The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-06-26

To the business man transportation
is an ali-absorbing question. The pub
lie today. as never before. is convinced
that the railroads with their I'M
equalled system of organization, must
be fully protected in order that the
industrial and commercial industries
Of the country shall prosper
During the past twenty years many
laws have been enacted by state legis-
latures and by congress affecting rail-
roads. which materially changed their
methods of operation. These changes
in many cases were beneficial TO the
public and a protection to the en-
ployes. but all required an additional
outlay Of large sums of money. The
cost Of operation increased rapidly on
this account, but at the same time rul-
inCs were made and put into effect
reducing the rates for both passenger
and freight. thus burning the candle
at both ends"
Asa war measure the railroads were
taken over by the United States gov
eminent for operation at midnight
December 81. 1917. on the evening
Of February IS, 1920, President VIII
son signed the transportation act to
become effective at midnight Sunday,
February 20. leaving only day TO
prepare to take over the railroads Tor
private operation, after tWenty-slX
months of federal control. The teIe-
graph wires were loaded that day
with instructions as to how the bust
ness should be handled and how to
SEPARATE the cash and accounts which
covered the business accruing prior
TO March 1 but not collected until
after that date on shipments in traslt-
In taking over this work there was
no delay in handling the business 50
far as dealing with the public is con-
cerned. The separation of accounts,
the inventory of all material and sup
plies and the future handling OF re
ceipts and disbursements for the u.
S. railroad administration and for the
corporation caused heavy additional
work in all departments.
The transportation act of 1920 had
as its prime object the re-establsh-
mcnt of railroad credit. The only way
this could be done was to determine
a plan OF placing the earning power
on such a basis as would permit the
railroads to perform public duty and
encourage capital for future expan-
sion.
The people thru congress has
clothed the interstate commerce com
mission with power to protect the
great transportation industry which Is
Of such vital Importance to the future
prosperity of the country. This au-
thority Is clear and defined. The in
come of the carriers must be suttcient
10 provide for an efficient and eco
non1ical MANAGEMENT and a fair re-
turn upon the property. For the com
Ing two years the interstate commerce
commission must establish rates ana
terms of operation which will enable
the railroads to handle the business
and render service to the pubhc ana
permit an earning of per cent on the
.ssfv INF ~
railroads
Every railroad carries an investment
value It covers the amount of money
actually expended in the construction
Of the line or on the permanent I'M
provement OF the property. The main
thing now TO be determined is the aS-
gregate investment value of the rail-
roads and whether they should be
taken as a whole. in groups, or by
districts.
The recent reports made by the in
terstate commerce commission in the
department established for the valua-
ton IF railroads indicate that the car
riers Of this country have value IN
excess of their capital stock and bonds
outstanding. on the completion OF
their work it is believed that the rail-
roads will show that they are not
overca pitalized.
II this work can be completed with
in two years. the interstate commerce
commission will then be able to estab-
lish a permanent rate of income for
the railroads on the value determined
During the two-year period the invest
ment value will have to he estimated
and the railroads permitted to earn
an income of per cent on this value
but no amount is guaranteed, there
fore we believe that the decision to
he made for increased rates should be
on a liberal basis.
We all realize at this time that the
volume of business of this wonderfully
productive country has exceeded the
Thility OF the carriers facilities. The
United States Railroad administration
did not place orders in 1919 for equip
ment which would be needed in 1920
10 handle increased volume of bust
ness. The equipment taken over by
the government has been in constant
use and must have repairs. The cor
porations could not buy the equipment
in advance, as no one knew when the
carriers would be turned over to their
owners. Therefore, the government
must take the blame for not preparing
in advance for what the railroads