Arizona republican., 1919-07-14
URGES BUSINESS CHACE FUR DUR
 ROADS CAPITAL
Railroad Head Gives Con- gress Some Suggestions to Aid in Solving Rail Problem-Give Capital a Chance

Chance
 NEW YORK. July 13.-Suggestions to members Of congress for "a sound solution of the railroad problem" by Robert s. Lovett, former president of the Union Pacific railroad system, for merly head of the division of capital expenditures of the United States rail- road administration, made public here today. included as a fundamental prin- ciple the necessity of legislation that will give railroad capital business chance"
 If congress will enact the necessary lieve that capital will take business chance declared Judge Lovett, T be- lieve that capital vii takle a business risk and the money required to provide the requisite railroad facilities for the future will be forthcoming"
 The head of the Union Pacific de- clared that in his opinion. the country | is confronted with four contingencies: i Inadequate and poor service, govern ment ownership, a federal guaranty of a reasonable return upon railroad capi- i tai, or reasonable rate-fixing by a gov ernment agency. the latter providing | fic and the carrier, with the right of each carrier to keep whatever profit it can make out of rates so established, by good management. good service, economy, wise investment and success in competing for business"
 Regarding rate making, Judge Lovett maintained that the regulation provid- ed by congress should require that the rates be sufficient to enable the car riers to provide the requisite service and facilities, protect existing invest ments and provide the new capital nec- essary in the public interest" as ad vocated by the committee If railroad executives and submitted to the sen ate committee on interstate and for eign commerce.
 Recommends Five Features
 Judge Lovett. likewise, favors five other features of the railroad commit tees report as being remedial anC wise as a national railroad policy, namely: Compulsory federal incorpora tion, exclusive federal regulation O securities and rates, the creation of department of transportation in tn, presidents cabinet, the head of whicl would have power "to act quickly ant deal with emergencies" and modified tion of restrictions upon railroad con solicitations and provision for the merg ling of lines when in the public inter est
 Our railroad transportation" ob serves Judge Lovett which is essen tially national should be rescued iron the irresponsible and conflicting stat agencies and brought under uniform control and regulation in the nationa interest, except as to strictly local mat terS.
 Without government ownership O operation. the only reliance for railroa revenue to support railroad credit mus 1 be upon the adoption by congress of
 sound railroad policy involving abso lute justice to railroad capital and re duiring specifically and plainly tha the rates to be fixed shall be sufficien
 to enable the carriers to protect exist ing values and to attract the new capi tai necessary in the public interest"
 Railroad investors, according
 Judge Lovett, are deserving as muc
 of encouragement, liberal treatmer
 and appreciation as stockholders i
 other enterprises with no public in
 terest involved"
 Praise for Stockholders
 No money except that devoted |
 benevolence is employed more in th
 public interest or is entitled to nor encouragement or fairer treatment an
 consideration than that which is in
 vested in the construction and develop ment of railroad facilities declare ! Judge Lovett, who added that ''it X about time that we were introducin
 common sense into some of cur tneo ries about railroad capital
 TTrIr I
 ! pulsory federal incorporation becaus . then the railroads would cease to | u tied hand and foot when it comes
 the issue and sale of stocks and bonds
 a restriction that 'too often the . them back upon short term borrowin . with dangerous and aften unfortunat :, consequences"
 II Exclusive federal regulation of tF $ issue of railroad securities, said Tude ,; Lovett, is so vital to railroad cred and to the success Of any system , -t regulation that may be adopted ths ,. it must not be overlooked" Feder = regulation of freight and passeng, 'l rates also, he thought imperative bt
 cause of the notorious" discriminate ' by many state railroad commissions " favor of their own citizens against cit zens of other states.
 - Establishment of a department ,s transportation with a secretary in u ,' presidents cabinet was emphasized
 needful for the reason that the railros ! business, "the largest single industry V V the United States next to agriculture
 is unrepresented in the governmel Y and without any friend at court 'v \, Such an official. Judge Lovett sai v v would be able ito meet emergenci p resulting from exceptional congestit ,a in traffic or through blockades ~ transportation by quickly mobilzir .e the nations transportation resourc 70 and by the arbitrary diversion, if ne, " be, of traffic from lines which cam m m'n handle it to lines which can. and " other instant and heroic methods