Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1919-08-01

and their equipment, and the investment by
wage earners of their services in the indus
try. These three elements are of equal i'm
portance in performing the public service But
of the three, only one-capital-is represent
ed on the board of directors.
This new plan recognized the principle that
it is not fair to exact responsibility where
there is no authority. Every railroad en-
ployee is in small measure responsible for the
safe and efficient conduct of the railroad in
dustry, and yet he is not permitted a vote
in regard to its operation. If all the railroad
employees on the Pittsburgh division, for eX-
ample, got together and decided to work
harder, improve their methods, and increase
the efficiency of the railroad system, it
wouldn't do them the slightest bit of good.
They might stand a chance of getting a small
raise in their salary, declares Mr. Plumb, but
the owners would pocket the real profits
The same thing would be true were the
railroads to be operated exclusively by the
government The employees would get the
same salaries whether they worked to in
crease their efficiency or motor practically
the same salaries But, under the Plumb
system, their returns would be in direct pro-
portion to their investment of skill and labor
By cutting down the expenses of operation
through the installation of machinery and
improved methods, the dividends at the end
of the year would be greater Also, there
would be less agitation for higher wages; for
higher wages would increase the expense OF
operation and cut down the profits.
The greatest argument in favor of this new
plan, from the public point of view, is that
it would have the tendency to reduce the rail
road rates In the first place, it would per-
nit the operation of the railroads by more
centralized system. Instead of several differ
ent roads, competing among themselves, there
would be one large road; one set of accounts
and books; one authority. For instance, for
years the Baltimore and Ohio Railroad has
paid the Pennsylvania Railroad three million
a rental hH privilege
ming it's trains over certain tracks and into
certain station in an eastern city. In anOth-
er city the Pennsylvania Railroad was paying
similar amount for a similar privilege. This
is one of the expenses which has been elm
mated under government regulation.
In opposition to the Plumb plan, it has
been said that, inasmuch wage earners as
we'll as capitalists are human, there might be
some objection among the board of directors
toward reducing rates and then by dividends
In answer to this, the Plumbists assert that a
reduction in rates would mean an increase in
business, with corresponding profit, and that
in any circumstances, the public is protected
by the Interstate Commerce Commission. A
section of the plan reads: ITO prevent the
public from paying in rates excessive profits
to the corporation to the government, we
provide that, whenever in one year the
amount of net profits received by the gov
eminent shall equal exceed five per cent
Of the operating revenues, the Interstate Com
m0TC0 commission snail 1mmoQlaLGIy r6QuCe
the level of rates by an amount sufficient tc
absorb these profits.''
The chief objections to government owner
ship of the railroads are the increase of rates
under federal regulation, and the present con-
spicuous deficit which mNst be met by taxa
ton. Mr.. Plumb declares that this deficit is
entirely excusabe, and easily explained. "You
must bear in mind" he says, that for years
the railroads have been paying dividends that
were not dividends at all, but a part of the
principal. Hardly road in the country had
as many cars at the outbreak of the war as
it had in 1913. Returns to railroad inves-
tors in recent years may be likened to the re-
turns received by the careless farmer who
Wlthdraws the fertility of his soil year by
year and puts none of it back. James J. Hill
said some years ago that the railroads would
have to spend more than $500, 900, 900 fol-
betterment before they would become eff
Gent. The Railroad Administration is spend
ing it. Less than 5000, 000, 900 of the deficit
| is due to operation. The balance goes to per
manent improvements"
The Plumb plan of railroad operation is
! similar to that now being considered by the
British government in regard to the operation
OF England's coal mines. Practically the same
proposition has also been adopted with re-
| spect to public utilities in Italy What ou1
American Congress will think OF it remains
| to be seen.