Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-12-08
FUTURE OF RAILROADS
PUT UP TO CONGRESS
NATIONAL Lawmakers Ready to Undertake
Task President Wilson Has
Assigned to Them.

tenn is scientific, because it cannot res
tain the necessary differentials. 1t
greatly increases the burdens on in
land towns and increases the advan-
tageS of seaportS, which are already
favored.
Congress also will insist upon addi-
tional safeguards through federal
control over stocks and bonds.
Program of Restoration.
Taking up the first line of policy
restore the railroads to private own
ership under new and strict federal
regulation and supervision.
This would entail modification OF
the Sherman act and the supplement
tary Clayton act. to allow agree.
ments between the railroads which
will enable them to operate with the
same efficiency and economy as they
were operated under the wartime
government control.
If the Sherman act is modified or
repealed and 1t is made lawful for
the railroads to enter into pooling
agreement for operation 1t is obvious
that there must be governmental SUI
pervision of these agreements to see
that such agreements now forbidden
by the Sherman act are not detrimen-
tai to public welfare.
1t is an open question as to where
such authority would be placed.
There has been a proposal that II
should be given to the Interstate
Commerce Commission. There is al
ready a precedent in the Panama
canal act. which gave the Interstate
Commerce Commission authority to
investigate and allow the railroad
lines to retain their water lines il
the commission found it to the public
interest that they should be retained.
The provisions of the shipping act
4.
it is for public advantage. 1t goes
over the whole list of provisions OF
the antitrust act and says the board
shall pass upon them and decide II
pooling of carriers is for the public
welfare.
Control Of Capital Issues.
Those who feel strongest that the
railroads should be returned to pri-
vate ownership as an efficient bust
ness proposition say that they, be-
Capital Issues Committee should be
authorized as n permanent govern
mental board and should have legal
authority to regulate the issuance of
stocks and bonds.
Twice in recent years the House of
Representatives has passed an act
giving to the Interstate Commerce
Commission the power to regulate
stock and bond issues of common car
riers.
The physical valuation of the rail-
roads. tabooed in some directions and
opposed by most of the railroad man
ayers, will be of especial value at
this time as an aid to the Interstate
Commerce Commission in passing
upon questions Of stock and bond is
sues.
soTethinE like national blue
q U la
against waste of money in obviously
fraudulent stock deals
For years to come the industries of
this country. charging to meet world
trade demands, will need all the
money that is open for investment, I'm
Stockholders Take Counsel.
An imposing array of advisory and
general counsel. headed by Elihu
Root has been organized by the Ma
road Securities to represent the stock
holders in negotiat tons with the gov
eminent looking toward the return of
the nations railroads to private own
ership.
The committee on. interstate and
foreign commerce of the House, be-
fore which this question will be
thrashed out, will meet as soon as
the next House convenes, with Rep
resentative John j. Esch of Wiscon-
sin as chairman. The railroads will
be invited to have their counsel
TESTIFY at the earliest possible date.
The main point advanced by those
who contend for government owner
ship and operation is: When the
need for efficiency impelled radical
action. the only way to get it was
through putting the railroads under
unified control. They argue that if
efficiency was achieved thus in war
times. why is not unified control by
government operation just as valua-
BILE in the days of reconstruction and
for the business-full peace days?
Those who are in favor of either
OF the broad policies-governmen -su-
pervised restoration to private owners
or outright government ownership
and operation-admit that the rail-
roads are naturally monopoly If
the highest efficiency is sought there
cannot be two lines serving the same
route. one is economically unneces-
sary. and an example of this is rival
panies. in the same city.
When railroad is projected
through new country and the right is
given to go through a mans prop
erty and take whatever is necessary,
paying. not the owners price. but
a
jury, this is done because it is recog-
nized that the railroad is for public
service. Since ii is recognized that
railroads are natural monopolies and
given extraordinary rights and priv
ileges. because they are projected for
public service. those who urge di-
rect government ownership and OPP,
Grafton ask:
"Why should they be allowed to
pay profits to any individual or set
of Individuals"
More Powers for I. C. C.
1t is generally admitted that in
any event more drastic authority
hands of the Interstate Commerce
Commission. 1t is generally felt that
for economic efficiency the railroads
must be operated as one system. II
they are again split up they Will
compete, cut rates and drive one an
other out, the big men will manipu-
late the small lines to make one big
system and pocket the profits. SO
that as far as the public would be
concerned 1t you'd be going back
to the same mad scramble as before
the war. when the emergency arose
that pointed the way to continued
economic efficiency.
The price necessary to buy in the
railroads is not prohibitive. congress.
men say. The nation has shown that
s55. 900 900 900 can be raised from the
sale of liberty bonds and taxesIdit
would he easy to raise 5000 ,OOp
or $40, 900, 000, 900 if necessary to take
over such an important public service
institution as the railroads.
The incoming republicans are view
ing with some alarm the spirit OF boil
shevism sweeping over the old world.
~ nv
searching the lands where the mass
of people have nothing to lose. They