The sun., 1919-05-20
Senator Cummins's Railroad Plan
Good and Bad.

Senator Cummins's Railroad Plan
Good and Bad.
Senator CUMMINs's railroad plan
as freshly outlined by him has some
good points, indeed, very strong points.
To take all the roads, for example,
and bunch them into a dozen closely
articulated systems would have been
wise thing to do at any time in the
past generation. To do this now is
essential. The little roads, the weak
roads, the poorly constructed and
scantily equipped roads, the roads go
ing through poor territory, serving
people who create no great quantity
Of interstate traffic but who must be
served, cannot live on rates that
would be adequate for great roads
equipped to do and doing vast vol.
ume Of rich business.
Whatever plan Of salvation is
worked out for the national railway
system the weak and hopeless roads
must be thrown in with the rich and
powerful roads. This means, as Sen
ator CUMMINs says, q traffic rate SUI.
fic!ently high to take care of the sys.
tens as a whole. 1t also means, as
he says, that valuation must enteI
into the problem. Good territory OF
bad territory, II a road Is doing its
work properly, serving the local pub.
lie and the whole country efficiently
to the limit of It's opportunities, II
should be possible for the capital In
vested in that transportation com
pany to earn something.
1t is also fair and It Is necessary as
we'll to assure an interest return t.
bondholders. Bondholders do not oper
ate railroad properties. They merel,
lend money to the corporations. i
they don't get their interest paid, 4
they don't get their principal when 1
Is due, capital will refuse to go int
such IN Investment; and capital can
not refuse to go into railway bond
without restricting the transportation
facilities Of the country, thereby in
Turing national industry and nationn
business.
Again, Senator Cummins is RICH
when he says that the public licens,
Of the roads should be Federal. The,
must be chartered under uniform
system, they must be operated unde
uniform regulation, they must be pro
tected by uniform safeguards.
All these principles are not merel!
sound, but, as we have said, the!
have become essential to the contln
uation Of the nations colossal railwa!
system.
But In the long run nothing wors
could happen to the roads, nothinI
worse could happen to shippers, moth
ing worse could happen to consumers
nothing worse could happen TO tn
American people-the nations work
ers, taxpayers and bill payers-thal
the adoption and exercise Of Senate
CUMMINs's plan Of guaranteed earn
ings as he has formulated it.
II a road was bound to get for 1t
stockholders per cent. a year
whether earned or not, whether do
served or not, 1t would be humal
nature for the management and tn
rank and file not to try any too har
either to earn it or to deserve II.
If another road couldn't receive an,
more than 9 per cent, no matter whu
! It earned. no matter what It deserve
to receive, the result would not IA
to kill incentive.
This Is the very thing which ha
happened under present Governmer
operation. 1t would go on, with guar
anteed earnings, under resumed pr
vate operation.
Now, II one part of the roads didn
have TO earn or deserve their div
bends, because they were sure to 20
them anyhow, and II 1t were useles
for the other part of the roads to 4
on striving to promote efficiency,
earn more and more and to desery
moro and more, think what woul
happen to the public! Increased II
; difference by the railway personn,
from top to bottom would mean hlghe
and higher traffic rates. AS efficienc
ran down and costs of operation IN
up the Government, guaranteeing I'll
bond interest and the dividend
5 whether earned or not would be con
PEELED to 20 on increasing the frelRl