Evening star., 1921-04-01
BY G. GOULD LINCOLN.
Copyright. 1921. by The Washington Sta

Copyright. 1921. by The Washington star.)
The railroads of the United States un-
der existing conditions are failing to
| make their receipts cover their required
expenditures with a fair return on the
capital represented by the value If
this condition is allowed to continue
fthey must ultimately go to the wall
An examination OF the conditions to-
day and the results obtained by the
roads leaves no other possible deduc
ton.
Three factors of utmost Importance
are crushing the railroads They are
Cd expenditures. (2) Inadequate re-
ceipts. and CD greatly decreased
business. Over these factors the
roads themselves have no final con-
troll. The United States railroad
labor board. created by the transpor-
tation act of 1920 and supported bN
public opinion. controls the greatest
single expense of the roads-wages
1t is estimated now that over go cents
out of every dollar taken in by the
roads goes into wages.
The receipts of the roads are con-
tro1led by the Interstate Commerce
Commission. which fixes the rates for
freight and passenger service.
The business of the roads is con-
troiled by the general economic con-
| NAeiOhS PiCNdlhHS lnrOuSnOOC the
country and the world.
The contention of labor and advo-
Gates of government ownership, how
ever, is that the roads are not
operated economically by the execu-
tives-that with proper cuts in ex-
penditures for material and interest
the roads could be made to pay for
themselves.
1t is unthinkable that thetranspor-
/ faf ~f
shall fail. The very life of the coun-
try depends upon transportation. In
the end, the force of public opinion
will settle the problem of the rail-
roads, which has a vast number of
angles, as it settles all other great
problems that arise here.
Loss Is Very Considerable.
Today the roads are in private own
ership. They were returned by the
government to their old owners March
1, 1920, after a period of govern
ment operation lasting for two years
and two months, the war period. The
government operated the roads at a
loss estimated at $4,000 900 for the
last year of government operation.
The private arrangements during the
year since they received the roads
back have operated them also at
loss. The exact estimate is not OBJ
tainable. but the loss is very con-
siderable.
Whether the railroads remain in
private ownership or are taken over
permanently by the government. some
one has to foot the bin for their
operation. Merely because the gov
eminent owns the roads will not
mean that the bills are not to be
paid If the roads do not make
enough money to pay for their opera
tion and the interest on >the money
invested, then. in the event of gov
ernment operation, the government
win have to make up the deficit That
means the money will have to come
out o fthe taxpayers pockets. The
criticism naturally arises that the
non-traveling public helps to pay the
transportation bill of the travellers
and the non-shippers help to pay the
bills for the shippers.
On the other hand. If the bills Of the
roads are to be paid under private
ownership. receipts must be increased
or expenditures decreased. Rates are
high today-higher than it was ever
imagined they would be. The railroad
managers have no idea Of asking Tor
increased rates-or that they would
be granted. They do intend to cut
down expenditures. And right there
is where labor steps in.
Problem II Financial.
The problem of the railroads today
is, first of all. a financial problem.
But the labor problem looms up as
the crux of the entire situation. Solve
it and the financial problem of the
roads will be solved in large part.
Nearly twe-thirds of the gross earn
ings Of the railroads are paid out in
wages. Other large expenditures are
for supplies, including coal, steel
rails ties, rolling stock. etc. and for
interest on the money invested in the
roads The prices of coal. Of steel
rails and other supplies are coming