New-York tribune., 1920-03-01
Freight Rate
Raise Needed
TO Save Roads
scovernment Preferred Def
81 of $854,432,434 to
Increasing Charges Dur
ing u. S. Control Period
cost Almost 2 Billions
Rail Companies Prepare
to Claim Many Millions
to Adjust Deterioration
By Stanley Frost

sneciai Dispatch to The Tribune
WASHINGTON. Feb %. - Twenty
.,x months of government operation of
.ss railroads will have cost the United
c,.4ss. before all accounts are settled,
.ns including the express and Pullman
..yv;ees, as we'll as the roads proper,
The following amounts:
In loans to the properties, against
which bonds or other securities will
be taken, s9ss,6l5,5ol.
In investments. some of which may
have to be cleared out at loss,
sss,2ssaoo.
Admitted deficit, as estimated by
Director General Hines, 1854, ASP ,434.
Total cost, of which about onc-half
will return to the Treasury within
the next zen wears, 81 1856, 1922, 1856.
This cost may be considerably in
creased, partly by bad investments;
asrtly because figures for the last two
months are estimates and partly
through habit government estimates
Rave of growing, but chiefly because
the roads are preparing to submit
c;aiUas for many millions on the ground
that the lines and equipment have been
allowed to deterlorate.
This is the big fact that stands out
VIXEN an appraisal of the results of
, government operation is undertaken.
Yet. standing by itself, it is not thing
/ hy which the success Of the experiment
ran be fairly judged for there IS an
IT.. foo{ hot daStrO1-c va l:,o
criterion-the government has had the
mower at any time to change that
asncit into 8 surplus by the simple eX-
ptdient Of issuing a hundre d-word or
der raising freight rates. So the thing
that the deficit actually proves is
simply that the government has pro
ferred deficit to higher freight rates.
No Change in Freight Rates
There are three main reasons offered
for this besides the political con-
sderauons that may have been pres
ent. The first is that the government
spending large sums for speed and
agencies did, and that the cost Of these
things could not fairly be put upon
shippers alone, and should be borne
by the nation as whole. The second
Is that conditions during and since the
war have been SO unstable and uncer-
tain that rate increases could not be
mede with any[degree of scientific wis
dom, and that it was better to wait the
return Of more settled business De
fore undertaking fundamental changes.
The third is that an increase in rates
means an increase in the cost of liv-
ing, and the government wished to
do all that it could to avoid this.
The first Of these reasons has now
ceased to operate, and the other two
cannot stand against the fact that the
roads must have q rate increase or 60
bankrupt as soon as the. government
guaranty is withdrawn. The prob
lem of making this adjustment. the
evasion of which is the real basis Of
the deficit. has now been thrown by
the new transportation act upon the
roads and the Interstate Commerce
under private control the rate increase
would have had 20 be made long ago.
So~that the deficit. tremendous as il. is,
must De judged not as showing the ef-
hcency or lack of it in the railroad
Administration, but on the question of
the wisdom of the governments policy.
Judgment Of the success of govern
nent operation has been difficult and
confused because there has been no
agreement as TO the standard by which
It should be measured. and often dc
tates havs been carried On at length,
with the opponent using different, but
unstated, bases. There are three that
may be used: First, the result may he
1uosed by the promises made by the
advocates OF government ownership. If
that is done the decision must be so
heavily against these advocates that
there is little need of going over the
evidence.
Nar Needs Form Basis
The second and fairest basis is to
De found by considering the railroad
soTlnlstration as war ageucy and
!udglng ii BY IS success or failure in
meeting war needs oaly-in transport
ing troops and supplies that the army
ana navy needed, the materials to keep
sae great war industries going, and the
1000 that had to reach the seaboard
% Keep our allies alive. If this basis
~ used the questions of cost, man
power and the like drop out of sight
sho results only count. On this basis
Te ROADS under Federal control must
ee credited with a great and shining
success.
An example of this work, in i'm
pOrIance, cossliness and efficiency is
% IL the handling Of the European food
sslsls IN the spring of 1918. On Feb
aeary 9 word came from our three
Mihcpai allies that unless the prom
sss ior food made by Mr.. Hoover
sere not only lived UP to in future, but
We deficit already accumulated made
Ev0o they would be "out of the war"
W April l--seven weeks away. This
"eant moving more than 2,500,000 tons
W.. y. freight in the midst of the coal
uis,s a and the worst weather and rail-
Th 1yad conditions America ever had seen.
a.: .us measures taken to meet the stu
ZION ZION were drastic and expensive.
ns"pty ~ cars were shipped West ahead
w;ts paced ones; the loading of box cars