Evening star., 1932-07-10
FAIR CHANCE FOR RAILROADS
URGED BY MAGAZINE EDITOR
Samuel 0. Dunn Declares Present Condi-
ton of Carriers Due to Economically
Unsound Government Policies

ton being fulfilled is unquestionably
true; but, as student for more than
a quarter century of every phase OF
our national transportation problem, /
assert that If Senator Couzens' prophecy
is fulfilled. it will be due to continuance
by our National and State govern
ments of the most unfair and eco
nomically stupid policies ever applied
to great and essential industry in
the history of this or any other country
He bases his prediction on the pro-
spective effects of the competition Of
other means of transportation. II this
should be the outcome, In what ways
would It affect the economic recovery
ef the country? First, If, as Senator
C>S1ens anticipates, the railways will
be able to earn a return upon only
some $1e,000,000, 900 of their present
investment, there will result the de-
struction, not only Of the value Of COM
mon stock, but also of the value Of
large part Of their bonds and other Sc
curities. Second, their ability to give
employment directly will be perma-
nently reduced by at least 100000
men and their ability to give employ
ment indirectly, because of the curtail-
ment of their power to make purchases,
will be reduced by at least another
100000 men, thus rendering 1t neces-
sary to release 100000 men to seek
new employment. Third the property
abandoned and destroyed will be princi-
pally in rural territories, which rely
largely or mainly upon 1t for taxes with
which to support their schools and local
governments, and they will be forced
either to greatly reduce their school and
local government expenditures or to get
the necessary taxes from other sources.
This destruction of railroad securi-
ties and property, this reduction Of
railroad employment and purchases and
the changes in taxation necessitated
economic recovery, and the effects would
be felt in every part Of the country for
years. Furthermore, the inevitable re-
suits will include Government owner
ship Of railways, because private enter
prise will certainly retire from the In
dustry If these policies are continued,
and will let Government incur the po-
litical danger of running it and the
taxpayers assume the huge losses that
inevitably and permanently will re-
suit.
Remedies Suggested.
What should be done to enable the
railways to recover when general busi-
ness begins to revive, and thereby en-
able them to aid in, and not retard,
the general recovery
u Withdraw from the Interstate
Commerce Commission and from all
State commissions all power to regulate
rates excepting to correct and prevent
unfair determinations. In 1910 free
dom to initiate rates was taken from
railway officers by giving the Interstate
Commerce Commission the power to
prevent proposed changes, and that
power has been more and more abused
by the commission to restrict railway
earnings in periods Of prosperity until
we are now confronted with the in
evitably consequent railroad financial
debacle in a period of depression.
"2. Apply by appropriate legislation
the same prohibitions and penalties re-
garding unfair determinations to all
carriers by water and highway that are
now applied to the railways and require
them to be enforced against all other
carriers by the same authorities that
are now required to enforce them
against the railways.
''3. Withdraw every vestige Of SUBJ
sidy from all carriers by requiring them,
by appropriate National and State leg
islation, to pay sufficiently for the use
Of waterways and Highways to relieve
the public of all taxation now borne by
it resulting from the use of public prop
erty for transportation for profit in
competition with the railways. Neither
in equity, law or sound economics is
any body entitled to use public prop
erty for private gain without paying
the public full compensation for its use.
a. Give to the railways by appro-
pirate legislation the same rights to
operate trucks and buses upon the
highways and boats upon the water
ways as are given to any other COM
pany.
"All that this proposed legislation
would do would be to give railway
managers the same power to manage
their business that managers of other
business concerns have, and opportunity
to compete on equal terms and with
out Government favoritism with other
carriers. The existing policy of regu-
lation was based upon the assumption
that railways were a monopoly. Largely
as q result of Government aid to other
carriers, transportation has now be-
come perhaps the most highly COM
petitive industry in the United States.
Why continue to treat the railways as
monopoly when they are meeting
with competition on every hand, and
when continuance Of a policy predi-
Gated upon an assumption that has
become obviously false can only be
unfair, destructive to an essential
industry its security owners and en-
ployes, and thereby, in large measure,
destructive to the public welfare?"