The Tomahawk., 1923-08-02

vide just and adequate compensation
to capital actually employed. The
above are, therefore, perfectly natural
expressions of the governments inten-
ton to deal fairly with the railroad in
dustry, both as to employees and in
vestors, and remove If possible, this
whole question from the field Of con-
troversy and litigation. We must also
recognize that the commerce of the
United States Is expanding. Our ma
tional wealth and productive power is
increasing, and our continued prosper
ity rests upon continuance of all our
favorable conditions. Our railroads
must expand, providing additional To-
comotives, cars, terminal and other IA
cilities which mean added investment.
Investors cannot be expected to put
their money into enterprises that do
not yield a reasonable return-nOr will
they-and it Is necessary that in the
future, investors may be made to feel
that the savings they put into railroad
properties are safe and secure in
vestment. Continued attacks on rail-
roads. with the intention of destroying
their credit, will do incalculable harm
to the nation"
He summed up what has been ex-
perienced under the Transportation
Act as follows:
I. IAN adjustment Of all freight
rates and passenger fares to the new
level required to put the railroads
upon sound economic basis and meet
the increased labor costs.
2. "A sudden and unexpected decline
in traffic which introduced a new diff
ficulty into the situation so that the
operations for the year 1921 were dis
appointing because they yielded lit
tie over one-half Of the intended in
terest upon the investment.
3. Reductions in rates and adjust
ments in wages in an effort to- meet
the changed conditions Of traffic"
| And then, after reviewing this and
other pertinent facts, he asked: 'DO
we want the Transportation Act to be
| continued? or, Do we want to destroy
it? The answer involves the whole
question of the public's interest in the
! subject Of transportation and how 1t
may be best served. The public's in
terest Is primarily centered upon the
amounts they must pay as passenger
fares and freight rates. These are de-
termined by four factors, namely, (D
Wages; (2) Fuel and Material Costs !;
| 90 Taxes, and "a Interest on Invest
ments. If these four elements are just
and reasonable, 1t follows that the
rates themselves must be just and rea-
sOnable. If the rates themselves are
too high, then one Of these four fac
tors is being overpaid. The public Is
just now confronted with rates ap-
proximately fifty per cent higher than
In 1917, but from every reasonable
economic point Of view, these rates
are fully justified by comparison with
the general price levels Of other COM
modities, and particularly of other
services. There Is at the present time
no perceptible slackening up Of COM
merce due to the so-called high freight
| rates, and the bare fact that the COM
merce Of the country Is moving freely
Is evidence that the freight rates them
selves are fully within the value Of
the service rendered to the public.
1.-THE Rule of Rate-making, Section
15a Of the Law, should be upheld by
every right-thinking citizen, and when
the full knowledge reaches the Ameri-
can public that 1t Is q measure con-
forming strictly to the Constitution
and as just and reasonable as human
intellect can conceive. 1t will meet
with popular approval"
MIR. Finley emphasized the fact that
1T was necessary and Is still neces-
sary. If capital Is to be attracted into
the railroad field, that the Congress of
the United States, speaking for all the
people. should assure investors in rail-
road securities that the administrative
authorities will fix rates upon basis
that will afford fair return. and that
the holders Of railroad securities will
not be relegated to the impracticable
and uncertain remedy afforded
through the ordinary channels of liti-
cation.
"While there is no guaranty con-
tanned anywhere in the Transports ton
Act, vet Section 15a does express the
policy Of giving fair treatment with
out the necessity Of litigation.
ITO repeal the Transportation Act
now would amount to a legislative
declaration that the Interstate Com
merce Commission was invited to do
an unconstitutional thing, to-wit, FIX
rates that would not produce a fair
return upon the value Of the property,
for the most that Is contained in the
Transportation Act upon this subject
is found in paragraphs two and three
Of Section 15a, and they may be
analysed briefly as follows:
"First-It is provided that the Inter
state. Commerce Commission shalt fix
rates which will produce a fair return,
as nearly as may be, upon the value Of
the railway properties devoted TO the
transportation service.