Evening star., 1919-03-02
ICRITICISES THE GOVERNMENT
MANAGEMENT OF RAILROADS
DAILY Financial America Calls 1t "Hurtful
Experimentation - Review of Local
Banking and Other Business Interests

What seems to be the underlying
reason for Director General Hines
objection TO the various plans before
the congressional committee now
dealing with the railroad problem,
says Daily Financial America might
appeal to us If they were not made
the basis of a request for authority
to continue hurtful experimentation
along the line of thoroughly dis
credited government operation. F'inau-
cial America says:
For years We have been directing
attention, both in general and in par
ticuiar cases, to the necessity for
purifying railroad finance in order to
reach the great desideraturn of ade-
auate transportation We hold that
the public welfare always should be
the main consideration, and that
where conservation of this is concerned
special interests. whether public or
private whether of labor or of capi-
tai. should not be allowed to stand
in the way. We maintain. further
more that the interests of honestly
managed railroads-that is to say, of
the great majority of the companies
call for the speedy extinguishment OF
all fictitious railroad capitalization
But our familiarity with the facts
of American railroad history con-
vinces us of the fallaey of the con-
clusiens which Mr.. Hines draws from
the premises We believe that puri-
ffeation of railroad finance and leav-
ing the railroads to work out their
own destiny under the law alone will
solve righteousiy our railroad prob
lem. The democratio doetrine-that
the best government is the one that
governs Ieast-applies to the indi-
al nj a f.
fairs, and to none more forcibiy than
to the railroad industry, upon which
all other industries and social prog
ress in general largely depend
View of Gold Exchange Medium.
One of the leading financial authori-
ties indorses the utility OF the gold
exchange fund. Il says that when
Secretary Cortelyou suggested. only
a few years ago, that the old note
replace the metal as an exchange me-
dreamer" and his scheme was ridi-
culed as one fit only for the millen-
MUM. We were debtor nation then
and our creditors looked on US as
trying to devise q way to offset our
obligations with substitutes. Now the
position is changed. We are creditors
The world is in debt to US. We can
very readily, therefore. pick up the
former Secretary's suggestion and
carry 1t to its fruitation, even If our
debtors are making the plea for its
esta blishment.
Taking only the selfish yiewpoint.
the esta blishment of gold exchange
fund-by which gold notes instead of
bullion would be shipped, or, as is Gus
! tomary with our federal reserve sys-
tenn, balancing of accounts on the
books of creditors and debtors would
nlaee-Wp rhas
more than any other nation, The
saving alone in the loss and expense
| incident to abrasion. transportation
charges. insurance and interest would
be enormous. This is really waste
promoted by distrust and economic
faliacy. The exigencies brought about
! by the submarine warfare have shown
that the old traditions were really
flimsy preiuulces. Formerly gold it
self was considered as the only rep
resentative of the real value trans
ferred. But force of necessity has
taught US otherwise. AS long as a
teountry can establish confidence in
the minds of its creditors it can retain
| it's gold and at the same time retain
its credit. Ifit should fail in it's obli-
cations, II naturally would be penal
| ized. But even the waste, incident
to the collecting of this penalty, will
be offset by the establishment of an
international exchange gold fund.
Forecast Is Optimistic.
The American Exchange National
Bank of New York sets forth in its
weekly summary and forecast of bust
! ness conditions certain reasons for
| optimism. 1t says that Wall street
| has become more optimistic regarding
/ the future. and the stock market
seems to be disceunting prospective
| profits and more active trade in i'm
pertant lines. The war destroyed q
vast amount of canital, but the pre-
ductive capacity Of America Is greater
| than before. This also is true OF Eng
| land, Canada and Japan, but contiaen-
| tai Europe Is sadly handicapped by
| the ravages of war and loss Of man
| power. It is preba BILE that France is
| in better shape than is commonly be-
| iieyed, but she cannot resume produe-
! tien to the best advantage until she
| has settled with Germany what the
latter shall pay. Belgium is in a sim
| liar position.
The recuperative power of civilized
| countries Is astonishing. Two good
crop years accompanied by q general
tresumption of Industrial life will re-
/ storA the prosperity OF thA pl4iA pse-
pie by providing food and employment
J far all Canifa1 cannot he go ly