Show Wa wo 06 HINES E W fin IRB A. A PlA N Control of Excess Profits Would QuId Protect I Int Interest re t of Public and aud All Lines IT Urges t Director General Gener tl Br nt Associated Press S 7 L LOUISVILLE O K Ivy Ky Jan Jan 29 W Walker D. D Hines director lre tor gen gen- en cral of railroads a s in an all n address before the the Transportation club here t tonight urged the necessity of a division of excess earnings of railroad corporations corporations corpora corpora- above aboe a reasonable return in order to protect the public against excess earnings of very cry cry prosperous railroads s and to insure a fair return to nIl all roads Those who vo oppose this plan seem 1 i J h l disco ung discouragement ment upon private ate c capital s said id Mr lr limes Hines They rhey seem to to- toas assume as as- sume that if this plan is is not adopted there will vill b bo he no of private capital but the they should rc rc- the discouragements which have o existed heretofore The THc real question Is s whether a plan shall be adopted which will both safeguard safeguard safe safe- guard the public interest and reasonably reasonably reasonably reason reason- ably protect private atc capital or whether on th the tue other hand a plan shall shaH be adopted which will fall fail to do either with an any 30 de degree r e of satisfaction Hold Bold Action X seeded Mr Ir lines limos declared his belief belier th that t unless the railroad problem at present present pres pres pres- ent is dealt with in a a. hold bold and ef effective tf- tf wa way the return to private management man man- after federal control will I-e I wholly disappointing also the Tim r rAn u compulsory c consolidation of or tho the railroad railroad rail rail- road rond systems of the country Into a few large systems and suggested the participation participation par par- of tho the public and labor management man man- I of or tho the railroads I In his discussion of ot the railroad rait I question an and the reorganization of ot th the I railroads which ho he believed ed necessary I after government control Mr hines said On the basis of or my roy twenty-six twenty years years' experience with railroad regulation thelast the la last t two years ears o of tho the p period being in 10 inthe inthe I Ithe the public service I wish ish to express I puy views as to some tome of or the fundamentals fundamentals funda funda- un 3 necessary to a successful f so ao- ao i lution I Railroad Discouraged Discourage In lOt 1017 Intelligent consideration on will be he greatly aided b by recalling the tho conditions condi condl of or railroad regulations as they exIsted ox- ox Isted in 1917 1117 and as they will viII again exist un under cr private control unless fundamentally fundamentally fun tun- cha changed b by new legisla tion In Iu 1917 HIli railroad executives were profoundly profound discouraged as to the lie conditions conditions con con- of ot railroad regulation They Thoy found extreme difficulty In proving to the public satisfaction what whal the they re regarded regarded re- re as ns their absolute necessities Incases in incases incases cases of or In Increased rea etl rates nn and they the had hart no satisfactory method c. c of dealing with the labor problems which were c constantly constantly con n- n becoming more pressing Both rates and service cre were being regulated b by rc federal e.-al e. and state legislative bodies and commissions Common action was much easier for the labor organizations than It was for or the railroads The re result ro ro- suIt sult was waR that private management manage mannge- J ment of ot the railroads was regarded b by bythe bythe the executives themselves s n as as largely figurative because the they felt that to a great extent the tho management was vir virtually virtually vir- vir taken out of o their hands bands Public Mutt Must Share Shnte The Tue q Jc question Uon Is la shall tho the railroads be bo returned to substantially the same samo regulation which had proved BO so discouraging discouraging dis dis- In 1917 or shall shaH changes bo be mado Sufficiently fUn fundamental to to re remove remove re re- move the difficulties up upon n this ques Ques- Lion ion I wish to 10 offer tho the results or of my myown myown myown own stud study of or the tho problem Broadly 1 believe that unless these I matters be dealt with In n. n bold and ef effective effective of- of way the return to private management man man- will wilt bo be wholly disappointing I I believe that no io prompt confident arid and liberal regulation of f tho the railroads I will be practicable unless provision Is IB IsI mad mado for appropriating for tor tho the benefit I of or the public Interest an Important part o of tho the excess which an any railroad coni cont pany pan mn may earn over o a a. clearl clearly reasonable reasonable reasonable reason reason- able return If this Is not riot done there will be he i two continuous obstacles to seI se- se I ont om ge 2 2 I 1 I I I HINES FAVORS LIMIT t c tt t ON RAilROAD PROFITS s st t I Continued front from Pa Page e 1 curing satisfactory general treatment of or the thc rate rale problem One will be that rates rales sufficiently I hl high h to protect the general situation i will inure to an unreasonable extent to the tho benefit of ot particularly prosperous prosper prosper- oils ous roads and this will operate t tp prevent prevent pre pre- vent tho the establishment of ot such rates The other will wilt be that rates which might be sufficient to protect the sit situation sit sit- c on the average a would operate to lo produce unduly high returns In ex exceptionally ex- ex prosperous years ears and this fear likewise have a a. restraining influence upon satisfactory action on the tho rate question Reserve r e Iund Advocated On the other hand If IC It is cle clearly t understood that an important part of or orthe the return of oC nn any company compan in excess of ot ofa ofa I a a. reasonable profit will wilt inure to the tho public benefit these obstacles to satisfactory satisfactory satis satis- factor factory treatment of ot the tho rato rate problem will disappear Tho The excess earnings earninG's thus appropriated for tho the public benefit bene beno- fit ought to be used lar largely el for tor the creation of or reserves to protect the tho railroad railroad rail rail- road situation in unfavorable years and thus an additional element of or stability will w be given ghen to the situation I 1 The readjustment J JI of ot rates at present to establish the credit of or all the rallI railroad rail rail- 1 j I road companies operating Independent Independent- I II ly 1 and on their separate responsibilities j I will be an exceeding difficult matter I because the abnormal conditions for thelast tho the last two years make it exceedingly difficult dif lIf to dra draw any satisfactory conclusions conclusions conclusions con con- 1 as to the actual earning ca capacity ca- ca of oC the railroads at the I The Tho public Is also likely to come to I realize that under a unified control a a. large Increase In rates would I Inot not not be nece necessary sary I Rate increases F reared Feared ared I Therefore the proposal for the largo large Increases In rates which probably willbe will willbe I be necessary to establish and sustain the credit of ot the railroads separately under private management Is likely to tobe tobe tobe be met by strenuous and plausible ob ob- ob In Iii such a situation the tIle prospect of oC obtaining tho the necessary increases willbe will willbe willbe be greatly Improved b by the plan which I recommend because all nil will vill date clale that If for tor any reason Teason on any railroad or generally it should turn turnout turnout turnout out that rato rate increases produce more than is sufficient the tho excess will go o largely to protect th the public Interest rather than to give Sho the private ate owners an u additional benefit |