New-York tribune., 1919-12-11
Believe Federal
Control of Roads
Will Be Extended
Rail Executives Do Not Ex-
pect Return of Carriers
Before March l; Lovett
Criticizes the Esch Bill

Unofficial reports from Washington
that pos tponement Of the return of the
railroads until after January has
been decided upon we're generally
credited in local railroad circles yes
terday despite the statement of Director
Generai Hines that so far as he knows
no change has been made in the Pres
ldsnt's plans to give back the carriers
TO their owners on the first Of the
year.
1t Is the opinion of leading railroad
executives here that return of the
roads will not take pace until per-
marent legislation has been pa sed, af-
fordlng reasonable protection from the
encumbrances. forced upon them by
the government during the period Of
Federal control. The belief held a
few weeks ago that Congress would
enact temporary measure that would
enable the transportation lines to be
returned by January ! has now given
way to definite opinion that the time
is too short or even such q make
shift expedient. The general view is
that Federal control will not end be-
fore March i.
Lovett Attacks Both Bills
In memorandum forwarded to mem
bers of Congress Robert S. Lovett,
chairman Of the Union Pacific system,
sharp criticizes the provis ons of the
Escn bill, passed by the House Com
mcnting on the Cummins b |, reported
by the Senate Committee on Inter tate
Commerce, it has the merit of at least
recognizing the facts of the railroad
situation and would go long way
toward solving the transportati ton prob
lem but for the feature limiting earn
ings to reasonable return on property
I inVestncnt'
ut then proceeds to declare in effect
| nat o'2 per cent on the value of the
property "a determined by the Inter
tate Commerce Cor mission is :; rea-
onat!e return ard confscates al in
.xcess of 6 per cent upon such value.
But the mot extra ordinary provision
that commanding that the Interstat te
Commerce Commission shall, so far as
2ractlcab e, adjust rates, fares, charges
and c.assihcations that the net operat-
ng income of the sevcrai carriers shall
Dear the same relation to the value of
holr re pective properties
mat is to say, that the commission
shall disregard earni. gs, ctfic enc
abb ity of management economy, wise
expenditure in development, location Of
Inc volume of business. and every
0tner conslderation entering into and
ordinarily controlling re i've values
II properties in the everyday. common
sense transactions Of men, and shall
n tead observe a rue which is never
bservcd by anybody.
lis 1t cor ceivab that the monov
Gecessary to provide TIE railroad faci3i-
ties which this growing country needs
e. eial y estimated at not less 'har
81 ,Oo0.00O,0O0 per annum-wi'l be OBJ
alnab from inve tors under legis a.
s'on Of this sort? The whole world is
\
les, railroads. steamships, indus rie
mines and enterprises of every kind
ne rest O.. the word d rea ize as never
'e.ore that credit is some hing tha
very peoD must sacredy guard at .
imes In ordNr to obJan n m ans ir
.mergencies. Tie best raj roads undel
he legi lation proposed could offer /
fcturn of on 6 Per cent on tie value
thelr property, and even that return
n y IN case it IS earned for, miYd YOU
lie bill does noe propose that the gov
rnment shah guarantee the return.
Says DIl Defeats Object
Thus a measure designed to re
a sure investors ard attract new caDts
% raj road ente prises defeats itseli
y scriminatny against Investments
n the railroad business by conf cat;ne
| the rewards of wisdom in invest.
Ag and efficiency in ope rations."
Jucge Lovett takes exception to the
Izch measure. in that it wou rave the
feet OF further delaying decision on
ate questions, with the add tiona]
.uues which it proposes to ace upon
ne Interstate Commerce Commission
IS mo amazing provision. he says
hat which per1etuates every wage
acreaSe and every working regu alton
made by the railroad adm inistration
/ under the stress OF world war