New-York tribune., 1920-10-23

revenue did not come up to anticlpa-
tons, and his predictions as to finances
were made to seem wholly unrelated to
the facts by subsequent devclo lopmcnts.
IN private business the corS'Quence
Of miscalculations and blundcrs in
budgcting is failure. In the case of
governmental activity the result is
rolling up a deficit Part of the deficit
is perhaps attributable to unpredictabie
/ developments. but. on the other hand,
the bulk of it represents tho outcome
of not seeing the situation clearly ana
compctenty.
Deficit Exceeds u Billion
The House Committee on Appropria-
tions has estimated that, before all ac-
counts are settled the deficit Will ag-
Cregate S1,375,000,000. The second
director general earlier in the year
! in a memorandum to this committee
+ estimated the amount by which the
roads failed to earn their standard re-
turn under government operation at
S9O3 ,922 97S, and to this the committee
added $25,O00,000 to cover losses on
short lines railroads, $65 100000 IN
terest on government bonds, $I50,000,-
600 shrinkage of government bonds and
railroad securities, bringing the total
up to Sl,2l4,0 900, 900, and the committee
be attained before all accounts were
settled
When Mr. McAdoo assumed charge
of the railroads, he anticipated no such
deficit in fact, in his testimony be-
fore the Senate Committee on Inter-
state Commerce on January 10, 1918,
he said:
My own hope is that we shall not
have to make good any deficiency. l
think that it may be possible to prac-
tee very considerable economy in
rlany directions in the operation of the
railroads under one control OF
there, and that is based upon some
general knowledge I have Of practices
under private management which we're
inherent in the system of autonomous
manage meNt OF d great many indepen-
dent railroad lines and also upon what
railroad men of large operating eX-
pcrience tell me can be done in the
way of operating railroads more ad-
vantage ously under unified control. SO
| hope that very large economies may
be practiced.
"How far they will be offset by in
creased cost Of material and in
but perhaps one hand will wash the
other. If it does and you maintain
the present status, perhaps the gov
eminent would not have to meet any
deficiency against guarantees it may
give.
I'm any case, hope that the de-
fciency will be inconsiderablc, and l
hope as we'll that we may have
surplus Howe 'cr, time must tell. We
must have fund out of which such
deficiencies can be paid if they arise"
McAdoo's Hopes Blasted
OF course, Mr.. McAdoos hopes were
blasted by what actually happened, de-
spite the fact that huge increases in
the charges of sportaton were
made a littlc later in the year. At this
time Nh McAGOo was optimistic about
the possibility Of tang care OF an in
crease in WAGES without an increase in
rates, but in June rates were increased,
bnt not enough to yield the results
Mr.. McAdoo expected.
railroad executives estimate that the
economies Mr. McAdoo effected often
at great Inconvenience to the travelling
and shipping public saved less than
$l50,oCoO00 a year. mainly through
curtallmen Of service rendered. And
vet this saving, plus the increase in
rates put into effect in June. 1918,
amounting to $1,000 coo 600 year,
was helpful in preventing the estab-
iisnment of a greater deficit.
As result Of Mr.. McAdoo's failure
TO predict accurately what the results
OF his administration would be, rail
road men now feel that he was never
within touching distance Of the situa-
tion he was steadily creating. But the
huge deficit is all the larger when it
is remembered that in 1919 after the
&fNlsticc there was an almost COM
ple'e s;oppage of work on additions
and there was no adequate maintc.
nance work. Director General illness
DEFENSE was uncertainty as to what
would be done with the roads and the
dlnlculty OF getting appropriations
But critics of the Railroad Admins
tratlon lay their chief emphasis not in
me failure to keep up equipment and
maintenance and betterments- serious
rs this item is-or on the deficit and
blNndering iscalculations, but on the
elect of the railroad administration
on the morale and efficiency Of railroad
labor.
After admitting that large proper
ton Of the fall in productivity of the
workers was due to prevalent world
Wide conditions, in which labor was
WORKING IN sellers marke railroads
nevertheless feel that much of the
they charge that the good results Of
local supervision in railroading were
largely destroyed during the period of
government control by the highly cer-
trained methods of the railroad ad-
minlstration. They assert that blanket
orders from Washington DISCOURAGED
tine use of local initiative, and to that
extent impaired efficiency.
Labor Out of Bounds
Railroad executives feel, too, that
labor got out Of the control of its local
supervising officials, because labor dis
pNtes were settled in Washington on q
nationwide basis. National agree
monts were made by representative Of
the workers with tho railroad admin-
lstratlon, and national bonds of adjust
mcnt were the media for attaining
harmony.
Nowhere, students Of thc question
declare, was the decline in productivity
greater than IN the railroad shops,
here, it IS estimated, it fell off fron
% TO 4U per cent. Many railroad
executives contend, too, that the aboN-
ton of piece work by the Administia-
~,