Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1919-11-13
The Amended Cunmins Bill
10y oseras e. Roberts In National City Bank suIstIrl

The Cummins bill In amended
form has Just been reported from
committed to the senate. We indl-
Gated last month some of the OBJ
jections to this bill but Expressed
our belief that with certain amend
monts 1t would probably reach the
heart OF tho railway problem, which
IL the rehabilitation OF credit. The
railroads have only one thing 10 cell,
and that Is, transportation; and the
price Of what they sell is the rate. The
restoration OF credit therefore depends
upon the establishment OF adequate
and compensatory rates. On this cru
cial point. section 9 VI the bill In the
amended form provides that the
rates prescribed for each district shall!
be as nearly as possible sufficient 10
| produce net operating income for all
the roads In that district of u per
cent annually on the value of the prop
erty as determined by the commission.
The commission ia also authorized, in
Its discretion, to increase the fixed re-
turn TO per cent, but the additional
one-haH per cent Is to be used to
cover tho cost OF nonprodUctive inn
provernents on the property.
We are convinced that It Is abso-
lutcly essential that congress shall
instruct the rate-making body to
maintain rates which will produce a
stipulated return. and while we think
that the additional one-half per cent
should be fixed and not left to the dis
cretion Of the commission, an assured
return of ga per cent will go long
way towards solving the railroads
problem. Last month we expressed the
opinion that return of 90 per cent
would Sc the minimum on which It was
reasonable TO expect new capital to be
attracted. In the past the railroads
have been regulated on the theory that
they ought to be permitted to earn
reasonable return on the fair value or
their property; but the rule was theo-
retical and not practical, for no one
could prove what fair value was. ne!th-
er could a reasonable return be agreed'
upon. One Of the unknown quantities
in the equation is in process OF, deter
mination as a result Of the federal VAL
uation act. The other unknown guam
tity will be settled If this bill becomes
q law.
The interstate commerce commits
sion itself desires congress to instruct
1t in the matter Of rate-making. The
following is an extract from state
ment Of Commissioner Clark:
The question OF what constitutes
lust and reasonable returns 10 the car
rier is left for the administrative tri-
punal TO decide, insofar as II could de-
termine rates on that basis. Some peo-
pie come before us and argue that
per cent is liberal enough. Others say
that II ought to be more, 6 or Tor
per cent. Now, in the light Of all the
what Is a EsasonaDie
standard Of return for these puolic SER
vice utilities that are subject to gov
ernmental regulation at the hands OF
congress, thru an administrative tn
buual to which congress delegates its
powers! / think that 1t would be SIM
pier, l think II would avoid endless
and would put an end 10
discussion and argument,
If the law laid down the standard
which 1t recognized as Reasonable,
Just as the law lays down the recog-
nized standard Of interest fetes IN the
various states" EE
The curnmins bill has beeh described
as the first broad friendly legislative
expression towards the railroads in
propably the pas: fifteen or more years
In addition tc the establishment of
p, Ipi,,1furr, rata of return It proposes