New-York tribune., 1920-02-07
In the Fog

Inc fallfOad conference report Is
still being discussed from various
points of view. That it is not as
bad as it might have been is the
prevailing opinion. But there is an
air Of unreality about the discus
sion. This is only natural Con-
gress remains in fog on the rail
road question. 1t is merely cropping
toward solution. There is as yet
no possibility of a true perspective.
The attachment by the govern
ment Of one-half of all operative
earnings over per cent is un-
deniably a step toward the sociali-
zation of the railroads. Yet Con-
gress Processes, and no doubt with
much sincerity, to be strongly op-
posed to Specialization. 1t makes
much of its eagerness to be rid of
governmental operation and to turn
the roads back to their nominal
owners. Yet by empowering the
Interstate Commerce Commission
to take over half the earnings of
the more efficient roads when they
exceed 6 per cent it plainly sets
the railroads apart from all other
industries and from all other forms
of property. 1t singles them out
for special economic and legal
treatment.
The railroads are subject to ordi-
nary taxation apd to income taxa
ton. They would be subject to ex-
cess profit taxes if they had ever
been allowed to make excess profits
worth taking into consideration.
These burdens fall on all But in
saying to the carriers: eff you,
under rates which the government
itself fixes and guarantees to be
fair and reasonable, earn by special
exertion or capacity more than 6
per cent on operation, you must
give up half of it for the ultimate
benefit of competitors and rivals"
Congress applies a rule which it
would shrink from applying to
other industries or occupations. It
lays down a principle which indi-
vldual Congressman, Interstate
Commerce commissioners and off,
cial administrators would never
dream of applying to their own
concerns.
Congress and the commission have,
III fact, for years past been seek
ing to denaturalize the railroad in
dustry. They have worked on the
theory that a dollar put into the
railroads Immediately becomes
sterilized. In the economic world
the great outstanding virtues are
thrift, accumulation, forehanded-
ness, the storing up to-day of re-
serves Of energy to be expended In
the future.
These virtues the owners Of the
railroads have been debarred from
practising. Instead, the govern
ment has bidden them to practise
virtues which belong in a different
sphere - the sphere of morals.
They have been admonished to have
no care for the morrow, to lay up
no treasure on earth, to forego
dividends and interest and to let
capital be impaired for the benefit
of others. Railroad investors have
not been allowed to profiteer. The.
water, the marrow and the bones
have been squeezed out of their
securities. They have perforce be-
come philanthropists, altruists, ideal
citizens in the moral sense, although
Improbable servants" in the eco
nomic sense.
1t must be SAID for them that
they have borne their discipline
heroically. Their consciences are
clear, although their strong boxes
have been depleted. Many of them
are so accustomed now to the moral
virtues thrust on them that thew
are almost willing to accept their
exalted moral status without
whimper and to question only
mildly the policy which elects them.
among all the investors in industry.
to divide with the government all
that they may earn, under govern
ment-made rates, in excess of 6 |
per cent.
Having for many years practised |
virtue on a semi-starvation basis, I
railroad stockholders are naturally
not a little gratified to think that,
whatever its concessions to the
Specialization" principle, the new
bill will perhaps partly alleviate
their lot. 1t is something to be no
onger fair game in season and out
of season for ruthless Interstate
Commerce Commission. If at least
4 6M per cent return Is allowed to
all the roads, the carriers may at