Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1919-11-13
al City Bank suIlstln.l

that tho debtednees Of the roads TO
the government for capital expondi-
lures during federal control, In to
be funded. The government Is to
carry this Indebtedness for period not
exceeding ten years at per cent per
| annum. In view of the need OF the
| railroads TO raise large amounts OF new
capital at once 1t is very fortunate that
they will not be compelled to so into
| the market at this time for funds to
repay the governments advances
which are believed to exceed $1.oo0,-
100000. Tho <bill also provides for a
return Of the working capital that was
! taken over with the roads. and which
Is estimated 10 amount to about $780,
coo, 900. ..
We have previously indicated our
dIsapproyai' Of that provision Of the
bill which empowers the railway
transportation board "a new body Gre
ated by the act) to group all Of the
roads of the country into large COM
peting systems OF not more than thir-
ty- Ave and not less than twenty. While
the necessity for the absorption OF
smaller corporations Is apparent, there
being no less than 1880 companies re-
porting to the interstate commerce
commission. we consider that such inn
pending arbitrary consultations would
have an extremely detrimental effect
on the mind Of the investor. The pol
Icy Of the bill. recognizing that under
existing conditions some roads show
very large earning power and some
roads small earning power. aims to re-
move this discrepancy thru consolida-
tons. and II Is we'll said that somebody
must do the Improbable business and
the way TO DO 1t Is to comhinelthe I'M
profitable business with the profitable
We believe. however. that a stabiliza-
ton Of railroad credit win result IN
voluntary consultations which will
prove more efficient agencies Of trans
portation than any that could result
from the exercise of arbitrary rulings.
Originally, the Cummins bill pro-
vided that the government should
recapture all earnings In excess, OF
a fair return. In the amended form
the bill provides that II a company
secures an operating Income above
per cent. one half OF the excess
between and per cent shall be
placed In a company reserve fund
and the other half turned over to the
railway transportation board for
general railroad contingent fund.
Above per cent, the company Will
place one fourth OF the excess in Its
reserve fund and three-fourths will go
TO the general railroad contingent
fund. When the reserve fund has ac-
cumulated an amount equal to 5 per
cent Of the value OF the property. its
accumulate on must eease and one
third of the. Operating. income above
6 per cent Tthereafter be retained
by the company and two-thirds paid
into the general railway contingent
fund. The company reserve funo
may be drawn upon zto pay diVi-
dends or interest { IL the company's
income falls beiow per cent, while
the general .cohtinsent fund is to be
used for the. general advance Of
interests.
The con stituthnA1ity Of the re-
capture OF these so-callcd excess
earnings by individual companies
has BEEN called Into question. bat 1t |
is a mint ON which eminent lawyers.
diFerlIn limiting profits the one point
tina, congress must consider Is the me-
cessity OF proUdiug-an incentive for
enterprise and efficiency. In this re-
sheet the amended bill marks SUD-
stantial advance over the original
a