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Shall Uncle Sam Go Into Railroad Business?
gy WILLIAM C. UTLEY
All.noAD legislation of
R regular 1 mand ; id or some session other attention Is of certain congress, at to
i,, generally agreed by those in
now in the Nation’s Capital. Ju:
! proporiions it will assume is
tter that has caused perhaps
M on the part of the rail-
r perhaps too little on
ves.
the part of the more or less apathetic
general public. of the rail
C.overi ent ownership
rrieis ;> tlie bugaboo—or the salva¬
tion— that is feared by the private in-
tere<tH who have developed and oper-
ted t he roads or endorsedly antiei-
at ed |,v tlie proponents and chant-
j ; j ns 0 f the New Deal administration
wliii'h has already entered several
holds of business in one way or an¬
other. Whether or not government
ownership or operation, or both, will
have any port in the legislation being
drafted for submission, is not known.
\o information has been given out as
to outcome, if any, of the recent con¬
ference between tlie federal co-ordina-
,or of railroads, Joseph B. Eastman,
and President Roosevelt.
The co-ordinator’s views may be con¬
tained, however, in this excerpt from
Mr. Eastman’s letter to the Interstate
Commerce commission early in 1934:
“Theoretically and logically public
9 IB f
ioiitlS*
.wit ft
mm
Railroad Chiefs in Conference. Left to Right: P. E. Crowley, New York Central; J. J. Bernet, C. & O.; Daniel Willa.l
B. & O.; W. W. Atterbury, Pennsylvania.
ownership and operation meets
known ills of the present
better than any other remedy.
regulation of a privately owned
operated industry, reaching deeply
such matters as rates, service,
ization, accounting extensions
.abandonments, mergers and
tion, is a hybrid arrangement.
an industry becomes so public in
acter that such Intimate regulation
its affairs becomes necessary, in
l"- c it would seem that it
cease to masquerade as a private
dustry and the government should
sume complete responsibility,
and otherwise. I Incline to
...
belief that such ownership and
tion will be tlie ultimate solution
the railroad problem.
. . .
’’However, If and when that
arrives, tlie impelling motive will
ably not he logic or theory, but
practical one that private
and capital will not be able to
on successfully.”
Uncle Sam, Railroader.
There are really only three or
reasons why governments In the
have tal;en over tlie railroads of
respective nations: To maintain
vency and meet financial
" ien the private companies seem
ahle or unwilling to do so; to
transportation without
In rates or service; to make
that employees are paid decent,
"ages, and, in a few cases, to
tate military plans and
As the co-ordtnator has said. If
1 nited States government should
cliase the railroads from private
r° r public operation, the only
ceivable Important reason will be
°f the financial difficulties in which
roads have found themselves since
beginning of the great depression.
Advocates of government
contend that the government
finance railway operation much
cheaply than the private
can, because government bonds
ffland a lower interest rate, and
federal backing makes them
^vestment; because the
could meet income deficits out of
eral appropriations during
"hen depression would
threaten the roads with
ished receivership, and because the
coupled necessity to produce
with the economies of
dation of ail lines and
"mild effect savings in operation.
Heavily in Debt.
j re indebtedness of the
" iicb matures during the period up
* n ‘l including 1940 is estimated at
'14,8.,9,801, but some of the roads
' ■ a favorable position to pull
t: situation In good shape.
executives contend that to classify
* industry -i.uustry in m general, general,
a
Joseph Eastman
gations and provide for future exten¬
sions and improvements Is unsound.
Mr. Eastman, himself, said in an¬
other part of his report to the Inter¬
state Commerce commission: “There is
no such tiling as aggregate railroad
credit. The supplies of capital must
be obtained by individual railroads,
each on its own credit. There are
wide variations in these individual sit¬
of uations. Many railroads are capi¬
talized very conservatively, but many
are over-capitalized, whatever test may
he applied. It Is essential to keep
these variations in mind in any con¬
sideration of railroad credit. At pres¬
ent few railroads would be able to
place a new issue of securities in the
of private market on anything like a sat¬
isfactory basis.”
The problem as it stands now is that
of each railway to refund that part of
the total which constitutes its own li¬
ability. It becomes apparent that some
railways will have to be aided in some
manner by the government. During
the period from 1923 to 1929, inclusive,
only 8 per cent of the operated railway
mileage of the country failed to meet
fixed charges on indebtedness, but in
1932 approximately 74 per cent were
unable to meet them. The figure im¬
proved somewhat to about 01 per ertit
for 1933. but little or no improvement
is looked for for 1934.
There are some 60,000 miles of line—
about one-fourth of the total—which
have met fixed charges with a comfort¬
able margin to spare, and another 26,
000 miles which enjoy a fairly secure
position in that respect. However, 41,-
000 miles, or about one-sixth of the to¬
tal, are in receivership and will, cer¬
tainly, need complete financial reorgan
ization, with scaling down of debts.
’There are another 55,000 miles whose
only hope of crowding into tlie safety
zone is a rapid and hearty pickup in
business.
The roads, of course, feel that those
in a safe condition do not deserve to be
acquired by the government for rea¬
sons of expediency which do not apply
to them, conteeding that the proper
course is for the government to aid
those roads which are in a shaky stace.
Upturn Would Help.
It is agreed that in the cases of many
of the roads a general upturn in traffic
would be the most important factor in
the restoration of railway health. This
would have to be about 50 per cent
above the 1933 level, but could be 15
to 20 per cent below the level of the
period from 1925 to 1929, an Increase
that does not seem probable in t*,e Im¬
to mediate future, at least.
Other than those which must be com¬
pletely reorganized, the roads which
need assistance may be said to fall into
three groups. Tlie first of these in¬
cludes those which meet fixed charges
fairly well, but whose bond maturities
are j troublesome, and whose Ite-
DADE COUNTY TIMES: December 20, 1934
construction Finance corporation loans
and other loans and bills payable are
substantial in amount. Reconstruc¬
tion Finance corporation loan exten
sions and a little assistance in meeting
other debts will lift these roads out.
They will need about $52,000,000 worth
of assistance in the next year, and
about $10,000,000 In the four years fol¬
lowing.
The second group also does tolerably
well with fixed charges, and would be
secure enough with a moderate up¬
swing in business. Maturing obliga¬
tions are tough; loans and bills pay¬
able and Reconstruction Finance cor¬
poration loans are heavy. Unless there
is a sharp and sudden improvement in
business they will need about $68,000.-
000 in 1935 and another $35,000jiQP from
19.30 to 1940.
Included in the third grot]
roads that are dangling on
edge. Their earnings are
need new business and
badly. All of their indebtedliel
very heavy, and there are^
turities threatening in size,
cash position poor from all aJM Jm
•Si need STe.nim.'KKi
, yJVH|j
of Hi.*!.", and amillier $2,
tween 1936 and 1940.
The total assistance needed immeoi^P t
three groups is $195,000,000
ly, and $72,000,000 additional in the fol¬
lowing four or five years. Besides this,
some
roads in the receivership class.
It is doubtful whether private capi¬
tal can, in any event, be expected to
provide large sums to refund maturi¬
ties and pay for necessary improve¬
ments. Present conditions are hardly
encouraging to the private investor.
Besides, the greatly enlarged public ex¬
penditures of the administration absorb
substantial amounts of capital that
might in another day be turned to pri¬
vate enterprise. After a staff survey
of officers who have charge of invest¬
ments of large amounts of capital for
insurance companies, banks and sim¬
ilar institutions, Co-ordinator Eastman
reported:
Beset With Fears.
“They (the investors) are beset with
fears witli respect to railroad Invest¬
ments. The confidence inspired by the
provisions of the transportation act
of 1920 has gone, and disillusionment
has taken its place. They fear the
competition of motor trucks and other
transportation agencies, the obso¬
lescence and probable abandonment of
much railroad property, what may hap¬
pen from monetary inflation, the oper¬
ation of the securities act, the con¬
struction of tlie St. Lawrence waterway,
the neglect of railway maintenance,
increase in taxation, domination of la
hor, tlie possibility that underlying se¬
curities will not be sufficiently protect¬
ed in reorganizations, the delay in ef¬
fecting railroad consolidations, regtula
tion by the commission, and a host of
other things.”
Besides capital assistance, the rail¬
roads maintain that federal legislative
policies protecting them from coinpeti'
tion and unfair taxation are necessary,
Even if the government should taka
over the roads, it is still not certain
that it could finance them more cheaply
than private capital. It would have to
pay for the roads, of course, arid the
reproduction cost of the railways is
estimated by the Interstate Commerce
commission at nearly $21,000,000,000.
There are plenty of foreign govern¬
ment-owned railways to be cited in con¬
sidering the entrance of the United
States into the railroad business
Whether they can be compared fairly
with an American venture of the kind
is doubtful. Unfortunately, the m v st
comparable and the closest, the Cana¬
dian National railways, is also one of
the “horrible examples.” rts aggre
gate deficit for nine years ending in
1931 was $ 1 , 112 , 000 , 000 , not counting
$ 456 000,000 taken out of capital—not
,
earnings—for improvements and exten¬
sions. If it had expended all that par¬
liament authorized it in 1930, the Cana¬
dian National railways would have eat¬
en up seven-eighths of the tax receipts.
Its debt is one-third of the agricultural
wealth of Canada, a great agricultural
country.
©. Western Newspaper Union.
Happenings Ovei the State
The organization i/vf imjMt
Georgia Vegetable GrJ
ation will be held in
ruary.
Dr Harold C. Atk
will head the Sixth IfiTTrict MJov
Association as its president Jj 1:
coming year.
Four frame buildings at
12 miles east of Valdosta, iV
last week. The cause of th
is undetermined.
Arthur* M. Bell was
Commissioner of Gaintl
recent election. He was unoppost
and only 61 votes were cast.
Hugh Quinn, of Macon, ha 1
re-elected president of the
of Georgia Boy Scout Councii
had served one year in
A county-wide terracing demop
stration was held at the Roy
[farm, two and one-half
lonticello, in Jasper
' cently.
In a heated city e'
asvile recently, JolfTT T»rm7 (
Jed Mayor by a vote of 500
Welch, who received
C. Prim, prominent Colur
poultry raiser, was re-elected pi
dent of the Chattahoochee Vi
Poultry Association at a rec<
meeting.
The Carnesville Future Farrne
have Cc^ned 14,000 cans of beef
cAs of vegetables, making
of 20,000 cans of food for
ity.
ristmas spending spirit
r evidence at at
V ^■•hants particularly
R- -Nile buying trend
)e, better-class
he Kress
^..tings, ,at Wesleyan which
!e weeks,
lutings were tak-
truction
at the Co-
rport lias been
& Son,
iolunit;
Wm of t||
L. Norton,
and Mrs. Mattie L. Sioan,
Spring'Wvere recently named
tional district supervisors of
1935 farm census to he tak>=ti
this State in January.
Two meetings designed
the paving of the Gainesvifi,
ferson-Athens highway
Athens-Elberton route
Carolina are scheduled to be h»a
in Athens within the next montpW
The receipts of tlie Elberton PosiJ
Office for November were 30 per
cent over the corresponding month
of 1933. The December receipts are
expected to show the healthiest in¬
crease of the Post Office receipts
in many years.
The Federal Government migiit
be asked to help beautify Augusta.
A plan is being fostered by the local
Chamber of Commerce and the Dis¬
trict Forester’s office to plant ten
piles of pine trees on^each highway
touching ^rnrusta.
Senator,.|3iiard B. Russell, Jr.,
Congressmu VJJraswell Deen and
Judge W. H. Federal
District Court, spoke fft55*ycross
recently at the laying of the cor¬
nerstone of the new Federal Build¬
ing and Post Office.
J. H. Skelton, Sr., of Hartwell,
State Senator-elect, said recently
that he would introduce a bill at the
January session of the State Legis¬
lature to increase the salaries of
the State Adjutant General and of
members of the Prison and Public
Service Commissions.
Oostanaula Tribe, Improved Or¬
der of Red Men, at Lindale, has
elected the following chiefs for the
ensuing term: J. L. Naves, prophet;
W. M. Waits, sachem; J. L. Yar¬
brough, senior sagamore; T. D.
Quinton, junior sagamore; C. M.
Head, C. of R.; W. J. Fitzpatrick,
C. of W.; C. H. Edmondson, K. of
W.; Ira Shamblin, trustee.
The Public Works Administration
increased recently the following al¬
lotment: Sparta, Ga., loan and
grant of $50,000 to Hancock County
for grade school and high school
improvements increased to $62,000
to enable the county to construct a
new one-story combined elementary
and high school building with au
ditorium and alterations to the old
building as orig ! nally proposed.
Approximately $9,000 will be paid
out to 300 Christmas Savings Club
members by a Valdosta bank, an
increase over the $6,500 delivered
to members last season.
A group of tobacco growers from
Georgia and Florida, unofficially
estimated to number at least 1,000,
recently heard J. B. Hutson, chief
of the tobacco section of the Agri¬
cultural Adjustment Administra¬
tion, urge restriction of next year’s
output, in an address delivered at
Tifton.
to Define “Riels? 1
ddualMan Decide the Amount of
|e. JM NA l«
:
tzJHkcotton adjustment pro
has been announced
seems to offer the best
opportunity for the cotton fann¬
er to receive the greatest returns
■^is r>ud labor against and investment, and of
le urrence
i)( ^ j. j/ ^strous days of 1931 and
f, BP^f. ^ JBkys Harry L. Brown, Di
' saWus ’ Extension.
^§pS»pproximate!y 4WW* signed I,no 1,000
m '™'S‘ in tin
§P 0 *' '-*'’‘1 ■>' Uich have
.
elfeelivt- u»r 1935, prp-
H^^^ne W/FF ■ base : jt
acreage as iiAwjJjJjp! c
ed with a reduction of
percent which was contr^JP accora
in 1934. One-year
PH
buy.
moon, he stV ’**
fi#. ^.ldp’t The have
par JUr
could not giv(T OmJBr
■ ....... ..... I'^Vl
i everything he wanted. No thinking
person would expect to get tii^aotu- -
tl moon. Its beauty and radiance mi ' from
•uiflice. But there are some person - ? j-ill pjjflfninent know
who look upon money as the medium a
by which they can get other tilings THE
just ns unreasonable. They believe Copyrlgh, >y
happiness -VI -
depends on money. It
must, therefore, lie able to get it fori Driv<® Into.
them. They do pot realize tltat I IJari] tinuw nil)J
money and happiness belotg to two of false friendship.
totally different realms. Money
distinguished
is mental and
The The anio anio which would
, coition* rn fTlff-i''-
es es mmury m>nuvy t w P Men iii^e
omitted iimitted suicide suicide because they lost
es, although there still re
I what would be riches to one'
stomed to the former prodi¬
money. With still enough
on which to Hveannd care A Few
which would he riches Night and
men fee 1 crushed by
one need feel lie does Will
riches who has Healthy
normal needs of
At All Drug
WrUeMurineCo.,Dpt
loni loni ay» Hero
.was .was d dog story from
Nova Scotia, recently. A Not
Troke a leg In a blizzard and A small boy trying
was freezing to death. He was dis¬ the most
covered by a faithful dog. The dog
tore off to the nearest cabin and
barked for help. The story was -com¬
plete in every classic detail.
The Inmates of tlie cabin at
refused to pay attention to the
so the dog kept barking until they <ffT
elded to go into the storm to see
what was the matter. Result: Man
Saved by Dog.
The nicest touch about the little To
story was that the correspondent did chapping,
not fall to state that tlnf hero dog cracking,
was a mongrel! Judging by stories, cooling
both fact and fiction, It is not per¬
mitted for blooded dogs to be heroes.
—Phll^rteiphia Ledger. C/m
How Calotabs Help
To Throw Off a *
Millions have found In Calotabs a Second, Calotabs are
most valuable aid in the treatment kidneys, promoting
of colds. They take one or two tab¬ of cold poisons from
lets the first night and repeat the Calotabs serve the
third or fifth night if needed. a purgative and
How do Calotabs help Nature which are needed
throw off a cold? First, Calotabs are of colds.
one of the most thorough and de¬ Calotabs are
pendable of all intestinal eliminants, only twenty-five
thus cleansing the intestinal tract of package, ten cc ,v $
the germ-laden mucus and toxines. package. (Adv.) ,
-
Hands Would Swell Mouth Clear
and Crack with
Eczema
Healed by Cuticura You take your
in piaster the
dentist
“Eczema started on my hands In Send f 2.00 for
blisters and then spread to my face. returned
My hands would Itch and I would Money
rub them and they would get in¬ satisfied when
flamed and burn terribly. They would MIAMI
pain and crack open and would swell 219 Shoreland
•mtll my hands were almost twice Reference: First So
their size. I could not sleep.
“I saw an advertisement for Cuti¬
cura Soap and Ointment and sent
for a free sample. The first appli¬ HAIR
cation was soothing so I bought How to keep youthful color
more i d after using two cakes Of to restore GRAY HAIR
boxes of bslr properly — how to get
Cuticura Soap and three rufif, falling’ —how hair,dry to marcel scalp,
Cuticura Ointment 1 was healed.” shampoos only few
henna — these are a
(Signed) Mrs. Wm. Twomey, 22 la this new, amazing,
whole TRUTH and bow YOU
Brookside Ave., Jamaica Plain, Mass, est eclentlrto
Worth 1 ts weight In gold. Save
Soap 25c. Ointment 25c and 50c. Send no money—pay
Talcum 25c. Sold everywhere. Pro¬ HAIR BEAUTV
prietors: Potter Drug & Chemical 331 Fourth Aveuuf.
Corp., Malden, Mass.—A dr.
M.
(§3?A)— December
date set by thehigWj~£r!
the lar ^ ■"^BeBSHSd:
Kid - .
and one of
30 tory coh of tracts, the sti$i$RSS^
will b^ntirely of federl
Between 3,500 and
men will be empIoPP^
projects.
Six of the largest contri
few two new ray Is int/
- -of a %£
i
it*.;
In prornlnl m"
home or is it" 1111
formula If
place?
linrsiOVIKIl
Ledger, Ino. A
Every ™
a Clep| ^ Hl
»
»
to be ’
sight
reli^JfcjS^
soothiiig,
R
'BB
JjJ
the - v <«
• )
.ft;. v ,
J
kMt mm _____
-*>* ,.
as
Bite ’IpyiggB
i.
you ore not' •.
examine it.
Miami, Fla.
Bank, Miami
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