The sun., 1919-06-09

road incorporation" Mr.. Cook says IN
referring to Federal Incorporation.
There is difference Of opinion as 10
how Federal Incorporation Is to be
brought about Some favor compulsory
Federal Incorporation, but the constitu-
tionality of this course Is doubted, and
its practlcability Is still more doubted.
Others believe that voluntary reincor-
poration Of existing State railroad COM
panies into Federal corporations should
be brought about. This, too, Is doubtful.
The simplest plan Is to organize Fed
eral railroad corporations with power to
purchase the stock and other securities
of the existing railroad corporations and
gradually bring about complete Federal
control of all the railroads Of the coun-
try Then. II desired, the physical prop
critics could be turned over. However,
practically all agree that Federal incor-
poration Is a necessary part of any solu-
tion of the railroad problem.
Agreement Is unanimous that railroad
wages should be high-as high as is con-
sistent with the welfare or the nation
Whether the recent extraordinary ad-
vances are fair will depend on Industrial
developments the world over. Excessive
railroad wages mean excessive railroad
rates, and excessive railroad rates mean
high cost of living. because the con.
sumner pays the freight in the end. Ex-
cessive railroad charges will cripple ex-
ports, because exports must be sold In
competition with the world.
Excessive railroad charges must be
deducted from export prices and the
farmer and manufacturer has to be con.
tent with the remainder. II his share IL
too small railroad rates and railroad
wages will face q demand for a reduc.
ton. The railroad labor problem will be
worked out on equitable lines by the
farming interests. the manufacturing in.
terests. the clerical classes. the consumer
and railroad classes themselves. People
will bsar self-imposed burdens more
cheerfllly than burdens imposed by 9TH
ers."
Has Faith in Thomas's Bill.
After laying down these general prin-
ciples on which those trying to settle the
railroad problems are coming more and
more to agreement, Mr.. Cook reviews
some of the plans which have been put
forward. He believes most Of all in the
Thomas bill. which he drew and which
he contends Is the simplest of all.
"A Federal railway board. not incor-
porated. but the members nominated by
the President and confirmed by the
Senate, would control FIVE railroad COM
panies, incorporated by the same act OF
Congress-" he explaina These five
Federal railroad companies Conc for
each OF the five districts into which
the railroads of the country would be
divided) would then acquire the stocks
and perhaps the bonds of tho present
existing railroad companies in any one
or all OF three ways-by exchange, pur-
chase or condemnation. The Federal
railway board would fix the basis, from
time to time. on which the exchange
would be based or purchase made. The
FEDERAL railroad companies would sell
their own capital stock to the public
from time to time as money would be
needed to buy the existing railroad
stocks and bonds, or to provide funds
for extensions and improvements.
The Federal railroad companies
would have power also to acquire exist
ing railroads themselves, the physical
properties. by purchase or condemnation.
The Federal railroad stock would be
made salable and desirable to the public
as an investment by a ratio OF dividend
varying according to the going rate Of
interest general at the time, such divi-
dends being guaranteed by the Govern
ment, and by a possible additional divi-
dend. If earned. up to per cent. Al
profits in excess OF 6 per cent. would
belong to the Government, to be used
exclusively for railroad purposes.
IAN financial operations of the Federal
railroad companies would be directed by
the Federal railroad board. All railroad
rates would be fixed by that board. II
will be noticed that this plan is not
Government ownership. The Govern.
ment would not own any OF the prop
erty, either stock. bonds or the rail-
roads themselves. The Government
would merely name the Federal railroad
board and guarantee the dividends The
Federal railroad board appointed by the
President. and confirmed by the Senate
would be governmental in its origin, but
not governmental In its work.
THE Federal Reserve Board In con-
troll Of our banking system Is much the
same. The Federal Reserve Board 1:
governmental in its origin. but non
governmental in its control of the banks
1t is an ideal system OF public contro
without Government or political control
No Likelihood OF Politics.
The Interstate Commerce Commits.
sion is another instance, 1t being ap'
pointed in the same way, and no one
has ever asserted that it has been poll
teal or partisan in its control Of thu
railroads. A Federal Railroad Board
would be equally safe. 1t would b.
public control without governmental
political or partisan control. and 1t II
ideal in that IL places full responsibility
not only for the establishment Of rate,
but also for the regulation Of expenses
and the railroads would continue to b.
operated by railroad men. Just as oul
banks continued to be conducted b,
bankers under the Federal reserve bank
ing plan.
This is of fundamental importanc,
because It avoids the inevitable evils o.
Government ownership. AS stated tn,
Thomas bill. Incorporating i've Fedora
railroad companies. can easily be ex
banded into a larger number of com
panies so as to keep the trunk railroad
lines separate and give competition II
service or at least an opportunity 4
work out such competition in service 4
It can survive"
Mr.. Cook then cites tho plans o
other men, which he feels in many way
carry the same general principles a.
the Thomas bill.
Senator Cummins. he recalls, has ad
vocated the plan of a Government hold
ing company and of Government guar
anty of dividends, which. he says, 81
substantially the plan OF the Thoma
bin" Representative Dewalt introduced
| bill in the House in January which q
virtually the same as the Thomas bill
but added a new feature In the form o
inspecting commissions.
Mr.. Cook comments that the American
people are tired OF committees. Wake
d. Hines, Director-General OF Railroads
advocated practically the plan Of tn
Thomas BILL" Mr.. Cook says, ant
favored Government guarantee OF in
come for a moderate amount, with tn