New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-01-04

ton should be stabilized on a peace
time basis and given opportunity for a
fair test under peace conditions.
illustrating his statement concern
ing the difficulty of getting cooperation
from the roads for a twenty one
already we're challenging orders he had
approved for locomotives at their own
request. The Baltimore & Ohio, he
said, had asked for $50 locomotives in
their 1913 budget, that he had approved
orders for 1l6 but that the road now
objected to taking them on the ground
that they did not like tho types, though
these types had been changed to suit
their requests.
Senator Pomerene-While there is
no doubt that the government had the
right to take over control of the roads
as war measure, and while it would
have the right to take over control
under government ownership, has your
legal department examined the ques-
ton as to whether it would have the
right TO. extend the period of control,
adopted as war measure, for FIVE
year period?
Mr. McAdoo-If Congress could fix
the period for twenty-one months after
the war it could fix it for five years
Pomerene-If that is correct it could
extend it for ten years or ninetyninc
years.
cAdoo-Yes
Pomerene-Have you asked your
legal department concerning this?
McAdoo--No.
Urges Permanent Reforms
In his prepared statement read be-
fore the committee, MI. McAdoo. after
citing reforms effected under unified
control, said:
81 believe that even under the han
dicaps of war conditions sufficient
showing has been made to indicate
are desirable as permanent peace meas
ures Yet it is clear that the general
public has not had an opportunity to
appreciate this and to weigh the real
value of what has been accomplished.
In view of the farreaching Importance
of any solution of the railroad oues-
ton which may be adopted, the public
is entitled to have, before the present
Federal control shall be terminated, a
reasonably fair test under peace con-
dltions of the advantages to be de-
rived from these reforms.
ct will be impossible to review the
results of even one year of Federal
control under peace conditions until
the spring of 1920, and it will then be
too late for Congress to icgislate be-
fore the end of the twenty-one months
period after the declaration of peace.
provided in the present law for gov
eminent control and operations under
peace conditions with n tenure SO short
as the twenty-one months cannot pos
sibly constitute a fair test"
Reasons for this, he explained, would
be the inevitable disturbance to en-
ployes' morale, the difficulty of carry
ing out an extensive programme Of i'm
provements, and of forcing on railroad
companies necessary expenditures.
Difficulties Are Ahead
"Indeed," he added, "the difficulties
with operation during the twenty-one
months period will be so serious that
| do not see how the government can
be fairly asked to encounter them. It
seems to me that any one who wishes
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 in
terest of the American public must
be anxious to have a reasonable period
Of Fece,al control after the war I'M
der conditions calculated to make for
tranquility and single mindedness up
o. tt part of the Federal railroad
organization l do not mean that this
would be desired in order to accom-
piish government ownership"
Another reason for longer test
period said the Director General, is
the ACCESSIBILITY of having adequate in
formation on valuation Ct railroad
property, now being gathered by the
interstate Commerce Commission 10
Guide Congress in legislation provid-
ing permanent SS!ution Of the rail
road problem.
Higher Rates Were Needed
Referring to the increase in freight
and passenger rates six months ago,
Mr.. McAdoo said that similar action
would have been necessary even un-
der private management to prevent
SERIOUS losses, and said it snou.d 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 possible
only under unified control, Mr. Nc
Adoo urged as another argument Tor
the iive-year continuance plan.
Great improvements and extensions
SHOULD De made IN terminal facilities
by enlargement and consolidation, said
the Director General. This. he said.
provides the greatest opportunity foH
reducing railroad costs and promoting
public convenience in the future.
Mr.. McAdoo estimated the govern
ment's loss in operating railroads last
year at S136.O00 900. This represents
the difference between the amount
guaranteed to the roads as rental and
the sums credited to the government
II railroad jncomc If the higher rates
had been in effect the entire year, he
estimated the government would have
made a surplus of $100,000000 and in
1919, with existing wages, operating
costs and traffic volume remaining sub
StantiallN the same as in last year. the
government should make surplus of
$100, 000, 900.
Summing up his recommendations
Secretary McAdoo said:
Broadly speaking, there are three
general permanent solutions of the
railroad question. The first is to send
the railroads back into the private
control of the several hundred old
companies.
"The second is to have outright gov
eminent ownership and control Of all
The railroads.
road map along logical lines, so as to
I 4