Norwich bulletin., 1920-01-08
HINES WOULD HAVE
 RAILROADS CONSOLIDATE

New York, Jan. 7.-Compulsory con ssolidation of the railroads into a few great eeFporafians before they return to private control with. the public and labor; as well as ca pital, represented in the mana cement of the systems, was advocated. tonight by Director General Hines ln an address before the Bar Association of New York city.
 Without this fundamental recon struction," MT. Hines declared, the result will be progressively disap- pointing and in a few years the dis satisfaction of the public will mani fest itself through an insistant demand for a radically different plan which is not likely then to stop short of out right government ownership"
 Pointing out the almost impossible" situation of the railroads prior to fed eral control, owing to the difficulty of financing the lines, MT. Hines said that tour past experience has demon strated that the old system will not succeed" He advocated the fixing by congress of a general standard of rates to allow earnings "clearly in ex- cess of reasonable return" which must go largely to providing adequate reserves to take care of years of depression and at the same time enough of the excess must be left
 
 vide adequate stimulus for efficiency.
 We make a grave mistake in as suming that the representatives of capital can alone manage the situa- tion;" MT. Hines said. ''The scheme of the past has been on that false theory and the result has been that tie public had injected itself into the management through all sorts of agen- cies and labor has injected itself into {, ganizations."
 Describing the difficulties attending the immediate establishment of any plan of private management with ade- quate credit to provide the necessary capital needed for private develop ment, MT. Hines said that it was gen 1 erally agreed that this was one of the most difficult financial periods in the history of the world.
 Railroad credit is dependent, of course, upon the conclusions which the investing public reach as to the earn ing capacity of the railroads" he con- tinued.
 By reason of this condition the public interest is confronted with a serious dilemma. How can it at the present moment make rates high enough to constitute adequate reas- surance to railroad credit without at the same time making them much higher than would likely turn out to be necessary if the period of radjust- ment could be postponed until time of more stable conditions? >"On one point l believe there must be agreement and that is that any rate increase which will at all estab- fish an adequate credit for the va rious railroad companies operating in- dependently on their own responsibili- | ty must be substantially greater than l rate increase which would protect the situation temporarily if unified control were continued until more sta i ble, the conditions appear. This means that the public must pay a very sub- 1 stantial price in an additional in- crease in rates for the privilege of the | immediate resumption of private man l agement.'
 r Defending the results obtained under federal control, the director general said: If the rate increases made ir 1 June, 1918. had been effective January 1 l. 1918. the additional revenue without | any increase in operating expenses would have been s494. 900 000 thus more than offsetting the deficit and leaving profit of $14aO0 ,OO0.p