The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1919-08-19

ment ownership with all of the sinister
possibilities of that alternative.
"A ton of any commodity will pur-
chase more transportation today than
at any time during the history of rail-
roads in any country in the world. Prac-
tically alone of all great American in
dustries the cost of transportation is
admitted to be the cheapest value on
the market. OF the railroads under
federal control Sc railroads, including
practically all of the systems in New
England, are not paying operating ex-
penses. Only 20 are earning the stand
ard rental based on the three-year pre-
war period. Based on the figures for
the first six months of 1919. the def1-
cit for 1919 under the standard rental
will be $500, 600, 900.
IF Congress proposes to build foun-
dation for American prosperity, it must
extend a steadying hand to the one
great enterprise without which this
country can not go forward. If Con-
gress does not take courageous and
constructive action now, the progress
of generation toward regulated sys-
tenn of privately owned and operated
railway transportation will be de-
stroyed and the Sixty sixth Congress
will have forced government ownership
unQeI cOnultlOnS a M Win results NAiSh
the future alone can assay
we believe that the association has
presented the only process which will
avoid this fatal and irrevocable step.
1t accepts the tremendous adance in
restriction and regulation now being
| worked out by Congress. Where regu-
| lation in the past has been found 10
| be inadequate we recommend that II De
| extended. Where returns upon the rall-
4 4 -. 80 ha nv
cessive and Unnecessary to enable the
| carrier to earn fair return or TO rem
DER adequate service, we recommend
| that the excess be ironed out by the
| only method that Will not force rate
| level which would destroy other sys-
| TENS with vast mileage serving large
proportion of the American people.
| I'VE submit that the policy of the
| forced reorganization is as unneceS-
sary, as chaotic and as prolonged as
| forced consultations or government
| ownership or the effort to force com
pulsory federal Incorporation.
| After the most careful analysis. We
are assured that a level of rates which
would produce an average return OF
SIX per cent upon the aggregate rail-
| way property in the several regions
| would enable the roads with lowe
| earning power, but large mileage and
/
| lie to readjust their budgets and their
organization to sound and whole
some future.
l. 'If any more destructive policy is to
be adopted, 1t should be the policy OF
| Congress and not the policy of an ad-
| ministrative bureau.
THE American people have invest
/! ed six billion dollars in permanent rail-
road property-road and equipment
| since 1907.
THAT sum was added under super
! vision of the commission. Yet that
! vast sum produced in 1917, the so-calle0
| high water mark of railroad prosperity
only about two hundred millions in net
income more than was earned In 1907
In short, the American railways pro
duced six billions of new money tc
earn less than the government PAID
for loans secured by mortgage upor
| the American people.
Singular misconception exists as tc
4 the effect and operation of the War
| field plan Had it been in effect dur
ing the period of 1915-16-17, the 16.
American railroad systems as Glass
| railroads would have earned net income
| amounting to only $54, 100000 more PEI
annum than their actual average. Tha
sum is negligible.
Had the Warfield plan been in eff
feet, the Glass l railroads would hav'
retained net income equal to only fiv'
and one-half per cent upon their ag
gregate, not their individual, propert,
investment A six per cent level oil
the aggregate investment would hav
left after the surrender of excess earn
ings by the railroads receiving exces
| earnings only five and one-han pc
cent or their aggregate property In tn
| treasury of the carriers to be disburse
by way of interest or dividends to tn
| AZ, O0O. 900 of people who have been in
| vited by Congress and by the consti
tuition to invest their earnings in rail
way securities upon the assurance o
| a square deal.
"In the so-called banner period o
I1915-16-17 100 out of 1872 systems. Clas
/ railroads, operating a total Of NOR
than 10000 miles, or over two-third
of the total mileage In the Unite
states, earned less than six per cen
upon their property investments. L
the year 1916, 81 railroads, operating
over $4,000 miles. paid no dividend
whatever.
yet, before the committee of Con
gress and in every case brought be
fore the commission to advance rates
vast mileage of American railway
has been choked off with the assertio
that average statistics show averag
prosperity.
I'm all of these cases. the commits
sion has been actuated to deny genera
relief because certain roads were pros
porous and the commission was unwill
ing to add to their prosperity even t
save the large number of roads whic
were receiving admittedly inadeQuat
I revenue.
"Under these conditions, opposed |
every effort to adjust rates to NEE
proven necessities by powerful mobil
ization on part of the shippers. tn
American railroads have been Kept in
bread line before the door of the inter
= state commerce commission since 1911
; Relief has been denied or grudgingl
I and sparinglY dealt out because Gel
tain roads in each region were though
to be affluent.
"The fundamental proposal of tn
Warfield plan is that this continual be
> sis for warfare between the shippt
and the railroads. this constant depres.