Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1918-02-08
Republican A. P. Leased Wire1

faVorably to the senate To-Day the
administration railroad bill, estl-
mated that under the measures
provisions the government will
guarantee annually to the railroads
of the country S945oo0,ooo, which
will represent a return Of 5.32 per
cent. This, he says, reflects
neither poverty nor riches" but the
committee believes a majority Of
the railroads will express these
terms as a just and fair measure
of their constitutional rights.
An agreement on the bill was reached
by the committee last Saturday but
minority reports are to be submitted by
Senators Cummins and La Toilette. Ad-
ministration leaders plan to call the
bill up for consideration next Monday.
"Your committee is Of the opinion
that this is the time for war emergency
legislation and not the time to settle
the many controversial and vexed ques-
tions concerning our future transporta-
ton policy" Chairman Smith says in
prefacing his report. He then takes
up the compensation section and adds:
About rs great operating railroads
do over 80 per cent of the railroad
business. The committee believes that
most of the great railroad carriers will
accept these terms as a just and fair
measure of their constitutional rights.
Section one further provides that or
binary taxes, national and state, shall,
as now, be paid out of operating rev.
enue; but war taxes accruing under the
act of October 3, 1917, are to be paid
by the companies out of their own
funds, or charged against the stan
dard return. In other words the hol-
ders of railroad securities ar eto bear
their own just portion Of the war bur-
den. Section one also requires that
each agreement shall contain adequate
and appropriate provisions for the
maintenance and depreciation Of the
property and the creation of reserves
so that the properties may at the end
of federal control be returned to the
owners in a condition substantially
equivalent to their condition when
taken over by the government.
There has, of course, been much
discussion as to the fairness and JUS
tice of the proposed amount of the
standard return. 1t is plainly in the
public interest-and indeed a war need
The rights of owners must be tested by
or capitalization never made operative
under federal or state law or generally
| followed by the courts"
| Chairman Smith explained that in
case Of controversy over compensation
the bill permits an appeal to the court
of claims. The committee recon-
mends, the report says, that improve.
ments made by the government while
the carriers are under government
control should go to the railroads when
they are returned to the security hold
ers. This should be arranged through
an agreement between the carriers and
the president
GOVERNMENT MAY
CONTINUE AFTER WAR
Discussing the provision inserted by
the committee providing for the ter
mination of government control is
months after the peace proclamation
has been issued, the. report says:
1T is possible that certain conditions
may arise from Federal control which
will need adjustment before the prop
critics are returned to their owners, and
d reasonable period to intervene tC
which these conditions may be met and
adjusted. 1t may be that the natior
will be unwilling to return to the con.
ditions obtaining before the assump
ton of federal control. Legislation
may be demanded radically changine
the relation of the government to tn,
railroads from that now existing in tn,
interstate commerce act as amended
Your committee has suggested a perioC
of eighteen months and they believ,
it will be found adequate for tha
purpose.
There also is a provision to the eff
feet that the president may, prior t
July /, next, relinquish control of sucl
, transportation systems as he may deen
| not nedful or desirable, and may there
5 after on agreement, relinquish all O
any system of transportation.
The section also contains a genera
provision that the president may re
lipquish all railroads at any time whe
S he shall deem such action needful O
desirable"
Y BELIEVES PRESENT
i SYSTEM is FAILURE
t Senator Poindexter, in his mi
: nority report, sat he believed the
s consensus of public opinion is that
the present system by which the
n railroads are compelled to operate
e as rival competitors for business
under private ownership with very
$ limited governmental regulations is
t a failure.
e at is a great mistake, in my
t Judgment" the senator said. "for
this committee to recommend that
on certain date the railroads
should be restored to private own
i ers without in any way changing
the dangerous and unscientific
; conditions which existed up to the
Il time the transportation systems
$1k L.x a
{ ~ do not think public opinion
will tolerate return to these con.
y ditions. Public interests require
II that competing lines should be re-
garded as part Of the transports
ton system Of the country, and
~ that business should be so distrib.
. uted between them as to afford on
the whole, the cheapest and best
e service to the public.
4 Under the system, which it is
"a proposed by the committee amend.
ment to restore 18 months after the
close of the war. some railroads
N earn as high as fifty per cent upon
IS their captaIizations. inflated Il; it
Y. is, while other roads which were
" equally necessary to the communi.
: ties which they served, earned no
profits at all. Under government
)l "' VIZ" t'o'its anu ftoSSeS
g Of all the railroads going ultimately
S. into one account, such inequalities
i. would adjust themselves. Under
Of private ownership it is obvious that
Il, this inequality of returns is inef-
or faceable and unjust.
E. This bill makes no provision f
m the prevention in the future of su,
re wholesale looting of public transport:
Y. ton systems as. were, perpetrated
re the cases of the Chicago and Alton, Il
: Rock Island. the New York, New H