Evening star., 1931-12-12
Railroads Plight Discussed,
But Solution Unagreed Upon

| The condition Of the railroads of the
United States continues to engage at
| tention with little unanimity as to
plans for relief.
Recognizing that under its latest
order the Interstate Commerce Com
mission has remedied an original effect
| in its reply to the petition for rate in
| creases and permits" the railroads to
administer in their own way the re-
ceipts from freight-rate increases al
! lowed in rejecting the Is per cent fiat
rate increase" the Newark Evening
| News comments The roads are not
required to pool this revenue, either as
gift to the weaker roads or as a res
ervoir of loans to them. The commits
| sion, however. expects the stronger
roads will carry out the spirit of their
! offer to make this pool a lending fund
for the weaker lines. The commission
reVerses its original order in two re-
spects Instead of requiring The addi-
| tional rates to be collected on a per-
car basis, they are revised to the ton
mage basis, which better meets the con-
venience of railroad freight operation.
| Instead of making the pooling Of the
proceeds a condition Of the graft, the
! commission leaves to the roads them
selves the responsibility of disposing
| Of this fund in the interest of the entire
railroad structure. The commission not
! only goes farther than the roads 1e-
quest that the pool be placed on a loan
basis, but admits it has no authority
/ to compel pooling at all
Lauding the change in the Commis-
sion'S policy in connection with the
gifts" from the stronger roads origi-
| nally proposed, the Jersey City Journal
holds: THE tendency Of any such gift
! policy, II it had been insisted upon by
! the I. c. c., and if it had become a
precedent to be followed by State
utility and rate-regulating boards all
| over the country, would have been to
discourage efficient management. What's
the use?' would have become. possibly,
the by-word in many utility head
quarters; and, knowing that somebody
could be compelled by the board to take
up the deficit by gift, economy ideals
would have flown out Of the window"
! X
Something of the serious condition
to which railroad securities have fallen
= is brought forCibly to public attention
by the Wabash receivership." suggests
the Goshen NeWsTimes, as it remarks
that much has been said concerning
! the Importance Of maintaining railroad
bond values, because of their wide ac-
ceptance as conservative investments by
insurance companies and other invest
| ing agencies whose holdings must
meet certain requirements as to earn
ings." On this point, the Louisville
| Courier journal in its discussion states:
The man who has no money invested
| IN railway securities, the man who is
not employed by the railroads or by
any one dependent upon them, while
[ 1inHprSta nHinu tho+ ho
! having hard time may not believe
| he Is affected nor realize lust how
seriously the situation disturbs the en-
tire economic structure of the Nation"
Ihe Courler-Journal pictures this con-
nectlon In its comment: Almost every
man has an insurance policy on his
life or that Of some member OF his
family. He knows that these pay annual
olVldends which reduce his premium
or add to the ultimate value of his
policy But does he know that these
olVldendS may be reduced or eliminated
entirely because of the railroads
| financial distress?" due to the fact that
''of the $4,000 900 900 of railroad bonds
outstanding, life insurance companies
| own one-third"
Unfair competition is listed by some
newspapers as one of the main causes
OF the financial difficulties of the rail-
roads. On this subject, the Lexington
Leader declares that "at present the
railroads are bearing an unjust burden.
They are being seriously and adversely
! anected by unfair competition. Their
revenues are falling off and their credit
Is being impaired" The Leader sug-
gests that ''the Government should
promptly provide for two things: First,
the consolidation of various systems, on
the basis already agreed upon by the
eastern lines; second, for the regula-
ton of competing carriers" Insisting
that railroad management viii con-