The Richmond palladium and sun-telegram., 1919-01-03
M'ADOO URGES
EXTENSION OF
RAIL CONTROL
AT HEARING
Five Year Continuance Need
ed to Give System Fair Test,
Senate Committee Told by
Director General.
LESS COST THIS YEAR
tRy Associated Press>

pljshments of railroads under federal!
control In the last twelve months and
arguments for a five year continuance
Of government operation to provide a
faiI test Of unified direction were re-
cited today by Directaor General Nc
Adoo, testifying before the senate in
terstate commerce committee, which
took up consideration of his recon-
en6ation for extension of control to
1924.
MIR. McAdoo read prepared state
emf, more than $4,000 words in length.
constituting comprehensive review
Of conditions under federal MANAGE
rlent. He planned to take most of the
Gay In presenting the testimony-prob-
ably the last public statement of his
ewardship of railroad matters be-
fore retiring as director general.
Tells of Reforms Effected.
After citing reforms effected under
unified control, the director general
said:
II believe that even under the hand
leaps OF war conditions a sufficient
showing has been made to indicate
that all the reforms have mentioned
are desirable as permanent peace
measures.
Yet It Is clear that the general
public has not had an opportunity to
appreciate this and to weigh the real
value OF what has ben accomplished.
I'm view OF the far reaching value Of
what has been accomplished: In view
Of the far reaching importance OF any
solution OF the railroad question
which may be adopted. the public is
entitled to have. before the present
federal control shall be terminated, a
reasonably fair test under peace Gov
d.tions Of the advantages to be de-
rived from these reforms.
1T will be impossible to review the
results of even one year of federal
control under peace conditions until
the spring of 1920 and 1t will then be
loU late for congress to legislate be-
fore the end Of the twenty-One months
period after the declaration OF peace,
provided in the present law for gov
rrnment control, Operations under
peace conditions with a tenure SO
short as the twenty-one months can
not possibly constitute fair test"
Guide to Legislation.
Reasons for this, he explained.
would be the Inevitable disturbance
10 employees morale, the difficulty OF
carrying out an extensive program of
programs and Of forcing on railroad
companies necessary expenditures.
Indeed" he added. "the difficulties
with operation during the twenty-one
months period will be SO serious that
| do not see how the government can
be fairly asked to encounter them.
Another reason for a longer test
period. said the director general. is
the advisability Of having adequate
information on valuation of railroad
property, now being gathered by the
Interstate commerce commission, to
guide congress in legislation, provid-
ing permanent solution of the rail-
road problem.
Referring to the increase in freight
and passenger rates six months ago,
Mr.. McAdoo said that similar action
would have been necessary, even un-
der private management to prevent
serious losses,and said 1t should be
possible to lower rates materially this
year.
Uniformity Of rates and equitable
distribution Of the rate bur yer all
railroads regardless of t that
some are unusually pro-. us and
others poverty stricken, is possible
only under unified control. Mr.. Nc
Adoo urged as another argument for
The five year continuance plan.
Loss $13a,coo,ooo.
Great improvements and extensions
should be made in terminal facilities
by enlargement and consolidation,
said the director general.
Mr.. McAdoo estimated the govern
nent's loss in operating railroads this
year at S136,O00O00. This represents
he difference between the amount
guaranteed to the roads as rental and
he sum credited to the government in
.ailroad income If the higher rates
1ad been in effect the entire year, he
estimated the government would have
made surplus OF s100.000,000 and in
1919, with existing wages, operating
costs ard traffic volume remaining
substantially the same as in last year.
ne government should make a surplus
of 500 900 900.
Since the object of the government
Ihould be at all times to operate the
-ailroads not for profit but at cost" h
,dded. 'and to render at the same
ime the best possible service. ! con.
identity believe 1t will be possible dur
ng the wear 1919. or certainly at the
md Of 1919, to effect a considerable
eduction in rates unless the traffic
or 1919 should be much less then il
vas in the year 1915"
Big Wage Advances.
Wage advances to the railroad en-
,loyes last year added between $780,
100000 and s7O0,O00O0O to the pay
oils. Mr. McAdoo testified. In add.
ion the coal bill was $4,000 higher
or the ten months of 1918 ending
November /. than in the same period
" 1917, and the cost of cross ties
md lumber increased s65.00O.000.
Many economies brought about un
Ter unified management, such as re-
outing. common use of terminals and
.ayiipment, heavier loading and elimi
,aMon OF useless competition, Mr.. Nc
Aioo explained, will not be reflected
Until this. year.
"Many of the changes in railroad
gear" the director general testified
fcontinued on PAGE Tenl