Evening star., 1929-12-14
BY CLINTON COFFIN,

Has the Interstate Commerce Com
mission power to compel an unwilling
| railroad to make important extensions
into new territory? The majority OF
that body has so ruled, despite some
dissent within its own membership, and
by so doing has probably iaised an
| issue in the field of transport regula-
ton which will eventually demand a
settlement from the Supreme Court.
The commission has ordered the Union
Pacific system, through subsidiary,
to raise and expend within three years
between $e,o00,00o and $12,0oo,0O0 for
the purpose of constructing. 1S5 miles OF
new railroad, constituting an east ana
west line through the center OF oregon.
and while the circumstance and Sit
nation of the contemplated conStruc-
ton is intrinsically important, railroad
| LAWYERS and railroad executives ATE
| practically all agreed that the lm-
portance of the precedent set rather
outweighs all other phases OF the pro-
| poSal.
In the long contest that has pre-
| ceded the decision, legal representatives
| of the Union Pacific System have SET
which the railroad world cannot be
| expected to relinquish unless it is forced.
In substance, this view is, that once
| CAPITAL investment has been committed
| to public service, Congress ana tne
! Commerce Commission, as congress
sional agents, have very complete con-
| troll over its use. But that either the
commission or Congress can compel the
investment of new capital In sucn
service, against the will of owners ana
managers of the capital, represented as
| thew are by railroad corporations, has
been declared a proposition supported
neither by existing statutes nor by the
Constitution. Nonetheless, q majority
| of the commissioners, with WhaC can
| be assumed to be good legal advice,
holds that the law permits them 10
order a railroad to extend ltS lmes,
unless the expenditure entalled would
be so great as to impair the aolllty OF
the corporation to keep up ethc1ent
operations. Since the Union Pacific in
recent years has been earning 10 per
cent and upward on the par value OF
its outstanding capital issues, which
are in excess of $733,0OO, 900, the de-
cision says there is no question OF It's
ability to meet the cost.
However the matter turns, 1t appears
| that a new milestone Will be lald on the
roadway and common carrier regulatlon
by this proceeding. The decision does
not appear to have been an easy one
for the commission to reach, but the
Oregon State Public Service Commits
sion, by repeated petition, has insisted
upon the issue being met, though two
of its first applications in the held nave
been dismissed That State, most
thickly settled on its Eastern and West
ern margins, has SparSely populateo
and unproductive interior, which has
been avoided by all pioneer railroad
construction, until the area has come
to be what the commission finds /:
"the largest area in the United States
without rail service" Eastern anc
western rail movements from one side
of the State to the other have to benc
either South or North for consumma'
tion. incurring much longer hauls thar
the airline distance would involve
Nevertheless. the railroad management!
see no prospect that the traffic develop
ed by a new Straightcross line WoulC
be sufficient to rccoup the capital IN
VeStment, and the Federal commission
! tacitly accepts their Judgment IN re-
marking that anticipated lack OF earn
ings on the ordered investment viii
have to be regarded by the Unior
. Pacific system as part of the cost O.
maintaining proper service.
Aside from all merits or dement's oi
the policy laid down by the commission
it seems to be the financial view thai
acceptance of the principle that sub.
stantial new railroad investment in raj
facilities can be requisitioned into serv.
ice by Government regulation will seri
ously modify outlook as to Fundamental
values of railroads as property.
People in and around the textile in.
dustry are inclined to do the best they
can-and If they can--to maintain PEI.
sonal neutrality while the great wal
between short skirt and long skirt style!
is being fought out in the dress nartS