The labor journal. [volume] (Everett, Wash.) 1909-1976, 1920-08-20

Private ownership is on trial, ant
unless it "makes good" it must giv'
way to Government ownership, ac
cording to an interview given out il
Chicago by Daniel Willard, presiden
of the Baltimore and Ohio Railroad
"In my opinion" Willard said
Congress, by enacting the transpor
tation act of 1920, made the contin
uation of private ownership and op
Grafton of railroads in this country
possible. The intent of Congress has
been fairly interpreted by the Inter
state Commerce Commission. Wheth
er private ownership and operation
of the railroads actually does con
tinue to be the established policy II
this country will now depend wholly
upon the railway managers them
selves.
Public to Be the Judge of Success
eff the railroads, under private
ownership and with basis of rates
sufficient to yield an adequate in
come, are able to satisfy the public
and to definitely demonstrate that
private ownership provides the pub
lie with better transportation and
in the long run, with cheaper trans
portation than can be looked for un,
der any other system, then the peo-
pie are going to be satisfied with
the present system. AS | say, pri-
vate ownership and operation of the
railroads now depend on the actions
of the railroad managers"
Mr.. Willard expressed himself as
+ho f,,t, If
believes the railroads will handle q
much larger volume of traffic anC
in that way will force down the cost
of living, despite the increase ir
freight rates.
With the coming of more normal
times, he is convinced that investors
will regain faith in railroad securi-
ties, and that the prices of stocks and
bonds will correspondingly advance.
Dividends Are the Main Point
Never before in all history has a
private industry been granted such
privileges as have come to the rail
roads by enactment of the Cummins-
Esch law. The mandatory terms OF
the bill left the Interstate Commerce
Commission little option in fixing
rate schedules. Private owners are
granted per cent on a total valua-
ton of $18,900,O This is only
$1140,000,000 under the "book val.
ues" claimed by the railroad corpora
tions. 1t is many millions in eX
cess of the real valuation of the
roads. Commissioners Eastman anC
Woolley, publicly declare that is 6
"leap in the dark" However, the
consuming public is called upon tc
pay rates which will insure dividends
on this amount, notwithstanding il
far exceeds actual money invested in
the national transportation system.
Nor is this all. The Cummins'
Esch law provides that should the
railroads, grouped in district, not
earn under the rates named in the
recent award, the yield in the aggre-
gate prescribed by Congress as es'
sential to produce efficient trans,
portation services as a whole" the
Interstate Commerce Commission
shall again adjust the rates so as tc
yield the return required by the act
Grab Hooks Are Very Elastic
Then read the following statement
made to holders of railroad securi
ties by the executive committee o1
the National Association of Owners
at a meeting held in New York, Au
gust s:
"Where railroads in any district
may feel they are entitled to greater
revenue, the question will automati
cally settle itself after sufficient
time has elapsed for it to be dem
onstrated whether the yield Congress;
thought necessary and the Commits
sion has acted upon has been pro
duced If the roads do not yield the
amount prescribed by Congress it i:
clear that the aid of the Commits
sion can be invoked without delay
Here you have it. If badly man
aged roads fall short of 6 per cen
dividends, all the private owners
have to do is to tell the Interstate
Commerce Commission and the elias
tic grab-hooks of the Cummins-E -Escl
law will be applied to the plain peo
pie again.
New Rates Effective August 26
In other words, if wasteful rail
road management deems it necessar!
to apply higher rate than that jus
awarded by Jne commission, all ina
will be necessary is to command the
Interstate Commerce Commission
The Cummins- -Esch law says the rail
road shareholders must receive pc
cent. There is nothing in the law tt
prevent excessive and wasteful eX
penditure of money, the paying O.
high salaries to officials, the pur
chasing of equipment from favored
concerns at prices that will eat deep
ly into the gross revenues of rail
roads. Over and above all this tn,
roads must earn per cent divi
dends.
Alfred P. Thorn, general counse
for the Association of Railway Elk
ecutives, has announced that the new
freight rates and passenger fare
will be made effective on August 20