The Lexington progress. (Lexington, Tenn.) 1884-current, 1922-02-24
PROPOSED SOLUTION Of THE RAILROAD
PROBLEM
BY T. w. Sims, Candidate for u. S. Senate.

tee, have reached the conclusion that
the only thing that can be done in the
way Of practical, complete, permanent
and comprehensive solution of the
railroad transportation problem, is:
That the United States government,
as early as practicable, shall acquire
by contract with the owners, or in
case of failure to agree on terms Of
, sale, by condemnation, all the fixed
real estate property of railroads used
| by them in the service of transporta-
ton and then rent or lease the prop
erty thus acquired to the corporations
from which il was acquired, or in case
Z, of failure to agree to the terms Of
rental, rent them to some other cor
poration, at a rental charge not to ex-
coed the amount that would be requir-
ed to reimburse the government for
such interest as II would have to pay
on bonds issued and sold to the
amount Of the purchase price paid by
the government for the property so
acquired, plus one per cent, per an
mum on the purchase price as an
Amortization sinking fund charge, to
be collected for q period Of thirty-six
Years, by which time the purchase
lprice would be paid in full to the gov
eminent. After such complete
amortization, no further rental or 9th
Tor charge to be paid to the govern
Iment by the leasing corporation. The
railroads 10 retain all other property
and in addition to the rental and the
one per cent. amortization payment
shall pay all taxes on che property &C
,,quired by the government as long rs
iii remains subject TO taxation and to
maintain the railroads and keep them
lin good repair and servicable condi-
,tion. But beginning with government
Ownership of the real estate acquired
by il, the taxes on same shall be re-
duced one thirty-sixth part Of the
whole for each year until the end Of
the S6 years constituting the arnorti-
zaticn period, after which time no
taxes Of any kind shall be levied and
collected on the property so owned by
the government.
The real estate Of railroads is ad-
lvancing in value, especially railroad
Terminal property in the larger cities
and the tax burden Is growing
heavier all the time. RSt no revenue
comes to the carriers, from such ter
minal property, although under the
Transportation Act, the roads are en-
TITLED TO fair return on the value Of
this. pon-revcnue producing property,
including unearned increment.
Under my plan the bonds Of the
government would have So years to
run and could be easily floated at q
AN per cent. interest rate. To this
would be added the one per cent.
amortization sinking fund charge,
making 81 per cent. which would pay
all principal and accruing interest in
thirty six years, leaving the property
completely paid for and free from all
future taxation by any taxing author
ity for all time to come.
i All new construction should come in
the same way and be absolutely free
from interest and taxation charges so
far as the real estate investment is
concerned. By this plan, great and
Substantial relief can be given the
railroads by the government without
any appropriation Of money from the
treasury Of the government and with
out one cent of additional taxation.
Such relief cannot come to the rail-
roads il it depends on private financ-
ling for profit, to bring it about.
| 1t is estimated by experts that the
fixed real estate property Of the rail-
roads used in the service Of traps-
! pnxt a tinn ia a,ual kr, Tx NOS cart - tho
value Of all the property Of the rail-
roads, including equipment. The
money coming in from the govern
ment for the property acquired under
this plan would be sufficient to pay
off all the bonded indebtedness Of the
railroads. The remaining property
not taken over by the government,
consisting Of equipment would have
no unearned increment value. This
plan does not contemplate govern
ment operation Of the railroads, but
leaves operation entirely to private
1 initiative and incentive and would not
involve the roads in politics any fur
Their than at present.
As the physical valuation under
government supervision and authority
will soon be completed, as to all the
railroads in the United States, this is
an opportune time to acquire the fixed
real estate property Of the railroads
in carrying out the plan herein out
lined.
II this plan or some other that will
accomplish the same purpose, 10 not
adopted, the railroads never can
amortize their real estate property
values out Of earnings and win have
TO 70 On in the future a. In the past,
living frbm hand to mouth BY paying
of ID bonds by the issus and
sale q another issue and viii never
4 get out 81 debt while time stands.
Under my plan eomplete smortixa-
ton Of al fixed property Of the ear
riers can Be realized, with reduced
rates and with increased efficiency Of
service and with d fooi profit On op-
'fssiea' Why not sdcPf y ~ srxs