The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-04-16
BxW. s. COUSINS.
(Copyright, 1923, by Cosmopolitan
Nawa Seryice

road controversy or 1875, which 10.
day looms between railway mana
gers and national legislators, threat
ems to become historic. The result,
no doubt. will have a. greater effect
upon the nations business than any
economic controversy Of the present
generation.
{ Railway managers are uniting to
prevent what they consider the
menace of government ownership,
or greater government control,
which is threatened because of high
freight rates and inadequate serv-
Ice. The progressive Congressional
representatives especially from the
West and South, are silently sleuth-
ing upon some scheme to bring,
relief to farmers who cannot mar
ket their crops profitably. and to
consumers who cannot get their
goods hauled at specified times or
satisfactory rates.
Affects Security Holders.
Billions of security values hang
in the balance.
The controversy is by no means
limited to the railway managers
and politicians. Every one is af-
fected. In addition to the lime
light actors, there are 767, 1877 priv
ate and corporate owners of railway
stock, besides the tens of thousands
OF holders of railway bonds. an
ever-increasing amount Of which is
coming into the market.
Every man, or woman in the
country who has a dollar of life
insurance or a savings bank ac-
count is Indirectly affected, for life
insurance companies and savings
banks have hundreds OF millions
Of dollars invested in railway bonds.
There is general agreement that
cheap freight and passenger rates
and adequate transportation facilf-
ties are the prime essentials for
continued prosperity of this nation.
But there are conflicting views as
to when a free rate is cheap.
Involve Huge Investment.
The more than ESQ, 1000 miles of
American railroads, having ssome
100000 miles Of trackage, represent
an investment of some $2O,-
900, 10000 These railway lines
furnish the life blood of Americas
domestic and foreign commerce. and
upon their economic operation de-
pend a good measure of the health
and prosperity OF the people. !
railroad situation and to what par
ticular defects do the various fac
tionS attribute all the noise and
wrangling which we hear about
the railroads.?
From the balance sheets of the
roads as whole, the answer is.
plain. Since 1918 the railroad sys-
TENS have earned about per cent
per annum, not on their stocks and
bonds, but on the valuation that
has been assigned to them by an
agency of the United States Gov
eminent, the Interstate Commerce
Commission.
Blame u. s. Regulations.
The railroad managers claim that
the regulatory policy rigidly en-
forced by the Government prevents
them from making a better showing
in this regard. The Congressional
critics Of the railroads and the State
supervisory agents have a different
story to tell. Inefficency, waste,
lack Of coordination and other con-
ditionS from which railroads should
be speedily freed, they say, are
chiefly responsible for their inability
to earn their living, and they pro-
pose to prove this to the satisfac.
ton of all concerned.
Can they do It? That remains to
be seen, but the next session of
Congress without doubt will make
the most important contribution to
the discussion of this subject that
has been made in all Of the fifteen
years Of Government regulation OF
the carrier systems.
Theory Of Expansion.
It is the best accepted theory of
industrial progress that expansion
in manufacturing capacity Is pro-
vided for partly from the invest
ment of new capital and partly
from the surplus earnings of past
operations. But the cost of this
new expansion should be gradually
liquidated as time passes on, so
that Indebtedness incurred for 1t
should be wiped out before it has
outlived it's usefulness.
The late James J. Hill said that
the railroad companies of the
United States, in order to keen
abreast of the times, would need to
spend at least a billion dollars a
year for new equipment. They have,
however, fallen so short of this that
q recent statement of the Ameri-
can railroad executives to the effect
that the roads would spend a bill
lion dollars of borrowed money in
1929 for new equipment and ex-
pansion excited widest comment
and received front page positions In |
most American newspapers. Had
the leaders kept abreast of the in |
expansion of the country |
generally during the last two |
decades. they would now be expend- |
ing that amount Of money every
year-and they would not be com !
PEELED to go to the investment
market to secure It.
LaggeI Behind.
This, then, is one of the first and
important points in the considera.
ton Of the railroad problem, name. |
ly, that in it's development It has
Jagged behind the country as a |
whole. In 1922 the whole carrier
system has only 100000 more
freight cars than they had way
back in 1912.
But what is said of the railroad |
systems as a whole does not apply /
to every railroad system in the
country. Many of them have earn
ed more than per cent of their
and have been as prog
ressive as other lines of industry in
their facilities for serv