Newark leader. ([Newark, Ohio]) 1917-1946, 1919-08-01
Doubled Railway Values Exposed
Interstate Commerce Commission Makes Signifi.
cant Discovery in Five Railroads

which is left after dividends some
times extremely high-have been paid
to all investors. 1t is secured by i'm
posing rates higher than are neces-
sary to enable just returns to be paid
to investors. Then this tax on the
consuming public levied through the
machinery of transportation charges,
is invested in railroad property; and
the public must thereafter pay tax
on it, too, through added transporta-
tion rates.
Let the system keep on operating,
year after year-high rates, surplus,
investment of surplus, rates in
creased to pay dividends on that sur
plus-and finally there comes a time
when the public cannot stand the
ever compounding tax. There comes
a time when the cost of transporta-
tion is so high that increases in rates
do not provide increases in revenue;
they result in decreased demand for
transportation.
The Railroads Before the War
The interests working to secure re-
turn of the railroads to private con-
troll are not dwelling on the fact that
before the Government assumed con-
troll $4,000 miles of road, or one-sixth
Of the total mileage, were operated
by the courts because of receiver
ships. During the 20-year period
preceding Government control oper-
ating corporations representing about
48 per cent of the total railroad prop
critics had been adjudged insolvent
and placed in recivership.
Plans for private ownership and
control-operation for private profit
and not for service-are based on the
assumed right of security holders to
receive financial returns on these
ever-increasing investment accounts.
Some of them ask governmental guar
antees of dividends.
The plan sponsored by the United
States Chamber of Commerce does
acknowledge the injustice of such a
system by providing that returns of
six per cent shall be paid only on
"the aggregate fair value of the
property of the roads" But it goes
on to say that this "fair value" shall
be determined by the valuations now
being made by the Interstate Com
merce Commission. Until the COM
pletion of the valuations, the prop
erty investment accounts of the rail-
roads are to be used as the fair value.
The Chamber of Commerce over
looks the fact that it has taken the
Interstate Commerce Commission six
years to complete valuations on 1000
miles of road, and these valuations
only up to 1914, while there are ap-
proximately 354,000 miles of railroad
in the country. They forget to esti-
mate how long the over-burdened
investment accounts would
have to be used as a basis for fair
value.
The Plumb Plan
No plan will solve the railroad |
problem which does not make public
service instead of private profit the
factor in railroad opera
ton. The Plumb Plan, labor's plan
for the disposition of the railroads,
takes private profit out of the rail
road industry. 1t provides the i'm
pulse for personal effort by paying a
dividend for increase in efficiency;
and this is shared equally by the
public and the employees. 1t provides
for every employe the opportunity to
increase his earnings by increasing
his service to the public, instead of
the old system whereby property
owners who were not in any way con-
nected with the physical operation Of
he railroads, increasing their profits
At the expense of public service.