The Washington herald., 1920-02-05
RAILPROBLEM
is ANALYZED
Hines Lays Matter Before
Public from Every
Angle.
HIGH COSTS EXPLAINED
Says Increase Has Not Been
Due to Rail Admin
istration.

Walker d. Hines. Director General
Of Railroads. in his endeavor TO place
the railroad situation before the pub
lie in an unbiased manner has gone
into the matter from every angle.
The railroad problem" says Mr.
Hines. is so complex and so impor-
tant that IL deserves honest-minded
analysis. and this not because the
plan OF any one group Of advocates
should be supported but because the
best solution. upon whatever princi-
pie IL proceeds. will be promoted by
clearness OF understanding Of the
facts.
The confused notion finds support
that while the increased operating
cost in private enterprise is due TO
war conditions. a corresponding in
crease in railroad operating cost Is
due 20 mistakes OF the Railroad Ad-
Ininistration. Such an argument as
sumes that the railroads should hav.
been, and in the future can b. nIadn
10 be, Independent Of economic crH-
ditions which have affected aud vii
affect every other Industrial enter
prise. The public viii DECEIVE Itself
10 ifs own injury II ii I~ Id 20 rely
upon this faIiacv.
Simply as an Illustration refer-
ence will be made 10 the largest pTl-
vstc enterprise in the country
Moody's Manual for 1919 Show ih,.t
the operating costs Of the United
States Steel Corporation ircI,, assd
from s4ei .S0O.cGc in 1919 10 SI.-4u 80
in 1918 dhe figures for 1919 not Vet be-
ing available). this being an ircr.sSe
Of S14G. COCOA That j.. the expenses
OF the steel Corporation iu TUN were
Isl per cent more than its 'Npa ses in
1914. The public naturally assumes
until the contrary Is sh0tn that this
increase was the normal result Of
enlarged production aud NECESSARY
increases i'm prices and wa2os due 10
war conditions
The operating costs II tho r.. l.
roads for 1919 can now h. r'oSaIv
approXimated and therefore VIII bo
used for comparison because They
are larger than rur 1915 The oprr-
ating costs for tH" class railroads
were $4,000 G0n for 1919. aui
were approximately S42es ono "ne
for 1919, being an increase Of g
100000. In other words. the
operating costs in 1919 were lo-
per cent mon, than the operating
costs in 1914. But many people are
disposed to assume until the CON
trary iS proved that this increase
in railroad operating costs is due ir
mistakes Of the Railroad Admins
tration and not TO enlarged produc-
nF So
sary increases in prices and vases
We find that the steel CurpuIs-
tion's tonnage Of finished products
increased about - per cent Il 1915
over 1914. with tho result that tts
increase in its cost per ton OF I'm
ished product in 1918 was 81 per
cent as compared with 1914. The
increased service OF the RAILROADS
in 1919 will be not less than es pot
cent in excess 0f tho service 1r
1914. SO that this would indicats
an incrca ~cd cost per unit Df S"Tz-
ice on tho railroads of not more
than so per cent in 1919 a. com
pared with 1914.
In thus endeavorinE to illustrate
the all-pervasive increase in cus.t
by this comparison between tho pri be-
cipsl steel enterprise and the IA .-
steel operations in 1915 for comps-
son with the railroad operation .r
1919 is believed to be clearly les.
favorable to the Railroad Admin
tration than the comparison wrra'
be il the 1919 figures of steel op,5-s.
tion were now available. This De
true because private industry. as
well as the railroad industry. w.s
subjected in 1919 70 unfaVorah's
conditions not prevailing in 1918
such as a slump in business in th'
first half Of the wear. interfersnu.l
with the volume Of business later -
the year on account " strikes. rh,
more complete effect OF increase
prices and wages. and tho genera
relaxation in effort. which in 1a1s
has characterized all industry as
compared with 1915. These add
tional difficulties are all rcfect's
in the railroad operations for 1919