Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-01-08
IOWA RATE CASE LARGELY RE.
sPoNsIeLE FOR GOVERN
MENTs ACTION
PRESENTS FINANCIAL
QUESTION coNvlNciNGLY
Argument Showed lnaavisability OF
Raising Rates or Attempting to Sell
New Securities-Only Way Out Was
to Go to Congress for Relief-Wilson
Adopted Thorne View.

precipitated government operation OF
the railroads was undoubtedly Cliff
! ford Thorne, Of Iowa His argument
| before the interstate commerce com
mission in the Is per cent case heare
in November, established that the rail-
loads were . y .pable OF escaping from
their own enhl6Shment. He showed
| that they were incapable Of meeting
| the physical demands upon them
/ that it was impracticable for them 10
| borrow money in competition with the
! federal government, at least IN any
Year when the government might re-
quire, as It probably will this year re
quire 100000, goo, 600.
AS the annual income of all the citl-
zens of this country is estimated al
Sal, 0eO, 000. 900. II the United states
took for itself $50, o00, 900, half the full
income OF every one Of its citizens
then it did seem an impossibiiity 10
levy such vast additional sums as the
railroad managers were seeking. Inc
Is per cent they were asking was
equivalent to per cent interest OF S.
600. 900. Next year we may be paying
interest on the $4,000. 100000 of gov
eminent debt, and 1t was proposed TO
add $4,000, 100000 Of railroad stocks
and bonds to pay interest on.
Mr.. Thorne went on to show that
the Increases Of income already allow
ed by the interstate commerce com
mission afforded a net operating m
come above operating expenses OF all
kinds, according to the railroads own
exhibits In the case, were s451. 0OO,0eV
more In 1915 than they had been IN
1850 per cent greater. 1t was Sl0o,-
OO0, 900 greater than any previous year
in the history Of the railroads, and the
1917 income Fiscal Year, net income
was greater than any other year IN
the history of the railroads, except
1916.
Poor Time to Raise Money
President Rea of the Pennsylvania
railroad in answer to question by
Mr.. Thorne, declared: THE railroads
should not go into the markets to sell
securities while the government was
trying to secure money to prosecute
the war" Mr.. Thorne: and that an
swer holds whether this advance 90
per cent? Is granted or not granted.
MIR. Rea: 1T does"
Having shown that the railroads
could not get capital by bond sales,
Mr.. Thorne proceeded with powerful
argument against the policy and legal
ity OF making additions and betterments
reuuised by the railroads out OF earn
ings, Before that could be done, he
declared, every decision OF the su-
preme court Of tho United States that
had over been rendered when that Is
sue has arisen, must be overturned.
Additions and bettersnents must come
out of new capital. IL you advance
freight rates." said Mr.. Thorne again.
to the interstate commerce commits
sion. "for the specific purpose OF build
ing improvements out OF earnings, II
will mean that the public must not only
pay all the operating expenses OF the
railroads. give them enough funds m
| freight rates and passenger fares TO
maintain them up to 100 per cent ell
ficiency, to pay all the interest on
bands and debts, to pay them their
regular usual dividends, grant them
surplus for tiding them over lean
years, pay interest on non-revenue pro-
DUNG construction before it yields
revenue you will require the public to
| build railroad properties for private
! com panies,and then pay return ever
! Lastlngly upon what We build
Had to Go to Congress.
| Having established IN logic and In
! law -sa, the railroads could not Dor
row MONEY and could not compel the
! o15lic 20 give them the money to MAKE
! -n, Investment. they want 20 make On
! oe--ernsats, ~. Tnorne proceeded TO
! gtggeg. MT TIE Icrnlss.ol could not
! atsg-1 -ae relief; that the railroads
-Es- ~ 10 Ias ccos-ess Tor t. Ano
! IT. Z.g-gcGgce1 that :. ti4s government
I ..g-.e-a .,zgcey II thege companies with
wn5ct, =, gr-6 zS1.t.ong and better
II es,I.s ne pHgp!e Will get bsck ever
( Yssz.T II .-tersrr MA. ne money costs
! -.e ggr s,r--ce-It 2-,6 Z: ,re maturity o.
! -aa pt3-c!5z
! ~slg liz sL-aoS. ire a5ertl i&ng1age
2l5c5 &: ~ T--..~Jne n seeT-a- oecas-
! s.gos r.gce65ag ~ c.Eu4ax N: ,hs If
( terence IL rt-2l NJ. T-:agroe wag max
Icg mir argurae-: 4 TIE Eo1rt u last
res1rt Tor Lte railroads.
Ny. Tacrne 1fts.1e one aScHicrzI ar
! glinaat 70 the e<.ec: TIA: = ~ Grr-
| eminent taxes over che Dpeyzt.or4 o.
the war and guarantees me o3YsSe1cs
that were pad curing Ete pre- VA
! perioG the government 9o11je t1ss En-
tiGed ~ The profits ezrnec pTer AM
alDoTe the c3T4deEog FOR = VIII ~ sA1o'
stltut!,-2 Z government opEf IN e-@G'
Tor railroad STOCK In sp4p3os taSs
woylG Inean IeL earuin2E tnat wc9}t
20 70 the government ri sepDrDzi,fste37
s190, QGt, 900 Annually in ptic5a2 cas1ssi-
fcation territnrv ''[rts4..Ls! <sle -eee.ttess
4 ton territory" aror1s only appgt ri!
the possibilities tor profit suxzests1 ~
M Thorre.
/ Presiden, WIinon nan rInGs s.s@DsIsc
this yiew II the sD1-Dips ac5 IL st4f
draft d bill 70 carry oct h&s plan u
is proposed 70 TAKE, ss De{on2inZ y
the government, wilatE5Yer Gasn51Ss IN.
railroads may naaks oysr ma aGoTs
the average earnings 1or me three
year perioc preceding me government,
| operation of thssa.
III
II kootezums Nerve Notes.