The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-09-16
RETURN OF THE ROADS.

/
Director General Hines is prepar-
4 ing to return the railroads TO their
owners at the close of the current
year. It is expected. of course. that
congress will enact legislation of some
sort. governing the future conduct of
the roads barre the change takes
place But il is by 70 means certain
that it will do so. Those who have
had in hand the framing OF railroad
bills are so at variance that harmo-
nious action within three and a half
months seems improbable. But the
passing necessity may act as a spur
to quicker action beyond what might
otherwise be expected.
The Plumb plan is unthinkable. The
Cummins plan is open to serious OBJ
! Jections. The warfield plan as 1t
stands is too sensible and fair to win
the approval Of the politicians in con-
gress.
The Railway Age in an editorial in
its current issue attacks one of the
main provisions OF the Cummins bill
upon the ground that it would have a
direct tendency to promote ineffi-
cheney in the operation of many rail-
roads. and says; THE bill is weak
just where it is most important that
it should be strong"
II the new legislation deal wisely
with the question of railroad revenues
it viii probably be successful, even tho
in other respects 1t may not be we'll
designed. II 1t do not deal wisely with
the question of railway revenues 1t
will be a failure no matter how skill
fully it may deal with other phases of
the problem.
The Cummins bill provides that for
the purpose of rate making the inter-
state commerce commission should
divide the railways into rate making
groups. and shall from time to time
determine the value of the property
In each group. and so lower or ad-
vance the rates of transportation as to
provide a fair return upon the value
Of the property in the group. 1t re-
quires the commission to consider.
among other things. the requirement
for additional capital in order to en-
able the carriers to perform their
duties to the public. and the condition
under which the same can be OBJ
tained. But the bill contains a pro-
vision which seems to be inconsistent
with these. and adapted largely to
nullify the good effects which they
would tend to produce. Section pro-
vides that III any carrier shall receive
from operation in any year more than
a fair return, the excess above such
fair return shall be paid to the trans
portation board within the first four
months OF the succeeding year" This
provision seems to mean that IL any
railway company shall earn more than
the commission shall have held to be a
fair return. all such surplus earnings
shall be taken from 1t and used Tor
purposes which have no relationship
to the progress or prosperity of the
railroad earning the surplus.
| A fair return upon value is a phrase
invented by the courts to indicate the
limit below which regulating bodies
cannot go in fixing rates without I'M
constitutionally confiscating property.
For ten years the old system of regu-
lation has been attacked upon the
ground that railroad commissions
have constantly tried to make railway
rates as low as they could without
eonfiscating property. instead of maxi
ing them such as to enable the rail-
ways to render good service and ade-
quately develop their facilities. The
Cummins bill would specifically enact
into law the restrictive and destruc-
tive principle upon which the regu-
lating commissions have acted.