New-York tribune., 1919-09-11
Association of Executives
Files Protest Agains t
''Fair Return Clause of
Senate Committee Bill
Harmful Effect Is Feared
Reasonable Rates Can Not
Produce Unreasonable
Earnings, Is Contention

WASHINGTON, Sept. 1O.-Thomas
De Witt Cuyler, chairman of the As
socation Of Railway Executives. which
represents approximately SO per cent Of
the mileage and earnings OF Glass |
American railroads, filed with the
Senate Committee on Interstate Com
merce to-day protest against the pro-
vision of the committees bill, pre-
sentcd by Senator Cumnains, which
limits the earnings Of railroad com
pany to a "fair RETURN" to be decided
by the Interstate Commerce Commits
sion, on the value Of its property
Mr.. Cuyler's letter, in part, said:
"Thc bill provides that if any com
pany shall receive from operation, dur
ing any year, more than q fair return,
10 be determined by the Interstate
Commerce Commission. on the value
of its property, the excess above such
fair return shall be paid over to the
government within the first four
months of the succeeding year.
No Unreasonable Earnings
ut ought to be borne in mind that
the earnings OF the companies are to
lied by the commission. Inasmuch as
Congress has no right to authorize
the collection Of unreasonabiy high
rates from the shippers who happen
to need the services Of u particular
road, or to make rates higher than is
reasonable for the service, it must be
presumed. as against the rate making
power, that the rates which it pre-
scribes or authorizes are reasonable
1t follows that any earnings which a
company makes VIII be derived from
reasonable rates. There is no such
thing as unreasonable earnings from
reasonable rates.
company is entitled, as property
right, to all it can Save from reason
able rates. and to deny il this T. ght
would be to d"ny it the right Of con-
stitutional protection for its property
Moreover 10 take from q company n
part of its net earnings derived from
reasonable rates NOT only dimlnishes,
and in some cases removes. the incen-
tive to competitive effort, efficiency and
economy, but forecloscs the hope OF
success as an attraction to capital.
Limitation Harmful
This limitation, together with the
necessity of constantly expending sub
stantial sums from the apparent net
earnings in renewals and replacements
incident TO maintenance OF roadways
and equipment, would, in our judg-
IN ent, seriously impair the ability Of
the railroads, upon which the company
IS dependent for handling its business,
to finance the necessary additions, bet
terments and equipment
"lnvestors Will hesitate 10 20 into
business in which not merely the
rates which may be charged are pro
scribcd by law, but the amount saved
by good management. thrift, economy
and efficiency is to be taken and ap-
propriatcd for the benefit of others, or
Toy some governmental purpose. to such
extent as government body, in its
unlimited discretion, shall deem fair:
procee ling which, in the common
judgment of mankind until now. has
been regarded as plain confiscation."
In addition to Mr.. Cuyler the steer
ing committee OF the association,
which authorized the letter. consists
OF Robert $. Lovctt, president OF the
NNion acme Rallroad Company, How
ard Elliott, chairman executive com
m1ttec Of the Northern Pacific Com
pany; Samuel Rea, president Of the
pennsylvania Railroad Company; a.
II. Smith, president Of the New York
Central lines; julius Kruttschnitt,
president Of the Southern Pacific Com
pany; s. 7. Bledsoe, general counsel Of
the Atchison, Topeka e. Santa Fa
Railway Company. and Alfred P. Thorn,
general counsel of the Association of
Railway Executives.