New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-01-02
~ Wealth Markets and Commerce

moving at a normal rate. But it is
very remarkable that in the last two
months it has been dealing with a
slightly smaller traffic than last year
and moving this traffic is costing very
closely 30 per cent more.
Mr.. McAdco's prophecy Of lowered
rates seems :llusory. The government
can scarcely afford to run the rail
roads at a heavy loss, which The tax
layers must meet. But that is exactly
what it is doing now. At the present
prospect th:s loss viii not be less
than halt billion dollars Il govern
ment administration continues FOR The
next Twelve months. The present pros
poet would seem therefore for higher
rates rather than lower.
The roads are very badly of, as is
we'll known, for new equipment and
rails, the improvement Of the roadbed,
terminal facilities and the rest The
present charge fer maintenance OF
cars and tracks is simply enormous
from half 70 two-thirds more than in
normal tines. For four CT five years
tAc roads have been systema tically
starved IN the last year and 4 half
nearly Two ycars-they have carried
volume Of traffic one-thirt greater
than any year before t1e way, VIII. no
increase il mileage and almost no in
crease in equipment or capitalization.
They had actually developed to such
high degree Of efficiency that even
unlimited power oyer rates, wages.
routing, combination and nearly every
thing else, has not enabled very
istration to make any material i'm
provcment IN the actual operation Of
the roads, car performance or other
economies. In the only case where
detailed figures were given as to the
saving in car mileage through re-rout-
ing CT short routing that has come to
the writer's notice, the actual saving
in the total traffic of this regional
department was siX-tcnths OF I Per
cent. And this was one of the most
law ANY lONdIilitS iCi SUCH IG-IOulLlS.
The railroads have developed to such
pitch Of efficiency that it has lit
orally become in this country, both
among railroad men and the general
public: a sort of fetch. You WILL for
example, hear Of railroad men talking
about the great Gloss" which has re-
suited to the railroads in, say, the
last ten years through idle or surplus
cars. These SURPRISES have never
amounted to moro than 10 per cent or
L. per cent of the total equipment;
and it may be doubted ii there is any
large business in the United States
/ subject to such variable conditions as
The railroads, which has ever been able
to run at anything like So per cent
capacity. In order that the roads may
/ adequately perform their service, the
car surplus must be normal and at
i times heavy. Until this is recognized
the roads Will never be adequately
equipped.
This means that the roads cannot
be satisfactorily operated on the mar
row margin of earnings they have had
il The last 1--WE or six years. Those
earnings have not averaged more than
PEI cent on the ne. capital employed
On present prospects for interest rates
! or de return on capital, this is made
/ Quate, and will have TO be so recog-
! nized in any scheme Of legislation for
lac, L..
owners.
The Larger Capitalism
The still larger fact thai must be
recognized, not Only in dealing with
The railroads. but in all other tnan-
cial and economic questions, is that
the United States is not alone in the
enormous rise in wages, in the cost
OF living and consequent costs Of pro-
duction. 1t is just as true Of Eng
land as the United States, and still
more true Of France and Germany and
all Of the Countries that used to be
framed in the beautiful picture Of "tho
pauper labor of Europe"
In Germany, for example, wages have
risen in many lines OF industry two
and three times as much as iii the
! United States. The whole world is
afoat upon a. sea of paper money. Only
England and the United States will be
able to get back to solid gold basis
Mt once. 1t is TO the interea. OF no
ration to bring about a violent con
Traction Of is currency and credits,
with q consequent violent fall in
prices. That would be simply suicidal
and tend strongly to bring on financial
: disaster and even worse, revolutions
and Bolsnevisnl.
Al! these contractions. and, there
fore, all lowering OF wages, will have
to be very gradual. In England and
tho United States, a least, and prob 4,
ably elsewhere, there Will be Il strong
and determined effort 20 maintain
something like the preaent scale of
high Wages. This means consequent
high costs Of production. IL this pro-
grammc can be realized, the idea Of !.
retusn to general pre-war level OF
prices within the next few years is
sheer fatu:ty.
In this country. at least, and III Eng