The labor journal. [volume] (Everett, Wash.) 1909-1976, 1920-10-29
M'ADOO WALLOPS
CUMMINS-ESCI1
RAILROAD LAW

William G. McAdoo, former sec
retary of the treasury, and director
general of railroads, attacked the
Cummins- transportation law i'll
a speech delivered in Indianapolis
Friday, October Is. He took issue
with Senator Harding, who had de-
clared "the law to be one of the
greatest progressive measures enact
ed in a generation" Mr.. McAdoo
declared that the bill was not a pro-
gressive measure, but Progressive
act of the most profound sort"
"The Cummins-Esch BILL" eX-
planned McAdoo, Ordered the rail
roads returned to their owners Mar.
/, 1920, guaranteeing the companies
against operation losses for six
months, while allowing them entire
control of expenditures, and gave
them in addition a rental for six
months of $452,517, ,56S, although the
government was no longer renting or
running the railroads.
Put $G34,652,35S on Taxpayers
"For the six month sended Aug.
81, 1920 august estimated), the
private operators made a loss of
$182, ,134,79O. The taxpayers of the
United States are therefore re-
quired by the Cummins bill to
pay this loss, plus hte rental of
$452 2,517 ,568, or a total for the six
months of $634 ,652,358. This gift
from the federal treasury is the
first blessing the progressive Cum
mins-Esch bill' has conferred on the
public.
"The princely gife of $634, 1862, 1858
made by the Cummins-E bill, to
be paid out of the United States
treasury to bondholders and stock
holders of the railroads, is indefen-
sible. 1t was made without anw con-
sideration whatever to the public
'In this connection, let me cite a
striking instance of one of the eff
fects produced by Senator Harding's
progressive and constructive Cum
mins-Esch railroad bill.
$8,986,S91 to Prosperous Road
"One of the most prosperous rail
roads in the United States, the Della
ware Lackawanna and Western, is
participating in this princely gift,
and yet, on September 16, 1920, it
filed with the interstate commerce
commission at Washington petition
for authority to issue additional
stock to the full amount of it's sur
plus 90,000,000) and to distribute
it as 200 per cent stock dividend
to its shareholders. Hence they need
no gift from the United States
treasury, and yet, under the Cum
mins-Esch bill this rich anthracite
coal railroad company will receive
from tn etreasury the sum of $S,-
9S6,891.
at san interesting fact that this
same Delaware, Lackawanna and
Western railroad was operated by
the government for the war year
1918 and earned net the entire rental
for that year, namely, $15,749,476,
and surplus of $225,000 besides.
Under private management this road
was operated for six months in 1920
at deficit which would equal for
the year, $17,937 1884.
Advocates Unified System
"The Cummins-Esch railroad bill
is not progressive measure; it is a
regressive measure of the most pro-
nounced sort.
at is through a unified system
alone that we shall finally secure
adequate railroad facilities and eff
cient service at a minimum cost.
There is and always will be inherent
waste and inefficiency in railroad op-
Grafton so long as independent COM
panies are engaged in selfish COM
petition wit beach other"