The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1916-02-22
Railroad Problems.

10 SOhSIeSS Is constantly oSiS
emphasized. 1t is small task that will be en-
trusted to the commission if it is to be undertaken
with view to real accomplishment While in
recent years more general realization of the ex-
tent to which the nations prosperity is dependent
upon the efficiency and successful operation of its
railroads has brought about decline of railroad
batting the hrst-ehoice method of appeal by
the demagogue to the voter, the legislator toI
whom hostility to railroads has become second
nature is extinct. and the roads still suiv-
ing, under the handicaps saddled upon them in the
earlier days. to render adequate public service and
the same time protect the rights of their share
holders
The fact that the present condition of the roads
is less alarming than the case less than two
years ago must not be accepted as evidence that
they have passed the danger point, as is brought
forcefully to public attention by Mr.. Otto H.
Kahn, eminent New York fnancier, in an article
in Worlds Work: Mr.. Kahn writes:
The fortuitous and fortunate circumstances
that, owing mainly to the direct and indirect ef-
feet of the stimulus of huge war orders and be-
cause of other unusual circumstances railroads
are doing much better at present, and that in
vestors after having left railroad securities more
or less severely alone for years are for the time
being, looking, upon them with friendly eye,
fact that the railroad industry is in an inherently
weakened condition that the spirit OF enterprise
has largely gone out OF railroading that, generally
speaking, expenditures for construction, equip
ment, improvements, etc, are confined TO the abso-
lutte necessities. Nor must the present prosperity
of the country blind us to the consideration that
the full measure of prosperity which 1t is capable
of attaining or, indeed, any permanent and COM
prehensive progress or prosperity cannot be
reached as long as its most important industry
that of raroading, is bureaucratized, shaekled,
harassed and famed.
In common with most students of the railroad
situation in this country Mr.. Kahn is convinced OF
the failure of supervision by the Interstate Com
merce Commission, at present constituted and
overwhelmed as it is with tremendous burden
of detail involved in countless separate nvestga-
tons and reviews. He points out, too the i'm
possibility of intelligent and successful adminstra
ton in face of the perplexitcs, the hardships and
the conflicts resulting from Federal regulation
supplemented by similar activities on the part Of
the legislatures and commissions of the different
States.
The remedies suggested by Mr.. Kahn are in
teresting, and while some radical none can be
regarded as anything but practical He would
place the roads, so far as rates and other phases
OF their business affecting interstate results are
concerned. wholly under national authority,
arguing that ''thc Federal Constitution expressly
reserves to Congress the exclusive power of deal
| ing with commerce between the States, and the
exercise by State authorities OF rate-rnaking and
other powers which, though technically confined
to railroad activities within the States, yet &C
tually must and do affect interstate relations, is
clearly opposed to the spirit, if not to the Ian
guagc, Of the Federal Constitution" Believing
that the principle OF giving the Interstate Com
mercc Commission power TO regulate rates is
sound and has come to stay, the writer is, how
ever of the opinion that the public could and
would be just as fully protected and that, in fact
both the public and the railroads would be the
gamers if the immensely complex, difficult, and
delicate task Of making rates were left in the
hands OF those trained for it by a lifes study cx-
perience and practice, G., the railroad officials
with full power, however, in the commission, on
its own motion, to reduce to increase rates for
cause"
This is advanced ground or perhaps some will
Drcfer to call the writer rcactonary? But surely
it will be conceded that this proposal is progress
sivc.
The banking and currency legislation of 1911;
affords an appropriate precedent and in many re-
spects parallel The national functions and
character Of the railroads are largely analogous tc
those of the national banks. Like the nationa
banks SO should the railroads be freed, at leas
j in essentials from the conflicting and multitude
nous jurisdiction OF the several States and placed
under Federal authority. And just like the ma
tional banks, they should not only be permitted
but be compelled to cooperate, and thus modified
for the maximum extent and efficiency OF serv
ice; in other words, pooling and kindred arrange
ments should be sanctioned, subject to the ap
proval of the Interstate Commerce Commission
The formula and principle of the banking and cur
rency legislation, viz a strong, effective .ane
controlling central Federal board in Washington
i relieved from detail work and from certain. es
sentially conflicting functions (Which should b.
conferred upon separate body with regiona
boards according to geographic groupings, nigh
prove exactly suited to railroad legislation.
), Unmis takably this suggests a new il
transportation and whatever may be the prospec