The New York herald., 1920-01-08
Continued from Page one.)


demands upon railroad companies. but
through demands on Congress and on
State Legislatures and public commits
sons, for legislation and regulations
Getting management. We have all
three interests participating in the man
agement in all sorts Of ways, and yet
there is no common ground on which
these three elements can meet and ex-
change views and endeavor to reach
conclusions.
II believe the only sort Of manage
ment which can be permanently effec-
tive is one which provides for an order
ly participation at the outset OF all
three interests, instead of the past
scheme, which leaves each interest to
pursue it's own methods irrespective Of
the others until an eventual contact is
established in some form OF controversy
Took Controversial Aspect.
"The fact is that in the past these two
Essential elements of the public and of
labor have asserted their participation
only through some foim OF controversy.
The public side of 1t is asserted through
hearings by legislative bodies or by conf
missions. and these hearings nearly al
ways take on a controversial aspect, and
largely conducted through a series OF law
suits. The labor side Of the matter gen.
orally manifests itself in an even more
controversial spirit.
'In my opinion there must be form OF
participation in the management from the
outset which will give each interest to
start with al understanding of the rea-
sonablc needs and expectations of the
other two interests. Out of this COM
munity OF understanding I believe there
will be evolved q much more successful
disposition than will otherwise be pos
sble"
Coming to another phase OF the prob
lem, the Director General said
II do not believe any form of railroad
operation can permanently succeed in this
country when conducted through so many
different railroad arrangements as at
present The public interest involved is
almost completely homogeneous. because
from one end OF the country to the other
the public wants adequate service and
complete interchange OF equipment In
order to obtain that service, and. OF
course. enjoys Uniform rates regardless
of the railroad on which the traffic is
carried.
Labor Interest Involved.
"The labor interest involved was largely
homogeneous before the war and is al
most completely so at present. We cam
not, therefore, hope to succeed with
heterogeneous lot OF railroad manage
lments more than one hundred in number,
with perhaps at least fifty of dominant
character. These numerous managements
will constantly embarrass each other IN
many ways. The great variations OF
prosperity and adversely will completely
Ibaffe people trying to understand the
real facts az TO the needs OF the railroads.
II believe that IL will be essential TO con-
solidate the railroads through some COM
lpusory process into few great corpora
ltions, upon the arrangements OF Wnlcn
tho public and labor will pc adequately
represented
'I nove there will be general agree
ment that this il one OF the most difficult
financial periods i'm the history OF tne
country or tho world Obviously, 1t VIII
be more difficult TO establish satisfactorily
the credit OF large number OIL raiiroau
companies at the present moment than u
would be TO 10 this at later date when
financial conditions generally nave be-
come better stabilized.
1T Ia evident that railroad investors
will view with alarm the heavy deficits
OF the past and probably will not be re-
assUle ed without substantial increases.
There probably could not be more diff
cult time in which TO readjust rates so as
to reassuro the railroad investor and at
the same time reasonably protect the pub
lie. BY reason of this condition the pub
tg Int tai ~
dilemma. How can it at tho present
moment make rates high enough to con-
stituto adequate reinsurance TO railroad
credit without at the same time making
them much higher than would likely turn
out TO be necessary II the period OF re-
adjustment could be postponed until n
time of more stable conditioner
Again. II is clear that IL will not he
possible for the railroad companies TO
make satisfactory financial plans on the
basis OF the legislation now In prospect
In time to commit themselves definitely