Evening star., 1933-02-23
Belief i'm Future of Railroads
Draws Attention to Report

place. They are beneficial as auxiliaries,
but the big pull must be by the rail-
roads"
"The committee has in mind, appar-
emily, a national system Of railroad
transportation, with no further effort to
supplement public regulation with COM
petitive regulation" comments the Day.
ton Daily News. by that means, the
committee hopes, the cost Of operation
of railroads can be so reduced as to
enable them to give proper public serv-
ice and meet their interest payments.
Something akin to this has been the
established policy of the Government
for years. Why hasn't the thing been
done? Because the railroads themselves,
struggling for advantage among them
selves, have opposed and prevented the
move"
with regard to certain railroads"
declares the Buffalo Evening News,
there is manifest need to reorgantze
the capital structure, railroads that nave
been run by and for financial manipu-
lators rather than by transportation ex-
perts working in the interest OF the
public and the stockholders. The COM
mittee makes pointed reference to these
carriers"
Many students, not only Of trans
portation, but of public utilities In
general" in the Judgment Of the New
ark Evening News, will approve the
committees recommendation that pres
ent made-to-order valuation metnodS
of arriving at rate bases for railroad
purposes should be scrapped- One OF
the best sentences In the whole report,
because it is plain common sense, Is
this: We see no reason why the rate
making rule should not say In plaln
English that railroads are entitled 70
make a reasonable profit based upon
costs of efficient operation, and that
they are not entitled to earnings mere,
" to preserve present structures II
overcapitalized.' The Rutland Herald
AYERS: 1T blasts, almost with breath,
the theory of allowing the railroads TO
earn on mythical capital structures or
oyervalued properties, and 1t also de-
stroys the similarly obsolete idea OK
limiting their profits by the recapture
clause"
Charges of inef1ciency on the part or
the railroads are made by the Sioux
Falls Argus-I,eader, the Port Huron
Times Herald, the Abilene Reporter
and the Danbury News Times. That
the report will influence policies Is the
conclusion of the Cincinnati Times
Star, the Hartford Times and the To-
peka Daily Capital. The Uniontown
Herald believe that this seems "a poor
time to unsettle the rate structure"
On regional consultations, the Wall
Street Journal points to the obstacle
that 1.-The Sherman and Clayton acts
are stiI the law of the land" The Bal
timore Sun remarks that the proposal
e. Hchnilln
be welcomed by those who believe In
Government ownership" On the sub
ject of rates the Houston Chronicle
asks: How can we estimate the rea-
sonabIe costs of operation without con-
sidering the invested capital?" The
Altoona Mirror comments: What or
the future? Some sort of regulation Is
needed for railroads. 1t may or may
not be further regulation. Railroad OIL
ficials agree the railroads have been
over-regulated by outside influences.
Should freight and passenger trafnc
exclusive of private transportation be
returned to the railroads as they exist;
should the railroad be consolidated In
an attempt to bring it back, or is there
a better cure for railroad business yet
to be exploited"
"The committee believes" says the
Philadelphia Evening Bulletin, that
current earnings of the railroads should
provide for the amortization of debt
during a reasonable period OF life and
efficiency for the plant for which the
debt is created. The perpetual railroad
mortgage, or bond, is one of the bur-
dens of the present railroad problem.
One of the lessons Of the present sit
uation, applicable in every other enter
prise as in railroads, Is that the crea-
ton Of debt, the making Of the mort
gage, ought to bs accompanied by a
definite plan for its amortization or
"The report" says the
Roanoke Worid-News, should give
impetus to the movement
for the retroactive repeal Of the re-
capture clause, both as unworkable and
as based on an unsound premise>~~1h
has already cost a great many millions
Of dollars for valuation work that Is ad-
of little practical value, and
that becomes obsolete before it can b