Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-01-17
FINANCING THE RAILROADS

One of>the first acts of Director General Hines of the
railroad administration is to ask congress for half a bill
lion dollars. which may be loaned to the railroads for the
purpose of financing improvements which are to be made
this year. The half billion already voted by congr4ss has
been practically all used up in similar financing for the
hence it is the duty of congress to provide it, ard this Will
undoubtedly be done.
The situation differs materially from that which ex-
listed when the railroadsfwere under private management.
EIhen the roads had to Look after their own financing, and
|the TASK which would have. been relatively simple had
there been q frank acceptance by the government and
the general pubic of the facts in the case, and a sensible
adjustment Of legislation to those facts, was rendered
difficult in all cases. and impossible in some, by obstacles
which were placed in the way by the government, acting
in response to an inadequately informed public opinion.
1t was demanded Of the railroads that they should do
business in the most expensive and involvement manner.
as they were not permitted to avail themselves of the
economies which lay in sane cooperation. They were
taxed according to the fancy Of forty-eisht separate state
governments, some of which went onathe theory that any.
thing that could be taken from a railroad company was
clear gain. They were regulated according to the tastes
OF the several state railroad commissions and the federal
commission, the orders of the latter often being in direct
conflict with those issued by the state commissions De-
|mands for service increased constantly, and with them the
cost of operation, while incomes were cut to the quick bv
the frequent taruf reducuons, and advances were usually
resisted~on general principles.
Under these conditions the railroads had becom. nm
welcome borrowers. People who have money to loan
have the habit-very annoying at times-of wanting it
back. They will not lend to an individual or an institution
which is not making enough more than expenses to give
reasonable assurance that the loan will be repaid. The
railroads could not give that assurance, henc, when thew
sought money with which to make necessary improve
nents they were received coldly.
The government has done for the railroads most OF
the important things which formerly it would not permit
them TODD for themselves, even under the most rieid su-
|pervision. 1t has combined them for working purposes.
It has Nevied increased tariffs to provide for increased az.
|penses. And row it is lending money to the roads SO that
improvements may be made. ~"
Should the roads be retained permanently by the gov
eminent the nation will, Of course, liquidate those loans
by figuring them as against the purchase price. And. II
reason, rather than unreason prevails, the roads, even un-
der government management. will be placed on a self.
sustaining basis, with proper provision made for funds
for improvements. And If they are returned to private
~management conditions must be created under which.
carefully and thoroughly supervised, the roads will be able
to do for themselves the things that the government is
now doing for them, the doing Of which is essential to any
successful plan Of operation. whether under public or
private management.