The Evening Missourian. [volume] (Columbia, Mo.) 1917-1920, 1919-08-15
THE PLUMB PLAN


E. Plumb, general counsel for the Or
ganized Railway Employees of Ameri-
ca, has for its purpose the securing oil
public ownership and democracy in
the operation of the railroads.
The plan proposes to buy the roads
by issuing government bonds with
which to pay for the legitimate pri-
vate interests in the railroad industry.
An exchange will be made of govern
ment bonds for securities now held by
investors. The value of the railroads
would be determined by the courts,
thus making it judicial question to
be answered only after an examination
of the charters of the existing COM
panies, the laws under which they are
created and the manner in which the
company has lived up to its charter
and these laws. The public would
not have to pay for watered stock.
The Plumb plan proposes to operate
the roads by a board of fifteen direc-
tors, five named by the President OF
the United States to represent the
public, five elected by the operating
officers and five elected by the classi-
fed employees. This does not mean
government ownership but an opera
ton by board in which those having
the responsibility have also the au-
thority. The claim is made that it is
superior to government operation be-
cause it prevents control by an in
efficient bureaucracy and that it is
true democracy since it gives the men
engaged in the industry a voice in its
management.
After operating expenses OF the
roads are paid and fixed charges are
met, including the interest on out
standing government securities, the
surplus is divided equally between the
government and the men. The en-
ploye's portion is to be divided be-
tween the managerial end classified
employees, the former receiving double
the rate received by the latter class.
This is not profit, since the corpora
ton has no capital What the men re-
ceive is then a dividend on efficiency.
This is not bonus system. 1t gives
to those who increase production a
share of the results their increased
effort has produced and this share is
theirs as long as they are actually in
the service and is not forfeitable.
The operating officials receive the
larger rate of dividend because it
serves as a greater stimulus to the
group with the most responsibility
Since the operating officials would
lose dividends if wages were increas-
ed, it acts automatically to prevent
collusion between labor directors and
the operating directors to outvote the
public's directors in raising wages be-
yond a reasonable level. The CHIEF
argument against the plan is that the
public loses control of its own prop
erty and that the men in charge can
not be prevented from combining tc
pay themselves extortionate wages
This method of sharing dividends sets
up a natural barrier against collusion
This is not the only protection thai
the public has, for the rate-makins
power remains with the Interstate
Commerce Commission; and if wage:
were raised so high that rates had II
be increased, the commission could re
fuse to change them and shippers
might appeal to the courts for re
dress. If the operation by the direc
tors results in deficit, Congress cal
revoke their charter. The difference
in dividends creates no hostility be
tween officials and men, becaus'
without harmony between them nei
ther group can earn dividends. Al
official in working for his own divi
dends is working for the dividends o
his subordinates, for one cannot gail
unless all gain.
The purchase of the roads is super
vised by purchasing board compos
ed of the Interstate Commerce Com
mission and three directors of the ney
government corporation, one directo
from each group.
The rate of wages to be paid tn
employees is determined by the boar
of directors.
Disputes between the officials an
the men are adjusted by boards, t
which the operating officials elect fiv
members, the men five members. Il
case of failure to reach an adjustment
the case is appealed to the directors.
According to the proposed plan, tn
government invests it's share of tn
surplus in improvements and exten
sions, thus adding to the fixed chare
es. It retires the outstanding bond!