The Birmingham age-herald., 1923-12-02

upoH lHe average net rallWay operaL- | ing income of each railroad for the 1 years 1915-16-17, which included the | years of highest net operating in- | come of southern railways.
 | O O O
 Obligation Fulfilled.
 The government, it will be re- | called, was in possession of the rail- | roads during 1918, 1919 and to March, 1 1920 when they were turned back to l their owners. Not only did the gov ! ernment pay the railroad corpora 1 tions the rental above set forth, but
 extended it to September, 1920. Also, | the government agreed to turn the
 railroads back in as good condition as when taken over. The govern
 ment fulfilled this obligation, and l when shown in individual instances 1 the railroads were not turned back in | a s good physical condition as when | taken over, the government paid out l of the treasury such sums as were ! necessary to attain this object. Lit l erally millions of dollars were paid
 out to railroad corporations out of
 the treasury of the United States for | this purpose. The government. as
 such, did not operate the railroads;
 they were operated by railway off
 cials, and the government simply | took over the property of the cor 1 porations and guaranteed them, re- 1 gardless of conditions or the out come of the war, the compensation
 set forth above.
 o 0 o
 Roads Protected.
 "It Is true that expenses of opera | tion enormously increased during the l war. What did the government do to
 protect the railroads when it turned | them back, against a continuation of | increased operating cost? First, Con | gross passed a law making 1t man
 datory upon the interstate commerce
 commission, and indirectly, upon ] state commissions, to so fix the gen.
 eral level of all transportation
 charges that the railroads as whole, in each so-called rate making terri
 tory, would earn, after payment of
 all operating expenses and taxes, not l less than 6 per cent on their valua-
 ton.
 "The interstate commerce com mission accordingly increased freight rates from 25 to 40 per cent, effective August 26, 1920, four days prior to the expiration of the guarantee period ending September l. This increase in rates Was ac- complished by an estimate of tenta- tive valuation of railroads designed to produce, after September 1, 1920, a net income of per cent on such valuation.
 'The railroads now complain that after September, 1920, even under the increased rates, they did not re- ceive the per cent return assured by Congress and attempted to be given by the interstate commerce commission. During 1921 and part of 1922, the carriers did not earn the rate of return assured by Congress, but regardless of whatever rates might have been published, either as {. T fr-f voluntarily established by the car riers, such net income would have been impossible. Traffic fell off enormously in the fall of 1920, and through 1921, due to economic de- precision which extended over the world,
 Railroads The Exception.
 "It is fact that during this period of depression, business interests, manufacturers and agricultural in terests sustained enormous losses. The only business of national character which did not operate, as a whole, at loss during the fall of 1920 and all of 1921, were the rail- roads. They did not make 6 per cent, they did make some per cent, over and above all expenses and taxes, while all otherfndustry and business not only did not realize any returns, but sustained financial losses az gregating billions of dollars. For the carriers to complain that during this particular period they only made about two per cent net on their valuation, after all operating eX- penses and taxes had been paid, is difficult to appreciate, in view of the enormous deficits made up or ab sorbed by all other American busi- ness interests.
 During the last 15 months, the railways of the southern group as erating expenses, taXes-including income taxes-and expenses of every kind, have earned the greatest net railway operating income in their history. They are today earning a rate of return substantially in eX- cess of the 5% return fixed by the | interstate commerce commission Strong railroads of the south are making profits far in excess of the rate of return fixed by the inter- state commerce commissiQu. Not withstading the fact that the rail- roads of the south, as a whole. are enjoying their greatest era of pros perity, it is a sad commentary that some high executive officers of the southern roads continue to plead poverty. while their traffic officials, before the interstate commerce com-' 1 mission and before state commls- sions insist upon icrease in the pre- vailing high freight ra-es.
 What south Opposes.
 "The shipping public in the south does not begrudge the southern car riers their wonderful prosperity, and are insisting hopefully that this pros perity shall continue. The shipping public of the south is opposed to the agitation in some quarters for a reduction in the valuation of the roads placed by the interstate com purposes, as well as the strongest possible opposition to any suggestion of government ownership and opera | tion. The informed shipp,ng public 1 wonders, however, why the southern railroads do not frankly tell the southern business man and farmei of their wonderful prosperity, and ask for its continuation, rather than continue to plead poverty and de- mand increased rates. The railroads during the last IS months have handled efficiently the greatest vol
 in the history of the country, this 1 demonstrating that under private 1 ownership and government regula- | tion, the carriers can no+ only serve | the American people efficiently, but can at the same time bring remuner- ation to their owners of satisfac- l tory character.
 Tt is obvious, therefore. that the railroads have not broken down. were not unfairly treated by the govern ment, that their failure to earn 6 per cent in the period of depression after the war was not due to oppressive measures by the government; that the railroad, as whole, did make during the deflation era, their oper- ating eXpenseS and make some net return, while it is common knowl- edge that other industries, as a whole, were unable to earn operating eX- penses and make any net return; and that since business has revived, under rates prescribed by the interstate commerce commission and govern ment supervision and regulation, the