AMERICA'S PROBLEM, RAILROADS' LOSS.

Evening Post, Volume LXXXIII, Issue 88, 15 April 1911, Page 9

AMERICA'S PROBLEM, RAILROADS' LOSS.

£10,000,000 A YEAR. GOVERNMENT STOPS RISE IN RATES. DOES IT MEAN- PUBLIC OWNERSHIP? fraoil otTE OWN COBSESPOKDENT.] SAN FRANCISCO, 16th March. If the railroads of America had been permitted to put into effect the increases of rates that they announced a few months ago, they would have gained from £10.0Ci>,000 to £12,000,000 a year, according to an estimate published by the Literary Digest in a review of financial press opinions. But they were not permitted. The Interstate Commerce Commission, the court that con- j trols tho railroads, decided unani- j inously ihai the increases were not juet'- i tied. Fortunately for people that use tha railroads, a new law had been passed some eighteen months before, forbidding the old-time practice cf raking the rates and arguing t'he question afterwards, j Formerly the railway companies used to enjoy— and the people to suner— the larger charges during tne years that the disputes over these charges dragged their way^ through the 1 courts.^ But now, if increases are planned, the company is obliged first to show that it is *gi vm 2 value for the I money and not simply seeking to swell swollen dividends. j All xhat the railroads wanted in this case was to add a few cents to the freights on certain classes of goods. But so enormous it, the work done by the i iron horses of America that these few j cents, aggregak-d, would have amounted j to millions of pounds sterling each year. BIG PROBLEMS AHEAD. It is the size of this industry that makes it so momentous a problem for the American people. The Government has undertaken to control the railroads, to regulate the use of their tens of thousands of miles of track, to say what returns they may receive for the billions of capital invested, and to check the old' abuses, such as the rebating system, whereby the railroads helped the big trusts to kill competition. But atill the piobkm remains. The intei'-State Commerce- Commission itself has admitted quite recently that the laws against rebating are nieffeeth't, and, now that an apparently decisive step has been taken in the fixing of rates, a new series of entanglements and pitfalls is seen ahead. What is to become of the small railway companies? the financiers ask. These companies cannot possibly keep pace with the money-saving 'improvements i made by the big lines, and yet it seems that they are not to be allowed to charge any higher rates. It is commonly predicted, \or instance, by the New iork Times, that they will be forced to place themselves injthe hands of- the great railroad magnates. The tendency toward monopoly, says the Times, is increased. WELL STRIKES BE OUTLAWED? Another new complication arises from the effect of the Commerce Commission's decision on the railroad employees. The commission says that the companies must not raise their rates. Then, the companies reply, we cannot give higher wages to our men. What follows? The men may insist on higher wages, and the companies may truly be unable to meet the demands without running at a. loss. _ Will .the then allow the lineirto-bo closed down-? Will it not rather be compelled to intervene for the prevention of a strike — and eventually to become the arbiter, not only of railroad rates, but of railroad wages ? Several critics foresee this result. Labour unionists of the non-Socialist order are frightened at the prospect. In the opinion of President W. G. Lee, of the Brotherhood of Railway Trainmen, the decision will bring a movement to reduce wages. And Thomas L. Lewis, president of the United Mine Workers of America, says that at thia rate we will ultimately have a commission empowered to prevent the working men of the country from demanding increased pay. Financiers predict this result also, and rejoice over it. The fact is that Uncle Sam has been compelled to depart from the narrow path of strict individualism. Many J experts believe he will not be able to stop short of nationalisation of all the railroads of the country. Inevitably, said E. P. Ripley, president of ths-! Santa Fe railway, Government ownership will be the outcome. And the Washington Post sees the same tendency. NATIONALISATION NO LONGER, A TERROR. Even a member of the Commerce Commission has something of the same idea. Judge Prouty, in an interview in which Mr. Ripley's prediction was called to his attention, said : "If it is impossible to have suitable regulation without Government ownership, Government ownership will come. If railroad managers see fit to make Government regulation an excuse for not providing proper transportation facilities, the people' will find it necessary to take over the railways. This possibility hae no terrors for me. Nearly every other civilised country in the ■world except Great Britain has done so to its advantage. 1 don't believe this country should permit itself to be terrorised into submitting to unreasonable rates by the threat of Government ownership."' It is remarkable that such a dictum should come from such a man, when it is considered that a Government ownership proposal brought a national uproar just a few years ago. It was. when William Jennings Bryan returned from Europe to run for the Presidency against Roosevelt. His advocacy of nationalisation was given so hot a reception that he dropped it hurriedly.