Evening Star Newspaper, December 18, 1934, Page 13

. WASHINGTON, D. C, TUESDAY, ' DECEMBER 18, 193L . _ .. : THE EVENING STAR, . . % LEE GITES BENEFIT OF RATE CONTROL I. C. C. Chairman Declares Unregulated Carriers Still Discriminate. (Continued From Twelfth Page.) in the accomplishment of properly re- lated State and interstate rates. ‘We also co-operate with State Com- missions in connection with applica- tions for certificates of public con- venience and necessity for the con- struction of new lines or abandonment of existing lines of rallroad wholly within a State, by inviting the State Commission to hold hearings, make the record and submit such recom- mendations as it may see fit to do. Thus the knowledge of local situations possessed by a State Commission is made available to us in these mat- ters, Commission Inquiry. When it deems it necessary the eommission may institute an investi- gation upon its own motion. Upon Judieial review its findings of fact are conclusive if based upon an adequate record and are .not arbitrary. Many controversies between shippers and carriers are “ironed out” without re- course to formal proceedings through the mediation or advice of the com- mission, and it endeavors to bring this about whenver possible, thereby saving time and expense to the parties and the Government. Another important phase of the commission’s work has to do with the financial affairs of the railroads. Since 1920 railroads have been required to obtain authority from the commission to construct new lines or to abandon portions of their lines. There can be no interlocking directorates without the commission’s approval. Railroads can issue securities only after the commission has given authorization therefor. In a single year it has passed upon securities with a face | ‘value of over 560 million dollars. Ap- plications for loans to railroads by the Reconstruction Finance Corporation must first be approved by the com- mission. ‘The commission is also charged with the administration of laws relating to the safety of railroad equipment, lim- iting the number of hours railroad employes engaged in train operation may be continuously on duty, investi- gating collisions or other serious acci- dents, requiring the installation of au- tomatic train control or train stop de- vices, and inspection of locomotives to determine whether they may be oper- ated with safety. It has authority to require the use of specified appliances with the view to increasing safety in train operation. ‘The commisison prescribes rules governing the form of the carirers’ rate schedules and classifications and the manner of filing and posting them for public inspection. There are more than 6,000,000 tariff schedules and supplements now on file. These carTy literally billions of rates. Under the provisions of the car serv- {ee act, the commission has authority | to issue orders in emergencies arising out of car shortages, congestion at ter- minals, or other causes, designed to | relieve the situation, and particularly to prevent any interruption of the free flow of food, fuel, perishables, live stock, etc. Carriers are required to keep their accounts in accordance with a uniform system, prescribed by the commission, which inspects these accounts fo in- sure eompliance with the law. Probable violations of the transpor- tation laws, involving criminal pros- ecution, such as rebating, under- billing, and the working of employes in excess of the limitations of the| hours-of-service act are investigated by the commission and if it is felt that the facts warrant a prosecution, the matter is reported to the United States attorney of the proper district, who is assisted by the commission’s attorneys in the further prosecution of the case. Requirement of Reports. Carriers under our jurisdiction are required to make annual, quarterly, and monthly reports, which are com- piled and the results published and made available to the public. These constitute a mass of valuable data which shows the financial condition of the carriers, efficiency of railway man- agement and operation, the character of the traffic hauled, with tonnage fig- ures, wage statistics, in fact, data with respect to practically every phase of transportation under our jurisdiction. The commission is authorized to in- quire into the management of the busi- ness of carriers and is directed to keep itself informed as to the manner and method in which it is conducted. It is required to report annually to Congress such information and data collected as may be considered of value in the determination of ques- tions connected with the regulation of commerce, together with such recom- mendations as to additional legisla- tion as it may deem necessary. It is unlawful for any railroad sub- Ject to the act to own or operate or have any interex in any water car- rier operated through the Panama Canal or elsewhere with which the railroad does or may compete for traf- fic. The commitsion may determine questions of fact as to the competi- tion, or possibility of competition, after a hearing on the application of any railroad. If the commission be of the opinion that any specified service by water other than through the Panama Canal is being operated in the interest of the public and is of advantage to the convenience and commerce of the people, it may au- thorize its continued operation by a railroad. In 1913 Congress enacted the so- ealled valuation act, which was spon- sored by the elder La Follette. The report accompanying the sim- plitying and economizing amend- ments to the interstate commerce act last year probably contains the best reason for an up-to-date railroad val- uation. It is, that it constitutes “a practical working tool and guide for the commission in its many regulatory duties,” and, the railroad situation is becoming so acute.” What is the extent of this railroad property we are required to value? Besides the 250,000 miles of what are designated main tracks and 400,000 miles of all tracks to which I have already referred, there are more than 2,000,000 freight cars, some 60,000 passenger cars and 57,000 units to Congress itself when || years and dropping in recent years to approximately one-third of that amount. Annual expenditures for maintenance, in order to keep it in a safe and efficient state of operation, have ranged from $2,600,000,000 to $1,250,000,000 per year during the Iast 15 years. Many millions of dol- lars are required annually to offset the losses resulting from physical and functional depreciation. Privately Owned Profit. ‘Though dedicated to public use this property is privately owned, with a vast army of people holding long-term fixed obligations and another vast number holding equities therein. While the public does not guarantee the suc- cess of such enterprises, nevertheless, under the Constitution, the owners and operators of these properties are entitled, if they can earn it under just and reasonable rates and honest and efficient operation, to reasonable compensation in return for the serv ices performed by them. ‘The valuation act directed the com- mission to investigate, ascertain and report, among other things, the origi- nal cost, investment, cost of repro- duction and cost of reproduction less depreciation of all physical property; present value of lands; amount and value of aids, gifts, grants and dona- tions; results of corporate operations; full and complete financial and cor- porate histories of existing and prede- cessor compenies. In compliance with this requirement, the property was inventoried in the fleld by our engineers by measuring the grading and ballast in cubic yards, counting and observing the condition of the ties and rails, motive power and roll- ing stock. No plece of property of any significance was neglected. Cor- porate records were examined, all per- tinent financial transactions were re- viewed. The mandate of Congress was obeyed. Today there is available in public reports in concise form a veritable encyclopedia of the property of the railroads, their corporate and financial affairs from dates of con- struction to dates of valuation. It has been referred to as the greatest scien- tific valuation of property ever un- dertaken, ‘These railroad properties do not remain static. It is evident, there- fore, that unless some method was devised of keeping current the data, on which valuation reports are based, our valuation records would soon be- come only of academic and historical interest. Foreseeing this, Congress directed that, upon the completion of the original valuations, we should thereafter keep ourselves informed of the changes occurring in these prop- erties in order that the original inven- tories and valuations might be revised and corrected from time to time. Car- riers are, therefore, required to fur- nish detailed records of all property changes by units and cost. These rec- ords are checked in the fleld by our employes and the changes are carried into the inventories. In addition to keeping the basic in- ventories current, it is necessary for us to keep abreast of fluctuating costs of construction and materials. These price studies are used as data for the development of “price indices,” which enables us to determine, in short or- der, the present reproduction cost of these properties. Money Not Wasted. Finally on the subject of valuation, I want to leave with my listeners the assurance that money spent in the valuation of the railroads has not been wasted. It is fortunate, however, at a time when the Nation is confronted with the complicated problem of the future of the railroads and the extent to which they must be reorganized or supported by the Government that the Congress, the commission and the public have able & current ine ventory or record not only of the prop- erty itself, with its physical and functional depreciation recorded, | data from which may be determined, among other things, the original cost, the amount of money invested, as well as the cost of reproduction of the properties in their present condition. These afford far-reaching light either in penetrating the question “what is the matter with the railroads” or what must be done in treating individual cases. In conclusion, I would like to say a word with reference to the lack of regulation of transportation agencies which compete with those under regulation. With no require- ment that the rates and charges of these unregulated transpoxtation agencies be published and strictly ad- hered to, shippers using these forms of transportation encounter the same character of discrimination as pre- vailed among railroad users before the act to regulate commerce was passed. As a further justification for regula tion there should be such co-ordina. tion between all forms of transporta- tion that each may be utilized in the sphere where it can best and most economically serve the public. This is impossible under present conditions. The result is much wasteful transpor- tation and the public does not get the maximum of service at a minimum cost. The existing unregulated com- petition has played havoc with many rate structures. With particular ref- PIERRE Conn. Ave. at Que Come to Dinner Tomorrow Wednesday Special Philadelphia Make a Beautiful of motive power; and if all this mo- |; tive power and rolling stock were hitched together it would form a great train of some 18,000 miles in length. ‘Then there are appurtenant facilities ncluding telegraphs, telephones, sig- )| pals, bridges, shops, depots, stations pd terminals. It is a vast, intricate rty. Most of it is subject to the and times of industrial and com- activity; all is exposed to the p of the elements, with resultant rust fnd decay, even in times of de- tear of pounding traffic |} These ba are strong) P’ and hand- somely made of -grade leather. isefui Le bn. It is subject to obsolescence | yesulting from the rapidly changing arts of , construction and operation, now becoming manifest in all forms of transportation. Its capital changes are measured by millions of dollars dally, aggregating the immense sum of more than a billion dollars in some Y ee. G. W. KING 511 11th St. Na. 4242 {8 “Home of Fine Leather Goods” Saiptie st g ST erence to the Iack of regulation of motor vehicles operating on the high- ways, I stated in an address made by me before the convention of the Na- tional Association of Rallroad and Utilitles Commissioners in Washing- ton last month that: “Considering the appalling loss of life and injuries caused by motor vehicle traffic on the highways, I believe it is of paramount importance in any scheme for the reg- ulation of such carriers that the utmost consideration should be given to this subject. “The preservation and protection of human life is of greater consequence than commercial considerations of competition and profit. I am firmly of the opinion that there should be legislation that will bring about & proper restriction of the length, height, width, and weight of motor vehicles, & limitation of the number and size of trailers, and—probably the most im- portant of all—a requirement that only qualified and experienced drivers be permitted to operate properly equipped and regularly inspected mo- tor vehicles, under limitation of rea- sonable hours of service. Regulations of this character, no doubt, would have prevented a recent bus accident in New York in which 19 passengers lost their lives.” I do not believe that other transportation agencies should be regulated in precisely the same way or to the same degree as the railroads, but each should have a form of regulation appropriate to its par- ticular type of transportation. I do not believe that regulatory legislation should be of a restrictive character, but with a view to bringing order out of the present chgotic regulated-un- regulated transportation scramble. It should not be with a view to returning traffic to the railroads unless such trafic can be hauled more economi= PAY THE KAY WAY; 81 Delivers Any Gift up to 50 9ok 21100 e iy o 3¢ o wosk or *1.30 bwice mondly i Suchue w to 1130 9190 & woek o0 *3.00 twice mondbly vl pochane w0 1500 w-—l-‘:wq;u-flv-l - 10000 © NO INTIREST OR' CARRYING CHARGES, cally by them, for, as the commission sald as far back as 1928: “Rallroads have no more economic right to any traffic than had the canal and stage coaches which opposed the construc- tion of railways on the ground that they would take traffic already being carried on the canals and highways." Filipino Center Elects. N. P. Donesa was recently elected president of the Filipino Center at the annual election of officers. Other offi- cers include Luis B. 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