The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-08
Director General McAdoO's Railway
Plan and senator Cum mins's.

4
nifty of Federal ownership, but with
| private management.
Practical railway managers must
see great deal of merit in many of
! the recommendations which Mr. Nc
! ADoo made to Congress the other day.
| The best OF these were his proposals
to wipe out permanently the little
| roads. or rather to piece them into
the big roads; tosAuvc permanently >
few general systems IA possible; to
permit permanently no clrCuitous
routing of freight; to maintain per-
manently union freight and passen-
traffic.
To any man Of common sense.
whether he is for Government opera
ton or for private operation, the adj
yantagcs Of those measures are OBJ
vlous. The little jcrk-water road Of
few miles of track. a handful of
rolling stock. Inadequate capacity TO
do anything well. insufficient revenues
TO employ the best talent in the bust
ness, Is as much out of place to-day
rs II rowhoat trying by itself to com
pete or to do anything worth while
in the ovprScaG carrying trade. III
the early generations Of railroading
the Nanderhllts and the HuntingtonS,
with their consultations, alliances
and poolings. anticipated this truth.
In the next generation the Hills and
the Harrimans tried 10 drive it home
10 the railroad craft. to the public
and to the Government.
Director General MCApoo has con-
slstcntly claimed for the Government
the right, the duty. the Necessity, of
doing the things which the Wander
bilts and the lIarrmnns were forbid
den to do by the Laws of the United
States. Whatever doubt there may be
about the success Of the railway ad-
ministration under Nj. MC.\uoO. there
can he no doubt that he has taught
every man. woman and child In the
country that before we can have a
satisfactory HdtioiIuI Ial.NuS ~ stem
we must go straight back to the aims
and the efforts of those who ploneerC.
nnd built up our transportation sys-
TEN. We may snfeguafl, but we must
exercise those principles.
Director General MC.\Doo's plan. as
we see it, is ut fault In that. when
the Government has upward of two
years YET 70 learn from experience
way to go about doing 1t. he wants to
decide now upon the tiycycar period.
though this uuestio ion could be decided
more wisely six months from how, or
half from now.
Senator CUMMTNs's plan, Is at
| greater fault because. without wait
= ing for experiment, he would have
; once, though he sees the danger of
having the Government operate them.
/, 1t does seem clear, however, that If
, the Government IS going to stay In
tlt' IullIbil uuSllltSS, VIC way VI tsli
other. Senator CrMMINs's plan Is
{ preferable TO Mr.. MCADoo's plan.
, If the Government, owning the
roads, leased them to private com.
, pun,cS 10 operate, leased them with
=. out political or other favoritism, the
. Government would always hc sure ~
see that the roads had traffic rates
that could provide sufficient revenues
: TO enable the operating companies 10
pay their rentals to the Government
and to operate at n sufficient profit, III
addition, to justify the companies In
going on with their working to carr
. the rental and pay 1t over 10 the M
tional Treasury.
We confess We do not see the i'm
. pOrtance of Senator CTMMINs'S be
= lief that "betwecn S2,0OO,0o0 and
50 OOO,OOO could be saved yearly by
the lower interest on invested capita
= which the Government-owncd stoct
/ would pay" 1t is not the interes
> rate or the dividend rate on railway
> securities that has been the big factor
in the freight bills payable by thu
II public. Relatively the difference IL
. capital returns is Il drop in tn
u bucket. Railroads have paid no divi
u dends at all, and yet the freight bills
n of the public have risen and risen
II Railroads have defautcd on the in
IL terest on their bonds, aud yet tn,
1 freight bills Of the public have rlscl
"a stupendOusly.
$ There could he no more strikin
example Of the unimportancc of rail
y way dividends or interest compare
III with operating costs Than the way
p which freight bills and passenger bill
'd of the American people have gone II
N IN the last year. Stockholders didn
r get anything more. Bondhnlder
didn't get anything more, Many q
10 them got less, and yet the operatn
to expenses of the roads In labor an
rs coal alone Increased by upward Of
OF billion dollars a war Tho total I,