Perth Amboy evening news., 1923-12-18
HASKIN,S
LETTER

fishing a few great systems as con-
templated by the Transportation Act
of 1920, then consolidation must be
forced upon them by Congress. This
is accepted as the administration
program for dealing with the rail-
road problem in view of what Presi-
dent Coolidge had to say about it in
his message and of Secretary of
Commerce Hoover's discussion of 1t
in his annual report.
Secretary Hoover not only argues
for the necessity OF consolidation but
outlines a definite method by which
it may be brought about. That this
method will be embodied in bills
| that will be pressed for speedy con-
sideration in both Houses of Con-
gress is taken for granted.
The Hoover plan contemplates the
Federal Incorporation of the con-
~solidated railroad systems and YOU
provide that after the lapse Of a rea-
sonable period for voluntary action
by the railroads the Interstate Com
merce Commission should be m
powered to create definite organiza-
ton committees for each system con-
templated, These committees would
include representatives of the pub
lie and of the component roads.
at should be the duty of such
committees" says Mr.. Hoover, Ito
develop and perfect a plan of con-
~solidation either through the ex-
change of securities of the consol1-
dated systems directly with the Sc
curity holders of the component
roads or by some other method. l
believe that under such auspices the
security holders would be willing
voluntarily to make such an ex-
change. If q minority should refuse,
it would be entirely feasible to in
woke condemnation and purchase OF
their securities for the consolidated
system at an established fair value.
Such a. method would permit the de-
termination of the relative value OF
the different railways considering
both the physical properties and the
often lower total of their securities,
and due account could be taken of
future as we'll as present conditions.
The Secretary of Commerce offers
a new suggestion i n connection with
this plan, pointing u that 1t could
be provided that some roads or ter
minals could be owned Jointly by two
or more of the consolidated sys-
TENS, as there are situations where
such an arrangement would be most
advisable in creating more efficient
TRANSFORMATION. He also states that
the public interest could be safe
guarded by limiting the total capt.
talization of the consolidated systems
to an amount not exceeding the
physical value of the railways.
Private Owners Oppose
Ire private owners of the rail-
roads, or at least those who occupy
the positions of managerial respon-
sibility of the more important lines,
are generally opposed to consol1da-
ton. At least they have made 1t
clear that they do not purpose tax
ing advantage OF the permission to
combine which was a feature of the
law passed in 1920. The big finan-
cial interests that dictate railroad
policy in the United States apparent
ly do not deem it desirable to
strengthen the weaker roads at the
expense of the stronger.
When transportation rates are fix
ed at levels which permit all the
railroads to earn 51a or 6 per cent
it is obvious that the larger oad
will earn more than that and enjoy
a measure of prosperity that VIII
make their securities decidedly pop
ular in Wall Street. 1t is equally
obvious that railway management
does not want rates reduced, and
when the advocates of consolidation
offer as the first argument in sup
port of their proposal that it will
bring about an immediate lowering
of tariffs it is not surprising that the
private owners stirred to oppo-
sition.
1t is not known at this time, of
course, how bitter or how strong this
Opposition will be, and it is possible
that it may be minimized by the dl-
rect or indirect threat of Govern
ment ownership. A situation may
develop where the private OWNERS
and their representatives will be
told, or will be made to see, that II
they do not accept consolidation and
cooperate intellectually in bring
ing 1t about they may have
Government ownership thrust upon
them as the only alternative solution
of the transportation problem.
AS It is, there is an element In
Congress that now takes the position
that consolidation will be IN expert
ment that will only defer the day
when the Government must take
over and operate the railroads. SEN
. ator CouZens, of Michigan, is named
as one OF the leading opponents or
this idea. He has said repeatedly that
he does not favor Government own
ership, but that he can not see any
thing else that can be done.
) Ford Also In Opposition
Henry Ford, who is rarely in har-
mony with anything hat is favored
l by the great financial interests CEN
; tering in New York, in this situa-
! ton is lined up with them in oppo-
, sition to the consolidation program.
Mr.. Ford does not want his railroad
combined with any other road, and
, he has made this statement most
l emphatically to the Interstate Com
merce Commission.
4 1t is said that when Mr.. Ford ac-
uuired his railroad he did so not
merely in order to be able to haul
, his own coal from his W mines in
} Kentucky to his Detroit plants or to
get more advantageous rates on his
manufactured products, but that he
might give the country a demonstra-
ton of how a railroad ought to be
operated to give the public the maxi
I mum service at the minimum
charge. The flivver king had the
l idea that he could contribute toward
the solution of the transportation
problem by conducting a practical
= experiment.
His first move to raise the wages of
| the workers on his road on the
theory he had applied successfully
in his factories that that was the