New-York tribune., 1918-05-23
Bankers Recognize
The Necessity of
McAdoo's Move
Urge Caution in Matter of
Railroad Executives Sal
ary Adjustment

Wall Street, in the past the maker
and unmaker of many railroad execu-
tives through its financial control of
the country's transportation lines, al
though surprised by the suddenness of
Director General McAdoo's summary
retirement of all railroad presidents,
yesterday viewed the development with
more or less complacency. Although
there was some disposition to criticise
the railroad administration for its ac-
ton in the matter bankers who have
long been identified with railroad
finance admitted that the step was
probably necessary in order to bring
about proper coordination of the in
dividual interests represented in the
various roads, thus making for better
unified control, and so increasing eff
cheney of operation.
The stock market showed little per-
turbation over the news. Railroad
stocks declined with the rest of the
market, 3ut the tendency was not suffi
GENTLY pronounced to indicate any ap
prehension among railroad sharehold-
crs concerning the management and
operation of their properties under the
new programme. A number of lead
ing bankers took the position that, as
the railroads may now be considered
part of the military machine of the
country it is eminently proper that
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absolute supervision of the Washing
ton authorities. They therefore re-
garded the action Of Mr. McAdoo as
perfectly logical. 1t was asserted,
however, that as matter of rrecau-
tion many of the larger systems would
probably retain the services Of their
presidents as a safeguard for the in
tcrests of the stockholders. While the
presidents, under such an arrangement,
would not have any direct supervision
of operations, they would neverthe
and suggestions as to matters of
policy.
Tightens Governments Grip
In ultra-conservative quarters the
assertion was made that the action of
Mr.. McAdoo indicates step nearer
complete government ownership Of the
railroads, and doubt was expressed
whether it would be possible as a re-
suit of the present scrambling of the
railroads to return them to their
original arrangements after the war.
1t was felt, however, that many of the
benefits that will be injected into the
railroad situation through government
control and operation during the period
of the war will place the railroads in
stronger position than they have oc-
in that connection that through the
latest act of the railroad administra
tion at Washington railroad securities
as a whole have been put in n stronger
position, inasmuch as the new oper-
ating arrangement will unquestionably
insure closer cooperation in their man.
agement. 1t is assumed, of course, that
as soon as Mr.. McAdoo has men in
charge of operation appointed directly
by him there should follow closer CO.
operation OF management, while the. de-
sires of the railroad administration
should be more closely followed than
might be the case in the event of the
retention of the present railroad heads.
Railroad men declined to comment on
the action of the Director General, al
though there was a disposition in rail-
road circles to resent the intimation
that the railroad presidents were being
removed from operating control be-
cause of insubordination.
A banker, whose firm has been closely
linked with the financing of an impor-
tant Western railroad, commended the
action of the Director General as be-
ing the only thing he could do under
the circumstances. He said that Nc
Adoo, no doubt, had found that sew
eral railroad executives were trying to
serve two masters-the government and
their respective boards of directors.
This condition, in this bankers opin-
ion, could not continue to exist if the
plan of Federal control is to be sue.
cessful.
Some criticism was directed against
the Director Generals announced in
tention to make a drastic cut in the
salaries of railroad presidents. The
view in banking circles was that this
was an unimportant matter compared
with the more vital questions involved
in an economical operation of the car
riers during the war period.
Applying the statement made by
him Tuesday night, Francis H. Sisson,
vice-presidcnt Of the Guaranty Trust
Company, said that the saving by cut
ting the present remuneration of rail-
way officials was infnitesimal when
considered in the light of the enor-
nous increase in the wages of employees
that is expected to take place in the
not distant future. Mr.. Sisson pointed
out that there was grave danger of
losing the services of railroad experts
unless the Director Generals order un-
dergoes modification.
What r. r. Executives Earned
"The average salary of railroad Of
fcials for all the railroads of the
country" he added, "is in the neigh
borhood of $4,000 a year. Railroad
presidents are paid from $4,000 to
$4,000; presidents from $4,000 to
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