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

forth be accepted for failure to meet
the public need. There cannot be
cheap transportation, but the public
will expect and has right to de-
mand that it be adequate.
There is little likelihood that its
expectations will be realized. The
railroads, backed by a safe and sure
government guarantee, with large
grants of public funds, with com
PLEASANT regulation and almost sy-
cophantic obedience from government
officials, have paralyzed the coun-
try's trade and commerce in the four
months of private control. Coinci-
dentally with the increased rates
new embargoes were placed, and to-
day but a small percentage of avail
able traffic is being handled. The
result is closed mills and idle work
ers and a doeful outlook for the COM
ing winter.
Private ownership has failed in
every test made of it, and only the
most optimistic advocate of the sta
tus quo can hope that there will be
any appreciate improvement until
an obsolete and unsatisfactory sys-
TEN has been relegated to the limbo
of forgotten things.
New Plight of Railroads
Were higher rates all that were
required to enable the railroads to
function efficiently, it might be said
that they have now passed through
their most critical period. But high
er rates are not the panacea for
transportation problems. 1t frequent
ly happens that they defeat their
intended purpose by restricting in
stead of increasing income.
The railroads are now operating on
basis of diminishing returns. Wit
nesses before the Interstate Com
merce Commission, representing large
industries, solemnly warned the
members that if the railroad de-
mands were granted it would be
necessary to close down many fac
tories because of inability to mar
ket their products. They were dis
its possibilities. What 40 per cent
raise will mean to them may easily
be imagined.
Many commodities, with the new
rates superimposed, will go beyond
reach of the buying public. This
will be reflected in decreased traf-
fic, which in turn will mean lower
operating revenues. That can mean
but two things to the railroads.&c.
solvency and liquidation. 1t is the
conservative opinion of many stu
dents of railroad economics that dur
ing the next six or eight months
many railroads will be compelled to
apply for receiverships, and that,
naturally, will mean a condition more
serious than already prevails.
Obviously, the railroads are living
only for the hour They are giving
no thought to the future. They are
following literally the biblical in
junction not to give heed to what
they shall eat or what they shall
wear, for tomorrow, or the day after,
they will be dead They cannot sur
>vive with the financial tonics that
were literally supplied by SOM
PLEASANT Congress. Their malady is
too deeply-seated to be reached by
such superficial remedies. They
have a fatal cancer that is slowly
but surely gnawing their vitals, and
it is but a matter of time until COM
plete prostration and then collapse
sets in.
Meanwhile, there will be lot of
market rigging and manipulation,
that may, perhaps, enable the in
siders to become outsiders, and the
public will be left holding the bag.
There will be a mass of fake securi-
ties to be taken over as representing
the assets of a broken-down trans
portation system that is surely pay
ing the penalty of its past crimes.
Overhead Is Responsible
The railroads are suffering from
an excessively inflated overhead.
Fundamental business economies have
been disregarded. The railroads to-
day are carrying as fixed charges
against earnings the cost of the first
engine and car ever constructed, the
first rails ever laid. During the
ninety odd years since the first rail.
road was constructed in Connecti
cut not a dollar of funded debt has
been iquidated. Railroads that ar,
now dust, shadowy motive power
that long since returned to its ma
tive element, and a long series o
high financial misdeameanors arr
Wondering in the musty crypts tina
are euphemistically decribed as prop