Elko independent. [volume] (Elko, Nev.) 1915-current, 1916-02-03
BY Pae. and lnt'I News Service.
BY SENATOR UNDERWOOD.


able to successfully and fairly regu-
late the transportation systems OF
America, the country will demand that
we go forward and the next step ahead
is the government ownership OF the
railroad lines"
In this manner Senator Oscar w.
Underwood OF Alabama stated the
transportation problem OF the United
States to the convention of the Ameli-
can Electric Railway Association and
the American Electric Railway Manu-
facturers Association here today.
Continuing. he said, in part:
II think a step in that direction
would be most unfortunate. II would
lead to many evils that we dream not
of today; to avoid which, we must
work out a satisfactory system OF
government regulation, both for those
engaged in the shipment of freights,
and those who have their money In
vested in the means OF transportation.
1T has been said that No man can
serve two masters and under the
regulation of today the transportation
companies of America must obey the
mandate of the Federal government
and at the same time the orders of
each state through which the railroad
line makes its way. All of the i'm
portant railroad lines run through two
or more states and are subject to diff
ferent laws and regulations whenever
a train crosses a state line. Go into
the baggage car OF an express train
leaving Chicago and you will find a
within the state of Illinois resting
against parcel whose destination is
beyond the state line. Consider for a
moment that the one package is sub
ject to the rule of one master and the
other must obey the mandate of at
least three masters. Our courts have
held that under the protection of the
federal constitution the right of the
railroads to charge rates that will pro-
duce reasonable income on invested
capital must be held inviolable, then
how can we successfully determine
what is a reasonable charge to be al.
lowed for invested capital when you
leave the determination to three or
more sovereignties, each acting in its
individual sphere?
Low rates and adequate facilities
are demanded by the public, but the
granting OF one is often the denial Of
the other. Adequate facilities very
often require the expenditure of large
sums of money, but low rates prevent
the accumulation OF surplus capital
and lessen the borrowing power of the
roads.
without new railroad facilities our
commerce can not be expanded beyond
our present limitation and trade has
met a permanent barrier to its future
development.
Two decades ago the great trunk
lines Of the country were able to Dor.
row in this country and abroad the
money necessary to increase their ia
cilities at four and four and a half pei
considered by the investing public a
firstclass investment. How is 1t to
day? Il Is often with great difficulty
that the best transportation systems
in the United States are able to renew
their old loans or place new ones
Practically none OF these loans car
now be placed at four per cent inter
est. A large majority Of the bonds OIL
notes sold In the last year earn above
five and half per cent interest ant
some are placed at rates as high as
seven and seven and a half per cent
What is the effect Of TINS condition OF
the shipping public? 1t must be borne
In mind that on every dollar that IL
earned by the transportation com
panies of America, lightweight cents
must go to pay wages, up-keep ant
operating expenses, and only twelve
cents goes to the capital account. Il
must also be borne in mind that there
is no speculative enhancement In thu
value of the railroads that can be con
yerted in the Golfers OF the compan!
because the property Of the railroad
is needed for It's operation and whei
the lines are once built the operation
must continue in the interest OF thu
public. and whatever their relative
value may be- does not affect the earn
ing capacity of the company.
"The sole source of revenue for thu
maintenance, development and OK
pansion Of our railroad systems mus
come from the men who ride on tn
trains as passengers and from the mel
who ship their goods over the railroa'
lines.
"If you increase the interest rates
the transportation companies mus
pay In the end you must get tn
money TO meet the increases either b
the reduction OF wages, the surtai
ment Of facilities or by an additions
charge on the passengers and shipper
OF freight.