Evening star., 1919-04-20
END-TO-END CONSOLIDATION
a. OF RAILROADS IS PROPOSED
Plan Is for Six to Twelve Great National
So Systems Under Strict Govern
mental Supervision.

properties and shall receive a federal
charter which will protect them
against rate regulation of any kind
ons the part-of the states, and which
will provide that they shall be entitled
to~earn's g. per cent on their Iegiti-
matized value, when, this is ascertain
cd, and. in the meantime, to receive
the present standard return.
To arrive at a valuation it is pro-
posed to create a valuation commits
sion. with headquarters at Washing
ton, which can determine on broad
principles Of valuation to be carried
out by regional valuation boards. These
regional boards should be composed of
representatives of the different inter
ests of their respective section-that
determine promptly the .legitima tiZed
value of properties in their district
On basis of fair, physical value and
earning capacity.
"The Interstate Commerce Commits
sion's functions should be made large
ly judicial and six regional commits
siOners should be created, each to he
composed of representatives of diff
fSrent interests in the region. and to
have a mandate authorizing the rail-
road companie to fix rates so as to
enable them to earn not less than 6
per cent on their legitimatized value.
The Interstate Commerce Commission,
through a separate bureau on which
there should be Representatives of the
railroad companies, would determine
which railroad companies are to be
consolidated SO as to form from six
to twelve national railroad systems.
1T is proposed that a new United
States railroad court of appeals be
created to deal with all litigation un-
der the railroad control law of March
25. 1918, as we'll as that arising under
the new laws.
Strengthen Credit of All.
"By consolidating the various rail-
road companies and merging the
weak companies with the strong sys-
TENS, the credit of all railroad COM
panies as whole. as well as in de-
tail. is promptly rehabilitated and put
on a very sound basis. Practically
all railroad securities. especially
bonds, will as a sequence become
readily marketable. This will help
not only with the financing of gov
help in the rehabilitation of business.
The new national railway systems
will promptly strengthen the weak
part of their properties and will want
a large amount of material and labor
for that purpose. The pubiic's posi-
tion will be greatly improved because
all communities now located on weak
roads will hereafter be on strong
roads The plan provides for COM
petition and creates some new
through routes not now existing.
Companies taking out federal char
ters must consolidate with such other
companies in accordance with in
structions of a special bureau of the
Interstate Commerce Commission.
Companies on consolidating shall
to the stockholders and Junior bond
holders of the corporations which join
in a consolidation.
Physical Valuation Proposed.
"The public and Congress still want
a physical valuation. as they. have the
idea that railroads are overcapital-
ized. Physical valuation. therefore.
will have to 'go on: but it should be
on a fair basis. The valuation prob
lem is such an important one that a
Created with headquarters in Wash
ington. The country should be di-
vided into. say, twelve districts, to
be in charge Of regional boards. which
should be selected, in very much the
manner in which the board of the
federal reserve bank is selected; that
is. each valuation board should con-
sist of. say, seven members. to be
selected in the following manner
Each of the following interests shall
submit three names to the President:
81 The Wholesale and retail mer-
chants of the region. say. through the
chambers of commerce.
"2. The manufacturers of the region,
say, through the manufacturers as
sociations.
"S. The farmers, say. through farm
ers' alliances.
-. Tho banking interests. through
the federal reserve bank or the bank
ers' associations.
'.5. The lnboring interests. through
the labor unions.
"s. The railroads themselves. say
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