Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1916-12-23
BRYAN AGAINST
OWNERSHIP BY
The GOVERNMENT
Gives RsEIaldS Committee His
Views on Railroad Control.
COMPETITION PREFERABLE.

Federal Regulation Should Not Be Al
lowed to Exclude Exercise Of State
Authority, He Contends-Thnks Rail-
road Stocks Should Represent Actual
Value and Be Stable as Government
Bonds
washington, Dec. IL. - William j.
Bryan, who startled the country ten
years ago by advocating government
ownership of railroads. appeared be
fore the Newlands Joint Committee on
Interstate Commerce last week I'm sup
port OF the claim that the states should
be allowed to retain authority over the
regulation OF all transportation lines
within their borders Mr.. BRYAN ex.
planned that he had long regarded gov
ernment ownership as inevitable. but
only because of railroad opposition to
effective regulation.
Against Government Ownership.
Personally | cannot say that De-
sire government ownership" he ex
planned, because | lean to the indi.
vidual idea rather than to the coIlec-
tive idea; that is, believe that gov
ernment ownership is desirable only
where competition is impossible"
Alfred p. 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 a bet.
ter balanced and more systematic reg.
ulation OF railroads the argument that
this is the only alternative 10 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 fair and
reasonable system of regulation that
would enable the railroads TO meet the
growing needs OF the country's busi-
ness the national government would
be compelled to take over the owner
ship of the lines with all the evils at
tendant upon such a system.
Preservation Of Competition.
Mr.. Bryan, OH the other hand. holds
that the further extension OF federal
authority over the railroads would be
a step in the direction OF government
ownership. He advanced the view that
the Capitalization Of control I'm 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 gen.
eral 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
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 that he saw
no reason why that should exclude the
states from acting on the same sub
ject as to state corporations. Il would
like TO see the stock of railroad. as
long as il IS in private hands. made as
substantial and as unvarying as the
value OF a government bond" he as
serted
He suggested that railroad capital.
Zation be readjusted to equaliZe IL 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
sufhcien; income to keep their stock |
at par and to create surplus The |
latter. he tentatively proposed. might |
be allowed to amount TO % per cent |
Of the capital.
Railway Earnings Low.
This subject OF railroad capitalization /
ana 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 |
10 1910 the average net earnings were
525 per cent Of the net capitalization
while for the five years from 1910 TO |
1918 the average was only 4.56 per
cent. The total earnings on the stock. |
computed by adding to the net oper
ating income the income from the se
curities owned and deducting bond In ,
terest, were for 1910. 100 per cent;