The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-09

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possible cost?
This means that we must not alon,
make the best and most economical
use OF existing facilities, but we mus
provide the new facilities needed 10,
the future development Of our coun.
! try.
We cannot here view the question
as one might in England and France
where the necessary railroads are al
ready built.
| How are we to develop our existing
roads, and how are we to build oul
J new railroads? The heart OF the prob
lem Is this: Shall IL be by the los
rolling and pork barrel methods un.
| der which we have developed our pos
OFFICES. our rivers and our harbors, oil
shall 1t be by Offering reasonable re.
ward to those who by prudent fore.
thought and initiative exert their i'm.
aginations and spend their money ir
developing the country.
AS citizens We cannot consider the
, railroads being returned to private
owners merely for the reason that i'm.
mediate return would rebound to the
benefit Of large holders of the securi.
ties in some of the companies.
The Return to Private Owners.
Any plan Of returning these prop
critics to private owners must contem-
plate three general propositions:
]. That a fair return may be paid
upon existing investment:
2. That a sufficient return may be
attract the necessary capital with
which to develop existing lines and
to build new lines; and
8. That railroads must compete
for capital in the money markets Of
the world, and must, by same token,
pay for that capital with some re-
gard to the risk.
1t has been suggested that the ma
ton might adopt some such course
with reference to railroads as Is en-
ployed by New York city in its con
tracts with the subway and elevated
The cardinal point In those relations
is that the city provides a large por-
ton OF the capital. but agrees that a
FAIR return upon the private capital
employed shall be earned and paid
before the city's investment gets its
return. After both sides have earned
a fair return, the remaining profits
are TO be divided equally.
Divided Ownership's ADVANTAGE.
Such a plan is advantageous where
there is an assured traffic. But there
Is grave question whether that plan
would have resulted in such daring
craftsmanship as was embodied in the
building OF the Great Northern BY Mr.
Hill, the cutting across Salt Lake by
Mr.. Hartman, the building of the
y. Y, p. & y. by Mr.. Cassatt, or the
construction of the Florida East Coast
by Mr.. Flagler.
The cardinal though is this: that il
we are to escape net only the bu-
reaucracy. extravaganza and dead
level of Government ownership and
operation. but also the political risk
involved in the creation Of a new and
gigantic class Of Government en-
ployees, We must be willing that some
men who exercise energy, daring and
prudence shall receive some fair
measure OF reward for their effort. In
other words. We must recognize that
1t is no crime to make money in rail-
road building. il the money Is made
honestly and fairly.
II this principle Is not to be recor-
nized, the money for future railroad
development simply cannot be OBJ
tanned under private ownership. To
return the properties to their present
owners without recognition of that
principle simply means that the ten
dencies OF a year ago will be revived
and inevitable bankruptcy or Gov
eminent ownership will again stare
the railroads in the face.
Plan Suggested by shonts.
II this principle of permitting CAP
ital TO earn sufficient reward to at
tract the means for normal future
railroad development is recognized. nv
observation Is that the principle will
he made concrete in some such form,
as the following:
/. A plan of Government regula-
ton which will be scientific and not
political; which will apply the same
point OF view to approving rates as
TO approving the chemical composi-
ton or steel rail:
:. Concentration in :he regulating
authority which adds to the ex-
penses OF the roads OF responsibility
Tor the rates with which those ex-
penses must be met;
D. PROVISION that initiation of
rates shall be in the hands OF the
carriers; that rates may not he sus-
aiter nearing, and that final de-
cislon must be made within sixty
days;
:. Establishment by Congress it,
SELF or the fundamental PRINCIPLES
10 govern the reasonableness OF
rates such principles to include fair
reward for excellence Of service.
eficiency OF management and pru-
cent foresight in providing new IA
cilities against future needs.
How the Public Would Gain.
III these four principles could he
embodied into law, 1t seems to mo that
the public would gain immense adyan-
tage by the promptest possible return
or the properties to their owners 7
DO not urge for one moment that the
old Gays or unrestricted operation shall
DC restored. Regulation, with full
publicity has, | believe, come to stay.
But there is no use in blinking our
eyes to the stern facts. II the rail-
roads are not permitted TO earn sum
clent money 10 attract new capital,
and II the risks of the business are not
20 hn