The Washington herald., 1921-08-13
The Railroad. Settlement.

TIME railroads owe the government something
over $7oooooooo expended during the period
- OF Federal control and operation for equip
Y n.4r .betterments and extensions. Such expend-
n tscs arc charges against capital They are paid
y from profits in SONG instances where profits are
: large They are usually paid by issuing securities
for "a period representing the estimated life of use
y funess of the investment. 1t would perfect
h N fair that the government should give the rail-
= roads the ten years agreed upon in which to pay
4 thS capital debt.
4 ,tiLs has been agreed between the railroads and
Y thoses officially represent the government for
! such settlements, that the government owes the
railroads $soooooooo for losses in operating income
guaranteed to them. This is debt due in cash
!, and now. 1t represents the balance due on the
= price agreed upon for the of the roads during
Z the war period The President, Secretary OF the
Treasury and Federal Director General OF the Rail
! roads have reached agreement to make this set
Element 1t is as if a had rented house for
a period OF years with the right to build an ad-
!, dition. At the end OF the lease, he pays the bal
ancc- due on rent account and takes the owners
%IpteS-or mortgage for the cost OF the addition
There is nothing unusual, unfair, onc-sided
rI fire, agreement with the railroads. But If 1t did
favor them; II it does make it financially easier for
therR, and If the government might Offset what it
owes against what it has paid for capital account
and demand the S2oooooooo balance, is it the part
!, ,,5T-agovernment OF, for and by the people, to
% put on the screws ana demand the pound of flesh
II from the country most important industry
Nh One thing the railroads did not do during the
% kar-they did not prohteer. They did not take
u extra toll from extra high prices. They did not
Y bile up great surplus Of profits. Instead they
Y were taken by the government, who operated
Il Them in ways forbidden the railroads by law, to
\ ilower7costs of operation and increase profits Yet
Al
/ operation as one large system regardless OF sep
= srate ownership, not able to earn enough by
i $500 100000 to pay for added equipment, better
:. inents and extensions. 1t not able to earn
:, Enough by Ssoo.ooo,ooo to pay even the profits
!" guaranteed by it to the railroads
III When the government was able to do this
\ with all the advantage it had and fixing its own
tates the railroads to be censured and punished
4. ior not being able to do better during the sue
4 cecding period of business depression? They have
not been able borrow money for capital charges.
z They have had no profits. They ask for the
profits guaranteed to them and that the govern
= ment extend the time of payment for the capital
I. inv estments made their account, under set
Element reached by the official agencies. This rs
what Congress is asked approve, with the further
I, arrangement that this shall be carried out with
+ out payments from the Treasury, any disturb
ance OF the governments fiscal affairs.
~ II TINS Settlemcnt IS approved Dg congress
the roads can pay their outstanding capital debts
!, and contract for large amount OF new equip
" tncnt They can rush needed repairs on their
y tracks and road beds. reopen shops and halt de-
u prcciaton None OF this fund will go to the stock
!: holders. II will go employ labor. 1t will be
4 invested in industry 1t is estimated by those dis
ASSOCIATED from the railroads, that it will give en-
poymcnt this fall and winter to 100000 men now
\ idle. With the repeal of the tax on freights, it
y will do than anything else Congress can do,
Ii to revive business. Why repeat the story of the
h gentleman who watched Rome burn?
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