Pine Bluff daily graphic., 1919-02-19

agement and permanent Goycrnmer reconcllaele. The railroads eounot ca your house 10 some one and then cN their cake and have it. You cannot rcn pect to be master in your house. | the railroads want to have privat, management in fact, instead of mere ly m name, they must take thci1 chances and rely upon public opinion 1 for square deal. If they are not will Ing to do that, if they ask the people to protect them by giving them a per manent guarantee of minimum earn lngs, the people will rightly insist up on such minute and eXacting safe. guards as to amount to Government operation.
 Opposes Opportunisn. "Personally, l am wholly opposed to the timid opportunism which would barter away the reality of private initiative and enterprise for pelman- ent governmental guarantee of earn lngs. If we cannot as citizens be con vinced that bureaucratic management is preferable to individual effort, we must not as stock or bondholders per nit ourselves to be bribed into niak- ing a compromise with our convictions. And l am optimistic enough to believe that by deserving the goodwill and confidence of the people, and making adequate efforts to keep them cor rectly informed, the railroads will get a square deal from the people
 T think indeed, that public opinion has come to recognize, not from ten I Co !, c. enlightened self interest, that the roads must be given such treatment henceforth and permitted such oppor- tunity as will attract a free flow of capital; because, otherwise. one of two things is bound to result; stagna- tion in the railroad industry, which means inadequate and insufficient service for growing and developing country, or Government ownership and operation.
 Could Legislate.
 "1f we are agreed that what we want is real private management un- der strict but fair, workable and con- structive Government Supervision and regulation, with no permanent guar antee of earnings (but rather profit sharing with the Government and perhaps with labor) it seems to me that the framing of appropriate legis- lation present no extraordinary diff culty, provided that an equitable basis of rate-making is established and defined with sufficient preciseness to enable the railroads to obtain actually instead of merelf theoretically, as heretofore, the protection of the courts against the imposition of unduly low rates.
 \"I hesitate to express opinions as to this thorny point concerning which so many better qualified than l ap~ pear to hold conflicting views, but l venture to throw out these suggest ions for what they may be worth
 Scientific rate-making is an inn possibility. A mathematical, uniform ly applicable formula for rate-makng might have been possible when the railroads started to come into being. It is no longer possible now. The rate structure is the product of a great many years of testing, experimenting, adapting, bargaining between the railroads and shippers, consumers, ports, cities, etc., in short, of evolution. It is of infinite intricacy of manifold, and subtle r-relationship.
 Plan Impractical.
 "It is no more practicable to make it over at this late date on lines of theoretical perfection, than it is prac- ticable to make over on such lines a large city, the growth of generations.
 Capitalization or over-capitaliza- tion has no effect whatever on rate making, nowadays. 1 doubt whether it ever had any.
 "Even the true value of railroad properties, as ascertained by valua- tlon sto thegsextent thut it can be so ascertained) can merely be one of the factors in rate making. As mattc1 of fact, l believe that from the prac- tical point of view a valuation of rail road properties such as the Interstate Commerce Commission has been en- gagged in for several years at the ex- pense of prodigious labor and of many millions of dollars, will prove large r ly futile, because think a fair ap- praisal on such principles as the courts will uphold, will show that the railroads on the whole are not over capitalized and that existing rates certainly do not err on the side of giv- ing more than fair return,
 But l realize that to satisfy public opinion, large portion of which sua-
 ects the railroads of taxing the people to pay dividends on watered stock, an authoritative appraisal fthe true val. ues of railroad properties must be had.
 | Will Take Years.
 'It should be borne in mind, how ever, that the completion of snch an appraisal will stil! take years, and that not few of the awards, in all probability, will have to be reviewed by the courts before they can becorle definitely established.
 My suggestions in view of these cir cumstances, are:
 1. Until the valuation are com pleted, let the l. c. c. or other author lty (having first been granted exclu sive power in rate-makingl be direct ed to consider the existing rates as prima facie fair and reasonable on the 1 basis of existing wages and costs, sub-