Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1919-01-03
REASONS
US. HOLDING
ROADS GIVEN
McAdoo Explains Plea for
Five Year Control
Promises Rate Cut.

uance of government operation to
provide a fair test of unified d.
rection were recited today by Di-
rector General McAdoo, testifying
before the senate interstate COM
/ merCe committee which took up
consideration of his recOmmenda-
tion for extension of control until
1924.
Mr.. McAdoo read a prepared
statement more than Is, 900 words
in length, constituting a review o
! conditions. He planned to take
I most of the day in presenting the
testimCny-probably the last pub
| tic statement of his stewardship of
railroad matters, before retiring as
| director-general.
After citing reforms effected un-
! der unified control the director
general said: Il believe that under
/ the handicaps of war conditions d
! sufficient showing has neen made
/ to indicate that all the reforms J
have mentioned az desirable as
permanent peace Rsurcs. Yet it
/ is clear that the general public
( has not had an opportunity TO ap-
/ preciate this and TO weigh the real
, value of what has been accom-
( plished.
| Need Time for Fair Test.
'It will be impossible 20 review
! the results of even one year OF
/ federal control under peace condi-
tions until the spring of 1920, and
it will then be too late for con-
gress to legislate before the end OF
( the q months period after the
! declaration of peace. pro, ided n
! the present law for government
control. Operations under peace
{ conditions with tenure so short
as the 81 months cannot possibly
/ constitute q fair test"
s5l;ls aSsae = i : I sflDss, s..s4s
10 employees morale. the difficulty
OF carrying out an extensive pre-
gram of improvements and o.
forcing on railroad companies nee
essary expenditures.
Not Step to Ownership.
Indeed" ne added. the Difficult
, ties with operation during the 81
months period will be so serious.
that I do not see how the govern
ment can be fairly asked to en-
counter them. 1t seems tC me that
anyone who wishes fair and dis
passionate study made : to what
IS the best ultimate solution. and
as to the extent to which the re-
forms | have mentioned are in
the interest of the American pub
lie and as to the way in which
those reforms can best De accom-
plished if III the interest of the
American puDlic-muSt be anxious
TO have a reasonable period OF
federal control after the war un-
der conditions calculated to mako
for tranquility and single-mindeG-
ness upon the part Of the federal
railroad organization. 1 do not
mean that this would be desired ill.,
order to accomplish government
ownership"
Another reason for longer test
period, said the director-Gcneral. IS
The advisability of having adequate
information on valuation of rail
road property, now being gathered
by the interstate commerce com
mission to guide congress in leg
islation providing permanent
solution of the railroad problem.
VIII Cut Rates This Year.
Referring to the increase in
freight and passenger rates SIX
months ago, MIR. McAdoo said that
similar action would nave been
necessary even under private
management to prevent substantial
losses, and said it would be pos
sible to lower rates materially this
year
Satisfactory and equitable distri-
button of the rate burden over all
railroads regardless of the fact
that some are unusually prosper
Gus and others poyerty-stricken, i;
possible only under unified control,
Mr.. McAdoo urged as another ar
gument for the five year cohtin-
uance plan.
Great Improvement and exten-
sions should be made in terminal
facilities by enlargement and con-
struction, said the director This,
he said, provides the greatest op-
pOrtunity for reducing operating
costs and promoting public cor
yenience in the future.
$l36,000.0 600 Years Loss.
Mr. McAdoo estimated the gov
ernment's loss in operating rail-
roads this year at Si36, 900 900.
This represents the difference be-
tween 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 a surplus OF
S10O, 100000 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 S100,000,000.
Pays Despite Increased Costs.
Since the objective OF the gov
ernment should be at all times to
operate the railroads not. for profit
but ,aA at cost" he vi .td and to to