Evening star., 1934-01-21
LAWS TO AID RAILS.
HELDUNL|KELYN0W
Eastman Advises Against
Public Ownership of Lines
at Present.
~ the Associated Press.

Dy the Associated Press.
A disposition in Congress against. any
attempt to cure railroad ills by legisla-
ton at this session was apparent yes
terday after Joseph Eastman, co-ordi-
nator of transportation, advised that
public ownership seemed best in the
long run, but any step toward it seemed
unWiSe now.
All in all. in answering the congress
sional question whether radical or
major changes were needed for the
railroad industry, Eastman said the
time was not ripe for any sweeping
changes, but he gave the advocates OF
complete Federal control considerable
comfort.
Theoretically and logically" he said
In an exhaustive review, public owner
ship and operation meets the known ills
of the present situation better than any
other remedy"
Burden Too Great. .
There was comfort too, for the other
aide in this statement:
Nevertheless, l am not prepared 10
recommend resort to pubic ownership
and operation. This is for the prmclpaI
reason that the country is not now
financially in a condition to stand the
strain of an ACQUISITION of these great
properties, imposing burdens Whlch can
not be definitely foreseen and might
well in present circumstances, De ols-
Y,roportionately severe.
Immediately after the report was
made public, leaders on Capitol Hin eX-
pressed the opinion that general rau-
road legislation at this session was un-
likely.
state Commerce Committee, SAID: ~
would seem there would be no general
railroad legislation at TINS Coneisoe, ,
adding that clearly there has not been
annple time to work out plans for gen.
erai revision of the railroad structure:
Eastman said. however, that Dill
is heinp drawn which would amend the
present interstate commerce act 10
give the Interstate Commerce Commls-
sion power to compel consoloatloils
where they are recommended by the
co-ordinator and full public hearings
conducted. The commission now can
approve or disapprove consultations
but cannot lOrce lneIH.
No Radical Changes.
But he expressed himself as opposed !
to any sweeping consolidation, either |
In the near future or over short !
period of years.
There are possibilities in the stu
alton" said Eastman. which l believe !
make it wise, quite apart from exist
ing economic conditions, to postpone
the immediate consideration OF any
radical or major change IN the organ
zation and conduct OF the railroad
industry"
The report was the first of four East
man will make to Congress. The others
will deal with need of regulation of
buses trucks and airplanes: the need
fer amendments TO present regulatory
statutes and possible additional labor
legislation. Legislation for truck and
bus regulation already has been intro
duced in the House. |
Reports bv w. B. Poland. appointed
to study consultations, on the plan
submitted to the President year ago
bv Frederick H. Prince of Boston: a
proposal for forced consolidation
through exchange of securities over
Leslie Craven, law professor at Duke
University and a tentative plan for
Government operation were included
in the data submitted.
The Prince plan, the report said
would not save as much money as its
proponents had first claimed. The
Craven plan was tagged by Eastman as
worthy of study.
Economy Banned.
Eastman said a grand consolidation
plan was impractical now because the
country could not stand the contro-
verSv that would be precipitated.
He also noted that the co-ordinator
has been prevented from issuing econ
only orders by the ban in the emer-
gencv act against anv orders that would
reduce raiload employment.
''Disregarding the practical diff
Guilty" Eastman said of Nation wide
consultations. Il am convinced that
such a consolidation would have to be
compelled and that 1t would not be wise
even if legally possible to force so
radical and far-reaching a change upon
the country under present conditions"
Nor am persuaded" he added. "of
the merits of any plan of consolidating
the railroads into a very few systems
which must follow and emphasize
lines and retain, but at the
same time vitally disrupt, competitive
conditions"
Public regulation of a privately
owned and operated industry, reaching
deeply into such matters as rates. serv-
fee. capitalization. accounting. extern
sions and abandonments. mergers and
consultations, is a hybrid arrange
ment Eastman said
Control Needed.
"WI,ep on ird,,etr,, hecor,ee en- rI,l,lic
In chara cter that such intimate regu-
lstion of its affairs becomes necessary,
In strict logic it would seem that it
should cease to masquerade as a pri-
vate industry and the Government
should assume complete responsibili.~
financially and otherwise.
While there are dangers incident to
any governmental undertaking so there
are to any private undertaking and to
any private-public undertaking. The
history of the American railroads is
proof enough of this fact There Is
reason to believe that many of the dan
gers which are ordinarily seen in pub
lie ownership and operation can be
brought under control. However, If
and when that time arrives, the i'm
pelling motive will probably not be
logic or theory. but the practical one
that private enterprise and capital will
not be able to carry on successfully.
That has been the general experience"
But he said that the financial diff
culties involved at present in Govern
ment ownership would be enhanced by
the fact that there would be a COM
paratively long period before the new
system could be got into a smoothly
running order and by the further fact
that the railroad industry now is in