New Britain herald., 1921-04-21
PRIVATE OWNERSHIP BEST FOR RAILROAD
Dean Johnson, Financial Expert, ~ Gives Views on Problem


 railroad problems before the Ameri- can Philosophical society hero today. Emory R. Johnson, dean of the Whar- ton School of Finance and Commerce of tho University of Pennsylvania. widely known transportation expert. said the government should proceed promptly with tho formulation ana publication of plans for the grouping of railroads into a limited number or competitive systema of comparatively equal strength. Railroads, ha added, should bo encouraged in every way practicable to carry out these plans for consolidation.
 Any discussion of tho transporta- ton problems now confronting tho American people," said pr. Johnson. must be based upon, tho assumption that railroad transportation can pa successfully developed only by adher- ing to private ownership and opera ton. If the people of tho United States become discouraged or bewii- dered and adopt government owner ship American railroads will gradual iy pass into a state of coma. and over industry will slowly como creeping paralysis.
 ..The outstanding problems of tho hour in connection with railroads in- ciude:
 Il. Tho necessity for the federal control of both intra and inter-stata railroad rates. This question is now before the supreme court of the Unit ed States. and 1t is earnestly to Dc hoped that the court will find consti- tutional that provision of the Trans portation Act of 1920 which gives the Interstate Commerce commission the power to change state rates that in- terfere with or adversely affect inter state rates.
 "2. Tho consolidation of railroads in accordance with a plan worked out and promulgated by the Interstate Commerce. commission for the pur- pose of eliminating from the railroad family thoso weak sisters whose in- solvent condition makes them bur den to their stronger brothers and 70 the public. This is a problem Of the near future. of the next ten years. j" a. Tho federal incorporation ot all railroads engaged in interstate commerce and tho consequent SUD- ordination of the railroads as corpora- tions to the United States government. Federal incorporation should run on all fours with consolidation. IL. thus. also becomes problem of the next ten years.
 "4. Tho debelopment of executive for the constructive regu- Iation of railroads and for the devel- opment of a unified system of trans portation by railroads, highways. waterways and possibly by airways This is n problem of the next twenty i've years during which period all the agencies and facilitiesg of trans should be welded together into unified system serving all parts of the country with maximum and efficiency. r.
 "A brief diagnosis Of the present railroad situation leads to the, fol- lowing conclusion:
 '',rhe cost of operating and of ex- tending the railroads must be brought down and this can De accomplished only (1) when the railroad execu- lives regain control over the man. agement of their business. and t2D when the costs of supplies. equip- ment and new plant are made as low ,s moderate profits on the past of producers will permit. This reduc- ion in the cost of railway supplies equipment and plant may be expect ed to accompany tho return of in- iustry to more normal conditions.
 ..The revenues of the carriers must be maintained. The hamper Ing laws and commission rulings of he several states as to intrastste rates must give way whenever the laws and rulings interfere with the unified regulation of railroads by | Inc federal government. Moreover. present rates. though confessedfy higher than they ought permanerS, Iy to be. must be maintained He least until the traffic of the railroads | shall return to normal. as 1t will | return gradually with n resumption | of the building trades, the construc- ton of roads and bridges. and the activity Of manufacturing |
 Both the government and the great body of investors must facil- tate the carriers in securing the added amount of capital necessary to rehabiiitnte the railroads of the | The government regula- ton of security issues must be made as helpful as possible. The govern mcnt must make the promptest pos sible payment to the carriers of the | four hundred million dollars 1t now owes them. and what is especially | important. the banks and buyers of securities must keep their faith in | American railroads. Capital can como only from private or govern mental sources. If we permit 1t to come from government sources. we shall run the risk of fastening upon | the country the government | of the railroads.
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