New-York tribune., 1918-01-05
Railroad Consumption


In volube, dilatory democracy the
greatest railroad system on the face of
the earth (232, 900 miles of track and all
appurtenances) is conscripted without ar
gument. Discussion is after the fact
In his message to Congress the Presi-
dent states his conclusion first, saying that
unless the railroad machine "be under a
single and unified direction the whole
process of the nations action is embar-
rassed." That is indsputable From this
statement of conclusion the President then
proceeds to put Congress upon notice as to
what has already happened. He has taken
the railroads out of the hands Of their
owners and managers, he says, not because
they were remiss in spirit or derelict in
practice, "but only because there were
some things which the government can do
and private management cannot" That
also is indisputable.
Which of these things to do that govern
ment can and private ownership can't, and
how to do them, might have been discussed
almost without end, but when 1t came to
dealing with the railroads the Administra-
tion was apparently in one of its ultimate
and doing moods. The things to be done
and the methods of doing them are set
forth in its cast of necessary legislation,
entitled "a bill to provide for operation of
transportation systems while under Fed
eral CONTROL" etc. Three features of this
bill stimulate the imagination.
There is stipulated for the railroad
owners "standard return" which shall
be the average of the net operating in
come of the three years ended June 80
last, and it is provided that "any net rail-
way income in excess of the standard re-
turn is to be the property of the United
States" In time it will be realized that
the government, perhaps unawares to
itself, has got into it's hands new tax
power of tremendous Importance. By
raising freight rates and passenger fares
it can increase railroad revenues at will,
and all over the standard return" would
be "the property of the United States"
The bill provides that the government
shall find the capital needed to increase
railroad facilities and it is hoped that the
saving from economies of unified opera
ton will produce surplus of revenue
great enough to finance cnlargements
without recourse to the national Treas
ury; but meanwhile it is provided that the
railroads themselves may issue securities
for all proper purposes, and the President
is authorized to purchase such securi-
ties at price not higher than par and
in his discretion to sell them again at a
price not less than their cost. Under
these provisions the government under
takes to supply railroad capital both di-
rectly and lndirectly-that is, both as
capitalist and banker-and the President
becomes potentially the largest dealer in
railroad securities the world has ever
known.
The third feature of the bill to be noted
here is the most significant. 1t is Sec.
ton l3, and reads:
The Federal control of TRANSPORTATION
systems herein and heretofore provided fol
shall continue for and during the perioe
of the war and until Congress shall there
after order otherwise.
BY this provision, in the Administra
tion's own bill, railroad conscription /.
not for the duration of the war, but fol
an indeterminate period, or until other
wise ordered. Meanwhile, by such
methods of operation and finance as are
proposed the governments intrinsic anc
material interests are bound to become
extremely commingled and confused with
those of private capital. Will the owner.
of the railroads ever get them back? No
body knows. There is no undertaking
automatically to return them at the enc
of the war or to restore the statu:
quo ante.
Having gently closed the door between
the railroads and their owners. the Ad
ministration pulls the latchstring inside