New-York tribune., 1919-04-06
The Great Rathole


The cheerful hope that railway income
has reached an irreducible minimum and
railway expenditure has attained non
extendable maximum receives rude
blow from the Interstate Commerce Com
missions figures for February. Below
neither depths other deeps yawn. Be-
meath the ground floor is a basement,
with a sub-cellar further down.
The mild February this year was as
favorable to rairoading as cold and
coalless last February was unfavorable.
Yet railway net income this year de-
creased ii per cent, compared with the
same month last year. Rates are up
25 per cent and the service is slower and
poorer, yet the net operating income for
the month was but S10,015, 900, as
against an average Of $4,000, 900 for
the three-year test period, under private
management, on which the government
rental is based.
The deficit to be met out of taxation
swells. 1t is $74,OOO,0OO for the first
two months of the calendar year, while
during the twelve months of 1918 it was
$202,000,000, or approximately ST.
100000 a month. Now the ways to
Avernus are more thoroughly creased,
and we slide down at a speed of $751;
100000 a month "Aint it grand and
glorious feelin'," as Briggs says. The
estimated deficit for the present year is
thus $3.50, 900, ,0O0-will probably be more
if disease, thus far progressive, is not
checked.
The railroad problem thus far has not
been taken seriously by the public-has
been regarded tolerantly as a huge joke.
But surely the humOr becomes grim. SO
far as transportation charges enter into
the cost of things, the public has had
squeezed out of it 25 per cent more
on the old volume of traffic about a
billion year. with nearly half billion
more to be taken from it in taxes Never
was there such a rathole.
Men Of pragmatic minds have held
that government operation was economi-
would quickly appear if the experiment
were tried on large scale. But no
sde-whiskered Chamber of Commerce
man Of the cartoonists fancy in his
widest prophecies of woe, ever ventured
to foretell what has happened. The re-
suits are stunning to theorists who have
dismissed gloomy representations as in
dlcatlve of bad heart and of fear for
protlts, and who have persuaded no small
part OF the people that the government
could do the business Of transportation
more cheaply.
The income tax hits the rich more than
the poor. But the new transportation
tax falls nearly on per capita basis.
Assuming measurable equality in incl
dence, the billion and a half additional
railroad cost "a billion on account of
higher rates and half billion to meet
the dehcit), and the average family is
paying STA year for the luxury Of gov
ernment operation.
In these days, when many old assump-
tons are in the crucible and a great heat
Is turned on to burn away the dross, the
experience with the railroads is highly
instructive. The doctrine has found some
acceptance that wicked capitalism is an
expioiter--is not socially useful, as lie
nlne puts it-and as d parasite should
nave no part in government. And, 10, it
IS Indicated, almost proved, that capital
istlc leadership is socially useful in a
hgh degree--pays its own profits and
1nen distributes large surplus to the
public.
The earnings Of its efficiency more
tnan meet its charges, large as they are,
and the 30 or 95 per cent of the indus
trial product that it gives to labor cx-
ceeds IN bulk any 100 per cent theoreti-
caiiy going to labor when there is CO.
operation. 1t is now habit to deridc
1ne laws" Of the Manchester school OF
pohticai economy. Our young men as
sumo they know better, very much bet
Yer, than such old fogieg as Golden. Ri
eardo and Mill, but behold, their theories
receive remarkable yindication when CON
@fafy theories arc put to test.
Inc bureaucracy at Washington bas
apparently proceeded on the theory that
~ not only had all the money in tho
world, but that it had mastered the sc-
Fret of unlimited manufacture and that