Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-10-13
Luw and Credit
From the New York Times.

Elihu Root and others hardly less dis
tngushed think that Charles E. Hughes is
wrong in his opinion that congress lacks the
power to regulate the earnings of railways in
excess of fixed return from reasonable rates.
The basis of their dissenting opinion is that the
Cummins proposal does not fix rates for in
dividual shipments, or carriers but for the total
service of group of carriers. That leaves the
total earnings of the group open for recon-
sideration and distribution the basis OF
realized results, according to the accuracy OF
the guess in the tentative schedules. The pro-
posed Curmins method is recommended as an
absolutely accurate" substitute for the pro
phetic and uncertain" method of enacting pre-
else rates in the manner exemplihed by the
practice of the interstate commerce commis sion.
The shippers right to have rate fixed for each
shipment by each carrier is said to be mere
common law right" subject to modification by
congress under its right to regulate commerce
in any reasonable manner, and any manner is
reasonable which is necessary to keep the rail-
ways in sufficient vi gor to enable them to main
tain competition among themselves.
1t is as much the right of doctors of law to
disagree as of doctors of medicine When
doctors of the law of such authority disagree,
it is the part of prudence to leave the last guess
to the supreme court. The disagreement suf
fees to make it sure that the constitutional
power to enact the Cummins rate law will be
unsettled tor some years. The creation OF
rate zone of that twilight sort is undesirable
and the more especially since even the vada-
ton of the Cummins method would settle only
the law. and would leave unsettled the even
more peremptory question of the credit of the
individual railways if the group rates are ade-
quate. The necessities of the railways are
matter of today, and should be settled today as
each days meals must be eaten on the day.
The defense of the Cummns plan proposes an
interval of hunger to be satisfied by an accumu-
lation of meals. If the law imposes that upon
the railways, there is no method of imposing it
not by the lawyers or the supreme court, but
by the opinions of those who have the resources
which the railways need
There is perfect illustration of that in the
working of the federal rate law and the state
public utility nickel fare laws. There is no dis
pute about the legality of the interstate COM
merce law nor about its effect on the credit of
the railways. There was no dispute about the
state public utility fare laws until their results
became manifest. 1t was put into testimony
before the presidents commission that sixty
two electric railways in the United States with
1912 miles of track already were in the hands
of receivers; sixty railways with 763 miles of
track had been dismantled and junked and
thirty-eight railways had been forced to aban-
don Isl miles of track" Those facts are the
nickel fare laws in many cities. There is need
of similar change of sentiment among the
federal rate regulators. But the federal rate
must be regulated upward if railway credit is
to be restored. That result is hopeless of
realization by any new method about which
lawyers disagree, and investors agree in dis
approval.