The Fargo forum and daily republican., 1918-01-04
D. RAILROAD
BOARD PLEASED
WITH new MOVE
Approved Government
Control of Railroads
Want Ownership

| Bismarck, N. D., Jan. 4.-The
/ North Dakota railway commission
sees in President Wilson's taking
| over of the railways, a course of
which it thoroughly approves, first
step toward ultimate government
ownership of railways, which the
state rail board endorses. A thought-
full statement on this subject, pre-
pared by Rate Expert James A. Lit
| tie and presented some time ago be-
fore the Newlands committee, has
been revised at the request of the
utilities bureau Of Philadelphia for
publication in the February issue of
Public Utilities, a high grade tech
nical periodical published by this
bureau. In this article, the North Da-
kota railway commission takes the
stand announced by Secretary Of the
Interior Lane as a member Of the
interstate commerce commission,
several years ago, when he stated in
reviewing the Burlington case in
which the railway company claimed
q right to earn a reasonable return
on a present value of $3.50, 600, 900,
representing an investment Of only
$25S 900, 900: IF the position of the
Burlington is sound and as a precise
expression of what our courts will
hold to be the law, then, as we are
told,- there is certainly the danger
that we may never expect railroad
rates to be lower than they are at
present. On the contrary, there is
the unwelcome promise made ini
this case that they will continuously
advance. In the face of such an
economic philosophy, If stable and
equitable rates are to be maintain
ed, the suggestion has been made
that it would be wise for the gov
ernment to protect its people byI
taking to itself these properties att
present value, rather than await the
day, perhaps 80 or so years hence,
when they will have multiplied in |
value ten or twenty fold"
Following up this line of reason |
ing, the North Dakota railway COM
ownership: "In various rate cases
the railroads have insisted, both in
court and before the interstate COM
merce commission, that they should |
be permitted to earn interest on the |
value Of their property which they |
claimed to be from 1856 to 40 per
cent of their capitalization. The to-
tai capitalization of our railroads is |
SIS, 300000,000; 1856
per cent of that amount is $23,907,- /!
100000, and 40 per cent is $685.
U1UgUUUsuUUE 1uSIC4OACg bAACy 6CCh
turns on from $8,607, 100000 to $10,-
710, 600, 900 in excess of their entire |
capitalization. This means that the
railroads would distribute a melon
of this amount to fheir stockholders
without the payment of a single
cent to the company or the addition
of a single mile Of track or train of
caRs to the property and that the
public would have to pay at six per
cent an annual charge Of about 500
million as interest on this melon,
in addition to interest on the securi-
ties outstanding, which include the
water from other melons of bygOne
days.
''The railways must forever re-
nounce all such unjust claims and
devote themselves exclusively to the
business of furnishing transportation
and improving their service, or the
government must retain possession
of the railroads after the war.
Under these conditions, we believe
that government ownership must be
adopted as a permanent policy"
Summed up, the railway commits
sion's argument is this: Govern
ment ownership Of railways ulti-
mately will be forced upon the coun-
try by the railroads themselves.
When the railways are taken over
it must be at their face value. That
value never will be less, and if
Uncle Sam intends to buy in, or
knows that sooner or later he will
be compelled to buy, whether he
would or no, there will never be a
time when he can strike a better
bargain.