The Birmingham age-herald., 1917-10-14
MONEY FOR RAILROADS

New York, October 13-(special.) Wall | street heard this week direct from prom inent railway officials who had just returned from Washington that the gov ernment would be asked in the very near future to come to the rescue of the raiI. roads, by creating a fund of not less than $500, ,0o0,O0o from which the carriers could borrow. According to this weeks ru- mors, In presenting their case to the ad- ministration, 1t will be declared by the railroads that owing to the exorbitant interest rates created by the worldwide war demand for money, 1t has been i'm possible to make much needed additions to locomotives, freight cars, terminals and other facilities: hence, that unless freight rates are increased, if anything like the demand for transportation is to be supplied, the needs of the railroads must be financed with government funds.
 What position will the government take when the railroad presidents appear at Washington with their proposal? What is there to be said on both sides of the question?
 First 1t must be admitted that If We are to win in the war with Germany, our railroads must be kept up. If our transportation machinery breaks down soldiers cannot be moved or supplied with food or ammunition. Just now the gov ernment is offering new instalment of sS0oO, ,000,o 900 liberty bonds. That money will go into guns and shells. Without adequate transportation that ammunition cannot be either manufactured or shipped to where 1t can be started across the ocean.
 Moreover, unless our transportation ma chinery Is kept going general business will break down. Under Such conditions the government would not be able to sell liberty bonds and without money in plenty the war against Germany could not be carried on for a single week. Thus 1t is plain that the railroads form the keystone of all of our war ac- | tivities With the various bonds ot Great Britain and France selling In this market on an per cent basis, some even
 higher. our railroads are finding it im- possible to raise money for additional To- l comotlves freight cars and terminals, ex- cept by paying prohibitive rates More oyer the cost of living for the railroads 1 has been greatly increased by the in- 1 creased cost of labor, fuel and all sup 1 plies. But admitting all this and more 1 would 1t be wise for the government to 1 create fund of $500, ,0O0,ooO to lend to the 1 railroads?
 It would not. Such step would lead direct to government ownership, step that knowingly would never be taken Dy the American public. Today the rail- roads of Canada are run down imam cially and physically. That pitiful con dition was created without the pubic having had any voice in the matter. The government, with the best intentions possibzle created a fund to help finance the railroads. Once in, there was no way out From the day the first dollar was loaned, things began to get worse and worse Only recently a number ol experts from all over the world were asked to go to Canada as doctors. and see what could be done. The one rec
 ommendation standing out strongest ir
 the written prescription was to get the railroads out of the hands of the gov
 ernment and back under private man. agement.
 Within the past few weeks President
 Markham of the Illinois Central. alter
 giving a number of reasons why govern
 ment ownership should be carefully
 avoided in this country, added:
 
 of the public is familiar with these facts that 1t is quite feasible to make the pub ,lic generally familiar with them, ane ] that when the public generally doet
 know them, it will see that they show iron, the standpoint of the public wei
 fare, government ownership is not onI, unnecessary but highly undesirable"
 But the railroad men who are going , down to Washington in the next fev ldays are asking: Unless we get the gov ; ernment to come to our rescue with th' proposed fund of $500, ,000,000 what are w ) to do? That is fair question, deserving ? a fair answer.
 ) Here it is: Today the railroads, as ? whole, own 635OO locomotives. The tota
 annual output of all locomotive plants 1 only $500 and the average price, becauS , of the demand from England and Franc , and Russia, is now $6o.o0o. against s3o,0O l in 1914. But even the $60,000 is purel nominal. The output of all locomotiv {; plants is taken for year and a hal l, to come. Two railroads badly in need Q
 additional motive power recently pa e l according to report, $1OO,O00 each for loco , motives of the Mallet type.
 ul But the chances of our railroads secur i ing additional motive power are no [ hopeless even if the warning nation
 have stepped in, as they have in tn . money market, and raised the price [ |, 1 a prohibitive level. Only one-lnlru z
 the 63,50O locomotives owned by our rail
 roads today are modern; to moderniz
 the other two-thirds, increasing their ca
 l pacity by 33 per cent, would cost bar : SS0O0 per locomotive, sum which coui T be found from current earnings. To Tn z crease the track and terminal faclltle ], of the railroads 33 per cent would ca I for a capital outlay of $S,5ooooo,ooo' ; amount absolutely out of reach. }, But the small amount required 10 moo !; ernize locomotives so that the rreigf 2 cars can be kept moving is not out }. reach That very thing has Just pee s done nv the Illinois Central. The resu
 is that the average daily movement ,. that conpany's freight cars is now owe s, a0 miles. compared with g for the cour 5, try as whole <,
 An increase of only three miles in th |, leverage daily movement of all freigr , cars owned by the railroads would .
 eouivalent to an increase of 515,OO0 ne : cars. But additional freight cars with 5. out additional motive power will only d . iharm instead of good.
 Additional motive power can be ha 5 even if the supply of new locomotives ar {. as scarce as hens teeth. By modernizin 6 lis old locomotives, long since bougf ' and maid for, Illinois Central has grea
 ,lv increased the average daily run { ' its locomotives That is how the aver . apa daily run of its freight cars ha = theen pulled up to more than 40 mile against 29 for the rai1, Cads of the cour
 fry as a whole. If all Of the railroad
 could bring their average daily run