The Connecticut labor news., 1921-05-27
PRIVATE CONTROL OF RAILROADS NOW
 ON ITS LAST LEG
Officials Admit It Before Congress Unless Other Big Grants
 Are Given.
(Bv CHARLES M. KELLEY )

(Bv CHARLES M. K kELLEG)
 Washington, May 2o-Privatc own ership of transportation is on it's last legs. Railroad officials admit it. They have frankly informed members of Congress that unless solution ot their multiplying difficulties is dis covered without delay many ot the carriers will Hose their grip and go under.
 we are in the throcs of death, spokcsmcn for the Association Ot Railway Executives told the Senate Committee on Interstate Commerce.
 A few of the roads may pull through, out 1 fear that many will be unable to solve their problems. That means in solvency and receivership-and a very grave situation for the business of the nation"
 "Unless you can bridge the gap be- tween your expenses and your in come," Senator Cummins, joint auth or of the iniqultous transportation act, sadly replied, you cannot continue for another year. That is plain, isn't it?"
 "Pcrfectly plain," admitted Julius
 kruttschmltt, chairman ot the board of the Southern Pacific.
 A llO1 uCDl CSSCu SCl OI PNNldllSlo , never foregathered than are now Duzzing about the national capitol, which IS the storm center of all rail road discussion. They have been call ed here to give statement Ot results gained under the transportation act, written after their dictation, and to offer to their supporters in Congress, if they have anything ot the sort to offer, some hope and consolation for the future. The net result Of their effort so far has been to increase the Epessimism of statesmen and force
 rhem to admit reluctantly, that all their hnely-laid plans to save private ownership have gone for naught. The simple fact is, and railroad managers cannot deny it, that pay day has arrived in Wall street and the lnancier-speculators who have been footing the transportation system are unable to make good. They find 1t absolutely impossible to hquidate the cXCeSseS of more than a half century of vile management, featured by every species of footing ana graft that in genious minds could devise
 In other words, the railroads are caught in the economic net that the managers have been spinning and
 
 no matter how earnestly 1t may strive
 to do so.
 Railroads Are Whipsawed. When the transportation act was being considered by Congress the pre- diction was made that ii enacted 1t would not in any measure solve the problems of the railroads. It was recognized as an unscientihc, unecon- omic effort to artifically influence the immutable law of sound business. It had for it's main object the recog- milton of the billions of dollars of fic- titious capitalization that had been ploughcd into railroad investment ac- counts, and then 1t set about to guar anty a fixed annual return on all this capitalization. It directed the Inter state Commerce Commission to es- tablish rates that would yield the car rierS per cent. annual income upon approximately $1oooo, 900 900. In obeying its instructions the commits sion brought about the ratio of dim inishing returns," for higher rates re- stricted traffic and defeated the pur- pose that Congress had in view. There is a difference of nearly a billion dollars between what the roads say they must have and what they are really getting. Unless they can effect economies that will close this which will aggravate and not palliate rheir troubles,-or go into receiver ships
 Of course, railway managers harp a great deal about extravagant wages paid to workers, but this is simply a blind to conceal their own incompet- ency and dereliction. If the workers are reduced to a starvation level the railroads will not yet have solved their financial difficulties. They must do something for themselves and not be permitted to take out of the slip pay envelopes of workers the amount needed to maintain a system founded largely on extravaganza and graft It must be clear to Open-mnded students of the railway impasse that the only real and abiding way out is 10 retire private managers and place transportation under government con- trol. Two years ago those who urged the Plumb Plan as remedy con- tended that 1t alone could afford real and permanent relief They pointed out the things that would happen to
 the railroads if the government lost control over them, and everything lprOphesied and much more has since ranSpired. The railroads are even in worse shape than their severest critic had dared to forecast. They are | breaking down everywhere, and 1t is dawning upon the single-mindcd gen tlemen who are responsible for this condition that Legislation will not help
 an incurable balady.
 Government Ownership Coming. When. suChl astute defenders of pri- vate control as Senator Cummins is forced to admit that it is failure and cannot exist the end of it's ruin ous rule cannot be far off
 To save the managers the govern mcnt will find 1t necessary 10 heavily >ubsidizc the carriers, and 1t is in i conceivable that any politician who is l SollcitOus of his future will go as far
 as that The stench of the billion l dollar guaranty that was given to the 1 railroads during the first six months of resumed private operation is still
 in the nostrils of the public It was
 the most malodorous legislative mis-
 carriage that has emanated from Con- gross in many years. It served mere l ly to empty the treasury without do
 ing anything of real value for the
 railroads.
 With all roads blocked save the ob- vious and sensible one of government
 ownership, Congress is going to take
 1t willy-nilly, and that before many
 months have been rolled back on the
 scroll of time