Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-01-02
THE PROBLEM OF THE RAILROADS
NI-The Problem Of Consolidation
By ]. E.. D4IJS
Director General Of Railroads OF III. nifed Stofs

The much discussed question ot
consolidation" OF railway systems. re-
ferred TO in my fifth article, calls Tor
amendment OF the national transpor-
tation act This change and The
change pertaining TO unequal earn
ings. however constitute the onIN
amendments necessary At this time.
Otherwise the existing law operates
Iadvantageously and under il re
markable record of progress is being
made bv the American railroads.
A general plan for the consolidation
Of the ra ilroads of this country into
limited number OF systems, to the
end that a uniform schedule of rates
will as nearly as possible bring about
substantially equal earning capacity,
would seem TO be desirable result TO
attain and necessary IL the present
system of uniform rate making is to
| continue Senator Cummins. whose
! name is attached to the transporta-
ton act. and who was chairman of
the interstate commerce committe" OF
the Senate when the act was passed.
| and has perhaps given more detailed
attention 10 the subject of transporta
ton than any other man in public
| life. said
1T has been utterly impossible for
! anv body Of men TO make a system of
rates that will sustain the weaker
| railroads of the country without Civ
! ing the stronger roads an Income eX-
| cessive and intclerable in its extent.
a nd there lies the great funda mental
| obstacle to our system OF rate
making"
At this time. when the railroads of
the country can be said as a whole 70
| be fairly prosperous, the difficulty of
applying uniform rates to carriers
| serving the same territory is appa rent.
/ The great agricultural district Of the
! Middle West furnishes perhaps the
most acute example of the inequita BILE
| results Of uniform rates in their effect
upon properties equally essential in
! the point of public service. but I'M
equal in producing net earnings.
! In this territory, actively competing
for business and more or less depend
ent for a large percentage of income
upon the products. of agriculture and
the products of animals, are the Bur
| lington. the Santa Pc. the Union Pa
| cific and Illinois Central. BY rea
son of advantageous location, and in
some cases comparatively low fixed
charges. the companies just named al
| SHOW NulIe TedSOioDlc 1itt col
sufficient to justify compensatory divi
bends on their capital stock. In the
same territory are the Northwestern
the Rock Island the Milwaukee, the
Great Western and the Minneapolis
and ST. Louis. But one of these com
panies Is now paying any dividend or
common stock, and this dividend has
been reduced to T. per cent, while two
of the systems are in the hands of re
ceivers.
| Efficient service is as essential tC
the public from the non.prosperous
companies as is the demand for such
service from those companies that are
producing fair net earnings. 1t Is
manifest that public commissions are
reluctant to Increase the earnings OF
those companies which are now max
ing satisfactory showing of profits
lin order that less prosperous com
ranies can return to their owners
some compensation for the Use OF
their property. and it is situation
like this that general plan of con
! solidstion seeks to correct.
| 1t is very easy to announce genera
principles for consolidation. 1t is prac
ticallv impossible to apply these rules
| to existing conditions. 1t seems to be
conceded that the present law, provid
ing for a complete plan, and specify
Ing that all consultations must he In
accordance with that plan, Is imprac