Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-03-13
PROPS FOR RAILWAYS.

There appears to be prevalent a
belief that the transportation bill
passed by congress guarantees
compensation for railways at an
excessive rate, only temporary
financial guarantee is given and
that partly to insure against any
cut in the pay of company en-
ployes at present, it being stipu-
lated that no reduction by any
company will be allowed before
next September. At that time it
is expected the interstate COM
merce commission will have in
creased transportation rates
enough to stabilize wages to the
satisfaction of the workers through
the labor boards of arbitration Gre
ated by the law,
The interstate commerce COM
mission has the power to decide
between ~ per cent and 61s per
cent as to which will be a fair re-
turn to the carriers on the value
of their property during 1920 and
1921. Thereafter the percentage
ot return that will he fair is left
entirely to the commission, as well
as the decision as to the values up
on which this return will be COM
puted. the latter decision being,
however, subject to review by the
courts. The commission may make
a rate for the entire country or diff
ferent rates for such regions as it
may determine upon.
Questions as to the efficiency
and economy of management by
the carriers and as to what con-
stitutes reasonable expenditures
for maintenance lie within the dis
erection of the commission.
1t may order the construction of
new lines or abandon others, if it
believes these steps to be in the
public interest.
After July ! no carrier may is
sue any stocks. bonds, or other Sc
curities, or assume any obligation
with respect to tho securities of
others, without the approval of the
commission This provision does
not apply, however, to notes matur-
ing within two years of the date
thereof, and aggrcgating not more
than five per cent of the par value
of the carriers securities then out
standing. Loans from a new re-
volving fund will also come under
the commissions supervision. II
will be readily seen that the Testo-
ration of railroad credit will be
profoundly affected, not only by
the attitude of the commission to-
ward issues of securities and the
obtaining of loans by a carrier, but
also by the spirit in which it UNI
dertakes its new duties and privl-
leges under the act.
The commission is directed TO
establish rates which will yield the
carriers an annual net railway OPP
Grating income equal to a fair re-
turn upon the aggregate value OF
the carriers property used in trans
portation service The aggregate
value of the property and the far
return thereon are to be deter
mined and published from time 10
time. but for 1920 and 1921 the
commission is directed by the act
to take 5la per cent of aggregate
value as a fair return. The COM
mission may increase this return TO
G per cent to cover expenditures
chargeable to capital account. IN
determining aggregate value, only
that consideration is to be given TO
property investment accounts
which they are entitled to in es-
tablishing value for rate making
purposes. If any carrier earns a
net operating income in excess NJ
6 per cent, one-half of such excess
is to be placed in a reserve fund
maintained by the carrier, until Il
equals 5 per cent of the value OF
the property; the other half of the
excess goes to a contingent fund
out of which the commission viii
make loans to carriers to meet eX'
penditures for capital account
After the carriers reserve reaches
H'5 per cent Of property value, one
half of such excess income owe
per cent as the carrier may earn
/ may be used for any lawful pnr
pose The commission may change
any rate, fare, charge, classified
ton, regulation. or practice which
it finds causes any undue or un
reasonable advantage, preference
or prejudice as between persons o.
localities in interstate, intrastate
or foreign commerce.