The sun., 1918-07-22
SHOULD BUY ROADS
NOW, SAYS EXPERT
Government Ownership In
evitable, Declares Will
lam w. Cook.

William w. Cook. general counsel for
the Clarence Fl. Mackay compan MES. and
author of a standard law hook, Cook
on Corporations" addressed a state
ment yesterday to the joint committee
on Interstate Commerce at Washington,
urging that the Federal Government be-
Cin at once TO acquire the stocks and
bonds of all railroads in the country
with the intent OF future Government
control. Condemnation proceedings
would entail a tremendous cost, he said
but the purchase of stocks can be done
by exchange that would not cost the
Government a dollar.
In his argument for Federal control
Mr.. Cook says:
I'VE cannot return to old conditions
The railroads would again break down
financially. and railroad securities would
again crumble away: higher rates would
again be denied the present vast saw
ing in direct routing, in common use OF
terminals, tracks and equipment. in the
discharge Of an army OF solicitors
branch officers, traffic agents and
branch ticket employees and in tho
elimination OF unnecessary trains and
unnecessary depots. would disappear.
ard the waste OF competition between
trunk lines and branch lines would re-
appear.
State commissions would again re-
sumo their pernicious activities and
chaos would again prevail Railroad
security holders will oppose any such
catastrophe Meantime. the railroads are
being fused and welded into a solid
mass OF metal. They cannot be disin-
tegrated into coke and iron ore. Their
oil organizations are being broken be-
yond repair. The stockholders want no
resurrection: the directors are falling
away the presidents are dropping out !;
the operating staffs are becoming Gov
eminent employees.
THE people will not want the old
system They will want the UNIFIED
system. And even If, like the Bourbons.
the former railroad regime did come
back, H. would again he suspected
Public control may cost more. but at
least the public will be spending Its
own money. The old regime was not
allowed to increase railroad rates be-
cause the public was determined to get
rid of that regime at any cost
Mr.. Cook urges that his plan he
adopted without delay, because the pur-
chase of railroad stocks can now be
made cheaply His statement showing
the expense OF condemnation proceed
ings follows:
Now is the time TO put this plan
into effect. because railroad stocks and
boKds are cheap and can be acquired
at fair prices. In times past when
Wall Street could get control OF great
railroad system cheaply. Wall Street
acted. The nation should act now in
regard TO the railroads, because per
manent Government control of the
railroads Ia inevitable. To obtain that
control the Government will have to
buy or condemn either the present
stocks or the physical properties OF the
railroads The former is much cheaper.
easier, quicker and less. disturbing to
business and TO the public
AT present prices the stocks and
bonds Of the railroads can be acquired
for about 5000. 100000. To condemn
the railroad properties themselves how
ever, would probably cost the Govern
ment twice that amount. The reason Is
that in condemnation the Government
would have TO pay for the earning power
Of the railroads"
Mr.. Cook here cited the Mononga hela
Canal case, in which the Supreme Court
established this principle. In addition
the Government would have to pay for
earning power belonging to the railroads
by reason OF State charters. He cited
a decision OF tne supreme court snow
ing that the franchise must be paid for
because II Is a substantial element in
the value OF the property taken.
Further. the indications are that the
American railroads are underca pits allied
and an asse ,sment of the properties
added to the earning power would
prove enormous. In addition. Mr.. Cook
says, litigation involved In condemna-
ton proceedings is a serious factor for
consideration.