The Washington times., 1921-03-22
SEES GREED IN
new R. R. PLAN
shapgood Says Securities Own
crs Seek Merely to Make
Own Holdings Good.
By NORMAN HAPGOOD.

The latest move in the railroad
game should not be confused with
the plan that / have been explaining
1 so fully in these articles.
The suggestion put forward by the
so-called National Association OF
Owners of Railroad Securities is in
teresting from various angles but it
is not at all the unselfish effort in
behalf of all security holders that is
represented by the other and more
important movement.
SAVED BY GOVERNMENT.
Mr.. Warfield's organization repre-
| sents a group of capitalists who
| have been at odds with the predomi-
mating capitalists of Wall street, and
they have been especially interested
I in one particular railway. They nat
urally want to make their own securi-
ties good.
The suggestions of this group have
| no great significance except as they
reflect the admissions that the whole
Community is now being driven to
make. Their statement Is little more
.lthan a criticism of the existing meth
DDS, but as such it illustrates what
everybody is now conceding.
The railroads have lied so hard and
fso long that they have now a heavier
penalty on their hands than they
would have had if their propaganda
had been more moderate. If their
managers had looked the facts
square@y in the face. with the Inter
ests of the shareholders in their
hearts, they would never have tried
to get the roads away from the Gov
lernment after the complete break
down of private management brought
49,. cc. h,1
(, the Government to take over the
roads at the end of 1917. They would
have rejoiced that they had gotten
on so easily.
4 For what was the Government
doing? 1t was taking the roads when
they could not carry coal to people
who We're freezing when they coull
flot move food to people who were
suffering for it, when they could
lot move the material needed for
our soldiers in France.
The Government took the roads
I and Immediately coal was moved,
food was moved, munitions and sup
plies of all kinds were moved. 1t
saved the situation. 1t saved the
country from the railroads, and 1T
saved the railroads from themselves.
AN EXCEPTIONAL RETURN.
And on what terms? Did it pay
TO the security holders return
based on ten years, as has been GUS
tomary in such cases abroad? That
would have to be in the lean years,
along with the fat We did nothing
ef the sort.
For our basis of return to the Sc
Guilty holders we took three abnor-
1nally fat years and guaranteed a
return equal to that exceptional
Jeriod.
In short, the Government ar
ranged that the people at large
should guarantee to the part Of the
people who had invested in these
securities that their investment
Chould be exceptionally profitable.
There were strong war. reasons, but
that is what was done.
But the railroad managers did not
have as faH jobs. They had often
lower salaries and they had far less
power. When a manager has been a
king. it is not much. fun to be
clerk.
Each manager would rather have
d railroad system to play with all
by himself, just as he liked, and the
public could always be counted OF
10 pay, in one way or another.
So they told the public that Gov
ernment operation would wreck the
roads and the public believed them.
The man who had had most to do
with reorganizing the roads for the
Government, when he saw this out
burst of propaganda, said to his
friends:
"They want the roads, do they? All
right, let them have them. The pub |
lie will soon see what these fellows
Eill do with the roads"
And they are seeing.
If Mr.. McAdoo can be criticized for
anything in his management of the |
railroad crisis (which in all the cir
rumstances may be doubted) 1t is for |
being too generous to both capital
and labor at the expense of the con-
Uumer. I
CALL FOR MORE SUBSIDY. ]
But that is the latest criticism that
will be made lat least the capital part
u iD by those who are now msnag-
ing the roads to suit themselves and |
- nOn ff,irUe 1IIIIII,-.-