Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-07-27
PROVIDING READY MONEY
FOR THE RAILROADS
President Harding Asks Congress to
Hasten the Payment Of What the
Government Owes

THE President is courageously shoulder
i ing his responsibilities as the head Of
the Government in charge of its business.
His railroad message yesterday was
business communication intended to secure
the necessary operation of Congress in
carrying out agreements made when the
railroads were taken over by the Govern
ment. Those agreements provided that the
property of the roads should be turned back
to the owners in rs good condition as when
they were taken and that a guaranteed
rental should be paid
When the roads were turned back to their
owners last year the Government owed them
several hundred million dollars. The rail-
roads likewise owed large sums TO the Gov
ernment for permanent improvements which
had been made in the property, sums prop
erly chargcable TO capital account. The
Esch Cummins law provided that the sums
due to the railroads should be paid as soon
rs possible, and it arranged a way for pay
ing them. 1t also contained n plan for the
repayment by the railroads of the money
spent by the Government for permanent
work. This plan has been carried out so
slowly that the railroads have been handi-
capped for lack of funds. 1t is virtually
impossible for them to float loan in the
present condition of the money market. The
railroad managers have been saying for
months that II the Government would pay
what it owes them they would be able to do
some Of the work that is imper9tivey
needed.
The President has in effect told Congress
not TO wait until the accounts between the
railroads and the Government have been
balanced, but to enlarge the powers of the
War Finance Corporation 50 that it can find
the money needed to pay to the railroads the
1,,A ttay,, -, yyla NI,N Nl,n dc
be relieved of their immediate and pressing
financial necessities. The payment of the
sums owed by the roads will continue to go
on as fast as adjustments have been made.
The plan proposed does not go into the
merits of the railroad problem. 1t Is merely
n plan to speed up adjustment of the inan-
Cial questions arising out of Government
operation. The Government owes tho roads
much more than they owe the Government.
and they need the money Mr.. Harding
says it should be paid to them Mt once.
How the broader questions are to bc ap-
preached will not be known until experience
has shown what changes must be made in
the EsCh- -Cummins law. That law is not
perfect. Indeed, railroad experts have said
that some of its provisions are unavoidable,
while they admit that the things which 1t
seeks to accomplish are desirable. The
antitrust laws have prevented cOmbina-
tions Of railroads which would be cconomi-
cally wise and they have prevented pooling
of freghts which would facilitate the move
ment Of goods. The ESch -Cummins law
permits combinations of roads into great
competing groups. but it has laid down con-
ditiOns under which the combinations should
be made that take no account of fundamcn.
tai business principles. 1t ignores the fact
that the fixing Of uniform rates by the In
tcrstNte Commerce Commission has made
competition in rates impossible, and assumes
that by maintaining the theory OF compcti-
ton the railroads will compete In the
qunlity "f the service which thev offer.
Until the attempt to reconcile two con-
ficting theories is abardoncd-the theory
of Government regulation with the theory
of competition-railroad legislation Will be
confusing and unsatisfactory.
There are some clear thinking men In
Washington nowadays and they may succeed
in devs!ng a plan for untangling the present
railroad complications and freeing the rail
roads from hampering restrictions which
prevent them from making such adjustments
of their relations with one another as will
result in more efficient service at lower
rates. When this happens the railroads
will find It easy to got all the capital they
need for meeting the demands of growing
business