New-York tribune., 1920-02-26
Fate of Roads
In Commerce
BOard'sHands
New Act Makes Commission
All-Powerful in Every vi
tai Interest of Nations
transportation System
Can Kill or Rescue Lines
Success or Failure of Pri-
vate Ownership Hinges ora
the Policies of IL Men
By Stanley Frost

If the new transportation act is
signed by President Wilson and goes
into effect next Monday there will be-
gin an era in railroad affairs in Amer
ica which will be changed in the most
vital ways from any that has pre-
ceded it. On its success will de-
pend whether the cry for government
ownership will revive in redoubled and
perhaps overwhelming force after a
few years, or whether the roads will
become reestablished on firm basis
free from the evils both of the period
of unrestricted competition which
brought about the great anti-railroad
movement, and of the period of "un-
restricted restriction" which almost
wrecked the entire system of transpor-
tation. Through the new act the
United States:
Plans to assure to the railroads main
tenance, credit and fair profit, as
we'll as to control and restrict them;
10 consider the interests of investors
As we'll as those of shippers.
Increases its control over the roads
In all directions, making it possible to
override almost any selfish interest that
may arise, and insures honest dealing
with the public, especially in regard
to the issue of securities.
Acts Once Illegal Now Proper.
Abandons the policy Of enforcing
competition, exempts the roads from
the Sherman antitrust act, and actu-
ally encourages the same kind of CEN
tralzation and cooperation which has
heretofore been illegal.
The policy of support of the roads,
however, is an intentlon-not a guar
anty. The government takes no re-
merely announces a change Of policy,
and leaves the carrying out of it to the
Interstate Commerce Commission.
There is no provision for doing more
for weak railroads than to tide them
over crisis. SO the whole success of
the railroads in the new era depends
upon the commission.
'On March ! next private ownership
of the railroads enters upon its final
test" says c. A. Prouty, former mem
Der of the commission and now direc-
tor of the Bureau Of Valuation of the
Railroad Administration. "lf it sue
ceeds it will become the permanent
policy Of this country # it fails in
the estimation of the public, govern
ment operation must result. Whether
it succf eds or fails must depend largely
upon th.s commission.
at is often charged that the decline
in railroad credit has been due to the
ihsutficiency OF earnings, but this
statement is not warranted The
trouble has been the uncertainty. The
public has come to realize that the
government holds these carriers
through its power to dictate their rates
in the hollow Of its hand and The doubt
of what the policy of the government
Is TO be has been the disturbing factor"
Public VIII Wait for Proof.
The policy has been announced but
the uncertainty will remain till it is
seen that the comm ission both wishes
and is able TO carry it out. 1t is in
che power of The comm mssiOn to kill the
railroads, just as it is in its power to
,ave thom. And there are powerful
interests which want the roads killed.
want private operation to fail, so that
either the Plumb plan or government
ownership Will result. These interests
will make themselves felt on the COM
mission.
cCmmissl oners to Kill or cure is seen
from glance at the new powers which
are given them in the transportation
act.
The first OF these is the keynote of
the new policy the power to fix rates
at level that Will insure the carriers
fair return upon their actual value.
This return is fixed at II per cent. for
two years. After that the commission
itself can determine what q fair return
ought to be and establish the rates
accordingly. Also, the commission is
to determine what is fair value OF
the roads. SO the entire earning power
of the railroads. taken as whole, is