The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1920-01-31

q
- days bcraus" they ar" not earning
her u\cd rharG"s under present c"ndl-
lions Il the ra'lrn"d~ ta!l I" earn th"':
rental whll. uniNr federal control be-
cause Of ;undCuUr'" rats. II - i'rSS!nie
for the cnlrrntH,ut I" MAKE NJ ;hc d.
nc.t ont Of funds raised by general tHN-
alton. hut u is not poSSihl" by means
rut Oc funds ra'scl 10y general taNnt"u.
but Il is .rnt possible by means Of any
legislation or IeErr-d"lnaIn Tor Inc pun
lie "a escape from tn burden "t paving
the total cost II the service IN On" form
ar another hrrauSr II the ,ul IN" IN
tire cost Of transportation. mcIuNinE
far rnte Of interest on the money cN-
;,.nded for facilities. must MI b" Pait
10y shos" who benefit by ;he use az Surh
facilities. 1t may he paid IN the shape
Of railroad rates or passenger larcS. or
L may. u - true. be paid IN whole or
IN part from the genera! treasury by
money taken from the people throuEh
various forms "f taxation. Tn" point Is
that. by whatever process II IS Collected.
the total cost Of III" railroad ranSpVr-
tstiun - borne by the public an! the
public should naturally h. interested
IN having that form AZ control ana "n"r-
alton Of tn" railroads as permanent
policy which will furnish the necessary
transportation at the lowest economic
cost. assuming aud ""nc"GinE always
tina, the operations Of tho carriers.
" neither under governmental or private
control, shall be carried on in such
way as not 10 diSrriminat" In favor or
any individual or locality at the expense
Of some other individual or locality. AMI
that they shall be 81 regulated In the
public interest as 10 prevent abuses
that othcrwls" might grow up and Hour
ISh under any system Of control
1t has been cont"nded by som" that
IL railroad rates and charges are re-
adjusted SO as 70 meet the Increased
- l,Ag u Il no. h.,
al amount OF such increased charges
will be multiplied four-fold 20 the con-
sumner. This IS equivalent to saying
that II the government requires and col
lects five billion dollars in taxes per
year. that the people will have 10 pay
four times that amount or twenty billion
dollars. AS matter OF fact the people
pay what the government collects. and
no more. and the same Is true OF the
railroads. II by any process or on any
account they are asked TO pay more. II
does not go 10 the railroads.
The Railroads Problem.
The first problem. therefore. that
confronts the railroads is that OF OBJ
taining sufficient revenue to offset the
increased operating costs which have
been placed upon them during the last
two or three years. and provide n net
income sufficient TO pay a fair return on
the value OF the property devoted TO the
public use-out that IS not the only
problem. 1t il estimated that II VIII
be necessary for the railroads OF the
United States as whole to raise dur
ing the next five or perhaps ten years,
not less than 81. 900, 0O0. 600 OF new CAPT
tai per annum-some have placed the
amount much higher than that-to be
used for the purchase OF additional cars
and engines. and for the building or
additional tracks and terminals. in or
der 10 take care OF the growing business
~ ~. ~ Ind n ha
business OF the country cannot grow.
manufacturers cannot as a matter or
fact increase their output. unless they
are able TO have their product trans
ported TO the markets where II can be
sold and In most cases II IS also neoes-
sary for manufacturers. IL they operate
at all. to have ample transportation 10
bring the raw materials which they need.
from the places where they are found
or produced. TO the factory where they
are needed. Of equal Importance is il
also TO the farmer that he should DO able
to ship his surplus products. whether
grain. fruit. or livestock, TO tho best
market.
Therefore. If We are to have private
ownership. the railroads must as min
imum requirement be able to pay their
operating expenses taxes and q fair re-
turn OF the money already invested in
their properties and they must earn in
addition thereto enough surplus to on
able them TO obtain from voluntary in
veStors not less than $1,000 100000 OF
new capital each year. and il Is in IN"
public interest that the new capital be
obtained on favorable terms. because tho
cost Of capital is just as truly an ele-
ment in Ae total cost OF transportation
as is tho st Of the wages paid to the
labor employed.
The two problems which I have re-
ferrcd to as confronting the railroads
are--tirst. sufficient revenue to pay the
present cost of operation and fair re-
turn on existing facilities. and second,
enough more to enable the carriers TO
obtain on favorable terms at least ST.
additional facilities. These two prob
lens must be dealt with whether We
have private ownership or government
ownership. They are inherent in tho
situation itself"
Condition OF The B. & o.
Mr.. willard at this point. by way Of
example went NJ length into detailed
account Of the effect Of government con-
troll upon the Baltimore & Ohio rail-
road. stating that under conditions as
thew have existed during the last two
years. the road. under federal operation.
has earned only about one half OF It's
interest charges each year, with nothing
for dividends or surplus.
III the Baltimore &c Ohio Company
could do over again under existing con-
ditiors exactly the same business that
II did during the fiscal year ending
June 80. 1916. the cost OF doing the bust
ness under conditions as they exist to-
day would be S12.000,OOO greater than
Il actually was during 1915. and II
freight rates and other charges now In
effect were 10 be applied to the business
actually handled in that year, tho req
enue would nc approximately St4.OOP'-
600 greater than Il actually was. show
ing that during the intervening perloo
Of three years the cost or DONG tno
identical business that was done IN iS.o
has incrcaS ed at the ratio OF about S2S.-
NNn 900 per annum more than the rev.
rnues have increased. II we were TO
do over again on that basis the business
Of 1916. we would have no surplus. we
could pay no dividends. and II would DO
necessary TO cut operating expenses 10
tho very lowest limit in order to pay tho
interest. and II would be matter OF
doubt whether the company would even
be able to pay it's interest. Failure 10
do so would. OF course. result In Teceiv-
ership.
The first problem. therefore. that pre-
scnts itself to the Baltimore ONO
Company. as We contemplate tho termi-
nation of Federal control. is the OBJ
tanning Of sufficient revenue 10 cnaple
'tli> company to pay the cost OF operation
and n fair return upon the value Of its
property In addition to this. tho Bal
timorc and Ohio is confronted with the
necessity Of raising large amount OF
new capital each year for extensions
and betCrmonts. During the last ten
years approximately SlS5 .n00.OOO OF new
capital has been raised and expended
for additional facilities including equip
mcnt. and every dollar OF the capital SO
raised has been borrowed and secured
either by collateral or by mortgage
placed upon the property Il has not
been possible during that time 10 sell
Baltimore C Ohio stock on n satIsfac-
tory basis. and under the terms OF tho
charter under which the company opcr-
atcS and by virtue Of which it exists.
u is nor permitted to sell It's capital
stock for less than par.
Solution Is Simple.