The Western news. [volume] (Libby, Mont.) 1933-current, 1938-08-11
SEEN and HEARD
around the I
NATIONAL CAPITALl
BY Carter Field +
FAMOUS WASHINGTON CORRESPONDENT

Washington. - Most congressman
and government officials who have
studied the situation, and practically
all bankers, will tell you privately
that government ownership of the
railroads is inevitable. The flnan-
cial situation of the railroads grows
worse by the month. More and more
government money, via the RFC,
is being poured into the doomed
financial structures. Which merely
means that they are tided over the
immediate emergency, whatever it
may be in each individual case, and
therefore will have a harder row
than ever to hoe from now on. For
there will be interest, not to mention
sinking fund, for the additional debt
so kindly advanced by the govern
ment.
Politics being what it is, no one
can think of any solution, not even
President Roosevelt, who is more
willing to be helpful to the railroads
than to any other industry Yet the
apparent fate of the railroad compa-
MES is actually bad news for nearly
everybody.
It is very bad for the stock and
bondholders, of course. And in turn
it is bad for the people with whom
these investors have been spending
their money, for obviously they will
spend less when the day comes.
1t is very bad for the treasures,
and therefore for the politicians and
taxpayers of every state in the I'm
ion. For at present the railroads
are paying staggering amounts of
taxes to state, county and city gov
ernments.
1t is very bad for the federal
Treasury, for not only do the rail-
roads pay a huge load of federal
taxes direct to the Treasury, but
their officers, high-ranking employ
ees and security holders sweeten
their own individual income taxes
no little because of the fact that the
railroads are privately owned.
Bad All Around
1t is bad for the federal Treas
ury, and therefore every living per-
son (for everyone contributes heav-
lily to the federal Treasury, directly
or indirectly, to an extent which
very few realize) for another rea-
son. Scarcely single government
official or member of congress be-
lieves that federal operation of the
railroads will be as economical as
private management. Hence the
prospect is that when the day comes
the railroads will quickly become a
burden on the government.
Politics being what 1t is, no really
drastic plan to avoid this approach
ing catastrophe seems likely of
adoption. AS a matter of fact, none
lis being proposed.
No man running for office, for
example, would be likely to propose
that the railroads be liberated from
all regulation, to follow their own
judgment or that of their individ-
ual officers, with view to seeing if
they could not work out their own
salvation. On the contrary, there
has been very little criticism of the
interstate commerce commission
for refusing recently to permit the
railroads to increase certain rates,
despite the fact that the I. c. C.
made its decision not because it did
not think the roads entitled to the
additional money, but because it did
not believe the proposed increases
would result in additional earnings |!
Commissioner Joseph B. Eastman
dissented violently from the right
OF the commission to substitute its
own judgment for that of railroad
managers, though personally he adj
mitted he did not think the increases
would provide more revenue.
Every traffic man, and most
farmers, know that if roads were
permitted to iuggle rates as they
pleased, they could often turn a pref
ty penny by cutting rates on perish
able crops, providing they did not
have to maintain the cut rates after
wards. But the feeling that this
would be against public interest has
prevented this ever being tried,
though every store in the land can
have bargain Tuesday If it likes.
Problem for Farley
The problem confronting James
A. Farley in Pennsylvania this sum-
mer and fall is plainly shown in the
figures OF the Democratic and Re
publican primaries. New Dealers,