The Nonpartisan Leader Newspaper, June 2, 1919, Page 8

The Railfoéds, Labor and the Farmers Return of Lines to Mean Increased Rates, Warns Brotherhood Representative—Farmers Would Pay Freight Washington Bureau, Nonpartisan Leader. 2 |F SENATOR WATSON of In- | diana gets his bill through con- gress, returning the railroads to private operation under a guarantee of income to the com- panies, we are all going to pay 15 per cent higher rates far freight and passenger service than we are now paying. That, in turn, will so increase the cost of living for all . of us, including 2,000,000 wage-workers on the rail- roads, that the cost of operating the roads will have to go up, and rates will take another jump. Or there will be a strike, with resultant paralysis of the industrial life of the country.. If congress passes the Underwood bill, return- ing the railroads to private operation under a guarantee of income to the operating companies, ! then we shall have to pay only about 10 per cent more for a ride on the passenger train or for ship- ment of a load of wheat than we now pay. And of necessity the cost of living will be affected in the same way as in the previous case. “That is the situation the country and congress must now face,” said Glenn E. Plumb, chief coun- sel for the railroad workers and author of the. Plumb plan of public ownership and operation un- der really democratic control, when the Nonpar- tisan Leader asked him what is to happen in the i railroad fight. “Passage of any of these bills by congress will “ ;- simply open the battle,” said Plumb. “The Under- i wood bill represents the scheme of the Warfield committee of railway security holders. The Watson ! bill, more drastic, represents the scheme of the railroad companies’ executives. The Watson bill | - calls for a minimum return of 6% per cent upon the ‘property investment accounts’ of the com- | panies, while the Underwood bill, more modest, de- mands only 6 per cent as the minimum return to the security holders upon the ‘property investment accounts.’” Thé Watson bill means that with the i cost of operation remaining where it now is, we : must contribute at least $535,000,000 more annu- ; ally in increased freight and passenger rates, than . We are now paying, while the Underwood plan calls for increased rates amounting to $441,000,000. “Will congress deliberately enact legislation ' which will add either of these amounts to the present cost of transportation? But let us suppose | that congress does—that it enacts the Watson bill. i That may be done in the belief that instead of raising the freight and passenger rates the com- panies can reduce wages. | WAGES CAN NOT BE CUT, | SAYS WORKERS’ ENVOY - “Wages can not be reduced, at the present cost {1f of living. Any attempt to reduce them will be re- { i sisted by the: railway workers because they must i i live. If compelled, there will be a strike, and the | i industrial life of the nation will be paralyzed. e o A TS A O s et R [l be met, by further wage demands. {{i every increase in freight rates is a direct obstacle . to industrial revival.” “On the other hand, if rates are increased, the consumer must pay. All wage-workers must pay, in a further increase in the cost-of living. - Any increase in the cost of living will be met, and must In addition, - This 'looks bad for the private operation of rail- roads, if they can be privately operated only upon a guarantee of 6 per cent or 6% per cent upon their ‘property investment accounts.’ Plumb was asked just what these accounts are that Watson and Underwood and the companies’ representatives use as a basis of figuring the price we must pay for railroad service. “The - ‘property investment accounts’ of the rail- ways do not represent money contributed by the security holders of the, corporation,” Plumb an- swered. “It is only a bookkeeping account with forced entries, intended by thé railways to balance the face of securities issued by them, ‘and it in- cludes false entries made to cover up and conceal all securities which have been issued for a con- sideration equivalent to the par value thereof, as” well as all discounts on securities, issued for a consideration less than par, and all investments which have been charged to the capital account and paid out of earnings contributed by the public; This demand for value is.‘intended by ‘the com- panies t6 give a solid earning basis for all securi- A A A A S V2 b R R e ties outstanding, without any regard whatsoever to the consideration paid therefor, or to the serv- ices to the public which securities actually rep- resent. “In brief, the ‘property investment account’ is a wholly fictitious-~valuation, concealing emptiness and wind, and dead men’s bones.” The amount of this fake valuation of the railroads, which Watson and Underwood pro- pose to have congress fill full of the gold of a governmental guarantee, is $19,000,000,000. Six and a half per cent on this sum is $1,235,- 000,000. Deduct the $930,000,000 rental paid the railroads by the government last year and we have $305,000,000. Add to this the amount of the operating deficit for last year, which was $231,000,000, and we get $536,000,000 as the amount which the people must pay above what they are now paying directly for the service of a privately operated system of rail- roads under the Watson scheme. The organizations of the 2,000,000 railroad work- ers serve warning that they will not reduce the food allowance of their own families to pay this imperial tribute to railway security holders. They announce, through Plumb, that they will not agree to any payment of income on money which is not actually devoted by the railway com- panies to public service—that is, the amount of money actually invested at the present time, which is described in the railway valuation act as “orig- inal cost to date.” “Original cost,” says Plumb, “must then be mod- ified by taking from it three factors. These are: First, the sums dishonestly diverted to the private profit of individuals; second, sums lost through the bad judgment of those who direct expenditures by the private railroad corporations; third, failure to maintain the integrity of the original investment by proper expenditures for maintenance and de- preciation, which is equivalent to a withdrawal of the original investment. “A valuation determined upon this theory will furnish a just basis for regulation under private ownership, and an equally just measure of compen- sation for the properties which are to be acquired " by the government. Rates based on such a valua- tion will insure the public against excessive charges. Operatior*based on such a valuation guar- antees the wage-earner against low wages in order to create extra profits or speculative values in securities.” ; Then these 2,000,000 determined wage-workers in the railroad industry are going to insist that the wind and water be squeezed out of the railroad “property investment account.” “If congress ignores the danger signals that will be raised by labor,” says the labor spokesman, “and passes the Watson bill, or any bill of like tenor, they are merely inviting universal disaster.” RAILROADS CORRUPTING FACTOR IN POLITICS Mr. Plumb’s view is concurred in by the Farm- ers’ National Committee on Transportation. In a statement issued recently, the committee says: “Those who argue for the return of the railroads to private ownership argue that under federal ownership the ‘railroads will be in politics.” Every farmer knows that under private ownership the railroads have been steeped.in politics and have been the most corrupting factor in American poli- tics, and that a return to private ownership means that they will continue their same old game. “Under private ownership, the railroad owners declare they must raise at least $1,000,000,000 ad- ditional capital for at least 10 years. For this capitalization they will have to pay at least 5 or 6 per cent. The annual interest charge on this after 10 years, will amount to $600,000,000 annually. “Under private ownership, the railroads will be run for a profit and to make all they can out of the public. There is no use blinking at this fact, which is admitted by the interstate commerce com- mission, after many years of trying to keep the railroads in line. In its report for 1911, the com- mission said: ‘It becomes increasingly evident that entire freedom from discrimination can be secured only by complete separation of the business of transportation from every other commercial enter- prise’ In other words, the government is unable to prevent discrimination. Discrimination is al- most as serious to the farmer as high rates. If he - can not get equality of service, he is’ at the mercy of his competitors and other business interests. . “The return of the railroads to private owner- ship means, therefore, high rates, constant trouble between the roads and their employes, discrimina- tion and inequality of service, and that the most corrupting factor in American politics will again be in the saddle.” WHAT’S SAUCE FOR THE GOOSE—_ \ =1 MONPoLY AFETY Com TAT I |ssuu