The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1922-12-28

The Commission has determined
that s}4 per cent is a fair rate OF
} return. and aNed SlS.900 900, 900 as
The aggregate value OF railroad
property used in providing trsas-
portation. This valuation IS based
upon an investigation OF the actual
value OF railroad prop.rty, 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-calculauons are made. The
companies must compete, with the
result that some will doubtless
earn more than sN per cent. and
others viii earn less Those earn
ing more are required TO pay one
halt the excess into a fund to be
managed by the Interstate Com
mission and invested in reserve
railroad equipment available for
use IN emergencies like the
present
The primary purpose OF railroad
regulation OF course is 10 protect
the public. The roads are natural
monopolies and II Is right that
their charges and operations
should be under governmental
control The interest OF the Esch-
Cummins law is TO give assurance
TO the public on one hand. that the
charges will be restricted. and 10
the investors on thee Bother hand
that IN regulating charges the
Interstate Commission will not
so so tar as 10 prevent a fair re-
turn on capital actually invested.
The threat TO repeal the Esch-
Cummlns law naturally has the e.
iect OF increasing the timidity OF
the public toward railroad invest
ments. Railroad service cannot be
had without the facilities. and
these cannot be had unless the in
vesting public is assured OF a re-
turn corresponding to what can be
had in other fields OF investment.
One view commonly held az the
sources OF this agitation seems TO
be that the railroads are owned by
lew rich bankers who are able 10
put their hands in their pockets
Tor all the money needed 10 pro-
VIDE. the recesss-y expansion OF
service. The railroads, however.
are not owned by bankers. the
ownership is widely distributed
and viii respond with additional
capital only as IL believes the in
vestment 10 be safe. Some OF the
stronger companies arc still able
10 raise money by giving mort
cages that come ahead OF m.
stock, bat this is just like putting
second mortgage on a farm.
! his process cannot be carried in
iehniiely. because the margin Of
'aiety grows smaller. Proper
inaneing Of the railroads REQUIRES
hat approximately onc-haif OF the
,apital shall be represented bv can
tai stock; in other words. that pro-
'ortion should be proprietary can
tal' IN order TO obtain favorable
erms upon borrowed money. Very
title new capital has been raised
or railroads by that means re-
entity. Most OF the purchases Of
lately have been accom-
'hshed on the ins,allment plan.
nortgaging the equipment for
bout Is per cent OF the value.
The railroad blockade this fall
as shown that the biggest railroad
Iroblcm Is how 20 raise the money
o keep the railroads I'D 10 the
rowing business Of the country.
The railroad companies came in
o the crop-moving season with
1uch motive power in poor condi-
ion as result of the shopmen'.
trike. and have had TO deal with
n extra heavy movement OF coal
csulting from the coal strike. and
nth all traffic reviving. In the last
leek OF October l.oi4,4e0 carload,
I freight were loaded. which il
ut a fraction Of one per cent be-
1w the peak-loading OF any week
] the history Of the country. The
ar loading figures for the past
1onth not only exceed those for
november. 1921. BIZ, are the high
St Tor that n9ath on rssQla