The sun., 1919-02-06
URGES U. s. TO BUY
RAILROAD BONDS
Francis L. Stuart Pleads for
Fixed Financial Policy
and Control.

and Control.
Francis Lee Stuart consulting en-
gineer of the Baltimore and Ohio Rail-
road. told the American Society OF Civil
Engineers at its meeting last night IN
the Engineering Societies Building, SO
West Thirty-ninth street that tho roads
should be returned to private owners as
eoon as enabling legislation can be
passed.
We have great national efforts to
make In world affairs" he said, and
tho sooner We put the vim OF an owners
interest back OF the largest business In
terest IN the country the better" He
continued as follows:
The normal growth OF our country
requires that the railroads spend In the
next nve years at least $4,000 600. 600
Tor improvements, betterments and nor
NAL growth Of our tran sportation ser
vice. ana a continuing and enlargins
amount thereafter to meet our growing
needs. While tho Government finds K
necessary to put our varying issues of
LIBERTY bonds. It seems best that the
Government should buy the securities of
reSains confidence enough to take the in
ventment out OF their hands.
rhis will require a possible advance
or from billion and half to two and a
haif billion dollars. for which the rail-
roads could be charged high enough
annual interest charge, over and above
the cost OF the money TO the Government
itselr. TO pay or the debt within twenty
or twenty-five years
"It will tain e.ob,o
road financial policy to renew the conn
dence OF the public in railroad securi-
Ties. and 1t seems to me that the rail-
road interests OF the country, which Is
tho largest single interest. should write
or all extraordinary war costs within a
short generation and lesser business In
terests in less time-in fact, I think, to
keep step with the age, the Government
should nnd financial measures to write
Off and obliterate all its national war
costs within thirty to forty years or
less.
Fixed Financial Policy.
The principle OF fxed financial
! policy and the control by the Govern
| ment necessary to carry out such pol
| Icy under all ordinary business cycles
should be made law by Congress The
control should be OF an enabling nature
and not more restrictive than is n,ces-
sary, and might at the present time well
| consist of:
First, a control Of rates initiated by
the carrier. The rate question Is largely
an artificial Issue and little understood
! by the public. The shippers of the coun-
try are chiefly interested in rate rela-
! tionships and the ultimate consumer in
| the amount OF the rate as he really pays
| the bill. We hear OF the shippers
, through their lawyers. but the ultimate
consumer Is rarely heard. because his
| indirect tax due to the rate alone is 30
| very small. There are possibilities in
more logical rate structure for settle
ment Of most Of the misunderstanding
between the public and the shipper. and
between the shippers themselves. for
which the railroads usually hold the
bag. In connection with the control OF
rates the Government should have an
unbiased economic study made for
more logical application Of rates than
at present
! Second, the wage question or the
railroad employee. like other mutations
OF the war. will be settled sensibly by
public opinion 1t does not seem .
| proper Governmental function TO settle
| wage scales. and II IL for the best con-
tinuing interest of labor itself that such
questions should be returned as soon az
| practicable to be settled between en-
ployers and employees. 1t is necessary.
| however, that the Government take cog
nizance OF such matters in the control OF
rates.
! ''Tiird, d cont-o! oe reproductive ey-
pend!tures required by the public. and
particularly as TO the grade crossing
elimination question which threatens to
be of serious financial Importance IN the
near future so that due cognizance may
be taken of such expenditures.
Issue of Securities.
| "Fourth-A control of issue of securi-
ties for improvements ana cohsol'oa-
| tions and OF the necessary railroad ac-
| counts. Generally the weak INES
should he consolidated with the strong
and the large lines prevented from pc
coming 80 large that they eliminate COM
netI,ion from any section Of the coun-
try.
"Sixth-A recognition that for the
| continuing solvency OF the properties the
voice OF the general public. whose well
| fare Is at stake, and the voice OF the
owners of the properties should De
heard with that of the shippers and rep
resentatives OF the employees.
"In my opinion the proper principles
for legislation for a fixed financial pol
| lev should be based on an average rail-
road efficiently operated. receiving as a
minimum fair profit for the transporta-
ton 1t has to sell. and that fair pront
must include:
81. An adequate going return on the
| investment over the cost OF proper SER
| vice 10 the public.
2. A return for such money as is Dor
rowed for improvements required by the
A. .esks xsFtNt ah NutIl n.
| clude the cost OF the money plus an
added equity TO the corporation I'm COM
pensation for extending their credit and
brains as collateral for such money.
| 3. The further right TO build up such
surplus as this class Of business. wisely
| conducted. shall have In reserve for
emergency"