The Birmingham age-herald., 1917-07-21
THE PEASANT EFFECT
THE RAILROAD PROBLEM
By HOLLAND

New York. July 2o-(Special)-In the monthly circular for July issued by the National City bank which reflects, 1t is presumed. carefully considered views of Frank A. Vanderlip, president of the bank, there occurs a paragraph referring to the railroad situation and intinating that the railroad crisis Is much more se- vere than is commonly understood to be the case.
 Cautious as Is this statement yet it has been carefully considered, so that the meaning behind 1t may be discov- cred. It has been observed that in al observations with men of finance and of business respecting the very great f. nancing operations now In progress and the business activities which stagger the imagination there is usually one com ment which instead of being optimistic is more or less pessmistic. That is based upon the situation in which the railway companies of the United States. as whole. find themselves. The gov ernment is not only permitting but prac- tically forcing pooling and upon a scale which few years ago would have caused nationwide criticism and pre- sumably many prosecutions. The gov- ernment has also brought the railroad systems of the United States, or sub stantially all of them into 8 single well co-ordinated unit which is only another way of stating what Daniel Willard. president of the Baltimore and Ohio Railroad company, and chairman .of the railway war council said recently was a fact namely: That the railroads of the United States are now federalized.
 But notwithstanding these unparalleled activities of the railroads by government command In the direction of co-ordina- tion apd unification and polling, they are nevertheless unable to secure the fresh capital which Is in imperative need if the railroads of the United States are to be so improved, so expanded, so abun- dantly fortified with adequate terminals as to be able to handle with speed and accuracy the enormous volume of trans portation business which they will be called upon to handle certainly after the war is ended.
 About IS years ago the late A. J. Cas- sart president of the Pennsylvania Rail- road company. ventured che view that unless there were Wlthln lu years SucH expansions and improvements as would substantially duplicate railway plants as they were, there would inevitably fol- low a time of congestion and almost paralysis of the transportation business which, harmful as that might be to the railroads themselves, would be of still greater detriment to the industries and plsiness of the United States,
 WHAT JAMES J. HILL SAID
 A statement made by James J. Hill about that time, or a little later, has been almost an automatic proverb so fre- quently has it been repeated. He was sure that the railroads of the United States would have no apprehension lest there be congestion of a kind which would tend greatly to paralyze business.
 Still the railroads could not Eet, ex- cepting for short periods of time and by paying heavy rates of interest and some bonuses, money enough to meet the or dinary day by day increased operating requirements. Capital is bold enough to take chances when it sees a reasonable hope of excellent or even fair profit, but capital would not take chances involv- ing any longtime investment of emoney by investing in securities offered by the railroad companies wherewith to obtain