New-York tribune., 1919-07-14
Rails Must Get
"Business Chance -
Lovett Asserts
Head of u. p. Calls on Con-
gress for Common-Sense
Treatment of Financial
Problems of Carriers

Following his criticisms Of plans
which have been promulgated as a
solution of the railroad problem, Judge
Robert S. Lovett, president of the
Union Pacific system, has prepared a
list of suggestions for submission to
members of Congress which, in his
opinion, offer satisfactory escape
from the present dilemma.
Underlying the proposals Of Judge
Lovett is the principle that Congress
must enact laws that will afford rail
road capital "business chance" If
this is done, he believes that the money
transportation facilities of the future
will be forthcoming.
In setting forth the remedy which
he considers wise as a national rail-
road policy Judge Lovett states it to
be his Judgment that the following
features are fundamentals:
"N) The rule of rate-making to be
provided by Congress itself, which should
require that the rates be sufficient to
enable the carriers to provide the requisite
service and facilities, protect existing in
vestments and provide the new capital
necessary in the public interest.
"(2) Compulsory Federal incorpora-
tion of all railroad carriers.
"(3) Exclusive Federal regulation of
"(4) Exclusive Federal regulation of
railroad rates.
"(5) Creation of department of
transportation, with power to act quickly
and deal with emergencies, and the dis
tribution of the regulatory power between
such department and the Interstate Com
merce Commission, with the creation of
such regional or other subordinate
missions and agencies as may be neces-
sary.
"(6) Modification of restrictions upon
railroad consultations, and provision for
the merging Of lines when in the public
interest and approved by the commits
siOn'
The, foregoing are features of the
plan formulated by the committee of
railroad executives and submitted
through its chairman, T. De Witt Guy
Ter, tc the Senate Committee on Inter
state and Foreign Commerce.
- Slnce the creation of the Interstate
Commerce Commission" says Judge
Lovett, 1.-The only concern of the gov
ernment, as reflected by legislation and
commission action, has been to keep
down the revenues, prevent discrimina-
ton and generally chastise railroad
management. No sense of response
bility for providing the requisite rail
road facilities has been manifested on
behalf Of the government. That task
'>H ,~SNAi wv w piiFotc enterprise,
Handicapped by the governmental
policy of suspicion and repression.
But it is now abundantly evident
that this policy will not provide the
transportation which is essential for
the country; that the government must
either take over the railroads and pro-
vide the facilities out of the public
treasury, or leave them in private own
ershlp under government supervision
of a kind and character that will as
sure fair dealing and attract the neces-
sary capital.
ut is about time that we were intro
duclng common sense into some of our
theories about railroad capital. No
money except that devoted purely to
benevolencc is employed more in the
public interest or is entitled to more
encouragement or fairer treatment and
consideration than that which is in
vested in the development and upbuild-
ing of our railroad facilities"
Federal incorporation of the rail
roads is vital for the establishment
of their credit, in the opinion of Judge
Lovctt, who adds:
"lf railroad company is compelled
to 60 to half dozen state railroad
commissions for permission to make an
issue Of stock or bonds and to en-
counter delays running from weeks to
mOntnS on account OF numerous hear
ings before different commissions AMI
in meeting their conflicting policies
and views before it can deliver the
securities, it will be impossible to have
the issue underwritten, or, if under
written at all, the cost will be excess
sive.
but, worse still, the chances are that
differences between the commissions
will arise, or that the inexperience and
perhaps the financial theories of some
of the many commissioners may re-
quire changes that will upset the plan
entirely
A Cabinet minister or executive COM
mission, Judge Lovett suggests, would
be the best agency for expediting and
encouraging the issuance of railroad
securities for legitimate purposes. He
does not advocate the abolition of state
commissions entirely, but thinks that
their powers should be limited to the
ordinary police supervision to which
each state is entitled. A department of
transportation, he believes, should be
created to take over and perform the
executive and administrative functions