The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1921-10-27
No Government Substituting Of Rail
roads; No Federal Guarantee Of
Railroad Income

the transportation act During its consideration by
it known the Cummns- Esch bill The act terminated
federal control of the railroads March 1920 Federal conf
troll Of the railroads the product of the Wilson admins
ration The termination of this control left both
and the railroads facing tremendous
very intricate problems involving railroad finances and oper
anon including rates, wages, etc.
Under federal control the Wilson administration guar
aneed railroads certain incomes
fixing certain amounts of compensation which railroads
receive In order to tide the railroads period
adjustment the transportation guaranteed the railroads.
for the six months from March 1920 September 1920
income of not less than half the which been
guaranteed them under federal control
Guarantee Stopped September l, 1920
on September 1870 all government guarantee of railroad
income stopped and nickel of any railroad
earned since then has been either guaranteed paid by the
government
However not all of the income guaranteed the railroads
during the six months period March l. to September 1920
has yet been paid due to the fact that the amount Of
this guarantee depended the amount of income the rail
roads obtained from the during the period of fed
era control under the Wilson administration very great
number OF the has not been settled Like nearly
everything else in connection with the Wilson administration
there appears be endless confusion with what
income promised the railroads under federal
result OF this confusion claims involving hundreds of mil
hons Of dollars have been filed by railroads. and litigation
in progress in some instances.
Until the validity these claims is settled the actual in
of the railroads during federal the Wilson
administration cannot be definitely asceraned Until this
definitely ascertaned the of income guaranteed
under the transportation act for six months be est
mated because the guaranteed income during those months
is based the income during the period of federal
litigation IN
tenons before the interstate commerce and other
tribunals involving railroad income the reports of which fill
the columns of newspapers today residue of the
cratic federal control of the railroads.
For the purpose of enabling the railroads. had been
under federal CONTROL to the public properly during
period of readustmne transportation act permitted
railroad during period of years following termination
OF federal CONTROL until March 1922 to borrow money
FROM the federal government under certain conditions The
railroad must make application to the interstate
commission stating the purpose of the loan applied
how the railroad proposes to expend it, order that the public
be served and the financial ability of the railroad repay
it The railroad must furnish the commission all information
required regarding all details of the railroads physical
dition equipment ownership capitalization, Indebtedness
and and all other facts which the commission
for its complete information regarding the ACCESSIBILITY
of making the loan.
Railroads Pay Per Cent for Loans
In addition to all this the railroad must put up security
the oan which security must meet with the approval of the
interstate commission The loans bear six per
interest and must be repaid within Is years
date For the purpose furnishing funds for these
transportation appropriated the $3O0OOOOO to
used revolving loan fund To date approximately $751;
100000 has been loaned railroads out of this fund and approx
mately $20OO0000 of these loans have been repaid.
The transportation act authorized the interstate
divide the railroads country into
equitable basis The act provided that the interstate
commission after thus grouping the railroads. should
estimate the ggregae value of the railroad property
group The commission should then ascertain the aggregate
amount traffic carried by the railroads of group
should then fix freight for each group based the
gregate of traffic handled by each group which
aggregate value OF their property under honest efficient and
economical management" However, the act provides that
during the two years. March 1920 to March 1922 fair
return shall be five and oneaf cent of the aggregate
value the railroads each group and the commission shall
fix for each group that will five and one half per
cent group valuations
Rates Fixed Not Guaranteed
1t is claimed by that this constitutes a government
of five and oneha per net income the rail
In point of fact is nothing of the sort The
fixed based aggregate traffic handled The five
onehaf per cent income income group aggregate
values But each group contains strong roads and weak
profitable and improbable Ones streak of rust and
nceny built systems Neither the commission the gov