Evening star., 1922-02-19


Of Harvard. but no final order has
yet been made for hearings. and. SO
far as the railroads are concerned,
they do not know what the commits
sion wants. Take another feature,
the so-called recapture clause, under
which the railroads are to divide with
the government profits in excess of
per cent. The act will have been
in effect two years on March 1. and
only within the past few days has the
commission taken any steps toward
getting recapture of any excess
earnings.
1t is hard to see how any new leg
islation can move smoothly when
chucked on during a period of un-
precedented depression. and infinitely
more SO must such new and revolp-
tionary legislation as the transporta-
tion act be given time and a fair try
out without keeping the situation
fretted and stirred up. ~
it would seem entirely the better
policy, members of Congress and bus:-
ness leaders, and particularly expert.
enced railway executives, believe, 10
leave to the organized federal agen-
cies. the Interstate Commerce Com
mission and the Railroad Labor Board,
in cooperation with the railroads. to
work out the problem of defiation and
| readjustment. And it is believed fur
| ther that the more entirely they are
let alone at this task the better il
will be for the entire economic well
fare Of the country
x y r i:
This does not mean Congress alone
should keep hands off There are; a
good many bodies of citizens who are
| mixing in with suggestions and pro-
tests and what not. They, of course.
have perfect right to do this, but
it is not helping matters.
The national council of the Cham
ber of Commerce of the United States
in referring back the suggestion for
new governmental agency in charge
! OF a director general of transporta-
tion to its transportation committee,
acted wisely in concluding that this
/ is no time to make fundamental
| changes. Let the transportation in
+! dustry run along as best il can for
time until it can get running more
| smoothly under the new law. it 10
| reasoned.
| Secretary Hoover. in his address
before the Interstate Commerce Com
mission advocating putting the GOV
| ernments credit behind the railway
| Improvement notes said: "In these
circumstances it seems to me vital
that the railways, as our greatest In
| dustry. should propose a courageous
program Of broad-yisioned better
ments, and. If necessary. the govern
ment should consider giving the use
| Of its superior credit. 1t would not
| cost the taxpayers a cent for the gov.
] ernment to give guarantees to equip.
| ment trusts to be devoted entirely 10
| equipment and construction. This is no
proposal to take money from the tax
| payer. 1t is a proposal to save him
| from paying treble the amount Of
his guarantee in profiteering and
| losses. 1t will render a reduction Of
rates earlier. for unless something is
done the improvements will have to
be paid for over years and out Of
| increased rates. Nor would we lose
a cent on the guarantee, for il Amer
: ican railways cannot earn interes.
| on their borrowings let US throw up
our hands and prepare for second
| Russia"
Secretary Hoover emphasized that
real program of construction would
! in its various ramifications give re-
lief to 100000 or 100000 of our unem-
| ployed. 1t would enable even larger
| numbers to increase their standard
OF living and thus. give increased
markets to the product Of our faroa-
ers. He said that "a billion dollars
| spent on American railways will give
more employment to our people, more
| advance to our industry. more assist
! ance to our farmers than twice thaS
sum expended outside the frontiers
of the United States"
| Strangely enough. there mas been
little comment upon this really pro-
gressive proposal of Secretary Hoover.
| OF course. the railroads would have
no possible objection. They like
Hoover's presentation of the situation
I before the Interstate Commerce Com
mission and will approve this par
| ticular proposition. The question is
| whether it would ever get by Con-
| gress. For some reason Congress
seems to have assumed the attfoude
that overmuch has already been done
for the railroads. So this appears to
be impracticable politically. since
Congress, after all is said and done,
has to be sold" on this idea. sd
F! AS to the financial situation Of the
railroads, it is altogether more hope
I full than is generally supposed. .n
/ 1921 they had one Of the poorest years
| they ever had. Traffic, both passea-
7! ger and freight. showed the greatest
decline ever experienced in a single
year-the greatest decline relatively
as well as actually. in percentage as
| well as in amount AS q result Of
that decline the railroads had q net
operating income in 1921 Of $500, ,o0o.-
900. whereas 6 per cent on their
valuation would have been $I,l1ss.
100000. So they fell short $5l6.000, ,eea
of earning per cent. They earned, IN
fact. about 3N per cent -
Now, the latter part OF the year
| was much better than the earlier
part, and the traffic since January 4,
1922, has been almost uniformly bete
| ter than during the same period OF
| 1921. The wages and other operating
costs are now lower than a year age
So the net operating results through-.
out 1929 ought to go along at q high
FER level than throughout 1921. and on
the assumption that business will be