New-York tribune., 1919-01-24

had purchased and allotted new equip
ment regardless of needs, Mr.. krutt-
schnitt cited the case of his own road.
For five years preceding government
operation, said the witness, the South
erin Pacific not only had ample equip
ment for its own needs, but received
annually $1,250,000 more in rentals for
the cars it loaned to other roads than
it paid out in rentals for the cars OF
other companies operated over tbs
lines.
Southern Pacific Case
an 1917" he told the Senator'S, "the
Southern Pacific handled the greatest
tonnage in its history and with re-
markably few complaints. And l am
convinced that it could handle an even
larger tonnage this year with the
equipment we have"
In the face of this situation, he told
the committee, and notwithstanding
the railroad administration in 1918
diverted so much tonnage from the
surplus of equipment. Mr.. McAdoo
allotted to the company 1000 add-
tional cars and of type that was not
economical for the company to use.
Although these cars have been or
dered by the railroad administration,
the witness said, he understood that
they had not yet been built. Nor he
told Senator Townsend, had the en-
gines which had ben allotted and were
of type that the road not operate
economically. been received.
Replying to questions by Senator
Kellogg, the witness said that with
respect to the pooling of traffic it
would not be possible for the roads,
under private control to help out the
weak lines by divertng to them traffic
that had been routed by shipper, but
that this could be done where the ship
per had not indicated his preference
What he had in mind when he talked
OIL pooling was an equitable division
OF the total amount of business to be
done or all lines between given points.
BY way of illustration, he took the
llnes between Minneapolis and Chicago.
Rates which you'd yield what would
be considered q fair return to the Chi
cago, Great Western on a conservative
valuation might return more than
would oe deemed fair compensation
to the Milwaukee, the Northwestern
and the Burlington lines. 1t was to
take care of such situations that the
railroad executives proposed pooling
Under government supervisi on, he said
II percentage of business between those
points would be assigned to each reoad,
sucn percentage being based on prior
performance. 1t would, therefore, be
to t. interest of each of the carriers
to compete for a greater percentage
OF the business. so that at the next
apportionment its allowance would be
increased. There never was period
OF cleaner competition, said he, than
when pooling was practiced
Senator Cummins wanted to know
what benefit the Burlington would de-
rive from the extension of help which
would increase the earnings of the
chicago Greatwestern. The witness
SAID that through the elimination of
unnecessary trains, the operating ex-
penses of the Burlington would be
reduced. He said that it would be bet
ter to send out one fully loaded local
freight train than four partly loaded
trains. 1t would also save expenses to
send out one fully loaded passenger
ofaln than four partly loaded
Against Common Ownership
Anything that reduces the cost of
operation, defers the time when the
road must ask for higher rates" said
the witness.
That implies, does it not, that the
roads could be owned by one corpora
tion or by the United States ?" asked
Senator Cummins.
Common ownership, either private
or by the United States government.
would eliminate every incentive to in
creased service" said the witness.
Under properly supervised pooling
arrangements there would be incentive
TO Improvement to the end that the
Garner which has had a small amount
OF business may receive larger al
lowance al the next revision of the
arrangement
Such pooling, the witness added
could be made voluntarily by the rail
roads or by direction of the Interstate
Commerce Commission.
Concerning the proposal of the rail
road executives to continue the state
railroad commissions in the exercise
Oh local police powers. the witness said
the decision of the Supreme Court in
the Shreveport case had served to clear
up much of the conflict between the
states and the Federal government in
the regulation of the roads. Federal
incorporation, and legislation which
would put this decision into effect. he
thought, would eliminate most Of the
conflict.