Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-19
Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, February 19.-Fair
treatment for the railroads in respect
to highway motor competition was
called for by Rome c. Stephenson,
president, American Bankers ASsocia-
ton, speaking as guest of honor of the
Advertising Club of New York at its
special membership luncheon here yes
terday. Mr. Stephenson also strongly in
dorSed sound economic railway con-
solicitations" and praised President Hoo
yer for his initiative in this respect.
II am very strongly of the opinion
that one of the measures which would
help materially to put back business
where it belongs is approval of the
four-system plan of railroad consolida-
ton as announced recently following
negotiations instituted by President
Hoover" said Mr.. Stephenson. Its
adoption by the Interstate Commerce
Commission would tend to stabilize the
transportation industry, facilitate oper-
alton and exert a favorable influence
on business in general.
ut is fact well known to business
leaders that our railroads are now fac
ing a crisis. Not only do they need
protective laws to meet competitive sit
uationS arising from increased use of
carriers, but they need unif1cation such
as the proposed four-system plan pro-
vtdeS. Our President has acted wisely
in assuming leadership in this respect
and his move deserves the support of
every clear-thinking citizen
Railroad Service.
At the outset of his address Mr..
Stephenson declared that the railroads
have served this country 80 superla-
lively well that We are prone in our
public affairs to overlook our depend
ence upon them and our obligations to
them" Declaring that the past, pres
ent and future progress of the United
States is inseparably bound up with
the welfare of the railroads, Mr.
Stephenson said I'm neglecting just
consideration for them we are even
more neglectful of the best economic
interests of the public: These public
interests are paramount, and they are
nowhere more greatly liable to harm
than through adverse treatment of the
railroads"
Calling attention to the tremendous
direct financial stake the people of the
country have in the railroads, with out
standing railroad notes and bonds and
preferred the common stocks aggregat-
ing total of $22,000,000,0 with
$4,000 100000 paid yearly in wages, half
billion dollars in interest to bond
holders and another half billion in
dividends to stockholders, to say moth
ing of almost $4O0,000,000 contributed
annually in taxes to the support of the
Government, the banker said the vital
izing effects on our national economic
life exerted by these direct distributions
were 1ncalculable.
Mr.. Stephenson sketched the ire
mendous influence of the railroads in
the development of the country and
their rapid growth until in 1920. Since
then, he pointed out, there has been
no new construction and an actual
slight decrease in mileage In this pc
Rod freight traffic has grown, he said,
but at decreasing rate, while pasSen-
ger traffic declined alarmingly drop
ping more than one-third in the last
10 years.
Railroad earnings have suffered dur
ing recent years, said Mr.. Stephenson,
though they have shown some improve
ment since the war period, due, not to
favorable treatment or propitious traf-
fic conditions, but to hard-won ad-
vances in internal operating efficiencies
and economies produced by railroad
management itself. Enforced econ
omies have been gained in part at
and there were 100000 fewer employees
in 1880 than in 1923.
I'VE are confronted with the Ques-
ton as to how much more the public
economic interest will stand an inva-
sion of the welfare of the railroads by
forces and difficulties not of their own
creating and not within the scope of
their own unaided powers to combat, -
said Mr.. Stephenson. II refer eSpe-
cially to new competitions that are
undermining the hard-earned position
of the railroads, not only with the aid
of natural economic forces, but also
which, positively or negatively, tend to
give these competitors undue advan-
tages over the railroads.
Greatest Single Industry.
1T goes without saying that the rail-
roads have no right, nor claim any so
far as I have been able to discern, to
complain at legitimate competition in
the field of transportation, for the pub
lie is entitled to the best possible trans
portation at the lowest practical cost.
But equally does it go without saying
that this cannot be fairly brought about
by using, directly or indirectly, the tax
ing powers of Government to enable
competitive methods of transportation
to do things they could not otherwise
do as unaided private enterprises, par
ticularly when such action impairs the
invested rights held in good faith by
great masses of our people in established
enterprises that are. serving the public
we'll"
Mr.. Stephenson declared that the rail-
roads constitute the greatest single
industry in America to which the
investments and the wage-earning abili-
ties of our citizens are intruSted.
IF this great public trust is to be
protected the railroads must be able to
earn more than just enough to pay in
terest on their bonds and a tolerable
return to their stockholders, he asserted
They must be enabled also to earn a
surplus in good years to set aside against
periods of depression and at the same
time continue to carry out improve
mentS, from which the public benefits,
but which do not add to earning ca
pacity."
Mr.. Stephenson said 1t was not his
purpose to argue against such competi-
tive transportation as the highway
passenger motor bus and motor truck as
such when conducted under proper
conditions and in keeping with public
welfare and benefit. He declared, how
ever, there is need for serious consid-
Grafton whether such competition is
being developed under conditions that
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