Evening star., 1920-01-18

control of the railroads of the United
States from the standpoint of actua |
saving in money to the consumer ana
vastly more efficient railroad sys-
tenn is made by Interstate Commerce
Commissioner Robert w. Woolley, in a
statement just issued. Mr. Woolley
claims that contrary to the general
trend of public opinion. which he
claims is fostered by the railroad eXecu-
tives. the railroads have not suffered
deficit under federal control. but
have actually made more money than
in the years prior to the three ear
test period, which, he says. was a
miracle period.
He says in his opinion the only
hope of preventing final government
ownership lies in the. government
holding the roads for period that
will carry them over the reconstruc-
ton days and back to normal. when
it may be possible to fix just what
the measure of rates should be under
private control. His statement, in
part, follows:
:. :. Mr.. WOlley's Statement.
when the President issued his or
der returning the railroads to private
control on March ] in my opinion he
served notice on Congress to the eff
feet that it would have not only to
act promptly, but assume response
bility to the people. Last May he in
dicated to Congress that the present
arrangement. speaking generally, was
d mere rope of sand: that it was pos
sible for the director general to main
tain only a semblance of morale in his
organization with the tenure of fed
eral control SO uncertain, and that
unless Congress enacted legislation
better adapted than the federal con-
troll act to effective administration
during the delicate reconstruction
period he would exercise the option
vested in him and return the roads on
January l.
I'VE all know that Congress failed
to function on schedule. that it would
have been disastrous to the assets of
the roads themselves, and, incidental
ly, to the whole financial situation. If
the return had been made without
adequate new legislation If the
President had merely said he would
postpone the date of return until
March Congress might have become
even more easy going. So. as prac-
tical matter. it was necessary to
shift the responsibility.
Defines True Situation.
! But this does not alter the situation
economically at all in these perilous
days. AS matter of fact, it isn't ac-
curate even to speak Of them as the
reconstruction period, because that cam
ratified. What the American people
are really confronted with, and what
Congress is really dealing with, though
some of it's leaders seem not to recog-
nize the fact, is. first. the danger of
still higher cost of living; and, second,
the danger of further labor troubles
and greater economic unrest. In form
ulating from the essence of two mani
festly bad bills a measure for the
permanent return of the railroads now
to private control and operation, no mat
ter how desirable such return may
doing the one thing that inevitably
means higher prices and early comfort
for the socialists Why lash the radi-
Gals and at the same time play into
their hands?
"The railroad executives are prepared
to file application for general increase
in freight rates. For months their
people into the belief that this increase
will prove benefit rather than a hard
ship and a peril.
Measure of Freight Tolls.
Il am informed that the measure of
the increase will have to be at least
rs per cent. A few days ago an Off
cial of one of the leading New Eng
land lines stated that the increase in
New England would have to be as much
freight receipts. a 25, per cent increase
would mean ss75,O00.00O additional,
| which the shippers would have to pay
annually. But the shipper passes this
along to the consumer or back to the
producer of the raw material, who has
to stand the cost of transportation to
the primary market. He SO states
frankly in the cases which come before
the Interstate Commerce Commission.
He makes no bones of it.
THE consumer catches an increase
in freight rates in the shape of an
accumulation of increases. He is
bound to, because he is at the mercy
of the manufacturer, the wholesaler,
the retailer, and generally the COM
mission man, as to each single ma
terial that enters into finished ar
ticle, and then as to the article itself.
Director General Hines stated at st.
Louis last June that the ratio was
fivefold. In other words. he said
that if rates were increased $300,00o,-
600 the consumer would pay to the
extent of $500. 100000. An 1875. .0o0.-
900 increase in freight rates would
mean s4s75.0oo,ooo the consumer
would pay. This would have an i'm
mediate effect of increasing the living
cost of families of five by something
like $215 per annum.
Rail Omcial's Views.
"Only few days ago. the vice presi-
dent Of one of the principal railroads
in the. country walked into my Office
and introduced himself to me. He
said that he was opposed to govern
ment ownership of railroads, and that
he thought the one way to prevent
government ownership by January 1,
1921. was for federal control to con-
tinue until We are well over the
shoals of reconstruction. He cited the
fact that with little or no increase in
passenger equipment the railroads
were handling something over 80 per
cent more passengers than ever be-
fore, that with only a moderate in
crease in freight equipment, including
locomotives. an enormously increased
freight traffic was being efficiently
handled, and gave as an instance that
whereas on October 1. 1917. the freight
car shortage had been $4,000 cars, it
was only about $1,000 in October. 1919.
He said he could foresee car short
r THE TWELVE FEDERAL RESERVE BANKS
January 8, 1920. Jan. IL, 1919.