The sun., 1919-07-05
RAILWAY REGULATION AS 1T
SHOULD BE.
Needs Of the Transportation system
Of the Country Made Plain by the
Results Of Federal Management.

|
itself in 1917 justified taking over the
railways Ms the only Immediately
available solution Of an otherwise in
surmountable diflculty for which in
slant solution was imperative. Never
theless 1t Is not SO clear that II the
railways had not been subject to the
legal restrictions from which the d.
rector General was at once free the
crisis would have arisen.
Under Federal management there
+, was an almost immediate and gener-
ally increasing impairment of operat-
ing efficiency. There was a considera-
Bile period during which the status a.
| operating executives was anomalous.
They were taken over" but they were
not over" They were subordinate
to the Director General, but they were
also responsible to their corporations.
| Very soon after the corporations be-
gan to negotiate with the Government
the compensation contracts they had
assumed the statute substantially as
sured them they met a condition of
fundamental antagonism. Influences
| which had never been recognized as
| over friendly to the railways began to
have an apparent effect on the nego-
tiations, and for many weeks, drag
ging through apparently futile confer
| ences, the temper of the railways was
tried almost to and sometimes quite
beyond the breaking point. In fact
there are many carriers with which
compensation contracts have not yet
been negotiated.
| Added to this was some inevitable
friction over financial matters. The
carriers had been required to turn
over practically all their funds to the
Government. The understanding was
that. pending the negotiation of con-
tracts for compensation, portion OF
the amount certified, as provided by
the statute, to have been the average
railway operating income during the
so-called test period" would be ad-
vanced as soon as certified. AS n mat
ter of fact months after Federal con-
troll began many large railways with
important obligations to meet were
| unable to obtain either statutory ad-
vance or governmental loan.
! All through these months the oper-
ating executives were cast in dual
role; they had divided responsibility,
and, so long as the interests they had
to serve were conflicting, a more or
| less bifurcated loyalty. After some
months this was cleared up through
the appointment of Federal managers
and the complete separation OF oper-
at:ng and corporate functions. 1t may
be said in passing that the grasp OF
the difficulty here outlined which the
in the solution through the plan which
he devised. Just at the critical period
Of Federal control. however. this dis
! organization and reorganization did
exist, and it extended from the exec
utives down through the ranks.
Organized railway labor had tasted
| the fruits of its power in the enact
ment of a long series of laws culmi
mating in the passage Of the Adamson
/ bill. 1t well knew what it could do
at Washington, and, with Washington
, TO go TO, was not nearly so sensitive
| to the regulations of discipline as I'M
! der private employment UnorEanized
| labor and employees felt that they
/ were Government employees without
being in Government employ. While
| ing on the Job, there was nothing in
the change which made in any way
! for increased efficiency, and the inevi-
table and now demonstrable effect was
considerable period OF substantial de-
probation OF morale IN the whole or
| ganization. This was a direct and not
unimportant effect OF Federal control
and was a clear even II undetermina-
BILE factor in the rapid mounting OF
! expenses over income.
This would have been prevented
and it is by no means negligible fac
tor in estimating the result-if to the
railways had been given the freedom
OF management which the Director
General has had and II the roads had
been required, under adequate Federal
supervision, to form an absolute pool
of equipment. facilities. operation and
revenue. Under such an order as that
II would not have taken the railways
many days to put the pool in opera
ton. and the Director General would
have had something which it would
have been practicable for HIM to direct.
a railroad president who was wise
in his day and generation once said
that no man should have executive d.
rcction of more miles Of road than he
could comfortably go over personally
every three months and still have
plenty OF time 10 do the rest of his
work. He thought 5000 miles was
the limit OF efficient executive capac-
lty. And yet he had more than twice
that. And the Director-Gen is OK
peCted to give competent executive
the country at time when the prob
lem of operating each one of them is
the most complex and perpleXing II
ever has been. 1t is no discrcdit TO
either of the Directors General. nor
reflection upon their executive ability,
nor is it unapprcciative of their ardu-
Gus effort to serve the public, to say
that they have failed They were called
upon to do something which IN the
very nature Of things could not be
done.
Railway regulation and control had
proceeded to a point where tho rail-
ways could not be operated efficiently
or effectively in 1917. To that fact
the railways agreed and for that rea-
son the Government sought a remedy.
Tho cure has been worse than the dis
case. This, however. will not prevent
an Intelligent public opinion from COM
Telling. through its legislative express
sion, safe, sound and sane solution