The Tomahawk., 1923-05-10
IN DEFENCE OF THE TRUTH
By THE Rev. H. C. HENcELL, Phi. D.
Reprinted from the Capital Times Of Madison, Wis

| per cent to Any railroad in the coun-
try. If, in the face Of constant gov
ernmental regulation and revision Of
rates and wages any railroad is so
marvelously well managed as to be
| able to show net return Of 5% per
cent with which to pay interest on its
bonds, etc., it is, under the Esch-Cum-
minis act, entitled to the 5A per cent.
but no more, no matter how efficiently
it may be managed. Thus, while the
Esch-C ummins act limits the possible
net earnings Of the railroads to a
maximum Of 5A per cent, 1t no more
guarantees anything to the railroads
than the Volstead law guarantees one
half Of one per cent alcohol to the
users Of near beer.
We are further told that the rail-
road stocks are largely "water" and
that the poor, long-suffering public Is
expected to guarantee 5A per cent
return to this "water." This charge
Is also false.
The physical valuation, without ref
erence to stocks or bonds (capitaliza.
tion), made under the LaF gillette valua-
ton law of 1918, plus actual cash in
vestments made since, less deprecia-
ton, Is greater than their capitaliza-
ton by millions Of dollars. In other
words, there is no room for the al
legged "water" in the railroads even
under the Eighteenth amendment.
1t may be true that shady deals In
over-capitalization (watering) Of rail-
road securities may be proved in some
notorious instances, but these cases
should be specifically named and con-
demned without involving all the rail-
roads. It Is unjust to make sweep
ing generalization preparing to depreci-
ate the value Of railroad securities to
the value Of German marks, a process
which amounts to ruthless confiscation
Of the property Of railroad stock and
bond holders. Russian sovietism goes
no further than this.
A further lie against the railroads
that deserves to be nailed is the
charge of excessive freight rates, Of
rates so high as to rob the farmer
! and other producers and the consumer
alike.
Records show that the average
freight rates on western railroads are
only about 40 per cent higher than
they were seven years ago, while wages
are 80 per cent; taxes 80 per cent {;
fuel 100 per cent higher than they
were at that time. Stories Of freight
rates higher than the total price re-
ceived for wheat, ETC., are pure bun
combe. In January, 1923, wheat was
S1.25 a bushel at Minneapolis, that
is, 40 cents higher than in 1918. The
freight rate from points as far as
South Dakota was only four to five
cents higher than in 1913.
I hold no brief for the railroads
or for any other industry, but I lone
fair play and detest unfair propo-
ganda. I am a Catholic priest, but
l write neither as a priest nor as a
Catholic, but as an american Citi-
zen who vIews Nth alarm, the crea-
ton of prejudice and class hatred
by men and organizations, not rec
ognized as socialists or communists,
but imbuedwith the same destructive
philosophy, and pursuing the same
ruthless methods. Ignorant or mo-
hcious, they are endangering Anne"
ican ideals of freedom ofopportunity
in favor of the servize state in which
citizens in business as weU as poll
tics, wil be the prey of scheming
Observation-Disclosures