Evening journal., 1919-02-20
CONDE MN5 U.S..
rail OPERATION
Otto H. Kahn Says Years
Experience Proves
Failure
SEES MENACE
IN POLITICS

NEW YORK, Feb. 20.-In a paper en-
Atled "A Suggestion Concerning To-
days Railroad Problem" read last
n ght before the Brooklyn Chamber OF
Commerce, Otto II. Kahn said:
One years experience has s1flced 10
demonstrate to- the people at Ia. ge thaI
government operation OF RAILROADS
means deterioration in service, higher
cost, lessened eagerness TO please the
shipper and study his convenience
not TO mention the menace OF politics
becoming a determin ng factor in the
fixing OF wages, In new construction,
bet,erments. etc.
Every right-thinking man must wish
10 see railroad labor, as indeed all la
Dor. content and literally compensated.
The just claims Of labor take prece-
dence over the claims or capital and
even those OF the consumer In general.
ButNit Is not reconcllable with the
American theory OF government to give
10 any executive department the power
withbH a searching public hearing be-
fore at least a semi-judicial body. to
increase the wages Of one class Ct la
Dor. as was done in the case OF the
railroad workers, by the stupendous
sum Of about S6O0OOO,OOO a year. and 10
apporlion Il by rgid and undlscrimln-
ating classification.
Wage Increase SS0O,00O,000.
The inci ease in wages actually paid
In 1918 Is officially stated at $3.50. 0O0.-
600. but | am Informed that when the
increases granted are in full effect for
a complete year, they are expected 10
reach approximately SS00.OO0OOO. The tax
this placed upon the consumers Of the
country Is comparable TO the total in
terest on our entire present net war
debt Excluding loans to the Allies, and,
capitalized at 4 i-2 per cent. represents
a principal sum OF approximately sis.-
100000.
1t may not be inappropriate 10 point
out In comparison TO the Increase OF
about sS00,OOOO00 granted to labor that
the total compensation which capital re-
ceives In the shape OF rental for all OF
the railways OF the county Is about
S900.OOO.ON0 per year And that sum in
cludes Interest on borrowed money TO
the extent Of about s500OO0,0O0 per
year. leaving as compensation TO the
owners Of the roads about si00OO0.O00I
apart from about si65,OOO,000 income
derived from miscellaneous physical
property and incorporating income
The total wages paid 10 railroad labor
for the last year are estimated at Si2,-
100000.
believe that a decisive majority Of
the farmers, the shippers and the con-
sumers in general, have made up their
minds that government operation Of
railroads is not wanted
The program. In support OF which /
believe public opinion is crystallizing.
Is:
First. Let the government exercise
strong and comprehensive control. but
fair and constructive, not punitive or
st7angling
Second. Let those features OF opera
ton. which under government man
agcment have proved advantageous
and convenient TO the public be pre-
served and those features Of legIsla-
tlon and administration. which ex-
perienoe has shown 10 be unduly and
hamperlng. be abolished.
Third. Without eliminating state
let their functions be so !
adjusted as 10 avoid conflict with the
Federal commission In matters OF rate |
making and security issues.
Fourth. Let rallroading then be |
thrown open TO private initiative and /
and competition in service
make II an attractive field for capital |
and. above all, for men Of ability and |
vision.
II there is one thing less desirable
than outright government operation. Il
Is government control so minute. ham,
pering and all-pervasive as to be tanta-
mount to government operation with
out corresponding responsibility. Most /
Of the plans which have been put for
ward within recent weeks from indl-
vidual quarters would mean this very /
thing. Their authors start by declar-
Ing themselves utterly opposed 10 gov
eminent operation, and then devise a
set OF provisions which TO all intents
and purposes are equivalent TO gov
eminent operation, or would necessa-
rily lead 10 lit. A feature common TO
all such plans Is that they &-e based
upon a permanent government guaran-
tee OF minimum earnings for the rail-
roads.
Two Things Not Reconsilable.
The two things, I. g, private man
agemenc and permanent government
guarantee OF earnings. are simply not
The railroads cannot eat