The herald and news. [volume] (Newberry S.C.) 1903-1937, 1916-12-01
RAILROAD VIEW or PRESENT
NEEDS IS DETAILED By THOM
Counsel for Railway Executives Adj
dresses Joint L congressional Commit.
tee-PreSent Regulatory System
Based ON Punishment and is Not
Constructive.

fet-PreSenr Regulatory system
Based on Punishment and is Not
Constructive.
Washington, Nov. 23-The railroad
view of what is the matter with the
coUntry's transportation facilities Was
presented to the joint congressional
investigating committee today by AL
fred p Thom, counsel for the railway
executive advisory committee.
Mr.. Thorn blamed the present sys-
tSm of "corrective'' regulation, divld-
! ed between the state and federal gov
ernment, for most of the problems
troubling the public and the car
riers and appealed for discussion
Of necessary changes mot upon any
mere theory or jealousy as to the dis
tribution of governmental power, but
upon the larger issue Of what public
interest requires.
Rates, Mr.. Thorn declared. are less
important to public interest than GER
tainty, safety and sufficiency of trans
fortation."
Under present conditions, in which
1.-The railroad business is largely con-
trolled by political instead of business
considerations" he added, railroad
credit is so poor and returns so small
that adequate extensions of lines into
undeveloped territory and enlarge
ment of facilities are impossible. He
said increased transportation facilities
would tend to reduce the cost Of liv-
ing by opening up new country, there
by causing increased production.
Punitive, Not Constructive.
Mr.. Thom pointed out that the pres
ent system OF railroad regulation had
its beginning in the abuses of the past
and was based on the principles of re-
preston, correction AID punishment,
rather than on constructive princi-
pies.
The railroads accept the view that
regulation is a permanent and endur-
ing part of government in America
and that the first duty of the carriers
is to the public. That duty is to al
ford reasonable facilities on reason
able terms and at reasonable lStes,
and this must be done before any pr1-
vate interests can be considered"
In support of his contention that
"the first consideration of the public IS
to obtain transportation facilities"
Mr. Thorn declared that when a ma
tion-wide strike recently threatened
to tie up the railroads, business men
would have been willing TO pay almost
anything to get their goods to the
market"
"The present system of regulation
is entirely adequate to protect the
public against eXorbitant rates, but is
not adequate to secure the public suf-
ficient facilities for its present and fu-
ture requirements
Railroad Building Lags.
LESS than 1000 miles of new rail-
roads have been constructed Turing
the past year. he said, "less than in
any wear since 1S4S, except the period
of the War Between the States, ami
yet the cost of living is daily adyanc-
ing owing to shortage of supplies
which might be remedied by secur-
ing access to new areas of produc-
ton
Among the conditions affecting rail-
road credit which deter investors, Mr..
Thorn mentioned the following: Rail
road revenues are not controlled Dy
governmental authority, and not by
one but by several governmental au-
thorities, which do not recognize re-
sponsibility for assured results to in
vestors and are entirely uncoordln-
ated.
Railroads can not control and the
government can not and does not
limit the expense account.
''The present system of regulation
is based on a policy of regulation and
correction and not on policy of help
fuIness and encouragement. !
"The outstanding obligations nj the
railroads have already exceeded the
financial rule of safety and involve
disproportionate amount OF obliga-
tons bearing fixed charges.
"The investor must accept a subor-
dinate obligation or security with no
assurance of a surplus of earnings to
support it.
"Other competitive lines Of invest
ment present superior attractions"