Evening star., 1938-04-06

railroads have had their old-age pen
sion scheme, whose expense today has
not been offset by adequate revenues.
The railroads, moreover. have had
their price-fiXing problem because the
I. c. c. fixes the price of freight
Also, the roads have had their Wagner
Act because collective bargaining has
been matter of law for many years
They have even had their legal
battles over what constitutes a fair
valuation" Congress having spent
millions of dollars to determine the
true investment.
Profit Limited.
What's more, the railroads actually
have had their rate of profit regulated
so that all sums in excess of a certain
per cent had to go to the Government.
One can scarcely think of a New
Deal regulatory measure that has
not been tried on the railroads.
So the railroads, having been regu-
lated to death, are now begging for
a chance to breathe. They need help.
And the Roosevelt administration is
struggling with the problem, knowing
that, if the railroad situation becomes
worse, the general business situation
Will be that much more difficult to
cure.
If politics could be kept out of the
railroad problem and if some of the
laws Of supply and demand and free
competition were permitted to func-
ton. there would be no acute railroad
problem. AS it is. the railroads are not
allowed to charge an adequate price
Tor the transportation services they
render, nor can they reduce their ex-
penses because the political strength of
the administration blocks the way.
Get Third of Loaf.
1hus few months ago, the rail-
roads asked for IS per cent increase
in freight rates and the I. c. C. gave
them only per cent.
Also, less than six months ago, the
railroad unions insisted on a wage
increase and forced it on the rail
executives under threat of a strike.
The railroads feel that last increase
was big mistake and the item should
be removed at once. But Mr.. Roose-
welt, for political reasons, says there
must be no wage cuts.
When political government inter-
venes to use the regulatory power for
Its own purposes and in opposition to
sound economics, confiscation of prop
critics ultimately results. because busi-
nesses that cannot operate on sound
lines find themselves in the red and
the Government eventually is COM
PEELED to take a hand.
The railroad labor chiefs thought
the way out was to get the Govern
ment to furnish subsidy. They urged
the plan this week at the White House
Now President Roosevelt has said
firmly there can be no subsidies, for
II the precedent is established with
respect to one industry, it will spread
to other industries and the Govern
ment would go bankrupt. Mr.. Roose-
Velt comedies that Government owner
ship should not be considered, because,
he says, that would put the railroads
deeply into politics.
Help Would Affect Many.
All in ALL what is to be done? Con-
solidation of parallel systems is
theoretically good plan. but it is
something for the long range. The
railroads need help in the next few
months if adequate transportation
service is to be maintained and if
insurance companies, educational in
stitutions and others who hold railroad
securities are not to suffer severe
financial losses.
The sound way is to let the railroads
operate their businesses as nearly as
possible as other private businesses are
operated. One thing is to remove un-
warranted pay increases recently be-
slowed or to insist that present per-
sonnel increase the amount of indi-
vidual service given. For the figures
show that there has not been corre-
spending output per man, so to speak,
as recent increases in wages have been
granted
The next thing is to renew the plea
before the I. c. c. for increased freight