Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-11-15
Releasing the Railroads
From the New York Times.

Under the law for federal operation OF the
railways the president has power to retain gov
eminent control of them for Fl months after
the proclamation of peace. He gave years
notice of his intention, nevertheless, to sur.
render his control at the end of this year, and
he has in his hands the bill passed by both
houses restoring to the Interstate Commerce
commission Immediately the powers which were
suspended when the roads were taken over by
the government as war measure. The present
status of the companies, therefore, cannot con-
tnue, and the interval for decision re-
speeding their future operation is not only
weary with other activities. The special session
probably will soon adjourn, and when the regu-
lar session meets in December the appropriation
bills cannot be neglected.
Senator Cumnins introduced a bill which
has not gained strength with time, although
diligently and frequently amended, and which
has SO antagonized the labor interests by anti
strike proposals that its prospects in the house
are not good. That is particularly true since the
house prefers the Esch bill, which has profited
by avoidance of some of the unwelcome fea--
lures of the Cummins bill and has not attracted
the confidence of the senate thereby. The pres
ent prospect is that when either house receives
the bill of the other it will strike out all but the
enacting clause and substitute its own, and the
surviving measure will be agreed upon in con-
ference. That requires time much time for a
measure affecting twenty billions of capital
and all the industrial interests of the country.
1t is not likely that the permanent future status
of the railways can be settled before private
operation is resumed and it is not desirable
that the action taken should be rather hasty
done quickly is to safeguard the welfare of the
companies and the country during the interval
between the end of government control and the
renewal of private operation.
Essentials only should be considered. for
contention and delay grow with each additional
detail in dispute. First the companies must be
safeguarded against the current deficit which
would bankrupt many of them if put upon
them instead of upon. the government,
There has been a welcome improvement
in the earnings of the roads recently.
but there remains. gaping deficit Of
$271 ,160,742 for the last nine months, or, say,
roundly 300000000 for a year. That leaves out
of account payment for several hundred millions
of equipment ordered for the governments use
for war purposes at war prices and condemned
by the companies as unduly expensive, insult.
able as private charge, and not we'll adapted
for use by many of them. There is well ad-
vanced proposal for financing this debt charged
to the companies, but, even if it should be en-
acted and accepted by the companies, the cost
would practically be charge on either the rates
collected by the companies or the taxes
collected by the treasury. Beside s, the i'm
provements in the companies earnings is be-
leved to have been at the expense of their phys
ical condition This year the government has
DOuR0l EUU,UUU tOHS VI Tails, VI just tHo
which the Pennsylvania company is now in the
market for on its individual account 1t is likely
that many roads need rails more than the
Pennsylvania, and are less able to buy
them Calculating only on the proportion of the
Pennsylvania, the companies as whole need
| 100000 tons of rails, and that would be below
fair yearly consumption Worst of all is the
deplorable condition of the companies credit in
the money market. During the first nine months
of this year there has been issued over two bill
lions of new securities and not one dollar in new
railway shares. The railways have been able to
do some refunding, but the industrials have put
out $17s0,000000 securities, indicating an activ-
ity of trade which will be checked if the railways
are unable to grow up to it. Many would like
to sell railway shares and few will buy them.
Under such conditions it is clear that under
either temporary or permanent legislation there
| should be for time continuance OF the guar
| antee of the standard return, and some action
| which should prevent the renewal Of the guer-
! rilla war by the state commissions on the rates
fixed by the federal authority. That is even the
! opinion of the chairman of the Interstate Com
| merce commission, who has said recently that,
since the condition of the railways was forced
upon them by war conditions, until the corpora
tions have reasonable opportunity to make their
own readjustments, the government should stand
| behind unavoidable losses to reasonable ex-
tent" Only those can dissent who wish the rail-
ways to become insolvent as step to govern
ment ownership and operation. Even the
brotherhoods have seen how hopeless program
that is and have dropped the Plumb plan to that