Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-08-13
The Railroad Situation

LF'rom the Philadelphia Inquirer.
The case against the Government
ownership of the railroads has been
we'll summed up in the statement
upon the subject which has just
been issued by the National Cham
Der of Commerce. Some time ago
the National Chamber invited an
expression of opinion upon this
question from the 1920 trade and
commercial bodies, having a mem
bership of $4,000 businessmen,
which it's organization includes, and
it appears from a tabulation of the
complete returns which have been
received that ninety-nine per cent
of those who voted opposed the
proposition which had been submit
ted to their consideration. They did
so for the several reasons which all
thoughtful and disinterested stu
dents of the situation have recog-
nized as controlling and which in
the judgment of the National Cham
ber must be regarded as conclusive.
In the first place under Govern
ment ownership the development of
railroad facilities would be depend
ent upon Congressional appropria.
tions which might and in all prob
ability would be determined by po-
litical influences and which would
follow after rather than anticipate
the countrys transportation needs.
If the Government were to buy the
roads it would have to issue bonds
to the extent of from eighteen to
twenty billions of dollars and it
would moreover be obliged to fur
nish from five hundred million to a
billion of new capital each and every
year for extensions and improve
ments. Where are those vast sums
to come from?
Everyone knows what strenuous
exertions it was found necessary to
put forth in order to secure the sue
cess of the Victory Loan, and the
majority of those who subscribed to
it were animated by a patriotic
spirit and did not buy the Govern
ment's bonds as an investment. But
the bonds whose issue the purchase
of the railroads would neceSsitate
would have to be sold on their mer-
its from a strictly business-like point
of view and on terms that would be
attractive.
; 1t would therefore be necessary to
fix their interest rate on CONNER
cial basis. which would hardly be less
than six per cent. that being the rate
which the strongest corporations un-
der the existing conditions and as a
consequence of the abnormal de-
mand for capital which everywhere
prevails are finding themselves COM
PEELED to offer. This disposes of the
argument that under Government
operation the roads could be so
economically financed that a great
saving in this direction could and
would be effected.
The other objections which the
National Chamber advances to the
| Government-ow proposition
are based upon the ground that ow-
! ing to the absence of competition
which furnishes the incentive to ef-
ficiency and progress, Government
| operation is never as efficient as
corporate management; that politi-
cal considerations would determine
the selection of the directors whom
it is proposed that the Government
shall appoint, and that either rates
and fares would be higher or the
inevitable deficits would have to be
met by drafts upon the public treas
| ury.
Here is a cold-b -blooded, matter Of
fact and strictly practical view of
! the matter from a purely business
| point of view. Think 1t over.