The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-04-22
MITCHELL OFFERS
RAILROAD PLAN
President Of National City Co.
Of New York Talks to
Canadian Club.
ASKS GRADUAL RETURN
Complete Private Operation
Within Few Years Prac-
ticable, He Says.
ASKS GRADUAL RETURN
Special Despdtch to THE sus.

Special Despdtch to The sux.
MONTREAL. April 21.--Charles f Nit
chell president OF tho National City
Company OF New York. in an address
here tonight before the Canadian Club
on american Railways Under Govern
ment Operation and the Financial Out
look described an entirely new plan for
the gradual return of railroads to COM
plete private operation. Briefly, he sug-
sested the continuation of Government
guarantee for a period Of two or three
years with a provision that a. any time
during this two or three year period
any railroad company. II It so elect,
could release the Government from its
guaranty and receive thereafter the full
net return resulting from its operations,
subject to a division OF excessive earn
[ ings
Three things appear to me essential"
said Mr. Mitchell, ito be done before con-
sderation is givea-to the return of
railroad property to private operation:
First, the reconstruction of the Inter-
state Commerce Commission, with rate
liking authority and responsibility def
nitely established second, an Immediate
| rate increase sufficient to take up the
burden of the wage increase granted
during Government operation. and third,
the passage Of such legislation as will
provide for division of profits above
what shall be determined to be rea-
| sonable return to invested capital. With
THESE things accomplished, We should be
| ready for private operation,
mat complete severance from Gov
ernment responsibility for railroad credit
should be immediate and for every road
at the same hour, seems to me. however,
n preposterous suggestion. The corner
| TO be turned must not be a sharp one
ne return must be gradual. both in
method and point of time. | feel that
the Government should continue il
guaranty of standard rental return as
now established for such a period prob
aoiE Two or three years. as will enable
private arrangements to get back a firm
| mold upon their affairs
Problem of Weak Compaptes.
Under such continuance Of guaran-
teed return. let the Government turn
nack the properties with reasona BILE
WORKING assets to the private owners.
/ ieaNlhg Tor gradual settlement and ad-
Juslment the counter claims inevitably
10 De made rs between the Government
| and the private owners for later but
| as early an adjustment as may be DOS
slole. Let private management reinstate
itself. with the requirement upon each
road TO pay over to the Government any
excess over the Government guaranteed
| rental return and with the right to call
| upon the Government during the guar
anty period for any deficit between its
net operating revenue and such suaran-
| iced rental But let there be provision
| that at any time during this two to
| three year period OF continued Govern
ment guaranty any railroad company
| may, if 1t so elect, release the Govern
hlent from its guaranty and receive
thereafter the full net return resulting
| from its operations. subject to a diyi-
sion or excessive earnings as heretofore
suggested.
Il am of the belief that under this
| plan, the owners OF the majority of our
large railroad companies would release
the Government from its guaranty
within the first year. and that the roads
| continuing to work under the guaranty
TO the end OF the period. which would
| naturally be the weakest of the COM
panies. would be comparatively few.
"Vhe financial condition of such re-
naming companies will doubtless be
such that drastic reorganizations will
De necessary ut such time as the Gov
eminent guaranty ceases. and / would
consider It more than likely that at such
| time the Government would deem II
wise to give its permission. present laws
| to the contrary Notwithstanding. for H.
sorption and consolidation of such roads
| in the stronger systems Thus would
the roads return TO private manaSenfent
| under the same incentive to the develop
| ment of efficient competitive service tn at
has made the railroad system Of the
! United States the model OF the world
Il recognize that this plan OF ad-
Justment involves many complex tiles
| which will demand cooperative effort
and well considered legislation to solve,
but | do feel that the plan subjects the
problem to comparatively simple and
| effective treatment"
Opposes Government Ownership.
Mr., Mitchell told the members and
guests that he was "unalterably opposed
| TO Government ownership and opera ton
of railroads." and gave the follow ing
| figures to show that 'the popular passion
for Government ownership and operation
has materially cooled during the past
year:
"T'IKe Foads' 'woxs frsa-sr5Sr4t ", S4>.asg
restrictions and yet the net earnings fell
off $2S5, O00,0 900. compared with the pre-
vious year. the railroads earning only. rs
per cent. of the amount which the Gov
eminent had guaranteed them as rental
Notwithstanding the increases in rates,
which were far greater than private
management had ever dreamed OF ask
ing. and which produced greater gross
revenue by $s65.o00 900, the people OF
| RlKaTinR
service. were called upon as taxpayers
to advance s210. 900. 900. the amount by
which the net earnings failed to equal