Evening star., 1920-03-07
Return Of ROADS
TO0WNERSLAUDED
Richard S. Hawes, Banker,
Predicts Great Benefit to
Nations Resources.


restore the transportation lines of the
country to their former great prom
inence as developers of the country's
latent resources is the opinion of
Richard S. Hawes. president Of the
American Bankers Association.
This is one of the important fea-
lures OF measure which the presi-
dent Of his association, representing
10000 banks. praises as one Of the
most constructive pieces Of legislation
passed in recent years.
Mr. Hawes' Statement.
For more than decade the rail-
roads which, up until that time, had
been the tran blazers in empire de-
velopment nave fallen away behind
the normal development of the COM
munities served" says Mr.. Halves.
The assurance of at least 5k per
cent on the aggregate value OF rail-
way property is going to place the
sive development
without consideration of its finan-
cial provisions, the measure. consid-
cred from the standpoint of the gen
eral public welfare, is most construc-
tive legislation. AS a stabilizer of
serve to insure continuance, if not
betterment of present prosperous con-
ditions
las to the labor features. let them
be given full and fair trial. There
provisions seem to have been con-
eeived in all justice to both sides. and
the best either side can do will be to
welcome an unbiased try-out. AT
least. don't judge them without just
cause for doubt The principle of ar
bitration provided is at least equi-
table to all concerned.
AasOciation Interested.
Representing 10000 banks in Amer
lea, 1t is natural that our association
should have been much interested in
the ehactment OF a measure that
would not only safeguard invest
ments but. from the much more inn
portant standpoint of providing.
through adequate assurance Of re-
| turns, transportation system that
would be conducive to the CONNER
clai ana industrial prosperity of every
community in the United States
When the bill was in the making
we appointed railroad committee.
headed by Walter w. Head of Omaha
TO go thoroughly into the questions
involved. The result was seven rec
concentrations. six of which have been
recognized in the framing of the pres
ent law
The points considered most essen
tai from the financial viewpoint were:
return OF railroads to private own
ershlp. voluntary consolidation of
properties, government guarantee of
net operating income equal to fed
eral control for six months, extension
OF carriers Indebtedness to govern
ment TO run serially for ten to twenty
years, regulation Of rates to provide
net income of s per cent on the ag-
gregate value of property. issuance
OF STOCK and bonds to be controlled
and regulated by governme MT and per
nlsSive federaf Incorporation.
Ihe last named is the only pro-
VISION not covered in the present law,
and IN reference to other features OF
the Dill Is not consequential.
Provisions Most Salient.
FROM the bankers standpoint, bu,
also Tor the good of the general pub.
nc IN the realisation of adequate
service. because improvements and
extensions have been Impossible
without sufficient income, the two
provisions most salient are:
The investment of power in the
interstate Commerce Commission To
estaolsh and adjust rates so that
thef6 can be fair return on the ag-
gregate value of the railway prop
erty: This fair return Is fixed for the
next two years at 5k per cent. witt b
a privilege of adding another hall
per cent for the purpose of makins
improvements. This provision alone
Is sumcient to put the railroads OF
tho country back on their feet. In re.
turn for this profitable rate, the In
terstate Commerce Commission il en-
powered to regulate and correct the
services given for such a rate, so
while paying more, the public will
be getting what has been lacking for
many years-adequate service. This
establishment of a statutory rate
should tend to restore almost imme-
diately the rapidly shrinking railroad
credits and enable them to make bet.
terments long past necessary.
Next In importance from our con-
s1deratton Is the regulation and con-
troll on the part Of the Interstate
Commerce Commission Of railroad
stocks and bonds. This should clear
the market of questionable issues and
put the financing OF our transporta-
tton systems on a much higher level