Evening star., 1934-12-23
The Trend.

The United States Government mas
taken over a railroad pending the
repayment of a loan made by the
Reconstruction Finance Corporation.
The railroad is not big company
as railroad systems 60 in this coun-
try. 1t Is the Denver & Salt Lake
Railroad in the Rocky Mountains, usu-
ally known as the Moffat line. The
late David H. Moffat, Denver banker,
started its construction more than
thirty years ago.
This is the first time since the
railroads Of the country we're turned
back to their private owners after the
World War that Uncle Sam has as
sumed control of line. The respon-
sible officials of the Government, in
cluding Jesse Jones, chairman of the
r. F. c., insist that this does not
mean that the Government is going
into the railroad business, or that it
desires to go into that business. The
implication is there, however, as we'll
as the vast possibilities. The rail-
roads have been heavy borrowers. Un-
less they are able to maintain pay
ments of interest and principal the
Government may, perforce, have to
step in and take control to protect
its financial interests in these
properties.
Government ownership and opera
ton Of the railroads has been agitated
for many years, particularly by "lib-
erals" After the country's expert
ence of Government railroad opera
ton during the World War the pub
lie seemed to be interested in having
the roads go back into private con-
troll. Numerous problems are in
volved in Government operation of
the railroads in addition to that Of
efficiency. One of them is the possible
creation of great political organi-
cation and an extension of bureau
cracy. Another is the fact that en-
ployes Of the railroads would become
employees of Uncle Sam, and the whole
question of labor relations, including
collective bargaining, the strike, etc.,
would take on different aspect.
The railroads have become the most
regulated industry in the country. The
Government tells them what rates
they may charge. 1t passes on all
loans and refinancing. Whether or
not this maximum Of Government
regulation is responsible, the railroads
have had tougher and tougher time
as the years have progressed. Many
other factors have entered into the
picture, among them competition from
automobiles and the air transport. No
one would suggest, probably, that the
railroads should be left without regu-
lation by the Government. But there
is the question Of degree, and how far
the Government hand may go without
sitting competition and efficiency.
The present administration appears
to be bent upon going into the devel-
opment of electric power in very con-
siderable way. 1t is not content with
the regulatory powers which the States
and in some instances the Federal
Government has over this newer pub
lie utility. 1t proposes to build
power plants and to sell power to
the public as well as to governmental
institutions. In this respect, the Gov
ernment appears to be going a step
further with the electric power indus
try than it has sought to 60 in the
past with the railroads.
The trend toward Government entry
Into business of one kind or another
has become more and more marked. It
began as a recovery measure and is
being continued for the present largely
on that same basis. But there are
indications that more permanence of
Government in business may be ex-
pected. This is not healthy condi-
tion, nor would it be so in the future.
Many excuses may be made for Gov
ernment control and operation. The
Government may even appear benefi-
cent to hard-pressed industries. But
in the end Government in business
means strangulation of private indus
try and erterprise