Evening star., 1937-01-17


not impossible, however, that the time
may come, as it has come in other
countries, when the system Of private
ownership and management will break
down for reasons beyond control. 1t
is not unwise to give some thought TO
that possibility, at least to the extent
of considering the best possible plan
for public ownership and operation, il
it should become necessary"
Railroad management-and un-
biased obServers-are convinced that
destruction of credit alone would
bring Government ownership and that
this now would come only through
adverse legislation preventing the rail-
roads from operating economically.
Chances are at least fair that the
entire situation will be materially
cleared by the conferences upon which
the brotherhoods and railroads have
embarked at the instance Of Presi-
dent Roosevelt for the primary pur-
pose of doing something about the
railroad retirement act, whose taxing
provision soon expires. Once knocked
out by the Supreme Court, and again
attacked by the industry, this law is
estimated to cost the lines $50. .000. 900
annually at the outset. The s35,00O.-
600 annual unemployment tax levy
under the social security act is another
item which the railroads are en-
countering-and not very happily
although there has been no concerted
move against II.
Another Adverse Factor.
Another adverse factor which the
industry undoubtedly will seek TO
eliminate is the tax on undistributed
earnings, and here it can count on the
support of the Interstate Commerce
Commission, which has sharply at
tackled the tax as a deterrent to the
requirement it has consistently i'm
posed on the railroads, namely, the
building up Of uncapitalized surplus
for various needs.
During the depression years, the
usual equipment and maintenance
expenditures went by the board, the
latter to such an extent that "the
results are now becoming apparent in
our accident records" Commissioner
McManamy said in his dissenting rate
opinion, and that condition cannot
continue. In the past year. the main
tenance account was billion and a
quarter dollars, and while that was
the high mark since 1880. it is only
half of the figure for 1923-1929. which
gives an idea of what ordinary needs
are in this respect.
There are several pieces of legislation
that the roads would like to see put
through on their own account
They are back again urging enact
ment of the Pettengill bill to do away
with the long g-and-short- clause
of the interstate commerce act, which
holds rates over long distances in line
with those for the intermediate points
Now the 1. c. c. must approve varia-
tions; under the law sought, the roads
could put them into effect without
this prior sanction. but the commits
sion would have veto power.
Railroads are urging this in the
interest of meeting competition, prin-
cipally by that of the water carriers.
Regulation of the latter also will
be sought again, and the railroads
will have some support from the I. c. C.
here also. The commission again is
calling on Congress to vest it particu-
larly with power to prescribe minimum
water rates for joint rail-water move
mentS. The railroads can be counted
on too vigorously to oppose the st.
Lawrence waterways project which
gives evidence of reviving.
Discrimination Guide"
incidentally, when Congress gets
around to railroad matters this year,
there should be a definite guide
available as to the extent the indus
try suffers from discrimination be-
cause of the Federal and State aid
granted other carriers An investi-
CATION dealing with this issue that
is constantly raised by the railroads
was started by Eastman while he was
co-ordinator of transportation. and
the report is in its final stages.
The past year saw the railroads
successful in their efforts to have
motor lines - principally contract
trucks - brought under regulation,
the law passed in 1885 finally going
into effect in April In the interim
the motor carriers have been doing
their best to put their industry on a
sound basis in the light of changed
and changing conditions, while the
railroads have been moving in the
direction of making rates comparable
to those on the highways.
Confronted with a multitude of
new problems in administering the
act, the commission has been bending
its effort to prevent abuses, while at
the same time safeguarding the
rights of everybody involved.
The commission believes the act is
workable and will be beneficial.
1t is the general consensus that
the railroads took long step toward
meeting bus-and even private car
competition in the East this past year
when the commission forced down
passenger fares, holiday travel, II
nothing else. lending strength to this
argument. Vast improvement also
has been made in equipment and
schedules, trains carrying everything
from nursery to cocktail lounge, and
getting over the road in time un.
dreamed of few nsaths ago.
Freight service is keeping in step,
and with the pick-up-and-deliver
plan spreading. the carriers are bet
tering materially their competitive
status. Carl R. Gray. president of
the Union Pacific, recently told ship
pers at Spokane that he expected, to
see the 1929 traffic level exceeded.
So it looks like the next few months
are going to figure Importantly In the
future of the railroads.