Evening star., 1934-01-20
EASTMAN'S REPORT ~
I OPPOSES FEDERAL ~
u; RAIL CONTROL NOW
"a i(Continued From First Page }

meet the vastly changed conditions
brought about by the advent Of new
| competing agencies of transportation
and their severe inroads upon traffic.
| The competition of these new agen-
cies also makes the preservation of in
tense competition between railroads a
much less important thing from the
| public point Of view than it once was.
THE familiar examples Of Federal
control in this country during the war
I period and Of the Canadian National
! System are discussed, and are shown
not to constitute convincing arguments
| against public ownership and opera
ton.
Would Effect Remedy.
| THE report finds that public owner
ship and operation would go further
than any other remedy to abate the
| railroad ills described.
, Public credit would take the place
Of crippled private credit.
Management and operation Of the
| industry would be wholly united. Pub
lie regulation would largely merge with
management and operation. Financial
domination would cease.
THE important questions are whether
other ills would take the place of those
abated, how serious they would be,
whether public opinion is ready for so
radical change, and how difficult and
perilous the taking over of the proper
ties would now be-"
| The commission then noted what 1t
called various real dangers" incident
to public ownership. The greatest of
| these, however. was named as the cost
| OF acquisition"
4 rTVl- -
quotations on various other parts Of the
! report:
Recently in view Of the rapid de-
velopment Of competition from other
| transportation agencies. the thought
has developed that a wiser plan would
| be one which would give major con-
| sideration to economy and less weight
| to the preservation Of competition (ln
the matter OF consolidation).
Merger Steps Outlined.
"The first Of these studies, called the
| Craven study, is attached as an appen-
! dix to the report. 1t reaches the con-
\ clusion that consultations can be COM
| PEELED and by a process, If need be.
which will involve an exchange of Sc
| curitieS without the use of cash.
| The report states that the railroads
could probably be put together under a
| grand plan of consolidation in a way
| which would result in a material re-
! duction in fixed charges. and that
| by the economies which would ulti-
mately be realized. although it would
take time to bring them about.
Such a plan would be open to some
| OF the objections which are raised TO
| h to tNVFN
| further disadvantage is that such plans
ordinarily would eliminate railroad
competition at many points. but still
retain it at others. The present un-
even distribution Of competition would
be accentuated with enhanced danger
that population and business would tend
| to concentrate at favored points
Another means of dealing with the
! ills Of the railroad situation is out
! lined The report finds that theoreti-
cally and logically public ownership and
| operation would be the best remedy
| However, the co-ordinator does not
now recommend 1t for the principal
reason that the country is not now
| financially in a condition to stand the
| strain of an acquisition of these great
properties, imposing burdens which
cannot be definitely foreseen and might
disproportionately severe
Inclusion Of Others Seen.
doubt is also expressed whether the
| railroads alone could be nationalizec
without including other forms of trans
port to q considerable extent.
1T is recommended that the present
co-ordinator plan be continued. as II
can be under the act. for another year
but it is recognized that it needs
further trial before it is given any fina
form
The co-ordinator expresses the
opinion that the Office should not as
sumo the form Of a bureaucratic estab-
lishment, but should be carried on with
q comparatively small and flexible staff
1T should be regarded as a means OF
Government aid to, rather than domi-
nation Of. the transportation industry
The emphasis should be on the private
managements and they should be aided
in the development of initiative ano
enterprise rather than restrained.
The co-ordinator should lend his
aid to the promotion Of leadership IN
the industry, to organization for com
mon ends, and to the initiation OF gen.
eral studies of various phases Of opera
ton. service. charges and management
| where such studies are needed
He should in short be primarily
means Of concentrating and bringing
to focus the best thought of the indus
try. rather than a means of supplying
or imposing thought from without
Various other suggestions in regaro
to the work of the co-ordinator are
made. including one that his field OF
activity should ultimately be extended
over all transportation agencies Whlcf
are subjected to Federal regulation
80
"On the subject of railroad credit
the report indicates that credit from
private sources will be negligible To-
some time During this temporary pc
riod Government credit should be ex
tended freely. to the extent that there
is reasonable security. for sound ant
well-considered expenditures which vii
add to employment and improve serV
ice to the public.
While the report does not favor tn
adoption of an immediate or gradua
grand plan of consolidation, the con
clusion Is reached that provision fo
compulsory consultations should bt
given O trial, but only where the com
mission finds, after full public hearing
that the consolidation would be in the
public interest, and only where the CO.
ordinator recommends that proceed
ing looking toward compulsory consoll
/ dation be initiated.
TT is thought that the method pro
posed for compelling consultations b.
the exchange of securities would hav'
elements of much public advantage
particularly IN reducing the speculative
evils of railroad unification projects"