The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1919-05-14
WANTS FAIR RETURN FIXED
Roads to BE Returned He
Says and Investing Public
Must Be Made Secure.
WANTS LOCAL REGULATION
People Must Have State Re-
course Instead Of Going
to Capital, He Says.

ST. LOUIS, May II. l2.-Compulsory ~
federal incorporation Of railroads
government guarantees OF income
and the removal OF the roads from
tho Jurisdiction OF the present state
commissions as steps proposed prior
to tho return OF the railroads to pri-
Vate ownership, were condemned by
Elihu Root in IA letter read today be.
fore tho Missouri Bankers conven-
ton. In session here. MIR Roots
letter was read by &. Davies War
field, president OF the National As.
soCiation Of Owners OF Railroad Sc
curitles, who had requested an opin-
ion from Mr.. Root as advisory coun-
sci OF the association.
AS an alternative. Mr.. Root un-
gualifiediy endorsed the plan put be
fore the security owners association,
under which congress would fix a
fair rate OF return OF tho railroads
OF each rate-making district AS IL
whole and require the rate making
authorities to fixorates which would
prcsumptively yield that return. In
the event OF any road making more
than the prescribed return the ex-
cess would be taken by the govern
ment and used TO promote public in
terost In transportation.
Federal Hate Defective.
A general rate fixed by the gov
srnment for all railroads. Mr.. Root
contends. has this defect: II the
rate Is fixed 30 as to glve'a fair re-
turn TO the weak roads II Will give
an excessive return to tho strong
roads, while II the rate Is fixed on
the basis OF an equitable return to
the strong roads. II would drive out
OF business their weaker competitors
Mr. Root precedes his conclusion
with the statement that 1T is APP
papsnt that the people OF the country
do not wish TO enter upon a per
manent system OF government opera
tion. The railroads are to be re-
turned to private ownership" he
says. and they cannot bo permitted
to go back to uncontrolled operation
OF the earlier period" He maintain
ed also that some provisions must be
made TO prevent the continuance
OF the steady trend toward bank
ruptcy which characterized the de-
chdc before the government took
possession In 1871" He points out
that half OF the people OF the United
States are interested directly or In
directly In the $4,000. 100000 OF Sc
curities representing the railroad in
vestment OF the country and that
one-quartor OF the savings OF O.0OO,
900 people holding policies In the
great life insurance companies is in
vested through these companies In
railroad securities. THAT. however,
he continues, It's only a small part Of
the reason for some arrangement
which will maintain tho value OF
these securities. Railroad securities
are chief basis OF credit on which
depends all the business OF the coun-
try and that credit be destroyed the
consequences to all American pros
perity Will be incalcula bly, DISASTROUS
Wants State Powers.
In regard to federal Incorporation.
Mr. Root says
There is only one avowed pur-
pose which could be accomplished by
This plan and mat " TO withdraw
The railroads entirely from the Jurls-
dictlon OF tho state commissions
This In unnecessary because congress
has power TO authorize tho federal
rate-making authorities 10 overrule
state commissions IN respect to rates
which interfere with interstate COM
merCe rates.
The commissions ought not 10 he
dcstroyed The people along the lines
OF the railroads OF the several states
ought TO have near their homes
bodies to which they can go for
redress OF grievances against the
railroads. They ought not 10 he com
PEELED TO go to Washington for that
purpose
Jne propose mr. government
Is objected TO by Mr. Root
on the ground that az the govern
men, must make tho guaranty good
there would be neither opportunity
nor incentive for private enterprise
In tho MANAGEMENT or hrNeL0pment