Evening star., 1919-04-27
NOW FOR THE FOURTH
STAGE FOR RAILROADS
None of Three Former Stages Has Proved
Fully Successful, Charles E.
Mitchell Contends.

appreciation of necessities of war con-
d1tfonS or otherwise, increased the
wage bill of our railroads within one
year 1865. 0. .G00,100, which advance fol-
lowed an advance made by the COM
panies themselves in the previous year
panles themselves In the previous ear,
ly wage bill arising since our entry
INTO the war are no less than $1,000
100000. The annual wages paid by oar
railroads today aggregate S3,O00,Vvv,-
oOO-an amount equivalent to the
gross earnings of all roads during the
year 1915.
Considering that the wartime in
crease i'll prices of railroad materials
has added to operating costs between
$500, 100000 and 100000. 900 annually
and that the yearly wage scale has
been increased Oy $i,2Sc, 100000, while
the entire advance in rates has aodsa
only about $1,000. .000.0c0 to annual
railroad revenues, it Will be clearly
seen that the railroad financial s:tua-
tion is far worse than it has ever been
before. Much as we may dislike the
thought, 4 further increase in rates 10
compensate in large measure. for this
Increase III operating expenses is IN
evitabie
1t would seem unfair. in thus pre-
senting the financial results of gov
ernment operation. not TO mention the
claimed savings and benefits as pre-
sented by the administration itself
The administration has very proper
ly extended the joint use of terminal
facilities and consolidated the sew
eral city ticket offices i'll the princi-
pal cities of the United States. Such
unifications have probably saved $2O.-.
000.O 900. annually. 1t has discontinued
the maintenance Of the off-the-line
traffic soliciting agencies, at a claim
ed saving of S13,U0U,0U0 per annum,
and has abolished the advertising ex-
penditures in connection Herewith at
claimed saving of $7,000,000 an
nually. 1t has materially reduced pas
senger service at an estimated saving
of $S0.000.000 per annum. which saw
ing, 1 may add. represents war
economy which the American public
has accepted purely as such. II has
enected saving in car mileage
through the routing of cars via the
shortest route. which saving in the
eastern and northwestern operating
regions has been estimated as high
as two-tenths OF l per cent of the
total car mileage.
Comparison Not Favorable.
1t has. by virtue of operation under
the unified system, succeeded in
handling 2 per cent more freight ton
mileage and per cent more passen-
private operation. These savings and
advantages are manifestly inf1nitesi-
NAL as compared to what the Amer
ican people know and can see con-
Retely-deterioratio of service and
an effect upon railroad finance SO
alarming that. were the roads to be
returned to private ownership under
conditions today existent. a ma jority
of our companies would be faced with
The time has come to solve the
problem of the future for the rail-
more difficult the solution The ad-
ministration has suggested that gov
ernment operation continue for q fur
ther period of five years. in order that
1t may be more thoroughly tested
This suggestion has met with mark
ed opposition and apparently it has
been dropped by it's original advo-
Gates. While it is in the power OF the
administratlon to turn the railroads
back at any time and immediate re-
t urn has been threatened, assurances
have been recently given that the
railroads will not be returned in a
way to bring disaster. which surely
means that they cannot be abruptly
returned. To fix a date, even that date
provided in the law, namely twenty
one months after the declaration of
the ratifcations of the treaty of
peace. as the date when the roads
shall be returned, would seem the
height of folly. The railroads should
be. and, probably will be. returned
when a sane and sound plan for their
return has been devised
Suggestions for the return and sub
sequent method of operation and reg
nIatlon have been many. Many of
the views expressed in these plans are
admirable. though for the most part
they involve the laying Of the rail-
Ioaa structure upon the operating
table and performing upon it major
surgical operations that will result
In making it little resemble that
transportation system which has
served so well our public in the past
Guarantee of Profits.
Most OF the plans provide, for guar
anteed minimum profits to the roads
ana a maximum profit return. i am
personally opposed to the minimum
suaranty suggestion, for believe IL
ment ownership. especially If private
management fails to earn the in
come guaranteed. ! believe il will
take from private initiative a fear of
failure. which is in itself, a spur to
ach1evement- ! do believe. however.
sna,s IN q iar dlvision OF profits above a
specined maximum, but I cannot be-
ileve IN fixing point in profits above
Which all excess goes to others than
the railroads. Rate making in itself
must be largely determined by the
expense Of operation. not Of one road
out OF all roads involved in the
SPECIFIC rate made. If operating on
such a rate the poorly located or
poorly managed road is to be given
q chance to live, the well located and
highly efficiently operated road will
nnd such rate extravagantly profit
able: Such excessive profits should,
L believe. be divided with the govern
ment and others as in the Judgment
or our Congress seems proper, but
the spur to achievement in operation
that results in high profits should
never be taken away by placing a
fixed maximum return on any road.
Perhaps the thought that would
contribute TO the discussion leading
to the solution of the railroad prob
lem may be of interest 1t is based
upon the conclusion that government
ownership and operation is not prac-
iIcal; that private ownership and
operation, freed from government
tory to have its dangers and is not
feasible; and that the situation must
be worked out under private ownes-
ship and operation under fair and
equitable regulation, the solution to
be found with as little disturbance
as possible of structures already
existent.
Three Essential Things.
Three things appear to me ESSENTIAL
to be done before consideration is
given to the return Of railroad prop
erty to private operation: first. the re-
construction of the Interstate Com
merce Commimssion, with rate fixing
authority and responsibility definitely
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