The sun., 1919-06-09
William w. Cook, It's Au.
thor, Favors Regional
Trunk Line Plan.
PUBLIC CONTROL Is GIVEN
q. S. Incorporation, but Not
Ownership; Body Like Re-
serve Board in Charge.

~ hlloSb III SIGHT DtCbubt VI lHo INCREASING
unanimity Of opinion as to the general
form a reorganization of the roads
should take, according to William w.
Cook, general counsel OF the Mackay
Companies, who drew the railroad bill
introduced in the Senate by Senator
Thomas in December, 1915. His bill
had many hackers.
VIRTUALLY all seem TO agree that there
shall be Federal Incorporation" says
Mr.. Cook. land country wide consolida-
lions and division of the consolidated
roads into regional districts, each dis
trict containing one or more trunk lines,
with an absorption OF the small railroads
in that district. and there Is also a
unRnimity of opinion that the fixing OF
rates shall be united with the RESPONSE
bility for the payment of the expenses.
interest. dividends and the raLolng Of
fresh capital for extensions and i'm
provements. The plan of the Thomas
bill has undoubtedly led the way to these
conclusions. and believe that plan will
ultimately prevail. with notifications,
such as larger number OF regional
railroads to promote competition in SER
vice."
the majority opinion now Is that the
great trunk lines should absorb the small
lines should be consolidated" says Mr..
Cook. This involves the consolidation
Of some 162 railroad companies into
some number between Ave and twenty
two systernA Four years ago l advo-
Gated five systems. Senator Cummins,
chairman OF the Senate committee hay-
ing this subject In hand, favors eigh-
teen systems Mr. Willard. president OF
the Baltimore and Ohio Railroad pro-
poses twenty-five systems. Mr.. Hines,
Director-G General of Railroads. proposes
six systenA
Competition Advocated by Some.
The difference OF opinion as to the
number Of systems Is due to the desire
to perpetuate competition in service. even
though competition in rates no longer
exists The railroad companies them
selves favor a considerable number OF
separate systems so that every important
trunk line may be operated more or less
Independently OF other trunk lines, thus
increasing competition in service. There
is no objection to this. even though such
competition may not reach expectations
Whether theee separate trunk line
systems, each absorbing all the small
railroads in its locality. be called re
gional railroads or trunk line systems
of railroads Is immateriaL The term
regional railroad has been criticised as
dividing the country into geographical
regions instead OF into trunk line regions
That criticism is ungrounded. The re-
gional railroad idea was originated sew
eral years ago, and divided the country
into trunk line regions and not into geo
graphical regions. because that would
cut the trunk lines in two.
However. aside from all these details
the important point to be noted here Is
the first great fundamental principle
which all agree to, namely, that all OF
the railroads shall be consolidated into
from five to twenty-five separate sys-
TENS"
AS to the common use of city termi-
nails and dlverting freight to the short
est route. Mr.. Cook says:
THE war has demonstrated that this
Is feasible and of great public benefit.
All admit that II should be continued.
The consultations mentioned will bring
this about. All agree that great econo-
mics and great public convenience will
result
"One class OF thinkers favors Govern
ment holding companies, which will Is
sue their stock with a guaranty of dlvi-
dends by the Government. such stock to
be issued to acquire the stock and bonds
of existing railroad companies. and to
furnish necessary fresh money for ex-
tensions and improvements. For more
than ten years 1 have advocated that
plan.
Another class of thinkers favors the
Government fixing railroad rates high
enough to pay. say. per cent on the
present investment, and enough more TO
make railroad credit sufficiently high to
attract fresh money for extensions and
improvements. The same principle un-
derlies both plans. namely. Government
backing. All agree that Government
backing is necessary.
Question as to Regulation.
at IL the consensus also that II the
Government backs the railroads the
Government should have full power to
regulate them. There wide differ
ence OF opinion as to how this regula-
ton should be exercised: whether II
shall be by full control through the
holding companies with a Federal rail-
road board, by an enlarged Interstate
Commerce Commission or by restoring
the old system of the railroads running
themselves, subject to check by Congress
and the commission. All agree. however
that whatever the Government demands
in the way OF regulation must be
granted"
As to Government ownership, Mr.
Cook says:
Here too there is almost unanimity
OF sentiment and public opinion. Gov
eminent ownership is discredited and
buried beyond possibility of resurrection
In this generation. The experience OF
the last year and a half has convinced
the American people that our form oil
government Is not fitted to operate oui
vast system OF railroads as unit or IT
any other way. 1t Is unnecessary &c
dwell on the details. High rates, pool
service, extraordinary increase OF ex'
penses. a Government deficit. taxes &c
foot the bills--all tell a lamentable tale
when the Interstate Commerce Com
mission fixed the rates but was not re
sponsible for railroad expenses. the rail-
roads faced financial ruin. The commits
sion put an iron hand on rates. but No
hand at all on expenses. Revenue anc
expenses must be Joined to balance. The
power to Ak rates goes with the obliga
ton OF paying expenses. interest anS
dividends.
IF the Government Is going to regu
late or to control the railroads through
holding companies. the Government mus
assume responsibility for expenses o.
providing rates high enough TO furnish
sufficient income for expenses, interes
and dividends. II, on the other hand. tn
railroads are left to pay expenses IN
terest and dividends they must be al
lowed to FIX the rates. with some checi
or other to prevent the abuse OF exces
sive rates
IAN agree to this. The old plan an
theory that the Government may NIX tn
rates and let the railroads do the bes
they can to pay expenses has gone int
the discard.