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How the States Can Co-operate in
the Efficient N ational Regulation
of Railroads :: :: :: : r
An Address by
Mr. Samuel Rea
President, Pennsylvania Railroad System
.*
*** *** ***
ºr kº tº º -: * . -
tº #i is...} : (.3% ºf ... . . . ".
* : - , , , , , .
Before the Members of the National Association
of Railroad Commissioners, Washington, D. C.
*
A L L E N, L A N E & SCOTT, PRI N T E RS
1211-12 r 3 C L O V E R S T R E E T
PHIL AD E L PH1 A
:
;
&:
*
.
.
How the States Can Co-operate in
•º twº."
the Efficient National Regulation
of Railroads :: :: :: :: :: ::
In an address before the Members of the Nat—
ional Association of Railroad Commissioners, at
Washington, D. C., on October 17, 1917, President
Samuel Rea of the Pennsylvania Railroad System
spoke on the pressing necessity for co-operation,
by the Railroad Commissions of the various States,
in the work of National regulation of the railroads,
under the jurisdiction of the Interstate Commerce
Commission.
Mr. Rea said:
The presence here, in our National Capital, of the
Railroad Commissioners from the various com-
monwealths of this Nation, serves to remind us of
the dual nature of the Government under which we
1ive. It is a fundamental principle of our insti-
tutions that we shall have local government for
matters of local concern, and National government
for matters of National concern. So, each State
is a sovereign in its own right and place, and is
self-governing as to matters which are truly local
within its own boundaries. But all equally are
subordinate to the superior authority and duty, which
rest upon the National Government, of providing
for the common defence, promoting the general
welfare, and making our Country in reality a united
Nation, and respected as one of the great Powers of
the World.
In these times of great events, when history is
being made daily, it is necessary for Nations, as
well as individuals, to become accustomed to changed
conditions and adapt themselves to new methods
of accomplishing their purposes. Even our laws,
and the manner of enforcing them, are changing,
lbecause public necessity of the highest degree
requires it. I am sure that I will not offend any
of you when I say that now, more than ever before,
all political rights and powers existing within this
Country, must be exercised with the one primary
purpose of protecting and defending our National
sovereignty, which must take precedence over all
other considerations.
RAILROADS” WAR BOARD A NATIONAL
INSTITUTION.
The Railroads' War Board, on which I have the
honor to serve, exists as the creature of our National
purpose. Its fundamental object is to unite the
railways upon the great work of doing all that is
within their power, with the facilities at their
command, to aid the Government of the United
States in winning the war. I cannot describe this
purpose in better words than were used in the
resolution adopted at the meeting of railroad execu-
tives in this City, on April 11, 1917, at which it
W3S agreed, on behalf of the carriers of the Country,
“that during the present war they will co-ordinate
their operations in a continental railway system,
merging, during such period, all their merely
individual and competitive activities in the effort
to produce a maximum of national transportation
efficiency.”
So, I say that the Railroads' War Board
is a National institution, and of necessity, considers
and deals with the railroads as a whole, from a
National point of view, and is endeavoring to
manage them in the best practicable way for the
collective welfare of the Country.
ſ ***
3
However, it must not be overlooked that every-
thing we do is in full recognition of the consti-
tutional and sovereign rights of the States and
of their various peoples. These rights are not
annulled or suspended by the war, but it is of the
most pressing necessity that they shall be co-
ordinated with the larger powers of the National
sovereignty. What I wish to speak about briefly
to-night is a few of the ways in which we feel that
the regulative bodies of the various States can co-
operate with the National regulative power, in
such a way as, not only to enable the railroads to
be of the greatest service to the Country during the
continuance of the war, but also to make them,
permanently, the most efficient servants of the
public in the times of peace which are to come.
TRANSPORTATION PROGRESS MADE WITH
AID OF PUBLIC CO-OPERATION.
With a degree of co-operation on the part of the
general public, which we feel can scarcely be too
highly praised, we of the War Board, are making
very material progress toward obtaining the max-
imum service out of the transportation plant of
the Country. We are expediting traffic; carrying
4
more tons to a car and to a train; moving freight
cars and engines more miles per day; eliminating
unnecessary train service; consolidating passen-
ger trains; securing prompter unloading, and in
many ways releasing men, trackage and equip-
ment to care for the movement of troops, military
supplies, food, fuel and other necessaries. We are
making priority shipments under mandate of the
Federal Law. By our own agreement, we are
moving empty cars about the country so as to put
them promptly where they are most urgently
needed, and are arranging the routing of traffic
according to the best physical conditions, and
without reference to benefiting individual roads.
These are but part of the response of the railroads
to the needs of the National defence. Other ex-
amples of subordination of the competitive activities
of individual railroads to the general welfare, are
supplied by the efforts made in expediting coal
shipments; in furnishing material for the canton-
ments; in providing additional facilities for new
shipyards, industries and mines; in handling the
movement of more than 700,000 troops to camp
and to seaports for transportation abroad, and in
other ways.
All of this means forcing of traffic out of its normal
channels, foregoing profitable business and making
great financial sacrifices at a time when it is extraor-
dinarily difficult to conserve railroad revenues. We
are face to face with an absolutely unprecedented
scale of prices for all materials; wages are higher
than ever known before; labor is difficult to obtain
at any price, and much of it is incredibly inefficient;
we are practically unable to obtain new locomotives.
as France has the first call on the American supply,
and similar conditions exist in the case of steel rails
and many other materials. We are daily made to feel
more keenly the competition of industries in the
labor market, because they are able to pay wages
which the railroads cannot afford. Many of our best
men volunteered in the military service months ago,
and thousands more have just been taken in the
draft. Nevertheless, the railroads have disregarded
all of these factors which make operation difficult
beyond precedent; they have put profits in the
second place and National service in the first place.
MR. CASSATT'S VIEWS ON THE BASIS OF
PUBLIC REGULATION.
The railroads are subject to public regulation, and
my conception of that regulation is the one which
6
I first heard expressed by my former associate, that.
great railroad statesman, Alexander J. Cassatt,
who died in office eleven years ago, when President
of the Pennsylvania Railroad Company. In sub-
stance, he said that whatever our views may be on
the subject of monopoly, we must recognize the fact
that the railroads are, in the nature of things, par-
tial monopolies, and that, therefore, in the public
interest, their rates, practices and activities must be
placed under governmental regulation. This regu-
lation must be protective not only of the com-
munities, passengers and shippers which the rail-
roads serve, but also equally of the owners and
administrators of these great National properties
which are now publicly owned, not by the Govern-
ment, but through a far higher type of public owner-
ship, viz., by hundreds of thousands of individual
citizens and the institutions in which they have their
funds invested or themselves and their families pro-
tected by insurance. You, the members of the rail-
road commissions of the various States, form an im-
portant part of this great regulatory power which
reaches all over the Country. To the extent that you
co-operate with the Federal Government in its su-
preme power of regulating interstate carriers, you are
7
sharing in promoting the common defence and the
general welfare. To the extent that you fail so to co-
operate, even though you may appear to be benefiting
certain citizens of your own State, you not only
weaken the railroads, impair their service and de-
stroy their credit, but also menace the National
authority, conflict with its policy, and weaken the
effective commercial and military power of the
Country.
It is to point out this situation and plead that your
attitude may always be one of co-operation that I
am here to-night. I appreciate what many of you
have already done in helping us, on the Railroads'
War Board, to do our work properly, and to make
successful our efforts to aid the Nation. May I
suggest some other avenues in which State Commis-
sions may co-operate still further in the interest of
the public?
ABOLISH USELESS REPORTS AND SIMPLIFY
ACCOUNTING.
Let me first ask that you aid us by consenting to
the abolition of all reports, documents and account-
ing requirements of all kinds which are not absolutely
necessary to enable you to do your work as it should
8
be done. The opportunities for simplification in
matters of this kind are almost innumerable. Public
regulation of the railroads, thus far, has simply added
Bureau upon Bureau and authority upon authority,
which have caused to be amassed uncounted and
uncountable figures in millions of printed pages
of reports, forming an undigested and useless mass.
Let me make this request of you: When you go
home, test the necessity of your various reports by
cutting some of them out for a time—let me suggest
during the continuance of the war, Land in that way
ascertain whether or not they have real value in the
part which you perform in the work of regulating
these great properties. You have before you some
recommendations by the Accounting Officers of the
American railways, who are acting as a committee,
with the Railroads' War Board, in co-operation with
the Interstate Commerce Commission, with a view to
giving the railroads some relief from the excessive
burdens resulting from multiplicity and duplication
in accounting. We need this relief most urgently,
because of the many men who have been called to
the colors from our accounting departments, and it
is of the utmost necessity that we should confine our
work to essentials.
In this connection let me say that it is a source of
much gratification that the Federal and State Com-
missions have accepted the calendar year instead of
the fiscal year of June 30 for the annual reports
which the carriers must file, and that the accounting
classifications are now almost identical. But the
field is a big one, and certainly much further saving
of effort may be achieved if you will give the matter
sufficient thought, and dispense with all but the
truly indispensable.
THREE MILLION OFFICIAL REPORTS MADE
BY THE RAILROADS IN A SINGLE YEAR.
For the year ending June 30, 1915, I think the
report prepared for the Newlands Committee showed
that, including duplicates made for the various
Federal and State authorities, almost 3,000,000
official reports were furnished by the railroads of
this Country. They consisted of annual and Quar-
terly reports, tax reports, accident reports, equipment
and other special reports. The Pennsylvania Rail-
road System alone furnished over 400,000. Let us
cut these to the bone and build up later if it is found
that any which are eliminated are missed. This is
10
the only way to get prompt relief, and promptness
in this matter is most urgently essential.
113,965,747 PAGES OF PRINTED TARIFFS
FILED As A FORMALITY.
To take up an allied subject and show how a
cumbersome procedure may be simplified if only the
effort is made, let me recall what was done as a pre-
liminary in the first 5% rate case of 1913. The
question whether or not the railroads needed addi-
tional revenue, sufficient to justify a 5% increase of
rates, was necessarily a general One, and was, as every-
one knows, considered on a general basis. But before
the case could even be heard we had to file separate
tariffs for every rate affected. The Pennsylvania
Railroad System, which was merely one of the carriers
involved, was obliged to spend, it is safe to say,
$450,000 for the tariffs which it was required to file,
and our Lines West of Pittsburgh alone filed tariffs
which made up the enormous and incomprehensible
total of 113,965,747 pages, weighing a total of
302,883 pounds. Of course there was no thought
in the mind of anyone as to the possibility of
reading or even casually examining all these tariffs,
11
but it was necessary to print and file them because
that was the procedure then in force.
Fortunately, since that time we have made some
headway in bringing about a recognition of the need-
lessness Of wasting so much time, effort and money in
a formality. In the most recent rate case, which
was begun last Spring, the Interstate Commerce
Commission suspended its rules of procedure and
allowed the application for a flat advance to be
made without the necessity for filing tariffs cover-
ing all the many thousands of rates involved.
STATE COMMISSIONERS SHOULD ATTEND
INTERSTATE COMMISSION HEARINGS.
Co-operation by the State Commissions with the
Federal Government, in the matter of readjusting
railroad rates to a reasonable basis, is indeed a great
field for assistance in stabilizing railroad credit, and
bringing about equitable conditions of transporta-
tion in which conflicts between interstate and intra-
state rates shall disappear.
It ought not to be necessary to spend weeks or
months in painfully working out some rate ad-
justment with the Interstate Commerce Commis-
sion and then have to do the same thing with the
12
State Commissions in all States affected by the pro-
posed changes. Nor should the spectacle be wit-
nessed of a State virtually setting aside the
superior authority of the Federal Government. I
hope to see the time come when State Commis-
sions will regularly send their representatives to sit
with the Interstate Commerce Commission during
its hearings, for the specific and definite purpose of
co-ordinating the action of the State Commissions
to what the Federal Commission may decide.
I think in such cases the State Commissions should
be willing, without the necessity of a rehearing, to
accept the proof heard before the Federal Commis-
sion, and allow the railroads to file rate tariffs in
the States simultaneously with those filed with the
National Government. In view of the thoroughness
with which the Interstate Commerce Commission
scrutinizes all evidence upon which the railroads
base their claims to any rate increases, I am sure that
no State would be running the slightest risk of giv-
ing any railroad more than was its just due, while,
at the same time, procedure would be greatly sim-
plified, and expense, both to the railroads and to the .
State Governments, would be saved.
13
A CASE WHERE A STATE SET ASIDE THE
FEDERAL AUTHORITY.
One of our neighboring States, I regret to say,
for a period of three years maintained a scale of
intrastate passenger rates which conflicted with the
interstate rates specifically authorized by the Com-
mission here at Washington. We had, therefore,
during that long period the spectacle, which I am
sure did not reflect credit upon Our National capa-
city for self-government, of a State setting aside
the action of the superior Federal power, while
citizens of other States were encouraged to violate
the spirit, if not the law, of the interstate commerce
act by crossing into the State in question in order to
circumvent the rates established by the Interstate
Commerce Commission. I am glad to see that this
matter has now been disposed of, and that the
Commission of the State to which I refer has at
last consented to have its rates equalized with those
established by the Federal authority.
Lest any of the representatives of the State Com-
missions present here may feel shocked at the
example which I have just given, let me direct their
attention to the fact that in the Central Freight
Association territory, there are still many intrastate
14
rates which have never been readjusted to conform
to the decision of the Interstate Commerce Com-
mission in the 5% rate case decided in 1914. I will
not say a word as to the situation West or South.
At the present time, when the railroads are so
urgently in need of additional revenues, it would be
very helpful if, in view of the small increases con-
ceded by the Interstate Commerce Commission in
the rate case of this year, the various State Com-
missions would all promptly act and allow the rail-
roads to apply these rates to intrastate traffic also.
I can assure you that what was granted is not half
enough, but if the States would permit it to become
fully effective the railroad situation would be
materially aided.
To sum up my judgment upon this subject, I feel -
that State Commissions should regularly be repre-
sented at all Federal rate hearings, and that, the
members in attendance should go back prepared to
make a report upon which immediate action on
intrastate rates should be based. &
And I also feel that, unless some extraordinary
reason exists, the State Commissions should acquiesce
in the judgment of the Federal Commission, and
authorize all changes necessary to conform thereto
without further proceedings.
15
RAILROAD REGULATION SHOULD BE UPON
AN ECONOMIC, NOT A PARTISAN BASIS.
The failure of the States to take a proper place in
the regulation of our railroads has given rise to great
misgivings, and many States have allowed the rail-
roads and investors—and I suspect the public—to
feel that railroad regulation was rather a partisan
question than a serious business and economic
question. I do not desire to press this matter too
hard. We all have our shortcomings and you men
can fully appreciate the significance of what I am
saying.
We want your co-operation, and co-operation
means prompt action and leadership. In this
Country, when action and leadership are not forth-
coming in the affairs of a corporation or any public
body, it must eventually go to the scrap heap, and
some other corporation or body must carry out
the National will, but meanwhile the Country
suffers.
Here let me say that we are deficient in terminal
facilities and equipment because of insufficient
earnings and unduly 1ow rates since 1907, and the
Country and the business man are paying the price
of neglect, notwithstanding all our efforts to help
16
them. Bricks without straw cannot be produced.
High costs, high taxes, and high wages cannot be
paid without sufficient rates. The Pennsylvania
Railroad faced the War of 1861, with average rates
of 2% cents per ton mile, and the War of 1917 with
average rates of slightly over 6 mills per ton mile.
Yet nearly everything that goes into the expense of
railroad operation costs far more now than it did
when the Civil War opened.
Testifying before the Joint Commission of the
States of New York and New Jersey, yesterday, on
port conditions in New York Harbor, I was obliged
to point out the results of the unremunerative
rates which the railroads have been compelled to
accept, stating that Over $20,000,000 should have
been spent on the Pennsylvania's New Jersey yard
and terminal facilities, to serve that port properly.
The situation is little different elsewhere. In
the City of Baltimore, embargoes exist and freight is
being unloaded on the streets; the lines of the
Philadelphia, Baltimore and Washington Railroad
should have immediately spent upon them over
$10,000,000 for additional facilities; the Northwest
System of our lines, between Pittsburgh and Chicago
—serving the lake ports, and the Pittsburgh, Youngs-
17
town and other great industrial districts—is suffering
from the limitations of embargoes; all, in my
judgment, because the returns allowed to the Penn-
sylvania system have been entirely inadequate for
very many years.
HOW MANY OF OUR 2385 RAILROAD COM-
PANIES SHOULD EXIST SEPARATELY.
Another field for co-operation by the state Com-
missions lies in aiding to bring about uniformity of
State Laws, and may I suggest that in the search
for uniformity, we shall not witness the usual con-
clusion, namely, that nothing can be accomplished
without adding further Bureaus, reports, statistics,
investigations, hearings, and detailed action by the
various Public Service Commissions of our 48 States.
The day is here for the consolidation and unifi-
cation of railroad systems. No less than 2385
separate railroad corporations report to the Inter-
state Commerce Commission and I hazard the guess
that at least 2300 of them could be merged into the
bigger systems with vast benefit to the public and
everyone else concerned. -
There are still, in the Pennsylvania Railroad
System, about 115 active transportation companies,
18
all necessary, as matters now stand, for the conduct
of the service. I think we will all agree that this
is just 114 too many, but when we reflect that they
represent what were originally more than 600 sepa-
rately incorporated companies, we can feel that some
progress is being made, in the right direction.
OBSOLETE ANTI-MERGER LAws SHOULD BE
WIPED OUT. -
In any question as to increased rates, the
profits or losses of these separate companies play
no part in the consideration of the matter by
the Interstate Commerce Commission, which looks
only to System results. In fact, little attention
is given even to large individual railroad Sys-
tems, because the country is so immense, and
the interests of the public in all the States so
intertwined, that the results of a whole region
are considered, such, as for instance, the Trunk
Line Territory, or the Central Freight Associa-
tion Territory, or the entire railroad region lying
between the Mississippi River and the Atlantic
Ocean and between the St. Lawrence and Potomac
Rivers. Yet many of the State regulative bodies
are still working under laws and powers that existed
19
when roads ten miles long were being incorporated,
and when a railroad meant little more than rails
laid along a public highway.
An interstate or National conception of transporta-
tion is wholly absent from the statutes of many of our
States. For instance, prohibitions against the
acquisition of so-called parallel or competing lines
still exist, oblivious of the fact that a 10 or 20 mile
stretch of intrastate line obviously cannot be com-
petitive with a 12,000 mile interstate System running
in the same general direction. Nor would such pro-
hibitions, in any case, be needful under our present
system of public regulation, uniform rates and
stringent laws against discrimination. I am glad
that these ideas are gaining wider recognition and
that there is less and less public sympathy with
legal conceptions that are anachronisms, but we
have still far too many laws and lawyers out of
harmony with the actual conditions of to-day. It
is in the highest public interest, for the furtherance
of adequate transportation service, that every pos-
sible encouragement should be given for the merger,
in law as well as in fact, of small lines into large
systems, and whatever obstacles still exist against
the accomplishment of such ends are stumbling
20
blocks in the way of progress and stand in defi-
ance of economic law. We need a broad, National
recognition of this fact, and you men can greatly
aid in bringing it about.
SHOULD LEGALIZE TRAFFIC POOLS AND
EXEMPT RAILROADS FROM SHERMAN
LAW. -
Even from the Federal standpoint there is no
longer any necessity for the application of the
Sherman law to the railroads. All possible needs for
its restrictions have been superseded and made
obsolete by our present system of almost complete
public regulation. We are having concrete proof of
this right now, before our eyes, in the work which
the Railroads' War Board is doing in full co-operation
with the Interstate Commerce Commission and the
other Federal authorities. Under the spur of the
great necessities arising Out of the needs of the
common defense, we may be forced to go very far.
In order measurably to protect the investment of
the public in our railroads, and promptly secure
needed transportation, we may be compelled to
pool traffic and train service, shift locomotives from
one line to another, and do many other things, in
21
the Nation's interest which are not now recognized
by any law, but the necessities of war.
I wish here to say, most unequivocally, that in
my judgment, the pooling of traffic by the railroads
is essential for the public service and should be
affirmatively legalized, not only for the period of the
war, but for all time. And I desire to add my belief
that the restrictions of the Sherman law should
not apply to the railroads, and that mergers and
combinations intended to increase efficiency, simplify
accounting, and eliminate the wastes of competition,
should not only be countenanced but encouraged,
under public supervision and control.
WHY THE PENNSYLVANIA RAILROAD RE-
MAINS A CORPORATION OF ONE STATE.
The Pennsylvania Railroad Company is still a
corporation of only one State, although its lines are
operated in thirteen different States. We hesitate
to become a corporation of other States because of
the conflict and confusion of laws and regulation,
and we look to the time when either the Federal
Government will take full and exclusive charge of all
interstate transportation questions, including in-
corporation, security issues and rates, or else when the
22
State and Federal authorities will so co-operate that
only one line of decision and action shall apply.
Then the Owners and managers will be fairly protect-
ed, as well as the general public, and railroad credit
will be in the hands of responsible regulative au-
thority.
What I say is not spoken with any hostility to
State Governments or State Commissions, for under
State charters we have lived and prospered in the
past. But the time has now come, in this great
Nation, when it is no longer possible to administer,
in the proper interests of the public, a railroad cor-
poration that depends for guidance upon many dif-
ferent Commissions with diversified laws, traditions
and procedure, and still have the efficiency necessary
for our continued National welfare. This lack of
uniformity begins with the manner of incorporating
a railroad Company, and extends to capitalization,
operation, and rates, and even to such matters as the
width of the right-of-way and the method of electing
directors.
THE GREAT FIELD OF REGULATION THAT
TRULY BELONGS TO STATE COMMISSIONS.
Let us not overlook the very important fact that,
aside from questions relating to our great railroad
23
systems, the State Commissions have on their
shoulders the responsibility of regulating and
supervising hundreds of public utility enterprises,
representing billions of dollars of invested capital
and serving, in a truly intrastate sense, Our great
and growing communities. This is properly a duty
of the State authorities and the responsibility of
discharging it adequately will inevitably become
more weighty and serious with the passing of every
year. I am confident that in its intelligent per-
formance you may, with profit to the public and in-
creased prestige to yourselves, expend the full
measure of your energy.
STATES SHOULD WORK FOR A REAL GOV-
ERNMENTAL VALUATION OF RAILROADS.
In the matter of railroad valuation, also, we need
the co-operation of the States. We have a Federal
Valuation Law that is most difficult to interpret
and, if carried out as tentatively proposed, will in-
volve enormous cost, while the results may be of
very doubtful value.
Mr. C. A. Prouty, the Director of Valuation, and
an experienced railroad regulator, has recently said
24
that the Solicitor of the Division of Valuation holds
“that the Valuation Act does not require the Com-
mission to find an ultimate value.” In this Mr.
Prouty acquiesces, but follows with the personal
observation that it is “his conviction that an ultimate
value for rate making purposes should be stated, and
that the full benefit of this valuation cannot be
realized unless this is done.”
Mr. Prouty says that the Act was the result of
repeated recommendations of the Interstate Com-
nerce Commission, which he understood provided for
a valuation in dollars as a whole. Now, if Congress
has given us a law which does not enact the views
of that body, and is not fair to the owners of the -
railroads and the public, why not forthwith try to
correct the law, after full conference with the Federal
and State Commissions and railroad representatives,
with the results embodied in revised and explicit
recommendations to Congress P Failing to secure
agreement, then why not recommend the suspension
of the work and Save an enormous expenditure which
may have little value? Why, in this uncertainty,
proceed further with this work, now requiring the
labor and attention of about fifteen hundred men
on behalf of the Government, and about forty-five
25
hundred men by the railroads, and costing ulti-
mately over $50,000,000?
PRACTICAL VALUATION POSSIBLE AND AT
REASONABLE COST.
I am one of the few railroad men who believe
that Federal valuation should be pushed to a con-
clusion, but I wish to voice my deep conviction
that it should be a real valuation, based upon a
marshalling of facts and data which may be used
for any purpose in the future. This is my individual
view, based upon a long experience in valuing rail-
road property for purchase, for leasing, and in
cases of acquisition by merger or consolidation.
Railroad properties are constantly being valued,
and are being bought, sold and leased on such
valuations, and have been, frequently, for the
last 60 years. It has been possible to do this
without encountering the tremendous expense,
complications, difficulties and grave differences
that are being experienced in the Federal valua-
tion, and it will be possible to do so again. I
believe that today we can have a real governmental
valuation of our railroads, and one that will be of
26
real utility, just as soon as we make up our minds
that practical considerations, and not theory, shall
govern the procedure.
We, therefore, ask you, as part of your public
duty, to take an earnest and active interest in this
matter. Do not content yourselves with merely.
combating the railroads' arguments, where you
think them vulnerable or in error. This is a place
for constructive work, in which you can perform a
service of value by aiding in bringing this vexed and
difficult problem to a just and satisfactory Solution.
WORK TO PROTECT THE CREDIT AND
PHYSICAL EFFICIENCY OF THE RAILROADS.
I must stop with these few thoughts and leave the
field to you, to cover in a wider and better way.
To return to my starting point, we ask your aid and
co-operation in these matters: Simplification of
accounting, elimination of unnecessary reports,
prompt according of reasonable rates, legalizing
pooling of traffic under proper public supervision,
encouragement of mergers to promote efficiency,
relief from obsolete restrictions of State statutes and
the Sherman law, and obtaining real valuation of
the railroads. Your influence in all these matters
27
is potent. We further ask each of you to remember
that your State, however important, is only a link
in the chain of public regulation of transportation.
Make your link as strong as possible to protect the
credit, and so the physical efficiency, of our rail-
roads.
It is recognized as never before that railroad
transportation is at the base of all our National
activities and powers. The Government cannot
Imove, in this great struggle, without its effective
aid. Therefore, let us, through co-operation, make
it a real and vital force, and a mighty arm of the
Nation in achieving success in our battles, our com-
merce and our National ideals.
When you return home, carefully consider the
Inarrow margin of earnings allowed to the railroads,
under public regulation, since 1907, upon the huge
investment placed at the disposal of the public. I
think you will then realize why it has been, and is
now, impossible to provide the requisite capital to
furnish adequate terminal facilities, and take full
advantage of electrification and improved appli-
ances in equipment and operation to keep the rail-
roads well in advance of the growth of traffic.
28.
THE POSITION OF THIS NATION AND ITS
CITIZENS IN THE WAR. -
In conclusion, let me say that when we have time
to review the events through which we are now pass-
ing, and have achieved the results for which we are
working as a Nation, I want to see set out in history,
for the eyes of future generations, the story of the
immediate and loyal response of citizens to the
common defence, and of the devotion of men and
enterprises in fighting for the Nation and serving
its ends.
Questions of conscription have been set aside and
the duty to volunteer, and to accept the selective
draft, have been adopted as the proper courses of
action for the individual citizens. We have given
a sign to all the world that this democracy has
dedicated its men, its honor and its private and
corporate wealth to the Nation, so that it may be in
the first rank to fight for the world's freedom and
the preservation of those ideals which underlie our
Government, our business, our private life, and our
relations with other Nations. We must insure our-
selves that the sacrifices of bygone generations, and
the efforts of the past to guarantee to every man
and every Nation the right to work out their own
29
lives and destinies, are not buried by the powers of
force and barbarism. In this great work it is an
honor for us all to share, realizing that transportation,
and especially railroad transportation, is a National
service and in the highest degree essential to
National prosperity in times of war or peace.
30
|
III,
|
iii.
3 9015
|
syracuse, N. Y.
PAT. JAM. 21, 1908
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