Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1922-12-14

The Commission has determined
that 5A per cent is a fair rate OF
return, and fixed $18,900,000,0O0 as
the aggregate value of railroad
property used i'll providing trans
portation. This valuation IS based
upon an investigation Of the actual
value of railroad property, before
the war, plus investments since.
and has nothing TO do with the
amount of stocks and bonds. The
rate Of return named IS not as
sured to individual companies,
but is simply the basis upon which
rate calculations are made. he
companies must compete, with the
result that some will doubtless
earn more than 5}4 per cent. and
others will earn less. Those earn
ing more are required to pay one
half the excess into a fund to be
managed by the Interstate Con-
mission and invested in reserve
railroad equipment available .or
use in emergencies like the
present.
The primary purpose of railroad
regulation of course is to protect
the public. The roads are natural
monopolies and it IS right that
their charges and operations
should be under governmental
control. The interest of the Esch-
Cunmins law is to give assurance
to the public on one hand, that the
charges will be restricted. and 10
the investors on the other hand
that in regulating charges the
Interstate Commission will not
go so far as to prevent fair re-
turn on capital actually invested.
The threat to repeal the ksch-
Cummins law naturally has the ci-
feet of increasing the tITldity Of
the public toward railroad invest
ments. Railroad service cannot BE
had without the facilities, and
these cannot be had unless the, n
vesting public is assured Of a re-
turn ponding to what can De
had in other fields of Investment.
One view commonly held at the
sources of this agitation seems 10
be that the railroads are owned by
a few rich bankers who are able 20
put their hands in their pockets
for all the money needed to pro-
vide the necessary expansion Of
service. The railroads, however,
are not owned by bankers; the
ownership is widely distributed
and will respond with additional
capital only as it believes The Il
vestment to be safe. Some Of he
stronger companies are still able
to raise money by giving mort
cages that come ahead OF he
stock, but this is just like putting
a second mortgage on farm.
This process cannot be carried in
definitely, because the margin Of
safety grows smaller. Proper
financing of the railroads requires
that approximately one-half of the
capital shall be represented by cap
ital stock: in other words, that pro-
portion should be proprietary cap
ital, in order to obtain favorable
terms upon borrowed money. Very
little new capital has been raised
for railroads by that means re-
Gently. Most of the purchases of
equipment lately have been accom-
plished on the installment plan,
mortgaging the equipment for
about rs per cent of the value.
The railroad blockade this fall
has shown that the biggest railroad
problem is how to raise the money
TO keep the railroads up 10 the
growing business of the country.
The railroad companies came in
to the crop-moving season with
much motive power in poor condl-
ton as a result of the shopmen 5
strike, and have had to deal with
an extra heavy movement Of coal,
resulting from the coal strike, and
with all traffic reviving. In the last
week of October 1,0l4,480 carloads
of freight were loaded which is
but fraction of one per cent be
low the peak-loading of any week
, in the history of the country. The
/ car loading figures for the past
: month not only exceed those foi
, November 1921, but are the high
est for that month on record.