Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-01-08
CLAIMS OLD SYSTEM
WILL NOT SUCCEED
Advocates Congress Fix General
Standard of Rates to Permit
Earnings.
PAST SCHEME FALSE THEORY
Charges Three Interests Partici-
pate in Management With No
Common Meeting Ground.
PAST SCHEME FALSE THEORY
tBY Associated Press. ]


NEW YORK, Jan. 7.-Compuisory
consolidation OF the railroads into
few great corporations. before they
tin nG5ufn TO private control, with the
public % and labor. as well as capital,
represented in the management of the
systems. vas advocated tonight by
Director General Hines, in an address
before the BSr Association OF New
Without, this Fundamental recon
ss.ruction." Mr. Hines declared. the
pointing and in a few. years the dis
satisfaction OF the public will mani
which Is not. likely then TO stop short
OF outright government ownership"
,,dn pointinE i , out the almost impossi-
to Federal control. owing 10 the diili-
Guilty Of financing the lines, Mr.. Hines
demonstrated that the old system viii
not succeed"
Advocates Fixed Rates.
He advocated the fixing BY Congress
OF general standard of rates TO al
reasonable return" which "nust go
largely To providing adequate reserves
1 .1d 'ake at ,Sa care s,t OF years OF depression
excess must be left with the company
earning II to provide adequate stimu-
lus for efficiency"
I'VE make q grave mistake in as
capital alone can handle the situa-
on that false theory and the result
has been that the public has injected
rseif into the management through
Injected Itself into the. management
through its own organizations We
have all three interests participating
2 ways. and yet there Sc no common
ground on which these three elements
can meet and exchange views and en-
uCnHOC TO reach conclusions h.-
lievc the only sort of management
@ wnich a,Gah can be psrmanentiy effective is
ucipation at the outset Of all three
OF these interests instead of the past
scheme which leaves each interest to
pursue It's own methods irrespective
OF the others until an eventual con-
Test is established in some form of
controversy"
DImcuIt Financial Period.
Describing the difficulties attending
the immediate establishment OF any
plan OF private management with ade-
qnate credit to provide the necessary
ment. MIR. Hines said that il was gen
orally agreed that this was one OF the
most difficult financial periods in the
history OF the world.
obviously he continued cit will
be more difficult to establish. satisfac-
torily:, the, credit of q large number
moment than il would be to do this
at later date when financial condi-
lions generally have become better
Railroad credit is dependent. of
coWse, upon the conclusions which
the investing public reach as to the
one would seriously contend that 1915
furnished satisfactory basis for con-
Guiding what the railroads could earn
but as matter of fact, 1919 is going
to be equally unreliable and proba bly,
more 30.
'.Thcrn nrnhahIv
more difficult time in which to re-
adjust rates SO as TO reassure the rail
reasonably protect the public.
Dilemma Confronts Public.
BY reason of this condition. the
public interest Is confronted with a
serious dilemma. How can it at the
present moment make rates high
ance TO railroad credit without, at the
same time, making them much higher
enan would likely turn out to be
lnent could be postponed until n time
or more stable conditions? Undoubt-
1HioLy, 1iaEy, II the policy be adopted of estab-
d,snins independent railroad credit in
Slantly at all hazards IL would be only
logical to make. the rate. increase
large enough to do so.
On one point T believe there must
pe aSreemeht, and that is that any
Iate II;lt,e increase which will at ali estab-
raiir asi an adequate credit for the various
nsi pnmaienh.ly Of their own responsibility
Tate increase which would protect the
SITUATION temporarily if united con-
trol were continued until more stable
cond,tions appear. This means thai
me me pnipmc i must pay a very substan-
tial price In an additional Increase in
rates for the privilege of the mime
uiaIe resumption of private manage
Defends Federal Control.
Defending the results oht,;.
said the deficit incurred was ,ot Sherai a,.d
70 fbe excessive Gesay costs but to the fact that
portation have, not been Increase" a"s, ;n
keeping With the increases in prices OF
,a,af III the he rate teo increases made in June.
laiS,"' the director -gcnerai SAID i"asg afro, !,
nsl., wnieh time. Of course. the increased
ditional revenue without any increase
,n operating expenses would have baen
s434,00O.000. thus more than ofTscttInn
ne ne oSn deheit nSd :, and leaving a profit Of