New-York tribune., 1920-01-26
Give the Railroads a Chance

L
which The Tribune published yester-
day emphasized some cardinal points
in the railroad problem which are
too often overlooked in Washington.
The railroad industry is, in very
real sense, the basic industry of the
country. 1t underles and serves all
the other industries. Their eco
nomic development and operation are
dependent to large extent on the
efficiency Of the transportation sys-
TEN.
There are two ways Of furnishing
the country the transportation which
it needs. Either the government
must perform the service at the cost
and risk of the taxpayers, making a
profit or creating deficit, or the
service must be intrusted to private
enterprise, under some sort Of gov
crnmental regulation. We have
just had a painful experience with
government operation, which has
vastly increased the cost Of trans
portation without increasing the
value of the plant or beneiiting
either the shipper or the ultimate
consumer. The Administrator and
Congress are one in wishing to get
rid Of the burden Of government Op-
eration
But if the government no longer
cares to operate the railroads it must
put it within the power of the orig
inal owners to operate them. Tho
owners do not ask for full! control.
They recognize the soci;..zed public
utility character of the enterprise
they are engaged in. But they SEQ
that they cannot maintain and de-
velop the transportation system un-
less Congress gives them the power
to establish their credit and to pre-
vent the interruption Of traffic
through wage deadlocks with their
employees.
Before the war railroad labor was
in chronic state Of discomfort. The
Interstate Commerce Commission
compelled the companies to keep
wages down, because it refused to
make adequate allowance in in
creased rates for increased costs of
operation. When the government
took over the roads it at once made
very large increases in wages. It
was unwilling to do what it had
asked the private owners to do-to
fight wage increases on the ground
that revenues were not sufficient to
meet them. 1t created huge deficits
to be paid out Of the public treasury
The treasures Of the railroads are
empty and their borrowing capacity
Is weak. If they are to improve the
service, which must be enlarged and
extended as the country grows, they
must have larger revenues. With.
out safe margin Of profit new capi-
tai cannot be drawn into the rail
roads. 1t is just as essential, Mr.
Shoup well says, to attract the in
vestor's dollar into the transporta-
ton industry as it is to provide
) against the threat of nationwide
transportation tie-up.
Congress seems still too much
, under the domination of old fallacies
in railroad regulation to meet this
issue clearly. There are two cur
rents of opinion. One sets toward Z
slight modification Of the pre-wa,
system of control, allowing the road.
t1uctuating and somewhat precari
Gus income and perpetuating the
:. strike system and the struggle be-
tween employees and EMPLOYERS fo,
the enjoyment Of the larger percent
age OF the profits. The other tends
toward fixed division of profits
elimination Of the strike menace, q
division of earnings over the stand.
ard rate of return and stabilizatior
generally under pooling aud re-
glonal consolidation scheme.
The first plan has the character
lstlcs of makeshift. The other is
at least constructive, although it in
wolves degree of government social.
lzation which Congress would shrink
from applying to any other industry
In these disputes over methods
however, Congress is in danger of
losing sight of the main purpose of
railroad legislation at this juncturc
That is to create an efficient trans
portatlon system, equal to the needs
fthe present and the future. Such
system must be self-supporting
and capable Of vigorous expansion
1t cannot live If it's credit is starved
Tho mental attitude of the govern.
ment toward the railroads is more
important than any specific legisla-
tion which may be attempted at this
time. II the railroads arc cncour-