The Washington times., 1920-05-30

Federal control.
Whereas the question then was al
most \ new one from the practical
point of view. today the United States
Government already has an actual
cash mortgage to the extent OF
81 100. .00O. 900 on the railroads. IL be-
comes q practical question of whether
the Government shall take over the
whole ownership to protect its al
ready large investment rather than
merely an academic discussion OF
whether Government or private own
ership is preferable.
Acquired Huge Holdings
It has been only q short time since
Uncle Sam begSn making direct In
vsstments In railroad securities. but
all the f. ii. Harrimans. Jay Goulds.
and Cornelius Vanderbilts the country
every produced never made such rapid
progress In gathering In railroad
property as he has made. They used
to say that Hartman added 10000
600 q year to his railroad holdings
from the time he reached his place OF
power in the railroad world until
carelessness In bis diet and neglect
of fundamental rules Of health caused
his early death. But in two years
Uncle Sam added at the rate OF more
than half billion year to his hold
ings of railroad securities. and IL Boil
shevism or some other political all
ment does not break down the ma
tional health. he stands an excellent
chance to acquire the whole transpor-
tation system.
Any citizen who can spare the time
from the movies Is privileged to at
tend the hearings now in progress
V-t atot
mission and hear. directly from the
about the question, the story of why
Government ownership hangs over the
railroads.
The biggest railroad men in the
country and the biggest shippers are
discussing the case. preparatory to
the announcement by the Commission
Of a decision granting or refusing the
application of the carriers for rate in
creases aggregating $1.017. .000.0 900.
There is every Indication that the
Commission will grant the roads an
increase which will add about $780,
900, 900 to their revenues. Later, when
the Railroad Labor Board grants the
railroad workers somewhere in the
neighborhood Of 81, 900, 900, 900 in wage
increases. the Commission will
authorize the railroads to add this
further sum to the rates charged for
the transportation of persons and
property.
The two will constitute an increase
of about 60 per cent in the railraod
rates now charged. That is II at
present it costs 800 to ship a su
of clothes from New York to Wash
ington. after the Commission has
acted. which will be early in the
summer, the cost will be $3.50.
VIII Add To Living Cost.
Incidentally an amount, equal to
the aggregate amount of the rate in
crease. will be added to the cost of
living. What more will be added un-
der the veil of the rate increase will
be governd by the conscience Of the
men figuring the costs.
The initial rate increase Of $1,O17,-
900. 900 being asked is for the purpose
of bringing the railroads up to an
earning point where they can pay
per cent dividends to the men who
own the properties. But Frederick
Strauss. a New York banker and ex-
pert in railroad securities, has told the
Interstate Commerce Commission in
this hearing that the railroads cannot
keep going on SO meager a return. He
said the American people will not per.
NIT the railroads to have the use OF
one dollar for an entire year for q
rental Of cents. Railroad dividends
must be brought up to a level Al
which they will compare favorably
with the dividends paid by industrial
corporations, such as steel mills, glas,
works, textile factories, ice plant.
and lumber yards before the people
will invacf fhetr in, ro I,
at q rate rapid enough to permit o.
the expansion OF the railroad facili
ties in pace with the transportation
needs of the country, says Mr.. Strauss
This would entail amendment of tn,
new transportation act to permit rail
roads to pay an 8 or 10 per cent divi
dend. To pay such returns still high
er rates would have to be charged.
Unless this program of greatly in
creased rates and increased dividend
can be carried out, says Mr.. Strauss
the railroads will starve for lack o.
new capital and Government owner
ship is inevitable.
Owners May he Willing.
Anyone can hear various whisper
about tho Interstate Commerce Com
mission corridors to the effect tha
the railroad presidents would be en-
| tirely willing for the Government 4
pay the owners SIS, s,OOO, 900. 900 or $40.
| OOOr0OO. 900 and take over the whole
| transportation system. They woul,
| have all this worry about rate in
| creases and wage increases off thei
minds and could put their money int
something more profitable.
Tho extent to which the genera
public, represented by vast numbers o
wildly scattered railroad stockholder,
who are not professional railroa,
| capitalists and the Government, al
| ready owns the railroads undoubted
Observation-Disclosures