The Hartford republican. (Hartford, Ky.) 18??-1926, 1922-02-24

the war in 1917 We have constructed
at least 10000 miles OF railway less
than our increasing population and
economic development called fOI. and
we are. behind in rolling stock by
about 1000 locomotives and 200, goo
cars. | wish to emphasize that I'M
less we can have an immediate re-
sumption of construction and equip
ment Of our commercial community
will pay treb'e The cost of the " hole
of them in their los sos OF a single
season. The very moment that we
reach anythi lg like normal business
we shall see repetition of car short
age, followed by an increase in the
cost of coal to the consumer from 81
to SO a ton; we shall again see pre-
miums of 90 cents a bushel for the
use of car Cor moving grain; we shall,
in fact, see a shortage of commodities
TO the consumer; and we shall see
eluts upol the halds Of the pro-
ducers. We shall see factories fill
ed with orders again closed for lack
of care; we shall see large intermit-
tency IN employment; and we shall
see the usual profiteering in commo-
dities due to a structure between the
producer and consumer.
There would be no difficulty
I., haefn0 guah IOoaa. IN
the experiences we have already
had to calculate a loss to the Ameri-
can people of a billion dollars for
each one of these periodic transpor-
tation shortages.
Furthermore. there is nothing
that is so recoverable loss to the
nation as idle shops and idle men.
Today we have both. There is moth
ing that will so quickly start the
springs of business and employment
as an immediate resumption of con-
struction and equipment of the rail-
ways. When business does resume
we shall need all of our capacity
for the production Of consumable
goods. We shall not only find 1t
strangled for lack of transportation,
but will find ourselves plunging in
to the manufacture of this very rail-
way equipment and construction in
competition with consumable goods
for materials and labor. Herein lies
the basic cause of destructive price
initiation and booms, with all their
waste and overexpansion. In times
of depression we should prepare for
the future, and by doing so we can
cure the depression itself.
"If we examine the fundamental
reasons for failure to resume equip
ment we will find them in the loss OF
confidence in railways as an invest
ment and the competition of tax-free
securities. We have passed the
period of credit strain in this depres-
sion. Surplus capital is pouring by
hundreds of millions monthly into
tax-free securities and foreign loans
and vet our railways are unable to
finance the most moderate OF con-
struction programs. The confidence
of the public in railway investments
was at so low an ebb before the war
that finance by the issue OF common
and preferred stocks had become i'm
possible and railway expansion was
living on bond issues. The conf
dence Of and assurance and continue
ty in earning power to cover this bur-
den of bonds has been even lowered
since the war began because OF I'M
certainties of both rising and falling
prices, of rising and falling wages, OF
rising and falling rates, preventing
all regularity of earnings upon which
an investor could be convinced, even
IL other difficult factors entered
into the problem. l see no occasion
to go into the labyrinth of past rail-
way finance, its propriety or lack OF
propriety, its foolishness or its Skill
That generation is gone by. This
commission approaches the financial
problems of the railways upon the &C
tual value not upon their issues OF
securities, and take it we are liv-
ing for the future, not the past. we
want transportation and we want 1t
with the values of private initiative
and clean public service.
'If we look to the immediate fu-
ture. with its complete necessity OF
pairing the railway earnings down TO
little more than bond interest until
we give relief to the shipper (and
thus the primary foundation to bu-
siness recovery can see little like
lihood of convincing the investor as
TO his margins of safety There Is
an tmosphere that our railways VIII
never again earn profits, and that
they are not as an industry worthy
of investment, and that because pri-
a a L.