New-York tribune., 1919-01-08
Interstate Commerce Commission
Would Return Railroads TO O,vners

properties IS augmented.'
Regarding the emancipation Of rail
way operation from financial dicta-
tion," he continued, "it would serve no
good purpose to recite the many in
stances in comparatively recent years
in which, through financial deals for
which it is difficult to find any word of
excuse, railroad properties have been
bankrupted or saddled with almost
overwhelming burdens of indebtedness
which have not increased the amount
or value of property devoted to the
public service, have not improved the
service rendered and have. on tho
whole, had the effect of increasing the
charges for service. There should be
some way by which under the law these
things could be prevented, or, if not
prevented. by which the perpetrators
could be required 10 adequately answer
for their acts.
"A transportation line operating by
virtue of public grant and upon
Whlch the industrial, commercial and
social lie OF communities depends.
should not be football of speculation.
Ihe records in estigations made and
reported upon by us in cases of fin
anclal wrecking of railroad companies
suggest the advisability of extending
the terms of the Clayton act with
eH@o " common or 1nterlOcklng
directors so as to render them appli-
cable to common carrier corporations
even when they are not competitors
Consideration of these questions and
corrective measures for the abuses re-
lerred to lead to the advisablity of
pupllc or governmental regulation of
the issuance Of securities by puhxc
service corporations is conceded gen
orally by thinking and fair-minded
men.
Proper Federal Regulation
"A proper Federal regulation of the
issuance of securities by the cornora-
tions engaged in interstate transporta-
tlon and supervision of the application
OF the proceeds therefrom would 90 far
toward preventing the abuses referred
10 IN the preceding paragraph The
commission is on record for several
years past as favoring such suner-
VISION and regulation of the issuance of
securities and for the establishment of
a relationship between Federal and
state authority which will eliminate the
tWlll ght zone of jurisdiction and under
when harmonious rate structure and
adequate service can be secured. state
ana interstate. If the government is to
assume, as 1t should, all of the respon,
slDllltles that properly go with an am
plified and broadened exercise Of its
regulatory powers and the regulation is
10 be adequate, the regulating body
must nave authority and powers which
/ IL mas not heretofore had over cues
tlons OF service and physical operation
OIL the carriers. In this way only can
an adequate service be secured and kept
II harmony with a reasonable level Of
rates. The conflict of jurisdiction as
! between the Federal government and
the states could probably be resolved
through harmonious cooperation if the
Federal tribunal could be authorized to
cooperate with state authorities by
utlllzlng their services in appropriate
instances and to an appropriate extent.
Restrictions governing the treat
ment OF competitive as compared with
non-competitive traffic are necessarily
linked with what has been said rela-
tive to revision of limitations upon
united on cooperative activities among
common carriers by rail or by water.
If those limitations are appropriately
broad there would seem to be no oc-
casion for different charges, terminal
| or otherwise, as between so-called com
petitlve and so-called non competitive
traffic, or for many of the old annoying
and expensive restrictions surrounding
milling and other services in transit.
Could Form Pools
Under broad revision of limitations
upon cooperative activities among car
riers they could form equipment pools
which would add efficiency to the
i Standardization Of construction and in
the utilization of equipment Under
the extension of authority to the regu-
latlng tribunal to require adequate
service, carriers that are disposed to
shirk their duty could be required to
/ provide themselves with the equipment
necessary to the furnishing of an ade
/ quate service.
Broad revision of the limitations
{ upon cooperative activities among the
I carriers would naturally bring a more
liberal use of the existing terminal ia
cllltles and would undoubtedly bring
about agreements between connecting
/ carriers under which existing terminal
facilities would be opened to traffic
which (s now and) heretofore has
been excluded. If Che regulating body
I IS empowered to require adequate SER
vice it could require the enlargement
of terminals, If that action were neces-
sary in the public interest, and could
require that terminals be opened to
tlaftlc IN so far as is reasonably and
| properly IN the interests of the COM
merce of the locality Where this
power was exercised the regulating
/ tribunal would, as a matter of course,
determine the reasonable compensation
to be paid to the owning carrier for
use of it's property by the carriers or
traffic so using that property.
sportation service and adequate
service are demanded by the welfare
the industry. the commerce and the
social life of the whole people. Secur-
I ing that class of service is more i'm
portant than is the question of whether
it shall be furnished at a slightly
{ higher or a slightly lower charge. An
adequate service cannot be provided
except from adequate revenues and as
a result of adequate expenditures for
maintenance, Improvement and eX-
pansion. Private capital cannot be
induced to invest in railroad securities
unless it can be reasonably assured of
the security of the investment and an
appropriate return thereon.
Rates On Service Basis
ct necessarily follows that the pat
rons Of the transportation companies
must pay rates that will yield revenues
sufficient to justify rendering the
| quantity and character of service de-
manded. The charges should not be
! higher than those that will yield proper
compensation for the service performed d
and appropriate return upon the prop
erty devoted to the public use.
|, IF through enlightened, broadened
and wise regulation that proper balance
between revenues. on the one hand,
! and RETURNS to caDita1 and eyOn RI it,1roe