Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1917-03-16
R. R. STRIKE WILL
SOON FIZZLE OUT
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Continued From First Page1
mercial welfare of the country in the
close regulation which is squeezing to
| death the constructiveness of our pub
| lie utilities. Private ownership with
out regulation has failed" went on Mr.
! Lee, and public regulation of private
ownership has also broken down be-
cause the standards of service of the
| railroads have improved. while their
earning capacity has remained sta
| uonary, and capital is being with
drawn, with the result that the work
| OF the future is not being planned" :"
| The solution of the problem, in Mr..
| Lees estimation, is to turn the search
| light of publicity on the financial deal
ings of the railroads and remove them
entirely from politics.
The speaker was introduced by
! Quincy Bent, of the Bethlehem Steel
! Company. whom President David E.
Tracy, of the Chamber of Commerce,
4 took pleasure in introducing as of
Steelton and Harrisburg.
Price Fixing Responsible
The fundamental difficulty of the
pubiic utility as business is that the
process of its product is absolutely
| 1Ned-regulated by law-while its cost
of doing its job is subject to the same
/ influences as affect other lines of busi-
ness, Mr.. Lee said.
The costs of conducting the steel
business-wages, materials. etc.-are
very much higher than they were be-
i fore the war. But steel prices are
several hundred per cent. higher, and
so steel manufacturers are making
large profits.
The cost of coal, wages and all
materials is now going up by leaps
and bounds. These costs must be paid
by every public utility, but its charges
to the public must remain stationary
unless government permits.
! The street car fare must stay at
. cents; the price of gas and electric
current stands: railroad freight rates
must remain unchanged.
| Economic Contradiction
Here is an economic contradiction.
| violating an ineXorable law, and vet
! a very simple rule of arithmetic,
/ namely, that you cannot subtract a
| larger sum from smaller.
"A public utility's treasury is abso-
lutely limited by what it takes in.
| What ii gets as capital must be eX-
! pended on the property; what it re-
ceives as rates must be used to pro-
mote the service and pay interest on
the capital.
IF the expenses are so high that a
fair return cannot be paid on the
capital, the business ceases to be at
tractive and capital refuse to promote
| further facilities.
Analyses situation
I'm the final analysis the whole sit
uation means just this:
1T is the peoples problem: the
| people must have facilities-railroads
street railroads. gas. electricity. If
costs of operation go up, the rates
must go up accordingly or the service
must be cut down.
The vital weakness in the situation
of the railroad, our greatest public
utility, is that the business has ceased
to look attractive to those with money
| TO invest.
Railroad Building at StandstilI
Railroad building is at a standstill.
No new railroad stocks are being is
sued. Yet business is booming and
railroad facilities are congested.
! Your greatest railroad, the Penn
sylvania, illustrates the good and the
bad of our present situation. 1t has
been soundly and honestly financed
| from the beginning. Last year the
| Pennsylvania landed a surplus of
S22, 100000 after paying its dividend.
Its total earnings were only per cent
on Its property.
This year, l am told, the Pennsyl-
vania will pay for it's coal some
| $50 900 more than last year; for
| materials at least $S,000,000 more,
and for wages S7,0OO,000 more with
out reference to the results of the
Adamson law in the present labor
crisis.
Sees No Surplus
/ THAT means that unless there is a
change in conditions the Pennsylvania
this year will earn no surplus; in
deed, will barely earn it's dividend
And that is what confronts our
greatest and soundest railroad cor
poration.
| IF our railroad and utilities are
permitted to promote the facilities the
public must have, people must rec
| ogniZe that increased costs shall be met
| by increased rates.
IF this is not done, government
ownership of all public utilities is in
evitable. That would indeed be ca
tastrophe.
Public Must Pay
| Government ownership would de-
| bauch our politics; introduce the pork
! barrel method into railroad building;
and in the long run be far more costly
to the people than the present system.
''All that ii is necessary to do to
remedy the existing disease is to look
facts squarely in the face and arrange
that the public shall pay for what it
gets.
Take politics out of railroad and
utility regulation and half the battle
will be over. The problem is a simple
problem of business-indeed, of ele-
mentary arithmetic-and should be
approached in that sense
] Mr.. Lee will discuss The Railroad
! Labor Problem" this evening before
/ the Engineers Society in the club at