The Washington times., 1919-10-24
Boersianer's
Comment
on Business
copyrfght. 1919
- r. l. oeldb~rl
By BOERsIANER.

Senator Cummins' anticipatory pre-
els of his railroad bill confirms the
advance inforamtion which a few
well-posted banking houses have had
on the proposed law.
Five and one-half per cent is vir-
tually guaranteed to shareholders, a
percentage that may be raised to 6
terstate Commerce Commission. This
commissions authority is enormously
enlarged. The roads are to be made
up Of from twenty to thirty-fve sys-
TENS.
Before the bill leaves the House u
is likely to be Importantly modified.
Mr.. Esch has ideas Of modification
which may appeal alike to- the Con-
gress and to railway men.
Important also is the fact that rail-
way interests--managers and associa-
tions of security holders-have come
to an understanding among them
selves and will work in harmony
Representatives of so-called rich
roads now see that they have much to
lose by ignoring the claims of the
lines less fortified financially.
Attitude Has Changed.
Finally, the general attitude-in
and out Of Congress-toward the com
panies has changed for the better A
punitive and vindictive feeling has
been superseded by spirit of tolera-
tion, If not Of absolute fairness
Looking backward. electors and
legislators see that in the last two
decades the roads have been popular
to-
either to blackmail or to attempts at
political preferment; nemises Of
their original rule of damning the
public. From coast to coast ii was
the rage to impose new and increas-
ing taxations and restrictions on the
carriers In default of other issues
The desperate politician could always
count on an attack on the roads
Much of the railway legislation since
1900 has been a compendium OF all
the fallacies that could possibly be
imported into the political treatment
of an economic problem The in
evitable (and, unfortunately. unfor-
seem results were that the COM
panies gradually lost favor with in
vestors and were moreover operated
in a thickening atmosphere of popu-
lar suspicion and vindictiveness.
Sequentially the roads found IL in
creasingly difficult to get capital for
essential development; fell more and
more behind the Industrial require
ments of the country: and when the
war made an abrupt demand on their
capacity and efficiency they simply
and expensively broke down under
test they were quite unable to cope
with.
Comparatively Square Deal.
,,,I rod
the cause-irAb to get money
from investors to make the. necessary
extensions and improvements. This
perception has spread sufficiently to
give the companies a comparatively
square deal in Washington.
The trouble facing the roads is
again financial, but of a different
character from the pre-war period.
Presumably investors will have more
confidence in the properties after the
Congress will have fixed the status
of the lines, but they will not provide
money on former terms.
With United States Government
bonds yielding almost 5 per cent,
some excellent municipal issues Of
fering return of per cent, and
the United Kingdom in the market
at still higher rate, the railways
cannot be expected to borrow on the
ola terms, no matter how well Sc
cured their securities. Their only
alternative is short-time borrowing
at, say, per cent for the better
emissions and higher for normal
notes. Long-term bonds need not be
expected for year or two-while
money commands a boom premium.
Extensive betterments on the part
OF the roads are unlikely in the time
specified, for these cannot be made
on dear money. But enough may be
done 20 operate the systems with
reasonable efficiency