New-York tribune., 1919-05-25
The Railroad Mess


speaks of the humbug which envelopes
the subjects discussion. Humbug is per-
haps not the exact word. although it
approXimates thereto. 1t may be better
to say "the persistent indisposition to
face obvious facts of the situation"
Plans, schemes, reports, eXhortations,
etc, come from numerous agencies,
public and private, but to little purpose
Either conclusions are run away from
or the very things whereof information
is needed are unmentioned or CLOSED
over.
The trouble began before the taking
over of the railroads, and it follows that
the remedy must strike deeper than their
mere return to private hands. There
was serious maladjustment between rail
road income and outgo. Wages and
cost of materials had risen, but railroad
rates stood still or were reduced unit
of transportation being one of few
things exchangeable for less Owners of
railway stocks saw the embarrassment.
and security quotations fell, and it be-
came more difficult to borrow cheap
money, thus further loading expenditure
with high interest charges.
Railroad management, when savings
incident to- physical improvements ran
against stone wall, resorted to des-
perate eXpedients. Dividends were re-
duced, maintenance charges cut, better
ments neglected and, finally, the wages
Of the unorganized 80 per cent of rail
way employees were kept as railway
managers recognized, at levels cruelty
low. Not only were the railroads ex-
pected to transmute dollars of less pur-
chasing power into as much supplies or
personal services as before, but their eX-
penditures were added to by great
body OF regulatory legislation.
Such condition could not last-was
at ar with ineXorable economic laws.
But the public disregarded Inevitable
ties. 1t did not distinguish between rail
road spectators and railroad owners
and, because the former made money bv
sometimes buying for a rise and some
times selling for a fall, assumed that the
railroad business was highly profitable
and that all assertion to the contrary
was interested falsehood. The era was
one of prejudice against concentrated
wealth, or at least against some of its
forms. 1t could be seen that savings
bank accumulations were widely distrb-
uted, but not that the ownership of rail
way securities was similarly distributed
Railroads were operated as units and
their financial management was in the
hands of few conspicuously rich men.
The thrifty Of New England and Penn
syivanIa and other states, as they look at
the withered contents of their tin boxes,
low know who owned the railroads.
The government, when it assumed
charge, raised the wages of the unor-
ganized railroad employees, many of
whom were receiving $50 month or
less. 1t was compelled to do so to keep
the service together. Coincidentally it
raised rates. At first the addition to in
come about equalled the addition to
outgo, and, while the change did not rem
edy the maladjustment, it did not aggra-
vate it. Then the compensation of the
better paid 20 per cent minority of rail
way employees was increased and the cost
Of supplies went further up and the NAL
adjustment was intensified; hence the
deficit.
This deficit, if the conditions out of
tied by mere shift of control. Private
management will doubtless be able to ef-
fect minor savings, but to redress the
balance it must enjoy the privileges in
cident TO ordinary private management.
that ls, 1t must have liberty of action
hoerty to hire as cheaply as it can. to
cut of what it deems superfluous en-
ployes and to fix rates at levels permit
ting net return But thus far it does
not appear that Washington purposes to
give the railroads freedom, and the
cowed railroad committees but timorous-
~ press the point.
if the President carries out his declared
Intention there is likelihood that the
railroads will be bundled back at the end
Of the year with little liberty of action
and with guarantees az doubtful value.
shouid this occur 1t is not easy to see
how many rcceiverships and liquidations.
with their attendant evils can be
avoided.
The reorganization plans centre about
the idea that the government is to pos
sess regulatory power In exchange for