The Washington times., 1920-05-30

iy would surprise, the man who has
been brought up to think OF small
group OF Wall Street millionaires as
the possessors of the lines. The oay
of that sort OF railroad ownership 10
gone.
For Instance the Pennsylvania rail-
road has'Il2.261 stockholders. or own
ers. One half OF these are women Of
these l12.28l stockholders. sSS are
corporations which In turn have NUM-
erous stockholders so the ownership
is still further distributed among the
people. The twenty largest stock
holders OF this railroad have COM
bined holdings of less than per
cent OF the stock. and the average
holding of all stockholders Is eighty
nine shares. so II will be seen that
something approximately public own
ership. II not outright Government
ownership already has been accom-
piished as to the Pennsylvania rail-
road.
This Is one railroad. but the Inter-
state Commerce Commission reports
that on nine other large systems 20
per cent OF the number of stockhold-
ers owned less than 20 per cent OF
the aggregate stock. the remaining
80 per cent being distributed among
ehouSohoo VI
u. 8. Largest Security Holder.
The United States Government. as
the trustee Of all the people. has made
notable accumulations of railroad Sc
curities since the war caused Uncle
Sam to enter directly into the rail-
road business. The Government Is
today the largest single owner OF
railroad securities. II the plan now
20 NJ h
railroads an additional $500 900, 900
loan Is adopted, the Government rail-
road security holdings will be in
creased to 81. 500. 900 900 or about one
twelfth of the value Of the entire
transportation system.
An analysis of these holdings, pre-
pared by Walker d. Hines. who has
just retired as director general of
railroads, traces the direct Govern
ment interest in the railroad enter
prise as follows:
The Government has purchased
1854, 900 900 OF equipment trust certi-
ficates. With the proceeds. the rail-
roads purchased new locomotives and
cars to assist them in carrying the
heavy freight during the war period.
About $4OO. O.OOO,0 900 OF railroad notes
and bonds have been purchased by
thS tho pioSVSuS uChhe
put into wage increases and general
operating expenses.
Three hundred million dollars sddi-
tional has been authorized by Con-
gress for investment in the railroads.
and now is in the course of being nd
vanced in the form Of loans under the
direction of the Interstate Commerce
Commission, the Treasury, and the
Federal Reserve Board. This makes
a total Of about LOO. .OOO, 900 already
invested by the Government in rail-
road securities or authorized for in
vestment The additional item Of
$500, ,OOO. 900 referred to above is pend
ing. and may or may not be invested
as Congress directs.
Guarantees Returns.
But under the transportation act
the railroads are guaranteed return
on their investment by the Govern
ment, and IL the rates granted by the
commission fall short of meet;ng
expenses with enough over and above
to pay the guaranteed return. the
Government must dig into the pubic
treasury and make a further invest
ment in railroad bonds or other obli-
cations to enable the railroad cor
porations to pay the guaranteed
dividends. So, there is prospect of
an ever-increasing investment on the
part Of the Government in the roads
In discussing this point, Director
General Hines says: "In contemplat-
ing the future relations Of the Gov
ernment to the railroads, 1t is I'm
portant to bear in mind that for a
long time to come tho prospect IL
that the Government will be the
owner Of an impressive total OF rail-
road securities. and 1t Is a question
whether this total may not increase
instead Of diminish as the years
go by"
A good many railroad men and citi-
zens in other vocations are beginning
to expect that the Government will
not long delay the absorption OF the
remaining eleven-twelfths of railroad
ownership. now privately held. The
result of the present transportation
congestion which Is tying up bank
credit and helping to cause much
business embarrassment will marh
a distinct step either toward or away
from Government owership, accord
ing to its success or failure. Long
continued railroad paralysis would
greatly hasten the taking over Of
thu lines.