The sun., 1919-11-05

jority Of the railroads that all should
join In asking for this increase In order
that the application might have the
weight Of unanimity. This situation re-
suited from the inherent conditions
herein stated, and which the Cummings
bill win correct. and II presents q strik-
ing illustration OF the impossible condi-
tions that are encountered in the proper
/ regulation OF the rates of the roads
without regulating excess earnings.
| The very fact that these roads made
application for the increase was one OF
the most deterrent factors presented be-
fore the Interstate Commerce Commits
sion, because they could not make rates
that would give these particular roads
such inordinate earnings. The opposing
shippers counsel at the hearings before
the commission successfully used these
| instances against any increases. 30 the
majority Of roads suffered and the ship
| pers and public suffered with them; so
did our allies. for II came at the war
period.
With all the railroads up to June 4
earning but 30 per cent Of the amount
| now paid them by the Government as
rental any one who endeavors to defeat
section 6 of the Cummins bill assumes q
great responsibility. No railroad Is en-
titled to receive earnings secured from
rates 1t would not be- entitled to for its
legitimate purposes.< hut without which
rates the majority of railroads, and
thence the transportation system. would
break down.
The proposals contained IN section 8
OF the Cummins bill would make auto
matte to a large extent the adjustment
OF railroad rates. The owner OF bond
or share OF stock would know what the
railroad that issued II would initialiy be
entitled to receive through rates at tho
hands Of the commission:
While public hearings would continue
the railroad executive would then 60 be-
fore the commission, II required at all,
with the knowledge that the presentation
OF the needs Of his road could not pro-
duce less than Congress has stated Is at
least necessary to maintain Transports
tion. Security holders could look with
confidence upon q return which would
enable them to receive their income, X
their securities entitled them to receive
any at all not by q guarante but from
rates that are adjusted to suit the con-
ditions found to exist in the respective
railroad territories, ana finally because
LOT the efficiency Of each road operating
In such territory. 1t would insure to
the railroads credit with which to
finance their requirements.
Circulars have also been distributed
which have 90 distorted the testimony
OF Interstate Commerce Commissioners
Clark before the House committee as to
make 1t appear that he opposes all regu-
lation Of excess earnings because he
stated that such earnings should not be
taken from one road and given to
another. As a matter Of fact Mr.. Clark
stated substantially what we stated. that
a part OF the earnings in excess Of a
fair and reasonable return and a partici-
patton therein by the railroads earning
such excess should be devoted to gen.
eral transportation purposes in supply
ing facilities to the shippers. and part
devoted to the employees of all the
| roads.
In respect to substantially the pro-
posals contained in Section 6 of the
| Curimins Bill, Commissioner Clark in
fact testified before the House commit
tee that they would "avoid endless con-
troyerses and put an end to in
teTmiEable, discussion and argument.
Apart from the unconstitutionality of
taking earnings from one road to give
to another, we have persistently pro-
nounced this un-American and unsound.
These are some Of the means that are
being urged against this section of the
Senate bill.
Financial and Business Interests
Cooperating.
The financial institutions throughout
the country that haye bought and sold
millions Of railroad securities to the
| great investing institutions and to pri-
vate investors have recognized that their
responsibility does not end when they
have sold those securities. Excepting
only in a few instances, they have given
splendid support to this constructive
legislation. If they will now feel It
Il H..
stockholders OF those railroads whose
securities they have sold to others and
who are receiving circulars misrepresent-
ing the conditions confronting them shall
know the facts. these difficulties will be
solved.
Senators and Representatives IN
Washington are being sent literature
which has been supplied for that purs
pose to uninformed stockholders In the
interest Of the defeat OF the legislation
which the chairman and the great ma
jority Of the members of the Senate
committee that has just introduced the
Cun.nins bill will tell you means Gov
ernment ownership II the constructive
legislation in Section 8 of this bill Is
defeated by the Misrepresentation made
as to its purposes and Its effects
Railroad Regulation and Private
Business.
Il One argument used by the opponents
OF this Section is that 1t is tlncoA stitu-
ttional. Those who wish It 80 declared
when securing the legal opinions ex-
pressed presented as the basis for such
opinions propositions which did not
contain the underlying principles Of the
procedure we proposed. The opinion
Of our Ave advisory counsel Of this
association declaring the proposals con-
stitutional has recently been given to
the public. The lawyers composing the
advisory counsel are former Senator
Elihu Root: John @. Milburn, New
York; John 8. Miller. Chicago; Forney
Johnston. Birmingham. and Hugh L.
! Bond, Jr., Baltimore (who Is also coun-
sci for the Baltimore and Ohio Rail-
road).
Another argument IL that IL such
: regulation is adopted It might be ex-
tended to private business Any one who
Is at all familiar with railroad regula-
ton knows that for over thirty years
the railroads have been regulated in
! nearly every department and respect,
} including the regulation of earnings
through rates: that they are public ser
: vice corporations and operated entirely
; for the use Of the public from whom
they receive their franchises, and no par
> allel whatsoever can be drawn between
. the two. 1t is wefl known that both
Houses of Congress are preparing
tighter railroad regulation than ever
before, which makes all the more neces-
. sary defniteness as to the position of
: the security owners have talked