The Topeka state journal., 1922-05-09
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC j. HASKLN. Direcear.
Washington. ID. @.
4 RENIEDY ZOE THE RAHRoAns

n AA4<l4ElOL EOEA LAZAlLxEkAlADS
Washington, d. C., May e.-Differ-
ence of opinion regarding the advisa-
bility of consolidating the railway
systems of the United States in accord
ance with the provisions of the trans
portation act is making itself felt
This plan was devised by congress
! with the aid of experts, as one of the
most feasible solutions to the Ameri-
can railroad tangle- Senator Cummihs
of Iowa is one of the chief champions
of the plan and expresses the opinion
that unless the railroad systems are
consolidated, the nation cannot escape
government ownership and operation
The general plan is to consolidate
into 20 or 80 main systems the hun
dreds of railroad companies now oper-
ating in the United States. The Amer
lean railroad system developed as the
result of independent projects of in
dividuals or small companies. In fact
the railroad systems that now exist,
such as the Pennsylvania. the Balti-
more & Ohio and the Southern are
nothing more than consultations of
a number of smaller lines. These con-
solidations have been the result of ac-
QUESTION of additional mileage by lines
which desired to extend their scope.
1t was a natural dvelopment with no
statutory dictation behind it.
The transportation act plan would
merge about 500 lines into 90 or 80
general systems and the consolidation
would not be as the companies want
| it particularly, but as the interstate
commerce commission. charged with
enforcing the laws governing railroad
transportation. wants it
The consolidation theory and plan
have had careful study by many ex-
perts The latest study to be made
. 1T-r- ef
torney and economist of Washington,
who specializes in railroad and indus
trial investigation Dr. Mullers study
has caused him to oppose the con-
solidation plan because OF the metnod
adopted for putting it into effect
He declares that the plan will not
reduce rates but 1t more likely to in
crease them to even more burdensome
levels. He does not oppose the gem
eral principle of consolidation but
contends that it should be a natural
DEVELOPMENT on the initiative of the
owners.
Muller Combats Cummins.
One OF the chief arguments ad-
vanced by Senator Cummins and his
adherents in favor of the government
consolidation plan is that it will unity /
railroad rates and place the whole
country on the same operating basis. |
DR.. Muller denies this. He declares
that there will be just as much diff
proportionately, among 20 or 80 sys-
TENS as between 500 railroad COM !
panies. The result will be that some |
of the big systems will grow strong
and other weak, just as among the sep
arate SEQ railroads. Such develop J
ment would bring about in the course !
of few years the same situation that (
now obtains and there would have to /
be another consolidation so that the
weak roads could be absorbed. This |
process would go on, DR.. Muller /
thinks, until ultimately there would |
be but one great railroad system. |
Obviously the result of this would be
the total destruction Of competition, |
the element in business of all kinds |
which experience shows is the inSti- |
gator of progress and service /
Doctor Mullers analysis persuadeS |
him that the principal weakness in
the American railroad system today |
is the restriction in the transportation 4
act which limits the earnings of a /
railroad to per cent. He points out
that railroads. like all other enter
prises, must pass thru periods of pros |
perity and depression. He says that
in the natural course of business the |
individual or the company is able in
good times to earn enough money TO |
permit of laying aside surplus. This
surplus is drawn upon when hard /
times come and earnings dwindle-
This is the policy which kept aivU
many great corporations and many
small firms during the last year or
two of business depression,
Now Doctor Muller points out, if /
the law limits to a low figure the
amount of money which a railroad
may earn, how can il lay a surplus /
aside for period of diminished in
come?
The natural course for railroad TO |
take in hard times would be to reduce
rates. All merchants do this In
prosperous times, they can get high
prices. In hard times. they must cut
BY such n course business is stimu-
lated. Bargains are offered and it IS
found that trade is enlivened to such
an extent that profits begin to reap
pear and prosperity returns. The
same rule would affect railroads. H. /
when times are hard, the railroads
could cut freight and passenger rates
and offer bargain transportation, traf-
fic would be timulated- But under
the earnings restriction rule, Doctor
Muller points out, the railroads must I
run counter to the natural trend, and. |
in hard times, increase their rates.
Sees Suicide for Roads.
All business men and economists
know that when rates go up business
decreases. The railroads thus are put
in a suicidal position.
DR.. Muller believes a remedy exists
for this situation but not in the trans
portation act as now drafted. He
favors the consolidation of the rail-
roads but declares the personal, COM
petitive element must be restored.
1t will be remembered that a couple
of years ago the county was hearing
much about the Plumb plan. This
was a plan whereby the railroad
union workers would share in the
earnings of railroads. DR.. Muller /
proposes a plan which is somewhat
reminiscent of this. He would per-
NIT the railroads to earn as muchKaS
they can in prosperous times. They
would be regulated. especially to pre-
vent the cutting Of melons and the