New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-12-07
A New Era for the Railroads


startling of its achievements so far is the
sudden conversion of the Interstate Com
merce Commission to a broad-gauge, mod
orn view Of the railroad problem.
The commission stood out for a long
time against conversion. IL had inherited
a theory Of regulation which might have
been justified by the conditions existing at
the time the original interstate commerce
act was passed-and even for ten or fiji
teen years thereafter. But when con-
ditions changed the commission still chung
10 its theory. The Reagan ullom act was
passed to protect the shipper against un-
Just and unfair treatment by the carrier.
So Federal regulation aimed for years at
reforming railroad practices and reducing
freight rates. Popular opinion strongly
supported that course; 50 for two decades
the railroads were made to feel the weight
OF regulation, while the shipper and con-
sumer enjoyed its benefits.
But there came a time when the effort
20 give the shipper and consumer a cheap
rate and to cut to the minimum the return
on the railroad stockholders investment
Logan to defeat the ends of justice as well
as those Of sound economy. The railroads
were compelled to carry freight at fixed
rates, while all the time their cost of OPP
Grafton was being swollen by state and
Federal taxation, by safety appliance leg
islation, by wage increases due 10 awards
in arbitrations conducted under Federal
auspices and by the steady rise in the cost
Of railroading materials. Year by year
the situation Of the carriers became more
pinched. Their credit declined and the ex-
pansion of their facilities had 70 be dis
continued.
Here was a condition in which the pub
lie was enjoying an apparently cheap rate,
but unInowingly paying high cost for it.
For the Gripping of the credit ola basic
industry like railroading and the starving
Of its growth could not but react unfavor-
ably on other industries by slowing down
transportation. Even before the war the
evil effects Of regulation with the sole pur-
pose of providing a cheap freight rate
were becoming manifest. The commission
was warned again and again that Federal
regulation must aim at building up the
railroads, not so much in the interest Of
their owners as in that of the nation. II
held its hand, however, from any such con,
structive work. Then when the war came
and we needed a strong transportation sys-
TEN, capable Of rapid expansion, we didn't
have it. The commissions theory of regu-
lation had left US unprepared and handi-
capped.
Even as late as last June the commits
sion would not admit It's error. 1t baked
at giving the carriers a 10 per cent in
crease in rates 1t expended a lot Of argu-
ment. which reads very foolish to-day in
the light Of events The condition Of the
railroads is at present factor of the nigh
est military and economic importance.
Nobody is now so blind as not to see that
giving them every assistance possible is a
matter Of governmental self-i5terest.
The commission is now Rady to give
them higher freight rates. II goes to much
greater lengths. 1t advostes government
loans As a means of funishing them CAPT I
tal needed for development. 1t recommends
the repeal Of the antitrust and anti-pooi-
ing laws in so far Is they may hamper tne
operations Of thsrailroads as a unit IL
can see no alternative to this programme
Of broad-mindd, constructive Federal reg
,lation-thesort we should have had long
before thiNthan government operation
with guarantees of fair returns 70 'he
,resentowners Of the roads. /
Tb& Is no escape now from railroad
,olE which puts on the government 'he
10 If developing the railroads Of the
,,,.rv into an efficient, serviceable unit
soth for military purposes and for the pur-
roses Of ordinary traffic. Congress must
choose between broad-gauge regulation ana
,e,,ye,nment operation. We have partial
Eoasrol regulation now. The roads would
be able to work under it without much tric-
ton If state railroad commissions were TO
me abolished and anti-pooling restrictions
we've 20 be removed. Competition is practi-
calIv dead in railroading, and there is no
need, under government regulation, Tor
prohibitions against combinations. Oper-
ating mergers are absolutely necessary TO-
sav 70 overcome freight congestion.
completc and intelligent Federal regula-
10, seems to us TO be the natural solution
~ the problem of energizing our railroad
stem. But If government operation must
come twill, at the least be a vast improve
,,ant on the negative and pernieious policy
of.partial regulation WHICH the Interstate