The labor journal. [volume] (Everett, Wash.) 1909-1976, 1921-03-04

! Try.
"These statistics tell their own
story. Table No. /, setting forth
| the railway operating revenues,
shows that since the rate increase
which became effective August 26,
I 1920, in spite of a falling off in
passenger and freight traffic on
account of the prohibitive rates, the
railroads have averaged an enor-
nous monthly revenue of 5000, 00O,-
600. This means an annual trans
portation bill for the people of this
country of more than $780, 0O,0 900.
When the roads were under private
control in 1917 the yearly revenues
were only S4,OO0,000,0 1000. During
1918 and 1919, the two years of
Government operation, they averaged
only $5,O0O,00O,OOO The railroads
are thus realizing an annual rev
enue at the present time which eX-
ceeds the revenues enjoyed during
each of the two years of Govern
ment control, by more than $4,000
100000, and yet the railroad own
ers complain that they are unable
to operate the roads at a profit.
Table No. 2, embracing railway
operating expenses, shows that
since the roads went back to pri-
vate operation the operating ex-
penses have jumped until they are
nearly $100,000,000 a month in eX-
cess of the highest monthly ex-
pcnsc under Government operation
"For the first time in American
history unearned profits were guar
anteed out of the public funds to
private corporations; this gift was
justified on the claim that deficits
under private operation would fall
far short Of deficits which were be-
ing incurred under Government OPP
Grafton. And the Senators who
made that claim pointed to Section
APP of the law as a protection to
the taxpayers of this country be-
cause it conditioned the Govern
ment's bounty upon honest, effic-
lent, and economical management
and reasonable expenditures
How did the railroads respond
to this show Of confidence on the
part of Congress? No sooner were
the transportation facilities of the |
country back in their hands than
they began the letting of contracts |
to supply companies at unprecedent- |
ed figures. The railroad shops
which had recently been organized. |
and employed union labor, proceed
ed to discharge men, reduce output
and were in many cases closed |
down. At enormous increase in |
operating expenses, fat repair con
tracts were given to outside COM |
panies employing non-union men.
In many instances, the boards of |
directors of these outside supply |
companies were controlled by the |
same men who were directors of the |
railroad companies. New compan-
les were organized in which the |
same interlocking control existed, |
and so lucrative did this farming |
out of repairs become, that the
stocks of the corporations supply |
ing repairs to the railroads main |
tanned higher level in Wall Street
than the securities of any other |
class of manufacturing concerns.
"This practice served a double |
purpose. 1t enriched the great |
interests which control the railroads |
and in addition it threatened the
existence of union labor. Under
Section 200 of the Transportation
Act these sinister purposes could be
served at public expense, because
no matter how high their operating
expenses, no matter how poor and
inefficient the service, the railroads
had been guaranteed profits of $751;
100000 month from the public
treasury.
"The inevitable result of this
guaranty which put a permium upon
inefficient service soon followed
The railroads not only failed to
make the profit of $75,00O,OO0 a
month, but they fell short of max
ing expenses. Although in grant
ing this guaranty it had been urged
among other reasons that the rail
roads would cost the Government
less under private operation than
under Government operation, it was
found on September |, 1920, that
the deficit for six months aggre-
gated an amount estimated at the
astounding figures of $631 800 900.
Think of it! In six months the
private owners of the railroads
piled up deficit IS per cent as
large as the deficit of 100000
incurred by the Government during
twenty-six months of federal CON
troll The monthly deficits under
under the exacting conditions of a
great war less than $30,00O,000 a
month. Under private operation in
a time of peace the deficits We're
in excess of $105,000,000"