Evening journal., 1922-02-04
PROBLEM snoulD RE FACED souARELY.

,HE Interstate Commerce Commission under provisions
Il Of the Transportation Act must soon determine
the Of net return that the railways should be
allowed to The provision OF the law directing the
Commission to fix rates that would enable the railways
to earn from 81 to per expires March There
after the rate Of return the railways should be allowed to
earn be fixed by the Commission itself and in that
connection 1t must consider the counrys need for ade-
quate transportation
editorial in It's current issue, the Railway Age ex
presses the hope that n passing upon this question
Commission will squarey face the railroad problem it
actually is Although that problem is being discussed by
many persons and dealt with by many bodies
almost nobody is facing it squarey and discussing or
dealing with its merits Continued paeriug with it
will disaster only TO the railways but to every
class business interests and every class Of people in
the country"
The railroad problem viii be solved, says the Railway
Age, only when the public and the government decide
finally to do Of two things and then act accordingly
one solution OF it would be the adoption OF government
ownership It would be a bad solution but it would be
solution The only other solution possible is the dei-
mite and final adoption OF policy OF allowing the rail-
ways under private ownership to an average net re-
turn sufficient to enable them to improve and expand their
properties that they handle all the tranic offered
to them with reasonable economy.
Government regulation may decide that the railways
like other industries may large profits in good years
in good years the railways must be content with smaller
profits than those earned in other businesses and in bad
years viii be allowed TO larger profits than are
earned in other businesses, One the other Of these
policies it must adopt however, II the railroad problem
is 10 be solved under private ownership.
Upon the net return the railways are allowed to earn
always must depend the amount OF Investment they
can make in their properties. Upon the new investment
they can make must always depend In turn both the
economy adequacy OF the service they can render
They cannot the future effect large economies in oper'
alton and reduce rates in the past unless they can
make large capital expenditures in the past They can
not increase the amount Of service rendered by them III
The future the past, unless they can make large
capital expenditures in the past
Facts such As these have been theoretically recognized
bat actually ignored in all past regulation Of the rail
ways They have been regulated II IT was to the puo
lie interest reduce and limit their net returns as muc0
las the courts would hold conscaory The facts re-
gardng railroad development under this policy OF resu
aiion are ndspuabe. The development Of the railways
has steadily declined This decline did not begin withir
recent years II began than ten years ago and mas
continued at an acceeraiing rate ever since Continued
application Of this theory will forever prevent an ade
quao revival Of railroad development and that would be
actually worse than government ownership itself