Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-01-03
DIRECTOR ARGUES
FOR FIVE YEARS.
CONTROL OF ROADS
Mr.. McAdoo Tells Senate
Committee of Years Ac-
compIishments by U. S.
LAST YEARS DEFICIT
PUT AT $136, ,OOO,O 600
Predicts Surplus of a Hundred Mil
lions Under Similar Condi-
tions This Year.

tons This Year.
| Accomplishments of railroads under
| federal control in the last twelve
months and arguments for five-year
continuance of government operation
to provide fair test of unified direc-
ton were recited today by Director
General MeAdoo, testifying before the
Senate interstate commerce committee,
which took up consideration of his
recommendation for extension Of con-
troll to 1924.
Mr.. McAdoo read a prepared state
ment, more than $1,000 words in length,
constituting a comprehensive review
of conditions under federal manage
ment. He expected to take most OF
the day in presenting the testimony.
probably the last public statement OF
his stewardship of railroad matters be-
fore retiring as director general
After citing reforms effected under
unified control, the director general
said:
Mr.. McAdoo's Statement.
"I believe that even under the handi-
caps of war conditions sufficient
showing has been made to indicate
that all the reforms I have mentioned
are desirable as permanent peace meas
ures. Yet it is clear that the general
public has not had an opportunity to
| H. srxt@ l4
value of what has been accomplished.
In view of the far-reaching importance
of any solution of the railroad ques-
tion which may be adopted, the public
is entitled to have, before the present
federal control shall be terminated,
reasonably fair test under peace con-
ditions of the advantages to be derived
! from these reforms
''It will be impossible to review the
results of even one year OF feoerai
control under peace conditions until the
spring of 1920. and it will then be too
the end Of the. e..tEepty-opesmnpfh
period after the declaration OF peace.
provided in the present law Tor gov
ernment eontful. Oper4tions under
peace conditions with tenure SO snort
as the twenty-one months cannot pos
sibly constitute fair test"
Fears morale" Disturbance.
Reasons for this, he explained, would
be the inevitable disturbance to en-
ployes' morale" the difficulty of carry
| ing out an extensive program OF inn
provements and of forcing on railroad
companies necessary expenditures.
with operation during the twenty-one-
month period will be so serious that
do not see how the government can be
| fairly asked to encounter them. IL
Il ruvkN> uvfet1A
fair and dispassionate study made as
| to what is the best ultimate solution
and as to the extent to which the re-
forms / have mentioned are in the in
terest of the American public, and as to
| the way in which those reforms can
| best be accomplished-if in the interest
| of the American public-must- be anx-
| ious to have a reasonable period OF fed
eral control after the war under condi-
tions calculated to make for tranquility
and single -mindedness upon the part OF
the federal railroad organization. / do
not mean that this would be desired in
order to accomplish government owner
Ship
Another Reason for Test.
Another reason for a longer test
period. said the director general. is
the the M advisability of having adequate
information on valuation of railroad
property, now being gathered by the
Interstate Commerce Commission, to
guide Congress in legislation provid-
ing a permanent solution of the rail-
road problem.
Referring to the increase in freight
and passenger rates six months ago.
MI McAdoo said that similar action
would have been necessary even un-
der private management to prevent
serious losses, and said il should be
possible to lower rates materially this
year.
Uniformity of rates and equitable
distribution of the rate burden over
all railroads. regardless of the fact
that some are unusually prosperous
and others poverty stricken, is pos
sible only under unified control. Mr..
McAdoo urged as another argument
for the five-year continuance plan.
Great improvements and extensions
should be made in terminal facilities
by enlargement and consolidation.
said the director general. This. he
said. provides the greatest opportu-
nifty for reducing railroad costs and
promoting public convenience in the
future.
Last Years Loss, $136, 100000.
Mr. McAdoo estimated the govern
ment's loss in operating railroads last
year at sl36. 6.00o 600. This represents
the difference between the amount
guaranteed to the roads as rental and
the sums credited to the government
in railroad income. If the higher
rates had been in effect the entire
year he estimated the government
would have made surplus of S100,
900, 900, and in 1919. with existing
wages. operating costs and traffic vol
ume remaining substantially the same
as in last year the government should
make surplus of 500. 00o.00
Since the object of the government
should be ct all times TO operate tho
railroads, not for profit, but at cost"
he added. "and to render at the same
time the best possible service, l con.
fidently, believe that it will be possible
during the year 1919. or certainly at
the end of the year 1919, to effect a
considerable reduction in rates unless
the traffic for 1919 should be much
less, than it was in the year 1915"
Added Expenses of Year.
Wage advances to railroad en-
ployes last year added between $780, 3
600. 900 and s700.00o.0o0 to the pay
rolls, Mr. McAdoo' testified. In addi-
ton the coal bill was $4,000. 900
higher for the ten months of 1918
ending November 1 than in the same
period of 1917, and the cost of cross +