New Britain herald., 1919-07-25
RETURNING THE RAILROADS.

i10 0CHeme TOT the return to private owners of the railroad prop critics in government hands as it was outlined by the National Transporta- tlon Conference seems to be worthy 3of thought and serious consideration WAen the step referred to is under Haken. It will appear to place a tinge of government ownership upon the 3publ1c service corporations, will allow : sconsiderable government supervision, & and will provide for competition among roads, which, the war has shown us, is worthy of support. &Guaranteed~ earnings are not favored, but it is suggested that the Interstate ENommerce Commission so fix rates That the carriers will obtain return &Of six per cent. upon the value of the 2pEoperty as determined by the board. Nhe, roads which earned more than six per cent. would be required to put 3Dne- half of the excess into a company Gontingent fund until that fund had sreached total of six per cent. of the
 nroperty valuation and the other half unto general contingent fund ad- ' Hninistered by government board.
 The latter fund, so it is planned, would be used to assist any railroads which might not succeed in earning hhefr six per cent. or allowed to ac- cumulate until it reaches seven hum khdred and fifty million dollars, when any surplus might be used to build Imp equipment of the roads, providing additional ones, or paying off capital and investment accounts of the roads. The roads of the country, it is recom- 30 competing systems and five hun
 dred million dollars is set as the sum
 which Congress should appropriate in place of the general contingent fund. All of this, it is planned, would
 be paid as the roads built up the pro-
 posed contingent fund from their own
 earnings. One of the great reasons that many roads have been unable to earn fair return on their investmen is that the sum represented in capital stock has by far exceeded the amount that has l been spent for producing equipment. Earnings were possible in the rosy days, since gone by, but the property was so much overvalued that there is little return per dollar at present. "Watered stock is good when money is cheap and useless when the dollar spent must earn it's return.
 Evidently a commission will set
 price upon the property and equip-
 ment of all roads, irrespective of what
 their liabilities in bond issues and
 capital stock amount to- Having as- certained the com panies' value, it will
 Joe a simple matter to judge what the earnings should be on a basis of six
 per cent. It will also be simple to revise rates so that those earnings will be brought in. Should extraor-
 dinary efficiency be attained so that the profits are greater, half of the
 money will go into a government fund
 flor the ailing brother afflicted by
 great catastrophe or a district calam-
 ity from natural causes, upon which
 no man can reckon, and half would
 go into fund to build up the roads
 own resources. The stockholder would
 get no more in actual cash returns
 than before, but would see the value
 of the property in which he is inter-
 ested enhanced and his investrnen
 further safeguarded. When the prop
 erty is increased by government ap-
 praisers his income would naturally increase. as the plan states that six
 per cent. returns would be allowed on
 fair valuation of the property
 Competition would be encouraged,
 and healthy reinvestment sustained
 Providing Congress is able to pu;
 through such a pl4n, at the same
 time safeguarding an already weak
 syLtem, the public will inevitably ben-
 eit. Stockholder and traveller will be
 better off after the scheme is in full
 swing. It appears sane plan.