Evening Republican, Volume 20, Number 294, Rensselaer, Jasper County, 9 December 1916 — NEW POLICY NEEDED IN GOVERNMENT RAILWAY CONTROL [ARTICLE]

NEW POLICY NEEDED IN GOVERNMENT RAILWAY CONTROL

HelpfulneisandEncouragement Urged 6/ Alfred P. Thom. CREDIT MUST BE IMPROVED Increase of Transportation Facilities Necessary to Securi Relief From High Cost of Living May Thue Be Provided For by the Railroads. Washington, Nov. 28.—A new policy of government railroad regulation, based on constructive principles of helpfulness and encouragement instead of upon principles of fepression and punishment, was urged by Alfred P. Thom, counsel for the Railway Executives’ Advisory Committee, the first witness on behalf of the railroads before the Newlands Joint Committee on interstate Commerce, which lias instituted a general inquiry into the problems of railroad regulation. “It is proposed by the joint resolution of Congress," said Mr. Thom, “to go intb a comprehensive study of the whole subject of transportation, to make a new assessment, after 29 years of experiment, of its history, its present conditions and its future needs. The railroads accept the view that regulation is a permanent and enduring part of government in America and that the first duty of the carriers is to the public. That duty is to afford reasonable facilities on reasonable

terms and at reasonable rates, and this must be dove any private interests can be considered.” Certainty, Safety and Sufficiency, Mr. Tbym contended that the real Interest of the public is in being assured of certainty, safety and sufficiency of transportation facilities, rather than in rates. The first consideration of the public is to obtain transportation facilities. What the cost is. is in reality a second consideration, he said. Mr. Thom proposed an increase of transportation facilities as a method of securing relief from the high cost of living. ‘‘There have been less than 1,000 miles of new railroad constructed in the United States during the past year,” he said, “less than in any year since 1848, except the period of the Civil Wa r - and yet the cost of living is dally advancing owing to a shortage of supplies which might be remedied by securing access to new areas of production. Credit Must Be Improved. leads to the consideration as to whether raiitoad credit is as good as the public interest requires. It is impossible for railroads to earn enough to supply the necessary new facilities from current revenue. They must be provided from credit- Investors cannot be coerced, but must be attracted.” Among tlie conditions affecting railroad credit which deter Investors he mentioned (.he following: “First, Kailroad revenues are not controlled ’by investors, but are fixed and limited by governmental authority and not by one but by several governmental authorities, which do not recognize responsibility for assured results to investors and are uncoordinated. —^Second, —Kail roads cannot control and the government cannot and does not limit the expense account. “Third, The present system of regulation is based on a policy of regulation and correction and not on a policy of helpfulness and encouragement. “Fourth, The outstanding obligations of the railroads have already exceeded the financial rule of safety and involve a disproportionate amount of obligations bearing fixed charges. “Fifth, The investor must accept a subordinate obligation or security with no assurance of a surplus'of earnings to support it. “Sixth, Other competitive lines of investment present superior attractions. “Seventh, The railroad business is largely controlled by political instead of business considerations. Look Forward, Not Back. “We may debate about what has caused the present conditions,” said Mr. Thom, “but #e cannot debate about what the people nfed. The President has taken the view* that we must look forward in this matter and ‘make a fresh assessiiieiit of circumstances’ in order to deal bglpfully and intelligently with the problem. Abusflt-are no more prevalent in the railroad business today than in any other business humanely conducted. The great question now is whether the existing system of regulation gives the public reliable assurance of sufficient present and future railroad facilities. “Those who .oppose any change must make their' appeal on the ground that the present systems assure the public of the continued adequacy of transportation facilities. If they do not, no argument based on the desirability of the present dual system of regulation will be accepted by public judgment. The question of ‘states’ rights’ is not involved. If the regulation of transportation 1 facilities privately owned should fail government Ownership must follow, and then all power of the states over the railroads would disappear. “Let us debate this question, then, not upon any mere theory or jealousy as to the distribution of governmental power, but upon the large Issue of what the public interest requires in respect Ut the assurance of adequate transportation service.”