The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1919-01-03
M'ADOO ARGUES
FOR RAILROADS
Five Year Continuance of
Government Operation
Burden of Plea.
RECITES YEARS REFORMS
Retiring Director Gives Rea-
sons for Extending Period
of Federal Control.
RECITES YEARS REFORMS

S1 SaS4 Sb4 SSae4S4s
Washington. Jan. S.-Accomplish-
ments of railroads under federal con-
troll in the last twelve months and
arguments for a five-year continu-
ance of government operation were
recited today by Director-General
McAdoo. testifying before the senate
interstate commerce committee,
which took up consideration Of mis-
recommendation for extension OF con-
troll to 1924. Mr.. McAdoo read a
prepared statement, more than $4,000
words in length. He planned to take
most of the day in presenting the
testimony, probably the last public
statement of his stewardship of rail-
road matters before retiring as di-
rector general.
After citing reforms effected under
unified control, the director general
said:
81 believe that even under the handi-
caps of war conditions sufficient
showing has been made to indicate that
all the reforms | have mentioned are
desirable as permanent peace measures.
Yet is clear that the genral public has
not had on opportunity to appreciate
this and to weigh the real value of what
has been accomplished. In view OF the
far-reaching Importance of any solution
of the railroad question which may be
adopted. the public is entitled to have.
before the present federal control shall
be terminated. a reasonably fair test
under advantages to be derived from
these reforms.
Too Short for Fair Test
'It will be impossible to review the
results of even one year of federal con-
troll under peace conditions until the
spring of 1920, and it will then be too
late for congress to legislate before the
end of the twenty one months period
after the declaration of peace, provided
in the present law for government con-
troll. Operations under peace conditions
with tenure so short as the twenty
one months cannot possibly constitute
a fair test"
Reasons for this, lie explained would
be the inevitable disturbance to en-
ployes' 'morale," the difficulty of car
rying out an extensive program of i'm
provements, and of forcing on railroad
companies necessary expenditures.
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 anyon who wishes
fair and dispassicaate study made as to
what is the best ultimate solution and
as to the extent to which the reforms
L
the American public. and as to the way
in which those reforms can best be ac-
complished--if in the interest of the
American public-must be anxious to
have a reasonable period of federal
control after the war conditions calcu-
lated to make for tranquility and SIN
-mindedness on the part of the fed
eral railroad organization. | do not
mean that this would be desired in Or
der to accomplish government owner
ship"
Another reason for a longer test pc
riod. said the director general, is the
advisability of having adequate infor-
nation on valuation of railroad prop
erty, now being gathered by the inter-
state commerce commission to guide
congress in legislation providing per-
manent solution of the railroad prob
lem,
AS 10 Increased Rates.
Referring tc ne increase in freight
and passenger rates six months ago.
Mr.. McAdoo said similar action would
have been necessary even under private
management to prevent serious losses.
and said it should be possible to lower
rates materially this year.
Uniformity of rates and equitable dis
tribution 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.. McAdoo
urged as another argument for the five
year continuance plan. Great improve
ments and extensions should be made
in terminal facilities by enlargement
and consolidation said the dreCtor-gen-
eral. This, he said, provides the great
est opportunity for reducing railroad
costs and promoting public convenience
in the future.
Mr.. McAdoo estimated the govern
ments loss in operating railroads this
year at S136, 100000. This represents the
difference between the amount guaran-
teed to the railroads 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 UO,OOO,OOO, and IN
1919, with existing wages, operating
costs and traffic volume remaining sub
stantially the same as in last year, the
government should make surplus OF
100000, ,000.
Reductions Probable.
Since the object of the government
should be at all times to operate the
railroads not for profit but at cost,
he added, 'and to render at the same
time the best possible service, / con-
fidently believe that it will be possible
during the year 1919, or certainly at the
end of the year 1913. to effect a con-
siderable reduction in rates unless the
traffic for 1919 should be much less
than it was in the year 1915"
Wage Advances.
Wage advances to rauroad employees
last year added between $500, 00G, 900 and
500, 600, 900 to the pay rolls, Mr.. Nc
Adoo testified in addition. the coal
bill was s14,000000 higher for the ten
months of 1918 ending Nov. l than in
the same period of 1917. and the cost of
crossties and lumber increased 500
600 900.
Economies Brought About,
Many economies brought about under
unified management. such as routing,
common use of terminals and equip
ment, heavier loading and elimination
of useless competition. Mr.. Mc-AdOo eX-
planned, will not be reflected until this
year. Nevertheless, he said, reports
from five OF the seven operating regions
show that on a group of selected prin-
cipal items OF economy. savings totalllng
SIS. .576, 900 have been effected.
Many changes in railroad operation
inaug1rated during last year." the di-
rector general testified. should prove
of permanent value and should continue.
if possible. regardless of what form OF
control is decided upon for the rail-
roads Such reforms include: Mainte-
nance of the permit system so as to
control the traffic at its source; mainte-
nance Of heavy loads for cars; pooling
OF repair shops; elimination Of circuit
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