Perth Amboy evening news., 1918-12-13
ANESN
THE FUTURE OF THE RAILROADS

ereate.t domestic problem Of reconstruction. The suggestion of Di
rector General McAdoo, just made, that government control be ex-
tended for five years has brought the issue to the fore.
Mr.. McAdoo sees but three courses to be pursued Government
operation for one year and nine months; a prompt return of the rail
roads to private control; or the extension. of government control Tor
five years. Mr.. McAdOo's main reason for favorlng the latter course
is because congress has not the time during the present session to
properly consider the question and pass adequate legislation.
But why should it be necessary for the present congress to dis
pose of this problem' The law under which the government is operat-
ing the railroads provides for government control for twenty-one
months after peace has been declared. When the present congress
expires by limitation on March 4 there is nothing TO prevent the new
congress being called into extra session with the railroad problem as
the principal matter for consideration. This would allow ample time
to dispose of it in a way that void be most satisfactory to n ma
jorhy Ct the people.
The important thing to be avoided is having the railroads mixed
up in politics. Already there is a tendency in that direction and there
IS reason to believe that a majority Of the people believe that gov
eminent ownership of the railroads would put them permanently IN
politics The present handling of he post office department is a strlk-
ing example of what government ownership means. The blight OF a
DuresOn on the transportation lines of the country would soon de-
l0oralze the whole system.
But it would be a mistake TO give back the railroads to their pres
ent ou ncrs to be operated under conditions as existed before the
government took charge. The government has shown by its own op
Grafton of the railroads that many of the laws passed governing rail-
roads yer unfair to the railroads and detrimental to the public in
teress. The only way the government was able to save the transpor
taion situation that had developed just before the government took
control was to Immediately do things that the government had abso
lutely prohibited the railroads to do.
But there was doubtless a reason why the railroads under private
control WERE prohibited from. doing things that the government did
not hesitate to put into effect. The country has had o many striking
examples of stock manipulation and high fnanciering with one rail
road after another that all the railroads were brought into disrepute.
To allow the private owners too much leeway often meant the ex
llotaton OF the roads for private gain. From the days of Jay Gould
and tie Erie railroad down to Hartman of a decade ago or eve the
more recent wrecking of the New York, New Haven and Hartford
railroad, the "high fnanciering' has brought the railroads into dis
lepnte so that they were not to be trusted.
Blu. in finding a remedy for this situation we do not believe the
-nry favors going to the other extreme, delivering the railroads
over to he tender mcrcies of the politicians and the vhims and vicis-
STUDIES of changing administrations. There must be some interme-
date ground that will be f'c to the railroads and emFt'yes and sal
isfactory to the public
In considering this proposition we are reminded of the national
bank system Of tn, country. Time was when the monetary system of
the nation was in "A most chaotic state. Wildcat money was a
common slogan. The paper money of one state was not good in an
other or, at best, was of changing value. The financing of an enter
prise was one big gamble; nothing was secure. Individuals were free
TO exploit everything and everybody for their own personal gain.
Then the government stepped in with effective legislation. 1t did
not take the banking business out of private hands, but it placed safe
4 guards about the banking business and stabilized it. Our banks today
are in private hands and are conducted as a profitable business, but
the government has % regulated the banking business through eff
fecive legislation that our banks today are the most reliable business
Institutions in the world. They have the utmost confidence of the PEG
pie and there is no question as to their success.
This wonderful change in the banking business has been brought
about by government regulation. While leaving the ownership and
management of the hanks in private hands, anyone desiring to start a
bank must secure permission TO do so. This permission is granted
only after a thorough Investigation has been made IS to the need
for the institution and the standing of the men behind it. Then, after
the bank is started it must carry a certain amount in reserve at all
times: ITS books must be open to inspection by the government at any
time the comptroller of the currency may call for a statement of the
banks affairs at amy moment and the statement must not only be.
furnished, but it must be published showing the details of the banks
its assets and liabilities so that the public is constantly informed as
TO the condition or IN institution. amount Of loans 1t can make
and the character of the same are regulated by the government. All
kinds OF restrictions are placed ABOUT the directors Of the institution.
Everything is in the open.
Now, why cannot some such system be adopted for the future
operation of the railroads? Why not leave the railroads in private
hands Just as the banks are, but have them inspected frequently: re-
ports called for and published, and otherwise have government super
vision that will cause the public to have the same confidence in the
railroads that they now have in the banks of the country?
1t would seem as if some such plan as this would be a satisfactory
solution to the railroad problem. We believe the nation is agreed that
the railroads should not go back to former conditions, but that does
not mean that the only alternative is government ownership and OPP
Grafton. The government regulation of our banking system seems to
show a way TO solve the matter. Legislation along such lines ought to
be enacted within the next twentyone months. 80