davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09

excess Of the requirements warranted
by real conditions.
Yet all these things-their neglect,
their faults, their issuance of watered
securities We're done before the eyes
of the public and under laws as they
then existed. So it does not seem
worth while to waste time by reference
TO past faults and neglects further than
to bear them in mind and prevent by
law their repetition in the future
Running briefly over the history Of
railroading in the United States, Mr..
Rand recalled that in the early days
of the nineteenth century the subject
OF internal improvements was much
discussed and resulted in the establish
ment of canals and the improvement
of waterways at public expense.
"ln the neighborhood Of 1929" he
said, "the country had some thirty
miles of railroads constructed, and,
owing to the jealousies and sectional
ISM which separated one district Of
the country from the others, public
moneys were not available, and we had
the beginning Of railroad corporations.
And up to 1850 all corporations
were created by special act of the vari-
Gus state legislatures. This system
has persisted, with the passage of
many general railroad laws. After
1850 the roads were required to report
Their expenditures and earnings to
designated state officials
Because Of the inability of general
laws to regulate the operation and
management of the railroads fairly and
Justly, particularly in reference to
their patrons, the various states
created railway commissions and in
1887 the Federal government created
the Interstate Commerce Commission.
Originally it was expected to lay down
rules which would extend fair and
equitable treatment to all patrons of
railroads, but in recent years the In
terstate Commission and various state
commissions have gone to the full
limit in the fixing of rates.
This regulation certainly has at
least contributed to the result that the
railroads have not been permitted to
grow and keep pace with the require
ments of their patrons and the gen
eral public, and be in all respects as
modern as industry itself"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Railroad Men
Hard Working Lot

"In envisaging the railroad problem
the welfare of the railroad worker
must NOT be overlooked for moment.
1t can be said without dispute that no
class Of workmen in the whole world
have given more of life's bubbling
energy to their work than these long
inadequately compensated people.
"Not se long ago the average rail
road cmploye toiled from 8 O'Clock in
the morning until Q, 10 or II o'clock
at night at wages which permitted no
more than bare existence. In the
memory OF many Of us, these wages
ranged from $40 TO S75 a month, .rega I'd :
less Of the skill, training and risk of
their calling"
Mr.. Rand thought it would be grave
mistake to make the roads Of the future
suffer for the sins Of the past. "Cer-
tainly," he asserted, mo one would un-
dertake 10 say that railroad officials
we're without fault, had never erred,
had never deliberately failed in their
obligations to the public. In days gone
by they have been in some instances
guilty Of NOT only unfair, unjust and
discriminatory relations with their pa
trons, but also Of manufacturing secari-
ties, Of issuing stocks and bonds far in
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Gold Imports
Precursors of Disaster

But these are merely possible or
probable stages in the process of re-
turn to the ultimate and normal con-
dltlons of international trade. Great
exports or great imports of gold are as
unusual as they are unhealthy-pre-
.cursors of disaster or pains of recov-
cry Only in case q country is a pro-
ducer of gold. as other countries are
producers of lead Or tin or copper, is
gold commodity Of large interna-
tlonal movements, excepting as con-
nected with some sort Of political or
financial laundering. Countries export
some lines of goods in order to have
imports of other goods. Inflows Of
money, even in the small measure in
which they occur, are good for the re-
ceiving country merely as stored-up
purchasing power, through which, by
later expectation, to command bal
ance of imports in payment and offset
Of the earlier balance of exports
Nor, in fact, in strict accuracy, do
countries either import or export
money or goods. 1t is only individuals
that do the trading. And they do
neither the shipping out nor the ship
ping in, excepting as it pays. Essen
TALLY, therefore, the same motives and
the same principles apply in interna-
tional as in ordinary inter-individual
trade. individuals trade with one an
other only because there is advantage
in the inter-individual specialization of
production. Each produces in the line
of his special opportunity or aptitude
and buys with his products the things
that he can get through exchange on
better terms than by attempting to
supply them for himself. 1t is division
of labor that makes exchanging Of
products.
individuals trade across national
boundaries as merely particular APP
pllcation of the general principle of
specialization of activities and inter-
dependence of interests. Division Of
labor between zones and countries is
merely an impressive and large-scale
illustration of the advantages that go
with division of labor and trade Amer
lea gets the maximum control of bana-
mas Or silk or coffee or sugar not by
producing them directly, but by buying
them with other products meat and
grain and cotton and lumber. This is
what it means to be able 20 buy
cheaper than one can produce; we can
produce cheaper the things to buy with
than the things we can buy. 1t is,
them. sheer blunder to attempt to
produce for ourselves what others can
better produce for us, and will gladly
offer us in exchange for the things
that we can produce on more favorable
terYnc than thpv
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
By H. J. Davenport
Professor Of Economics in Cornell
Cnivcr5ity

'oJfSSoT OF EC0N0MtCS In cornell
Uuivcr5ity
I HAVE already pointed out that, so
H. far as this country is directly and
lmme diately concerned, dehation with
its attendant fall in prices is not
probable; that, instead, we shall prob
ably do some more initiating in the
process Of lending for the imme date
needs Of Europe and of financing a
temporarily large balance of exports
over imports; that We shall get no
gold in this process, because Europe
has none to spare for sending to us
and that the result will probably be
that we shall further increase our
holdings either of international Sc
curtles or of foreign balances and
credits. These securities and credits
will afford the collateral upon which,
both as basis ana as inducement, our
credit imitation will proceed.
But this balance Of exports in our
favor will not last long. The press
ing needs CT Europe will be weaken
ing and our selling prices will be in
crcasingly unattractive. Europe will
remain a customer CT OURS, but ap-
preaching nearer and nearer to the
basis Of laying for goods with goods.
Especially if Europe attempts, through
credit dchotion, to return to a gold
basis, must It's prices decline with re-
latlon to ours, its exports to US ex-
rand and its imports from us decline.
The resulting absorption of gold out
of our redundant supply will then i'm
pose on us, in turn, the necessity of
debating our credit and our prices, as
a precaution against so great a loss
of geld as would of itself compel a
credit contraction here, a contraction
that, if too long deferred and toe
stou.ly resisted, might finally bring
about still sharper contraction and
evtn financial debacle.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Intricate Problems I'm Maxine
Returns Under Revenue Rim
Important Changes in M ethods of Computing T.,
on Income for 1913 Are Pointed Out by Ex.
pert; List of Exemptions Amended

securities owned by him, new stoc.
securities of no greater aggregate
or face value, no gain or loss will /.
deemed to occur from the exca.nsN
and the new stock or Securities
celved are to be treated as takino u
place of the stock or securities 60 -
changed. In many instances, hero,.
fore, taxes have probably been -
sessed on paper profits. where no ac.n.,
profits existed
The new bill provides that ;,,.u
shall be computed in accordance w;n
the method of accounting that is pa,
ularly employed by the taxpayer. Thu.
the computation may be made ejthe,
on the basis of receipts and disburs.
ments or on an accrual basis. demand
ing upon the method Of bookkeen,.
employed by the taxpayer. If NO su,S
method is employed, or if the metboa
employed does not clearly reflect II.
income. the commissioner shall require
the computation to be made on ha.;,
which does clearly reflect the incom.
Unless properly accounted for under
different method of accounting IN
come shall be included in the retur,
for the year in which received by N.
taxpayer
Whenever the commissioner copsia.
ers the use of inventories necesssrv
for the determination of the income
OF the taxpayer, such inventories shall
be taken by the taxpayer upon such
basis as the commissioner NAV ure.
scribe, as conforming to the best &c.
counting practice in the particular
trade or business, and as most clearly
rejecting the income. Under the reg-
ulations of che Treasury Department
effective for 1917, inventories were
required to be taken at cost, or at cost
or market, whichever is lower.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Would Share Profits
With All Employees

81 would also recommend that a
statute be made which would provide
that after reduction has been made
from gross earnings of operating ex-
penses, taxes, reserve funds, for depre-
citation, obsolescence and upkeep for
amortization purposes, and after fair
and reasonable return has been made
on the money invested (probabry per
cent in most cases. and paid in the
way of dividends and interest," that
where there is a remainder a reason
able part lthe amount to be decided by
the executives of the road shall be
distributed to every employee OF the
road in proportion to the size Of his
annual remuneration.
"Moreover, l would suggest that
where, after all the foregoing require
ments, including profit sharing with
the workers, have been met, there is
should be required by an action in law
to reduce its rates.
"1n mos. instances these specific
proposals are relevant not only to the
solution OF the railroad problem now
before Congress, but also to the work
ing out of analogous problems by the
several state legislatures
Humping his fist on his desk, Nh
Rand fairly shouted that each roaC
must stand on its own performance
and its success or failure must hinge
on the managerial ability of its OK
ecutives, who presumably are thor
oughly able men who have been Sc
lected from the best the whole ma
ton had to offer. "Outside regula-
tion," he added. throws out all the
plans of the executives, and response
bility for failures or bad service Is
ditfused. 1t does not seem that it is
necessary or just that Congress should
attempt to delegate any of its power
to any body Of men who at most can
not be as we'll qualified to settle ir
detail all of the minute questions as
they come up for determination as
the railroad officials who have come W
from the ranks, who understand thor
oughly the workings and requirements
of their machine, who are imbued will
an incentive to develop their prop
erty, to conserve it's usefulness and tc
get business to keep it going"
Mr.. Rand insisted that the present
railroad situation was too complicated
for solution by panacea that woulC
apply to ali roads equally. "To day,
he declared, 1--WE are confronted with q
large number of individual roads. tenn
porarily under control of the Federal
government, which are financially I'M
able to meet all the requirements
which they must face. demands upor
them which would call for an expen.
diture Of not less than $1.000,000,000 &
year for at least five years and posi-
bly, ten
ain this connection l well remember
that the late j. ?. Morgan, IN talking
to me about railroad problems, said that
70 per cent of the railroads in The
United States were bankrupt. Since
then many millions of railroad securities
nave had to go through the receyershir
nil
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Complicated
Questions

Although the above provisions APP
pear clear, many complicated questions
are presented in determining what is
income to be reported to the Treasury
Department. Items of income derived
from salaries, wages or payments for
personal services. interest and fees of
persons engaged in professions, pre-
sent but few difficulties because as a
rule income of that class is pure in
come easily ascerrainable, and not
mixed with the return of capital as
sets. If, however, salaries wages or
other similar payments include ad-
vanoes for expenses. such advance
need not be accounted for IN the return
OF the employe. The greatest diff
Guilty has been experienced in ascer-
tanning the amount Of income which
should be reported in cases of exchange
or transfer of property. The general
provisions of the law are to the effect
that in the case Of the sale or DISPOSE
ton of property, the difference be-
tween the cost of the property or the
value thereof, on March l 1913, if
acquired prior to that date, and the
selling price, is the profit which shall
be reported in the year in which such
property is sold or disposed Of. In
cases in which the tax return is made
on the basis of an inventory, such in
ventory value Will be used instead Of
cost. In the case of actual sales. the
profits as rule may be readily ascer-
tanned. IN me case of complicated
transfers or exchanges Of property,
however, it has been extremely diff
cult to determine the extent of the
gam or loss TO the individual, if any,
and whether 1t is a definitely ascer-
tanned, or merely Il paper, profit or
loss. The present bill has attempted
to clear up this situation in providing
mat when property is exchanged for
other property, the property received
IN exchange shall, for the purpose of
determining gain or loss, be treated as
the equivalent of cash to the amount of
its fair market value.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Thinks Home Field
More Profitable

But what about our new banking ex-
tensions and connections in foreign
fields? They are quite another matter
especially the establishment or the
extension of financing and investing
agencles America may, for a time at
any rate, and in possibly an impor-
tant degree. become foreign investor.
When finally the Europeans, the Eng
lish especially, get back to lower in
terest level than our own, as finally
they inevitably Will, we shall doubt
less be able to sell out our investments
on favorable terms. Meanwhile our I'M
dcrtekings may have we'll justified
themselves. We shall not permanently
become the centre of foreign financial
operations; we have too great and too
profitable field at home.
Nor are the long run prospects prom
ising that America is to become the
banking and clearing centre of the
world, nor is this solely because of
the outlook for lower interest rates in
England than in America, by which
London will offer the more favorable
terms Of discount for foreign bills Of
exchange and foreign acceptances 1t
is partly because London is now the
established financial centre. But pri-
marily and decisively it is because
England is the great shipping and
trading centre. This England is Tor
many different reasons-its free trade
policy among the rest The financial
hub of the world is almost inevitably
that cluster of ports from which the
great shipping routes of the world
radiate like the spokes of wheel.
Some one of the great European cities
will be the clearing centre. because
the populations and the industries Of
Europe make Europe the great import
ing and exporting centre-the world
trade centre OF gravity. Even had
equal volume of product its relative
sutiiciency in production--to say
nothing of its policy of economic iso-
latfon. its tariff system-would mega
tive its supremacy in international
commerce and finance. 1t is not so
much that England is the great carry
ing nation; it is also in geographical
position and in lines of activity the
great industrial and mercantile nation.
Bills of exchange originate against the
centre to which especially goods are
shipped. Buyers in need CT media Of
payment for the discharge OF their OBJ
legations seek bills of exchange against
the centre from whi~h they have i'm
ported their goods. New York will
never become the financial clearing
house of the world-no matter what
may be its financial weight or power
until 1t is the shipping centre, the
trade hub In truth, as American pro-
ducton comes to be more and more for
American ption-domest prod
vets exchanging more and more against
other domestic products, foreign trade
a diminishing fraction of the total of
American trade-the commercial and
financial centre of the country viii
tend to move in the direction of the in
dustrial centre and to something ap-
proXimating the population centre.
The financial primacy in America is
held by New York under lease of linn
tied term. a few decades probably. Its
primacy is indeed at present almost
as much at mattsr OF banking brains
ard banking policies as of economic
advantage.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Ban ON Imports
Cuts Exports, Too

America will. therefore, continue to
be great exporter and a great i'm
porter. 1t will pay for what it imports
by what it exports. For some time to
come as has been the case during
the four years Just passed-it will ex
port more than it imports. But, even
so, we shall not get gold. We have
already gone unwisely far in accent
ing this kind of payment. as England
and France have gone unwsely far in
offering it. To export goods and i'm
port gold raises the prices in the coun-
try that imports gold. In the long rum
then, ~ veto on imports is veto on
exports.
But in the main we have sold our
goods not on terms Of cash but against
promises, Of future payment or in the
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Why Not Give the Railroad
Owners q Five-Year Trial?
Z. Nj. c. Rand, for Many Years Railway Expert for
Russell Sage, Talks About the American Trans
portation Problem

officials should be permitted to deter
mine and assume responsibility for all
matters Of regulation under such laws
as Congress might enact, with the in
depreciation which may be made from
time to time by the judiciary.
Il would also recommend that there
should be an additional Cabinet officer,
to whom complete and full reports
should be made regularly of all acts
aid transactions OF the roads. 1t
airy between the railroads and Con
gress.
con the board Of directors of every
road one man approved by the Cabinet
should be named to represent the pub
lie interest, and another to represent
the employees of the road. All dummy
directors should be eliminated.
"If the railroads are turned over to
their owners at any early date and
the railroad officials have determined
the present and future needs of the
roads, Congress should provide cor
poration with an authorized capital of,
say, $780, 100000, which could lend to
the railroads from time to time sums
to be used for improvements only, with
proper security and amortization re-
quirements. (The capital should be in
creased and decreased if Congress can
be shown an adjustment is necessarily
"To prevent recurrence of some Of
the evils of the past in railroadlng [
would suggest short statute making
it felony hereafter to create, put out,
sell or buy or deal in any way in rail-
road securities of fictitious nature or
to do in any way what is known as wash
sales to manipulate or to attempt to
manipulate the market in railroad Sc
curities, or to do any act of discrimi-
natory nature, such as giving any ship
per an advantage in rates or facilities
which is not open to all shippers. (Fic-
titious nature might be defined as a
security which is without underlying
property or assets equal to the total
amount of securities outstanding on n
railroad property
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09

HREAT1NG formula for railroad
~ ing for the future that will be
satisfactory to all interests involved
seems about as simple as devising q
shuttle service to the planet Saturn.
Even the stanch advocates Of free in
differ fundamentally among themselves.
And the proponents of government
ownership wrangle endlessly with one
another, varying in their proposals all
the way from terminating private prop
erty in the roads by confiscation 70
achieving the same result by full COM
pensation at the par value Of all Sc
curities outstanding. Each observer of
the situation has his own pet plan to
offer.
In the discussion centring at Con-
gress there has been a tendency to re-
gard transportation as essentially a
social and political problem. Of course
it is that, but perhaps only secondarily.
Railroads were designed for other pur-
poses, chiefly for the carrying of per-
sons and freight from one place to
another.
Behind all the theories of railroad
ing which are spun one needs to look
at the physical job, which is the rail
roads real function. Whatever the
metaphysical concepts may be that
meet final appreciation, the need exists
indisputably to build up the transpor-
tation system of the country make it
more efficient, more serviceable, more
modern. Considered as a whole the
railroad system of the country seems
to require heavier rails, more up-to-
date engines, double tracks where
single tracks now exist, lines short
ened as far as possible, better stations,
especially in the smaller cities; re-
construction of many of the bridges,
and general overhauling that may take
at least decade.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-09
Character of Trade
viii MOI Change

But what will be the sort of goods
that Europe in the future Will have to
sell? And what the Goods that Europe
will be disposed to accept in exchange
for the goods THAT it has for sale? Pre-
sumably, the same goods that before
tho war Europe sold and Europe bought
only fewer Of each, IN the degree that
Europe has become q smaller Europe.
The same conditions Of relative ad-
vantage IN the specializations Of pro-
duction VIII exist after the war as be-
fore. Europc VIII want from Us what
be orc it wanted. We shall want from
Europe the same things in return for
what we send as we wanted before the
wsr. Europe Will buy from us the same
things, by selling to US what it used to
sell 10 us. The general motives and
conditions and the general channels Of
trade Will be unchanged, only that the
volume OF trade viii be somewhat d.
unfinished, and thet it VIII be IN some
measure modified sdiroction and in
its net balances by the new conditions
OF international investment and credits.
- but are we not going to hold against
Europe our newly opened trade with
South America, Asia and the South
Seas? The case is hopeless: at all
events, We should hope that it is. In
the degree doubtless that q smaller
Europe mas less product to sell [ o us or
TO any one else we may make shift 10
sell where before Europe sold. And in
the degree that a smaller Eurone must
buy less products from us we shall be
compelled to sell elsewhere our prod-
ucts, If we sell them at all, and to bring
home from elsewhere what products we
get. But in the degree that Europe has
products to sell-in the decree. that is
that goods can be had by Europe bv ex-
change on better terms than Enrone can
produce them directly Europe viii bn
selling abroad and buying abroad. We
could not help it if we would and wouId
not I we could. 1t is only on condition
that Europe sells its exports somewhere
that it can buy goods from US. Buvino
from US, 1t must sell to US or to some
one else. If we could get Eurone,s
markets away from her we should
merely so TAR cancel our own European
market. At the best, this would amount
Tor us to exchanging Europe "a cua.
toner for, say, South America.
But we have only limited balance
OF goods for export so much Of '" nnr
rhoau1t as we prefer to exchange
abroad for other products rather than
10 consume it at home why. tLen trv
70 sell 1t in South America rather than
IN Eurone, getting in return for il
south American products rather than