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

aggregate of 21,OOO,OO0 passenger train
miles a year was done away with in
the territory west of Chicago and the
Mississippi River, while in the Eastern
territory 26,420,000 passenger cal
miles were eliminated. Without this
saving in motive power and equipment
the moving of millions of troops could
not have been achieved successfully"
On the other hand, he said, wages
paid TO employees had been increased to
an aggregate extent of between
5000, 013, 600 and 100000.
In admitting deficiency of $780,
100000 in operating income under Fed
eral control below The guaranteed
rental to the roads for the use of the
properties, Secretary McAdoo insisted
that account should be taken of the
fact that whereas the increases in
freight and passenger rates were in eff
feet for only little more than six
months Of 1918 the wage increase and
the increased costs for fuel and all
other railroad supplies were in effect
Tor the entire twelve months
For the year 1919" he said with
all wage increases granted in 1918
operating for the entire twelve months
and upon the assumption that the traf-
tic for 1919 is substantially the same
as in 1918 and that the cost of fuel
and supplies remains the same, it is es-
timated that there should be q surplus
to the government over and above the
j standard return of approximately $780,
100000. 1t is to be expected, however
that during the year 1919 the cost of
material and supplies may be reduced
and 1t Is also reasonable to expect tn at
with improved operation under normal
conditions relieved Of the intense pres
sure and excessive cost incident to the
war necessity, and with general i'm
provement in operations and use of
facilities and equipment that may be
reasonably expected in peace time,
many more economies can be effected
Expects Rate Reduction
Since the object of the government
should be at all times to operate the
railroads not for profit but a. a cost
and to render at the same time the
best possible service, | confidently be
llevc that it will be possible during
the year 1919, or certainly at the end
cradle reduction in rates unless the
traffic for 1919 should be much less
than it was in the year 1918
Although all the Senators who ques-
toned Mr.. McAdoo at the close Of the
reading Of his statement exhibited I'M
friendliness toward his proposal to ex-
tend the period of government control,
each, by his inquiries, developed DIFF
ferent basis of complaint Senator
kellogg charged outright that by the
time the tive-year period had expired
the officials directing the roads would
have so completely scrambled the at
fairs of the various properties as to
make return to private control i'm
possible. Senator Cummins showed a
marked dissemination to continue in
: the hands OF the Executive the eXtraor-
binary powers granted for the war
! emergency. and he particularly OBJ
I jected to Mr.. McAdoo's statement that
1 during the hve-ycar period the Presi-
dent and not the Interstate Commerce
/ Commission should have power to
initiate changes in rates. Furthermore,
/ he RI the opinion that Congress
could readily reach a decision as to the
/ policy TO be followed within = year.
Fears Litigation
J Senator Underwood expressed appre-
hension that an extension of the period
would require new contracts between
the roads and the government. with
the probability that the government
! litigation. Senator Pomerene expressed
decided doubts as to the power of
/ Congress under the Constitution to OK
| tend control of the roads, adopted as
! a war measure, after peace was de-
: clared.
Senator Smith, chairman of the COM
mlttee, and Senators Poindextcr,
Townsend and Watson all voiced OBJ
Jections on various grounds.
Senator La Toilette remained silent
throughout the hearing
Pressed by Senator Smith concerning
his statement that it would be impossi-
bic to obtain the cooperation of the
railroads in q test of Federal control
for a period so short as twcnty-one
months, Mr.. McAdoo declared that the
morale of the railroad organizations al
ready was beginning to decline in an
ticlpation of change of authority.
With the higher officers of the roads.
he said, questions already were con-
stantly arising concerning policies of
operation, and with the employees it
was more or less Il state of ferment be-
ginning to develop. Senator Smith de
clared that he could not see how this
situation would be any better at the
end of five years if it should happen
that the form Of Federal control exer-
cised in the meantime did not prove
successful enough to warrant its con-
tnuation. To this Mr.. Nc..doo replied
lHdL congress Undoubtedly III Ine
meantime would have begun % formu-
late, on the basis of the experience
shown, a solution Of the entire prob
lem.
Question of Financing
Referring to suggestions as to ex-
tensivc betterments which Mr.. McAdoo
declared to be essential and which he
said only could be brought about
through Federal control-notably a
solution Of the terminal problem at
( Cincinnati, involving an estimated out
lay of $70,000,000 for freight and pas
senger service-Senator Poindexter
asked how Mr.. McAdoo proposed to
finance such undertakings.
1--WE would have 70 depend" replied
the director general, ION advance vol
untary agreements between the gov
eminent and the roads concerned, al
though the law permits the government
to undertake these improvements for
the account of the roads, which, how
ever, would have the right, of course.
to question them in the courts"
Senator Poindexter- Were not the
+ railroads of the country actually pre-
vented by the antitrust act, before
they were taken over by the govern
ment, from making many of these very
! improvements which they themselves
} regarded as necessary?
! McAdoo-No, don't think so. Some
times they had difficulties about ar
/ ranging credit, and sometimes it was
/ because they could not aoreo