Evening Republican, Volume 20, Number 300, Rensselaer, Jasper County, 18 December 1916 — 'AN AGAINST OWNERSHIP BY THE GOVERNMENT [ARTICLE]

'AN AGAINST OWNERSHIP BY THE GOVERNMENT

Bins Newlands Committee His Views on Railroad Control. COMPETITION PREFERABLE. Federal Regulation Should Not Be Allowed to Exclude Exercise of State Authority, He Contends—Thinks Railroad Stocks Should Represent Actual Value and Be Stable as Government Bonds. Washington, Deo. 11. - William J. Bryjfn. who startled the country ten years ago by advocating government ownership of railroads, appeared before the Newlands Joint Committee on Interstate Commerce last week,in support of the claim that the states should be allowed to retain authority over the regulation of all transportation lines within their borders. Mr. .Bryan explained that he had long regarded government ownership as inevitable, but only because of railroad opposition to effective regulation.

Against Government Ownership. “Personally I cannot say that I de sire government ownership.” he explained, “because I lean to the indi virtual idea rather than to tiie collective idea; that Is. I believe that government ownership is desirable only where competition is IWipossible.” , Alfred P. Thom, eotfnsel to the Rail wayi_J&Seculives' Advisory Committee, previously had presented before the members of the Newlands Committee as one of his reasons for urging a 1 etter balanced and more systematic t g uiatinn of railroads the argument that this is the only alternative to govern-, ment ownership. Calling attention to the restrictions imposed upon the transportation lines by conflicting state laws’ aiid regulations, to the practical cessation of new construction and to file impossibility under existing conditions of securing the new capital needed for extensions and betterments of railway 4 facilities, he warned the Congressmen that unless they provided a fair and reasonable system of regulation that would enable the railroads to meet the growing needs of the country’s business the national government would be compelled to take over the ownership of the lines with all the evils, attendant upon'such a system. Preservation of Competition.' ' •* Mr, Bryan, on the other hand, holds that the further extension of federal authority over the railroads would be a step in the. direction, of government ownership. ‘ He advanced the view that the centralization of control in the hands of the national government would impose 100 great a burden upon the regulating hotly, would offer strong temptation to railroads to interfere in politics and would encourage the general movement toward centralization of power in the federal government at the expense of the states. lie said that he did hot object to consolidations of railroad linos ;o long as they did not destroy competition, that he knew of no co’upltfh't against great railway systemic because of their size; and that he believed that the preservation of competition*was the test to he applied to all consolidations.

Regulation of Securities. Mr. Bryan declared himself In favor of national regulation of railway stock and bond issues, but added that he saw no reason* why that should exclude the states from acting on the same subject as to state corporations. “I would like to see the stock of a railroad, as long as it is in private hands, made as substantial and as unvarying as the value of a government bond.” he ascerted. He suggested that railroad capitalization be readjusted to equalize it with actual valuation t»f the property represented, making due allowance for equities, and that when this was done the roads should be allowed to earn sufficient income to keep their stock at par and to create a surplus. The latter, be tentatively proposed, might be allowed to amount to 25 per cent of the capital. Railway Earnings Low. This subject of railroad capitalization and the amount of railroad earnings received further attention from the committee during its recent sessions. In answer to questions by Senator Cummins. Mr. Thom submitted figures' showing the net earnings of the roads in recent years. These" figures show that during the five years from '1905 to 1910 the average net earnings were 8.25 per cent of the net capitalization, while for the five years from 1910 to 1915 the average was only' 4.50 per cent. The total earnings on the stock, computed by adding to the net operating income the income from the securities owned and deducting bond interest. were for 1910, 7.09 per cent; for 1911. <5.17 per cent; for 1912, 4.97 for I9I&, 5.94 per cent; for 1914. 4.00 per cent: for 1915, 3.44 per cent, thuk showing an almost continuous decrease throughout this six year period. Itv was announced that Halford Erickson, formerly chairman of the Wisconsin Railroad^Commission, would submit more complete information on this subject to the Committee |4 r a latgr date. .* . . * - - ' ■y*' &