Excerpt from Railway Regulation and Locomotor Ataxia: An Address by Frank Trumbull, Chairman, Railway Executives' Advisory Committee, Before the Twenty-Third Annual Convention of the National Hay Association at Cedar Point, Ohio, July 12, 1916

That there is in this country a fundamental need of adequate transportation facilities.

That such facilities during the continuance of present economic conditions can only be had by means of private capital, combined with private enterprise.

That private capital can only be obtained by the hope and realization of fair and reasonable return.

That to produce such return, freight rates may be raised, when it is shown that existing rates as a whole (considered regionally in this case) yield inadequate revenue, and that the higher rates proposed would be reasonable.

That such reasonable passenger fares may be charged as will yield a fair return on the property devoted to passenger use, and further - that in general each class of service, including the mail and express, should contribute its just proportion to the total economic cost of operation.

That in determining reasonable rates, interest upon rail way debt is not a factor and will be discarded. This has mightily clarified a thing about which there has been much confusion of thought and even more confusion of tongues. The fact is that bonds and stocks indicate only the ownership of property, and are not the property itself which is used by the public. This is simply a corollary to the long established principle that if railway companies take private property for public use, they must pay its reasonable value, regardless of how the previous owner acquired it or paid for it.

However, almost immediately after this decision was handed down, one state made an order redueing rates which, if sustained by the courts, will take away several million dollars per annum of the benefits derived at Washington. Various state rates and practices could not be changed to con form to the recommendations of the Commission; payments by the Post Office Department were still outside the Commission's jurisdiction; various tribunals (sometimes both the legislature and the commission of a single state) were determining what each class of service should pay upon traffic within the states as distinguished from that between the states; all the states were at liberty to make requirements which in one way or another changed the net revenue of the roads. All of which illustrates the real helplessness of the Inter state Commerce Commission to actually regulate. Clearly, something was still lacking.

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