The Birmingham age-herald., 1919-02-04
PLANTS MAXI: SOLUTION RAIL WAY
 PROBLEMS HARD,
 DECLARES HINES
This Is Important Reason Why Operation Should Be Extended or the Roads Returned to Owners
 Immediately
By Associated Press

Washington, February , Exaggerated complaint against government railroad operation growing out of a natural reac- tion from wartime patriotic tension is a psychological fac tor" which makes it difficult at this time to develop a perma- nent solution of the railway problem, Director General Hines said today in testifying before the Senate interstate commerce committee.
 This is one important reason, Mir. Hines said, why government operation either should be extended five years, and time given for calm deliberation, or the roads turned back to private management be- fore the present 21 months period ex- pires.
 Citing many cases of complaints against, government operation which he said were based on msapprehension or failure to understand railroad practices, MT. Hines said:
 Apparently every hardship or difficult ty connected with the war time opera ton of the railroads proves momentarily to be regarded as reason why there should be no solution except a prompt turning back of the railroads to all the railroad companies with new legislation which really makes no Fundamental changes whatever.
 q do not believe this state of mind will change until there is an opportunity to arrive at an understanding of the results of federal control under peace conditions. Therefore, the importance Of lgiving a fair and reasonable test to fed eral control under peace conditions Is not merely to give a fair showing to jadvocates of government ownership, but also to give fair showing to the ad- vocates of any plan other than the plan
 of going back to the old regime" BEST SOLUTION
 MT. Hines explained that he believes tthe best eventual solution would be de- velopment of few large railway sys- l tems, privately owned and operated, un-
 der strict government supervision. | There can be no solution through tho operation of the railroads by the numer-
 ous existing railroad corporations with their widely varying financial structures he said.
 'The deep seated suspicion of the public and of labor that there is serious over capitalization largely negatives all rep- lresentations as to the propriety of any given level of railroad operating income NO plan can be permanently success l full which leaves railroad operations with
 a large number of railroad corporations. some strong and some weak. So long as | this condition continues 1t will result | that on any given basis of rates and wages, some railroads will prosper to
 great degree and others will fail. "If any plan of private management | is to be successful it ought to provide | for the participation of the government
 and perhaps of labor in profits in excess
 of some comparatively moderte return. STANDARD IMPOSSIBLE | This country has settled down to the
 definite conception that railroads ought
 not to receive more than q reasonable
 return and also that they ought not to
 receive less Theoretically this appears | to be reasonably definite standard. | Practically the standard is impossible
 of application under the proposed plan 1 of private management. The logical thing
 to do is for the government to ascer- l tain what the fair return ought to be and to guarantee that to the railroads
 and then if it wishes the benefit of the increased efficiency which may proba- l bly, be expected from private initiative, l it can permit a moderate participation | in any profits in excess of that return. 1 Tt is recognized that it is indispen-
 sable that capital invested in railroads
 shall yield sufficient return to attract additional capital. But the proposed
 plan of private management involves
 the whole subject in so much confusion
 and uncertainty as to make the prospect
 of obtaining additional needed capital highly unfavorable.
 The real object sought to be accom- plished can be obtained without all this
 uncertainty and injury by the govern ment itself assuring once and for all a l fair return
 MT Hines will continue his testimony