New-York tribune., 1918-04-27

When the President issued the
proclamation taking control Of the
railroads his plan for compensating
the carriers was everywhere hailed
with enthusiasm. Railroad men
joined in the applause because the
desire to be fair to them was obvi-
Gus, and that was all they could
hope for. But the spirit of fairness
then exhibited is not carried out in
the proposed form of contract be-
tween the railroads and the govern
ment, and railroad executives ap-
pear to be thoroughly justified in
their complaint that the contract
would be unduly severe to the car
riers.
The first objection raised is to
that section which provides that the
compensation agreed upon may be
changed by order of the Interstate
Commerce Commission "to correct
substantial errors or omissions in
the accounts or reports Of the COM
pany or in the computations based
thereon" With that objection we
have little sympathy, since it is hard
to see how injustice would be worked
under it. If, through error or i'm
proper accounting, the compensation
named in contract is greater than
it should be, it is only proper that
correction should be made, just as
compensation ought to be increased
if investigation showed it to be less
than the company should receive
The only danger is that the commits
sion might make unnecessary and
unduly burdensome Investigations,
and thus run up expenses needlessly,
but that is hardly likely to happen
under existing conditions.
But while the first objection need
not be taken too seriously, the
others are much more forceful, par
ticularly the one relating to
maintenance. Under the contract it
is proposed that
(a) During the period of Federal
control the Director General shall
expend and charge to railway oper-
ating expenses, either in payments
for labor and materials or by pay
ments or credits to depreciation
funds, such sums for the mainten-
ance, repair and renewal Of the
property taken over as may be requi-
site in order that the property may
he returned to the company at the
end of Federal control in substan-
TALLY as good repair and in sub
stantially as complete equipment as
1t was on January /, 1918, and the
annual expenditure for such pur-
poses during the period of Federal
control of an amount equal, subject
to the allowances provided in Para
graph c of this section, to the aver
age annual expenditure for such
purposes during the test period shall
be taken as full compliance with
this covenant
(b) The Director General may ex-
pend and charge to railway operat-
ing expenses, either in payments for
labor and materials or by payments
or credit to depreciation funds, such
sums in addition to those expended
under Paragraph A of this section
measured as therein provided by
the expenditures during the test
PERIOD as may be requisite for the
safe and proper operation of the
property taken over, assuming q use
similar to the use during the test
period, and the amount of such ex-
cess expenditures during Federal
control shall be made good by the
company as hereinafter provided.
(c) In comparing the amounts ex-
pended and charged under the provi-
sions Of Paragraphs A and of this
section with the amounts expended
during the test period, due allow
ance shall be made for any differ
ence that may exist between the
price Of labor and materials and be.
tween the amount Of property oper-
ated during Federal control and the
average for the test period, SO that
the compensation may be reduced as
nearly as may be to basis of rela-
tive physical reparation.
1t is plain that expenditures for
maintenance equal to the average
expenditures during the base period
would not suffice to keep the prop
critics In as good repair and as fully
equipped as they were when the
government assumed control, for the
reason that the prices of materials
are now much higher and tending to
rise constantly. And the provision
for this discrepancy under Para
graph c is inadequate, by reason Of
the fact that the time at which the
comparison of prices is to be made
though vital factor, is not speci-
ned Moreover, upkeep is to be pro-
vided for upon the assumption that
usage will be no greater during the
control period than during the test
period, whereas, as every one knows