Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-06-23

figures equal to the burdens of fed
eral taxation. On the other hand
there are some railroads in this coun-
try, the building OF which would bet
ter have been, deferred, for they were
born out of misguided enthusiasm, or
unjustiflable speculation, or the mere
purpose of levying sort of transpor-
tation blackmail upon systems al
ready in the field. Finally, we have
many railroads which, though appar-
entity well managed and absolutely
serve. are finding it difficult to earn
a living and quite impossible to pro-
vide the necessary maintenance and
the means of expanded facilities.
:: Years Add to Costs.
: Every passing year adds to the cost
fof lpreaucing new railroads Most of
Our railroads were begun in time
when land was the most plentiful and
least valuable thing we possessed, and
their rights of way and terminals
cost, as compared with the present
Eaxpense that would be involved in
Everybody is doubtless familiar with
! the. story that few years ago
great engineer was commissioned to
Ike preliminary calculations of the
system between New York and Chica-
go. He is said to have reported the
tpurchase of real estate for terminals
on Manhattan island alone wUu.u re
quire as much capital as would the
physical construction of the entire
fIine from New York to Chicago.
! There could hardly be better il
lustration of the increasing difficulties
which the country must face in any
! considerable expansion of it's rail-
thetcal new trunk line from Lake
Michigan to the Atlantic coast was
not constructed: If it had been" 1t
| could not have earned returns on its
enormous cost unless rates had been
greatly Increased for it's benefit. But
FIT rates had been increased for it. they
would have had to be increased also for
/ the lines competing with 1t. Other
| WISE, the new road would have no
| business at all: An increase of tariffs
which. would have permitted such an
expensive new property to earn even
I a moderate return on it's investment
| would have enabled the older and less
expensive properties to earn abso
lutely preposterous returns.
| Would Cost Much More to Replace
1t is worth while to bear, in mind,
! in the face of current agitation. that
| we. could not replace our railroads for
| a vastly larger sum than the valua-
ton placed upon them by the Inter
| state Commerce Commission, and it
| is fortunate for our people that we
| structure founded upon replacement
! cost.
1 have referred to the previously
recited instance because it so per-
| fectly illustrates the whole situation
which the country must meet in deal
with It's railroad problem. Events of
the last few years have made US all
realize that the railroads must be
administered under some policy that
will make it possible to find the CAPT.
whereWith axDand
ing systems as business shall require
without imposing an impossible bur-
den upon industry and consumption.
/. 1t is no theoretical problem. IT is
aside with the wave of the hand.
When the government undertook
operation during the war, and stand
'ardized. wages, and was caught in
the sweeping current of mounting
cost. lit created a. situation to ignore
which would quickly develop a ma
tiona1 menace. At an awful cost we
learned the extravaganza and mount
ing burden of government operation.
Yet there are today very insistent
advocates of government ownership.
Frankly. I do not share their views.
our political system has not reach
ed a ESTATE of development when we
can insure proper administration.
Blunder to Destroy Initiative.
:. L believe it would be a colossal
tive. infect us with political corrup-
ton, create regional jealousies, and
impose incalculable cost on the pub
lie treasury. But we must find
solution of the rate problems and
the necessary expansion of facilities
and find that solution in spite of the
prejpdices of the present-day spon
sors for operations and the present
day destroyerS who would bankrupt
or conffscate, else government owner
a,,l will oy,i
accepted necessity. Nor do / share
the views of those who would lower
rates without regard to railroad good
fortune. The prosperity OF the rail-
ways is the prosperity of the Amer
lean people, and the property rights
in railway Investment are entitled to
every consideration under our Con-
stitution which is due to property
rights anywhere. Any tendency to-
ward confiscation will lead to con-
fusion and chaos, and destroy the
very foundation on which the re-
public is builded.
Would Saddle Losses on Treasury.
1t is easy to understand how many
people contemplate the abolition of
competitive carrying charges, and the
elaborate machinery of government
regulation, and argue that the logical !
step is to put them all in one common |
pool under government ownership. |
That would effect an adjustment be-
tween the fat and the lean! If it
didn't make them all lean. 1t would ,
equalize profits and losses between |
favored lines and the less fortunate |
ones, 1t would abolish profits and
saddle all the losses on the public
treasury. More, it would completely i,
disa rrange the. economic relationship |
between our different communities, |
upon which our present-day COM |
MERGE is builded. 1t is preferable to
preserve initiative and enterprise. to !
maintain the inspiring competition of |
service, and 1t is vital that the costI
Of Transportation be borne by the
commerce which|is served. " /,
No, my countrymen, I am not pro-
posing naturalization. nor a renewed |
experiment in government operation. |
the cost of which we have not yet
settled The federal treasury cannot |
we have lifted many of those already |
imposed. 1 had rather solve a diff |
Guilty than embrace a danger
Believes Step Justihable.
I do believe there is a rational. !
justifiable step, full Of promise to-
ward solution. 1t will effect a dimi- |
nution'in rates without making a net
return impossible. 1t will make |
l. refer to the program of CONSOLE I
dating all the railroads into a small I,
number Of systems, the whole to be |
under rigorous government super |
vision, and the larger systems to be !
so constituted that the weaker and |
Improbable lines would be able to
lean upon the financial strength of =,
the stronger and profitable ones I'M
til the growth Of the country makes |
them all earn a just return upon
capital invested. The transportation
act Of 1920, known as the Cummins-
ESch law, contemplated this kind of |
a consolidation, but made 1t per-
missive rather than mandatory In |
effect, 1t left to the railroad manage
me ts, subject to the master plan set