Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1917-01-03
Gives noW|ands Committee His
Views on Railroad Control
COMPETITION PREFERABLE.
Federal Regulation Should Net Do Al.
lowed 20 Exclude Exercise Of State
Authority, He entsnds-Thlnks Rail.
road Stocks Should Represent Actual
Value and % Stable 40 0evsrnn,Snt
Bonds.

= q
fore the Newlands Joint COMMITTEES on
Interstate Commerce last week In sup
mort of the claim that the states should
be allowed to retain authority over the
regulation o. all transportation lines
within their borders. Mr.. Bryan ex.
planned that he had long regarded gov
eminent ownership as inevitable. but
only because Of railroad opposition to
effective regulation.
Against Government Ownership.
PERSONALLY cannot say that I de-
sire government ownership" ne ex'
planned, because l lean to the indi-
vidual idea rather than to the collec-
tive idea; that is, believe that gov
eminent ownership is desirable only
where competition IL impossible
Alfred p. Thorn, counsel to the Rail
way Executives Advisory Committee,
previously had presented before the
members of the Newlands Committee
a one OF his reasons for urging bet
ter balanced and more systematic reg
ulation of railroads the argument that
this IL the only alternative TO- govern
ment ownership. Calling attention TO
the restrictions imposed upon the
transportation lines by conflicting state
laws and regulations. to the practical
cessation of new construction and to the
impossibility under existing conditions
Of securing the new capital needed FOR
extensions and betterments OF railway
facilities, he warned the Congressman
that unless they provided fair and
reasonable system of regulation that
would enable the railroads to meet the
growing needs Of the country's busi-
ness the national government would
be compelled to take over the owner
ship OF the lines with all the evils At
tendant upon such system.
Preservation Of Composition.
Mr.. Bryan, on the other hand, holds
that the further extension of federal
authority over the railroads would be
step in the direction Of government
ownership. He advanced the view that
the Capitalization of control In the
hands Of the national government
would impose too great burden upon
the regulating body, would offer strong
temptation to railroads to interfere in
politics and would encourage the gen.
eral movement toward Capitalization
OF power in the federal government at
the expense Of the states. He said that
he did not object to consultations Of
railroad lines so long as they did not
destroy competition, that he knew OF
no complaint against great railway
systems because Of their size and that
he believed that the preservation OF
competition was the test to be applied
to all consultations.
Regulation Of Securities.
Mr.. Bryan declared himself in favor
Of national regulation Of railway stock
and bond issues. but added that he saw
no reason why that should exclude the
states from acting on the same sub
ject as to state corporations II would
like to see the stock Of a railroad, as
long as 1t is in private hands, Pade as
substantial and as unvarying as the
value Of government bond" he as
serted.
He suggested that railroad capftali-
cation be readjusted to equalize 1t with
actual valuation Of the property rep
resented, making due allowance for
equities, and that when this was done
the roads should be allowed to earn
sufficient income to keep their stock
at par and to create surplus. The
latter, he tentatively proposed, might
be allowed to amount to Is per cent
Of the capital.
Railway Earnings Lew.
This subject Of railroad capitalization
and the amount Of railroad earnings
received further attention from the
committee during its recent sessions.
In answer to questions BY Senator
Cummins, MI. Thorn submitted figures
showing the net earnings Of the roads
In recent years. These figures show
that during the ave years from 1906
to 1910 the average net earnings were
6.25 per cent Of the net capitalization,
while for the I'VE yeas from 1910 TO
. 1915 the average was only 456 per
cent. The total earnings on the stock.
computed by adding to the net opsf-
ating income the income from the se-
cunties owned and deducting bond in
terest. were for 1910. 100 per cent;
for 1911. GIT per cent; for 1912, 4.07
per cent; for 1918. 5.94 per cent; for
1914, 400 per cent; for 1915. 3.A per
cent, thus showing an almost contin.
uous decrease throughout this six year
period. It was announced that Hal
ford Erickson, formerly chairman OF
the Wisconsin Railroad Commission.
would submit more complete informa-
lion on this subject to the COMMITTEES
at a later date.
DELAWARE.
..-s-- d.