New-York tribune., 1917-12-24
Roads Relieved of All Fl
nanciaT Difficulties for
Duration Of War
Earnings Guaranteed
officials Only Problem Nov
ing of Traffic, u. S. Ex-
perts Report 4

WASHINGTON, Dec. 23.-Hov Eng
lond has relieved her railways Of iinan-
cial difficulties during the war and lett
the managers free 10 devote all their
energies to moving the great volume OF
traffic are to be .old in a special report
on the English railways in war soon
to be published by the Carnegie En-
dowment for international Peace. The
study has been made by Professor
Frank II. Dixon, of Dartmouth, and Dr..
julius II. Parmelee. of the Bureau Of
Railway Economics.
The essential features Of the English
railway mobilization plan INCLUDE oper-
alton Of the lines by the same officials
and employees as before the war; the
transport of all government business
without the necessity of routine pay
ment for each specific service; the
guarantee by the government TO the
railway companies Of the same net
earnings that they had in the last year
of peace; the equitable settlement or
all labor disputes by the payment o.
war bonuses.
England declared war on Germany
August 4, 1914. At one minute after
midnight on August 5 the railroad sys-
TENS of England. Scotland and Wales
passed under the control OF the Centra.
Railway Executive Committee. vested
with governmental powers under law
put on the statute books in 1871
At the head of the committee Is the
chairman of the Board Of Trade, Cab
met officer, heading the department
roughly corresponding TO the Unlted
States Department OF Commerce and
Labor. The active head of the British
committee, however, Is a railway eX-
ecutive, Sir II. A. Walker, Of the Lon
don South Western Railroad.
The law under which the government
took over the railroads required 1t 70
render them full compensation for loss
or injury sustained because Of govern
ment control. To carry out this proyl-
sion of law the government made an
agreement with the railroad companies
the principal features o. which are:
/. That the railroads place their en-
tire organization ut the disposal or the
military authorities and handle traffic
in accordance with directions from
them.
=. That the government periodically
pays to each road such sums OF money
as are necessary TO make its net In
come for the period equal to its net IN
come for the corresponding period OF
the calendar year 1913. In other
words, the last year of peace was taken
as the basis of payment
Several notifications OF the agree
ment have been radc. The first modi-
fication covers the question o. fixed
charges on new railway capital IN
vested during the war period. Fixed
charges are OF course paid out OF net
revenue. Under the agreement as
originally made a company compelled
BIZ military or other eXigency TO en-
large its facilities would automatically
be placed in worse position than a
road on which no such cXlgency oc-
Cured Accordingly, early in 1917 the
government agreed to allow per cent
interest on all capital Invested IN new
railway property since August 4. 1914
The second modification covers the
question Of deferred maintenance
Under war conditions the English roads
found it difficult 10 maintain normal
maintenance either on way and struct-
ures or on equipment. Yet deferred
maintenance was properly chargeable
to the expense account OF the year dur
ing which the wear and tear OF service
made the maintenance necessary. Ac-
cordngly, early in 1917 the English
government permitted the railroads Ia
enter reasonable charges Tor mainte
IL inc no
counts. Ii such maintenance charges
were not wholly expended the deferred
portion was credited TO reserves to be
drawn upon later.
Despite the loss OF some 100000 en-
ployes who enlisted for service at the
front. the physical operation OF the
British railroads under the agreement
with the government has been a sue
cess. They have furnished the largest
amount of transportation in the history
of the country, with smaller and less
skilled labor force.
Radical measures to improve the car
service situation were not undertaken
until the beginning of this year. after
over two years of war. The pooling OF
cars, undertaken By the American rail
WAYS on their own initiative, was no;
ordered in England until January l.
1917.
1t is known that there have been
deficits for the government to pay, as
it is not charged for specific move
ments of troops or supplies. Speaking
in the House of Commons in the spring
of this year, Mr.. Bonar Law, Chancellor
of the Exchequer, stated that the Eng
lish railway agreement was an extraor-
dinarily good bargain for the govern
ment.