Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-08-03
A BUSINESS PROBLEM MET
IN A BUSlNESSLIKE WAY
The Eseh .Cummins Railroad Law at
Work illustrates the Historic
Republican capabIIity
for Government

for government
MIR. WILSON has said that he
A'1 signed the Esch -Cummins railroad
law because il was passed so near the
date fixed for turning the railroads
back to their owners that it was i'm
possible to get satisfactory" law in
the time remaining. He accepted it
reluctantly and he has been flinging
jibcs at II ever since.
No one has said that it is perfect
statute. Perfection is not to be OK
pectrd from any legislative body. Laws
are the result of comnromise and con
! Cession among conflicting interests, and
IL they are workable that Is about all
that can be expected.
The new railroad law is workable,
for it is working.
1t worked in the first place when the
Railway Labor Board, created to ad
just the grievances Of the employees.
made its wage award about two weeks
ago, and thus removed any excuse for
strike. Because the award was not so
large as the men had asked for there
was strike gossip for a day or two,
it is true. but it soon ceased and has
not been heard since. The men got by
ppaceablc arbitration and with no ex-
peusc to themselves and without in
terruption of the business of the coun-
try more than they could have won by
strike.
The satisfactory working of the plan
of arbitration will lessen the regrets of
those who. wished the law to contain
provisions pcnalizing strikers. IT is
likely that as time goes on public scnti
mcnt will inflict penalty enough on men
who strike in the face of reasonable and
workable rules for adjusting grievances
by arbitration.
But the law did not stop with pro-
visions for wage awards. For the first
time it made explicit recognition OF the
duty of the Interstate Commerce Com
mission to consent to such rates as
would guarantee to the owners of the
railroads fair return on the money
invested. The statute fixes this at
minimum of 5fs per cent and it gives to
the commission the power to arrange for
an additional one half of one per cent
If Il thinks the sum Is needed in order
to provide money for bettermcntS. The
language of the law is Imperative. 1t
says that "thc commission shall
establish such rates that the carriers
ns a whole when efficiently aud honestly
managed may earn "a fair return upon
the aggregate value of the railway
property
The railways were asking for in
creased freight and passenger rates while
the labor board was hearing the petit
ton of the men for higher wages. The
need of such increases was sustained by
evidence. Then when the labor board
granted n wage increase Of S8O0.OOO. 900
a year the roads asked for further
increase in rates sufficient to cover this
sum.
The Interstate Commerce Commits
sion had no discretion. 1t had. been
to establish rates that
would keep the roads solvent. 1t has
obrved the command.
Whatever other effect the new rail-
road law may have it is indisputable
that within four months of it's passage
it has restored the credit of the rail-
roads. and removed from them the han
dicap under which they have been suf-
fering for twenty five years. Now tn"
roads can 60 into the open market and
secure the money they need for pro-
viding new equipment of all kinds. Ehis
they could not get in the past because
they have been starved by timid men in
Washington, who feared that If tlEy
treated the railroads fairly they would
be charged with favoring capital at the
expcnse Of the working man.
II will take time to rehabilitate the
railroads, but it is reasonable to expect
that within FIVE years, or possibly three
ycars. they will be capable Of meeting
the demands upon them.
The new law works in rate fixing
as well as in wage fixing.
OF course the public will have TO pay
the bills. But if the railroad managers
are faithful to their trust, the public
will get all that it pays for. The coun-
try has learned during the past three
years that inadequate railroad tacil-
ties are an expensive luxury. business
men would have been willing TO pay two
or three times the legal freight rate II
they could have got their goods when
they ordered them. But the railroads
were so congested with trafhc that
everything received moved slowly and
embargoes were put on shipments be.
cause the facilities were already taxed
be"ond their capacity.
II business is TO prosper the avenues
of distribution must be kept open. We
knew this theoretically a long time ago,
but there IL no man doing any consider
able business who has not had 1t i'm
pressed upon him by hard experience
since 1917.
And instead OF being frightened by
an increase in the freight rates and it's
possible effect on the cost Of living we
are beginning to study the subject in its
details. w. Jett Lauck, an economic
expert, for example, has been saying
that the new freight rates will not in
crease the cost of pair Of shoes to
the retailer more than cents at the
most. The retailer, in the present state
of the shoe market. Is likely to absorb
this sum instead of passing It on TO the
consumer. And the same thing il true
of virtually all other commodities-hats,
shirts, neckties, underwear, clothing
and the like. Coal, which Is bulky,
is about the only thing In common use
the price Of which is likely to be affected
at all by the new freight rates.
Daniel Willard, president OF the
! Baltimore and Ohio railroad, is of the
opinion that the new rates are likely TO
decrease prices because Of their effect
! upon brS.ness as a whole. II their ef-
| feet upon the railroads is what every one