate ownership from results under n
policy OF correction n punishment"
said he. ut can DO Judged only under
Q policy In, which the Government gives
proper help and encouragement, and II
private ownership breaks down then
Government ownership Is inevitable. 1t
ought not to he accepted until after pri-
vate ownership has failed"
But hasn't private ownership already
broken down."
ut has not. but It will certainly break
down unless there Is q change Of policy"
replied Mr.. Thorn.
Mr.. Thorn said the railway policy Of
tho country should he 10 SHAPED as 10
attract and hold the men who are con-
tent with a small return on their in
vestment II II be secure. The time had
gone by when the investor who was
willing to take a risk In the nope OF big
returns could be induced TO lake rail-
way securities. One certain way TO at
tain this result was for the Government
10 take over and guarantee the return.